Berkshire Hills Bancorp (BHLB) Q4 2023 earnings summary

Executive summary

• FY23 operating earnings were $93.2M, or $2.14/share, versus $2.19/share in 2022; GAAP net income was $69.6M versus $92.5M.

• 4Q23 operating earnings were $20.2M, or $0.47/share, versus a GAAP net loss of $1.4M, or $0.03/share; results included a $25.1M pre-tax securities-sale loss and $3.7M severance expense.

• Year-end tangible book value per share rose 7% QoQ to $22.82.

Financial highlights

• FY23 FTE net interest income was $376.9M, up 7% YoY; non-FTE net interest income was $369.0M versus $344.6M in 2022.

• FY23 operating PPNR was $141.6M, up 6% YoY; the efficiency ratio was 63.9%, down 45 bps YoY.

• 4Q23 FTE net interest income was $90.4M, down 2% QoQ and 13% YoY; FTE net interest margin fell 7 bps QoQ to 3.11%.

• 4Q23 operating non-interest income was $16.7M; operating expense was $75.3M versus GAAP non-interest expense of $79.0M.

• FY23 provision for loan credit losses was $32.0M; 4Q23 provision was $7.0M, with annualized net charge-offs of 0.20%.

Outlook and guidance

• FY24 ending loans outlook: $9.5B–$9.7B; adjusted deposits outlook: $10.2B–$10.3B, based on growth from normalized year-end deposits after above-trend payroll deposits.

• FY24 non-FTE net interest income outlook: $362M–$364M; non-interest income: $76M–$78M, adjusted for proportional amortization method accounting.

• FY24 provision expense outlook: $33M–$36M; non-interest expense: $293M–$297M; effective tax rate: 20%–22%.

• Efficiency initiatives and reinvestment in front-line, revenue-generating teams planned for 2024; experienced bankers recruited to support deposit gathering.