Earnings momentum for
Berkshire Hills Bancorp Inc.
) has been advancing since this savings and loan holding bank
posted 34.3% year-over-year earnings growth in the second quarter
of 2012. Shares have been showing an uptrend since June. Achieving
a Zacks #1 Rank (Strong Buy) on August 21 and possessing a P/B
multiple of just 0.91, this stock is an attractive pick for value
Second Quarter Results
On July 24, Berkshire Hills Bancorp reported second quarter 2012
earnings per share of 47 cents, in line with the Zacks Consensus
Estimate and up from 35 cents in the year-ago quarter. The
year-over-year improvement was mainly driven by significant growth
in revenue, partially offset by higher operating expenses.
Total net revenue jumped 46.2% year-over-year to $47.3 million,
including revenues from two completed acquisitions - The
Connecticut Bank and Trust Company (CBT) and Greenpark Mortgage
Corporation. Net interest income surged 44.8% to $35.1 million.
Likewise, non-interest income increased 50.4% to $12.3 million.
However, non-interest expenses rose 19.4% to $34.2 million on the
back of higher compensation and benefits costs.
Berkshire Hills Bancorp witnessed a strong growth in its loan and
deposits during the quarter. As of June 30, 2012, total loans were
$3.4 million, up 37.3% from $2.5 million as of June 30, 2011.
Similarly, total deposits rose 37.2% to $3.4 million as of June 30,
Earnings Estimates Rising
Over the last 60 days, the Zacks Consensus Estimate for 2012
increased by a penny to $1.92 per share, implying year-over-year
growth of 23.1%. For 2013, the Zacks Consensus Estimate improved
4.8% to $2.38 over the same time frame.
Valuation Looks Reasonable
Along with a P/B multiple of 0.91, Berkshire Hills Bancorp has a
forward P/E ratio as low as 11.6 (a P/E ratio under 15.0 and P/B
ratio below 3.0 generally indicate value). In addition, it
currently enjoys a robust dividend yield of 3.07%. Therefore, apart
from being a value stock, the company also offers a steady income
Headquartered in Pittsfield, Massachusetts, Berkshire Hills Bancorp
is the holding company for the Berkshire Bank and Berkshire
Insurance Group. The company, offering personal and business
banking, insurance, and wealth management services, has 68 full
service branch offices in Massachusetts, New York, Connecticut and
Vermont. With a market capitalization of roughly $528.4 million,
Berkshire Hills Bancorp competes with Flushing Financial Corp. (
) and Anchor Bancorp (
), among others.
BERKSHIRE HILLS (BHLB): Free Stock Analysis
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