Yahoo Finance Berkshire Hills Bancorp Inc (BHLB) Q1 2024 Earnings Call Transcript Highlights: Key Financial ...
Operating Net Income: $20.9 million, up 4% linked quarter.
Operating EPS: $0.49, increased by 4% linked quarter.
ROTCE: 8.73%, down 17 basis points versus fourth quarter.
Net Charge-Offs: $4 million, down 9% linked quarter.
Loan Loss Allowance: Increased by 1 basis point to 1.18% of loans.
Expenses: $72.4 million, decreased by 4% linked quarter.
Common Equity Tier 1 Ratio: 11.6%.
Tangible Common Equity Ratio: 8.2%.
Net Interest Margin: Increased to 3.15%, up 4 basis points linked quarter.
Average Deposits: Increased by $42 million linked quarter, up 3% year over year.
Average Loan Balances: Increased by $69 million linked quarter, up 6% year over year.
Branch Network: Sale of 10 branches in New York, reducing total branch count to 83.
Provision Expense: $6 million for the quarter, with allowance for credit losses at 118 basis points of loans.
Release Date: April 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Good morning, gentlemen. Dave, just curious, you've seen the press releases in terms of some of the senior talent you've been able to hire as of late here. Is that starting to impact in terms of, number one, reported loan growth, or number two, is that starting to bleed into the pipeline for both loans and deposits? A: Dave, the short answer is yes. We are seeing the pipelines build up both for deposits and the deeper relationships that we're building with the existing clients. And in fact, some of the benefit of new hires is also showing up in our wealth management group, where the number of referrals is at its highest level. So yes, we're beginning to see results and the pipelines have built up. And pipelines for both deposits and loans are up year over year on both sides of the balance sheet, partly driven by those hires.
Q: And any segment in terms of those hires that they specialize in, or is it just sort of broad-based commercial banking? A: It is a little more targeted, Dave. It's highly targeted towards the professional segments and CPAs and law firms and not-for-profits, and I think that's where most of the hires that have joined us have specialized in. So we're beginning to see new types of clients and higher value clients that we previously didn't have as much access to.
Q: Hey, guys. Good morning. First question I had is on the fee line. Your guide previously for the full year '24 was $76 million to $78 million. And if you annualize this quarter's run rate, you come up pretty far below that. So I was wondering if you could help us think through what some of the big changes are likely to be that will get you closer to that guide number. Is it SBA loan sale gains, or are there some other items in there that we should look for a pretty good uptick during the course of the year? A: Mark, fees were a little light in the first quarter. There's SBA, I called out, was down a little less than $700,000 linked quarter. What I tried to say in the comments was some of what we thought would hit in the first quarter wound up pushed to the second quarter. That line has been down for about three quarters in a row. Over the last couple quarters, it's been lower premiums. Premiums are starting to recover. So we're feeling better about that line item as the year unfolds.
Q: Okay, great. And then secondly, David, are we likely to see any more securities sales, or was this a one-time deal in conjunction with the branch sale that just made sense and cleaned up the portfolio to the point that you wanted it to be? A: Yeah, I think we're essentially done for now. I'd call it two and done since it's been two quarters in a row. But clearly, the second one was linked to the branch sale. Our securities are now down to about 10%, just under 10% of the balance sheet. On the low end of the peer group, we still have pledging requirements for some of our municipal customers. So I don't anticipate any further box securities sales like we've had the last two quarters.
Q: Hi. Good morning, gentlemen. Hoping we could just start back with the securities sales. David, can you just remind us what was the date on when those were sold and what was the yield? Or just approximate timing in the quarter? I mean, assume it was March, end of March, but -- A: Yeah. So we started a few days after the announcement. So securities sales occurred throughout the month of March. And in the slide, you see the average -- we were just under 2% on the market yield, 1.98%.
Q: Morning. I just want to start off, on the average balance sheet, I know they were truncated in terms of the held-for-sale amounts on there. Are the yields there good in terms of the 5.72% loan yield and the 2.75% deposit cost? Is that reflective, or is it a little bit skewed due to the short duration that they were on the averages there? A: So if you're talking the margin, we tried to call this out on the margin page in the press release, Chris. So the short answer, are the numbers good? Yes. There's a big difference between endings and averages related to loans and deposits associated with Project A, and that shows up on -- I'm sorry, I think I said page 7 -- page 10 of the press release. So you see low average balances, for example, for loans that we sold of only $18 million in the quarter. The footnote tells you the day that we moved them out of the regular portfolio into a held-for-sale portfolio.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
