Berkshire Bank Sees Gains in Third Quarter

By Sam Minton | October 24, 2024 | Reprints | Unlock Link | Print
berkshire bank branch

Commercial Record file photo

The third quarter of 2024 was a successful one for Berkshire Bank as its net income increased $18 million year-over-year.

Executives attributed part of those gains to the sale of 10 branches in New York State, which generated a $16 million non-operating gain that executives said will lead to increased long-term profitability. The bank also sold $46.5 million in consumer loans.

“We are pleased to report a robust quarter reflecting accelerating momentum across key business drivers,” Berkshire CEO Nitin Mhatre said during Thursday morning’s investor call. “Quarterly operating income has increased sequentially throughout this year driven by calibrated loan growth, improving credit quality and continued expense management. Third quarter operating income per share increased 16 percent year over year. This quarter also saw approximately 1 percent growth in average deposit balances. During the quarter, we completed the sale of ten branch offices. Including branch consolidations, the total branch count has been reduced by 14 percent this year to 83 offices. Also, after quarter-end, the company’s balance sheet was further strengthened through the sale of $46.5 million in consumer loans.”

Berkshire also saw operating revenue increase two percent year-over-year while net interest income decreased as the high interest rate environment banks had grown accustomed to in recent years has shifted. Net interest income decreased from $88.5 million in the second quarter of 2024 to $88.1 million in the third quarter and $90.3 million year-over-year.

“The net interest margin decreased modestly to 3.16 percent from 3.20 percent linked quarter and 3.18 percent year-over-year,” Berkshire CFO Brett Brbovic said. “Operating expense increased $0.9 million, with lower occupancy and technology costs offset by higher miscellaneous expenses.”

Additionally, Berkshire’s capital strength improved with the tangible common equity ratio improving to 9.1 percent from 8.2 percent in the second quarter and 7.7 percent year-over-year.