Berkshire Hills Bancorp, Inc.

Hello and welcome to the Berkshire Hills Bancorp Q4 earnings release conference call. My name is Katie and I'll be coordinating your call today. If you'd like to ask a question during the presentation, you may do so by pressing star one on your telephone keypad. I'll now hand over to your host, Kevin Kahn, Head of Investor Relations and Corporate Development to begin. Kevin, please go ahead.

Good morning and thank you for joining Berkshire Bank's fourth 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, Shubhideep 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 Mahatrey.

Thank you, Kevin. Good morning, everyone. Happy New Year to all, and welcome once again to Berkshire Bank's fourth quarter's earning call. I'll begin my remarks on slide three, where you can see the highlights for the fourth quarter and full year 2021. It was another solid quarter with strong financial performance continued balance sheet and asset quality trend, and accelerating progress on our best strategy. In terms of financial performance, I'll be speaking to the adjusted numbers. We posted fourth quarter EPS of 42 cents, up 50% year over year. EPS was lower than third quarter, but consistent with expectations, and the momentum for EPS drivers is encouraging. Revenues for the quarter were lower year by year, driven by a reduction in our loan balances, including strategic exits that were consistent with our getting better before getting bigger approach outlined in our best program. Expense discipline remains a focus for us, and fourth quarter adjusted expenses were down 4% year over year, and full year adjusted expenses were flat in 2021 versus 2020. As we've said before, we will self-fund our best strategy by reinvesting eight-figure cost saves from procurement efficiencies, real estate rationalization, and other efficiency initiatives in growth initiatives such as our bankers, customer experience, and enabling technology that drives revenue and profitability growth. Our fourth quarter adjusted return on tangible common equity, or ROTC, improved to 7.3 percent from 5.5 percent a year ago another key highlight for the quarter was that consistent with our guidance of seeing growth in average balance sheet in the first half of 2022 we did see our end of period core loan balances grow for the first time this quarter after nine quarters of decline this was primarily driven by our organic growth focus that drove over 200% year-over-year growth in originations. For full year 2021, we posted adjusted earnings of $1.69 in 2021 versus $0.60 in 2020. Net interest income pressure was partially offset by strong fee revenues, including SBA and wealth management fees. You may recall that we had a large credit provision in the first half of 2020 in response to the pandemic. And as you've seen over the last few quarters, credit has become a tailwind for Berkshire versus a headwind. Our adjusted 2021 RODSI was 7.7% versus 3.2% in 2020. Our balance sheet remains quite strong in both absolute and relative terms. our credit trends continue to improve as our risk management actions over the past year or more have paid dividends. Non-performing assets were lower year over year and quarter over quarter. We had a provision benefit of $3 million this quarter, and we remained well-reserved. In 2021, we returned a total of $92 million of capital, or 109% of our adjusted net income to shareholders. Last night, we announced our next stock repurchase plan of $140 million, representing approximately 9% of our shares at current price level. We have ample capital to both fund expected loan growth and continue stock repurchases. Given our relatively low stock valuation as a multiple of our tangible book value, we are prioritizing share repurchases, but we will also assess increasing our cash dividends in 2022. On the strategy front, we just completed the first six months of our three-year best plan. We've made solid progress so far and yet are still in the early part of our journey and profitability growth. In fourth quarter, we achieved our goal to be in the top quartile of ESG rankings nationally. We continue to make key hires in frontline and support units, including hiring new head of treasury and head of enterprise analytics. We started new partnerships to drive originations and franchise growth, and we completed implementation of various foundational components of technology. Board refreshment continued in the quarter as well. We added a new independent director, Nina Chandli. We've attached Nina's short bio on the last page of our earnings deck. Nina brings deep industry experience to our board in banking, wealth management, and financial technology. Welcome aboard, Nina. For full year 2021, as part of our best program launched in May, we streamlined our business model by selling non-core operations, including the sale of our insurance subsidiary and mid-Atlantic franchise. We consolidated 16 branches. We outsourced servicing activities for efficiency and centralized procurement activities. We launched technology initiatives to enhance customer experience and support business growth and commenced new partnerships to drive originations and customer growth. In 2021, we also 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, including those in low to moderate income neighborhoods. This is consistent with our best plan as well as our vision to become the top performing leading socially responsible community banks in New England and beyond. In 2021, we added three new directors to our board and named David Brunel as the chairperson of the board. As we look back at 2021, it is truly gratifying that our team's progress has been recognized in our stock price. In 2021, our stock's total return, including dividends, was 69%. Despite that recovery, we still trade close to 1.3 times the tangible book value, and our current profitability is still only about half our best-planned targets, which illustrates a significant opportunity for growth in coming years. Finally, I would like to thank our over 1,300 employees for their passion, commitment, and hard work in 2021 as we implemented our best transformation program. Our bankers and staff are the reason why we're on a comeback trail. And their dedication and commitment to Berkshire's customers and communities is what will continue to drive our success going forward. With that, I'll turn the call over to Shivadeep to discuss our financials in more detail. Shivadeep.