Berkshire Hills Bancorp's New Transformation Plan Does Not Exactly Inspire Confidence
The embattled Berkshire Hills Bancorp (NYSE: BHLB) has rolled out a new transformation plan to attempt to turn the bank around after a dismal year in 2020 and lots of management turnover in recent years. The $13 billion asset bank in Boston came under fire last year from activist investor HoldCo Asset Management for not exploring a sale of the bank, and for not repurchasing shares when the bank traded significantly below tangible book value (equity minus intangible assets and goodwill).
Now, a co-founder of HoldCo has joined Berkshire's board and struck a cooperation agreement with the bank. Additionally, Berkshire has a new CEO and CFO in place. While the transformation plan would greatly improve the bank's performance, there is nothing particularly exciting about it in my opinion. Here's why.
The new plan, called Berkshire's Exciting Strategic Transformation (BEST), has three pillars called optimize, digitize, and enhance. The bank plans to continue to optimize Berkshire's geographic footprint, which it has already been doing through branch sales and branch closures, and to optimize processes, products, and pricing. Berkshire wants to enhance its balance sheet through more profitable lending by doing more business banking, lending through the U.S. Small Business Administration (SBA), and asset-based lending, while also continuing to grow wealth management.
Source Fool.com
