Berkshire Hills Bancorp: Earnings Likely To Bounce Back, But Risks Are High (NYSE:BHLB)

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Following the first quarter’s loss, earnings of Berkshire Hills Bancorp, Inc. (NYSE:BHLB) will most probably bounce back in the year ahead. This is because the management intends to implement the second, profit-making half of its strategic plan later this year. Moreover, a

Financial Position FY19 FY20 FY21 FY22 FY23 FY24E
Net Loans 9,439 7,954 6,720 8,239 8,934 9,114
Growth of Net Loans 5.1% (15.7)% (15.5)% 22.6% 8.4% 2.0%
Other Earning Assets 2,281 3,708 4,073 2,578 2,665 2,302
Deposits 10,336 10,216 10,069 10,327 10,633 10,032
Borrowings and Sub-Debt 828 572 111 126 507 462
Common equity 1,718 1,188 1,182 954 1,012 1,094
Book Value Per Share ($) 34.8 23.6 23.9 20.8 23.5 25.4
Tangible BVPS ($) 22.6 22.9 23.3 20.2 23.0 25.0
Source: SEC Filings, Author’s Estimates (In USD million unless otherwise specified)

Income Statement FY19 FY20 FY21 FY22 FY23 FY24E
Net interest income 365 317 291 345 369 359
Provision for loan losses 35 76 (1) 11 32 26
Non-interest income 84 66 143 69 43 67
Non-interest expense 290 840 286 289 302 297
Net income – Common Sh. 96 (533) 119 93 70 87
EPS – Diluted ($) 1.97 -10.60 2.39 2.02 1.60 2.02
Source: SEC Filings, Author’s Estimates(In USD million unless otherwise specified)

BHLB OBK QCRH SASR GABC BY Peer Average
P/E (“ttm”) 43.89 11.37 8.27 10.26 11.02 7.96 9.78
P/E (“fwd”) 16.92 11.38 9.47 11.00 12.41 8.33 10.52
P/B (“ttm”) 0.93 0.87 1.03 0.59 1.43 0.95 0.97
P/TB (“ttm”) 0.94 1.03 1.24 0.79 2.03 1.19 1.26
Source: Seeking Alpha

P/TB Multiple 1.16x 1.21x 1.26x 1.31x 1.36x
TBVPS – Dec 2024 ($) 25.0 25.0 25.0 25.0 25.0
Target Price ($) 28.9 30.1 31.4 32.6 33.9
Market Price ($) 21.3 21.3 21.3 21.3 21.3
Upside/(Downside) 35.5% 41.4% 47.2% 53.1% 59.0%
Source: Author’s Estimates

P/E Multiple 7.8x 8.8x 9.8x 10.8x 11.8x
EPS 2024 ($) 2.02 2.02 2.02 2.02 2.02
Target Price ($) 15.7 17.7 19.8 21.8 23.8
Market Price ($) 21.3 21.3 21.3 21.3 21.3
Upside/(Downside) (26.3)% (16.8)% (7.3)% 2.2% 11.6%
Source: Author’s Estimates



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