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Berkshire Hills Bancorp (BHLB)
NYSE:BHLB
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Berkshire Hills
(NYSE:BHLB)
68Neutral
Berkshire Hills (BHLB) vs. S&P 500 (SPY)
Market Cap
$1.20B
Dividend Yield2.72%
Average Volume (3M)460.91K
Price to Earnings (P/E)18.6
Beta (1Y)1.09
Revenue Growth4.29%
EPS Growth-9.78%
CountryUS
Employees1,340
SectorFinancial
Sector Strength77
IndustryBanking
Share Statistics
EPS (TTM)1.43
Shares Outstanding46,404,930
10 Day Avg. Volume598,253
30 Day Avg. Volume460,910
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.27
Price to Cash Flow (P/CF)8.40
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$34.19Price Target Upside32.11% Upside
Rating ConsensusHold
Number of Analyst Covering5
Berkshire Hills Business Overview & Revenue Model
Company DescriptionBerkshire Hills Bancorp, Inc. (BHLB) is a financial holding company headquartered in Boston, Massachusetts. It operates through its primary subsidiary, Berkshire Bank, which provides a wide range of banking products and financial services. The company's offerings include personal and business banking, wealth management, and insurance services. Berkshire Hills focuses on serving the financial needs of individuals, small businesses, and commercial clients across its regional footprint in the northeastern United States.
How the Company Makes MoneyBerkshire Hills Bancorp makes money primarily through its subsidiary, Berkshire Bank, which earns revenue from interest income and non-interest income sources. Interest income is generated mainly from loans and investment securities, with the bank earning interest on loans provided to individuals and businesses. Non-interest income comes from fees and services, including wealth management, insurance services, and transaction fees. The bank also earns from service charges on deposit accounts, ATM fees, and other banking-related fees. Additionally, strategic partnerships and community engagement initiatives enhance its service offerings and customer base, contributing to its earnings.
Berkshire Hills Financial Statement Overview
Summary
Berkshire Hills has demonstrated robust revenue growth and operational efficiency improvements, as reflected by the income statement. The balance sheet shows reduced financial leverage and a solid equity base, but liquidity concerns persist due to decreased cash. Cash flow issues arise from a significant drop in operating cash flow, indicating potential cash management challenges.Income Statement
Berkshire Hills has shown a steady increase in total revenue over the years, with a significant jump from 2022 to 2023. The gross profit margin has improved from prior years, indicating enhanced efficiency in operations. However, the net profit margin has declined from 2023 to 2024 due to a decrease in net income, which may signal rising costs or operational challenges. EBIT and EBITDA margins show improvement, suggesting operational strength despite net income fluctuations.65
Positive
Balance Sheet
The balance sheet of Berkshire Hills reflects a solid equity base with an increasing trend in stockholders' equity, demonstrating growing investor confidence. The debt-to-equity ratio has significantly improved due to the reduction of total debt, indicating reduced financial leverage and risk. The equity ratio remains stable, ensuring a strong financial structure. However, the decrease in cash and cash equivalents could impact liquidity.70
Positive
Cash Flow
Berkshire Hills experienced a significant drop in operating cash flow in 2024 compared to 2023, indicating potential challenges in cash generation from core activities. While free cash flow in 2023 was robust, its absence in 2024 is concerning and suggests difficulties in sustaining capital expenditures without external financing. The lack of reported free cash flow and operating cash flow in the latest year raises red flags about cash management.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 613.94M | 576.30M | 413.53M | 381.47M | 381.85M | Gross Profit |
| 438.58M | 322.94M | 171.76M | 134.22M | 381.85M | EBIT |
| 434.06M | 317.57M | 156.48M | 149.02M | -552.87M | EBITDA |
| 434.06M | 0.00 | -513.17M | 118.66M | -514.93M | Net Income Common Stockholders |
| 61.00M | 69.60M | 92.53M | 118.66M | -513.17M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.13B | 1.20B | 2.11B | 3.51B | 3.25B | Total Assets |
| 12.27B | 12.43B | 11.66B | 11.55B | 12.84B | Total Debt |
| 103.50M | 568.29M | 125.51M | 110.84M | 571.64M | Net Debt |
| -79.28M | -634.95M | -19.83M | 1.49M | 480.42M | Total Liabilities |
| 11.11B | 11.42B | 10.71B | 10.37B | 11.65B | Stockholders Equity |
| 1.17B | 1.01B | 954.06M | 1.18B | 1.19B |
| Cash Flow | Free Cash Flow | |||
| 120.64M | 153.26M | 121.74M | 103.87M | 220.43M | Operating Cash Flow |
| 125.21M | 155.08M | 123.23M | 105.48M | 227.64M | Investing Cash Flow |
| 8.06M | -282.39M | -1.27B | 600.55M | 641.10M | Financing Cash Flow |
| 117.21M | 645.19M | 207.69M | -636.10M | 109.30M |
Berkshire Hills Technical Analysis
Negative
25.88
Price Trends
28.29
Negative
28.70
Negative
26.61
Negative
Market Momentum
-0.71
Positive
28.25
Positive
8.27
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BHLB, the sentiment is Negative. The current price of 25.88 is below the 20-day moving average (MA) of 28.04, below the 50-day MA of 28.29, and below the 200-day MA of 26.61, indicating a bearish trend. The MACD of -0.71 indicates Positive momentum. The RSI at 28.25 is Positive, neither overbought nor oversold. The STOCH value of 8.27 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BHLB.
Berkshire Hills Risk Analysis
Berkshire Hills disclosed 29 risk factors in its most recent earnings report. Berkshire Hills reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Berkshire Hills Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $2.60B | 13.44 | 6.52% | 3.75% | 6.21% | -16.59% | |
74 Outperform | $8.15B | 11.69 | 8.54% | 3.13% | 5.86% | -10.72% | |
73 Outperform | $2.05B | 14.95 | 9.53% | 2.98% | 18.58% | 11.39% | |
72 Outperform | $1.51B | 9.45 | 10.44% | ― | -3.61% | -29.58% | |
68 Neutral | $1.20B | 18.56 | 5.60% | 2.72% | 4.29% | -9.78% | |
67 Neutral | $959.66M | 13.97 | 5.68% | 5.02% | 7.79% | -8.83% | |
64 Neutral | $13.80B | 10.64 | 9.23% | 4.22% | 17.66% | -7.66% |
* Financial Sector Average
Performance Comparison
BHLB
Berkshire Hills
25.88
4.61
21.67%
BRKL
Brookline Bancorp
10.77
1.58
17.19%
INDB
Independent Bank
61.04
12.34
25.34%
NBTB
NBT Bancorp
42.73
9.47
28.47%
WBS
Webster Financial
48.72
1.64
3.48%
CUBI
Customers Bancorp
48.20
-4.05
-7.75%
Berkshire Hills Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -8.84% | Next Earnings Date: Apr 17, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong operating earnings growth, improved asset quality, and significant deposit growth, driven by successful strategic initiatives and a merger announcement. However, challenges remain with a decline in net interest income and modest loan growth, alongside an elevated tax rate due to merger expenses.Highlights
Strong Operating Earnings Growth
Operating EPS of $0.60 was up 3% linked quarter and up 28% year-over-year. Operating net income of $26 million was up 5% linked quarter and up 29% year-over-year.
Improved Asset Quality Metrics
Delinquencies and non-performing loans were at 52 basis points of loans, the lowest level in almost 20 years. Net charge-offs were 14 basis points of loans.
Significant Deposit Growth
Average deposits increased $299 million or 3% linked quarter. Excluding payroll and brokered CD balances, end-of-period deposits grew 3% quarter over quarter.
Successful Strategic Initiatives
Completed the sale of 10 branches in New York, de-risked the balance sheet, and invested in bankers and technology. Net Promoter Score remained above 60 in the fourth quarter.
Merger with Brookline Bancorp
Announced a merger with Brookline Bancorp to create a Northeast franchise, expected to close in the second half of 2025, improving scale and profitability with estimated accretion to EPS.
Lowlights
Decline in Net Interest Income
Net interest income of $86.9 million was down 1% linked quarter and down 2% year-over-year. Net interest margin was down 2 basis points linked quarter to 3.14%.
Headwinds in Loan Growth
Average loan balances were up only 0.4% linked quarter, with growth primarily in C&I and commercial real estate. The pipeline was lower quarter over quarter.
Elevated Tax Rate
The tax rate was elevated in the fourth quarter due to non-deductible merger expenses, reaching 26% compared to the expected 22-23% in 2025.
Company Guidance
During the Berkshire Hills Bancorp Fourth Quarter 2024 Earnings Conference Call, the company provided robust guidance and financial metrics showcasing strong performance. The operating earnings per share (EPS) stood at $0.60, marking a 3% increase from the previous quarter and a 28% rise year-over-year. Operating net income was $26 million, up 5% linked quarter and 29% year-over-year. The operating return on tangible common equity (ROTC) was 9.93%, with an increase of 2 basis points from the prior quarter and 103 basis points year-over-year. Fee revenues increased by 8% quarter-over-quarter, while credit provision expenses remained stable and operating expenses decreased by 2% linked quarter and 6% compared to the previous year. Asset quality metrics were strong, with net charge-offs at 14 basis points of loans and reserve to loans ratio stable at 122 basis points. Delinquencies and non-performing loans were at their lowest in nearly two decades at 52 basis points. Capital ratios improved, with the common equity tier 1 (CET1) at 13.0% and tangible common equity (TCE) at 9.4%. Average deposits grew by 3%, and the loans to deposit ratio was a solid 96%. The company anticipated a decline in funding costs as deposit rates were adjusted following the Federal Reserve's interest rate cuts. Additionally, Berkshire Hills announced a merger with Brookline Bancorp, expected to enhance profitability with significant EPS accretion by 2026 and achieve an efficiency ratio below 50%.Berkshire Hills Corporate Events
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Berkshire Hills Reports Strong Q4 and Announces Merger
Positive
Jan 30, 2025
On January 30, 2025, Berkshire Hills Bancorp reported strong fourth-quarter results for 2024, showcasing a 28% year-over-year increase in operating EPS and improvements in loan-to-deposit ratios. The company also announced a merger with Brookline Bancorp, aiming to create a leading Northeast banking franchise, supported by a successful $100 million capital raise. These strategic moves are expected to enhance shareholder value and improve the company’s market position.
Private Placements and FinancingM&A Transactions
Berkshire Hills and Brookline Bancorp Announce Merger Plan
Neutral
Dec 16, 2024
Berkshire Hills Bancorp, Inc. and Brookline Bancorp, Inc. have agreed to merge through a transaction that will see Brookline integrated into Berkshire, with Brookline Bank as the surviving entity of the bank mergers. The merger includes a stock exchange for Brookline’s shareholders and involves various equity and debt arrangements, with management roles and board compositions set to reflect equal representation from both companies. The merger is expected to consolidate operations and enhance market competitiveness, with a private placement raising $100 million to support the transaction, maintain capital ratios, and fund general corporate purposes.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.