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Berkshire Hills Bancorp (BHLB)
NYSE:BHLB

Berkshire Hills (BHLB) AI Stock Analysis

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Berkshire Hills

(NYSE:BHLB)

Rating:62Neutral
Price Target:
$27.00
â–²(10.16%Upside)
Berkshire Hills Bancorp's overall score reflects a stable financial position with strong revenue growth and operational improvements. However, liquidity concerns, alongside technical indicators suggesting overbought conditions, present risks. The strategic merger and approved proposals provide a positive outlook despite legal challenges.

Berkshire Hills (BHLB) vs. SPDR S&P 500 ETF (SPY)

Berkshire Hills Business Overview & Revenue Model

Company DescriptionBerkshire Hills Bancorp, Inc. operates as the bank holding company for Berkshire Bank that provides various banking products and services. It offers various deposit accounts, including demand deposit, NOW, regular savings, money market savings, time certificates of deposit, and retirement deposit accounts; and loans, such as commercial real estate, commercial and industrial, consumer, and residential mortgage loans. The company also provides wealth management services comprising investment management, trust administration, and financial planning; and investment products, financial planning, and brokerage services. In addition, it offers electronic banking, commercial cash management, online banking, small business banking, asset based lending, and mobile banking services; and debit cards and other electronic fee producing payment services to transaction account customers. The company serves personal, commercial, non-profit, and municipal deposit customers. As of March 14, 2022, it operated 106 full-service branches in Massachusetts, New York, Connecticut, and Vermont. The company also has commercial banking offices in Providence, Rhode Island and New Haven, Connecticut. Berkshire Hills Bancorp, Inc. was founded in 1846 and is headquartered in Boston, Massachusetts.
How the Company Makes MoneyBerkshire Hills Bancorp, Inc. primarily generates revenue through interest income from its lending activities, which includes personal loans, commercial loans, and mortgages. The bank earns interest from these loans, which is a significant portion of its income. Additionally, BHLB makes money through non-interest income sources such as fees for banking services, wealth management advisory fees, and transaction fees. The bank also benefits from strategic partnerships and investments that enhance its financial services offerings. Key factors contributing to its earnings include effective risk management, expanding customer base, and maintaining competitive interest rates on its products.

Berkshire Hills Earnings Call Summary

Earnings Call Date:Apr 24, 2025
(Q1-2025)
|
% Change Since: 1.53%|
Next Earnings Date:Jul 16, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance with significant improvements in net income, operating leverage, and asset quality. The successful digital deposit initiative and strategic merger plans further contributed to the positive outlook. However, concerns about declining noninterest income and uncertainty in the economic environment were noted. Overall, the positive highlights outweigh the lowlights.
Q1-2025 Updates
Positive Updates
Strong Operating Net Income Growth
Operating net income for the quarter was $27.6 million, up 6% linked quarter and 32% year over year.
Positive Operating Leverage
Positive operating leverage of 5% linked quarter and 11% year over year due to improved revenues and declining expenses.
Asset Quality Metrics
Total delinquencies and nonperforming loans were at 42 basis points of loans, the lowest level in about twenty years.
Digital Deposit Initiative Success
The digital deposit initiative gained momentum, delivering approximately $75 million in new deposits.
Merger with Brookline Bancorp
The merger of equals with Brookline Bancorp is expected to improve scale and profitability, with an estimated 23% accretion to Berkshire's 2026 consensus estimate.
Improved Net Interest Margin
Net interest margin was 3.24%, up 10 basis points linked quarter.
Operating Expenses Reduction
Operating expenses were down $3.1 million or 4% linked quarter and $4.5 million or 6% year over year.
Recognition as a Trustworthy Bank
Berkshire Hills Bancorp was recognized as one of the most trustworthy banks in America by Newsweek for the fourth consecutive year.
Negative Updates
Noninterest Income Decline
Operating noninterest income was down $2.5 million or 11% linked quarter, primarily due to lower SBA gains and BOLI income.
Uncertain Economic Environment
The economic environment remains volatile, impacted by tariffs and other policy initiatives, creating uncertainty in loan demand.
Slight Decline in Operating ROTCE
Operating ROTCE was down 27 basis points linked quarter.
Loan Demand Slowdown
The pipeline for loan demand has slowed down compared to the previous quarter, indicating a potential economic slowdown.
Company Guidance
During the Berkshire Hills Bancorp First Quarter 2025 Earnings Conference Call, the company reported robust financial metrics, highlighting an operating net income of $27.6 million, which marked a 6% increase quarter-over-quarter and a 32% increase year-over-year. The earnings per share remained stable at $0.60 compared to the fourth quarter but showed a 22% rise year-over-year. The operating expenses were reduced to $68 million, reflecting a 4% decrease from the prior quarter and a 6% decline year-over-year, thereby resulting in a positive operating leverage of 5% quarter-over-quarter and 11% year-over-year. The operating ROTCE was reported at 9.66%, which was a decline of 27 basis points quarter-over-quarter but an increase of 93 basis points year-over-year. Asset quality metrics were strong, with net charge-offs at 15 basis points of loans, and the reserve to loans ratio increased by 2 basis points to 1.24%. Additionally, total delinquencies and nonperforming loans were at 42 basis points of loans, the lowest in two decades. The loan-to-deposit ratio stood at 5%, illustrating a 1% decrease from the previous quarter. The company's strategic digital deposit initiative garnered $75 million in new deposits, and the nonstrategic runoff portfolios were reduced by 76% year-over-year to $34 million. The anticipated merger with Brookline Bancorp is expected to result in a 23% accretion to Berkshire's 2026 consensus estimate, and integration planning is underway.

Berkshire Hills Financial Statement Overview

Summary
Berkshire Hills shows strong revenue growth and operational efficiency improvements. However, declining net income and significant cash flow issues require attention to maintain liquidity and profitability.
Income Statement
65
Positive
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.
Balance Sheet
70
Positive
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.
Cash Flow
55
Neutral
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.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
646.11M379.83M402.53M419.37M381.85M
Gross Profit
359.76M322.94M402.53M381.47M381.85M
EBIT
434.06M317.57M156.32M149.02M25.33M
EBITDA
91.10M91.59M128.53M165.26M-514.93M
Net Income Common Stockholders
61.00M69.60M92.53M118.66M-533.02M
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.07B1.20B2.11B3.51B3.25B
Total Assets
12.27B12.43B11.66B11.55B12.84B
Total Debt
494.97M568.29M188.55M176.38M645.91M
Net Debt
-633.44M-634.95M-496.80M-1.45B-911.96M
Total Liabilities
11.11B11.42B10.71B10.37B11.65B
Stockholders Equity
1.17B1.01B954.06M1.18B1.19B
Cash FlowFree Cash Flow
120.64M153.26M109.24M103.87M220.43M
Operating Cash Flow
124.40M155.08M110.74M105.48M227.64M
Investing Cash Flow
-316.44M-282.39M-1.26B600.55M641.10M
Financing Cash Flow
117.21M645.19M207.69M-636.10M109.30M

Berkshire Hills Technical Analysis

Technical Analysis Sentiment
Negative
Last Price24.51
Price Trends
50DMA
24.77
Negative
100DMA
26.17
Negative
200DMA
26.97
Negative
Market Momentum
MACD
-0.08
Positive
RSI
42.69
Neutral
STOCH
55.71
Neutral
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 24.51 is below the 20-day moving average (MA) of 25.20, below the 50-day MA of 24.77, and below the 200-day MA of 26.97, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 42.69 is Neutral, neither overbought nor oversold. The STOCH value of 55.71 is Neutral, 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 44 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
BYBY
73
Outperform
$1.06B9.3611.08%1.59%7.68%-1.13%
BLBLX
71
Outperform
$1.46B7.4215.82%6.01%8.33%13.48%
71
Outperform
$1.10B9.7411.70%0.37%4.17%-0.91%
70
Outperform
$1.15B41.282.45%3.81%-2.81%-64.23%
LOLOB
66
Neutral
$1.27B21.386.10%0.43%12.30%-41.81%
64
Neutral
$12.77B9.717.85%78.05%12.07%-7.97%
62
Neutral
$1.14B9.959.69%2.94%17.96%399.48%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
BHLB
Berkshire Hills
24.51
4.00
19.50%
BLX
Banco Latinoamericano De Comercio
41.60
14.33
52.55%
DCOM
Dime Community Bancshares
26.22
8.57
48.56%
QCRH
QCR Holdings
64.74
8.92
15.98%
LOB
Live Oak Bancshares
27.85
-5.34
-16.09%
BY
Byline Bancorp
25.21
2.78
12.39%

Berkshire Hills Corporate Events

M&A TransactionsShareholder MeetingsBusiness Operations and Strategy
Berkshire Hills Approves Key Proposals at Annual Meeting
Positive
May 22, 2025

On May 21, 2025, Berkshire Hills Bancorp, Inc. held its annual stockholders meeting virtually, where several key proposals were approved. These included the issuance of common stock for the merger with Brookline Bancorp, an amendment to increase authorized shares, the 2025 Stock Option and Incentive Plan, election of directors, and the ratification of Crowe LLP as the accounting firm for 2025. The approval of these proposals indicates a strategic move to expand Berkshire’s market presence and enhance its operational capabilities, potentially impacting stakeholders positively by positioning the company for future growth and stability.

The most recent analyst rating on (BHLB) stock is a Buy with a $34.00 price target. To see the full list of analyst forecasts on Berkshire Hills stock, see the BHLB Stock Forecast page.

Shareholder MeetingsRegulatory Filings and Compliance
Berkshire Hills Prepares for Annual Meeting in May
Neutral
May 14, 2025

On March 24, 2025, Berkshire Hills Bancorp filed a registration statement for its annual meeting scheduled for May 21, 2025. The statement included details about board meeting attendance in 2024, noting that most directors attended over 75% of meetings, except for Jeffrey W. Kip, who attended 67% and is not seeking re-election.

The most recent analyst rating on (BHLB) stock is a Buy with a $34.00 price target. To see the full list of analyst forecasts on Berkshire Hills stock, see the BHLB Stock Forecast page.

M&A TransactionsShareholder MeetingsRegulatory Filings and Compliance
Berkshire Hills Faces ISS Opposition on Stock Plan
Negative
May 12, 2025

On March 24, 2025, Berkshire Hills Bancorp, Inc. filed a registration statement in preparation for its annual meeting on May 21, 2025, where stockholders will vote on the 2025 Stock Option and Incentive Plan. Institutional Shareholder Services (ISS) provided an unfavorable recommendation for the plan due to a higher shareholder value transfer than its benchmark. Berkshire aims to clarify and provide additional information to assist ISS in evaluating the plan. The company has outlined the status of its stock options and equity awards, which are contingent on a proposed merger with Brookline Bancorp, Inc. The board recommends stockholders vote in favor of the plan, which will cancel remaining shares under previous plans if approved.

The most recent analyst rating on (BHLB) stock is a Buy with a $34.00 price target. To see the full list of analyst forecasts on Berkshire Hills stock, see the BHLB Stock Forecast page.

M&A TransactionsLegal Proceedings
Berkshire Hills Faces Legal Challenges in Merger Deal
Negative
May 9, 2025

On December 16, 2024, Berkshire Hills Bancorp and Brookline Bancorp entered into a merger agreement, aiming to create a stronger entity with over $20 billion in assets, enhancing their competitive position in key northeast markets. However, the merger has faced legal challenges, with several demand letters and lawsuits alleging inadequate disclosures in the joint proxy statement/prospectus, seeking to delay or rescind the transaction. Despite these challenges, both companies have issued supplemental disclosures to address concerns and maintain the merger timeline, while denying any legal violations.

Business Operations and StrategyFinancial Disclosures
Berkshire Hills Reports Strong Q1 2025 Financial Results
Positive
Apr 24, 2025

On April 24, 2025, Berkshire Hills Bancorp, Inc. reported strong financial results for the first quarter of 2025, showcasing a 22% increase in operating EPS year-over-year and a 5% rise in operating revenue. The company’s efficiency ratio improved to 59.5%, marking the best result in two years, while delinquent and non-performing loans were at their lowest in nearly two decades. CEO Nitin Mhatre highlighted the positive impact of strategic initiatives and the completion of the sale of the Upstart consumer loan portfolio. The company also concluded its Community Comeback program, exceeding its $5 billion goal in lending and investment, and was recognized by Newsweek as one of the most trusted companies in America.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.