Berkshire Hills Bancorp (BHLB) in Pittsfield, Mass., recorded a decline in quarterly earnings despite improvement in its interest margin.
The $5.5 billion-asset company earned $8.1 million in the third quarter, a 20% decline from the third quarter of 2012, it announced Monday. But per-share earnings of 43 cents were 2 cents higher than the average estimate of analysts polled by Bloomberg.
Berkshire Hills' net interest income increased by 27%, to $45.9 million, as its net interest margin widened by 43 basis points, to 3.93%. Noninterest income dropped by 15%, to $12.1 million, as mortgage banking fees fell to $444,000 from $4.3 million.
Berkshire Hills's provision for loan losses increased by 27%, to $3.2 million, and its net chargeoffs rose by 40%, to $3.2 million.
Its noninterest expenses increased by 33%, to $42.8 million. Compensations costs rose 16%, to $18.5 million, and the company recorded $6.5 million in merger-related and one-time costs, up from $2.2 million. The bank agreed in July to buy 20 New York branches from Bank of America (BAC), along with $640 million in deposits.
In July, Berkshire Hills announced that it would seek to reduce costs through a comprehensive review of its operations, including an evaluation of its branch network.