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Earnings momentum for Berkshire Hills Bancorp Inc. (BHLB - Snapshot Report) has been advancing since this savings and loan holding bank posted 34.3% year-over-year earnings growth in the second quarter of 2012. Shares have been showing an uptrend since June. Achieving a Zacks #1 Rank (Strong Buy) on August 21 and possessing a P/B multiple of just 0.91, this stock is an attractive pick for value investors.

Second Quarter Results

On July 24, Berkshire Hills Bancorp reported second quarter 2012 earnings per share of 47 cents, in line with the Zacks Consensus Estimate and up from 35 cents in the year-ago quarter. The year-over-year improvement was mainly driven by significant growth in revenue, partially offset by higher operating expenses.

Total net revenue jumped 46.2% year-over-year to $47.3 million, including revenues from two completed acquisitions – The Connecticut Bank and Trust Company (CBT) and Greenpark Mortgage Corporation. Net interest income surged 44.8% to $35.1 million. Likewise, non-interest income increased 50.4% to $12.3 million. However, non-interest expenses rose 19.4% to $34.2 million on the back of higher compensation and benefits costs.

Berkshire Hills Bancorp witnessed a strong growth in its loan and deposits during the quarter. As of June 30, 2012, total loans were $3.4 million, up 37.3% from $2.5 million as of June 30, 2011. Similarly, total deposits rose 37.2% to $3.4 million as of June 30, 2012.

Earnings Estimates Rising

Over the last 60 days, the Zacks Consensus Estimate for 2012 increased by a penny to $1.92 per share, implying year-over-year growth of 23.1%. For 2013, the Zacks Consensus Estimate improved 4.8% to $2.38 over the same time frame.

Valuation Looks Reasonable

Along with a P/B multiple of 0.91, Berkshire Hills Bancorp has a forward P/E ratio as low as 11.6 (a P/E ratio under 15.0 and P/B ratio below 3.0 generally indicate value). In addition, it currently enjoys a robust dividend yield of 3.07%. Therefore, apart from being a value stock, the company also offers a steady income opportunity.

Headquartered in Pittsfield, Massachusetts, Berkshire Hills Bancorp is the holding company for the Berkshire Bank and Berkshire Insurance Group. The company, offering personal and business banking, insurance, and wealth management services, has 68 full service branch offices in Massachusetts, New York, Connecticut and Vermont. With a market capitalization of roughly $528.4 million, Berkshire Hills Bancorp competes with Flushing Financial Corp. (FFIC) and Anchor Bancorp (ANCB), among others.

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