| Recent acquisitions boosted Berkshire Hills Bancorp’s bottom line in the third quarter, improving earnings per share by 17 percent from the year-ago period.
Net income for the third quarter totaled $14.7 million, representing an increase of about 22.6 percent from the same quarter last year.
The holding company for Pittsfield-based Berkshire Bank acquired $706 million in new assets when it bought Hampden Bank in Springfield late last year and around $190 million in new loans this past spring when it bought Firestone Financial, a Needham-based commercial specialty finance company.
But when queried by an investor about his views of the present M&A environment, CEO Michael Daly took a decidedly non-aggressive bent.
“I don’t see material changes in the hunger for extensive consolidation. Not like we’ve talked about in the past,” he said. “What I’ve heard and what you’ve heard is we’re going to get to a point where there’s going to be this wave of consolidation. I don’t know that I see that. I see opportunities for banks to combine forces where it’s appropriate for them to do so and really nothing more than that.”
Total assets increased to $7.8 billion in the third quarter, compared with $6.5 billion at year-end 2014. Loan growth associated with the Firestone acquisition contributed to a $286 million, or 4 percent, increase in the third quarter alone, the bank said. That asset growth was funded largely by a $185 million increase in deposits, plus the utilization of excess cash and $42 million realized from the issuance of common stock for Firestone merger consideration.
Compared with the prior quarter, total loans increased $380 million, including $192 million in commercial loans acquired with Firestone. On an annualized basis, organic loans grew by 14 percent. Berkshire Bank benefitted from higher mortgage applications in the prior quarter, and the loans acquired with Firestone consisted largely of variable rate equipment term loans to a diversified portfolio of national commercial borrowers. At the end of the third quarter, commercial loans had increased to 54 percent of total loans.
Annualized net loan charge-offs totaled 0.26 percent of average loans and quarter-end non-performing assets were 0.31 percent of total assets. The company increased its loan loss allowance by 7 percent in 2015 to keep pace with its organic loan growth. It recorded no loan loss allowance for those loans acquired with Firestone.
Total deposits increased 3 percent in the most recent quarter. The ratio of loans to deposits stood at 103 percent at the end of the quarter.
