Berkshire Hills Bancorp, Inc.

Good morning, ladies and gentlemen, and welcome to the Berkshire Hills Bancorp 4th Quarter 2023 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star 0 for the operator. This call is being recorded on Thursday, January 25, 2024. I would now like to turn the conference over to Mr. Kevin Kahn. Please go ahead, sir.

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. Here with me today are Nitin Mahatre, Chief Executive Officer, Sean Gray, Chief Operating Officer, David Rosado, Chief Financial Officer, and Greg Lindenmuth, Chief Risk Officer. Our remarks will include forward-looking statements and refer to non-GAAP financial measures. Actual results could differ materially from those statements. Please see our legal disclosure on page two of the earnings presentation referencing forward-looking statements and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in our news release. At this time, I'll turn the call over to Nitin. Nitin?

Thank you, Kevin. Good morning, everyone, and thank you for joining us today. I'll begin my comments on slide three, where you can see the highlights for the fourth quarter and the full year. While the rate environment remains challenging, we're encouraged by the early trends in deposits balances. We executed a security sale late in the fourth quarter and used those proceeds to pay down wholesale borrowings, eliminating the negative carry associated with those securities. We also incurred a severance charge of 3.7 million related to a workforce reduction across the organization. For 2024, expense optimization, deposit growth, and credit management will be our top priorities. We intend to self-fund investments in strategic priorities that support our vision to be a high-performing, relationship-focused community bank. David will review these items and our 2024 guidance in more detail in a few minutes. Operating net income for the quarter was $20.2 million An operating EPS of 47 cents declined 6% linked quarter, primarily from a decline in net interest income. Full year 2023 EPS of $2.14 was down 2% year over year. We are encouraged by the trends in asset quality and deposit growth in the quarter. Our credit costs have trended down and our loan books are performing well. Non-performing assets and net charge-offs declined 14% linked quarter, and we increased our loan loss allowance by three basis points to 1.17% of loans. Average deposits were up 3% linked quarter, largely driven by an increase in money market and time deposits. Our liquidity position is robust, and our available liquidity coverage of core uninsured deposits was 146%. We've included a page in the appendix with more details. Our average loan balances were up 11% year over year and up less than 1% linked quarter, given lower loan demand and discipline underwriting. Our balance sheet remains strong. We ended the quarter with a common equity tier one ratio of 12% and a tangible common equity ratio of 8%. We repurchased 328,000 shares in the fourth quarter and 1.1 million shares in 2023, which reduced our share count by 3% over the year. Our board has authorized and regulators have approved a new share repurchase program of 40 million in 2024, and we expect to continue share repurchases opportunistically. We've updated pages in our earnings deck on our overall commercial real estate portfolio and the page that provides details on our office portfolio. Both of these pages highlight that our portfolio is granular, geographically diverse, and resultantly less risky. David will cover some of these metrics in more detail in a few moments. We continue to make steady progress on our strategic priorities. optimizing real estate branch network and balance sheet. In 2023, we consolidated four branches and exited two office buildings. We will continue to look for opportunities to lower our occupancy expenses further. Our team successfully converted our digital banking platform for consumer and small business clients to improve the client experience and platform efficiency. Our employee engagement and customer net promoter score were at their highest level in 2023, and we were recognized by Newsweek as one of the best regional banks in the country and were the only bank headquartered in Massachusetts with an overall five-star rating. The disruption in our markets has enabled us to opportunistically hire deposit and relationship-focused frontline bankers. These bankers have strong deposit books and complement our existing teams. Gaining even a small part of the opportunity presented by the market disruption would be meaningful for Berkshire. Slide four shows our progress on five key performance matrix. Our full year 2023, we are near the low end of our target range for operating return on assets at 79 basis points, and our operating return on tangible common equity was 10.1% above the lower end of our target range. Our full-year PPNR grew to 142 million. Our ESG score remains in the top quartile nationally, and our full-year net promoter score improved further to 45. We have made steady progress over the last three years and are energized about significant opportunities for improving our financial performance further. I want to use this opportunity to thank all of my Berkshire Bank colleagues for their continued hard work and commitment to our vision to be a high-performing, relationship-focused community bank. Through this difficult external environment and corresponding changes being made internally, their commitment to our strategy and dedication to our customers and communities is what brings us together and truly sets us apart. With that, I'll turn the call over to David to discuss our financials in more detail. David?