Berkshire Bank Pays A Good Dividend And May Be A Takeover Candidate

Nov.15.13 | About: Berkshire Hills (BHLB)

The Berkshire Hills Bancorp (NASDAQ:BHLB) is the financial arm of the bank that provides retail and commercial banking, mortgages, insurance and wealth management services for customers in Massachusetts, Connecticut, New York and Vermont.

History of BHLB

Berkshire Hills Bancorp, Inc. was founded in 1846 and is headquartered in Pittsfield, Massachusetts in the Berkshire area of the state. The bank has $5.5 billion in assets with over 70 branches in Central New York and New England. The company reports annualized revenue of $231 million, with $5.5 billion in assets and $4.0 billion in loans. Michael P. Daly is currently the Chief Executive of the Bank.

Stable Dividend

The company has established a solid footprint in an attractive market in the country and has positioned itself for growth. Revenues increased 39 percent in 2012 and 28 percent in 2013 to date.

An aspect of Berkshire Hills Bancorp stock that shareholders most appreciate is the stable dividend payments. The current $.18 per share dividend has been the same for five quarters in a row, steadily climbing over the past 12 years. With an annual dividend that adds up to $.72 per share, BHLB is one of the better plays for those interested in owning a dividend paying financial stock. The dividend compares very favorably to the poor dividends paid by the mega banks like Bank of America (NYSE:BAC).


Berkshire Bank faces significant competition in Berkshire County. Its major competitors are Adams Community Bank, T.D. Bank (NYSE:TD) and various credit unions.

BHLB Outlook

In August of 2013, a subsidiary of Berkshire Hills Bancorp, Berkshire Bank, purchased 20 Bank of America branch offices in Massachusetts, in Chatham, New Lebanon, Hudson and three in Columbia County, N.Y. Berkshire's acquisition of these branches joins their regional holdings of Rome Bancorp and Beacon Federal in 2012.

Possible Takeover Candidate

This expansion makes BHLB a better acquisition candidate for a larger bank that wants to expand into the fairly stable areas of Western Massachusetts, Northeastern New York and Southern Vermont.


BHLB's current price of $26 is off its 52-week high of $29.38 but significantly higher than its low of $21.25.

Investors interested in a growing bank stock that pays a good dividend should consider taking a small position in this security.

Disclosure: I am long BHLB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.