Berkshire Hills Reports Record Quarterly and Annual Core Earnings;
Dividend Announced; Annual Meeting Set
PITTSFIELD, Mass., Jan. 28, 2013 /PRNewswire/ -- Berkshire
Hills Bancorp, Inc. (NYSE: BHLB) reported record core earnings of
$13.2 million for the fourth quarter
and $44.2 million for the year 2012.
Berkshire produced $0.54 in
core earnings per share during the quarter, which was a 23%
improvement over the prior year fourth quarter and a 4% increase
over the third quarter of 2012. For the full year 2012,
Berkshire reported $1.98 in core earnings per share, which was a 29%
increase over 2011 core results of $1.54. Berkshire has posted three years of
consecutive quarterly core earnings growth due to ongoing business
expansion and improved profitability.
(Logo: http://photos.prnewswire.com/prnh/20120131/NE44966LOGO
)
Operations in the last two years have benefited from
acquisitions, including Beacon Federal Bancorp which was acquired
on October 19, 2012. GAAP
earnings include the impact of net non-core charges for mergers and
systems conversions. GAAP net income totaled $9.3 million ($0.38
per share) for the fourth quarter and a record $33.2 million ($1.49 per share) for the full year in
2012.
FOURTH QUARTER FINANCIAL HIGHLIGHTS
- 14% increase in total assets to $5.3
billion, compared to the prior quarter
- 23% increase in core earnings per share, compared to fourth
quarter of 2011
- 4% increase in core earnings per share, compared to the prior
quarter
- 20% revenue growth, compared to the prior quarter
- 3.67% net interest margin
- 13% annualized organic non-maturity deposit growth
- 10% organic demand deposit growth
- 0.52% non-performing assets/total assets
- 0.28% annualized net loan charge-offs/average loans
- 1.02% core ROA (0.72% GAAP ROA)
- 8.2% core ROE (5.8% GAAP ROE)
Berkshire Chairman and CEO Michael P.
Daly stated, "The success of our business initiatives
produced record core earnings and a double digit total stock return
for our shareholders in 2012. We maintained strong organic
growth while successfully integrating our bank acquisitions in
Northern Connecticut and
Central New York, and expanding
our lending in Eastern Massachusetts. Our fourth quarter net
interest margin increased and our core return on equity rose above
8%. With these achievements, we raised our quarterly dividend
to the highest level in our history."
Mr. Daly continued, "We have produced these results through
positive core operating leverage based on disciplined growth.
We achieved 49% year over year revenue growth in the fourth
quarter. Our total assets reached $5.3
billion, placing us among the 100 largest exchange traded
banks in the U.S. This scale has enabled ongoing
infrastructure investment in products and services which we deliver
with a responsive local focus in our regions. We have a
competitive advantage that we expect will result in sustainable
market share growth delivered with increased efficiency and
profitability."
Mr. Daly concluded, "We augmented our balance sheet strength in
2012 while improving our capital efficiency. Our performance
oriented team is focused on the drivers of customer preference and
shareholder returns. We recently set out ambitious three year
goals to maintain our market and financial momentum, including
double digit metrics for annual growth in per share core earnings
and core return on shareholder equity by the end of the plan
period. We are dedicated to delivering on the potential
of this franchise and on the promise of our brand and culture as
America's Most Exciting Bank®."
DIVIDEND DECLARED
The Board of Directors voted to declare a cash dividend of
$0.18 per share to shareholders of
record at the close of business on February
14, 2013, payable on February 28,
2013. The dividend was increased in the prior quarter by 6%
from the previous $0.17 per share
level. This dividend equates to a 3.1% annualized yield based on
the $23.03 average closing price of
Berkshire's common stock in the
fourth quarter of 2012.
ANNUAL MEETING DATE SET
The Board of Directors has voted that the Annual Meeting of
Shareholders shall be held on May 9,
2013 at the Crowne Plaza Hotel, One
West Street, Pittsfield,
Massachusetts at 10:00 a.m.
The date of March 14, 2013 was
established as the record date for the determination of the
shareholders entitled to notice of, and to vote at, the Annual
Meeting.
FINANCIAL CONDITION
Assets totaled $5.3 billion at
year-end 2012, including $0.8 billion
from the Beacon acquisition in
October. For the year 2012, total assets grew by
$1.3 billion (33%) from $4.0 billion including the benefit of organic
growth together with acquisitions. Overall measures of asset
quality, capital, and liquidity remained strong throughout the
year. Total shares outstanding increased in 2012 by 4 million
(19%) to approximately 25.1 million shares primarily as a result of
merger consideration.
For the year, organic loan growth was $156 million (5%), reflecting growth in
commercial business loans and residential mortgages.
Including merger impacts, total loan growth was 35% for the year
and 17% for the fourth quarter. Most fourth quarter
residential mortgage originations were sold to the secondary market
in the low rate environment, and selected commercial loans
outstanding were reduced as the Company rebalanced the portfolio
composition while absorbing merger related growth.
Berkshire continues to employ
its capital to support the credit needs of its markets and generate
shareholder returns. Organic commercial business loan growth
totaled $101 million (25%) for the
year. Berkshire is building
business loan volume in its markets as it targets banking
relationships with middle market customers who need a full range of
products and services provided by a responsive local banking
partner. Berkshire also
expanded its small business lending program to facilitate lending
across its footprint. Commercial business loans increased to
$600 million during the year,
comprising 30% of all commercial loans and 15% of total loans at
year-end.
Organic residential mortgage loan growth totaled $125 million (12%) for the year, including the
benefit of Berkshire's expanded
Eastern Massachusetts mortgage
lending team. Berkshire's
mortgage loan originations exceeded $1.1
billion in 2012, responding to strong demand related to
improved housing market conditions and low mortgage interest
rates. With the Beacon
acquisition, total consumer loans outstanding grew by $282 million (77%) in the fourth quarter.
Beacon's strong consumer lending
operations are expected to be a significant new source of loan
production for Berkshire as merger
integration is accomplished in 2013.
Asset quality metrics remained favorable throughout the year and
at year-end. Non-performing assets were 0.52% of year-end
assets. Fourth quarter annualized net loan charge-offs were
0.28% of average loans Year-end accruing delinquent loans
were 1.11% of loans, increasing modestly from 0.89% at the start of
the year including the impact of acquired banks. The loan
loss allowance increased by 2% during the year, while decreasing in
comparison to total loans due to the impact of acquired loans
recorded at net fair value, which comprised 34% of total year-end
loans.
For the year, organic deposit growth totaled $166 million (5%) primarily due to an increase in
low cost transaction account balances. This was principally
in demand deposit balances which posted 27% organic growth for the
year, with the largest increase coming in the fourth quarter.
Demand deposits are the focus of relationship based business
development for retail and business accounts. Total
commercial deposits increased to $1.3
billion at year-end, providing nearly a third of total
deposit funds. Reflecting customer liquidity preference in
the current low rate environment, ongoing transfers of maturing
time deposits combined with strong account growth to produce 8%
organic savings deposit growth and 7% organic money market account
growth for the year. During the fourth quarter, Berkshire opened additional New York branches
in Slingerlands and Wilton, continuing its de novo branch
expansion in the greater Albany
market where it now has 17 total branch offices.
Total year-end shareholders' equity increased to $666 million in 2012, including $90 million recorded for bank merger equity
consideration. Year-end tangible book value per
share increased to $15.56, as capital generation more
than offset the impact of merger intangibles resulting from the
accretive earnings streams acquired. Total book value per
share increased to $26.53 due mainly
to retained earnings. Berkshire utilized subordinated debt as a
significant source of merger consideration in order to take
advantage of attractive fixed rate capital available in the low
rate environment. This resulted in the more efficient
utilization of equity capital. Tangible equity/assets
remained strong at 7.8% at year-end, compared to 8.7% at the start
of the year.
RESULTS OF OPERATIONS
Berkshire posted strong core
growth in revenue, earnings, and earnings per share for the fourth
quarter and the year in 2012. Core profitability improved as
a result of the positive operating leverage attributable to revenue
growth and disciplined expense management. Berkshire is achieving these results while
bearing the costs of maintaining its asset sensitive interest rate
risk profile and absorbing the charges related to its branch and
team expansion, and its investment in technology and other
infrastructure. The fourth quarter was the first quarter to
include the combined operations of the year's acquisitions, and
year-to-year increases include the impact of 2011
acquisitions.
The fourth quarter core return on equity was 8.2%. GAAP
net income in most periods also reflected non-core charges which
were primarily merger related, together with systems conversion
costs. The reconciliation of net income and core income is
shown on table F-9 of the financial tables. Non-core charges
in the most recent quarter were primarily related to the
Beacon merger. For the year,
non-core charges were within the range of management
expectations. The Company does not view these non-core items
as a component of its ongoing operating costs. Including the
impact of non-core items, the fourth quarter GAAP return on equity
was 5.8%.
Berkshire's total fourth
quarter net revenue increased by $10.1
million to $59.6 million
compared to the linked quarter. Higher revenues included the
benefit of Beacon operations,
which produced $6.6 million in
revenue for the comparable period in the prior quarter (based on
the number of days that Beacon was
owned in the fourth quarter). Fourth quarter revenues also
included $1.4 million in net
securities gains primarily on Beacon stock held by Berkshire on the merger date. Excluding
the non-core securities gains, core revenues were $58.2 million or $9.54 per share annualized in the most recent
quarter. This is a 26% increase from $7.59 in the fourth quarter of 2011,
demonstrating the top line accretive benefit to shareholders from
acquisition activities and organic growth.
The net interest margin improved to 3.67% in the most recent
quarter, compared to 3.50% in the prior quarter and to 3.61% in the
fourth quarter of 2011. The total fourth quarter net benefit
from loan purchase accounting accretion was $3.2 million compared to $1.1 million in the prior quarter. This
increase contributed 0.18% to the fourth quarter net interest
margin and was primarily due to cash recoveries on a small number
of acquired impaired loans. The quarterly net interest margin
has varied throughout the year based on the impact of loan
prepayments and recoveries on deferred balances and purchase
accounting entries. The cost of deposits decreased to 0.59%
in the fourth quarter compared to 0.66% in the prior quarter.
This included the benefit of demand deposit growth, together with
the Beacon deposits.
Berkshire continues to maintain
its asset sensitive interest rate risk profile in order to enhance
its long-term earnings.
Fourth quarter fee income totaled $15.8
million, increasing by $1.9
million over the prior quarter. This was primarily due
to the benefit of Beacon
operations, which produced $1.2
million in fee income in the comparable period of the prior
quarter. Berkshire's fee
income in the second half of 2012 has benefited from higher
mortgage origination revenues related to increased refinancing
demand in the current low rate environment. Net mortgage
origination revenue totaled $5.9
million in the fourth quarter, compared to $4.3 million in the prior quarter. Fourth
quarter insurance revenues increased compared to the prior year
primarily due to a managed change in seasonal contingency
income. Near-record quarterly wealth management revenue was
achieved in the fourth quarter due to organic growth and improved
market conditions.
The fourth quarter provision for loans losses increased to
$2.8 million from $2.5 million in the prior quarter. Net loan
charge-offs totaled $2.7 million and
$2.3 million in these periods,
respectively. There were no significant changes in the Bank's
favorable charge-off metrics or in the metrics related to the loan
loss allowance, which increased by $0.1
million to $33.2 million
during the quarter.
Fourth quarter core non-interest expense totaled $36.8 million, increasing by $6.8 million from the prior quarter. This
included the impact of the Beacon
operations which generated $4.3
million in non-interest expense in the comparable period of
the prior quarter. As Berkshire completes the integration of
Beacon operations in 2013, it
expects to achieve annual net Beacon related cost savings of $5.5 million based on a 30% gross cost saving
target. The efficiency ratio measured 59.7% in the most
recent quarter, increasing from the prior quarter as the Company
absorbed additional variable costs related to expansion and
integration in anticipation of further efficiency gains in
2013. Fourth quarter non-recurring and merger related expense
totaled $7.5 million and was
primarily a result of Beacon
merger related expense. The core effective income tax rate
was 29% in the fourth quarter and 30% for the year 2012. The
GAAP effective income tax rate on continuing operations was 25% and
28% for the same periods, respectively, reflecting the higher
proportionate benefit of tax preference items on GAAP earnings net
of non-core merger charges.
NOTE ON ACCOUNTING CORRECTION
Based on a review of its lease agreements in the most recent
quarter, the Company determined that its net income had been
overstated by an immaterial amount in prior periods. The
expense recorded for leases with contractual cost escalators has
been corrected to reflect a level cost over the contractual lease
period, rather than based on the actual current period cost which
was previously recorded. As a result, non-interest expense
has been increased, and income tax expense has been decreased based
on the tax rate effective for this correction. This
correction was posted to 2012 income in the most recent quarter and
to 2011 annual income; it was immaterial to prior quarterly
results. Related adjustments have been made to the balance sheets
presented for retained earnings, other liabilities, and the tax
asset.
CONFERENCE CALL
Berkshire will conduct a
conference call/webcast at 10:00 a.m.
eastern time on Tuesday, January 29,
2013 to discuss the results for the quarter and provide
guidance about expected future results. Participants should
dial-in to the call a few minutes before it begins.
Information about the conference call follows:
Dial-in:
|
888-317-6003
|
Elite
Entry Number:
|
8255026
|
Webcast:
|
berkshirebank.com (investor relations
link)
|
A telephone replay of the call will be available through
Tuesday, February 5, 2013 by calling
877-344-7529 and entering conference number: 10023105. The
webcast and a podcast will be available at Berkshire's website above for an extended
period of time.
BACKGROUND
Berkshire Hills Bancorp is the parent of Berkshire Bank –
America's Most Exciting Bank®. The Company has
approximately $5.3 billion in assets
and 75 full service branch offices in Massachusetts, New
York, Connecticut, and
Vermont providing personal and
business banking, insurance, and wealth management services.
Berkshire Bank provides 100% deposit insurance protection for all
deposit accounts, regardless of amount, based on a combination of
FDIC insurance and the Depositors Insurance Fund (DIF).
FORWARD LOOKING STATEMENTS
This document may contain 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 made in this
document.
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 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 amounts which the Company
views as unrelated to its normalized operations, including merger
costs, restructuring costs, and systems conversion costs.
Similarly, the efficiency ratio is also adjusted for these non-core
items and for tax preference items. The Company also adjusts
certain equity related measures to exclude intangible assets due to
the importance of these measures to the investment community.
Non-GAAP expense adjustments are primarily related to charges
related to merger and acquisition activity. These charges
consist primarily of severance/benefit related expenses, contract
termination costs, and professional fees. There are
additionally non-GAAP adjustments related to non-recurring
securities gains, discontinued operations, the disposition of
excess properties, and core systems conversion costs. Tax
adjustments are based on an analysis of tax accruals for core
income and for GAAP income, with the net difference included with
non-core items and reflecting the timing impacts of tax expense
estimates.
CONTACTS
Investor Relations Contact
David Gonci; Investor Relations Officer;
413-281-1973
Media Contact
Lori
Gazzillo; AVP, Community Relations; 413-822-1695
BERKSHIRE HILLS BANCORP, INC.
|
CONSOLIDATED BALANCE SHEETS - UNAUDITED -
(F-1)
|
|
|
|
December
31,
|
September
30,
|
December
31,
|
|
(In
thousands)
|
2012
|
2012
|
2011
|
|
Assets
|
|
|
|
|
Cash and
due from banks
|
$
63,382
|
$
48,214
|
$
46,713
|
|
Short-term
investments
|
34,862
|
33,834
|
28,646
|
|
Total cash
and short-term investments
|
98,244
|
82,048
|
75,359
|
|
|
|
|
|
|
Trading
security
|
16,893
|
17,237
|
17,395
|
|
Securities
available for sale, at fair value
|
466,169
|
467,444
|
419,756
|
|
Securities
held to maturity, at amortized cost
|
51,024
|
51,156
|
58,912
|
|
Federal
Home Loan Bank stock and other restricted securities
|
39,785
|
37,135
|
37,118
|
|
Total
securities
|
573,871
|
572,972
|
533,181
|
|
|
|
|
|
|
Loans held
for sale
|
85,368
|
114,698
|
1,455
|
|
|
|
|
|
|
Residential mortgages
|
1,324,251
|
1,226,022
|
1,020,435
|
|
Commercial
mortgages
|
1,413,544
|
1,255,172
|
1,156,241
|
|
Commercial
business loans
|
600,126
|
568,781
|
410,292
|
|
Consumer
loans
|
650,733
|
368,417
|
369,602
|
|
Total
loans
|
3,988,654
|
3,418,392
|
2,956,570
|
|
Less:
Allowance for loan losses
|
(33,208)
|
(33,090)
|
(32,444)
|
|
Net
loans
|
3,955,446
|
3,385,302
|
2,924,126
|
|
|
|
|
|
|
Premises
and equipment, net
|
86,461
|
70,707
|
60,139
|
|
Other real
estate owned
|
1,929
|
1,399
|
1,900
|
|
Goodwill
|
255,199
|
220,688
|
202,391
|
|
Other
intangible assets
|
19,059
|
17,991
|
20,973
|
|
Cash
surrender value of bank-owned life insurance
|
88,198
|
76,904
|
75,009
|
|
Other
assets
|
131,313
|
92,578
|
92,362
|
|
Assets
from discontinued operations
|
-
|
-
|
5,362
|
|
Total
assets
|
$
5,295,088
|
$
4,635,287
|
$
3,992,257
|
|
|
|
|
|
|
Liabilities and stockholders'
equity
|
|
|
|
|
Demand
deposits
|
$
673,921
|
$
560,452
|
$
447,414
|
|
NOW
deposits
|
379,880
|
296,219
|
272,204
|
|
Money
market deposits
|
1,388,514
|
1,183,247
|
1,055,306
|
|
Savings
deposits
|
487,505
|
381,604
|
350,517
|
|
Total
non-maturity deposits
|
2,929,820
|
2,421,522
|
2,125,441
|
|
Time
deposits
|
1,170,589
|
1,028,286
|
975,734
|
|
Total
deposits
|
4,100,409
|
3,449,808
|
3,101,175
|
|
|
|
|
|
|
Senior
borrowings
|
358,471
|
447,246
|
221,938
|
|
Subordinated notes
|
89,617
|
89,602
|
15,464
|
|
Total
borrowings
|
448,088
|
536,848
|
237,402
|
|
|
|
|
|
|
Other
liabilities
|
81,047
|
59,267
|
46,368
|
|
Liabilities from discontinued operations
|
-
|
-
|
55,504
|
|
Total
liabilities
|
4,629,544
|
4,045,923
|
3,440,449
|
|
|
|
|
|
|
Total
stockholders' equity
|
665,544
|
589,364
|
551,808
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$
5,295,088
|
$
4,635,287
|
$
3,992,257
|
|
|
|
|
|
|
(1) At
year end 2011, four former Legacy New York branches were held for
sale as discontinued operations and sold as of January 20,
2012.
|
(2) The
Company acquired The Connecticut Bank and Trust Company ("CBT") on
April 20, 2012 with total assets of $0.3 billion.
|
|
(3) The
Company purchased certain assets and assumed certain limited
liabilities of Greenpark Mortgage Corporation
("Greenpark") on April
30, 2012 with total assets of $0.1 billion.
|
(4) The
Company acquired Beacon Federal Bancorp ("Beacon") on October 19,
2012 with total assets of $0.8 billion.
|
|
BERKSHIRE HILLS BANCORP, INC.
|
CONSOLIDATED LOAN & DEPOSIT ANALYSIS -
UNAUDITED - (F-2)
|
|
LOAN
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic
annualized growth %
|
(Dollars in millions)
|
|
Dec.
31,
2012
Balance
|
|
Acquired
Beacon Balance
|
|
Sept.
30,
2012
Balance
|
|
Acquired
CBT Balance
|
|
Dec.
31,
2011
Balance
|
|
Quarter
end
Dec. 31,
2012
|
Year to
date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
residential mortgages
|
|
$
1,324
|
|
$
169
|
|
$
1,226
|
|
$
10
|
|
$
1,020
|
|
(23)
|
%
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
mortgages:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
168
|
|
9
|
|
156
|
|
12
|
|
124
|
|
7
|
|
18
|
|
Single and
multi-family
|
|
124
|
|
50
|
|
91
|
|
18
|
|
106
|
|
(76)
|
|
(47)
|
|
Commercial
real estate
|
|
1,122
|
|
114
|
|
1,008
|
|
99
|
|
926
|
|
(0)
|
|
(2)
|
|
Total
commercial mortgages
|
|
1,414
|
|
173
|
|
1,255
|
|
129
|
|
1,156
|
|
(5)
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
commercial business loans
|
600
|
|
33
|
|
569
|
|
55
|
|
411
|
|
(1)
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
.
|
|
|
|
|
|
Total
commercial loans
|
|
2,014
|
|
206
|
|
1,824
|
|
184
|
|
1,567
|
|
(4)
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity
|
|
325
|
|
33
|
|
302
|
|
8
|
|
298
|
|
(13)
|
|
(5)
|
|
Other
|
|
326
|
|
258
|
|
66
|
|
8
|
|
72
|
|
14
|
|
(16)
|
|
Total
consumer loans
|
|
651
|
|
291
|
|
368
|
|
16
|
|
370
|
|
(9)
|
|
(7)
|
|
Total
loans
|
|
$
3,989
|
|
$
666
|
|
$
3,418
|
|
$
210
|
|
$
2,957
|
|
(11)
|
%
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic
annualized growth %
|
(Dollars in millions)
|
|
Dec.
31,
2012
Balance
|
|
Acquired
Beacon Balance
|
|
Sept.
30,
2012
Balance
|
|
Acquired
CBT Balance
|
|
Dec.
31,
2011
Balance
|
|
Quarter
end
Dec. 31,
2012
|
Year to
date
|
|
Demand
|
|
$
674
|
|
$
56
|
|
$
561
|
|
$
51
|
|
$
447
|
|
41
|
%
|
27
|
%
|
NOW
|
|
380
|
|
65
|
|
296
|
|
26
|
|
272
|
|
26
|
|
6
|
|
Money
market
|
|
1,388
|
|
201
|
|
1,182
|
|
60
|
|
1,055
|
|
2
|
|
7
|
|
Savings
|
|
488
|
|
107
|
|
382
|
|
2
|
|
351
|
|
(1)
|
|
8
|
|
Total
non-maturity deposits
|
|
2,930
|
|
429
|
|
2,421
|
|
139
|
|
2,125
|
|
13
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total time
deposits
|
|
1,170
|
|
195
|
|
1,028
|
|
72
|
|
976
|
|
(20)
|
|
(7)
|
|
Total
deposits
|
|
$
4,100
|
|
$
624
|
|
$
3,449
|
|
$
211
|
|
$
3,101
|
|
3
|
%
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Organic annualized growth rates are calculated on organic growth
only, which excludes the impact of mergers and
divestitures.
|
(2)
Quarterly data may not sum to annualized data due to
rounding.
|
BERKSHIRE HILLS BANCORP, INC.
|
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED -
(F-3)
|
|
|
|
|
|
|
Three
Months Ended
|
|
Years
Ended
|
|
December
31,
|
|
December
31,
|
(In
thousands, except per share data)
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Interest and dividend
income
|
|
|
|
|
|
|
|
Loans
|
$
47,601
|
|
$
35,466
|
|
$
160,936
|
|
$
124,398
|
Securities
and other
|
3,887
|
|
3,562
|
|
15,003
|
|
13,862
|
Total
interest and dividend income
|
51,488
|
|
39,028
|
|
175,939
|
|
138,260
|
Interest expense
|
|
|
|
|
|
|
|
Deposits
|
5,870
|
|
5,792
|
|
22,482
|
|
23,372
|
Borrowings
and subordinated debentures
|
3,653
|
|
2,101
|
|
10,069
|
|
8,368
|
Total
interest expense
|
9,523
|
|
7,893
|
|
32,551
|
|
31,740
|
Net
interest income
|
41,965
|
|
31,135
|
|
143,388
|
|
106,520
|
Non-interest income
|
|
|
|
|
|
|
|
Loan
related fees
|
7,012
|
|
856
|
|
17,555
|
|
3,160
|
Deposit
related fees
|
4,355
|
|
3,848
|
|
15,593
|
|
13,641
|
Insurance
commissions and fees
|
2,565
|
|
2,145
|
|
10,821
|
|
11,088
|
Wealth
management fees
|
1,865
|
|
1,650
|
|
7,296
|
|
5,838
|
Total fee
income
|
15,797
|
|
8,499
|
|
51,265
|
|
33,727
|
Other
|
421
|
|
318
|
|
1,306
|
|
(37)
|
Gain on
sale of securities, net
|
1,435
|
|
8
|
|
1,442
|
|
14
|
Non-recurring (loss) gain
|
-
|
|
-
|
|
43
|
|
2,099
|
Total
non-interest income
|
17,653
|
|
8,825
|
|
54,056
|
|
35,803
|
Total
net revenue
|
59,618
|
|
39,960
|
|
197,444
|
|
142,323
|
Provision for loan
losses
|
2,840
|
|
2,263
|
|
9,590
|
|
7,563
|
Non-interest expense
|
|
|
|
|
|
|
|
Compensation and benefits
|
18,862
|
|
13,172
|
|
64,081
|
|
49,545
|
Occupancy
and equipment
|
5,985
|
|
4,063
|
|
19,469
|
|
15,317
|
Technology
and communications
|
2,949
|
|
2,464
|
|
9,467
|
|
7,457
|
Marketing
and promotion
|
483
|
|
419
|
|
2,031
|
|
1,539
|
Professional services
|
1,600
|
|
1,146
|
|
5,785
|
|
4,669
|
FDIC
premiums and assessments
|
919
|
|
542
|
|
3,377
|
|
3,205
|
Other real
estate owned and foreclosures
|
66
|
|
153
|
|
281
|
|
2,003
|
Amortization of intangible
assets
|
1,357
|
|
1,314
|
|
5,339
|
|
4,236
|
Non-recurring and merger related
expenses
|
7,497
|
|
3,678
|
|
18,019
|
|
19,928
|
Other
|
4,548
|
|
2,579
|
|
12,957
|
|
8,543
|
Total
non-interest expense
|
44,266
|
|
29,530
|
|
140,806
|
|
116,442
|
|
|
|
|
|
|
|
|
Income
from continuing operations before income
taxes
|
12,512
|
|
8,167
|
|
47,048
|
|
18,318
|
Income tax
expense
|
3,183
|
|
609
|
|
13,223
|
|
1,884
|
Net
income from continuing operations
|
9,329
|
|
7,558
|
|
33,825
|
|
16,434
|
(Loss)
gain from discontinued operations before income
taxes
|
|
|
|
|
|
|
|
(including gain on disposals
$4,962 in 2011 and $63 in 2012)
|
-
|
|
4,692
|
|
(261)
|
|
4,684
|
Income tax
expense
|
-
|
|
3,773
|
|
376
|
|
3,770
|
Net
(loss) gain from discontinued operations
|
-
|
|
919
|
|
(637)
|
|
914
|
Net
income
|
$
9,329
|
|
$
8,477
|
|
$
33,188
|
|
$
17,348
|
|
|
|
|
|
|
|
|
Basic
earnings per share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.39
|
|
$
0.36
|
|
$
1.52
|
|
$
0.92
|
Discontinued operations
|
-
|
|
0.04
|
|
(0.03)
|
|
0.05
|
Total
basic earnings per share
|
$
0.39
|
|
$
0.40
|
|
$
1.49
|
|
$
0.97
|
|
|
|
|
|
|
|
|
Diluted
earnings per share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.38
|
|
$
0.36
|
|
$
1.52
|
|
$
0.92
|
Discontinued operations
|
-
|
|
0.04
|
|
(0.03)
|
|
0.05
|
Total
diluted earnings per share
|
$
0.38
|
|
$
0.40
|
|
$
1.49
|
|
$
0.97
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
24,165
|
|
20,930
|
|
22,201
|
|
17,885
|
Diluted
|
24,396
|
|
21,043
|
|
22,329
|
|
17,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The
Company acquired Rome Bancorp on April 1, 2011. The income
statement includes operations from that date.
|
(2) The
Company acquired Legacy Bancorp on July 21, 2011. The income
statement includes operations from that date.
|
(3) The
Company acquired CBT on April 20, 2012. The income statement
includes operations from that date.
|
(4) The
Company purchased certain assets and assumed certain limited
liabilities of Greenpark on April 30, 2012. The income
statement includes operations from that date.
|
(5) The
Company acquired Beacon Federal Bancorp on October 19, 2012. The
income statement includes operations from that date.
|
BERKSHIRE HILLS BANCORP, INC.
|
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED -
(F-4)
|
|
|
|
Quarters
Ended
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
(In
thousands, except per share data)
|
2012
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
Interest and dividend
income
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
47,601
|
|
$
39,497
|
|
$
38,787
|
|
$
35,051
|
|
$
35,466
|
|
Securities
and other
|
3,887
|
|
3,626
|
|
3,869
|
|
3,621
|
|
3,562
|
|
Total
interest and dividend income
|
51,488
|
|
43,123
|
|
42,656
|
|
38,672
|
|
39,028
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
5,870
|
|
5,628
|
|
5,482
|
|
5,502
|
|
5,792
|
|
Borrowings
and subordinated debentures
|
3,653
|
|
2,270
|
|
2,121
|
|
2,025
|
|
2,101
|
|
Total
interest expense
|
9,523
|
|
7,898
|
|
7,603
|
|
7,527
|
|
7,893
|
|
Net
interest income
|
41,965
|
|
35,225
|
|
35,053
|
|
31,145
|
|
31,135
|
|
Non-interest income
|
|
|
|
|
|
|
|
|
|
|
Loan
related fees
|
7,012
|
|
5,646
|
|
3,524
|
|
1,373
|
|
856
|
|
Deposit
related fees
|
4,355
|
|
3,775
|
|
3,963
|
|
3,500
|
|
3,848
|
|
Insurance
commissions and fees
|
2,565
|
|
2,742
|
|
2,768
|
|
2,746
|
|
2,145
|
|
Wealth
management fees
|
1,865
|
|
1,774
|
|
1,757
|
|
1,900
|
|
1,650
|
|
Total fee
income
|
15,797
|
|
13,937
|
|
12,012
|
|
9,519
|
|
8,499
|
|
Other
|
421
|
|
375
|
|
269
|
|
241
|
|
318
|
|
Gain on
sale of securities, net
|
1,435
|
|
-
|
|
7
|
|
-
|
|
8
|
|
Non-recurring (loss) gain
|
-
|
|
1
|
|
-
|
|
42
|
|
-
|
|
Total
non-interest income
|
17,653
|
|
14,313
|
|
12,288
|
|
9,802
|
|
8,825
|
|
Total
net revenue
|
59,618
|
|
49,538
|
|
47,341
|
|
40,947
|
|
39,960
|
|
Provision for loan
losses
|
2,840
|
|
2,500
|
|
2,250
|
|
2,000
|
|
2,263
|
|
Non-interest expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
18,862
|
|
15,992
|
|
15,638
|
|
13,589
|
|
13,172
|
|
Occupancy
and equipment
|
5,985
|
|
4,599
|
|
4,490
|
|
4,395
|
|
4,063
|
|
Technology
and communications
|
2,949
|
|
2,302
|
|
2,258
|
|
1,958
|
|
2,464
|
|
Marketing
and promotion
|
483
|
|
419
|
|
778
|
|
351
|
|
419
|
|
Professional services
|
1,600
|
|
1,327
|
|
1,493
|
|
1,365
|
|
1,146
|
|
FDIC
premiums and assessments
|
919
|
|
907
|
|
870
|
|
681
|
|
542
|
|
Other real
estate owned and foreclosures
|
66
|
|
42
|
|
(6)
|
|
179
|
|
153
|
|
Amortization of intangible
assets
|
1,357
|
|
1,314
|
|
1,357
|
|
1,311
|
|
1,314
|
|
Non-recurring and merger related
expenses
|
7,497
|
|
2,214
|
|
4,085
|
|
4,223
|
|
3,678
|
|
Other
|
4,548
|
|
3,046
|
|
3,221
|
|
2,142
|
|
2,579
|
|
Total
non-interest expense
|
44,266
|
|
32,162
|
|
34,184
|
|
30,194
|
|
29,530
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations before income
taxes
|
12,512
|
|
14,876
|
|
10,907
|
|
8,753
|
|
8,167
|
|
Income tax
expense
|
3,183
|
|
4,847
|
|
2,921
|
|
2,272
|
|
609
|
|
Net
income from continuing operations
|
9,329
|
|
10,029
|
|
7,986
|
|
6,481
|
|
7,558
|
|
(Loss)
gain from discontinued operations before income
taxes
|
|
|
|
|
|
|
|
|
|
|
(including gain on disposals
$4,962 in 2011 and $63 in 2012)
|
-
|
|
-
|
|
-
|
|
(261)
|
|
4,692
|
|
Income tax
expense (benefit)
|
-
|
|
-
|
|
-
|
|
376
|
|
3,773
|
|
Net
(loss) gain from discontinued operations
|
-
|
|
-
|
|
-
|
|
(637)
|
|
919
|
|
Net
income
|
$
9,329
|
|
$
10,029
|
|
$
7,986
|
|
$
5,844
|
|
$
8,477
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share:
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.39
|
|
$
0.46
|
|
$
0.37
|
|
$
0.31
|
|
$
0.36
|
|
Discontinued operations
|
-
|
|
-
|
|
-
|
|
(0.03)
|
|
0.04
|
|
Total
basic earnings per share
|
$
0.39
|
|
$
0.46
|
|
$
0.37
|
|
$
0.28
|
|
$
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share:
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.38
|
|
$
0.46
|
|
$
0.37
|
|
$
0.31
|
|
$
0.36
|
|
Discontinued operations
|
-
|
|
-
|
|
-
|
|
(0.03)
|
|
0.04
|
|
Total
diluted earnings per share
|
$
0.38
|
|
$
0.46
|
|
$
0.37
|
|
$
0.28
|
|
$
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
24,165
|
|
21,921
|
|
21,742
|
|
20,955
|
|
20,930
|
|
Diluted
|
24,396
|
|
22,031
|
|
21,806
|
|
21,062
|
|
21,043
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See
notes on pages F-1 and F-3 regarding merger, acquisitions and
divestiture.
|
|
|
|
|
|
BERKSHIRE HILLS BANCORP, INC.
|
ASSET
QUALITY ANALYSIS - (F-5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or for
the Quarters Ended
|
|
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
(Dollars in thousands)
|
|
|
2012
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
NON-PERFORMING ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Non-accruing loans:
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgages
|
|
|
$
7,466
|
|
$
8,440
|
|
$
8,525
|
|
$
8,281
|
|
$
7,010
|
Commercial
mortgages
|
|
|
12,617
|
|
13,552
|
|
15,336
|
|
12,151
|
|
14,280
|
Commercial
business loans
|
|
|
3,681
|
|
2,024
|
|
1,047
|
|
1,029
|
|
990
|
Consumer
loans
|
|
|
1,748
|
|
1,823
|
|
1,209
|
|
1,411
|
|
1,954
|
Total
non-accruing loans
|
|
|
25,512
|
|
25,839
|
|
26,117
|
|
22,872
|
|
24,234
|
Other real
estate owned
|
|
|
1,929
|
|
1,399
|
|
827
|
|
439
|
|
1,900
|
Total
non-performing assets
|
|
|
$
27,441
|
|
$
27,238
|
|
$
26,944
|
|
$
23,311
|
|
$
26,134
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
non-accruing loans/total loans
|
|
|
0.64%
|
|
0.76%
|
|
0.78%
|
|
0.75%
|
|
0.82%
|
Total
non-performing assets/total assets
|
|
|
0.52%
|
|
0.59%
|
|
0.60%
|
|
0.58%
|
|
0.65%
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND ALLOWANCE FOR LOAN
LOSSES
|
|
|
|
|
|
|
|
|
|
Balance at
beginning of period
|
|
|
$
33,090
|
|
$
32,868
|
|
$
32,657
|
|
$
32,444
|
|
$
32,181
|
Charged-off loans
|
|
|
(3,073)
|
|
(2,353)
|
|
(2,102)
|
|
(1,923)
|
|
(2,313)
|
Recoveries
on charged-off loans
|
|
|
351
|
|
75
|
|
63
|
|
136
|
|
313
|
Net loans
charged-off
|
|
|
(2,722)
|
|
(2,278)
|
|
(2,039)
|
|
(1,787)
|
|
(2,000)
|
Provision
for loan losses
|
|
|
2,840
|
|
2,500
|
|
2,250
|
|
2,000
|
|
2,263
|
Balance at
end of period
|
|
|
$
33,208
|
|
$
33,090
|
|
$
32,868
|
|
$
32,657
|
|
$
32,444
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for loan losses/total loans
|
|
|
0.83%
|
|
0.97%
|
|
0.98%
|
|
1.07%
|
|
1.10%
|
Allowance
for loan losses/non-accruing loans
|
|
|
130%
|
|
128%
|
|
126%
|
|
143%
|
|
134%
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOAN CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgages
|
|
|
$
(1,034)
|
|
$
(243)
|
|
$
(886)
|
|
$
(381)
|
|
$
(449)
|
Commercial
mortgages
|
|
|
(893)
|
|
(1,790)
|
|
(378)
|
|
(1,116)
|
|
(1,198)
|
Commercial
business loans
|
|
|
(496)
|
|
(99)
|
|
(2)
|
|
(3)
|
|
(244)
|
Home
equity
|
|
|
(22)
|
|
(90)
|
|
(707)
|
|
(247)
|
|
(90)
|
Other
consumer
|
|
|
(277)
|
|
(56)
|
|
(66)
|
|
(40)
|
|
(19)
|
Total,
net
|
|
|
$
(2,722)
|
|
$
(2,278)
|
|
$
(2,039)
|
|
$
(1,787)
|
|
$
(2,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
charge-offs (QTD annualized)/average loans
|
|
0.28%
|
|
0.27%
|
|
0.25%
|
|
0.24%
|
|
0.27%
|
Net
charge-offs (YTD annualized)/average loans
|
|
0.26%
|
|
0.25%
|
|
0.24%
|
|
0.24%
|
|
0.27%
|
|
|
|
|
|
|
|
|
|
|
|
|
DELINQUENT AND NON-ACCRUING LOANS/TOTAL
LOANS
|
|
|
|
|
|
|
|
|
30-89 Days
delinquent
|
|
|
0.63%
|
|
0.62%
|
|
0.41%
|
|
0.55%
|
|
0.55%
|
90+ Days
delinquent and still accruing
|
|
|
0.48%
|
|
0.38%
|
|
0.49%
|
|
0.40%
|
|
0.34%
|
Total
accruing delinquent loans
|
|
|
1.11%
|
|
1.00%
|
|
0.90%
|
|
0.95%
|
|
0.89%
|
Non-accruing loans
|
|
|
0.64%
|
|
0.76%
|
|
0.78%
|
|
0.75%
|
|
0.82%
|
Total
delinquent and non-accruing loans
|
|
|
1.75%
|
|
1.76%
|
|
1.68%
|
|
1.70%
|
|
1.71%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Amounts related to loans and deposits of discontinued operations
have not been reclassified on the above schedule,
|
although they are
reclassified out of loans and deposits on the balance sheet and
income statement.
|
BERKSHIRE HILLS BANCORP, INC.
|
SELECTED FINANCIAL HIGHLIGHTS -
(F-6)
|
|
|
|
|
|
|
|
|
|
At or for
the Quarters Ended
|
|
|
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
|
|
|
|
2012
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER
SHARE DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
earnings, diluted
|
|
$
0.54
|
|
$
0.52
|
|
$
0.47
|
|
$
0.45
|
|
$
0.44
|
|
|
|
Net
earnings, diluted
|
|
0.38
|
|
0.46
|
|
0.37
|
|
0.28
|
|
0.40
|
|
|
|
Tangible
book value
|
|
15.56
|
|
15.86
|
|
15.49
|
|
15.81
|
|
15.51
|
|
|
|
Total book
value
|
|
26.53
|
|
26.60
|
|
26.31
|
|
26.28
|
|
26.09
|
|
|
|
Market
price at period end
|
|
23.86
|
|
22.88
|
|
22.00
|
|
22.92
|
|
22.19
|
|
|
|
Dividends
|
|
0.18
|
|
0.17
|
|
0.17
|
|
0.17
|
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
return on assets
|
|
1.02
|
%
|
1.00
|
%
|
0.94
|
%
|
0.94
|
%
|
0.93
|
%
|
|
|
Return on
assets
|
|
0.72
|
|
0.88
|
|
0.73
|
|
0.59
|
|
0.85
|
|
|
|
Core
return on equity
|
|
8.23
|
|
7.81
|
|
7.13
|
|
6.80
|
|
6.74
|
|
|
|
Return on
equity
|
|
5.79
|
|
6.89
|
|
5.58
|
|
4.23
|
|
6.16
|
|
|
|
Net
interest margin, fully taxable equivalent
|
|
3.67
|
|
3.50
|
|
3.70
|
|
3.62
|
|
3.61
|
|
|
|
Fee
income/Net interest and fee income
|
|
27.35
|
|
28.35
|
|
25.52
|
|
23.44
|
|
21.44
|
|
|
|
Efficiency
ratio
|
|
59.68
|
|
56.54
|
|
59.29
|
|
59.27
|
|
59.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROWTH
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
commercial loans, year-to-date (annualized)
|
|
29
|
%
|
22
|
%
|
30
|
%
|
3
|
%
|
29
|
%
|
|
|
Total
loans, year-to-date (annualized)
|
|
35
|
|
21
|
|
27
|
|
11
|
|
38
|
|
|
|
Total
deposits, year-to-date (annualized)
|
|
30
|
|
12
|
|
16
|
|
11
|
|
41
|
|
|
|
Total net
revenues, year-to-date, compared to prior year
|
|
39
|
|
34
|
|
45
|
|
43
|
|
33
|
|
|
|
Earnings
per share, year-to-date, compared to prior year
|
|
62
|
|
106
|
|
110
|
|
40
|
|
(2)
|
|
|
|
Core
earnings per share, year-to-date, compared to prior year
|
|
29
|
|
30
|
|
39
|
|
50
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA (In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
5,294
|
|
$
4,634
|
|
$
4,508
|
|
$
4,029
|
|
$
3,992
|
|
|
|
Total
loans
|
|
3,989
|
|
3,418
|
|
3,366
|
|
3,039
|
|
2,957
|
|
|
|
Allowance
for loan losses
|
|
33
|
|
33
|
|
33
|
|
33
|
|
32
|
|
|
|
Total
intangible assets
|
|
274
|
|
239
|
|
240
|
|
222
|
|
223
|
|
|
|
Total
deposits
|
|
4,100
|
|
3,450
|
|
3,410
|
|
3,184
|
|
3,101
|
|
|
|
Total
stockholders' equity
|
|
666
|
|
591
|
|
583
|
|
557
|
|
552
|
|
|
|
Total core
income
|
|
13.2
|
|
11.4
|
|
10.2
|
|
9.4
|
|
9.3
|
|
|
|
Total net
income
|
|
9.3
|
|
10.0
|
|
8.0
|
|
5.8
|
|
8.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET
QUALITY RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
charge-offs (current quarter annualized)/average loans
|
|
0.28
|
%
|
0.27
|
%
|
0.25
|
%
|
0.24
|
%
|
0.27
|
%
|
|
|
Non-performing assets/total assets
|
|
0.52
|
|
0.59
|
|
0.60
|
|
0.58
|
|
0.65
|
|
|
|
Allowance
for loan losses/total loans
|
|
0.83
|
|
0.97
|
|
0.98
|
|
1.07
|
|
1.10
|
|
|
|
Allowance
for loan losses/non-accruing loans
|
|
130
|
|
128
|
|
126
|
|
143
|
|
134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity to total assets
|
|
12.60
|
%
|
12.75
|
%
|
12.94
|
%
|
13.82
|
%
|
13.82
|
%
|
|
|
Tangible
stockholders' equity to tangible assets
|
|
7.81
|
|
8.01
|
|
8.04
|
|
8.80
|
|
8.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Reconciliation of Non-GAAP financial measures,
including all references to core and tangible amounts, appear on
pages F-9 and F-10.
Tangible assets are total assets less total
intangible assets.
|
(2)
All performance ratios are annualized and are based
on average balance sheet amounts, where applicable.
|
(3)
Amounts related to loans and deposits of discontinued
operations have not been reclassified on the above schedule,
although they are reclassified out of loans and
deposits on the balance sheet and income
statement.
|
BERKSHIRE HILLS BANCORP, INC.
|
AVERAGE
BALANCES - (F-7)
|
|
|
|
Quarters
Ended
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
(In
thousands)
|
2012
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
Assets
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
Residential mortgages
|
$
1,340,375
|
|
$
1,207,635
|
|
$
1,167,007
|
|
$
1,057,903
|
|
$
1,039,025
|
Commercial
mortgages
|
1,404,515
|
|
1,276,909
|
|
1,250,741
|
|
1,153,690
|
|
1,166,989
|
Commercial
business loans
|
580,436
|
|
545,988
|
|
490,983
|
|
412,237
|
|
392,542
|
Consumer
loans
|
598,802
|
|
368,795
|
|
375,090
|
|
366,035
|
|
376,385
|
Total
loans
|
3,924,128
|
|
3,399,327
|
|
3,283,821
|
|
2,989,865
|
|
2,974,941
|
Securities
|
572,268
|
|
559,116
|
|
549,479
|
|
525,109
|
|
515,128
|
Short-term
investments and loans held for sale
|
126,378
|
|
115,835
|
|
47,302
|
|
15,107
|
|
20,748
|
Total
earning assets
|
4,622,774
|
|
4,074,278
|
|
3,880,602
|
|
3,530,081
|
|
3,510,817
|
Goodwill
and other intangible assets
|
267,588
|
|
239,186
|
|
235,961
|
|
223,930
|
|
230,864
|
Other
assets
|
320,104
|
|
258,246
|
|
235,712
|
|
235,909
|
|
247,376
|
Total
assets
|
$
5,210,466
|
|
$
4,571,710
|
|
$
4,352,275
|
|
$
3,989,920
|
|
$
3,989,057
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders'
equity
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
NOW
|
$
355,366
|
|
$
291,158
|
|
$
297,431
|
|
$
272,239
|
|
$
274,041
|
Money
market
|
1,362,868
|
|
1,170,840
|
|
1,136,161
|
|
1,084,948
|
|
953,162
|
Savings
|
463,692
|
|
376,064
|
|
370,182
|
|
359,859
|
|
446,672
|
Time
|
1,161,175
|
|
1,039,301
|
|
1,038,662
|
|
983,696
|
|
1,028,817
|
Total
interest-bearing deposits
|
3,343,101
|
|
2,877,363
|
|
2,842,436
|
|
2,700,742
|
|
2,702,692
|
Borrowings
and debentures
|
519,831
|
|
531,076
|
|
398,650
|
|
257,389
|
|
248,611
|
Total
interest-bearing liabilities
|
3,862,932
|
|
3,408,439
|
|
3,241,086
|
|
2,958,131
|
|
2,951,303
|
Non-interest-bearing demand deposits
|
635,044
|
|
537,466
|
|
498,972
|
|
439,015
|
|
448,952
|
Other
liabilities
|
68,447
|
|
43,047
|
|
39,665
|
|
40,039
|
|
38,110
|
Total
liabilities
|
4,566,423
|
|
3,988,952
|
|
3,779,723
|
|
3,437,185
|
|
3,438,365
|
|
|
|
|
|
|
|
|
|
|
Total
stockholders' equity
|
644,043
|
|
582,758
|
|
572,552
|
|
552,735
|
|
550,692
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$
5,210,466
|
|
$
4,571,710
|
|
$
4,352,275
|
|
$
3,989,920
|
|
$
3,989,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary data
|
|
|
|
|
|
|
|
|
|
Total
non-maturity deposits
|
$
2,816,970
|
|
$
2,375,528
|
|
$
2,302,746
|
|
$
2,156,061
|
|
$
2,122,827
|
Total
deposits
|
3,978,145
|
|
3,414,829
|
|
3,341,408
|
|
3,139,757
|
|
3,151,644
|
Fully
taxable equivalent income adj.
|
667
|
|
623
|
|
638
|
|
669
|
|
674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Average balances for securities available-for-sale are based on
amortized cost. Total loans include non-accruing
loans.
|
(2)
Amounts related to loans and deposits of discontinued operations
have not been reclassified on the above schedule,
|
although they are
reclassified out of loans and deposits on the balance sheet and
income statement.
|
BERKSHIRE HILLS BANCORP, INC.
|
AVERAGE
YIELDS (Fully Taxable Equivalent - Annualized) -
(F-8)
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
|
2012
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning
assets
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
Residential mortgages
|
4.00
|
%
|
4.28
|
%
|
4.58
|
%
|
4.63
|
%
|
4.68
|
%
|
Commercial
loans
|
5.29
|
|
4.85
|
|
5.00
|
|
4.89
|
|
4.98
|
|
Consumer
loans
|
4.56
|
|
3.97
|
|
3.93
|
|
3.98
|
|
4.03
|
|
Total
loans
|
4.73
|
|
4.62
|
|
4.75
|
|
4.72
|
|
4.74
|
|
Securities
|
3.17
|
|
3.02
|
|
3.30
|
|
3.29
|
|
3.26
|
|
Short-term
investments and loans held for sale
|
2.86
|
|
2.15
|
|
0.63
|
|
0.07
|
|
0.14
|
|
Total
earning assets
|
4.49
|
|
4.27
|
|
4.49
|
|
4.48
|
|
4.49
|
|
|
|
|
|
|
|
|
|
|
|
|
Funding
liabilities
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
NOW
|
0.35
|
|
0.28
|
|
0.30
|
|
0.26
|
|
0.39
|
|
Money
Market
|
0.45
|
|
0.47
|
|
0.49
|
|
0.55
|
|
0.62
|
|
Savings
|
0.18
|
|
0.18
|
|
0.18
|
|
0.20
|
|
0.19
|
|
Time
|
1.31
|
|
1.48
|
|
1.44
|
|
1.51
|
|
1.52
|
|
Total
interest-bearing deposits
|
0.70
|
|
0.78
|
|
0.78
|
|
0.82
|
|
0.87
|
|
Borrowings
and debentures
|
2.80
|
|
1.70
|
|
2.14
|
|
3.16
|
|
3.35
|
|
Total
interest-bearing liabilities
|
0.98
|
|
0.92
|
|
0.95
|
|
1.02
|
|
1.06
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest spread
|
3.51
|
|
3.35
|
|
3.54
|
|
3.46
|
|
3.43
|
|
Net
interest margin
|
3.67
|
|
3.50
|
|
3.70
|
|
3.62
|
|
3.61
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
funds
|
0.84
|
|
0.80
|
|
0.82
|
|
0.89
|
|
0.92
|
|
Cost of
deposits
|
0.59
|
|
0.66
|
|
0.66
|
|
0.71
|
|
0.73
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cost
of funds includes all deposits and borrowings.
|
(2)
Amounts related to loans and deposits of discontinued operations
have not been reclassified on the above schedule,
|
although they are
reclassified out of loans and deposits on the balance sheet and
income statement.
|
BERKSHIRE HILLS BANCORP, INC.
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES -
(F-9)
|
|
|
|
|
|
|
|
|
|
At or for
the Quarters Ended
|
|
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
(Dollars in thousands)
|
|
2012
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
Net
income
|
|
$
9,329
|
|
$
10,029
|
|
$
7,986
|
|
$
5,844
|
|
$
8,477
|
|
Adj: Gain
on sale of securities, net
|
|
(1,435)
|
|
-
|
|
(7)
|
|
-
|
|
(8)
|
|
Adj:
Other non-recurring gain
|
|
-
|
|
(1)
|
|
-
|
|
(42)
|
|
-
|
|
Plus:
Non-recurring and merger related expense
|
|
7,497
|
|
2,214
|
|
4,085
|
|
4,223
|
|
3,678
|
|
Adj:
Income taxes
|
|
(2,147)
|
|
(859)
|
|
(1,853)
|
|
(1,255)
|
|
(1,947)
|
|
Adj: Net
loss (income) from discontinued operations
|
|
-
|
|
-
|
|
-
|
|
637
|
|
(919)
|
|
Total core
income
|
(A)
|
$
13,244
|
|
$
11,383
|
|
$
10,211
|
|
$
9,407
|
|
$
9,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
non-interest income
|
|
$
17,653
|
|
$
14,313
|
|
$
12,288
|
|
$
9,878
|
|
$
8,825
|
|
Adj: Gain
on sale of securities, net
|
|
(1,435)
|
|
-
|
|
(7)
|
|
-
|
|
(8)
|
|
Adj:
Other non-recurring gain
|
|
-
|
|
(1)
|
|
-
|
|
(42)
|
|
-
|
|
Total core
non-interest
income
|
|
16,218
|
|
14,312
|
|
12,281
|
|
9,836
|
|
8,817
|
|
Net
interest income
|
|
41,965
|
|
35,225
|
|
35,053
|
|
31,138
|
|
31,135
|
|
Total core
revenue
|
|
$
58,183
|
|
$
49,537
|
|
$
47,334
|
|
$
40,974
|
|
$
39,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
non-interest expense
|
|
$
44,266
|
|
$
32,162
|
|
$
34,184
|
|
$
30,524
|
|
$
29,533
|
|
Less:
Non-recurring and merger related expense
|
|
(7,497)
|
|
(2,214)
|
|
(4,085)
|
|
(4,223)
|
|
(3,678)
|
|
Core
non-interest
expense
|
|
36,769
|
|
29,948
|
|
30,099
|
|
26,301
|
|
25,855
|
|
Less:
Amortization of intangible assets
|
|
(1,357)
|
|
(1,314)
|
|
(1,357)
|
|
(1,318)
|
|
(1,314)
|
|
Total core
tangible non-interest
expense
|
|
$
35,412
|
|
$
28,634
|
|
$
28,742
|
|
$
24,983
|
|
$
24,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
Total
average
assets
|
(B)
|
$
5,210
|
|
$
4,572
|
|
$
4,352
|
|
$
3,990
|
|
$
3,989
|
|
Total
average stockholders'
equity
|
(C)
|
644
|
|
583
|
|
573
|
|
553
|
|
551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
stockholders' equity, period-end
|
|
666
|
|
591
|
|
583
|
|
557
|
|
552
|
|
Less: Intangible assets, period-end
|
|
(274)
|
|
(239)
|
|
(240)
|
|
(222)
|
|
(224)
|
|
Total
tangible stockholders' equity,
period-end
|
(D)
|
$
392
|
|
$
352
|
|
$
343
|
|
$
335
|
|
$
328
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
shares outstanding, period-end
(thousands)
|
(E)
|
25,149
|
|
22,213
|
|
22,169
|
|
21,191
|
|
21,147
|
|
Average
diluted shares outstanding (thousands)
|
(F)
|
24,396
|
|
22,031
|
|
21,806
|
|
21,062
|
|
21,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
earnings per share, diluted
|
(A/F)
|
$
0.54
|
|
$
0.52
|
|
$
0.47
|
|
$
0.45
|
|
$
0.44
|
|
Tangible
book value per share, period-end
|
(D/E)
|
$
15.56
|
|
$
15.86
|
|
$
15.49
|
|
$
15.81
|
|
$
15.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
return (annualized) on assets
|
(A/B)
|
1.02
|
%
|
1.00
|
%
|
0.94
|
%
|
0.94
|
%
|
0.93
|
%
|
Core
return (annualized) on equity
|
(A/C)
|
8.23
|
|
7.81
|
|
7.13
|
|
6.80
|
|
6.74
|
|
Efficiency
ratio (1)
|
|
59.68
|
|
56.54
|
|
59.29
|
|
59.27
|
|
59.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary data
|
|
|
|
|
|
|
|
|
|
|
|
Tax credit
benefit of tax shelter investments
|
|
$
483
|
|
$
483
|
|
$
505
|
|
$
505
|
|
$
664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
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, which is used widely in the banking industry, to provide
important information regarding
|
|
its operational
efficiency.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Ratios
are annualized and based on average balance sheet amounts, where
applicable.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
Quarterly data may not sum to year-to-date data due to
rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
Amounts related to loans and deposits of discontinued operations
have not been reclassified on the above schedule,
|
|
although they are
reclassified out of loans and deposits on the balance sheet and
income statement.
|
|
|
|
|
BERKSHIRE HILLS BANCORP, INC.
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES -
(F-10)
|
|
|
|
|
|
|
|
|
|
At or for
the Years Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
(Dollars in thousands)
|
|
2012
|
|
2011
|
|
Net
income
|
|
$
33,188
|
|
$
17,348
|
|
Adj: Gain
on sale of securities, net
|
|
(1,442)
|
|
(14)
|
|
Adj:
Other non-recurring gain
|
|
(43)
|
|
(2,087)
|
|
Plus:
Non-recurring and merger related expense
|
|
18,019
|
|
19,928
|
|
Adj:
Income taxes
|
|
(6,114)
|
|
(6,547)
|
|
Adj: Net
loss (income) from discontinued operations
|
|
637
|
|
(914)
|
|
Total core
income
|
(A)
|
$
44,245
|
|
$
27,714
|
|
|
|
|
|
|
|
Total
non-interest income
|
|
$
54,132
|
|
$
35,803
|
|
Adj: Gain
on sale of securities, net
|
|
(1,442)
|
|
(14)
|
|
Adj:
Other non-recurring gain
|
|
(43)
|
|
(2,087)
|
|
Total core
non-interest
income
|
|
52,647
|
|
33,702
|
|
Net
interest income
|
|
143,381
|
|
106,520
|
|
Total core
revenue
|
|
$
196,028
|
|
$
140,222
|
|
|
|
|
|
|
|
Total
non-interest expense
|
|
$
141,136
|
|
$
116,055
|
|
Less:
Non-recurring and merger related expense
|
|
(18,019)
|
|
(19,928)
|
|
Core
non-interest
expense
|
|
123,117
|
|
96,127
|
|
Less:
Amortization of intangible assets
|
|
(5,346)
|
|
(4,236)
|
|
Total core
tangible non-interest
expense
|
|
$
117,771
|
|
$
91,891
|
|
|
|
|
|
|
|
(Dollars in millions, except per share
data)
|
|
|
|
|
|
Total
average
assets
|
(B)
|
$
4,531
|
|
$
3,485
|
|
Total
average stockholders'
equity
|
(C)
|
$
588
|
|
$
481
|
|
|
|
|
|
|
|
Total
stockholders' equity, period-end
|
|
$
666
|
|
$
552
|
|
Less:
Intangible assets, period-end
|
|
(274)
|
|
(224)
|
|
Total
tangible stockholders' equity,
period-end
|
(D)
|
$
392
|
|
$
328
|
|
|
|
|
|
|
|
Total
common shares outstanding, period-end
(thousands)
|
(E)
|
25,149
|
|
21,147
|
|
Average
diluted common shares outstanding (thousands)
|
(F)
|
22,329
|
|
17,952
|
|
|
|
|
|
|
|
Core
earnings per common share, diluted
|
(A/F)
|
$
1.98
|
|
$
1.54
|
|
Tangible
book value per common share, period-end
|
(D/E)
|
$
15.56
|
|
$
15.51
|
|
|
|
|
|
|
|
Core
return (annualized) on assets
|
(A/B)
|
0.98
|
%
|
0.80
|
%
|
Core
return (annualized) on equity
|
(A/C)
|
7.52
|
|
5.76
|
|
Efficiency
ratio (1)
|
|
58.71
|
|
63.23
|
|
|
|
|
|
|
|
Supplementary data
|
|
|
|
|
|
Tax credit
benefit of tax shelter investments
|
|
$
1,976
|
|
$
1,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Efficiency ratio is computed by dividing total core tangible core
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, which is used widely in the banking
industry, to provide important information
regarding its
operational efficiency.
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(2) Ratios
are annualized and based on average balance sheet amounts, where
applicable.
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(3)
Quarterly data may not sum to year-to-date data due to
rounding.
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(4)
Amounts related to loans and deposits of discontinued operations
have not been reclassified on the above
schedule, although
they are reclassified out of loans and deposits on the balance
sheet and income statement.
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SOURCE Berkshire Hills Bancorp, Inc.