Berkshire Hills Announces Transformation Plan
Berkshire's Exciting Strategic Transformation (BEST) Targets Improvements in Financial Performance, Customer Experience & Community Impact
Boston, MA, May 18, 2021 – Berkshire Hills Bancorp, Inc. (NYSE: BHLB), the parent company of Berkshire Bank, a purpose-driven community bank with locations primarily in New England and New York, today announced Berkshire's Exciting Strategic Transformation (BEST), its plan to improve the customer experience, deliver profitable growth, enhance stakeholder value and strengthen its community impact.
"We want to get better before we get bigger and I'm confident that our collective actions through BEST will move our company forward with the passion, resolve and confidence to prove that Berkshire's purpose-driven community-dedicated banking will enhance value for all our stakeholders," stated Nitin Mhatre, CEO of Berkshire. In pursuit of its vision of being the leading socially responsible and commercially successful omni-channel community bank in the markets it serves, Berkshire will undertake a series of strategic actions and new initiatives to build a better and stronger company.
"Berkshire is charting its path forward in a competitive, rapidly evolving banking environment. We undertook our comprehensive strategic planning process involving our board, executive management team, business line leaders and employees throughout the company. The end result is BEST, which will guide the actions we will take to transform our 175 year old institution to greater heights," added Mhatre.
Over the next three years, Berkshire will look to aggressively transform its performance and is targeting to:
- Increase Return on Average Tangible Common Equity (ROTCE) to 10%-12%
- Increase Return on Average Assets (ROAA) to 100-105 bps
- Increase Pre-Tax Pre-Provision Net Revenue (PPNR) by $71-91 million from the 2020 adjusted level
- Become a top quartile Net Promotor Score (NPS) bank in New England
- Be recognized as a top quartile U.S. bank by leading Environmental, Social, Governance (ESG) raters
The Company plans to focus on three transformational pillars - optimize, digitize, and enhance - which will collectively drive performance improvements, enabling the achievement of its BEST goals.
- Berkshire will continue to assess its branch footprint and delivery channels looking at opportunities to strengthen the franchise while maintaining a strong customer experience. It also plans to reduce its office footprint by leveraging its existing work from home initiative. The company expects to complete a number of other initiatives to support its expense objectives including centralizing its procurement function and pursing automation projects to improve efficiencies. Berkshire also will adjust its balance sheet to improve deposits and asset mix, eliminate duplicative product offerings and optimize its pricing structure.
- Berkshire plans to grow select business verticals where it sees the highest potential for future growth including small business lending, asset-based lending, wealth management and its MyBanker concierge banking platform. It expects to build loan origination momentum through a correspondent mortgage channel, consumer lending and development of new fin-tech partnerships. The Company also plans to enhance its existing suite of socially responsible financial solutions and develop new product and service offerings.
- Through BEST, Berkshire will leverage technology to digitize operations, centralize data management and eliminate manual processes and duplication by investing in back-end technology behind all points of customer contact. This will allow Berkshire to strengthen its data warehouse to more efficiently and effectively support its consumers' financial journeys as well as allow for self-service options. Berkshire expects to roll out new digital channels to better serve customers building off its successful, highly rated digital account opening platform and will continue to improve its mobile solutions to enhance customer satisfaction.
Berkshire conducted a virtual presentation of its BEST plan on May 18, 2021 at 10:00 a.m. Eastern Time. A telephone replay of the presentation will be available through Tuesday, June 8, 2021 by dialing (800) 585-8367 and entering conference ID 5785379. The full virtual presentation, including a copy of the formal presentation deck and a transcript, will be available on Berkshire's website ir.berkshirebank.com for an extended period of time.
ABOUT BERKSHIRE HILLS BANCORP
Headquartered in Boston, Berkshire Hills Bancorp is the parent of Berkshire Bank, which operates 118 banking offices primarily in New England and New York. The Bank is transforming what it means to bank its neighbors socially, humanly and digitally to empower the financial potential of people, families and businesses in its communities as it pursues its vision of being the leading socially responsible omni-channel community bank in the markets it serves.
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About Berkshire Bank
Berkshire Bank is transforming into a 21st-century community bank as it pursues purpose-driven performance based on its Be FIRST corporate responsibility culture.
Berkshire Bank provides business and consumer banking, mortgage, wealth management, investment, and insurance services. The Bank has approximately $12.8 billion in assets and operates 130 branch offices in New England and New York, with an agreement to sell its eight Mid-Atlantic branches. Headquartered in Boston, Berkshire Hills Bancorp (NYSE: BHLB) is the parent of Berkshire Bank and is a member of the Bloomberg Gender-Equality Index. To learn more, call 800-773-5601 or follow us on Facebook, Twitter, Instagram, and LinkedIn.