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Berkshire Hills’ Q1 profit rises, boosted by Rome acquisition

By Journal Staff

Date:

PITTSFIELD, Mass. — Nearly a year after Berkshire Hills Bancorp, Inc. (NASDAQ: BHLB) closed on the acquisition of Rome Bancorp, the deal continues to boost earnings for the Massachusetts–based banking company.

Berkshire reported first-quarter net income of $5.8 million and earnings per share (EPS) of 28 cents, up from $2.3 million and 20 cents a share for the first quarter of 2011. Berkshire directly credits the acquisition of Rome Bancorp as well as Legacy Bancorp for the gain.

Not including an after-tax charge of 17 cents a share for nonrecurring and merger related expenses, together with income from discontinued operations, Berkshire reported 45 cents a share in core earnings in the first quarter. That’s up 50 percent from 30 cents in the year-ago period.  

 “We maintained strong momentum as we started the year, including a 9 percent annualized increase in core EPS compared to the prior quarter,” Berkshire President and CEO Michael P. Daly said in an April 24 news release. “We continue to have strong growth in our balance sheet, while maintaining a solid net-interest margin. Our fee revenue also grew strongly during the quarter, while our focused expense discipline resulted in operating costs a little better than our expectations.”

Daly expects that momentum to continue benefiting Berkshire going forward, especially as it completes the acquisitions of Greenpark Mortgage Corporation and The Connecticut Bank and Trust Company. Berkshire will close on the Greenpark acquisition this quarter after completing the acquisition of The Connecticut Bank and Trust Company on April 20. Berkshire now operates eight branches in the greater Hartford, Conn. area, bringing its total branch count to 68.

“We look forward to additional revenue and earnings growth from both of these strategic initiatives, along with the benefits to all of our business lines from this further expansion of our footprint,” Daly said.

Analysts forecast EPS of 47 cents for Berkshire’s second quarter and $1.92 for the year.

During the first quarter, Berkshire’s net-interest income rose to $38.7 million, up from $28 million, while non interest income grew to $9.8 million, up from $8.1 million last year.

Interest expense decreased slightly from $7.8 million in the year-ago period to $7.5 million in the latest quarter, while non interest income increased from $23.2 million to $30.2 million, primarily due to a $2.4 million increase in compensation and benefits costs and $2.5 million increase in non-recurring and merger-related expenses.

Berkshire’s board of directors declared a cash dividend of 17 cents per share payable on May 24 to shareholders of record on May 10.

Berkshire acquired Rome Bancorp and its five branches in Rome, Lee, and New Hartford last April.

Headquartered in Pittsfield, Mass., Berkshire Hills Bancorp (www.berkshirebank.com) is the parent company of Berkshire Bank, which has $4.3 billion in assets and 68 branches in Massachusetts, New York, Connecticut, and Vermont

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