Berkshire Hills Bancorp, Inc.

Good morning, ladies and gentlemen, and welcome to the Berkshire Hills Bancorp Fourth Quarter 2024 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session, and to ask a question, please press star 1 on your telephone keypad. If at any time during this call you require immediate assistance, please press star 0 for the operator. This call is being recorded on January 30, 2025. I would now like to turn the conference over to Kevin Kahn, Investor Relations Officer. 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. Here with me today are Nitin Mahatre, Chief Executive Officer, Sean Gray, Chief Operating Officer, Brett Berbovic, 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 disclosures on page two and three 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.

Thank you, Kevin. Good morning, everyone, and thank you all for joining us today. I'll begin my comments on slide four, where you can see the highlights for the fourth quarter and for full year 2024. We had a strong quarter with robust improvement in the operating earnings quarter over quarter and year over year. Operating EPS of 60 cents was up 3% linked quarter and up 28% year over year. Operating net income of $26 million was up 5% linked quarter and up 29% year-over-year. Operating RODSI was 9.93% up two basis points linked quarter and up 103 basis points year-over-year. The outperformance in the quarter was driven by strong fee revenues that were up 8% linked quarter coupled with stable credit provision expenses and lower operating expenses, which were down 2% link quarter and down 6% year-over-year. This is the fourth year in a row where we have outperformed our peer median in terms of year-over-year expense trend. We've included a slide in the appendix to show that expense trend data relative to our peers. Asset quality and balance sheet metrics remain strong. Net charge-offs were 14 basis points of loans, and our reserve to loans was flat to the third quarter at 122 basis points of loans. Delinquencies and non-performing loans were at 52 basis points of loans, the lowest level in almost 20 years, a solid testament to the strength of our collaborative risk culture across our frontline bankers and the risk teams. Capital ratios were up linked quarter with CET1 at 13.0% and TCE at 9.4%. Average deposits were up 3% and average loan balances were up 0.4% linked quarter. Liquidity remains solid with our loans to deposit ratio at 96% on an average basis. As anticipated, our focus on deposit gathering and associated strategic initiatives for the previous two quarters have gained traction in the second half of 2024. Total deposit costs were down 12 basis points linked quarter and total funding costs were down 17 basis points linked quarter. We expect funding costs to decline as the Fed cuts interest rates further, and like many banks, we continue to move deposit rates lower in the fourth quarter. On strategy front, we made steady progress on our strategic initiatives in 2024. We've successfully executed on a variety of expense optimization initiatives, sold 10 branches in New York to tighten our network, further de-risked the balance sheet, and invested in bankers and technology to further improve the client experience reflected in our net promoter score that remained above 60 in the fourth quarter. As you know, in December, we announced a merger of equals with Brookline Bancorp to create a preeminent Northeast franchise. Turning to slide five, you will see high-level overview of the combined bank. The transaction improves scale and meaningfully improves profitability as reflected in the estimated 40% and 23% accretion to Berkshire's 2026 consensus EPS estimate on gap and cash basis respective. Slide 6 shows the merger rationale. The merger combines Berkshire's stable, lower-cost, more rural funding base with higher growth lending markets in eastern Massachusetts and Rhode Island or Brookline. And with the expected 12.6% expense saves from the synergies of the two organizations, the combined efficiency ratio is expected to get below 50% in 2026. We announced this merger of equals in the fourth quarter and expect the closing in the second half of 2025, subject to requisite regulatory and shareholder approvals and closing conditions. I want to thank all of my Berkshire Bank colleagues for their continued hard work and commitment to the bank and our clients, and look forward to their continued support and commitment through this transition. We will be communicating an integration plan to our employees over the next several weeks, and we continue to maintain Berkshire Bank's standalone performance during transitions through the transaction closing in the second half of 2025. With that, I'll turn it over to Brett Bobovic to talk through our financials in more detail. Brett? Thank you, Natan.