BHLB - Earnings call transcript Q4 2017 | Berkshire Hills Bancorp, Inc.

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Operator

Good morning, and welcome to the Berkshire Hills Bancorp Fourth Quarter 2017 Earnings Release Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Gordon Prescott, Senior Vice President, General Counsel. Please go ahead.

Gordon Prescott

everyone. morning, Good hitting worry, pinch for O'Rourke but today, next I will for be to Ali off back not call. am Ali to our lead

results. this So of us for for thanks year joining end discussion

of Our news release the berkshirebank.com available on to will furnished our Relations be the and SEC. website Investor is sections

materially this statements. morning statements Our these include remarks and actual from forward-looking will results could differ

and related factors, XX-K please most release recent on earnings Forms SEC detail For and our XX-Q. on reports see

financial discussed be to will this over measures and With understanding financial non-GAAP certain Daly. news measures as and provided projections. addition, References release. of call. GAAP only to future Berkshire's I'll in or trends, A reconciliation the turn non-GAAP relied assist CEO, our upon on that, to not performance comparison In conference in be Mike call actual should results measures are measures results and to is you included

Mike Daly

morning quarter Jamie us provide Good Gray joining and overview everyone. Moses. for me Gordon. Richard Sean are the and then of With you, morning an call. Thank year up. Marotta, the we'll through Thanks fourth our I'll our over for financials, turn guidance of I'll will it walk and quarter you to Jamie some and outlook discuss I'll the it wrap and who then this

profitability. grew managed level of started smoothly to Boston. focus our asset profitability We in headquarters overall start cost and the has billion and First despite the the It let us. for integration we trends allowed activity, with was significantly. on drove our Commerce moved organic the we us XXXX. expenses positive. high our We bank our deal. with That $XX grew solid growth integrated absorb So us. Choice footprint. me the we a the keep corporate for And big The revenues. to we year maintained We crossed Commerce across improving deal; threshold And

their look And be integration attention of their the to to growth deposit level to we end region. system of the our sheet. for pleased $X.X near year. to continued the the balance with importantly talent, in will enthusiasm and completed forward and customer full are XX%. on partnership We high March service the the to billion improved our in Commerce our ratio loan throughout capitalizing assets added benefits And

the already seeing business opportunities With market, the are we on cost in and accretion anticipate added teams we've and savings we the projected earnings achieving schedule. the

in regional the opening Boston to corporate with are headquarters process officially bank of doors the Boston. our the us Headquarter, We largest in making

private Our there. leaders new commercial locating regional, and banking are

And over of so with of the we in anticipate solid growth. selectively over grew course city First building Commerce the XX% revenues We year. acquisitions by included this the our And organic team and XXXX. in along benefits Choice the the

XX% revenues moving kept Company XX% for year. annualized Our growth on the we business. the and assets and XX% mortgage C&I significantly to organic net return are close Margins below and delivered million. impact towards X% loan efficiency improved despite total fee growth the $XXX increased now our Core to ratio income revenue. in expanded commercial of

our bolstered the the ending ratio X.X%. asset during capital also We equity tangible the fourth to quarter with of year

quarter. was closed out And it good it with solid all-in-all, a year. So we the

is expected Now taxes. corporate the we accounting quarter start XXXX the and reform tax comment impact with but Jamie generally fourth for the on for XXXX, positive benefit reform. the And of will on

scale, of along month to one benefit a earmarked and programs. announced our with earlier provided the believe employees We've our portion XX% As and hard thing tax a X,XXX thank pay portion dedication. to this build further quite a communities. our about enhance you this know, for right you time an to our benefited also a passing the employees our benefit training and we we the hour development of felt this We minimum adjustments as and wage to We do. and $XX out in of increase was to on to work strongly over our an employees over frankly of impact their bonuses and employee

of of culture many and our means to always efforts. has been our employees satisfied that believe As important front course you deliver and employees motivated our And we the soul this communities rewarding because us are really customers line know, supporting and of and shareholders. encouraging

Berkshire's the bank's which took also $X additional organizations, to volunteers contribute supports an foundation local across opportunity the million We to community. and from charitable scholarships

course, of local donations, to is in for employees back we, that. giving them another Because build of off time volunteer our our actually values In do provide addition encourage at. pay all their cultures core of to and communities to

Now I'll I'm review going it it point at to you the to and then wrap he turn this Jamie? quarter provide Jamie, over of will up.

Jamie Moses

the first fourth quarter, balance pipeline of related in the we a impact the growth. reported of annualized the X% Thanks annualized DTA We and of the issuances. year-over-year EPS X% year the EPS organically increase total and reform quarter Starting mid writing we was core due which the Mike. GAAP morning, in annualized charges growth. see in And EPS the close one-time down The good loan commercial single to X% the includes delivered for acquisition. everyone. expect includes quarter was to We the a and grew high $X.XX and EPS digit in GAAP healthy Core $X.XX. including fourth growth Commerce digit which annualized tax to commercial loss mid $X.XX sheet, remain single share $X.XX organic to with loans

In and this continue ended low annualized side, hikes payroll quarter, digit deposit rate to commercial acquisition. with Period-end the first low the of hold anticipate we balances Average betas. the driven single Now deposit by in have including Margins assets balances. we strong and Commerce on XX% earning activity balances. well, the impact to grew quarter the continued organic up year daily average on the growth depend growth. will

in acquisition. to advanced the and NIM including of grew accretion XXX to fourth million loan $X.X purchase quarter the the benefit Our Commerce

the quarter. first lower the fees was the offset new seasonally expect fee fees. flat Commerce The will originated the lower gradually mostly slightly quarter, Overall, be levels decline purchase impact with the revenues. for and mortgage quarter. in was to increased and In due expect overall FTE. any in down $XXX stable and seasonally XX% to coming remain For $X.X our quarter, quarter, SBA we significant our And to quarter-over-quarter on anticipate credit Purchase to mortgages in mortgage come margin to purchase. $X.X lower first the expected accretion next first expect million lower production the Margins slightly million income on We deposit back we range is wealth in tax quarter, steady. as fee provision We management about rate expect loan be we provision new fee we revenue and held higher be charge-offs. and seasonally quarter-over-quarter. held income loan in as accretion don't million revenues loan by the the net or insurance is charge-off steady from fourth offset changes to exceeding first sale

acquisition. increase the Commerce side, the quarter-over-quarter the tied On operating in was to expense expense

remaining FDIC an benefit increase in tied a charges dropped quarter Commerce the $XX $X to be acquisition acquisition about non-core Commerce billion to wage most one-time estimate cost expenses employee reflecting through to year. in million to quarter crossing the The and tax DTA of expected mark. from tied for hike at employee expense reform. $XX and quarter. is in the $X this reform should impacts minimum increase the million development write the seasonal cost, in in efficiency quarter million the employee in tied fourth a digit to ratio of the investment single and down result cost, tax primarily Commerce million $XX anticipate XX%. the community operating as a for first $XX that in The of We first in and Our charges full quarter included flow million expenses We about mid point, core

historic the rate benefit in of core some Our XX% was which fourth quarter includes credits. tax

first reform historic of quarter will was range that estimate first in the the the tax and the at the the for year than us quarter. year be range XX% rate to credits in will good XX.X both a tax All shares. will share forward, in we account growth together, It our core to core less have million expect earnings per that We our common impact and end end high XX% to full XX% higher quarter for share average be legislation. about and Going due XX% tax significantly we the to quarter. fourth anticipate diluted

over back delivering to XXXX. overall turn and in are We to it I'll forward with the With performance Mike. pleased solid that results look

Mike Daly

Okay. Thank you, Jamie.

quarter-over-quarter, as touch in on which quarter a also Jamie this so mean year. double expect XX% a said, of would we start first X%, And digit EPS the good would high like over year. XXXX a deliver be to to XX% I'd also to increase So some last ROA to guidance. core level improvement over the core

to a growth single high at loans pace digit expect grow deposit match. We to to this mid with year

contribute Greater to including teams should New Boston Our expanded Jersey this and new growth. and markets

and the any in lower the targeting are building we business shows margins remain continue Credit be with efficiency year. it for with fee in are the mortgage above the forecasting not will X% right our investing any in between the balance anticipate sign are below but XX% pursue for and and should And Our we our streams. the core franchise significant year. lastly, expected And in EPS that opportunistically revenue of barring range growth change combined XX% throughout and deteriorating our tax stable growth steady to efficiency ratio we betas. ROA we will XXXX, XXXX. healthy no XX% our deposit And rate, significant to full core to remain

next our going delivering the keep culture have on and banking are people any believe hires the will on promises. a our in in it us constituents. This With it's from am economy another that produce strong results growth. open we the on right with I and optimistic positive the the our our by communities poised continue. X% looks well. The commercial raise confidence businesses heading with lot in have a is our pleased and XXXX. we region are optimism should and Board their local reform to And We a capitalize far. should this recent as that And It's to strong to to to our momentum strong it up the about to of growth private will year are allowed those dividend Boston, a performance over several and come to years questions. that opportunities. into Tax impact seeing position and us continued last allow evidencing we all over And this benefit year

Operator

The Instructions] Sandler Mark comes of [Operator Please first go O'Neill. ahead. Fitzgibbon question from

Nick Cucharale

Good thank that morning. Nick are across in strength particular footprint? trend nice organic and start is year filling on are front well, This this your Are quarter seeing market and to. to C&I alluded you. Good, Cucharale really as on the this wanted increasing very Mark. Doing showing you you for there some optimism just

Mike Daly

Sean?

Sean Gray

really on It's like for continue Philadelphia XX%. proving we We for with growth opportunities a to and to be look Boston Northern Greater us. market. Greater the and Sure. ABL New growth C&I so with to loan hub see the C&I Jersey we approximately the continue overall good That ABL market pace coupled and good

Nick Cucharale

presence could on update concept I Okay, and you What hoping then are there. And your figures? speaking great. your of the us loan in Boston deposit was

Mike Daly

and figures Boston. for Loan Sean deposit

Sean Gray

about right billion billion approaching for now. market. Greater towards heading and $X Deposits Loans $X.X Boston are approaching the

Nick Cucharale

us Terrific. compares with sharing to quarter? would mind commercial then lastly that your pipeline And how loan and last you

Sean Gray

higher than been Pipeline a it's is for while.

are seeing business mix. good a We

continuing to We are C&I opportunity. see more

north $XXX that is So moving of pipeline million. about

Operator

comes KBW. Gilbert Please ahead. next go from The Collyn question of

Collyn Gilbert

Thanks. morning, Good guys.

on just landscape just and pricing? Sean to loan structures loan just just a as bit discussion seeing following on and a relates loan of in terms you little can the talk Just it competitive you up a are about what yes and on pricing

Sean Gray

the stable see I are margin. to stay going with core think yield loan consistent we

mid high rate a are now. to on right We Xs a seeing roll as

Collyn Gilbert

loan just current of then are the you digit And portfolio? variation anticipate single mix the for from okay. about you guys growth to - you much Okay, the are Do seeing the so when that composition year. thinking you mid high

Sean Gray

No.

we will stable. be think I pretty

Collyn Gilbert

Okay.

pressure and just Okay. into assumptions in of what And NIM, your - there the curious on then terms what's you pricing rate, for outlook? rate like going deposit Jamie, then your

Jamie Moses

Yes.

forward tied points to going X and maybe talked the way And And going of be a that's tied then rate there decline And we then that point that that's so expected to I is thinking FTE a in basis we are we of Collyn, about is to here two we the after in going script. the guess adjustments So are it, forward that stable. that curve be basis in looking to couple are off X hikes or at have number the there to a QX lower XXXX. based in pretty smaller we to XXXX. maybe on accretion the about based

think So NIM going be is the to stable. we

Collyn Gilbert

presume Okay. get you the expecting a obviously And of assume pressure on - because you then would asset just I right continued side. are still because benefit would funding I the

Jamie Moses

you be It's happens have drives those we of I That's just Yes. one out if with NIM that's when That's depended in or And to going right. things mean market. to things the to of right. there you the that the deal down, right. - what on going something happens. up are it's it one going be that's

Collyn Gilbert

just are first know you sure just then bit mentioned sort outlook. you broadly. accretion just to but on And Okay. assumption XXXX like quarter I - so when the talking more talk about want NIM, little yes of NIM apples-to-apples your on I for make we your

Jamie Moses

no problem. Yes,

the you as course think should gradually the over year. about So that down coming of

you course at Of prepays. a we surprise quarter, it something bumpy. to sort to expect you things number, that as exactly happens. for But XXXX's make a Last if There know loan can look of little like XXXX are can hard a had There when think tied well. when that accretion I has it, surprises. it's

Collyn Gilbert

and last seeing little healthy your significant and Mike end was can a And the you If about What Okay, comment question. you your but bit growth? more you growth. mortgage, that's there I not then that helpful. heard correctly talk at - outlook on it not why suggesting

Mike Daly

Sean?

Sean Gray

look we We the see Sure. pretax really really to healthy drive of and profit. at to bps it XX as business XX

are market the there them to a we business. are bit new when we little with opportunities maybe margins as So stable seeing with some marketing see now, down the investment, with in hold we'll we When double look and hires.

Mike Daly

we business. see That's in an to not that say increase mortgage won't

our I just think from forecasting next I on in think area. - standpoint that year our we we growth are significant that budget

Jamie Moses

most in the lower origination think Collyn, go if landscape sort I I companies predicting Yes, at are like you overall over XXXX. of look versus to a think mortgages XXXX the of

holding steady there. we So kind are of just

Collyn Gilbert

Okay.

that's materializing, than the of a issue call. is with or how So just anything macro maybe It's specific more not you Choice opportunity just macro - First okay. that's thought integrating

it That's I'll Okay. helpful. leave there. guys. Thanks

Operator

next question go Please of FIG from Dave ahead. Partners. comes The Bishop

Dave Bishop

- curious in stripping first the but quarter out we you quarter terms you could probably a through operating but on in about looking morning, thinking expense first as what Good of quarter are you run the there maybe know rate was side for quarter the I in into talked of expenses? gentlemen. I term the first us maybe a walk the quarter, about what's NIM in the noise outlook if lot is talk charges and some merger good fourth

Jamie Moses

Right.

in mid in happen said digit of That's for we like year terms factors things we have bit update expenses. some whole So a QX. that seasonal that little high and payroll single in because the QX

growth to XX% And of efficiency to that bit. below expect and XX%. ratio a XX% come EPS we little guided again an So down to

fully take the help saves that, in QX that roll of the are to again and cost impact if the think then can the at in you Commerce have rest So year. going of through I then a we and should look should

Dave Bishop

Okay.

the the of terms Commerce cost from XQ in house side savings. in fully of So

Jamie Moses

fully going QX, they and say QX should will run to then be - QX be be Yes. through would rate. in the I

Dave Bishop

loan is just and movement, what over geographic of Got are of region it. deposit sort And across core pricing one any any market there, the then market sort you side any of other. in the deposit about cost outside just - terms your across sort been variation talked seeing, you on there your yields,

Sean Gray

helps market. deposit and No. And minimize pressure, run We've seen non-relationship in but seen we've so upward stability. demand really discipline special the any us the disciplined don't we rate

Operator

comes The Piper Please go Brody from Preston next of Jaffray. question ahead.

Brody Preston

Good morning, guys.

provide miss moving for you Jamie. this outlook Did for if Sorry expecting accretion forward? you - are an I what

Jamie Moses

Yes.

QX gave that accretion expect the then we year. the again is So to $X.X number come we And for down throughout of the million. gradually rest

Brody Preston

just right, rate the trends a to expect what All might know are you. be great, relatively but stable remain seeing to run thank on here, I And provision moving good you the given you said touch forward? credit wanted you and

Jamie Moses

Yes.

then slightly loan So on lower and be QX that. will in we expect to provision depend after it growth the

kind are looking we that's how of at So them.

Brody Preston

Okay, you side? guys doing the retention Commerce then deposits both loan on And transaction, with great. the the and customer how on are

Sean Gray

experience our the seen got everything to expect. is expectations. over closing modeling session. P pertains any meeting concludes conference where boarding I'd back as are we've a We our would like and on We've lot right so for question-and-answer Michael to it turn remarks. This we to acquisition. far Daly And

Mike Daly

want joining I us. our April quarter results. thank when everybody look Well, again first in certainly for with forward We to we to everyone Okay. speaking discuss

Operator

for attending conference The now concluded. today's Thank presentation. is you

may You disconnect. not

Berkshire Hills Bancorp (BHLB) 26 Jan 182017 Q4 Earnings call transcript