BOSTON, April 29, 2019 /PRNewswire/ -- Berkshire
Hills Bancorp, Inc. (NYSE: BHLB) reported GAAP net income of
$24 million, or $0.51 per share, in the first quarter of
2019. The non-GAAP measure of core earnings totaled
$28 million, or $0.60 per share. Non-core expenses were
primarily composed of merger and restructuring charges.
FIRST QUARTER FINANCIAL HIGHLIGHTS (balance sheet
metrics are compared to prior quarter-end):
- $0.51 GAAP EPS; $0.60 Core EPS
- 59.5% efficiency ratio
- 98% loans/deposits, improved from 101%
- 13.0% equity/assets, improved from 12.7%
- 0.15% net loan charge-offs/average loans
- 0.26% non-performing assets/assets
CEO Richard Marotta stated, "We
brought in the first quarter of 2019 on plan and initiated a
process of refocusing our operations on profitable customer
relationship business. Our focus is also on driving
efficiencies while supporting key market objectives. The
results of this work will unfold over the year as we target to
support our profitability in light of lower purchased loan
accretion from past bank acquisitions. Our goal in
accomplishing this is to create a platform for growth in per share
earnings and profitability following this year of transition.
Part of this shift was our decision during the quarter to pursue
the sale of the national mortgage banking operations of our First
Choice Loan Services, Inc. subsidiary. This team has a
long track record and national recognition that we believe will be
attractive to a partner with complementary scale and presence in
the evolving mortgage business. We will continue to offer
competitive residential mortgage lending within our regional
footprint through our Berkshire Bank Home Lending team."
Mr. Marotta continued, "We're moving along well with our planned
acquisition of SI Financial Group, which was approved by their
shareholders earlier this month. This acquisition is on track
to be completed during the second quarter. We're pleased to
be working well with the Savings Institute team on our integration
plans, including a systems conversion targeted in
October. During the quarter, we completed the
consolidation of six existing Berkshire branches with minimal
customer relationship impact expected as a result of our other
strong delivery channels including other nearby branches, our
MyBanker™ platform, and our digital
channels. I'm also pleased to announce that our Board
recently formed a Corporate Responsibility and Culture Committee,
which will oversee our important initiatives including diversity
and inclusion in our workforce. I'm proud of the work
of our teams which is summarized in our first annual Corporate
Social Responsibility Report, which is available on our web site at
ir.berkshirebank.com."
DIVIDEND INCREASED
The Board of Directors approved a quarterly cash dividend of
$0.23 per common share to
shareholders of record at the close of business on May 9, 2019, payable on May 23, 2019. The dividend equates to a
3.4% annualized yield based on the $27.24 closing price of Berkshire Hills Bancorp
stock at the end of the quarter. Effective on the same dates,
the Board also approved a quarterly cash dividend on preferred
stock totaling $0.46 per share.
The Board had approved a 5% increase in the common and preferred
dividend following the start of the year.
STOCK REPURCHASE AUTHORIZATION
The Board authorized the repurchase of 2.4 million common shares
for the period expiring on March 31,
2020. This replaces the Company's existing unused 500,000
share repurchase authorization. Berkshire CFO Jamie Moses stated "We're focused on the
profitability metrics that drive shareholder value and plan to
adjust our balance sheet and capital allocation opportunistically
based on our strategic plan and to support shareholder
value." The authorization does not constitute a commitment to
repurchase shares and share repurchases are subject to regulatory
approval, as well as market and other conditions. This
authorization is equivalent to approximately 4.7% of Berkshire's outstanding shares including 5.7
million shares expected to be issued as merger consideration for
the SI Financial Group acquisition. Under the authorization,
stock repurchases may be made through open market purchases, block
trades, privately negotiated transactions, or pursuant to a trading
plan that may be adopted in accordance with Rule 10b5-1 of the
Securities and Exchange Commission.
DISCONTINUED OPERATIONS
For financial reporting purposes, the national mortgage banking
operations of First Choice Loan Services, Inc. ("FCLS") have been
classified as discontinued while the Company pursues the sale of
these operations in 2019. FCLS continues to serve its markets
while this sale is being pursued. Amounts and balances
related to these operations have been separately classified in the
accompanying unaudited statements of income and financial
condition. The operations of FCLS have been reported as
discontinued operations retrospectively for all periods
presented. Revenue and expense shown in the unaudited
statement of income exclude amounts related to FCLS.
Discontinued operations are not viewed as part of the Company's
normalized operations and have been classified as non-core.
FCLS mortgage loans held for sale and related borrowings have also
been classified as discontinued operations.
FINANCIAL CONDITION
Total assets were unchanged at $12.2
billion in the first quarter. Total loans decreased by
1% as lending operations were targeted toward higher profitability
customer relationship strategies. The Company has ceased
originating indirect auto loans and as a result is targeted to have
less future reliance on higher cost wholesale funds as the existing
portfolio seasons and is paid down. Total deposits increased
by 2%, half of which was due to daily fluctuations of payroll
deposits which ended the period at $562
million, compared to $467
million at the start of the period. Excluding payroll
impacts, most of the growth was in time deposits.
Liquidity, capital, and asset quality metrics improved
compared to the prior quarter. Book value per common share
increased by 1.4% to $33.75 and the
non-GAAP measure of tangible book value per common share improved
by 2.4% to $21.66. Pursuant to
the adoption of new accounting requirements, approximately
$80 million has been recorded to
other assets and other liabilities related to assets in use through
lease arrangements.
RESULTS OF OPERATIONS
GAAP earnings were $0.51 per share
in the most recent quarter, compared to $0.31 in the prior quarter and to $0.55 in the first quarter of 2018. Results
in all periods were affected by significant non-core charges.
Core results in prior periods have been retrospectively adjusted to
exclude national mortgage banking operations. The
$0.09 per share in after-tax net
non-core items in the most recent quarter included approximately
$0.04 in unrealized securities gains,
$0.01 in loss from discontinued
operations, $0.03 in merger charges,
and $0.09 in restructuring and other
charges.
Core earnings per share were $0.60
in the most recent quarter, decreasing quarter-over-quarter and
year-over-year primarily due to the impact of lower purchased loan
accretion. The per share after-tax contribution from
accretion decreased by $0.11
quarter-over-quarter and by $0.03
year-over-year. Due to the seasoning of the acquired
loan portfolio, the benefit of this accretion is expected to be
lower in 2019 compared to 2018. The Company's current
strategic review is intended to offset this impact through balance
sheet adjustments, line of business review, expense reductions, and
capital management. The return on equity measured 6.0% in the
most recent quarter. The non-GAAP measure of core return on
tangible common equity was 11.4% in the most recent
quarter.
The net interest margin was 3.17% in the most recent quarter,
including a contribution of 0.05% from purchased loan
accretion. Measured before accretion, the margin was 3.12%,
which was up 0.01% over the prior quarter. Most yields and
costs rose quarter-over quarter due to the 0.25% increase in the
target Fed Funds rate in the fourth quarter of 2018, including a
0.12% increase in deposit costs.
Fee income increased by $1 million
quarter-over-quarter due to higher SBA loan sale gains, including
gains on fourth quarter loans which could not be sold during the
federal government shutdown. National mortgage banking
revenue had been the largest source of fee income in recent
years. Fee income has been retrospectively adjusted to
exclude these revenues, which has reduced the revenue contribution
from non-interest income. The fourth quarter loan loss
provision exceeded net charge-offs and the ratio of the loan
loss allowance to loans increased to 0.69% from 0.68%.
GAAP non-interest expense decreased quarter-over-quarter, due to
lower non-core expenses. The efficiency ratio measured 59.5%
in the most recent quarter. Branch consolidations completed
in the first quarter are expected to contribute to improved
efficiency in future periods. Excluding FCLS, full time
equivalent staff totaled 1,457 positions at first quarter-end,
compared to 1,485 at the start of the quarter. This 2%
reduction was due to various efficiency initiatives undertaken
during the quarter. FCLS full time equivalent staff totaled
431 positions at quarter-end. The effective income tax rate
measured 22% in the first quarter of 2019.
STRATEGIC REVIEW
Before the conference call, the Company will post a slide
presentation summarizing its strategic review on its web site at
ir.berkshirebank.com.
INVESTOR CONFERENCE CALL
Berkshire will conduct a conference
call/webcast at 10:00 a.m. eastern
time on Tuesday, April 30, 2019 to discuss the
results for the quarter, the results of its strategic review, and
guidance about expected future results. Participants are
encouraged to pre-register for the conference call using the
following link: dpregister.com/10130208. Callers
who pre-register will be given dial-in instructions and a unique
PIN to gain immediate access to the call. Participants may
pre-register at any time prior to the call, and will immediately
receive simple instructions via email. Additionally,
participants may reach the registration link and access the webcast
by logging in through the investor section of the Company's website
at ir.berkshirebank.com. Those parties who do not have
internet access or are otherwise unable to pre-register for this
event, may still participate at the above time by dialing
1-844-792-3726 and asking the Operator to join the
Berkshire Hills Bancorp (BHLB) earnings call. A telephone
replay of the call will be available through Tuesday, May 07,
2019 by dialing 877-344-7529 and entering access number
10130208. The webcast will be available on Berkshire's
website for an extended period of time.
BACKGROUND
Berkshire Hills Bancorp is the parent of Berkshire Bank, a
premier regional bank distinguished by its local responsiveness and
engagement. With corporate headquarters in Boston, the Company operates in six
Northeastern states, with $12.2
billion in assets and 109 banking offices.
Berkshire has a pending agreement
to acquire SI Financial Group, Inc., the parent of Savings
Institute Bank & Trust Company, a $1.6
billion bank with 23 branches in eastern Connecticut and southern Rhode Island.
FORWARD LOOKING STATEMENTS
This document contains forward-looking statements as defined in
the Private Securities Litigation Reform Act of 1995. There are
several factors that could cause actual results to differ
significantly from expectations described in the forward-looking
statements. For a discussion of such factors, please see
Berkshire's most recent reports on
Forms 10-K and 10-Q filed with the Securities and Exchange
Commission and available on the SEC's website at www.sec.gov.
Berkshire does not undertake any
obligation to update forward-looking statements.
NON-GAAP FINANCIAL MEASURES
This document contains certain non-GAAP financial measures in
addition to results presented in accordance with Generally Accepted
Accounting Principles ("GAAP"). These non-GAAP measures
provide supplemental perspectives on operating results, performance
trends, and financial condition. They are not a substitute
for GAAP measures; they should be read and used in conjunction with
the Company's GAAP financial information. A reconciliation of
non-GAAP financial measures to GAAP measures is included on page
F-9 in the accompanying financial tables. In all cases, it
should be understood that non-GAAP per share measures do not depict
amounts that accrue directly to the benefit of
shareholders.
The Company utilizes the non-GAAP measure of core earnings in
evaluating operating trends, including components for core revenue
and expense. These measures exclude items which the Company
does not view as related to its normalized operations. These
items primarily include securities gains/losses, merger costs,
restructuring costs, and discontinued operations. Merger
costs consist primarily of severance/benefit related expenses,
contract termination costs, systems conversion costs, variable
compensation expenses, and professional fees. Merger costs in
2018 and 2019 are primarily related to the acquisitions of Commerce
Bancshares Corp. and SI Financial Group (pending).
Restructuring costs generally consist of costs and losses
associated with the disposition of assets and liabilities and lease
terminations, including costs related to branch sales.
Restructuring costs also include severance and consulting expenses
related to the Company's strategic review. Discontinued
operations are the Company's national mortgage banking operations
for which the Company is pursuing sale opportunities.
In 2018, the Company recorded $8
million in charges related to the restructuring of banking
systems vendor relationships. The Company recorded a
$3 million cost for the pending
settlement of an existing legal proceeding with a plaintiff
claiming to be representing a class of depositors. Non-core
charges in 2018 also included a $1.5
million net charge related to the CEO transition.
Non-core adjustments are presented net of an adjustment for
income tax expense. This adjustment is determined as the
difference between the GAAP tax rate and the effective tax rate
applicable to core income. The efficiency ratio is adjusted
for non-core revenue and expense items and for tax preference
items. The Company also calculates measures related to
tangible equity, which adjust equity (and assets where applicable)
to exclude intangible assets due to the importance of these
measures to the investment community.
CONTACTS
Investor Relations Contact
Erin E. Duggan; Investor Relations
Manager; 413-236-3773
Media Contact
Elizabeth Mach; Senior Vice
President, Marketing Officer; 413-445-8390
TABLE
INDEX
|
CONSOLIDATED
UNAUDITED FINANCIAL SCHEDULES
|
F-1
|
Selected Financial
Highlights
|
F-2
|
Balance
Sheets
|
F-3
|
Loan and Deposit
Analysis
|
F-4
|
Statements of
Income
|
F-5
|
Statements of
Operations (Five Quarter Trend)
|
F-6
|
Average Yields and
Costs
|
F-7
|
Average
Balances
|
F-8
|
Asset Quality
Analysis
|
F-9
|
Reconciliation of
Non-GAAP Financial Measures
|
|
and Supplementary
Data (Five Quarter Trend)
|
BERKSHIRE HILLS
BANCORP, INC.
|
SELECTED FINANCIAL
HIGHLIGHTS - UNAUDITED - (F-1)
|
|
|
|
|
At or for the
Quarters Ended (2)
|
|
|
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
|
|
|
|
2019
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE
DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
common share, diluted
|
$
0.51
|
|
$
0.31
|
|
$
0.70
|
|
$
0.74
|
|
$
0.55
|
|
|
|
Core earnings per
common share, diluted (1)
|
0.60
|
|
0.69
|
|
0.72
|
|
0.73
|
|
0.65
|
|
|
|
Total book value per
common share
|
33.75
|
|
33.30
|
|
32.84
|
|
32.49
|
|
32.12
|
|
|
|
Tangible book value
per common share (1)
|
21.66
|
|
21.15
|
|
20.68
|
|
20.28
|
|
19.86
|
|
|
|
Market price at
period end
|
27.24
|
|
26.97
|
|
40.70
|
|
40.60
|
|
37.95
|
|
|
|
Dividends per common
share
|
0.23
|
|
0.22
|
|
0.22
|
|
0.22
|
|
0.22
|
|
|
|
Dividends per
preferred share
|
0.46
|
|
0.44
|
|
0.44
|
|
0.44
|
|
0.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE RATIOS
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
assets
|
0.78
|
%
|
0.47
|
%
|
1.08
|
%
|
1.17
|
%
|
0.88
|
%
|
|
|
Core return on assets
(1)
|
0.92
|
|
1.07
|
|
1.12
|
|
1.18
|
|
1.06
|
|
|
|
Return on
equity
|
5.97
|
|
3.61
|
|
8.27
|
|
8.88
|
|
6.69
|
|
|
|
Core return on equity
(1)
|
7.00
|
|
8.09
|
|
8.49
|
|
8.81
|
|
7.95
|
|
|
|
Core return on
tangible common equity (1)
|
11.44
|
|
13.21
|
|
14.02
|
|
14.68
|
|
13.48
|
|
|
|
Net interest margin,
fully taxable equivalent (FTE) (4)(5)
|
3.17
|
|
3.41
|
|
3.32
|
|
3.50
|
|
3.36
|
|
|
|
Fee income/Net
interest and fee income from continuing operations
|
17.56
|
|
15.59
|
|
18.06
|
|
17.21
|
|
18.03
|
|
|
|
Efficiency ratio
(1)
|
59.54
|
|
54.88
|
|
52.20
|
|
52.42
|
|
55.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROWTH
(Year-to-date)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial
loans (annualized)
|
(3)
|
%
|
6
|
%
|
5
|
%
|
5
|
%
|
1
|
%
|
|
|
Total loans
(annualized)
|
(4)
|
|
9
|
|
10
|
|
10
|
|
4
|
|
|
|
Total deposits
(annualized)
|
8
|
|
3
|
|
0
|
|
2
|
|
(3)
|
|
|
|
Total net revenues
from continuing operations (compared to prior year)
|
3
|
|
17
|
|
22
|
|
21
|
|
16
|
|
|
|
Earnings per common
share (compared to prior year)
|
(7)
|
|
65
|
|
28
|
|
33
|
|
25
|
|
|
|
Core earnings per
common share (compared to prior year)(1)
|
(8)
|
|
32
|
|
37
|
|
36
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
12,173
|
|
$
12,212
|
|
$
12,030
|
|
$
11,902
|
|
$
11,519
|
|
|
|
Total earning
assets
|
11,039
|
|
11,140
|
|
10,957
|
|
10,827
|
|
10,442
|
|
|
|
Total
securities
|
1,881
|
|
1,919
|
|
1,918
|
|
1,920
|
|
1,932
|
|
|
|
Total
loans
|
|
8,947
|
|
9,043
|
|
8,905
|
|
8,710
|
|
8,376
|
|
|
|
Allowance for loan
losses
|
62
|
|
61
|
|
58
|
|
56
|
|
54
|
|
|
|
Total intangible
assets
|
551
|
|
552
|
|
553
|
|
555
|
|
556
|
|
|
|
Total
deposits
|
|
9,166
|
|
8,982
|
|
8,766
|
|
8,839
|
|
8,683
|
|
|
|
Total shareholders'
equity
|
1,577
|
|
1,553
|
|
1,532
|
|
1,516
|
|
1,498
|
|
|
|
Net income
|
|
23.6
|
|
14.3
|
|
32.2
|
|
34.0
|
|
25.2
|
|
|
|
Core income
(1)
|
27.7
|
|
32.0
|
|
33.1
|
|
33.8
|
|
30.0
|
|
|
|
Purchased loan
accretion
|
1.3
|
|
8.2
|
|
4.5
|
|
6.9
|
|
3.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY AND
CONDITION RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(current quarter annualized)/average loans
|
0.15
|
%
|
0.17
|
%
|
0.19
|
%
|
0.21
|
%
|
0.17
|
%
|
|
|
Total non-performing
assets/total assets
|
0.26
|
|
0.28
|
|
0.30
|
|
0.20
|
|
0.27
|
|
|
|
Allowance for loan
losses/total loans
|
0.69
|
|
0.68
|
|
0.66
|
|
0.64
|
|
0.64
|
|
|
|
Loans/deposits
|
98
|
|
101
|
|
102
|
|
99
|
|
96
|
|
|
|
Shareholders' equity
to total assets
|
12.95
|
|
12.72
|
|
12.74
|
|
12.74
|
|
13.00
|
|
|
|
Tangible
shareholders' equity to tangible assets (1)
|
8.83
|
|
8.59
|
|
8.53
|
|
8.47
|
|
8.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Non-GAAP financial
measure. Core measurements are non-GAAP financial measures that are
adjusted to exclude net non-core charges
primarily
|
|
|
|
related to
acquisitions and restructuring activities. See page F-9 for
reconciliations of non-GAAP financial measures.
|
|
|
|
|
|
|
(2)
|
Reconciliations of
non-GAAP financial measures, including all references to core and
tangible amounts, appear on page F-9.
|
|
|
|
|
|
|
(3)
|
All performance
ratios are annualized and are based on average balance sheet
amounts, where applicable.
|
|
|
|
|
|
|
|
|
(4)
|
Fully taxable
equivalent considers the impact of tax advantaged investment
securities and loans.
|
|
|
|
|
|
|
|
|
|
(5)
|
The effect of
purchased loan accretion on the quarterly net interest margin was
an increase in all quarters, which is shown sequentially as
follows
|
|
|
|
beginning with the
most recent quarter and ending with the earliest quarter:
0.05%, 0.30%, 0.17%, 0.25%, 0.13%.
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
BALANCE SHEETS - UNAUDITED - (F-2)
|
|
March 31,
|
|
December
31,
|
|
(in
thousands)
|
2019
|
|
2018
|
|
Assets
|
|
|
|
|
Cash and due from
banks
|
$
98,689
|
|
$
100,972
|
|
Short-term
investments
|
68,930
|
|
82,217
|
|
Total cash and
short-term investments
|
167,619
|
|
183,189
|
|
|
|
|
|
|
Trading
security
|
11,164
|
|
11,212
|
|
Marketable equity
securities, at fair value
|
59,121
|
|
56,638
|
|
Securities available
for sale, at fair value
|
1,386,768
|
|
1,399,647
|
|
Securities held to
maturity, at amortized cost
|
369,331
|
|
373,763
|
|
Federal Home Loan
Bank stock and other restricted securities
|
54,624
|
|
77,344
|
|
Total
securities
|
1,881,008
|
|
1,918,604
|
|
|
|
|
|
|
Loans held for sale,
at fair value
|
4,773
|
|
2,183
|
|
|
|
|
|
|
Commercial real
estate loans
|
3,388,139
|
|
3,400,221
|
|
Commercial and
industrial loans
|
1,957,339
|
|
1,980,046
|
|
Residential
mortgages
|
2,544,824
|
|
2,566,424
|
|
Consumer
loans
|
1,057,193
|
|
1,096,562
|
|
Total
loans
|
8,947,495
|
|
9,043,253
|
|
Less: Allowance for
loan losses
|
(62,038)
|
|
(61,469)
|
|
Net loans
|
8,885,457
|
|
8,981,784
|
|
|
|
|
|
|
Premises and
equipment, net
|
105,651
|
|
106,500
|
|
Other real estate
owned
|
-
|
|
-
|
|
Goodwill
|
518,325
|
|
518,325
|
|
Other intangible
assets
|
32,219
|
|
33,418
|
|
Cash surrender value
of bank-owned life insurance
|
191,768
|
|
190,609
|
|
Deferred tax asset,
net
|
38,783
|
|
42,434
|
|
Other
assets
|
182,720
|
|
120,926
|
|
Assets from
discontinued operations
|
165,078
|
|
114,259
|
|
Total
assets
|
$
12,173,401
|
|
$
12,212,231
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
Demand
deposits
|
$
1,526,584
|
|
$
1,603,019
|
|
NOW and other
deposits
|
820,177
|
|
1,122,321
|
|
Money market
deposits
|
2,743,448
|
|
2,245,195
|
|
Savings
deposits
|
731,711
|
|
724,129
|
|
Time
deposits
|
3,344,495
|
|
3,287,717
|
|
Total
deposits
|
9,166,415
|
|
8,982,381
|
|
|
|
|
|
|
Senior
borrowings
|
995,271
|
|
1,345,467
|
|
Subordinated
borrowings
|
89,562
|
|
89,518
|
|
Total
borrowings
|
1,084,833
|
|
1,434,985
|
|
|
|
|
|
|
Other
liabilities
|
204,725
|
|
149,519
|
|
Liabilities from
discontinued operations
|
140,423
|
|
92,428
|
|
Total
liabilities
|
10,596,396
|
|
10,659,313
|
|
|
|
|
|
|
Preferred
shareholders' equity
|
40,633
|
|
40,633
|
|
Common shareholders'
equity
|
1,536,372
|
|
1,512,285
|
|
Total shareholders'
equity
|
1,577,005
|
|
1,552,918
|
|
Total liabilities and
shareholders' equity
|
$
12,173,401
|
|
$
12,212,231
|
|
|
|
|
|
|
Net common shares
outstanding
|
45,522
|
|
45,417
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED LOAN
& DEPOSIT ANALYSIS - UNAUDITED - (F-3)
|
LOAN
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Growth
%
|
(in
millions)
|
|
March 31, 2019
Balance
|
|
December 31, 2018
Balance
|
|
Quarter ended
March 31, 2019
|
|
|
|
|
|
|
|
|
|
Total commercial real
estate
|
|
$
3,388
|
|
$
3,400
|
|
(1)
|
%
|
Commercial and
industrial loans
|
|
1,957
|
|
1,980
|
|
(5)
|
|
Total commercial
loans
|
|
5,345
|
|
5,380
|
|
(3)
|
|
|
|
|
|
|
|
|
|
Total residential
mortgages
|
|
2,545
|
|
2,566
|
|
(3)
|
|
|
|
|
|
|
|
|
|
Home
equity
|
|
365
|
|
377
|
|
(13)
|
|
Auto and
other
|
|
692
|
|
720
|
|
(16)
|
|
Total consumer
loans
|
|
1,057
|
|
1,097
|
|
(15)
|
|
Total
loans
|
|
$
8,947
|
|
$
9,043
|
|
(4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Growth
%
|
(in
millions)
|
|
March 31, 2019
Balance
|
|
December 31, 2018
Balance
|
|
Quarter ended
March 31, 2019
|
|
Demand
|
|
$
1,527
|
|
$
1,603
|
|
(19)
|
%
|
NOW and
other
|
|
820
|
|
1,122
|
|
(108)
|
|
Money
market
|
|
2,743
|
|
2,245
|
|
89
|
|
Savings
|
|
732
|
|
724
|
|
4
|
|
Time
deposits
|
|
3,344
|
|
3,288
|
|
7
|
|
Total
deposits
|
|
$
9,166
|
|
$
8,982
|
|
8
|
%
|
BERKSHIRE HILLS BANCORP, INC.
|
|
CONSOLIDATED
STATEMENTS OF INCOME - UNAUDITED - (F-4)
|
|
|
Three Months
Ended
|
|
|
March 31,
|
|
(in thousands,
except per share data)
|
2019
|
|
2018
|
|
Interest and
dividend income from continuing
operations
|
|
|
|
|
Loans
|
$
105,651
|
|
$
91,741
|
|
Securities and
other
|
15,458
|
|
14,405
|
|
Total interest and
dividend income
|
121,109
|
|
106,146
|
|
Interest expense
from continuing operations
|
|
|
|
|
Deposits
|
26,622
|
|
15,325
|
|
Borrowings
|
9,028
|
|
6,064
|
|
Total interest
expense
|
35,650
|
|
21,389
|
|
Net interest
income from continuing operations
|
85,459
|
|
84,757
|
|
Non-interest
income from continuing operations
|
|
|
|
|
Mortgage banking
originations
|
46
|
|
138
|
|
Loan related
income
|
6,003
|
|
4,819
|
|
Deposit related
fees
|
6,858
|
|
8,066
|
|
Insurance commissions
and fees
|
2,853
|
|
3,025
|
|
Wealth management
fees
|
2,441
|
|
2,597
|
|
Total fee
income
|
18,201
|
|
18,645
|
|
Other
|
970
|
|
1,268
|
|
Securities
gains/(losses), net
|
2,551
|
|
(1,502)
|
|
Gain on sale of
business operations and assets, net
|
-
|
|
481
|
|
Total non-interest
income
|
21,722
|
|
18,892
|
|
Total net revenue
from continuing operations
|
107,181
|
|
103,649
|
|
Provision for loan
losses
|
4,001
|
|
5,575
|
|
Non-interest
expense from continuing operations
|
|
|
|
|
Compensation and
benefits
|
33,500
|
|
33,847
|
|
Occupancy and
equipment
|
9,446
|
|
9,192
|
|
Technology and
communications
|
6,257
|
|
6,484
|
|
Marketing and
promotion
|
1,267
|
|
1,222
|
|
Professional services
|
2,275
|
|
1,696
|
|
FDIC premiums and
assessments
|
1,639
|
|
1,195
|
|
Other real estate
owned and foreclosures
|
2
|
|
67
|
|
Amortization of
intangible assets
|
1,200
|
|
1,268
|
|
Merger, restructuring
and other expense
|
7,015
|
|
5,093
|
|
Other
|
9,390
|
|
5,302
|
|
Total non-interest
expense
|
71,991
|
|
65,366
|
|
|
|
|
|
|
Income from
continuing operations before income
taxes
|
$
31,189
|
|
$
32,708
|
|
Income tax
expense
|
6,917
|
|
7,337
|
|
Net income from
continuing operations
|
$
24,272
|
|
$
25,371
|
|
|
|
|
|
|
(Loss) from
discontinued operations before income taxes
|
$
(854)
|
|
$
(162)
|
|
Income tax
(benefit)
|
(217)
|
|
(39)
|
|
Net (loss) from
discontinued operations
|
$
(637)
|
|
$
(123)
|
|
|
|
|
|
|
Net
income
|
$
23,635
|
|
$
25,248
|
|
Preferred stock
dividend
|
240
|
|
230
|
|
Income available
to common shareholders
|
$
23,395
|
|
$
25,018
|
|
|
|
|
|
|
Basic earnings per
common share:
|
|
|
|
|
Continuing
Operations
|
$
0.52
|
|
$
0.55
|
|
Discontinued
Operations
|
(0.01)
|
|
-
|
|
Total
|
$
0.51
|
|
$
0.55
|
|
|
|
|
|
|
Diluted earnings
per common share:
|
|
|
|
|
Continuing
Operations
|
$
0.52
|
|
$
0.55
|
|
Discontinued
Operations
|
(0.01)
|
|
-
|
|
Total
|
$
0.51
|
|
$
0.55
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
Basic
|
46,113
|
|
45,966
|
|
Diluted
|
46,261
|
|
46,200
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (5 Quarter Trend) - UNAUDITED -
(F-5)
|
|
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
(in thousands,
except per share data)
|
2019
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
|
Interest and
dividend income from continuing
operations
|
|
|
|
|
|
|
|
|
|
Loans
|
$
105,651
|
|
$
111,576
|
|
$
102,651
|
|
$
100,254
|
|
$
91,741
|
|
Securities and
other
|
15,458
|
|
15,119
|
|
14,918
|
|
15,230
|
|
14,405
|
|
Total interest and
dividend income
|
121,109
|
|
126,695
|
|
117,569
|
|
115,484
|
|
106,146
|
|
Interest expense
from continuing operations
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
26,622
|
|
23,811
|
|
21,460
|
|
17,768
|
|
15,325
|
|
Borrowings
|
9,028
|
|
10,118
|
|
7,724
|
|
7,424
|
|
6,064
|
|
Total interest
expense
|
35,650
|
|
33,929
|
|
29,184
|
|
25,192
|
|
21,389
|
|
Net interest
income from continuing operations
|
85,459
|
|
92,766
|
|
88,385
|
|
90,292
|
|
84,757
|
|
Non-interest
income from continuing operations
|
|
|
|
|
|
|
|
|
|
|
Mortgage banking
originations
|
46
|
|
148
|
|
15
|
|
334
|
|
138
|
|
Loan related
income
|
6,003
|
|
5,087
|
|
7,246
|
|
6,003
|
|
4,819
|
|
Deposit related
fees
|
6,858
|
|
7,131
|
|
7,004
|
|
7,605
|
|
8,066
|
|
Insurance commissions
and fees
|
2,853
|
|
2,479
|
|
2,930
|
|
2,549
|
|
3,025
|
|
Wealth management
fees
|
2,441
|
|
2,287
|
|
2,283
|
|
2,280
|
|
2,597
|
|
Total fee
income
|
18,201
|
|
17,132
|
|
19,478
|
|
18,771
|
|
18,645
|
|
Other
|
970
|
|
1,666
|
|
468
|
|
155
|
|
1,268
|
|
Securities
gains/(losses), net
|
2,551
|
|
(3,023)
|
|
88
|
|
718
|
|
(1,502)
|
|
(Loss)/gain on sale
of business operations and assets, net
|
-
|
|
-
|
|
-
|
|
(21)
|
|
481
|
|
Total non-interest
income
|
21,722
|
|
15,775
|
|
20,034
|
|
19,623
|
|
18,892
|
|
Total net revenue
from continuing operations
|
107,181
|
|
108,541
|
|
108,419
|
|
109,915
|
|
103,649
|
|
Provision for loan
losses
|
4,001
|
|
6,716
|
|
6,628
|
|
6,532
|
|
5,575
|
|
Non-interest
expense from continuing operations
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
33,500
|
|
34,927
|
|
31,746
|
|
33,499
|
|
33,847
|
|
Occupancy and
equipment
|
9,446
|
|
9,366
|
|
9,145
|
|
9,224
|
|
9,192
|
|
Technology and
communications
|
6,257
|
|
6,103
|
|
7,507
|
|
7,053
|
|
6,484
|
|
Marketing and
promotion
|
1,267
|
|
1,224
|
|
1,167
|
|
1,084
|
|
1,222
|
|
Professional
services
|
2,275
|
|
3,302
|
|
1,481
|
|
864
|
|
1,696
|
|
FDIC premiums and
assessments
|
1,639
|
|
1,488
|
|
1,640
|
|
1,411
|
|
1,195
|
|
Other real estate
owned and foreclosures
|
2
|
|
1
|
|
(1)
|
|
1
|
|
67
|
|
Amortization of
intangible assets
|
1,200
|
|
1,202
|
|
1,218
|
|
1,246
|
|
1,268
|
|
Merger, restructuring
and other expense
|
7,015
|
|
16,006
|
|
198
|
|
847
|
|
5,093
|
|
Other
|
9,390
|
|
6,754
|
|
5,526
|
|
6,298
|
|
5,302
|
|
Total non-interest
expense
|
71,991
|
|
80,373
|
|
59,627
|
|
61,527
|
|
65,366
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
$
31,189
|
|
$
21,452
|
|
$
42,164
|
|
$
41,856
|
|
$
32,708
|
|
Income tax
expense
|
6,917
|
|
4,384
|
|
9,095
|
|
8,145
|
|
7,337
|
|
Net income from
continuing operations
|
$
24,272
|
|
$
17,068
|
|
$
33,069
|
|
$
33,711
|
|
$
25,371
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/Income from
discontinued operations before income taxes
|
$
(854)
|
|
$
(3,884)
|
|
$
(1,147)
|
|
$
426
|
|
$
(162)
|
|
Income tax
(benefit)/expense
|
(217)
|
|
(1,075)
|
|
(305)
|
|
106
|
|
(39)
|
|
Net (loss)/income
from discontinued operations
|
$
(637)
|
|
$
(2,809)
|
|
$
(842)
|
|
$
320
|
|
$
(123)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
23,635
|
|
$
14,259
|
|
$
32,227
|
|
$
34,031
|
|
$
25,248
|
|
Preferred stock
dividend
|
240
|
|
229
|
|
230
|
|
229
|
|
230
|
|
Income available
to common shareholders
|
$
23,395
|
|
$
14,030
|
|
$
31,997
|
|
$
33,802
|
|
$
25,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share:
|
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
$
0.52
|
|
$
0.37
|
|
$
0.72
|
|
$
0.73
|
|
$
0.55
|
|
Discontinued
Operations
|
(0.01)
|
|
(0.06)
|
|
(0.02)
|
|
0.01
|
|
-
|
|
Total
|
$
0.51
|
|
$
0.31
|
|
$
0.70
|
|
$
0.74
|
|
$
0.55
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per common share:
|
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
$
0.52
|
|
$
0.37
|
|
$
0.72
|
|
$
0.73
|
|
$
0.55
|
|
Discontinued
Operations
|
(0.01)
|
|
(0.06)
|
|
(0.02)
|
|
0.01
|
|
-
|
|
Total
|
$
0.51
|
|
$
0.31
|
|
$
0.70
|
|
$
0.74
|
|
$
0.55
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
46,113
|
|
46,061
|
|
46,030
|
|
46,032
|
|
45,966
|
|
Diluted
|
46,261
|
|
46,240
|
|
46,263
|
|
46,215
|
|
46,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
AVERAGE YIELDS AND
COSTS (Fully Taxable Equivalent - Annualized) - UNAUDITED -
(F-6)
|
|
|
Quarters
Ended
|
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
|
|
2019
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning
assets
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
4.91
|
%
|
5.40
|
%
|
4.67
|
%
|
5.08
|
%
|
4.76
|
%
|
Commercial and
industrial loans
|
|
5.83
|
|
5.97
|
|
6.22
|
|
5.73
|
|
5.19
|
|
Residential
mortgages
|
|
3.74
|
|
3.72
|
|
3.66
|
|
3.72
|
|
3.56
|
|
Consumer
loans
|
|
4.45
|
|
4.52
|
|
4.27
|
|
4.13
|
|
4.01
|
|
Total
loans
|
|
4.73
|
|
4.94
|
|
4.66
|
|
4.73
|
|
4.45
|
|
Securities
|
|
3.52
|
|
3.38
|
|
3.36
|
|
3.47
|
|
3.26
|
|
Short-term
investments and loans held for sale
|
|
3.59
|
|
3.74
|
|
3.82
|
|
3.86
|
|
3.43
|
|
Total earning
assets
|
|
4.49
|
|
4.64
|
|
4.41
|
|
4.48
|
|
4.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funding
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
NOW and
other
|
|
0.65
|
|
0.59
|
|
0.58
|
|
0.44
|
|
0.28
|
|
Money
market
|
|
1.23
|
|
1.10
|
|
0.92
|
|
0.88
|
|
0.73
|
|
Savings
|
|
0.18
|
|
0.16
|
|
0.15
|
|
0.14
|
|
0.14
|
|
Time
|
|
2.07
|
|
1.93
|
|
1.76
|
|
1.54
|
|
1.40
|
|
Total
interest-bearing deposits
|
|
1.44
|
|
1.31
|
|
1.18
|
|
1.02
|
|
0.90
|
|
Borrowings
|
|
3.02
|
|
2.67
|
|
2.42
|
|
2.29
|
|
2.02
|
|
Total
interest-bearing liabilities
|
|
1.67
|
|
1.55
|
|
1.38
|
|
1.23
|
|
1.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
spread
|
|
2.82
|
|
3.09
|
|
3.03
|
|
3.25
|
|
3.13
|
|
Net interest
margin
|
|
3.17
|
|
3.41
|
|
3.32
|
|
3.50
|
|
3.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of funds
(1)
|
|
1.42
|
|
1.31
|
|
1.16
|
|
1.03
|
|
0.90
|
|
Cost of
deposits
|
|
1.19
|
|
1.07
|
|
0.96
|
|
0.83
|
|
0.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cost of funds
includes all deposits and borrowings.
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
AVERAGE BALANCES -
UNAUDITED - (F-7)
|
|
Quarters
Ended
|
|
March
31,
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
March
31,
|
|
(in
thousands)
|
2019
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
$
3,377,902
|
|
$
3,373,936
|
|
$
3,331,097
|
|
$
3,316,482
|
|
$
3,250,861
|
|
Commercial and
industrial loans
|
1,986,792
|
|
1,921,361
|
|
1,824,369
|
|
1,773,722
|
|
1,811,433
|
|
Residential
mortgages
|
2,556,299
|
|
2,539,592
|
|
2,459,943
|
|
2,268,886
|
|
2,138,544
|
|
Consumer
loans
|
1,079,583
|
|
1,112,433
|
|
1,120,942
|
|
1,113,089
|
|
1,114,586
|
|
Total loans
(1)
|
9,000,576
|
|
8,947,322
|
|
8,736,351
|
|
8,472,179
|
|
8,315,424
|
|
Securities
(2)
|
1,895,768
|
|
1,933,891
|
|
1,928,851
|
|
1,931,104
|
|
1,933,002
|
|
Short-term
investments and loans held for sale
|
67,367
|
|
51,827
|
|
47,752
|
|
36,136
|
|
45,600
|
|
Total earning assets
(4)
|
10,963,711
|
|
10,933,040
|
|
10,712,954
|
|
10,439,419
|
|
10,294,026
|
|
Goodwill and other
intangible assets
|
550,966
|
|
552,206
|
|
554,359
|
|
554,591
|
|
557,321
|
|
Other
assets
|
557,442
|
|
494,377
|
|
501,739
|
|
486,616
|
|
505,046
|
|
Assets from
discontinued operations
|
115,721
|
|
101,464
|
|
141,443
|
|
130,392
|
|
110,260
|
|
Total
assets
|
$
12,187,840
|
|
$
12,081,087
|
|
$
11,910,495
|
|
$
11,611,018
|
|
$
11,466,653
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
NOW and
other
|
$
963,043
|
|
$
920,225
|
|
$
844,888
|
|
$
819,166
|
|
$
712,181
|
|
Money
market
|
2,378,496
|
|
2,339,699
|
|
2,348,516
|
|
2,524,713
|
|
2,518,920
|
|
Savings
|
736,707
|
|
728,853
|
|
740,765
|
|
749,995
|
|
743,944
|
|
Time
|
3,429,375
|
|
3,229,521
|
|
3,274,518
|
|
2,878,846
|
|
2,913,512
|
|
Total
interest-bearing deposits
|
7,507,621
|
|
7,218,298
|
|
7,208,687
|
|
6,972,720
|
|
6,888,557
|
|
Borrowings
|
1,273,167
|
|
1,495,673
|
|
1,255,182
|
|
1,281,398
|
|
1,191,838
|
|
Total
interest-bearing liabilities
|
8,780,788
|
|
8,713,971
|
|
8,463,869
|
|
8,254,118
|
|
8,080,395
|
|
Non-interest-bearing
demand deposits
|
1,538,767
|
|
1,579,013
|
|
1,635,564
|
|
1,619,470
|
|
1,656,260
|
|
Other
liabilities
|
192,119
|
|
127,370
|
|
132,521
|
|
89,933
|
|
126,949
|
|
Liabilities from
discontinued operations
|
92,629
|
|
79,659
|
|
120,612
|
|
114,046
|
|
94,362
|
|
Total
liabilities
|
10,604,303
|
|
10,500,013
|
|
10,352,566
|
|
10,077,567
|
|
9,957,966
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
shareholders' equity
|
40,633
|
|
40,633
|
|
40,633
|
|
40,633
|
|
40,633
|
|
Common shareholders'
equity
|
1,542,904
|
|
1,540,441
|
|
1,517,296
|
|
1,492,818
|
|
1,468,054
|
|
Total shareholders'
equity
|
1,583,537
|
|
1,581,074
|
|
1,557,929
|
|
1,533,451
|
|
1,508,687
|
|
Total liabilities and
shareholders' equity
|
$
12,187,840
|
|
$
12,081,087
|
|
$
11,910,495
|
|
$
11,611,018
|
|
$
11,466,653
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
|
Total average
non-maturity deposits
|
$
5,617,013
|
|
$
5,567,790
|
|
$
5,569,733
|
|
$
5,713,344
|
|
$
5,631,305
|
|
Total average
deposits
|
9,046,388
|
|
8,797,311
|
|
8,844,251
|
|
8,592,190
|
|
8,544,817
|
|
Fully taxable
equivalent income adjustment
|
1,809
|
|
1,763
|
|
1,807
|
|
2,033
|
|
1,820
|
|
Purchased loan
accretion
|
1,320
|
|
8,247
|
|
4,548
|
|
6,881
|
|
3,433
|
|
Total average
tangible equity (3)
|
1,032,571
|
|
1,028,868
|
|
1,003,570
|
|
978,860
|
|
951,366
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Total loans
include non-accruing loans.
|
|
|
|
|
|
|
|
|
|
|
(2) Average balances
for securities available-for-sale are based on amortized
cost.
|
|
|
|
|
|
|
|
(3) See page F-9 for
details on the calculation of total average tangible
equity.
|
|
|
|
|
|
|
|
(4) Excludes
discontinued operations for presentation purposes. Performance
ratios are calculated including the impact of discontinued
operations.
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
ASSET QUALITY
ANALYSIS - UNAUDITED - (F-8)
|
|
|
At or for the
Quarters Ended
|
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
(in
thousands)
|
|
2019
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Non-accruing
loans:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
18,513
|
|
$
20,372
|
|
$
22,639
|
|
$
10,338
|
|
$
10,084
|
|
Commercial and
industrial loans
|
|
5,614
|
|
6,003
|
|
4,914
|
|
4,029
|
|
7,430
|
|
Residential
mortgages
|
|
2,341
|
|
2,217
|
|
2,683
|
|
3,196
|
|
5,777
|
|
Consumer
loans
|
|
4,038
|
|
3,834
|
|
4,401
|
|
5,466
|
|
5,996
|
|
Total non-accruing
loans
|
|
30,506
|
|
32,426
|
|
34,637
|
|
23,029
|
|
29,287
|
|
Other real estate
owned
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Repossessed
assets
|
|
742
|
|
1,209
|
|
1,069
|
|
1,241
|
|
1,241
|
|
Total non-performing
assets
|
|
$
31,248
|
|
$
33,635
|
|
$
35,706
|
|
$
24,270
|
|
$
30,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-accruing
loans/total loans
|
|
0.34%
|
|
0.36%
|
|
0.39%
|
|
0.26%
|
|
0.35%
|
|
Total non-performing
assets/total assets
|
|
0.26%
|
|
0.28%
|
|
0.30%
|
|
0.20%
|
|
0.27%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND
ALLOWANCE FOR LOAN LOSSES
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
|
$
61,469
|
|
$
58,457
|
|
$
55,925
|
|
$
53,859
|
|
$
51,834
|
|
Charged-off
loans
|
|
(4,579)
|
|
(4,029)
|
|
(4,471)
|
|
(5,714)
|
|
(3,791)
|
|
Recoveries on
charged-off loans
|
|
1,147
|
|
325
|
|
375
|
|
1,248
|
|
241
|
|
Net loans
charged-off
|
|
(3,432)
|
|
(3,704)
|
|
(4,096)
|
|
(4,466)
|
|
(3,550)
|
|
Provision for loan
losses
|
|
4,001
|
|
6,716
|
|
6,628
|
|
6,532
|
|
5,575
|
|
Balance at end of
period
|
|
$
62,038
|
|
$
61,469
|
|
$
58,457
|
|
$
55,925
|
|
$
53,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses/total loans
|
|
0.69%
|
|
0.68%
|
|
0.66%
|
|
0.64%
|
|
0.64%
|
|
Allowance for loan
losses/non-accruing loans
|
|
203%
|
|
190%
|
|
169%
|
|
243%
|
|
184%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOAN
CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
(752)
|
|
$
(1,357)
|
|
$
(3,074)
|
|
$
(2,079)
|
|
$
(817)
|
|
Commercial and
industrial loans
|
|
(1,580)
|
|
(1,538)
|
|
(189)
|
|
(1,193)
|
|
(972)
|
|
Residential
mortgages
|
|
(95)
|
|
(108)
|
|
61
|
|
(632)
|
|
(406)
|
|
Home
equity
|
|
(257)
|
|
(116)
|
|
(242)
|
|
108
|
|
(588)
|
|
Auto and other
consumer
|
|
(748)
|
|
(585)
|
|
(652)
|
|
(670)
|
|
(767)
|
|
Total, net
|
|
$
(3,432)
|
|
$
(3,704)
|
|
$
(4,096)
|
|
$
(4,466)
|
|
$
(3,550)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
0.15%
|
|
0.17%
|
|
0.19%
|
|
0.21%
|
|
0.17%
|
|
Net charge-offs (YTD
annualized)/average loans
|
0.15%
|
|
0.18%
|
|
0.19%
|
|
0.19%
|
|
0.17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELINQUENT AND
NON-ACCRUING LOANS/TOTAL LOANS
|
|
|
|
|
|
|
|
|
|
30-89 Days
delinquent
|
|
0.22%
|
|
0.27%
|
|
0.38%
|
|
0.22%
|
|
0.39%
|
|
90+ Days delinquent
and still accruing
|
|
0.23%
|
|
0.22%
|
|
0.22%
|
|
0.40%
|
|
0.23%
|
|
Total accruing
delinquent loans
|
|
0.45%
|
|
0.49%
|
|
0.60%
|
|
0.62%
|
|
0.62%
|
|
Non-accruing
loans
|
|
0.34%
|
|
0.36%
|
|
0.39%
|
|
0.26%
|
|
0.35%
|
|
Total delinquent and
non-accruing loans
|
|
0.79%
|
|
0.85%
|
|
0.99%
|
|
0.88%
|
|
0.97%
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED -
(F-9)
|
|
|
At or for the
Quarters Ended
|
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
(in
thousands)
|
|
2019
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
|
Net income
|
|
$
23,635
|
|
$
14,259
|
|
$
32,227
|
|
$
34,031
|
|
$
25,248
|
|
Adj: Net securities
(gains)/losses (1)
|
|
(2,551)
|
|
3,023
|
|
(88)
|
|
(718)
|
|
1,502
|
|
Adj: Net
losses/(gains) on sale of business operations and assets
|
-
|
|
-
|
|
-
|
|
21
|
|
(481)
|
|
Adj: Merger and
acquisition expense
|
|
1,609
|
|
2,792
|
|
198
|
|
847
|
|
5,093
|
|
Adj: Restructuring
expense and other expense
|
|
5,406
|
|
1,822
|
|
-
|
|
-
|
|
-
|
|
Adj: Legal
settlements
|
|
-
|
|
3,000
|
|
-
|
|
-
|
|
-
|
|
Adj: Systems vendor
restructuring costs
|
|
-
|
|
8,379
|
|
-
|
|
-
|
|
-
|
|
Adj: Loss/(income)
from discontinued operations before income taxes
|
854
|
|
3,884
|
|
1,147
|
|
(426)
|
|
162
|
|
Adj: Income
taxes
|
|
(1,223)
|
|
(5,185)
|
|
(397)
|
|
-
|
|
(1,520)
|
|
Total core income
(2)
|
(A)
|
$
27,730
|
|
$
31,974
|
|
$
33,087
|
|
$
33,755
|
|
$
30,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue from
continuing operations
|
|
$
107,181
|
|
$
108,541
|
|
$
108,419
|
|
$
109,915
|
|
$
103,649
|
|
Adj: Net securities
(gains)/losses (1)
|
|
(2,551)
|
|
3,023
|
|
(88)
|
|
(718)
|
|
1,502
|
|
Adj: Net
losses/(gains) on sale of business operations and assets
|
-
|
|
-
|
|
-
|
|
21
|
|
(481)
|
|
Total core revenue
(2)
|
(B)
|
$
104,630
|
|
$
111,564
|
|
$
108,331
|
|
$
109,218
|
|
$
104,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense from continuing operations
|
|
$
71,991
|
|
$
80,373
|
|
$
59,627
|
|
$
61,527
|
|
$
65,366
|
|
Less: Merger,
restructuring and other expense (see above)
|
|
(7,015)
|
|
(4,614)
|
|
(198)
|
|
(847)
|
|
(5,093)
|
|
Less: Legal
settlements
|
|
-
|
|
(3,000)
|
|
-
|
|
-
|
|
-
|
|
Less: Systems vendor
restructuring costs
|
|
-
|
|
(8,379)
|
|
-
|
|
-
|
|
-
|
|
Core non-interest
expense (2)
|
(C)
|
$
64,976
|
|
$
64,380
|
|
$
59,429
|
|
$
60,680
|
|
$
60,273
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
(D)
|
$
12,188
|
|
$
12,081
|
|
$
11,910
|
|
$
11,611
|
|
$
11,467
|
|
Total average
shareholders'
equity
|
(E)
|
1,584
|
|
1,581
|
|
1,558
|
|
1,533
|
|
1,509
|
|
Total average
tangible shareholders' equity
(2)
|
(F)
|
1,033
|
|
1,029
|
|
1,004
|
|
979
|
|
951
|
|
Total average
tangible common shareholders' equity
(2)
|
(G)
|
992
|
|
988
|
|
963
|
|
938
|
|
911
|
|
Total tangible
shareholders' equity, period-end (2)(3)
|
(H)
|
1,026
|
|
1,001
|
|
979
|
|
961
|
|
941
|
|
Total tangible common
shareholders' equity, period-end (2)(3)
|
(I)
|
986
|
|
961
|
|
939
|
|
921
|
|
901
|
|
Total tangible
assets, period-end (2)(3)
|
(J)
|
11,623
|
|
11,660
|
|
11,477
|
|
11,347
|
|
10,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, period-end
(thousands)
|
(K)
|
45,522
|
|
45,417
|
|
45,420
|
|
45,420
|
|
45,360
|
|
Average diluted
shares outstanding (thousands)
|
(L)
|
46,261
|
|
46,240
|
|
46,263
|
|
46,215
|
|
46,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core earnings per
common share, diluted(2)
|
(A/L)
|
$
0.60
|
|
$
0.69
|
|
$
0.72
|
|
$
0.73
|
|
$
0.65
|
|
Tangible book value
per common share, period-end (2)
|
(I/K)
|
21.66
|
|
21.15
|
|
20.68
|
|
20.28
|
|
19.86
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(H)/(J)
|
8.83
|
|
8.59
|
|
8.53
|
|
8.47
|
|
8.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance ratios
(4)
|
|
|
|
|
|
|
|
|
|
|
|
GAAP return on
assets
|
|
0.78
|
%
|
0.47
|
%
|
1.08
|
%
|
1.17
|
%
|
0.88
|
%
|
Core return on assets
(2)
|
|
0.92
|
|
1.07
|
|
1.12
|
|
1.18
|
|
1.06
|
|
GAAP return on
equity
|
|
5.97
|
|
3.61
|
|
8.27
|
|
8.88
|
|
6.69
|
|
Core return on equity
(2)
|
(A/E)
|
7.00
|
|
8.09
|
|
8.49
|
|
8.81
|
|
7.95
|
|
Core return on
tangible common equity (2)(5)
|
(A+O)/(G)
|
11.44
|
|
13.21
|
|
14.02
|
|
14.68
|
|
13.48
|
|
Efficiency ratio
(2)(6)
|
(C-O)/(B+M+P)
|
59.54
|
|
54.88
|
|
52.20
|
|
52.42
|
|
55.10
|
|
Net interest
margin
|
|
3.17
|
|
3.41
|
|
3.32
|
|
3.50
|
|
3.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary data
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (7)
|
(M)
|
$
684
|
|
$
1,787
|
|
$
1,374
|
|
$
2,119
|
|
$
596
|
|
Non-interest income
charge on tax-credit investments (8)
|
(N)
|
(579)
|
|
(1,610)
|
|
(1,112)
|
|
(1,594)
|
|
(506)
|
|
Net income on
tax-credit investments
|
(M+N)
|
105
|
|
177
|
|
262
|
|
525
|
|
90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(O)
|
$
1,200
|
|
$
1,202
|
|
$
1,218
|
|
$
1,246
|
|
$
1,268
|
|
Fully taxable
equivalent income adjustment
|
(P)
|
1,809
|
|
1,763
|
|
1,807
|
|
2,033
|
|
1,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net securities
losses/(gains) include the change in fair value of the Company's
equity securities in compliance with the Company's adoption of ASU
2016-01.
|
|
(2) Non-GAAP
financial measure.
|
|
|
|
|
|
|
|
|
|
|
|
(3) Total tangible
shareholders' equity is computed by taking total shareholders'
equity less the intangible assets at period-end.
|
|
|
|
|
|
Total tangible assets is
computed by taking total assets less the intangible assets at
period-end.
|
|
|
|
|
|
|
|
(4) Ratios are
annualized and based on average balance sheet amounts, where
applicable. Quarterly data may not sum to year-to-date data
due
|
|
|
|
to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
(5) Core return on
tangible equity is computed by dividing the total core income
adjusted for the tax-effected amortization of intangible
assets,
|
|
|
|
assuming a 27%
marginal rate, by tangible equity.
|
|
|
|
|
|
|
|
|
|
|
|
(6) Efficiency ratio
is computed by dividing total core tangible non-interest expense by
the sum of total net interest income on a fully
|
|
|
|
taxable equivalent basis and
total core non-interest income adjusted to include tax credit
benefit of tax shelter investments.
The
|
|
|
|
Company uses this non-GAAP
measure to provide important information regarding its operational
efficiency.
|
|
|
|
|
|
|
(7) The tax benefit
is the direct reduction to the income tax provision due to tax
credits and deductions generated from investments in
historic
|
|
|
|
rehabilitation and
low-income housing.
|
|
|
|
|
|
|
|
|
|
|
|
(8) The non-interest
income charge is the reduction to the tax-advantaged investments,
which are incurred as the tax credits are
generated.
|
|
|
|
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SOURCE Berkshire Hills Bancorp, Inc.