Berkshire Hills Bancorp, Inc. (NYSE:BHLB) Q3 2024 Earnings Conference Call October 24, 2024 9:00 AM ET

Company Participants

Kevin Conn - Investor Relations Officer
Nitin Mhatre - Chief Executive Officer
Brett Brbovic - Chief Financial Officer
Greg Lindenmuth - Chief Risk Officer

Conference Call Participants

Christopher O'Connell - KBW
Laurie Hunsicker - Seaport Research
Mark Fitzgibbon - Piper Sandler

Operator

Good morning, ladies and gentlemen, and welcome to the Berkshire Hills Bancorp Third Quarter 2024 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 on October 24, 2024.

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

Kevin Conn

Good morning, and thank you for joining Berkshire Bank's third quarter earnings call. My name is Kevin Conn, Investor Relations and Corporate Development Officer. Here with me today are Nitin Mhatre, Chief Executive Officer; Sean Gray, Chief Operating Officer; Brett Brbovic, Chief Financial Officer; and Greg Lindenmuth, Chief Risk Officer.

Our remarks will include forward-looking statements and refer to non-GAAP financial measures. Actual results could differ materially from those statements. Please see our legal disclosure on Page 2 of the earnings presentation referencing forward-looking statements and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in our news release.

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

Nitin Mhatre

Thank you, Kevin. Good morning, everyone, and thank you all for joining us today. I'll begin my comments on Slide 3, where you can see the highlights for the third quarter.

I'm pleased to report that we had a strong quarter with robust improvement in operating earnings quarter-over-quarter and year-over-year. Operating EPS of $0.58 was up 5% linked quarter and up 16% year-over-year. Operating net income of $24.8 million was up 7% linked quarter and up 15% year-over-year. Operating ROTC was 9.91%, up 26 basis points linked quarter and up 64 basis points year-over-year.

Asset quality and balance sheet metrics remain strong. Excluding the Upstart loan sale charge-off, net charge-offs were 16 basis points of loans and our reserve to loans was flat to second quarter at 122 basis points. Of note, our total [pass-through] (ph) loans percentage at 53 basis points is at its lowest level in 15 years. And our reserve for losses at 122 basis points is about 5 times the total non-performing loans. We increased our capital ratios linked quarter with CET1 at 11.9% and TCE at 9.1%. Liquidity remains solid with our loan-to-deposit ratio at 96% and average noninterest-bearing deposits as a percentage of total deposits remains steady at 24%.