Berkshire Hills Bancorp Files Q3 2024 10-Q

TL;DR

BHLB's Q3 2024 10-Q is in. Check financials.

AI Summary

Berkshire Hills Bancorp Inc. filed its 10-Q for the period ending September 30, 2024. The filing details the company's financial performance and position, including assets, liabilities, and equity. Specific financial figures and operational details for the third quarter of 2024 are presented.

Why It Matters

This filing provides investors and analysts with the latest financial data for Berkshire Hills Bancorp, crucial for understanding the bank's performance and making informed investment decisions.

Risk Assessment

Risk Level: medium — As a financial institution, Berkshire Hills Bancorp is subject to various market and regulatory risks inherent in the banking sector.

Key Numbers

• 20240930 — Period End Date (The 10-Q covers financial data up to this date.)
• 20241112 — Filing Date (The date the 10-Q was officially submitted to the SEC.)

Key Players & Entities

• BERKSHIRE HILLS BANCORP INC (company) — Filer
• 20240930 (date) — Period of Report
• 20241112 (date) — Filing Date
• 60 STATE STREET (location) — Business Address
• BOSTON (location) — Business Address City
• MA (location) — Business Address State
• 02109 (location) — Business Address Zip

FAQ

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share BHLB The New York Stock Excha

Filing Documents

• bhlb-20240930.htm (10-Q) — 4853KB
• q32024ex311.htm (EX-31.1) — 16KB
• q32024ex312.htm (EX-31.2) — 16KB
• q32024ex321.htm (EX-32.1) — 7KB
• q32024ex322.htm (EX-32.2) — 7KB
• bhlb-20240930_g1.jpg (GRAPHIC) — 73KB
• 0001108134-24-000020.txt ( ) — 25848KB
• bhlb-20240930.xsd (EX-101.SCH) — 93KB
• bhlb-20240930_cal.xml (EX-101.CAL) — 213KB
• bhlb-20240930_def.xml (EX-101.DEF) — 757KB
• bhlb-20240930_lab.xml (EX-101.LAB) — 1192KB
• bhlb-20240930_pre.xml (EX-101.PRE) — 995KB
• bhlb-20240930_htm.xml (XML) — 6912KB

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Note 1 Basis of Presentation 11 Note 2 Branch Sale 12 Note 3 Trading Securities 12 Note 4 Securities Available for Sale, Held to Maturity, and Equity Securities 13 Note 5 Loans and Allowance for Credit Losses 19 Note 6 Deposits 36 Note 7 Borrowed Funds 36 Note 8 Derivative Financial Instruments and Hedging Activities 38 Note 9 Leases 46 Note 10 Capital Ratios and Shareholders' Equity 48 Note 11 Earnings per Share 53 Note 12 Stock-Based Compensation Plans 54 Note 13 Fair Value Measurements 55 Note 14 Net Interest Income after Provision/(Benefit) for Credit Losses 65 Note 15 Tax Equity Investments 66 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 67

Selected Financial Data

Selected Financial Data 67 Average Balances and Average Yields/Rates 69 Non-GAAP Financial Measures 71 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 83 Item 4.

Controls and Procedures

Controls and Procedures 85 PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 86 Item 1A.

Risk Factors

Risk Factors 87 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities 88 Item 3. Defaults Upon Senior Securities 88 Item 4. Mine Safety Disclosures 88 Item 5. Other Information 88 Item 6. Exhibits 89

Signatures

Signatures 90 Table of Contents PART I

CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED BALANCE SHEETS September 30, 2024 December 31, 2023 (In thousands, except share data) Assets Cash and due from banks $ 134,056 $ 148,148 Short-term investments 435,911 1,055,096 Total cash and cash equivalents 569,967 1,203,244 Trading securities, at fair value 5,560 6,142 Equity securities, at fair value 13,278 13,029 Securities available for sale, at fair value 661,740 1,022,285 Securities held to maturity (fair values of $ 451,194 and $ 476,228 ) 512,277 543,351 Federal Home Loan Bank stock 30,685 22,689 Total securities 1,223,540 1,607,496 Less: Allowance for credit losses on securities held to maturity ( 65 ) ( 68 ) Net securities 1,223,475 1,607,428 Loans held for sale 50,634 2,237 Total loans 9,212,322 9,039,686 Less: Allowance for credit losses on loans ( 112,047 ) ( 105,357 ) Net loans 9,100,275 8,934,329 Premises and equipment, net 54,667 68,915 Intangible assets 16,192 19,664 Cash surrender value of bank-owned life insurance policies 245,210 242,309 Other assets 337,212 341,757 Assets held for sale 6,930 10,938 Total assets $ 11,604,562 $ 12,430,821 Liabilities Demand deposits $ 2,267,595 $ 2,469,164 NOW and other deposits 748,737 858,644 Money market deposits 3,042,712 3,565,516 Savings deposits 998,549 1,053,810 Time deposits 2,519,896 2,686,250 Total deposits 9,577,489 10,633,384 Short-term debt 353,500 260,000 Long-term Federal Home Loan Bank advances and other 232,042 125,223 Subordinated borrowings 121,549 121,363 Total borrowings 707,091 506,586 Other liabilities 249,531 278,630 Total liabilities $ 10,534,111 $ 11,418,600 (continued) September 30, 2024 December 31, 2023 Shareholders' equity Common stock ($ 0.01 par value; 100,000,000 shares authorized and 51,903,190 shares issued and 42,981,618 shares outstanding in 2024; 51,903,190 shares issued and 43,500,872 shares outstanding in 2023) 528 52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. BASIS OF PRESENTATION The Consolidated Financial Statements (the "financial statements") of Berkshire Hills Bancorp, Inc. and its subsidiaries (the "Company" or "Berkshire") have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The Company is a Delaware corporation, headquartered in Boston, Massachusetts, and the holding company for Berkshire Bank (the "Bank"), a Massachusetts-chartered trust company headquartered in Pittsfield, Massachusetts. These financial statements include the accounts of the Company, its wholly-owned subsidiaries and the Bank's consolidated subsidiaries. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise. The Company has evaluated subsequent events for potential recognition and/or disclosure through the date these financial statements were issued. These interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X, and accordingly, certain information and footnote disclosures normally included in financial statements prepared according to GAAP have been omitted. The results for any interim period are not necessarily indicative of results for the full year. These consolidated financial statements should be read in conjunction with the audited financial statements and disclosures Berkshire Hills Bancorp, Inc. previously filed with the Securities and Exchange Commission in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. In management's opinion, all adjustments necessary for a fair statement are reflected in the interim periods. Reclassifications Certain items in prior financ

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Future Application of Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." The ASU requires disclosure in the rate reconciliation table of additional categories of information and more details about the reconciling items in some categories if items meet a quantitative threshold. The ASU also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold, among other things. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is still evaluating; however, the adoption is not expected to have a material impact on the Company's Consolidated Financial Statements. NOTE 2. BRANCH SALE During the third quarter of 2024, the Company completed the sale of ten of the Bank's branches in upstate and eastern New York. The sale was made pursuant to definitive agreements entered into on March 4, 2024 with three buyers. The sale consisted of three separate transactions, which were completed during the third quarter of 2024. In the aggregate, the Bank sold $ 383 million in deposits and $ 50 million of related residential mortgage and consumer loans, along with all branch premises and equipment. The three buyers also assumed related operations and the employment of all associated staff. The sale excluded the Bank's commercial banking business. The Company recorded a $ 16.0 million pre-tax gain related to the branch sale. NOTE 3. TRADING SECURITIES The Company holds a tax-advantaged economic development bond accounted for at fair value. The security had an amortized cost of $ 5.5 million and $ 6.2 million, and a fair value of $ 5.6 million and $ 6.1 million, at September 30, 2024 and December 31, 2023,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 4. SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND EQUITY SECURITIES The following is a summary of securities available for sale, held to maturity, and marketable equity securities: (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Allowance September 30, 2024 Securities available for sale U.S. Treasuries $ 6,896 $ 11 $ — $ 6,907 Municipal bonds and obligations 64,050 289 ( 1,408 ) 62,931 — Agency collateralized mortgage obligations 308,857 340 ( 56,765 ) 252,432 — Agency mortgage-backed securities 276,077 9 ( 43,155 ) 232,931 — Agency commercial mortgage-backed securities 86,714 — ( 16,148 ) 70,566 — Corporate bonds 38,697 23 ( 3,403 ) 35,317 — Other bonds and obligations 655 67 ( 66 ) 656 — Total securities available for sale 781,946 739 ( 120,945 ) 661,740 — Securities held to maturity Municipal bonds and obligations 236,707 421 ( 17,087 ) 220,041 45 Agency collateralized mortgage obligations 103,272 — ( 15,332 ) 87,940 — Agency mortgage-backed securities 44,465 — ( 7,048 ) 37,417 — Agency commercial mortgage-backed securities 126,312 — ( 22,001 ) 104,311 — Tax advantaged economic development bonds 1,244 — ( 36 ) 1,208 20 Other bonds and obligations 277 — — 277 — Total securities held to maturity 512,277 421 ( 61,504 ) 451,194 65 Equity securities 15,035 — ( 1,757 ) 13,278 — Total $ 1,309,258 $ 1,160 $ ( 184,206 ) $ 1,126,212 $ 65 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Allowance December 31, 2023 Securities available for sale U.S. Treasuries $ 7,980 $ 1 $ — $ 7,981 $ — Municipal bonds and obligations 64,788 494 ( 1,429 ) 63,853 — Agency collateralized mortgage obligations 426,986 — ( 79,112 ) 347,874 — Agency mortgage-backed securities 492,633 2 ( 75,155 ) 417,480 — Agency commercial mortgage-backed securities 174,879 — ( 29,553 ) 145,326 — Corporate bonds 43,291 34 ( 4,2

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table summarizes the activity in the allowance for credit losses for debt securities held to maturity by security type for the three and nine months ended September 30, 2024 and 2023: (In thousands) Municipal bonds and obligations Tax advantaged economic development bonds Total Balance at June 30, 2024 $ 45 $ 20 $ 65 Provision for credit losses — — — Balance at September 30, 2024 $ 45 $ 20 $ 65 (In thousands) Municipal bonds and obligations Tax advantaged economic development bonds Total Balance at June 30, 2023 $ 49 $ 22 $ 71 (Benefit) for credit losses ( 1 ) ( 1 ) ( 2 ) Balance at September 30, 2023 $ 48 $ 21 $ 69 (In thousands) Municipal bonds and obligations Tax advantaged economic development bonds Total Balance at December 31, 2023 $ 48 $ 20 $ 68 (Benefit) for credit losses ( 3 ) — ( 3 ) Balance at September 30, 2024 $ 45 $ 20 $ 65 (In thousands) Municipal bonds and obligations Tax advantaged economic development bonds Total Balance at December 31, 2022 $ 66 $ 25 $ 91 (Benefit) fo

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