Berkshire Hills Bancorp Reports $25.7 Million Net Income in Q1 2025, Significant Recovery from Prior Year

Berkshire Hills Bancorp, Inc. reported a net income of $25.7 million, or $0.56 per diluted share, for the first quarter of 2025, a significant recovery from a net loss of $20.2 million, or $(0.47) per diluted share, in the same period last year. The company’s operating earnings per share also increased to $0.60, up from $0.49 in the prior year, reflecting a 22% year-over-year growth. This improvement was attributed to a combination of revenue growth and expense reductions, bolstered by strategic initiatives including branch sales and enhancements in digital banking services.

Total revenue for the quarter reached $110.4 million, compared to $55.5 million in the previous year, driven by a $2 million increase in net interest income and a $3 million rise in non-interest income. The net interest margin improved to 3.24%, up from 3.15% in the prior year, primarily due to the reinvestment of proceeds from the sale of lower-yielding securities into higher-yielding loans. The efficiency ratio also improved to 59.5%, marking the best quarterly performance in two years.

Berkshire's total assets decreased to $12.0 billion from $12.3 billion at the end of 2024, largely due to a seasonal decline in cash and equivalents. Total loans increased by 0.5% to $9.43 billion, with notable growth in commercial real estate and residential mortgage loans. The company’s asset quality remained strong, with non-performing loans at 0.25% of total loans, a slight improvement from 0.26% at year-end 2024. The allowance for credit losses increased to 1.24% of total loans, reflecting management's proactive approach to potential economic uncertainties.

In terms of strategic developments, Berkshire is in the process of merging with Brookline Bancorp, a transaction expected to close in the second half of 2025. This merger is anticipated to enhance the company’s market position and operational scale. The company also reported a decrease in total deposits to $9.88 billion, primarily due to seasonal fluctuations, while borrowings increased to $685 million to support liquidity needs. The capital ratios remained strong, with the common equity tier 1 capital ratio at 13.2%, exceeding regulatory requirements.

Looking ahead, Berkshire Hills Bancorp expressed confidence in its operational strategies and market positioning, aiming to leverage its recent initiatives and the upcoming merger to drive future growth. The company remains focused on maintaining strong asset quality and capital levels while navigating the evolving economic landscape.