BOSTON – Beacon Financial Corp., the holding company of Bank Rhode Island, reported a third-quarter net loss of $56.3 million on Wednesday, reversing a profit in the same period a year earlier.
The loss was largely driven by $129.8 million in pre-tax, one-time costs tied to the merger of Berkshire Hills Bancorp Inc. and Brookline Bancorp Inc., which closed Sept. 1 and created Beacon. Excluding those charges, operating earnings were $38.5 million.
Wednesday’s filing marks the first quarterly report under the Beacon name. The company assumed $12.1 billion in assets and $10.3 billion in deposits in the merger.
“The completion of our merger of equals represents a significant milestone as we begin our journey as Beacon Financial Corporation,” said Paul Perrault, the company’s CEO and president. “The expanded scale of our organization provides a solid foundation for improved profitability, increased stockholder returns and sustained growth throughout the Northeast. Our dedicated teams are collaborating on integration efforts that are proceeding as expected and will culminate with our core system conversion and the rollout of the new Beacon Bank brand in early 2026.”
Beacon compared results to the same quarter a year earlier, when Brookline Bancorp – then BankRI’s parent – earned $20.1 million, but cautioned the numbers aren’t fully comparable due to merger accounting changes.
Beacon reported a loss of 64 cents per share but earned 44 cents per diluted share after excluding one-time merger costs. This result fell short of Wall Street expectations. Analysts surveyed by Zacks Investment Research had forecast earnings of 85 cents per share.
Revenue for the period came in at $228.5 million, and revenue net of interest expense reached $145 million, topping Wall Street estimates. Net interest income stood at $132.6 million.
Non-interest income rose to $12.3 million [from $6 million in the prior quarter], driven by one month of combined operations that added $2.5 million in deposit fees, $1 million in wealth-management fees and $900,000 from SBA loan sales.
Non-interest expenses more than doubled to $135.3 million, driven by $51.9 million in one-time merger costs. Without these charges, expenses rose $23.2 million, reflecting one month of merged operations and higher amortization of acquired intangibles.
Provision for credit losses surged to $87.5 million, up from $7 million the prior quarter, largely due to $77.9 million in merger-related adjustments. Excluding that, the provision was $9.6 million – up $2.6 million – driven by weakness in the Boston office market and a reserve tied to a large Eastern Funding equipment-financing credit, according to the holding company.
The net-interest margin climbed 40 basis points to 3.72%, from 3.32% in the prior quarter, aided by higher yields on the marked loan portfolio and lower funding costs from reduced borrowed funds.
The newly formed Beacon now oversees more than 145 branches across New England and New York – including 22 BankRI locations in Rhode Island – which will eventually be rebranded under the Beacon Bank name as part of the merger rollout.
Material from The Associated Press was used in this report.
Matthew McNulty is a PBN staff writer. He can be reached at McNulty@PBN.com or on X at @MattMcNultyNYC.
