Beacon Financial Corp.: Q3 FY2025 earnings call

What management said about Q3 FY2025, from the documents filed with the SEC on 29 October 2025: press release. The quarter’s numbers.

Read the filing

Key takeaways

• Net loss on Merger one-time costs: The company reported a net loss of $(56.3) million, or $(0.64) per basic share, against net income of $22.0 million in the second quarter. Results include one-time Merger costs. Source
• Operating earnings excluding one-time costs: Operating earnings, a non-GAAP measure, were $38.5 million, or $0.44 per diluted share, once the one-time costs are excluded. Source
• Net interest margin rose 40 basis points: Net interest margin increased 40 basis points to 3.72 percent, compared with 3.32 percent in the second quarter. Source
• Charge-offs included previously reserved credits: Net charge-offs were 0.51 percent of average loans on an annualized basis, up from 0.21 percent, and included amounts reserved in earlier periods. Source
• Nonaccrual loans rose with Merger and one credit: Nonaccrual loans reached $98.6 million. Of the increase, $23.9 million was assumed in the Merger and the rest came from one large commercial real estate deal. Source
• Loans declined on purchased mortgage sales: Excluding the Merger, loans and leases fell $419.4 million from June 30, 2025, mainly from sales of purchased mortgage loans assumed in the Merger. Source
• Integration proceeding as expected: Management said integration efforts are proceeding as expected and will end with a core system conversion and the new Beacon Bank brand rollout in early 2026. Source

“The completion of our merger of equals represents a significant milestone as we begin our journey as Beacon Financial Corporation”

Paul Perrault, the Company's President and Chief Executive Officer

What changed from last quarter

• New: The Berkshire and Brookline merger of equals completed effective September 1, 2025, creating Beacon Financial Corporation. Source
• New: The company now reports as Beacon Financial Corporation under NYSE ticker BBT. The prior quarter was reported by Berkshire Hills Bancorp under NYSE ticker BHLB. Source
• New: A new Beacon Bank brand is planned to roll out in early 2026, alongside a core system conversion. Source

Results and Merger accounting

• Net loss on Merger one-time costs: The company reported a net loss of $(56.3) million, or $(0.64) per basic share, against net income of $22.0 million in the second quarter. Results include one-time Merger costs. Source
• Operating earnings excluding one-time costs: Operating earnings, a non-GAAP measure, were $38.5 million, or $0.44 per diluted share, once the one-time costs are excluded. Source
• Two components of one-time costs: Merger-related expenses were $51.9 million. The provision for credit losses increased by $77.9 million. Both amounts are associated with the Merger. Source
• Reverse acquisition accounting affects comparability: Berkshire is the legal acquirer and Brookline the accounting acquirer. Quarterly figures before the Merger reflect Brookline alone, so periods are not directly comparable. Source

Net interest income and margin

• Net interest margin rose 40 basis points: Net interest margin increased 40 basis points to 3.72 percent, compared with 3.32 percent in the second quarter. Source
• Margin drivers: marked loans and funding: Management attributed the increase to one month of higher yields on the marked loan portfolio and to lower funding costs from reduced borrowed funds. Source
• Deposit costs fell from prior year: Interest-bearing deposit cost was 2.89 percent, against 2.92 percent in the second quarter and 3.39 percent in the third quarter of 2024. Source

“The expanded scale of our organization provides a solid foundation for improved profitability, increased stockholder returns and sustained growth throughout the Northeast.”

Paul Perrault, the Company's President and Chief Executive Officer

Non-interest income and expenses

• Non-interest income rose on combined activity: Non-interest income rose to $12.3 million, led by deposit fees, wealth management fees and gains on SBA loan sales, reflecting one month of combined activity. Source
• Expense growth from combined operations: Excluding one-time charges, non-interest expense rose $23.2 million, from one month of combined expenses and higher amortization of intangible assets. Source
• Effective tax rate rose to 27.8 percent: The effective tax rate was 27.8 percent for the quarter, compared with 25.6 percent in the second quarter, on a pre-tax loss. Source

Credit quality and provision

• Provision excluding Merger accounting rose: Excluding Merger-related accounting adjustments, the provision for credit losses was $9.6 million, up $2.6 million from the second quarter. Source
• Charge-offs included previously reserved credits: Net charge-offs were 0.51 percent of average loans on an annualized basis, up from 0.21 percent, and included amounts reserved in earlier periods. Source
• Allowance coverage rose to 1.39 percent: The allowance for loan and lease losses covered 1.39 percent of total loans at September 30, 2025, up from 1.32 percent at June 30, 2025. Source
• Nonaccrual loans rose with Merger and one credit: Nonaccrual loans reached $98.6 million. Of the increase, $23.9 million was assumed in the Merger and the rest came from one large commercial real estate deal. Source

“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.”

Paul Perrault, the Company's President and Chief Executive Officer

Loans, deposits and balance sheet

• Total assets reached $22.8 billion: Total assets were $22.8 billion, including $12.1 billion assumed in the Merger. Excluding the Merger, assets fell $0.9 billion from $11.6 billion at June 30, 2025. Source
• Loans declined on purchased mortgage sales: Excluding the Merger, loans and leases fell $419.4 million from June 30, 2025, mainly from sales of purchased mortgage loans assumed in the Merger. Source
• Customer deposits up, payroll and brokered down: Excluding legacy Berkshire deposits, customer deposits rose $88.8 million from June 30, 2025, while payroll and brokered deposits declined. Source
• Legacy securities sold to align risk: The company sold $176.4 million of legacy Berkshire securities to align interest rate risk on the combined balance sheet and reduce wholesale funding. Source
• Borrowed funds declined sharply: Borrowed funds fell $633.9 million from June 30, 2025 to $1.1 billion, excluding the Merger. The company also assumed $559.4 million of borrowings in the Merger. Source

Capital, dividend and returns

• Equity to assets at 10.58 percent: Stockholders’ equity to total assets was 10.58 percent. Tangible stockholders’ equity to tangible assets was 8.37 percent, and tangible book value per share was $22.20. Source
• Dividend declared at $0.3225 per share: The board approved a dividend of $0.3225 per share, up from $0.135 declared in the second quarter. It is payable November 24, 2025. Source
• Annualized return on assets fell: The annualized return on average assets fell to (1.48) percent, from 0.77 percent in the second quarter, reflecting the net loss. Source

Franchise, integration and strategy

• Integration proceeding as expected: Management said integration efforts are proceeding as expected and will end with a core system conversion and the new Beacon Bank brand rollout in early 2026. Source
• Franchise of more than 145 branches: Headquartered in Boston, the company has $22.8 billion in assets and more than 145 branches across New England and New York, under four banking divisions. Source
• Specialty units: Eastern Funding, 44 Business, Clarendon: Equipment financing is provided through Eastern Funding, SBA lending through 44 Business Capital, and private wealth services through Clarendon Private. Source

Coming up, as management said on 29 October 2025

• Core system conversion and new brand: Management expects integration to culminate in a core system conversion and the rollout of the new Beacon Bank brand in early 2026. Source
• Sale of $83.3 million held-for-sale loans: The $83.3 million of purchased mortgage loans transferred to held-for-sale are expected to be sold, with the sale closing in the fourth quarter. Source
• Dividend payment on November 24, 2025: The $0.3225 dividend will be paid November 24, 2025 to stockholders of record on November 10, 2025. Source

Figures management reported

Risks management discussed

• Operational: Merger accounting and adjustments mean third-quarter results may not be directly comparable to prior periods. Source
• External: Management cited continued stress in the Boston office sector as a driver of higher provisions this quarter. Source
• Financial: Remaining charge-offs came from a larger number of smaller SBA and equipment financing loans, in addition to the two named credits. Source

Earlier plans management reported on

• Met: Berkshire had said the merger was expected to close in 2025. The company reports the Merger was completed effective September 1, 2025.
• On track: Management states integration efforts are proceeding as expected, culminating in a core system conversion and brand rollout in early 2026. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.