Net Loss of $(56.3) million, EPS of $(0.64)
Operating Earnings of $38.5 million, Operating EPS of $0.44
Quarterly Dividend of $0.3225
Beacon Financial Corporation (NYSE: BBT) (the “Company”) today announced a net loss of $(56.3) million, or $(0.64) per basic share, for the third quarter of 2025, compared to net income of $22.0 million, or $0.25 per basic and diluted share, for the second quarter of 2025, and $20.1 million, or $0.23 per basic and diluted share, for the third quarter of 2024.
https://mma.prnewswire.com/media/2808710/BBT_Earnings_Pres_2025_10_30.pdf?p=pdfthumbnail
Effective September 1, 2025, Berkshire Hills Bancorp, Inc. (“Berkshire”) and Brookline Bancorp, Inc. (“Brookline”) completed the previously announced merger of equals transaction (the “Merger”) to create Beacon Financial Corporation, a premier Northeast financial services company. “The completion of our merger of equals represents a significant milestone as we begin our journey as Beacon Financial Corporation,” commented Paul Perrault, the Company's President and Chief Executive Officer. “The expanded scale of our organization provides a solid foundation for improved profitability, increased stockholder returns and sustained growth throughout the Northeast. Our dedicated teams are collaborating on integration efforts that are proceeding as expected and will culminate with our core system conversion and the rollout of the new Beacon Bank brand in early 2026.”
Financial results for the third quarter of 2025 reflect pre-tax one-time costs of $129.8 million associated with the Merger. Excluding these one-time costs, operating earnings (non-GAAP) were $38.5 million, or $0.44 per diluted share, for the third quarter of 2025. These one-time costs consist of Merger-related expenses of $51.9 million and an increase to the provision of credit losses expense of $77.9 million, also associated with the Merger. Please refer to “Non-GAAP Financial Information” below for a reconciliation of net income to operating earnings.
DISCUSSION OF RESULTS
Presentation of Results – The Merger
The Merger was accounted for as a reverse acquisition using the acquisition method of accounting, with Berkshire treated as the legal acquirer and Brookline treated as the accounting acquirer for financial reporting purposes.The Company recorded the assets and liabilities of Berkshire at their respective fair value as of September 1, 2025.At the time of the Merger, Berkshire contributed, after fair value purchase accounting adjustments, approximately $12.1 billion in assets, $9.1 billion in loans, $1.1 billion in investment securities and $10.3 billion in deposits.
The Company's financial results for any periods ended on or prior to June 30, 2025 reflect Brookline's results only on a standalone basis. As a result of this factor and the below listed adjustments related to the Merger, the Company's financial results for the third quarter of 2025 may not be directly comparable to prior reported periods. The following table outlines the value of the assets acquired and liabilities assumed as of September 1, 2025.
In ThousandsFair value of consideration transferred:Value of hypothetical legacy Brookline shares transferred $ 1,209,451Payment of seller transaction expenses 6,022Conversion of Company stock options 1,147Cash paid for fractional shares 49Total purchase consideration 1,216,669Fair value of assets acquired:Cash and due from banks 105,440Short-term investments 978,667Investment securities available-for-sale 1,102,464Loans held for sale 3,471Loans held for investment, net of allowance for credit losses 9,078,979Premises and equipment 73,368Bank owned life insurance 246,979Accrued interest receivable 49,717Core deposit intangible asset 174,415Customer relationships intangible asset 14,000Other assets 314,956Total assets acquired 12,142,456Fair value of liabilities assumed:Deposits 10,287,573Borrowings 559,402Accrued expenses and other liabilities 191,060Total liabilities assumed 11,038,035Net assets acquired 1,104,421Goodwill $ 112,248
BALANCE SHEET
Total assets at September30, 2025 were $22.8 billion. Assets of $12.1 billion were assumed in the Merger. Excluding the impact of the Merger, total assets decreased $0.9 billion from $11.6 billion at June30, 2025, and decreased $1.0 billion from September30, 2024.
Total loans and leases were $18.2 billion at September30, 2025. Loans and leases of $9.1 billion were assumed in the Merger. Excluding the impact of the Merger, loans and leases decreased $419.4 million from June30, 2025, and decreased $592.3 million from September30, 2024. The decrease was primarily driven by the sales of $249.3 million of purchased mortgage loans and the transfer of an additional $83.3 million of purchased mortgage loans to held-for-sale, the sale of which is expected to close in the fourth quarter, all of which were assumed as part of the Merger.
Total investment securities at September30, 2025, excluding the impact of the Merger, decreased $229.7 million to $1.7 billion from June30, 2025, and decreased $218.4 million from September30, 2024. The Company assumed $1.1 billion of investment securities in the Merger. During the third quarter, the Company sold $176.4 million of the legacy Berkshire investment portfolio to align the interest rate risk for the combined balance sheet and reduce wholesale funding.
Total cash and cash equivalents at September30, 2025 decreased $370.2 million to $1.2 billion from June30, 2025, and decreased $271.4 million from September30, 2024, excluding the impact of the Merger. The Company assumed $1.1 billion of cash and cash equivalents in connection with the Merger. As of September30, 2025, total investment securities and total cash and cash equivalents represented 13.0 percent of total assets as compared to 11.9 percent and 10.8 percent as of June30, 2025 and September30, 2024, respectively.
Total deposits as of September30, 2025, excluding the impact of the Merger, decreased $344.7 million from June30, 2025. The Company assumed $10.3 billion of deposits in connection with the Merger. The legacy Berkshire deposits include $1.2 billion of payroll deposits and $397.6 million of brokered deposits. Excluding legacy Berkshire deposits, payroll deposits declined $185.4 million and brokered deposits declined $248.1 million, while customer deposits increased $88.8 million from June 30, 2025.
Since September30, 2024, excluding the impact of the Merger, customer deposits have increased $376.8 million while brokered deposits and payroll deposits declined $307.2 million and $185.4 million, respectively.
Total borrowed funds at September30, 2025, excluding the impact of the Merger, decreased $633.9 million from June30, 2025 to $1.1 billion, and decreased $976.4 million from September30, 2024. The Company assumed $559.4 million in borrowed funds in connection with the Merger
The ratio of stockholders' equity to total assets was 10.58 percent at September30, 2025. The ratio of tangible stockholders' equity to tangible assets (non-GAAP) was 8.37 percent at September30, 2025. Tangible book value per common share (non-GAAP) was $22.20 at September30, 2025.
INCOME STATEMENT
The following information for the three months ended September 30, 2025 includes one month of combined Company activity and two months of legacy Brookline standalone results. For the nine months ended September 30, 2025, the information includes one month of combined Company activity and eight months of legacy Brookline standalone results.
NET INTEREST INCOME
Net interest income increased $43.9 million to $132.6 million during the third quarter of 2025 from $88.7 million for the quarter ended June30, 2025. The net interest margin increased 40 basis points to 3.72 percent for the three months ended September30, 2025 from 3.32 percent for the three months ended June30, 2025. The increase is primarily driven by higher yields for one month on the marked loan portfolio and lower funding costs driven by declines in borrowed funds.
NON-INTEREST INCOME
Total non-interest income for the quarter ended September30, 2025 increased $6.3million to $12.3 million from $6.0 million for the quarter ended June30, 2025. The increase was primarily driven by the one month of combined Company activity which resulted in increases of $2.5 million in deposit fees, $1.0 million in wealth management fees, and $0.9 million in gain on sales of loans and leases from the Small Business Administration (“SBA”) business line.
PROVISION FOR CREDIT LOSSES
The Company recorded a provision for credit losses of $87.5 million for the quarter ended September 30, 2025, compared to $7.0 million for the quarter ended June 30, 2025. The increase in provision reflects purchase accounting associated with the Merger of $77.9 million including $69.5 million on funded loans and $8.4 million on unfunded commitments. Excluding Merger related accounting adjustments, the provision was $9.6 million, $2.6 million higher than the prior quarter. This increase was reflective of continued stress in the Boston office sector and additional specific reserves on one large Eastern Funding equipment financing credit.
Total net charge-offs for the third quarter of 2025 were $15.9 million compared to $5.1 million in the second quarter of 2025.The $15.9 million in net charge-offs reflect the charge-off of previously reserved amounts of $5.0 million for a C&I credit in the Boston market and $5.7 million for two large Eastern Funding equipment financing credits, with the remaining charge-offs primarily associated with a larger number of smaller 44 Business Capital SBA loans and Eastern Funding equipment financing loans. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis increased to 51 basis points for the third quarter of 2025 from 21 basis points for the second quarter of 2025.
The allowance for loan and lease losses represented 1.39 percent of total loans and leases at September30, 2025, compared to 1.32 percent at June30, 2025, and 1.31 percent at September30, 2024.
ASSET QUALITY
The ratio of nonperforming loans and leases to total loans and leases was 0.54 percent at September30, 2025, a decrease of 0.11 percent from 0.65 percent at June30, 2025. Total nonaccrual loans and leases increased $36.3million to $98.6 million at September30, 2025, from $62.3 million at June30, 2025. The increase included $23.9 million of nonaccrual loans assumed through the Merger. The remaining increase was driven by one large commercial real estate deal put on nonaccrual during the quarter. The ratio of nonperforming assets to total assets was 0.45 percent at September30, 2025, a decrease from 0.55 percent at June30, 2025. Total nonperforming assets increased $38.4million to $102.0 million at September30, 2025 from $63.6 million at June30, 2025.
NON-INTEREST EXPENSE
Non-interest expense for the quarter ended September30, 2025 increased $77.3million to $135.3 million from $58.1 million for the quarter ended June30, 2025. The increase was primarily driven by one-time Merger and restructuring expenses of $51.9 million. Excluding these one-time charges, non-interest expense increased $23.2 million driven by one month of combined expenses as well as an increase of $2.2 million in amortization of identified intangible assets.
PROVISION FOR INCOME TAXES
The effective tax rate was 27.8 percent and 33.7 percent for the three and nine months ended September30, 2025 compared to 25.6 percent for the three months ended June30, 2025 and 24.7 percent and 24.6 percent for the three and nine months ended September30, 2024.
RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY
The annualized return on average assets decreased to (1.48) percent during the third quarter of 2025 from 0.77 percent for the second quarter of 2025.
The annualized return on average stockholders' equity was (13.41) percent for the third quarter of 2025. The annualized return on average tangible stockholders' equity (non-GAAP) was (16.98) percent for the third quarter of 2025.
DIVIDEND DECLARED
The Company's Board of Directors approved a dividend of $0.3225 per share for the quarter ended September30, 2025. The dividend will be paid on November 24, 2025 to stockholders of record on November 10, 2025.
CONFERENCE CALL
The Company will conduct a conference call/webcast at 1:30 PM Eastern Time on Thursday, October 30, 2025 to discuss the results for the quarter, business highlights and outlook. A copy of the Earnings Presentation is available on the Company's website at beaconfinancialcorporation.com. To listen to the call and view the Company's Earnings Presentation, please join the call via https://events.q4inc.com/attendee/309414724.To listen to the call without access to the slides, interested parties may dial 800-715-9871 (United States) or 646-307-1963 (internationally) and ask for the Beacon Financial Corporation conference call (Access Code 6567963). A recorded playback of the call will be available for one week following the call on the Company's website under “Investor Relations” or by dialing 800-770-2030 (United States & Canada) or 609-800-9909 (internationally) and entering the passcode: 6567963.
ABOUT BEACON FINANCIAL CORPORATION
Beacon Financial Corporation (NYSE: BBT) is the holding company for Beacon Bank & Trust, commonly known as Beacon Bank, a full-service regional bank serving the Northeast that was created on September 1, 2025 through the merger of equals between Berkshire Hills Bancorp, Inc. and Brookline Bancorp, Inc. Headquartered in Boston, the Company has $22.8 billion in assets and more than 145 branches throughout New England and New York. Beacon Bank offers a full suite of tailored banking solutions including commercial, cash management, asset-based lending, retail, consumer and residential products and services. The Bank operates through its banking divisions – Berkshire Bank, Brookline Bank, BankRI, and PCSB Bank. The Company also provides equipment financing through its Eastern Funding subsidiary, SBA lending through its 44 Business Capital division, and private wealth services through Clarendon Private.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other documents we file with the Securities and Exchange Commission (“SEC”), in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters, including statements regarding the Company's business, credit quality, financial condition, liquidity and results of operations. Forward-looking statements may differ, possibly materially, from what is included in this press release due to factors and future developments that are uncertain and beyond the scope of the Company's control. These include, but are not limited to, changes in interest rates; general economic conditions (including the impact of tariffs, inflation, and concerns about liquidity) on a national basis or in the local markets in which the Company operates; ongoing turbulence in the capital and debt markets; competitive pressures from other financial institutions; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; changes in the value of securities and other assets in the Company's investment portfolio; increases in loan and lease default and charge-off rates; the adequacy of allowances for loan and lease losses; decreases in deposit levels that necessitate increases in borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters, and future pandemics; changes in regulation; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions and adverse economic developments; the risk that goodwill and intangibles recorded in the Company's financial statements will become impaired; and changes in assumptions used in making such forward-looking statements. Forward-looking statements involve risks and uncertainties which are difficult to predict. The Company's actual results could differ materially from those projected in the forward-looking statements as a result of, among others, the risks outlined in the Company's Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and other filings submitted to the SEC. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
BASIS OF PRESENTATION
The Company's consolidated financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) as set forth by the Financial Accounting Standards Board in its Accounting Standards Codification and through the rules and interpretive releases of the SEC under the authority of federal securities laws. Certain amounts previously reported have been reclassified to conform to the current period's presentation.
NON-GAAP FINANCIAL MEASURES
The Company uses certain non-GAAP financial measures, such as operating earnings after tax, operating earnings per common share, operating return on average assets, operating return on average tangible assets, operating return on average stockholders' equity, operating return on average tangible stockholders' equity, tangible book value per common share, tangible stockholders' equity to tangible assets, return on average tangible assets (annualized) and return on average tangible stockholders' equity (annualized). These non-GAAP financial measures provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial services sector. A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.
INVESTOR RELATIONS:
Contact: Carl M. Carlson Beacon Financial Corporation Chief Financial and Strategy Officer (617) 425-5331 carl.carlson@brkl.com
MEDIA CONTACT:
Contact: Gary Levante Beacon Financial Corporation Chief Marketing Officer (413) 447-1737 glevante@berkshirebank.com
BEACON FINANCIAL CORPORATION AND SUBSIDIARIESSelected Financial Highlights (Unaudited) At and for the Three Months Ended September 30, June 30, March 31, December 31, September 30, 2025 2025 2025 2024 2024 (Dollars In Thousands Except per Share Data)Earnings Data:Net interest income $ 132,606 $ 88,685 $ 85,830 $ 84,988 $ 83,008Provision for credit losses on loans 87,496 6,997 5,974 4,141 4,832Provision (recovery) of credit losses on investments 32 3 12 (104) (172)Non-interest income 12,345 5,970 5,660 6,587 6,348Non-interest expense 135,318 58,061 60,022 63,719 57,948(Loss) Income before provision for income taxes (77,895) 29,594 25,482 23,819 26,748Net (loss) income (56,262) 22,026 19,100 17,536 20,142Performance Ratios:Net interest margin (1) 3.72% 3.32% 3.22% 3.12% 3.07%Interest-rate spread (1) 3.04% 2.57% 2.38% 2.35% 2.26%Return on average assets (annualized) (1.48)% 0.77% 0.66% 0.61% 0.70%Return on average tangible assets (annualized) (non-GAAP) (1.51)% 0.79% 0.68% 0.62% 0.72%Return on average stockholders' equity (annualized) (13.41)% 7.04% 6.19% 5.69% 6.63%Return on average tangible stockholders' equity (annualized) (non-GAAP) (16.98)% 8.85% 7.82% 7.21% 8.44%Efficiency ratio (2) 93.35% 61.34% 65.60% 69.58% 64.85%Per Common Share Data:Net (loss) income – Basic $ (0.64) $ 0.25 $ 0.21 $ 0.20 $ 0.23Net (loss) income – Diluted (0.64) 0.25 0.21 0.20 0.23Cash dividends declared 0.323 0.135 0.135 0.135 0.135Book value per share (end of period) 28.78 14.08 13.92 13.71 13.81Tangible book value per share (end of period) (non-GAAP) 22.20 11.20 11.03 10.81 10.89Stock price (end of period) 23.71 10.55 10.90 11.80 10.09Balance Sheet:Total assets $ 22,821,439 $ 11,568,745 $ 11,519,869 $ 11,905,326 $ 11,676,721Total loans and leases 18,241,907 9,582,374 9,642,722 9,779,288 9,755,236Total deposits 18,904,063 8,961,202 8,911,452 8,901,644 8,732,271Total stockholders' equity 2,414,996 1,254,171 1,240,182 1,221,939 1,230,362Asset Quality:Nonperforming assets $ 101,990 $ 63,596 $ 64,021 $ 70,452 $ 72,821Nonperforming assets as a percentage of total assets 0.45% 0.55% 0.56% 0.59% 0.62%Allowance for loan and lease losses $ 253,735 $ 126,725 $ 124,145 $ 125,083 $ 127,316Allowance for loan and lease losses as a percentage of total loans and leases 1.39% 1.32% 1.29% 1.28% 1.31%Net loan and lease charge-offs (3) 15,857 $ 5,127 $ 7,597 $ 7,252 $ 3,808Net loan and lease charge-offs as a percentage of average loans and leases 0.51% 0.21% 0.31% 0.30% 0.16%(annualized)Capital Ratios:Stockholders' equity to total assets 10.58% 10.84% 10.77% 10.26% 10.54%Tangible stockholders' equity to tangible assets (non-GAAP) 8.37% 8.82% 8.73% 8.27% 8.50%(1) Calculated on a fully tax-equivalent basis.(2) Calculated as non-interest expense as a percentage of net interest income plus non-interest income.(3) The balance at September 30, 2025 excludes a $15.8 million Merger Day 1 charge-offs write up.
BEACON FINANCIAL CORPORATION AND SUBSIDIARIESConsolidated Balance Sheets (Unaudited) September 30, 2025 June 30, March 31, December 31, September 30, 2024 2025 2025 2024ASSETS (In Thousands Except Share Data)Cash and due from banks $ 182,251 $ 87,386 $ 78,741 $ 64,673 $ 82,168Short-term investments 1,038,369 419,362 278,805 478,997 325,721Total cash and cash equivalents 1,220,620 506,748 357,546 543,670 407,889Investment securities available-for-sale 1,739,423 866,684 882,353 895,034 855,391Total investment securities 1,739,423 866,684 882,353 895,034 855,391Allowance for investment security losses (129) (97) (94) (82) (186)Net investment securities 1,739,294 866,587 882,259 894,952 855,205Loans and leases held-for-sale 83,330 – – – -Loans and leases:Commercial real estate loans 10,212,798 5,485,546 5,580,982 5,716,114 5,779,290Commercial loans and leases 3,934,709 2,520,347 2,512,912 2,506,664 2,453,038Consumer loans 4,094,400 1,576,481 1,548,828 1,556,510 1,522,908Total loans and leases 18,241,907 9,582,374 9,642,722 9,779,288 9,755,236Allowance for loan and lease losses (253,735) (126,725) (124,145) (125,083) (127,316)Net loans and leases 17,988,172 9,455,649 9,518,577 9,654,205 9,627,920Restricted equity securities 99,431 66,481 67,537 83,155 82,675Premises and equipment, net of accumulated depreciation 158,375 83,963 84,439 86,781 86,925Right-of-use asset operating leases 90,757 42,415 44,144 43,527 41,934Deferred tax asset 178,456 52,325 52,176 56,620 50,827Goodwill 353,471 241,222 241,222 241,222 241,222Identified intangible assets, net of accumulated amortization 198,339 14,600 16,030 17,461 19,162Other real estate owned and repossessed assets 3,360 1,288 917 1,103 1,579Cash surrender value of bank-owned life insurance policies 332,840 85,479 84,959 84,448 83,932Other assets 374,994 151,988 170,063 198,182 177,451Total assets $ 22,821,439 $ 11,568,745 $ 11,519,869 $ 11,905,326 $ 11,676,721LIABILITIES AND STOCKHOLDERS' EQUITYDeposits:Demand checking accounts $ 3,905,559 $ 1,726,933 $ 1,664,629 $ 1,692,394 $ 1,681,858NOW accounts 1,470,808 650,707 625,492 617,246 637,374Savings accounts 2,904,888 1,795,761 1,793,852 1,721,247 1,736,989Money market accounts 5,589,693 2,153,709 2,183,855 2,116,360 2,041,185Certificate of deposit accounts 4,127,226 1,877,661 1,878,665 1,885,444 1,819,353Brokered deposit accounts 905,889 756,431 764,959 868,953 815,512Total deposits 18,904,063 8,961,202 8,911,452 8,901,644 8,732,271Borrowed funds:Advances from the FHLB 841,044 934,669 957,848 1,355,926 1,345,003Subordinated debentures and notes 198,283 84,397 84,362 84,328 84,293Other borrowed funds 41,189 135,985 113,617 79,592 68,251Total borrowed funds 1,080,516 1,155,051 1,155,827 1,519,846 1,497,547Operating lease liabilities 92,211 43,528 45,330 44,785 43,266Mortgagors' escrow accounts 11,179 15,289 15,264 15,875 14,456Reserve for unfunded credits 13,727 4,586 5,296 5,981 6,859Accrued expenses and other liabilities 304,747 134,918 146,518 195,256 151,960Total liabilities 20,406,443 10,314,574 10,279,687 10,683,387 10,446,359Stockholders' equity:Common stock, $0.01 par value; 200,000,000 shares authorized; 89,576,403 shares 1,023 970 970 970 970issued, 96,998,075 shares issued, 96,998,075 shares issued, 96,998,075 shares issued,and 96,998,075 shares issued, respectivelyAdditional paid-in capital 2,177,807 904,697 903,696 902,584 901,562Retained earnings 407,557 475,781 465,898 458,943 453,555Accumulated other comprehensive income (28,905) (39,378) (42,498) (52,882) (38,081)Treasury stock, at cost;5,449,039, 7,039,136, 7,037,610, 7,019,384, and 7,015,843 shares, respectively (142,486) (87,899) (87,884) (87,676) (87,644)Total stockholders' equity 2,414,996 1,254,171 1,240,182 1,221,939 1,230,362Total liabilities and stockholders' equity $ 22,821,439 $ 11,568,745 $ 11,519,869 $ 11,905,326 $ 11,676,721
BEACON FINANCIAL CORPORATION AND SUBSIDIARIESConsolidated Statements of Income (Unaudited) Three Months Ended September 30, June 30, March 31, 2025 December 31, September 30, 2025 2025 2024 2024 (In Thousands Except Share Data)Interest and dividend income:Loans and leases $ 198,273 $ 143,933 $ 143,309 $ 147,436 $ 149,643Debt securities 10,984 6,691 6,765 6,421 6,473Restricted equity securities 1,466 1,062 1,203 1,460 1,458Short-term investments 5,438 2,386 2,451 2,830 1,986Total interest and dividend income 216,161 154,072 153,728 158,147 159,560Interest expense:Deposits 71,901 52,682 53,478 56,562 59,796Borrowed funds 11,654 12,705 14,420 16,597 16,756Total interest expense 83,555 65,387 67,898 73,159 76,552Net interest income 132,606 88,685 85,830 84,988 83,008Provision for credit losses on loans 87,496 6,997 5,974 4,141 4,832Provision (recovery) of credit losses on investments 32 3 12 (104) (172)Net interest income after provision for credit losses 45,078 81,685 79,844 80,951 78,348Non-interest income:Deposit fees 5,005 2,472 2,361 2,297 2,353Loan fees 1,004 472 393 439 464Loan level derivative income (loss) 635 (4) 70 1,115 -Gain on sales of loans and leases held-for-sale 1,175 264 24 406 415Wealth management fees 2,466 1,421 1,491 1,608 1,509Other 2,060 1,345 1,321 722 1,607Total non-interest income 12,345 5,970 5,660 6,587 6,348Non-interest expense:Compensation and employee benefits 49,999 35,147 35,853 37,202 35,130Occupancy 6,921 5,349 5,721 5,393 5,343Equipment and data processing 11,110 6,841 7,012 6,780 6,831Professional services 2,114 1,471 1,726 1,345 2,143FDIC insurance 1,971 1,880 2,037 2,017 2,118Advertising and marketing 1,583 1,371 868 1,303 859Amortization of identified intangible assets 3,587 1,431 1,430 1,701 1,668Merger and restructuring expense 51,885 439 971 3,378 -Other 6,148 4,132 4,404 4,600 3,856Total non-interest expense 135,318 58,061 60,022 63,719 57,948(Loss) income before provision for income taxes (77,895) 29,594 25,482 23,819 26,748(Benefit) provision for income taxes (21,633) 7,568 6,382 6,283 6,606Net (loss) income $ (56,262) $ 22,026 $ 19,100 $ 17,536 $ 20,142Earnings per common share:Basic $ (0.64) $ 0.25 $ 0.21 $ 0.20 $ 0.23Diluted $ (0.64) $ 0.25 $ 0.21 $ 0.20 $ 0.23Weighted average common shares outstanding during the period:Basic 87,508,517 89,104,605 89,103,510 89,098,443 89,033,463Diluted 87,832,552 89,612,781 89,567,747 89,483,964 89,319,611Dividends paid per common share $ 0.3225 $ 0.135 $ 0.135 $ 0.135 $ 0.135
BEACON FINANCIAL CORPORATION AND SUBSIDIARIESConsolidated Statements of Income (Unaudited) Nine Months Ended September 30, 2025 2024 (In Thousands Except Share Data)Interest and dividend income:Loans and leases $ 485,515 $ 440,493Debt securities 24,440 19,831Restricted equity securities 3,731 4,326Short-term investments 10,275 5,724Total interest and dividend income 523,961 470,374Interest expense:Deposits 178,061 176,401Borrowed funds 38,779 49,376Total interest expense 216,840 225,777Net interest income 307,121 244,597Provision for credit losses on loans 100,467 17,862Provision (recovery) of credit losses on investments 47 (255)Net interest income after provision for credit losses 206,607 226,990Non-interest income:Deposit fees 9,838 8,251Loan fees 1,869 1,955Loan level derivative income (loss) 701 543Gain on sales of loans and leases held-for-sale 1,463 545Wealth management fees 5,378 4,382Other 4,726 3,352Total non-interest income 23,975 19,028Non-interest expense:Compensation and employee benefits 120,999 106,521Occupancy 17,991 16,663Equipment and data processing 24,963 20,594Professional services 5,311 5,788FDIC insurance 5,888 6,027Advertising and marketing 3,822 3,937Amortization of identified intangible assets 6,448 5,045Merger and restructuring expense 53,295 823Other 14,684 12,748Total non-interest expense 253,401 178,146(Loss) income before provision for income taxes (22,819) 67,872(Benefit) provision for income taxes (7,683) 16,693Net (loss) income $ (15,136) $ 51,179Earnings per common share:Basic $ (0.17) $ 0.58Diluted $ (0.17) $ 0.57Weighted average common shares outstanding during the period:Basic 88,566,368 88,944,569Diluted 88,998,517 89,241,470Dividends paid per common share $ 0.5925 $ 0.405
BEACON FINANCIAL CORPORATION AND SUBSIDIARIESAsset Quality Analysis (Unaudited) At and for the Three Months Ended September 30, June 30, March 31, 2025 December 31, September 30, 2025 2025 2024 2024 (Dollars in Thousands)NONPERFORMING ASSETS:Loans and leases accounted for on a nonaccrual basis:Commercial real estate mortgage $ 30,213 $ 987 $ 10,842 $ 11,525 $ 11,595Multi-family mortgage 2,994 1,433 6,576 6,596 1,751Construction 535 – – – -Total commercial real estate loans 33,742 2,420 17,418 18,121 13,346Commercial 14,035 8,687 7,415 14,676 15,734Equipment financing 41,793 46,067 32,975 31,509 37,223Total commercial loans and leases 55,828 54,754 40,390 46,185 52,957Residential mortgage 6,597 3,572 3,962 3,999 3,862Home equity 2,220 1,561 1,333 1,043 1,076Other consumer 243 1 1 1 1Total consumer loans 9,060 5,134 5,296 5,043 4,939Total nonaccrual loans and leases 98,630 62,308 63,104 69,349 71,242Other real estate owned 824 700 700 700 780Other repossessed assets 2,536 588 217 403 799Total nonperforming assets $ 101,990 $ 63,596 $ 64,021 $ 70,452 $ 72,821Loans and leases past due greater than 90 days and still accruing $ 23,570 $ 24,899 $ 3,009 $ 811 $ 16,091Nonperforming loans and leases as a percentage of total loans and leases 0.54% 0.65% 0.65% 0.71% 0.73%Nonperforming assets as a percentage of total assets 0.45% 0.55% 0.56% 0.59% 0.62%PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:Allowance for loan and lease losses at beginning of period $ 126,725 $ 124,145 $ 125,083 $ 127,316 $ 121,750Merger Day 1 allowance on non-PCD loans * 69,487 – – – -Merger Day 1 allowance on PCD loans 64,511 – – – -Charge-offs (16,661) (5,601) (9,073) (8,414) (4,183)Recoveries 804 474 1,476 1,162 375Net charge-offs** (15,857) (5,127) (7,597) (7,252) (3,808)Provision for loan and lease losses excluding unfunded commitments *** 8,869 7,707 6,659 5,019 9,374Allowance for loan and lease losses at end of period $ 253,735 $ 126,725 $ 124,145 $ 125,083 $ 127,316Allowance for loan and lease losses as a percentage of total loans and leases 1.39% 1.32% 1.29% 1.28% 1.31%NET CHARGE-OFFS:Commercial real estate loans $ 819 $ 3,524 $ – $ – $ -Commercial loans and leases 15,116 1,640 7,647 7,257 3,797Consumer loans (78) (37) (50) (5) 11Total net charge-offs** $ 15,857 $ 5,127 $ 7,597 $ 7,252 $ 3,808Net loan and lease charge-offs as a percentage of average loans and leases 0.51% 0.21% 0.31% 0.30% 0.16%(annualized)*Excludes the provision of $8.4 million for credit losses on unfunded commitments during the three months ended September 30, 2025.** Excludes the impact of Merger Day 1 purchase accounting that resulted in $15.8 million of charge-offs during the three months ended September 30, 2025.***Provision for loan and lease losses does not include provision (credit) of $0.7 million, $(0.7 million), $(0.7 million), $(0.9 million), and $(4.5 million) for credit losses on unfunded commitments during thethree months ended September 30, 2025, June 30, 2025, March 31, 2025, December 31, 2024, and September 30, 2024, respectively.
BEACON FINANCIAL CORPORATION. AND SUBSIDIARIESAverage Yields / Costs (Unaudited) Three Months Ended September 30, 2025 June 30, 2025 September 30, 2024 Average Interest (1) Average Average Interest (1) Average Average Interest (1) Average Balance Yield/ Balance Yield/ Balance Yield/ Cost Cost Cost (Dollars in Thousands)Assets:Interest-earning assets:Investments:Debt securities (2) $ 1,165,022 $ 11,273 3.87% $ 874,212 $ 6,752 3.09% $ 853,924 $ 6,516 3.05%Restricted equity securities (2) 73,853 1,467 7.95% 65,724 1,062 6.46% 75,225 1,459 7.76%Short-term investments 448,044 5,438 4.85% 215,982 2,386 4.42% 145,838 1,986 5.44%Total investments 1,686,919 18,178 4.31% 1,155,918 10,200 3.53% 1,074,987 9,961 3.71%Loans and Leases:Commercial real estate loans (3) 7,013,916 107,942 6.02% 5,533,208 77,136 5.51% 5,772,456 83,412 5.65%Commercial loans (3) 1,818,012 31,033 6.68% 1,286,908 20,757 6.38% 1,079,084 18,440 6.69%Equipment financing (3) 1,209,797 24,692 8.16% 1,240,128 25,069 8.09% 1,353,649 26,884 7.94%Consumer loans (3) 2,505,760 35,286 5.62% 1,556,254 21,437 5.51% 1,505,095 21,123 5.60%Total loans and leases 12,547,485 198,953 6.34% 9,616,498 144,399 6.01% 9,710,284 149,859 6.17%Total interest-earning assets 14,234,404 217,131 6.10% 10,772,416 154,599 5.74% 10,785,271 159,820 5.93%Non-interest-earning assets 975,676 630,518 666,067Total assets $15,210,080 $11,402,934 $11,451,338Liabilities and Stockholders' Equity:Interest-bearing liabilities:Deposits:NOW accounts $ 917,794 1,786 0.77% $ 637,786 1,034 0.65% $ 639,561 1,115 0.69%Savings accounts 2,201,808 12,867 2.32% 1,780,838 10,692 2.41% 1,738,756 12,098 2.77%Money market accounts 3,324,253 23,131 2.76% 2,189,373 13,990 2.56% 2,038,048 15,466 3.02%Certificates of deposit 2,607,493 24,956 3.80% 1,879,749 18,437 3.93% 1,768,026 20,054 4.51%Brokered deposit accounts 823,059 9,161 4.42% 748,205 8,529 4.57% 841,067 11,063 5.23%Total interest-bearing deposits 9,874,407 71,901 2.89% 7,235,951 52,682 2.92% 7,025,458 59,796 3.39%BorrowingsAdvances from the FHLB 792,455 8,709 4.30% 904,399 10,422 4.56% 1,139,049 14,366 4.94%Subordinated debentures and notes 121,526 2,394 7.88% 84,380 1,718 8.14% 84,276 1,378 6.54%Other borrowed funds 42,303 551 5.16% 46,086 565 4.93% 53,102 1,012 7.58%Total borrowings 956,284 11,654 4.77% 1,034,865 12,705 4.86% 1,276,427 16,756 5.14%Total interest-bearing liabilities 10,830,691 83,555 3.06% 8,270,816 65,387 3.17% 8,301,885 76,552 3.67%Non-interest-bearing liabilities:Demand checking accounts 2,414,119 1,654,594 1,669,092Other non-interest-bearing liabilities 287,062 225,469 264,324Total liabilities 13,531,872 10,150,879 10,235,301Stockholders' equity 1,678,208 1,252,055 1,216,037Total liabilities and equity $15,210,080 $11,402,934 $11,451,338Net interest income (tax-equivalent basis) /Interest-rate spread (4) 133,576 3.04% 89,212 2.57% 83,268 2.26%Less adjustment of tax-exempt income 970 527 260Net interest income $ 132,606 $ 88,685 $ 83,008Net interest margin (5) 3.72% 3.32% 3.07%(1) Tax-exempt income on debt securities, equity securities and revenue bonds included in commercial real estate loans is included on a tax-equivalent basis.(2) Average balances include unrealized gains (losses) on investment securities. Dividend payments may not be consistent and average yield on equity securitiesmay vary from month to month.(3) Loans on nonaccrual status are included in the average balances.(4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.(5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets on an actual/actual basis.
BEACON FINANCIAL CORPORATION AND SUBSIDIARIESAverage Yields / Costs (Unaudited) Nine Months Ended September 30, 2025 September 30, 2024 Average Interest (1) Average Average Interest (1) Average Balance Yield/ Balance Yield/ Cost Cost (Dollars in Thousands)Assets:Interest-earning assets:Investments:Debt securities (2) $ 977,060 $ 24,839 3.39% $ 864,501 $ 19,953 3.08%Restricted equity securities (2) 69,802 3,733 7.13% 74,422 4,327 7.75%Short-term investments 304,870 10,275 4.49% 140,156 5,724 5.44%Total investments 1,351,732 38,847 3.83% 1,079,079 30,004 3.71%Loans and Leases:Commercial real estate loans (3) 6,071,163 262,321 5.70% 5,763,065 246,026 5.61%Commercial loans (3) 1,449,490 71,518 6.51% 1,058,312 53,619 6.66%Equipment financing (3) 1,243,492 75,696 8.12% 1,367,380 80,034 7.80%Consumer loans (3) 1,873,834 77,584 5.52% 1,492,213 61,392 5.49%Total loans and leases 10,637,979 487,119 6.11% 9,680,970 441,071 6.07%Total interest-earning assets 11,989,711 525,966 5.85% 10,760,049 471,075 5.84%Non-interest-earning assets 742,502 678,235Total assets $ 12,732,213 $11,438,284Liabilities and Stockholders' Equity:Interest-bearing liabilities:Deposits:NOW accounts $ 729,035 3,825 0.70% $ 656,879 3,487 0.71%Savings accounts 1,910,457 33,732 2.36% 1,721,518 35,324 2.74%Money market accounts 2,571,233 50,708 2.64% 2,047,011 46,940 3.06%Certificates of deposit 2,127,184 62,986 3.96% 1,697,477 55,443 4.36%Brokered deposit accounts 779,717 26,810 4.60% 898,455 35,207 5.23%Total interest-bearing deposits 8,117,626 178,061 2.93% 7,021,340 176,401 3.36%BorrowingsAdvances from the FHLB 900,666 30,978 4.54% 1,117,809 41,893 4.92%Subordinated debentures and notes 96,887 5,813 8.00% 84,241 4,130 6.54%Other borrowed funds 53,177 1,988 5.00% 83,195 3,353 5.38%Total borrowings 1,050,730 38,779 4.87% 1,285,245 49,376 5.05%Total interest-bearing liabilities 9,168,356 216,840 3.16% 8,306,585 225,777 3.63%Non-interest-bearing liabilities:Demand checking accounts 1,919,100 1,646,932Other non-interest-bearing liabilities 254,646 280,947Total liabilities 11,342,102 10,234,464Stockholders' equity 1,390,111 1,203,820Total liabilities and equity $ 12,732,213 $11,438,284Net interest income (tax-equivalent basis) /Interest-rate spread (4) 309,126 2.69% 245,298 2.21%Less adjustment of tax-exempt income 2,005 701Net interest income $307,121 $244,597Net interest margin (5) 3.45% 3.05%(1) Tax-exempt income on debt securities, equity securities and revenue bonds included in commercial real estate loans is included on a tax-equivalent basis.(2) Average balances include unrealized gains (losses) on investment securities. Dividend payments may not be consistent and average yield on equity securities mayvary from month to month.(3) Loans on nonaccrual status are included in the average balances.(4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.(5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets on an actual/actual basis.
BEACON FINANCIAL CORPORATION AND SUBSIDIARIESNon-GAAP Financial Information (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024Reconciliation Table – Non-GAAP Financial Information (Dollars in Thousands Except Share Data) (Dollars in Thousands Except Share Data)Reported Pretax (loss) income $ (77,895) $ 26,748 $ (22,819) $ 67,872Add:Merger Day 1 CECL provision 77,902 – 77,902 -Merger and restructuring expense 51,885 – 53,295 823Operating Pretax income $ 51,892 $ 26,748 $ 108,378 $ 68,695Effective tax rate 25.9% 24.7% 25.9% 24.6%Provision for income taxes 13,419 6,606 28,026 16,895Operating earnings after tax $ 38,473 $ 20,142 $ 80,352 $ 51,800Operating earnings per common share:Basic $ 0.44 $ 0.23 $ 0.91 $ 0.58Diluted $ 0.44 $ 0.23 $ 0.90 $ 0.58Weighted average common shares outstanding during the period:Basic 87,508,517 89,033,463 88,566,368 88,944,569Diluted 87,832,552 89,319,611 88,998,517 89,241,470Return on average assets * (1.48)% 0.70% (0.16)% 0.60%Add:Merger Day 1 CECL provision (after-tax) * 1.52% -% 0.60% -%Merger and restructuring expense (after-tax) * 1.01% -% 0.41% 0.01%Operating return on average assets * 1.05% 0.70% 0.85% 0.61%Return on average tangible assets * (1.51)% 0.72% (0.16)% 0.61%Add:Merger Day 1 CECL provision (after-tax) * 1.56% -% 0.62% -%Merger and restructuring expense (after-tax) * 1.04% -% 0.42% 0.01%Operating return on average tangible assets * 1.09% 0.72% 0.88% 0.62%Return on average stockholders' equity * (13.41)% 6.63% (1.45)% 5.67%Add:Merger Day 1 CECL provision (after-tax) * 13.77% -% 5.54% -%Merger and restructuring expense (after-tax) * 9.17% -% 3.79% 0.07%Operating return on average stockholders' equity * 9.53% 6.63% 7.88% 5.74%Return on average tangible stockholders' equity * (16.98)% 8.44% (1.83)% 7.25%Add:Merger Day 1 CECL provision (after-tax) * 17.44% -% 7.00% -%Merger and restructuring expense (after-tax) * 11.61% -% 4.79% 0.09%Operating return on average tangible stockholders' equity * 12.07% 8.44% 9.96% 7.34%* Ratios at and for the three months and nine months ended are annualized. At and for the Three Months Ended September 30, June 30, March 31, December 31, September 30, 2025 2025 2025 2024 2024 (Dollars in Thousands)Net (loss) income, as reported $ (56,262) $ 22,026 $ 19,100 $ 17,536 $ 20,142Average total assets $ 15,210,080 $ 11,402,934 $ 11,543,330 $ 11,580,572 $ 11,451,338Less: Average goodwill and average identified intangible assets, net 353,189 256,508 257,941 259,496 261,188Average tangible assets $ 14,856,891 $ 11,146,426 $ 11,285,389 $ 11,321,076 $ 11,190,150Return on average tangible assets (annualized) (1.51)% 0.79% 0.68% 0.62% 0.72%Average total stockholders' equity $ 1,678,208 $ 1,252,055 $ 1,235,201 $ 1,232,527 $ 1,216,037Less: Average goodwill and average identified intangible assets, net 353,189 256,508 257,941 259,496 261,188Average tangible stockholders' equity $ 1,325,019 $ 995,547 $ 977,260 $ 973,031 $ 954,849Return on average tangible stockholders' equity (annualized) (16.98)% 8.85% 7.82% 7.21% 8.44%Total stockholders' equity $ 2,414,996 $ 1,254,171 $ 1,240,182 $ 1,221,939 $ 1,230,362Less:Goodwill 353,471 241,222 241,222 241,222 241,222Identified intangible assets, net 198,339 14,600 16,030 17,461 19,162Tangible stockholders' equity $ 1,863,186 $ 998,349 $ 982,930 $ 963,256 $ 969,978Total assets $ 22,821,439 $ 11,568,745 $ 11,519,869 $ 11,905,326 $ 11,676,721Less:Goodwill 353,471 241,222 241,222 241,222 241,222Identified intangible assets, net 198,339 14,600 16,030 17,461 19,162Tangible assets $ 22,269,629 $ 11,312,923 $ 11,262,617 $ 11,646,643 $ 11,416,337Tangible stockholders' equity to tangible assets 8.37% 8.82% 8.73% 8.27% 8.50%Tangible stockholders' equity $ 1,863,186 $ 998,349 $ 982,930 $ 963,256 $ 969,978Number of common shares issued 89,576,403 96,998,075 96,998,075 96,998,075 96,998,075Less:Treasury shares 5,449,039 7,039,136 7,037,610 7,019,384 7,015,843Unvested restricted shares 218,503 854,334 855,860 880,248 883,789Number of common shares outstanding 83,908,861 89,104,605 89,104,605 89,098,443 89,098,443Tangible book value per common share $ 22.20 $ 11.20 $ 11.03 $ 10.81 $ 10.89
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