Berkshire Hills Bancorp

Shares of Berkshire Hills Bancorp ( BHLB) of Pittsfield, Mass., closed at $24.68 Tuesday, returning 4% year-to-date, after an 11% return last year.

The shares trade for 1.6 times tangible book value, and for 10.4 times the consensus 2014 EPS estimate of $2.38. The consensus 2013 EPS estimate is $2.28.

Based on a quarterly payout of $0.18, the shares have a dividend yield of 2.92%.

Berkshire Hills had $5.3 billion in total assets as of Dec. 31. The company acquired Beacon Federal Bancorp of East Syracuse, N.Y., in October, adding about $1 billion in assets, along with seven offices.

The company reported fourth-quarter earnings of $9.3 million, or $0.38 a share, declining from $10 million, or $0.46 a share, in the third quarter, and increasing from $8.5 million, or $0.40 a share, in the fourth quarter of 2011. Fourth-quarter net interest income increased to $42 million from $35.2 million the previous quarter, and $31.1 million, reflecting Beacon Federal and other acquisitions. The fourth-quarter results also included $4.5 million in nonrecurring merger related expenses.

The company's 2012 ROA was 0.76%.

Berkshire Hills on Feb. 7 announced plans to expand its commercial lending team in eastern Massachusetts, "to service middle-market commercial and industrial businesses." The new lending group is to be headed by a former commercial lending team leader at TD Bank, perfectly illustrating how smaller community banks can take market share from larger rivals.

Kelley says that there are still "big market-share taking opportunities for Berkshire Hills Bancorp.

The analyst said in a report on Jan. 29 that "loans unexpectedly declined by 3% (11% annualized)" during the fourth-quarter as the company purposely allowed residential loans to runoff and experienced higher prepayments on acquired commercial real estate loans than expected. However, Kelley expects that "loans will grow by 7.2% and 7.5% in 2013 and 2014."

Kelley's price target for Berkshire Hills Bancorp is $26.00 and he estimates the company will earn $2.26 a share this year, with earnings increasing to $2.30 a share in 2014.

BHLB Chart BHLB data by YCharts

Interested in more on Berkshire Hills Bancorp? See TheStreet Ratings' report card for this stock.

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