Berkshire Hills Bancorp, Inc.

Hello and welcome to the Berkshire Hills Bancorp Q3 earnings release conference call. My name is Emma and I'll be the operator for today's call. If you'd like to ask a question, you can do so at the end of the presentation by pressing star followed by one on your telephone keypad. It's now my pleasure to hand over to Kevin Conning, investor relations officer. Please go ahead, Kevin.

Thank you, Emma. Good morning and thank you for joining Berkshire Bank's third quarter earnings call. My name is Kevin Kahn, investor relations and corporate development officer. Our news release is available in the investor relations section of our website, berkshirebank.com, and will be furnished to the SEC. Supplemental investor information is provided in an information presentation at our website at ir.berkshirebank.com, and we will refer to this in our remarks. Our remarks will include forward-looking statements, and actual results could differ materially from those statements. For details, please see our earnings release and most recent SEC reports on Forms 10-K and 10-Q. In addition, certain non-GAAP financial measures will be discussed in this conference call. References to non-GAAP measures are only provided to assist you in understanding our results and performance trends and should not be relied on as financial measures of actual results or future projections. A comparison and reconciliation to GAAP measures is included in our news release. On the call today, we have Nitin Mahatre, President and Chief Executive Officer of Berkshire Hills Bancorp, Shubhadeep Basu, our Chief Financial Officer, Sean Gray, our Chief Operating Officer, and Greg Lindenmuth, our Chief Risk Officer. At this time, I'll turn the call over to our CEO, Nitin Mahatre.

Thank you, Kevin. Good morning, everyone, and welcome once again to Berkshire's third quarter earnings call. I'll begin my comments on slide three, where you can see the highlights of the quarter. It was another solid quarter with progress across four components highlighted here, including financials, asset quality, capital, and strategy. In terms of financial results, we posted GAAP EPS of $1.31 in the quarter, an increase of $0.89 and $0.88 year over year and quarter over quarter, including one-time gains through strategic exit from insurance business and mid-Atlantic markets. Adjusted EPS was 53 cents, up 9 cents quarter over quarter and unchanged from a year ago. To provide more color on the financial results and specifically about the balance sheet, I'd say that we're making tangible progress towards our high performance goals overall. We're still in the getting better before getting bigger phase for the balance sheet. This is consistent with what we'd highlighted during our best program launch call on May 18th this year. Our deposits balance sheet is getting better in terms of its mix and corresponding cost of funds. Our loan balances are declining, including runoff of non-strategic portfolios, but we're also seeing a reduction in the rate of decline in loan balances and should start seeing growth in those balances in the first half of 2022 as we reactivate the organic growth muscle through growth and productivity from existing bankers, addition of top-notch bankers, and adding new partners to grow low-nourish nations. Expenses were essentially flat on both quarter-over-quarter and year-over-year basis. Subhadip will share more details on this in a few minutes, and I would reiterate that we are committed 100% to self-funding our best strategy. We will generate expense saves while reinvesting most of those saves to grow revenues and bottom line in coming years. Adjusted return on tangible common equity, or ROTC, for the quarter was 9.5%, and adjusted return on assets was 0.86%. Both of these metrics trending in the right direction, consistent with our best program three-year targets. Switching to asset quality, as you will see from the charts in the deck and the appendix, our credit trends continue to improve rapidly across the board, as our risk management actions over the past year or more have paid dividends. Delinquency rates are around pre pandemic levels of 0.87% down 11 basis points year over year and five basis points quarter over quarter. COVID loan modifications were down 85% year over year to 65 million or less than 1% of loans portfolio. You may recall that our COVID deferrals had peaked in Q2 of 2020 at 1.6 billion. when our bankers ran towards our customers at the start of the pandemic versus running away from them to give those borrowers the best chance to survive through the crisis. Deferrals are now down by 96% from that peak, and we've been able to help many of our customers weather the storm effectively. Kudos to our lenders, portfolio managers, credit, and workout teams for their customer focus and corresponding asset quality improvement. Non-performing loans were down 22% and net charges were down 66% year-over-year and 55% quarter-over-quarter. Marked improvement in asset quality supported provision benefit of $4 million in the quarter. On capital, we returned over $54 million to our shareholders in the second quarter through share buybacks and dividends, representing about 210% of our adjusted net income in the quarter. Our capital ratios remain quite strong relative to peers with CET1 at 15.3% at quarter end and increase of about 1% over previous quarter. Our balance sheet trend gives us more than ample capital to both opportunistically repurchase stock to improve shareholder value over the near term and to achieve expected loan growth targets in our best plan over the medium to long term. On strategy front, We made great progress this past quarter on our best strategic plan. We streamlined our business model by selling non-coal operations, including the sale of our insurance subsidiary and mid-Atlantic franchise. We announced our Berkshire community comeback initiative that highlights how our lending investments and philanthropic initiatives in the community will help our customers across the footprint and specifically in the low to moderate income neighborhoods. This is consistent with our best plan as well as our vision to become the leading socially responsible community bank in New England and beyond. As mentioned earlier, part of our growth strategy includes partnerships. These partnerships include like-minded fintech partners that are delivering exceptional customer experience. We just announced a strategic partnership with Upstart. Upstart is a lending, leading artificial intelligence or AI lending platform designed to improve access to credit digitally while reducing the risk and cost of lending. Upstart will help us generate consumer loans in the footprint within our credit risk parameters. We continue to build our firm with key hires, which I'll describe in more detail later. It's a great environment to hire bankers in our footprint as there is significant consolidation going on. Our board of directors continues its refresh. We added Jeff Kipp as a new director, and Dave Brunel was named as the chair of the board in the third quarter. Jeff's bio is attached in the appendix section. Our heartfelt gratitude goes out to Bill Dunleavy, who retired after 10 years of service on our board, including the last two years as the chair, during which time Berkshire made meaningful changes in board governance, executive leadership, risk management, and strategy. Thank you, Bill. We appreciate your steady and prudent guidance during a challenging time. With that, I'll turn the call over to Shivadeep to discuss our financials in more detail. Shivadeep.