Beacon Financial Corporation Announces Fourth Quarter Results

BOSTON, Jan. 28, 2026 (GLOBE NEWSWIRE) -- Beacon Financial Corporation (NYSE: BBT) (the “Company”) today announced net income of $53.4 million, or $0.64 per basic and diluted share, for the fourth quarter of 2025.

For the year ended December 31, 2025, the Company reported net income of $90.3 million, or $1.03 per basic and diluted share. For the year ended December 31, 2025, excluding $70.1 million of merger-related charges, operating earnings after tax (non-GAAP) was $142.3 million, or $1.63 per basic share and $1.62 per diluted share.

“We’re beginning to build momentum as we closed 2025 with the strength of the combined Beacon organization and ongoing synergies created by our merger of equals,” commented Paul Perrault, the Company's President and Chief Executive Officer. “I’m proud of the hard work and dedication of our colleagues who provide exceptional service to support our clients and are working to drive meaningful performance improvements across the organization. Their leadership, resilience, and collaboration are integral to our ability to deliver an enhanced experience for those we serve while building the foundation for long-term success.”

Presentation of Results - The Merger

The Company’s merger of equals (the “Merger”) with Brookline Bancorp, Inc. (“Brookline”) was accounted for as a reverse acquisition using the acquisition method of accounting, with the Company treated as the legal acquirer and Brookline treated as the accounting acquirer for financial reporting purposes. 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, the Company’s financial results for the fourth quarter of 2025 may not be directly comparable to prior reported periods.

BALANCE SHEET

Total assets at December 31, 2025 increased $352.9 million to $23.2 billion from $22.9 billion at September 30, 2025, and increased $11.3 billion from $11.9 billion at December 31, 2024, primarily due to the assets assumed in the Merger.

At December 31, 2025, total loans and leases were $18.0 billion, representing a decrease of $275.8 million from September 30, 2025, driven by a decline in investment commercial real estate loans of $235.5 million and increased $8.3 billion from December 31, 2024, primarily due to the loans and leases assumed in the Merger.

Total investment securities at December 31, 2025 decreased $50.7 million to $1.69 billion from $1.74 billion at September 30, 2025 due to scheduled repayments and limited purchases during the fourth quarter, and increased $793.7 million from $895.0 million at December 31, 2024 primarily due to investment securities assumed in the Merger, partially offset by the sale of $176.4 million of the legacy Berkshire Hills Bancorp, Inc.'s investment portfolio during the third quarter. Total cash and cash equivalents at December 31, 2025 increased $821.1 million to $2.0 billion from $1.2 billion at September 30, 2025 primarily due to an increase in payroll deposits, and increased $1.5 billion from $543.7 million at December 31, 2024, primarily due to cash and equivalents assumed in the Merger. As of December 31, 2025, total investment securities and total cash and cash equivalents represented 16.07 percent of total assets, compared to 12.94 percent and 12.08 percent as of September 30, 2025 and December 31, 2024, respectively.

Total deposits at December 31, 2025 increased $610.6 million to $19.5 billion from $18.9 billion at September 30, 2025, consisting of a $260.5 million increase in customer deposits and a $845.6 million increase in payroll deposits, partially offset by a $495.5 million decrease in brokered deposits. Total deposits increased $10.6 billion from $8.9 billion at December 31, 2024, primarily due to the deposits assumed in the Merger.

Total borrowed funds at December 31, 2025 decreased $292.2 million to $788.4 million from September 30, 2025, and decreased $731.5 million from $1.5 billion at December 31, 2024 as combined liquidity as a result of the Merger and the increase in deposits allowed for reduction in borrowings.

The ratio of stockholders’ equity to total assets was 10.75 percent at December 31, 2025, compared to 10.76 percent at September 30, 2025, and 10.26 percent at December 31, 2024. The ratio of tangible stockholders’ equity to tangible assets (non-GAAP) was 8.62 percent at December 31, 2025, compared to 8.56 percent at September 30, 2025, and 8.27 percent at December 31, 2024. Tangible book value per common share (non-GAAP) increased $0.57 from $22.75 at September 30, 2025 to $23.32 at December 31, 2025, and increased $12.51 from $10.81 at December 31, 2024.

NET INTEREST INCOME

Net interest income increased $70.9 million to $199.7 million during the fourth quarter of 2025 from $128.9 million for the quarter ended September 30, 2025. The net interest margin increased 20 basis points to 3.82 percent for the three months ended December 31, 2025 from 3.62 percent for the three months ended September 30, 2025.

NON-INTEREST INCOME

Total non-interest income for the quarter ended December 31, 2025 increased $13.6 million to $25.9 million from $12.3 million for the quarter ended September 30, 2025. The fourth quarter included three months of combined results compared to one month in the prior quarter.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $8.1 million for the quarter ended December 31, 2025, compared to $20.3 million for the quarter ended September 30, 2025. The $20.3 million provision in the third quarter included provisioning aspects related to the Merger, predominately around the provision for unfunded commitments which was not impacted by the adoption of ASU 2025-08. On a comparable basis, the third quarter provision was $11.1 million. This improvement reflects the steady credit performance of Beacon Bank & Trust in the fourth quarter as risk rating migration improved during the quarter with criticized and classified loans remaining flat quarter over quarter, compared to the deterioration in the third quarter.

Total net charge-offs for the fourth quarter of 2025 were $9.0 million, compared to $15.9 million in the third quarter of 2025. The $9.0 million in net charge-offs were primarily driven by resolutions to a large Boston office loan, a distressed mall loan, and an equipment financing loan. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis decreased to 20 basis points for the fourth quarter of 2025 from 51 basis points for the third quarter of 2025.

The allowance for loan and lease losses represented 1.40 percent of total loans and leases at December 31, 2025, compared to 1.39 percent at September 30, 2025, and 1.28 percent at December 31, 2024. The increase in the ratio during the quarter was largely driven by an increase in specific reserves, predominantly related to several Eastern Funding credits, two rent controlled multi-family properties in New York, and a large asset based lending transaction. These increases in specific reserves were offset by a reduction in outstanding loans during the quarter.

ASSET QUALITY

The ratio of total nonperforming loans and leases to total loans and leases was 0.63 percent at December 31, 2025 compared to 0.54 percent at September 30, 2025. Total nonaccrual loans and leases increased $15.5 million to $114.2 million at December 31, 2025 from $98.6 million at September 30, 2025. The ratio of nonperforming assets to total assets was 0.50 percent at December 31, 2025 compared to 0.45 percent at September 30, 2025. Total nonperforming assets increased $14.8 million to $116.7 million at December 31, 2025 from $102.0 million at September 30, 2025. The increase in nonperforming assets was largely driven by a $9 million office loan in Boston with approximately 50 percent specific reserve.

NON-INTEREST EXPENSE

Non-interest expense, excluding merger and restructuring expense (Non-GAAP), for the quarter ended December 31, 2025 increased $44.5 million to $127.9 million from $83.4 million for the quarter ended September 30, 2025. The fourth quarter included three months of combined results compared to one month in the prior quarter.

PROVISION FOR INCOME TAXES

The effective tax rate was 29.0 percent and 25.9 percent for the three and twelve months ended December 31, 2025.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets increased to 0.94 percent during the fourth quarter of 2025, compared to (0.11) percent for the third quarter of 2025; and was 0.59 percent for the year ended December 31, 2025, compared to 0.60 percent for the year ended December 31, 2024.

The annualized return on average tangible stockholders' equity (non-GAAP) increased to 11.19 percent during the fourth quarter of 2025 compared to (1.27) percent for the third quarter of 2025; and was 6.92 percent for the year ended December 31, 2025 compared to 7.24 percent for the year ended December 31, 2024.

ACCOUNTING ADOPTION

During the fourth quarter, FASB issued ASU 2025‑08, Financial Instruments – Credit Losses – Purchased Loans. This ASU aligns the initial recognition of the allowance for loan losses on purchased loans between PCD and non‑PCD assets by applying the gross‑up approach previously required only for PCD loans. The Company elected to adopt the ASU, effective January 1, 2025, and applied it to the Merger completed in the third quarter, as permitted under the guidance. The third quarter results presented in this release have been updated to reflect the adoption.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.3225 per share for the quarter ended December 31, 2025. The dividend will be paid on February 27, 2026 to stockholders of record on February 13, 2026.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Time on Thursday, January 29, 2026 to discuss the results for the quarter, business highlights and outlook. A copy of the Earnings Presentation is available on the Company’s website, www.beaconfinancialcorporation.com. To listen to the call and view the Company’s Earnings Presentation, please join the call via https://events.q4inc.com/attendee/590872928. To listen to the call without access to the slides, please dial 800-715-9871 (United States) or 646-307-1963 (internationally) and ask for the Beacon Financial Corporation conference call (Conference ID: 6567963). A recording 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) 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 $23.2 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, possible U.S. government shutdowns, 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; the risk that the Company fails to realize the anticipated results of the Merger; 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.

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