Berkshire Hills Bancorp, Inc.

Hello and welcome to today's Berkshire Hills Bank Corp second quarter 2022 earnings conference call. My name is Elliot and I'll be coordinating your call today. If you would like to register a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. I would now like to turn the call over to Kevin Kong. The floor is yours. Please go ahead.

Good morning, and thank you for joining Berkshire Bank's second 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, we have Nitin Mahatre, President and Chief Executive Officer of Berkshire Hills Bancorp, Shubhideet 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 second quarter earnings call. I'll begin my remarks on slide three that captures the highlights of the quarter. Overall, this was a strong quarter with significant improvement in EPS and ROTC, quarter over quarter and year over year. Revenues were up 9% versus the first quarter, driven by strong net interest income growth. Loan balances growth was robust and net interest margin grew significantly and those tailwinds more than offset the headwinds in fees. Expenses were flat quarter over quarter and slightly lower year over year as we continue to be disciplined on expense management while continuing to self-fund our best program. Earnings per share of 51 cents was up 19% quarter over quarter and up 17% year over year. Return on tangible common equity improved to 8.48% and improvement of 99 basis points quarter over quarter and 40 basis points year over year. On capital front, our balance sheet remains strong. We ended the quarter with a common equity tier one ratio of 12.9% after returning about $61 million of capital to shareholders. We have ample capital to both fund the loan growth and continue stock repurchases. Our credit matrix improved again in the second quarter, and thanks to the tremendous work by Berkshire team members across frontline to workout groups, our net charge-offs for the quarter were at historically low level of less than half a million dollars. On a related note, in June we announced that Moody's assigned us an investment grade issuer rating of BAA3 with a positive outlook. The rating outlook is positive for both the holding company and the bank. On the best strategy front, we continue to make steady progress. We continued our optimization initiatives, including the consolidation of five branches scheduled for third quarter. Getting better before getting bigger was an important part of our strategic focus in 2021. And now, even as we've begun to grow our balance sheet in 2022, we continue to look for opportunities to improve our balance sheet mix and align it better with our core strategy. And to that extent, we've decided to stop originating Firestone loans, even to existing customers, to have that portfolio runoff in due course. Important to note that this is a strategic decision and not related to the performance of the portfolio, which is in fact quite strong, as non-performing loans were less than 1% of portfolio balances at the end of second quarter, loan deferrals were at zero, and we recorded net recoveries of 118,000 in the quarter. Similarly, the economic uncertainty, given the economic uncertainty, we will stop new originations from Upstart. Important to note that our experience with Upstart has been terrific. We are pleased with the quality and demographics of the customers acquired through that partnership and the corresponding opportunity to deepen banking relationships with those customers over time. Credit performance of this portfolio is strong, and life-to-date annualized charge-off rate on that portfolio is about 35 basis points compared to our model 4 to 5 percent annual charge-off rate. That said, we believe that given the economic uncertainty, taking a pause in new originations from this partnership is a prudent course of action, and it will enable our teams to focus on the core business of the bank that represents about 98 percent of loans, that continue to grow and perform well. On ESG strategy, we continue to improve our ESG program performance. Additionally, we became the first bank under $150 billion in assets to issue a sustainability bond through our issuance of $100 million of subordinated debt in the second quarter. Our customer experience and net promoters score part of our best strategy. We continue to make good progress. Our mobile app rating on iOS improved further to 4.7 stars this quarter, and our net promoter score measured directly through J.D. Power showed further gains in the quarter. Slide four highlights the continued strength of our loan originations and balances. As we reported in the previous quarter, Q122 was the inflection quarter where our total loan books started to grow again after a gap of six quarters. We are pleased to see that the momentum continues with loan balances growth of 7% quarter over quarter on both average and end of period basis. Loan growth was driven by new loan originations that were up significantly year over year. Our strategy to invest in our bankers, customer experience, and technology is helping us win new business across the board. Finally, I'd like to thank all of our Berkshire Bank colleagues for their continued hard work and passionate commitment to our vision of becoming a high-performing, leading, socially responsible community bank. Their commitment to our strategy and dedication to our customers is what is driving our improving performance and continued progress. With that, I'll turn the call over to Shubhadeep to discuss our financials in more detail. Shubhadeep.