Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen. And welcome to the Berkshire Hills Bancorp Second Quarter 2023 Earnings Conference Call. At this time, all lines are in listen-only mode.

Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded today, Thursday, July 20, 2023.

to conference like Conn. to now would turn over the Kevin I go sir. Please ahead,

Kevin Conn

and joining Investor Good quarter you thank morning, for My Development is Corporate earnings Berkshire name Kevin and Conn, Relations Officer. call. second Bank's

with Officer; Gray, Executive Chief Officer; Chief Mhatre, Chief Lindenmuth, Rosato, Sean and David today Greg Nitin Officer; Risk Here me Financial Chief are Operating Officer.

on statements materially Page in financial measures. our could differ from Our presentation, statements. statements non-GAAP legal of referencing remarks of is release. Actual and measures. X to to disclosure will the earnings non-GAAP included and refers GAAP measures news include A see those forward-looking non-GAAP Please forward-looking our results reconciliation financial

I'll over the call time, to this turn Nitin? At Nitin.

Nitin Mhatre

on the where highlights you, see the quarter. can second Slide X, Thank morning, my Good Kevin. for you everyone. I'll comments begin

We the progress continue that subsided market uncertainty, are X, quarter. began the second significantly heightened thankful has to on March steady which in and make

encouraged net funding encourage liquidity million offset We charge-offs million are durability, we position. versus were linked the income a management quarter, first our added providing declining with disciplined by loan modest allowance We'd costs. with rising interest $X.X in while strong credit capital and continued $X.X by our deposit also growth. up Fee quarter, decline from loss to loan our revenues to commensurate

slide updated outlook on minutes. quarter earnings will few fourth XXXX our call David that the intend we year operating in we've outlook provide a to included January, a While review meaningfully environment. an once our each different given

XX up equity a earnings return points X% share year-over-year. and X% $XX.X on versus was Operating down million, declined up basis Operating quarter decline of Operating tangible first linked per XX% XX% and of common and first X.XX%, net was quarter quarter versus was income $X.XX year-over-year. declined year-over-year.

flat basis. balances were quarter basis, the average to on an balance On in were second an X% Deposits deposit stable down first quarter. end-of-period and

bank small X% deposit balances ending X%. data average deposit comparison, down a show were and down balances As HA Fed were

facing While we're relatively where not long-term immune we believe to market. the stable, pressures across deposit relationship history designs is cities funding our given our and and the industry, mix smaller in new cost base

we balance prudently. And over quarter, that period. extent, Average loan with We pulling continue loan the recognize and growth, were that needs expect X% of many the at banks be X% up that linked of commercial half to back we cutting in continued our even customers' serve slower a year. banking growth while balances borrowing albeit pace may lending, or loan second to

to On term, to we loans average about XX% of think loans in to in have and an consumer XX% Longer book loans commercial loans. were XX% basis, XX% commercial this quarter. balance of our XX%

X common Tier ratio Our with ended XX.X% remains ratio common the a quarter We sheet a equity tangible balance of equity X.X%. and of strong.

macroeconomic million. Given quality our for as even trends, $X this credit was asset expense it strong. remain continues quarter on Provision remained vigilant to

in allowance quarter range basis guided Our loans to line of XXX points, with points. XXX ended to at the XXX basis our

balance and the non-strategic run sheet to Upstart and loan ago, year A derisk books, we including Firestone. decided off

and so do off have page, more details. provides appendix to updated data continue in books We on an those run which included

office will a in granular and portfolio, page cover diverse, less updated geographically in on portfolio detail We more have few also how moments. David metrics provides that these the some details our is of appendix our highlights mix resultantly which risky.

are, detailed more three-year feet highlights progress quarter, in report to of bond the front, best year the on than of this couple On program units I'll on of affordable anniversary development. of overall is additional but XXX provide on second more sustainability completed million we resulting details $XXX a our in the next square plan. the the housing marks note strategy on A quarter our slide, our with of of website. of allocation this this XXX,XXX the past green available creation building

our progress shows X BEST Slide program's overall performance metrics. on key five

As not a our line. will we've be the the past, targets straight path said to in

the on points assets return X.X%. of near end XX our return target at low a tangible range are and equity We on basis common on at

us We've PPNR our quarterly administer. surveys to been J.D. Our annualizes customer Promoter Power customer $XXX that Score million. Net tracking through and helped design

first highest Promoter or higher our was significantly at in level the XX.X% score the Our in for Score, XX.X% XX. of ever year quarter, than came full the Net quarter versus of NPS and

work vision our I want customers responsible hard colleagues over past commitment to all becoming driving for bank. and is our and ongoing community this high-performing use opportunity their to strategy to Bank socially is Their a improvement what years. to the performance to two of our of continued dedication Berkshire commitment our my thank leading

With that, David? detail. more I'll to to our turn David the call discuss in financials over

David Rosato

Slide Thank Nitin. you, of quarter. X overview shows the an

or As GAAP up diluted earnings quarter $X.XX $X.XX down and linked Net $X.XX basis mentioned, basis per earnings, and matched share, was year-over-year. fully points quarter-over-quarter year-over-year. interest million points margin Nitin XX operating down were $XX.X up X.XX%, which XX

or of NIM behind year-over-year. quarter Net is was June X% income and us. NIM XX% X.XX, we Our interest was and declined or $X.X linked the believe the worst up $XX.X million compression million

$X and quarter. X% increased linked or expense expenses X% linked million or and $XXX,XXX decreased were quarter. allowance million were were for linked basis at X% X% million Average or loss or million revenues quarter Average credit of Operating or Provision we of $XXX midpoint loans, million. average X% up $X.X $X.X X%. deposits or up Non-interest $XXX or million with XX the line for our $X.X up up year-over-year. $X increased $XXX,XXX the the year-over-year. quarter of quarter at expectations January $X loans points charge-offs guidance and down was our in first and from million Net million

decline by portfolio. million by in our detail Slide balances or was $XX average modest in Growth our on were book, mortgage more $XXX Upstart which a million driven quarter. X% X loan residential reduction up shows our consumer linked in offset a

up up X%, or C&I were as X%, be or and below linked quarter continue commercial $XX clients. the down selective $XXX first million million X% loans X% million or $XX we loans were pace loans more to of quarter. Total CRE with were

our or Slide $XXX quarter of deposit X quarter and year-over-year. balances. million declined Broker linked deposits X% total increased $XXX X% to deposits. million the or deposits an Total just balance in million declined $XXX average $XXX average X% million shows basis and are on average

to deposits the quarter the were in flat quarter. End-of-period first second

deposit in the deposits expected, modest a mix in an increase with non-interest-bearing As and deposits. shifted decline

deposits XX% versus second Non-interest-bearing the were in deposits in percentage as of quarter XX% total a QX.

XX% and in time up continue. deposits quarter, expect we As expected, time first the deposits growth to were versus

and cumulative were points, Deposit XXX The deposit through beta points basis is points XX% quarter. costs quarter total up beta the total XXX deposit second basis of Fed XX first from the basis was XX%, tightening. for the

XXXX. deposit the rest will total through of We continue that XX% to approach beta anticipate the cumulative

rates. Turning loan in to higher Slide growth year-over-year We volume interest interest function to Higher costs in the interest quarter $X.X million loan a contributed income. lift XX% decrease was X. interest X% a income. and income, or show million volumes higher while $XX.X provided NII second funding higher of primarily or net net to The net

swap and shows fees on item. is caution by up fee linked cash were income, X quarter. X%, higher were but driven income or that up $XXX,XXX Loan other or Deposit-related commercial up income, management Slide swap $XXX,XXX $XXX,XXX volatile a which I'd fees higher X% was fees. line

fee tax quarter seasonal Gain SBA down annual versus prep up were first to balances primarily The $XXX,XXX revenues management fees XX $XXX,XXX linked of on Wealth revenue sale the reflects of in quarter, the BC quarter. quarter. due credit sold. card $XXX,XXX fees mostly paid loans increased in first first other the in on were decline fees

hires the quarter of Expenses or our expense and at compensation. X% X%, Occupancy office and expenses. branch or $X from reflecting and incentive equipment X% down sales guidance. was from linked our up shows event January first $XXX,XXX continued sales and end the up XX from was Slide consolidation. quarter or $XXX,XXX Compensation from million were high new

the communications our banking bank, of a which Technology for XX% conversion. continue digitize normalize were up priority is we $XXX,XXX complete to and year strategic to the spend or quarter, half back as the expenses Technology as invest we over digital versus the will first us.

increase other deposit in insurance small the spread in reflects over other expenses premiums. increases increase expenses several The largely balance of is The items. in

I've I'd February, time like expense base. joining to talk to about our understand Since spent our expense in considerable base a for moment. working

in we support our reduction We franchise, And organically. for are saves and committed and part to managing expenses will with discipline opportunities frontline continue identify grow those of and revenue to teams reinvest transparency. to expense

$XX of carefully new disruption, run-rate from stemming the evaluating talent to quarterly to to Including dollar manage million we a will opportunities expense. of million, while $XX attract every market

total XX% up quarter. were We stand a first down Net a $X.X from of mostly $X.X consumer $X.X XX quarter net from the million. summary or charge-offs million loans. of at our of charge-offs points of million $X.X of XX basis $X.X metrics. is recovery C&I in of had quality Net loans and CRE. the $XXX,XXX million asset consisted were loans Non-performing of charge-offs first and million Slide

are recognize originations very both and of we portfolios monitoring current and While credit our are economic benign, quality carefully. we metrics that exist uncertainties

we mentioned, the the portfolio. updated our office Nitin in As page on appendix

non-performing office that quarter, last until our loans points loans basis a and XX%, lease space. Last end-of-period not average suburban a XXXX. approximately majority are are loan-to-value also ago. to year weighted second loans Class A the in for noted CRE points mentioned were down As note we the basis large larger is ratios that quarter, significant from XX X and quarter, I'd maturities

our We've all loans added which as shows a FDIC banks. the in charge-offs of a net loan page appendix, percentage for

time generally a long outperformed banks peer have over We frame.

basis to of year Our This today, XXXX basis Crisis. includes the averaged average the points course, Great to banks. from loans for charge-offs long-term Financial data, first all points XX XX net FDIC-insured

charge-offs Over the slide loans. points basis years, of prior last the net XX our XX shows, of as

a and XX past the five basis. an Slide over returns operating our quarters on GAAP shows

is know, presenting on you environment improving current remain many performance. As focused long-term operating headwinds, but our the we

our positions. prudently liquidity FHLB quarter end from XX borrowings excess $XXX second and down March quarter. we In built at the unwound in $XXX million, the XX. capital quarter, Slide were details first shows million the liquidity we of

ceiling. reminder, from June through our that a from following excess resolution debt As We held the of balance held we X sheet. liquidity liquidity March on XX, last the call, the

in Our billion quarter. average the FHLB was balance $X.X

quarter, first end the period book AOCI value versus book was share an and Tangible the stability AOCI. basis, $XXX shows quarter X.X%, right share second at in was share, roughly per up ended million. quarter TCE million quarter XXXX. $XX flat ratio to at the per loan-to-deposit and second after-tax quarter first XX% X% our at ended XX% per mark flat in an of tangible the of and versus our The included and on the ratio which in first quarter to value bottom on the The an improvement $XX.XX, value tangible excluding down chart the book

loan Our capital top deploy to is capital priority organic management growth. support to

Secondly, our stock is given biased average we low-risk and little to million repurchases price. over growth employ. stock believe given cost We of Berkshire stock In repurchased we business of $XX.XX. opportunistic a remain at an model potential the stock $XX.X undervalued, our QX, we

Our stock. preferred repurchase opportunistically growth, support remains loan to we capital organic to of and use will continue

Slide our outlook. XXXX XX shows updated

outlook echoes loan reported net half growth refreshed We and income first in year quarter. what and the changes. have Our see deposits lower mix on funding stable banks of lower the the many interest already versus modestly second

versus second million prior expenses half the between be million $XX $XX expect to $XX also million $XX to year million guidance. for per and of the We quarter

rate tax be XXXX. expected we lower full XX% to tax XX% year expect for to our Given income,

also levels. expect fees around We half be second to first half

we 'XX our credit plan for We to expected fourth repurchases have our to in our quarter outlook outlooks and or call provision provide change no on share January.

With like further to turn Nitin to back that, it comments. for I'd

Nitin Mhatre

the positioning. cyclicality face close prepared compression sector on as credit on inverted issues and solid be cycle the The banking the yield the issues with market, the industry to New stable NIM a our the of England to Thanks, economy, remarks industry first which and David. continues we're passed, operating I'll and tightening. typical in footing. quarter from such large my by have fortunate and curve be comments to We're

than While to costs the the better significantly cycle. GFC we increase believe we expect the losses through cycle, that during credit they'll be

but larger banks also like to the Berkshire. We likely versus that banks industry more will regulatory believe the impact impact costs regional community increased are

levers, including can't we we and we derisking are our prudent environment, the expense focused While controlling can management. what several hiring, on sheet and control have macro opportunistic balance

responsible our Finally, earlier, that footprint. bigger the to We focused capital as better. I and and in while have and organic strong selective, mentioned confident will position getting and on remain we profitable are a benefit disruption liquidity are market from we get growth positioned

turn I'll it the operator. Operator? With over to that,

Operator

now question-and-answer Ladies first Hovde question at session. we you, [Operator from Group. Bishop begin Dave will gentlemen, and will Your sir. Thank Instructions] the come

David Bishop

Hey, good morning, Nitin and Dave.

Nitin Mhatre

Dave. morning, Good

David Rosato

morning. Good

David Bishop

Nitin. those a average a becoming year-over-year I here. XX bigger the Maybe the sticky, Hey, of like loan the on it like are and up question residential appreciate appears portfolio. basis pretty of points holistic here, basis maybe segment mortgage growth loan part sort in a but yields

those how maybe or curious looks impacting profitability. positioned upward? Just are maybe reprice the obviously margin, they're to It is like which reprice impacting

to Just as benefit of maybe yields. missing that grow the curious fast repricing there Are and something yield the in just decision as making there? we terms

Nitin Mhatre

Sure, Yeah. Dave. observation. question, Great great

XX% to here factor XX%. this is commercial the stated consumer was the be think it we I mix. quarter We that like would commercial, guiding

that highest the manage to at continue we level. So

it's a we're are the portfolio, getting which X.X% part And then new the about portfolio the book smaller quarter that for yield. yield had applications about other The X% lower is, and had yields.

that's So it think improving the I portfolio a slowly while. yields, takes but

high-quality think amount even what's of think new maybe place more I infrastructure through. not important, comes comes customers production is able, conforming relationships with a what been are And has is to bank. in now that selling tremendous to the put I that's that it

make income fact, we're that's here XX% mix XX% And But half is I the our consumer to stated, second fee looking overall commercial. XX% So maintain commercial want year. to to to think at the that generate David in we going in higher plus. as the governor of

David Bishop

Got it.

be could to XXXX? second in half sales of portfolio income the the So there fee select year generate

Nitin Mhatre

Yeah.

the sell starting originations, we're think production just looking about -- pretty next quarter. I we be of would to to XX% much XX%

David Rosato

not Yeah. more It we improvement relatively generate takes year. about gain enough but It's up David. with the bit It's Dave, would large quarter. And to something actively back sale. we're out, modest on transition. expect numbers. can managers linked the business we to was the of on it's in time the we call Gain talking half further how a sale

David Bishop

-- Got it. And just lastly then yeah.

David Rosato

going was to It's predates quarter the been but now LTV, purchases from as of portfolio that's to perspective. the the lot add our people And from just the books. at approaching Nitin's risk-based in around perspective, a just the to it's we're it's is I quality portfolio capital-efficient, an FICO that we're healthy say, X% that comments, sitting table, of XX% on going repricing. just of A most Nitin lagging said, legacy spreads. on capital volume in environment, this approaching yields. But new generated each right the current that

David Bishop

half the think then that in of we looks terms deposits, loan of sheet And Just it funding cash back mix of the in the terms about be how it. stability to shift second guidance, is balance balance borrowings? Got growth, should and half, the sheet or the going growth relative into from of flow securities curious year? the in

David Rosato

-- that believe, very the I last that's retail the franchise. commercial money three to that quarter, I I base months it I I'd ago, nicely. again, say said even what really that last little happened of the bit deposit quarter, and and stronger newcomer was impressed this question for saying said would start by the XXXX. I in with and would performed deposit bank, And a today Sure. our a and as say

of it's had mix a changing we strong for And as very changing have strong everyone. non-interest-bearing slips changing. the there There still for -- little just is was we total It's deposits. deposits. us, percent But

than and growing is a guidance, year-to-date loans, faster our in even deposits. because are challenge So it in

did continuing loan fund broker with last is fight and in which So for the consumer need nail and fund that partially also to deposits, we but deposits. will how with home quarter, advances partially that. we And we tooth commercial to

some the out caught expense are my that but bankers expense I reinvesting are making frontline working on hires that around doing. the the bit franchise deposits And in generating the Those in hard comments as well and loans. comment little front, a we're as still around of

deposit stood continue gets invest balance continue more little I the really grow overtime. business has the also we'll going get when to well, we to a up environment our to to it's believe and reasonably we into and -- base build So will but better,

David Bishop

just Got the question, quarter appreciate one Thanks. I flow it. -- the Any pay rate the different for end-of-period on the given And noted color late average the I final in it borrowing terms then versus what materially Dave, just you the give maybe down? average advances advances can versus. you. were? Was rate color of in maybe of

David Rosato

wasn't. it really No,

Republic the April, but It around cetera. abate, were that in in back to First funding we Silicon starting really process. et turmoil early and, was So Valley

So ballooned balance we And by part third. up had I a liquidity. sheet remember about would calling just out, said our the of I that bring down we to

So that's what we did.

-- was we that only the the what However, back then the ceiling turmoil. we didn't debt experienced know in quarter

So have. we liquidity, thought are But the net maybe scheme about income. that the of longer on impact Pretty color. call rates it, especially holding grand the we in end not weeks, short would marginal the we that's things, than only three up that in curve differentiated. interest The of

rate not ending average rate So material. versus really

David Bishop

it. hop I'll confirm. off. Thanks, Got wanted thought. Dave. just what I I to That's

David Rosato

You're welcome. Dave. Thanks,

Operator

ahead. will come at Your RBC Capital Please from next question Young Bill Markets. go

Bill Young

guys. me morning, you Can good Hey, hear okay?

Nitin Mhatre

Billy. morning. Good Yes,

David Rosato

Great Billy.

Bill Young

Great. Okay.

comments. in First, your missed terms is I maybe this or assuming to Fed guidance of What outlook actions? just your I in want apologize your currently if

Nitin Mhatre

-- we it miss share Well, it you didn't say because didn't it.

So -- said, is it should it's really it consistent I forwards. market with better or inconsistent is not

build forwards view market have different. really one March then And about next cycle an XXX and move higher easing in don't a year, points basis we more in. of So have beginning

Bill Young

to Could just And comfortable more of we make it. your you maybe guess, loan maybe I pushing Okay. Got end could economic $X.X in the over speak in range. just billion scenario kind that high you of I or kind switching achieving kind growth. of growth Got level to, guess at of it. higher loan of what just would be terms

maybe X%. about think I that's

Kevin Conn

at you off if a from It's think perspective we possibility pushed of difference been together 'XX just pretty I months And is all now end Sure. the much three an recession table. economic of the were the right? is ago, out. the

as up interest You've seen -- the The you've market respond strongly. equity quite rates well. seen

say would data But So the feels in, it's never a -- I if would come pushed it that's not like downturn. say the about I we're concerned been out.

say referencing of our management two just the growth. I funding, would quarter. almost govern then linked as fund What all economic to And thinking. outlook so One collective you're is the about but other is his comments, in in cost down drivers Nitin are there's ability originations that high-level balance funding the is sheet, of talked that our our and loan

linked quarter, service bit Our to customer pipelines we're are base. especially we selective, being customer our more are reduced -- a want base, we existing but our

So but fund to the how what gets scenario are worse, And that economic if going it the -- what it? of we over tightens? Fed is -- overlay under

Nitin Mhatre

Bill. Yeah,

on balances, I C&I in especially significantly line think in want? one the the what that more thing the customers is ABL of do quarter. part example, think And controllable needs the utilization, it go might and ramp in up the the relatively show and consumers, up we've for down segment. might that second I the depending would seen attendant add And is I the to of other less the

Kevin Conn

Nitin, to a our utilization of an had line point. in good C&I books. cash paying that's when right? it's expense, basis, a muted lines level rate minimize The are -- We their elevated They're And quarter. And can. doing They're the on we down who even payoffs down in -- out called everything book. to their maximize they utilization. X% down ABL floating so maximizing around paying really interest mostly Yeah. our was customers

Bill Young

that kind in it quarter-end the the what of Got was on versus what at that, down rate, just utilization first it. to And X% quarter? is up follow

David Rosato

was the round. XX%, It on yes,

Bill Young

one, just And I housekeeping it. Got guess, it. question. Got

Just average? end not X.X to loans, period, the that X.X up right,

David Rosato

that's ending. Yes,

Nitin Mhatre

is to that to year, the on X.X XX% color the the more end Billy, Billy, the would to second about quarter And commercial. just from of delta -- the of come roughly X.X that XX% between growth

Bill Young

that and appreciate back. one And Thank I'll you. just question Understood. final I color. step

David's maybe Just expense or future following headcount actions you of up cost signaling might some your comment. reduction? Are perhaps more savings base consolidation terms in take branch on you additional in

Nitin Mhatre

expenses, resource looking avenues certainly the of at and kind all to have Within prioritization. and we big counsel levers. internally projects at management and look and We're a expenses of

So there staff there's growth. different There's to leverage procurement, and the in managing estate, are levers in real also levers in levers.

I think looking So everything. we're at

of those some of come talked some will that David And also about. completion through projects the

managing a through banking, digital When seeing year the we in to customers. half coming better delivery platform while for example, start we'll to offsets of second we'll providing complete lower-cost the the because be

Bill Young

Understood. Thanks taking my questions. for

Nitin Mhatre

Thanks, Billy.

David Rosato

you. Thank

Operator

go Your question next Fitzgibbon Piper ahead. at Mark from Please come will Sandler.

Mark Fitzgibbon

Good guys. morning. Hey,

Nitin Mhatre

Mark. morning, Good

Mark Fitzgibbon

Hi, question the like do had, but about And think some margin I on being Based when behind, stay it think bottoms? first in X%? you sounds with curve worst David, your compression do it the I in the can you modeling, above margin. the the comments your additional forward we'll heard margin see

David Rosato

to We in X.XX. an the we think in average the range XX And of the So basis XXXX. but back points, is QX. year half down to probably in of be of and that comments half down the I'll limit year, X.XX. the QX margin were The -- X.XX-X.XX, first so X.XX my will in

think don't see half don't comment see again. that right delta pressure going margin. deposit enough of second forward pressure there's year quarter. type X% and on in our We really reference My above the to of first we mostly was back so be don't see in to we're between and well the year We and easing we should based margin no curves -- full XXXX. So now,

Mark Fitzgibbon

over obviously buyback And aggressive with have program, then last several the on very it you guys Okay. next, been the quarters.

quarters? how normalized bit buyback that all to with thinner, likely fact have or are the program, be your gotten sort a capital next couple the and the say, aggressive of economic uncertainty of more the ratios you Given little now

David Rosato

like So been the this. I we've really Mark. We're we'd aggressive, wouldn't -- use been word think -- to we've around thoughtful

little bit quarter to March. So talked where last of prior about this the turmoil at the did we we nothing end a

in just few was $X.X So -- -- a the bought quarter. and first shares bought we million

in would it's So aggressive levels. quarter I the our -- capital when the we where in million bought on was $XX.X word I a about executed this about really in $XX.X what think levels we change capital that change our million, and

down, earned we we bring So we didn't money, bought shares, capital we retained that capital.

So year back you're to in is going but don't process be looking for signal, the going what And we quarter-by-quarter. we're to do our the consistent. want half over of to thought

stock Economic at the the hold uncertainty, we book should more value. the to worse our it versus tangible capital buy opportunity basically is, back

Mark Fitzgibbon

Okay. last Nitin question I And you. then had, for

think maybe program selling of of significantly generating actions the level? up peers you ahead, you to kind are wondering, take I the and a to are ROA to business like today. close time ROTCE higher drive fair extreme additional below to are in you Your to to something pieces profitability do profitability levels over need get try guess the And I'm pretty off terms more below in quarters goals guys a peer-like question those best what way goals. of

Nitin Mhatre

where Mark, where third year entering remarks, we program, are. in we completed when of and to I we year started think my I were into mentioned the we second

but We're pleased I all say time. run-rate. I that the of think the satisfied, we as not are the matches on internally trajectory kind

continue to journey. accelerate and we'll that manage yes, So

into actions we of part our the growth. expenses most come aggressive activities manage revenue I that invest while tightly will the from the forward our support part going likely to continuing think how generation

We're not at that's any we're plan. more revenue talking acceleration think initiatives business at the point sales this and of portfolio time. aggressive expense, -- about efficiency as where I looking

David Rosato

same. from just an that, The a different add which economic would lot economic goals I when the the there's were that's one more Mark, they in of outlook and just what headwinds we're all are thought an environment the actions, environment set. with. now process, goals an those dealing thought set to than It's were is very

Mark Fitzgibbon

Okay. Thank you.

Nitin Mhatre

Thank you, Mark.

David Rosato

Mark. welcome, You're

Operator

KBW. from Chris Please Your next question will at ahead. come O'Connell go

Chris O'Connell

morning. Good

Nitin Mhatre

Good Chris. morning,

Chris O'Connell

some far you've frontline opportunity items so if frontline forward? So been just to hires type as far as able of to advantage frontline an markets? in and stuff And the off in made expense to what wanted hires. be walk you the do you've to you us on the you'd perhaps start many have maybe then mentioned that you of disruption of think make? the hires through add last hires take there's going and And your And how M&A quarter the looking that

Nitin Mhatre

quarter Yeah, hire X% when Chris, out We X% in our the BEST second we grow say translated roughly that's in branch started we did We to about we to outside XX%. XXXX. about I'll the of go what network, question. to program. back great frontline by announced And did teams about frontline our folks, want X% to a quarter.

run-rate So and I grow. continuing that think to of we're to managing net attrition, we're

ran pace. much the the He Brown, the pretty bankers Valley the be Head First We'll we're the probably of Jim however, who of for more the Commercial, at producing Private, What is for Republic. Private. our -- the increasingly, incoming banking Boston Boston calls. same knows commercial And Bank, in all seeing Silicon example,

and we So get in the believe more client that more selectively base opportunities will swings at bring we that to and books. hire plate, be good folks there'll

but little we're bit, the signed So overarching accelerate that momentum up maintaining a for. we might that

Chris O'Connell

for --- And the it. ones that you Got hires

Kevin Conn

more a books. on deposit banking. generators. just and I within going say, wealth commercial, track had management, People was across commercial a it's bit large banking private and to have And emphasis deposit who just record of

Chris O'Connell

recently to for ones the that of just institution Private maybe to to prior particularly Any sense was the over size going you And be can get at from the ask Boston have the that their books deposit it. Got they of better I focused. long-term? our the hired FRC

Nitin Mhatre

the those suffice books market. in names Chris, say high-quality with call, outstanding talented but and in relationships won't sizes the put on the we to it producers they're really that

takes it time. comes to and pipeline. that, So books time relatively that it's customers we're over hopeful so hires, And with build that new

Chris O'Connell

it on? then And I yield the mentioned if coming in where the yields missed But Great. commercial earlier you discussion. have are origination may

Nitin Mhatre

The new business for commercial?

Chris O'Connell

Yeah.

Nitin Mhatre

Yeah, about that those is roughly X-X.X-ish.

Chris O'Connell

some the that in run-off. stable the to year-end? term, by it still remained near securities of Great. the where securities past any to few yield, for here opportunity the seems And relatively in portfolio, yield could quarters, sense migrate like which But has on

Nitin Mhatre

fixed good It's relatively Yeah, a question. It's static. portfolio. rate

the a of -- basically for yield the country. long going one right, the a bought every these and like underwater bank is this we bond it's questions, is way in time, is period It's to So -- haven't fundamental portfolio change. of almost in not which other another that

people You've talk some back important started which to the accretion is laying about really those AOCI concept. out cash and flows, a of see

those activity So next you probably will But yet. obviously, but can't accelerate cash rates static expectations work, like did to share there's up and a going we And there numbers quarter, tell we surprisingly done we see the in XXXX. dramatically fall is if suggest, view build -- in our it's that. AOCI out then tick that linked It's forward of flow and a there, are prepayment Honestly, I haven't what quarter. modest.

Very front in year? change fixed it's back year from specifically, is, rate half the a the yield the marginally your half the because But question the portfolio. of will of

Chris O'Connell

Got it. Okay.

funding the marginal that more resi given the any sheet coming thought on what's in balance to back there? the just of of to circling the selling on there versus cost going Just XX% growth selling of XX% production Is margin RE forward. yield as off -- off

David Rosato

little than that. a more complicated bit It's

There give while sheet, of the more outlets a to And So to product we it down Freddies people geography a but do to the sell some right product of some conforming sell it and our lot do just we're to we slow funding business which harder higher is put of harder do, We pressures that, some really And bit at that's agencies, we sell to little a want the to that. so part markets and and a that. our balance jumbos. bit of having to of do already agencies, that's loans, our sell conventional but is time than that originations to some hit are then a loans generating balance sell. right? So the of good that. there's originating in Fannies of the and have do the

Nitin Mhatre

Yeah.

I think yes. of the the version would answer Chris, shorter be,

is is so in group will more on to If it's mix that sell extent. I we the improving that in the business conforming Yeah, XX%, leader target. XX% that market. sell can more, think secondary the more we managing current working the

Chris O'Connell

is if commitments allocation could Great. additional going the that as And the additional just lastly, looking? $XXX then Or any I forward? yeah, sustainability color any million Just there? bond. provide of backward color mean that is you to

Nitin Mhatre

Yeah.

X, year, models did typical which typically minus at X of it I the think a out look within the how what you issuance of. why bonds that two and are proceeds to kind the deploy on prior how in procedure give in two we're reported the you were deploying the And there we call plus the years they proud you is allocated, first construct issuance actually the of you these for and years. reason whereas of all successful very this we the

mix access a inclusion LMI it's in XX%-ish projects the of development, and building neighborhoods. chunk all square so as housing to it, big building of I for feet about XX%-ish another was was about affordable development housing, for done. in affordable And and XXX,XXX rough quarter green And said, green financial

Chris O'Connell

the all Okay, I great. That's have for Appreciate now. you. Thank color.

Nitin Mhatre

Chris. Thank you,

Operator

At this time, there no are questions. further

the to turn conference it Nitin closing for will I So any Mhatre back remarks.

Nitin Mhatre

interest on for call now. us be call our for great you joining close your the in can you Michelle, and day a Thank and Have well. all Berkshire.

Operator

this for this all to your for your please ask disconnect participating. call And would you to Ladies thank We conference lines. like conclude you morning. and does gentlemen,

Berkshire Hills Bancorp (BHLB) 20 Jul 232023 Q2 Earnings call transcript