PITTSFIELD, Mass., Jan. 27, 2014 /PRNewswire/ -- Berkshire
Hills Bancorp, Inc. (NYSE: BHLB) reported record net income
totaling $41 million in 2013, an
increase of 24% compared to $33
million in the prior year. Earnings per share
increased by 11% to $1.65 and
included the impact of shares issued in 2012 for bank
acquisitions. Core earnings increased to a record
$47 million in 2013 primarily due to
the benefit of growth in New York
and Eastern Massachusetts. Core earnings exclude net non-core
charges for acquisitions, restructuring, and systems
conversions. Core earnings per share totaled $1.87 in 2013, compared to $1.98 in the prior year.
(Logo: http://photos.prnewswire.com/prnh/20120131/NE44966LOGO
)
For the fourth quarter of 2013, Berkshire reported net income of $10.5 million ($0.42 per share), an increase of 13% over
$9.3 million ($0.38 per share) in the fourth quarter of
2012. Core earnings totaled $10.0 million ($0.40 per share) compared to $13.2 million ($0.54 per share) in 2012. Year over year
fourth quarter mortgage banking fees decreased by $5.4 million due to the decline in refinancing
volumes driven by higher mortgage interest rates compared to the
record low rates seen in the second half of 2012.
FOURTH QUARTER FINANCIAL HIGHLIGHTS
- 16% annualized loan growth
- 14% annualized growth in total commercial loans
- 3% decrease in core non-interest expense compared to prior
quarter
- 7% decrease in core non-interest expense compared to second
quarter
- 0.53% non-performing assets/total assets
- 0.31% net loan charge-offs/average loans
CEO Michael Daly stated, "We
produced record revenue and earnings in 2013 due to ongoing
expansion in our New England and New
York footprint. Loan growth was strong in all major
categories in recent quarters and our goal is to produce further
market share gains in 2014. Fee revenues increased in the
final months of the year and we further reduced operating expenses
through our restructuring strategies. We remain closely
focused on the revenue and efficiency opportunities that we see for
positive operating leverage based on the benefit of our expanded
footprint and upgraded systems."
Mr. Daly continued, "We enter 2014 with further initiatives to
build on our progress. We recently completed the acquisition
of 20 New York branches from Bank of America. We welcomed
more than 65,000 new customers, deepening our presence in the
communities between Albany and
Syracuse. The Bank opened a
new office in Loudonville, New
York this month as part of our ongoing organic
expansion. The Bank has also expanded our brand awareness
across our footprint through strategic media partnerships. We
will continue to be flexible and judicious in managing our growth
with the objective of reliable and attractive returns to investors
seeking a quality investment in these uncertain financial
markets."
BOARD CHANGE
Berkshire also announced that
Richard J. Murphy has been appointed
to the Board of Directors, replacing Geno
Auriemma, effective January
23, 2014. Mr. Murphy serves as Vice President and
General Manager of the Tri-City ValleyCats, a minor league baseball
team based in Troy, New York. With over 25 years of
experience in professional sports management, Mr. Murphy brings to
the Board a strong financial acumen, a solid background in brand
and marketing, and close ties to the Albany, NY community.
While Mr. Auriemma is stepping down from the Board, he will
continue to serve as a spokesperson for Berkshire Bank. As
Board Chairman, Mr. Daly stated, "The Board thanks Mr. Auriemma for
his significant contribution to expanding the America's Most
Exciting Bank brand in Connecticut
and we are pleased to be continuing that relationship. We
also congratulate him on his reappointment as the head coach of the
U.S. Women's National Basketball Team and we wish him much
success in his current season at the University of Connecticut."
ANNUAL MEETING DATE SET
The Board of Directors voted that the Annual Meeting of
Shareholders shall be held on May 8,
2014 at the Crowne Plaza Hotel, One
West Street, Pittsfield,
Massachusetts at 10:00 a.m.
The date of March 13, 2014 was
established as the record date for the determination of the
shareholders entitled to notice of, and to vote at, the Annual
Meeting.
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
13, 2014, payable on February
27, 2014. This dividend equates to a 2.8% annualized
yield based on the $25.97 average
closing price of Berkshire's
common stock during the fourth quarter of
2013.
NEW YORK BRANCH
ACQUISITION
On January 17, 2014, Berkshire acquired approximately $450 million in deposits from Bank of America,
together with related assets, including approximately $4 million in loans. Berkshire expects to use the proceeds to pay
down certain borrowings and to purchase investment
securities. As part of this transaction, Berkshire acquired 20 branches in Central New York, two of which were
consolidated as part of the transaction.
FINANCIAL CONDITION
Berkshire increased its total
assets by $223 million (4%) to
$5.7 billion in the most recent
quarter due to growth in loans and investment securities funded by
borrowings. For the year, total assets increased by 7%.
At year-end, measures of asset quality, liquidity, and capital
remained within targets. As of December 31, 2013, tangible book value per share
increased to $16.27 and total book
value per share grew to $27.08.
Total loans increased by $157
million (16% annualized) in the fourth quarter, including
double digit annualized growth in all major categories.
Berkshire's loan growth
accelerated in the second half of the year, reflecting higher
originations and a decline in runoff after the yield curve
steepened in mid-year. For the full year, loan growth was
approximately 5% in total and in most major categories.
Growth of 15% in commercial business loans included contributions
from new commercial banking teams recruited in Hartford, Syracuse, and Eastern Massachusetts. In
the latter market, Berkshire
consolidated its commercial banking team into a new regional
headquarters located on Route 128 in Burlington, and moved its Westborough regional team into a well located
new commercial office. During the year, Berkshire added a commercial leasing team and
new leadership for its expanded small business lending
program. Berkshire also
recruited additional mortgage loan originations leadership and
expanded its automobile lending operations across its footprint
under the direction of its Syracuse consumer lending team from the
acquired Beacon Federal Bank.
Berkshire increased its
investment securities by $81 million
in the fourth quarter, following a slightly larger increase in the
prior quarter due to improved securities market conditions.
Investments have been concentrated in medium term U.S. agency
mortgage backed instruments. Berkshire is further increasing its portfolio
with agency mortgage backed securities in conjunction with the
New York branch acquisition
subsequent to year-end.
Asset quality metrics remained favorable at year-end.
Annualized net loan charge-offs measured 0.31% of average loans in
the final quarter and 0.29% for the year. Year-end non-performing
assets were 0.53% of total assets, compared to 0.52% at the start
of the year. Accruing delinquent loans decreased to 0.73% of
total loans from 1.11% during the year. The loan loss
allowance measured 0.80% of total loans at year-end, compared to
0.83% at the start of the year. Approximately 24% of year-end
loans were balances recorded at fair value in recent bank
acquisitions.
Total non-maturity deposits increased by $29 million (4% annualized) in the fourth
quarter, while time account balances decreased by $62 million (23% annualized) as higher yielding
time accounts matured. For the year, deposits decreased by
$252 million (6%) due to the
outplacement of non-relationship acquired balances and certain
higher costing commercial balances primarily in the second
quarter. These changes were in anticipation of the
New York branch purchase announced
mid-year, which resulted in approximately a $450 million increase in deposits shortly after
year-end. The loan/deposit ratio measured 109% at year-end,
and the pro-forma loan/deposit ratio was estimated at approximately
97% including the benefit of these acquired branches. Total
borrowings increased by $234 million
in the fourth quarter to support the growth in earning
assets. Proceeds from the acquired deposits were planned to
be used in part to repay certain borrowings.
Total equity increased by $5
million during the fourth quarter and $11 million for the full year, including the
benefit of retained earnings and net of stock repurchases earlier
in the year. The ratio of total equity/assets decreased to
12.0% from 12.6% during the year due to the 7% increase in total
assets in 2013. The ratio of tangible equity/assets decreased
to 7.5% from 7.8% during the year.
RESULTS OF OPERATIONS
Berkshire posted record revenue
and earnings for the year due to expansion from organic and
acquisition growth strategies, including team recruitment, de novo
branch expansion, and business combinations. Most categories
of revenue and expense increased as a result of this
expansion. GAAP earnings include the impact of net non-core
charges for acquisitions, restructuring, and systems conversions.
The reconciliation of net income and core income, together with
related financial measures, is shown on financial tables F-9 and
F-10. In the fourth quarter, the return on assets measured
0.77% and the return on equity measured 6.18%, with minor impact
from non-core items.
Berkshire's fourth quarter net
revenue decreased by $4.1 million
(7%) year over year. This was primarily due to the
$5.4 million decrease in mortgage
banking fees from record volumes last year before rates increased
near mid-year 2013. Compared to the prior quarter, total net
revenue decreased by $2.4 million
(4%) as lower net interest income was partially offset by higher
securities gains.
Net interest income includes purchased loan accretion related to
loans acquired in business combinations. Purchased loan
accretion totaled $2.4 million in the
most recent quarter, compared to $8.5
million in the prior quarter; prior quarter results included
elevated recoveries of purchased impaired loans together with an
out-of-period accounting adjustment. The net interest margin
was 3.26% in the fourth quarter compared to 3.93% in the prior
quarter. Excluding purchased loan accretion, the net interest
margin was 3.07% and 3.21% in these two quarters, respectively, due
to lower earning asset yields in the most recent quarter. The
income impact of the margin change was partially offset by the 5%
increase in average earning assets compared to the prior
quarter.
Total fee income increased at a 6% annualized rate in the fourth
quarter compared to the linked quarter, including double digit
annualized growth in several major categories. Net securities
gains increased to $3.4 million from
$0.4 million due to the realization
of gains on certain bank equity securities as a result of improved
market conditions.
The allowance for loan losses increased slightly to $33.3 million from $33.2
million during the year. The provision for loan losses
also increased in 2013 to $11.4
million from $9.6 million in
the prior year. Total net loan charge-offs increased to
$11.3 million from $8.8 million primarily due to portfolio
growth. In the most recent quarter, the provision was
$3.1 million and net charge-offs were
$3.0 million.
Fourth quarter core non-interest expense decreased by 3% from
the linked quarter and by 7% from the second quarter of 2013 due to
the restructuring program initiated shortly after mid-year.
Most major categories of core expense decreased after
mid-year. Full time equivalent employees totaled 939 at
year-end. Total fourth quarter GAAP non-interest expense
decreased by 16% year over year and 13% compared to the linked
quarter including the impact of lower non-core charges. The
effective income tax rate was 31% for the most recent quarter and
29% for the full year 2013.
CONFERENCE CALL
Berkshire will conduct a
conference call/webcast at 10:00 a.m.
eastern time on Tuesday, January 28,
2014 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:
|
4858232
|
Webcast:
|
berkshirebank.com
(investor relations link)
|
A telephone replay of the call will be available through
Wednesday, February 5, 2014 by
calling 877-344-7529 and entering conference number: 10038874. The
webcast 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®. Including New York
branches acquired in January, the Company has approximately
$6.0 billion in assets and 92 full
service branch offices in Massachusetts, New
York, Connecticut, and
Vermont providing personal and
business banking, insurance, and wealth management
services.
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 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. In the
second half of 2013, non-core restructuring charges are related to
severance costs as a result of management and staffing changes,
along with facilities costs related to excess facilities where the
bank is exiting its occupancy and investment. Non-core items
recorded in the third quarter of 2013 also included the after-tax
impact of an out-of-period accounting adjustment, along with an
adjustment of variable compensation based on the additional revenue
recognition.
CONTACTS
Investor Relations Contact
Allison O'Rourke; Vice President - Investor
Relations; 413-236-3149
Media Contact
Ray
Smith; Assistant Vice President - Marketing;
413-236-3756
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
BALANCE SHEETS - UNAUDITED - (F-1)
|
|
|
|
December
31,
|
September
30,
|
December
31,
|
|
(In
thousands)
|
2013
|
2013
|
2012
|
|
Assets
|
|
|
|
|
Cash and due from
banks
|
$
56,841
|
$
61,149
|
$
63,382
|
|
Short-term
investments
|
18,698
|
15,710
|
34,862
|
|
Total cash and
short-term investments
|
75,539
|
76,859
|
98,244
|
|
|
|
|
|
|
Trading
security
|
14,840
|
15,330
|
16,893
|
|
Securities available
for sale, at fair value
|
760,048
|
684,716
|
466,169
|
|
Securities held to
maturity, at amortized cost
|
44,921
|
46,925
|
51,024
|
|
Federal Home Loan
Bank stock and other restricted securities
|
50,282
|
42,342
|
39,785
|
|
Total
securities
|
870,091
|
789,313
|
573,871
|
|
|
|
|
|
|
Loans held for
sale
|
15,840
|
27,064
|
85,368
|
|
|
|
|
|
|
Residential
mortgages
|
1,384,274
|
1,313,609
|
1,324,251
|
|
Commercial
mortgages
|
1,417,120
|
1,366,104
|
1,413,544
|
|
Commercial business
loans
|
687,293
|
668,983
|
600,126
|
|
Consumer
loans
|
691,836
|
675,147
|
650,733
|
|
Total
loans
|
4,180,523
|
4,023,843
|
3,988,654
|
|
Less: Allowance for
loan losses
|
(33,323)
|
(33,248)
|
(33,208)
|
|
Net loans
|
4,147,200
|
3,990,595
|
3,955,446
|
|
|
|
|
|
|
Premises and
equipment, net
|
84,459
|
83,136
|
86,461
|
|
Other real estate
owned
|
2,758
|
3,561
|
1,929
|
|
Goodwill
|
256,871
|
256,871
|
255,199
|
|
Other intangible
assets
|
13,791
|
15,030
|
19,059
|
|
Cash surrender value
of bank-owned life insurance
|
101,530
|
100,299
|
88,198
|
|
Deferred tax
asset
|
50,711
|
61,617
|
57,729
|
|
Other
assets
|
54,009
|
45,911
|
75,305
|
|
Total
assets
|
$
5,672,799
|
$
5,450,256
|
$
5,296,809
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Demand
deposits
|
$
677,917
|
$
669,878
|
$
673,921
|
|
NOW
deposits
|
353,612
|
352,762
|
379,880
|
|
Money market
deposits
|
1,383,856
|
1,357,201
|
1,439,632
|
|
Savings
deposits
|
431,496
|
438,135
|
436,387
|
|
Total non-maturity
deposits
|
2,846,881
|
2,817,976
|
2,929,820
|
|
Time
deposits
|
1,001,648
|
1,064,049
|
1,170,589
|
|
Total
deposits
|
3,848,529
|
3,882,025
|
4,100,409
|
|
|
|
|
|
|
Senior
borrowings
|
974,428
|
740,022
|
358,471
|
|
Subordinated
notes
|
89,679
|
89,663
|
89,617
|
|
Total
borrowings
|
1,064,107
|
829,685
|
448,088
|
|
|
|
|
|
|
Other
liabilities
|
82,101
|
65,351
|
81,047
|
|
Total
liabilities
|
4,994,737
|
4,777,061
|
4,629,544
|
|
|
|
|
|
|
Total stockholders'
equity
|
678,062
|
673,195
|
667,265
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
5,672,799
|
$
5,450,256
|
$
5,296,809
|
|
|
|
|
|
|
(1) Certain
reclassifications have been made to prior year balances to conform
to the current year presentation.
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED LOAN
& DEPOSIT ANALYSIS - UNAUDITED - (F-2)
|
|
LOAN
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized growth
%
|
(Dollars in
millions)
|
|
Dec. 31, 2013
Balance
|
|
|
Sept. 30, 2013
Balance
|
|
|
Dec. 31, 2012
Balance
|
|
Quarter ended
December 31, 2013
|
Year to
date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total residential
mortgages
|
|
$
1,384
|
|
|
$
1,314
|
|
|
$
1,324
|
|
22
|
%
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
mortgages:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
139
|
|
|
105
|
|
|
168
|
|
132
|
|
(17)
|
|
Single and
multi-family
|
|
128
|
|
|
132
|
|
|
124
|
|
(10)
|
|
4
|
|
Commercial real
estate
|
|
1,150
|
|
|
1,129
|
|
|
1,122
|
|
7
|
|
2
|
|
Total commercial
mortgages
|
|
1,417
|
|
|
1,366
|
|
|
1,414
|
|
15
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial
business loans
|
688
|
|
|
669
|
|
|
600
|
|
12
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial
loans
|
|
2,105
|
|
|
2,035
|
|
|
2,014
|
|
14
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity
|
|
307
|
|
|
304
|
|
|
325
|
|
4
|
|
(6)
|
|
Other
|
|
385
|
|
|
371
|
|
|
326
|
|
16
|
|
18
|
|
Total consumer
loans
|
|
692
|
|
|
675
|
|
|
651
|
|
10
|
|
6
|
|
Total
loans
|
|
$
4,181
|
|
|
$
4,024
|
|
|
$
3,989
|
|
16
|
%
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized growth
%
|
(Dollars in
millions)
|
|
Dec. 31, 2013
Balance
|
|
|
Sept. 30, 2013
Balance
|
|
|
Dec. 31, 2012
Balance
|
|
Quarter ended
December 31, 2013
|
Year to
date
|
|
Demand
|
|
$
678
|
|
|
$
670
|
|
|
$
674
|
|
5
|
%
|
1
|
%
|
NOW
|
|
354
|
|
|
353
|
|
|
380
|
|
1
|
|
(7)
|
|
Money
market
|
|
1,384
|
|
|
1,357
|
|
|
1,440
|
|
8
|
|
(4)
|
|
Savings
|
|
431
|
|
|
438
|
|
|
436
|
|
(6)
|
|
(1)
|
|
Total non-maturity
deposits
|
|
2,847
|
|
|
2,818
|
|
|
2,930
|
|
4
|
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total time
deposits
|
|
1,002
|
|
|
1,064
|
|
|
1,170
|
|
(23)
|
|
(14)
|
|
Total
deposits
|
|
$
3,849
|
|
|
$
3,882
|
|
|
$
4,100
|
|
(3)
|
%
|
(6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 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)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Interest and
dividend income
|
|
|
|
|
|
|
|
Loans
|
$
43,566
|
|
$
47,601
|
|
$
186,115
|
|
$
160,936
|
Securities and
other
|
5,093
|
|
3,887
|
|
17,626
|
|
15,003
|
Total interest and
dividend income
|
48,659
|
|
51,488
|
|
203,741
|
|
175,939
|
Interest
expense
|
|
|
|
|
|
|
|
Deposits
|
5,166
|
|
5,870
|
|
20,859
|
|
22,482
|
Borrowings and
subordinated debentures
|
3,651
|
|
3,653
|
|
14,130
|
|
10,069
|
Total interest
expense
|
8,817
|
|
9,523
|
|
34,989
|
|
32,551
|
Net interest
income
|
39,842
|
|
41,965
|
|
168,752
|
|
143,388
|
Non-interest
income
|
|
|
|
|
|
|
|
Loan related
fees
|
1,578
|
|
1,162
|
|
8,247
|
|
5,152
|
Mortgage banking
fees
|
445
|
|
5,850
|
|
5,235
|
|
12,403
|
Deposit related
fees
|
4,717
|
|
4,355
|
|
18,340
|
|
15,593
|
Insurance commissions
and fees
|
2,143
|
|
2,565
|
|
10,020
|
|
10,821
|
Wealth management
fees
|
2,212
|
|
1,865
|
|
8,683
|
|
7,296
|
Total fee
income
|
11,095
|
|
15,797
|
|
50,525
|
|
51,265
|
Other
|
1,227
|
|
421
|
|
2,949
|
|
1,306
|
Gain on sale of
securities, net
|
3,392
|
|
293
|
|
4,758
|
|
300
|
Non-recurring
gain
|
-
|
|
1,142
|
|
-
|
|
1,185
|
Total non-interest
income
|
15,714
|
|
17,653
|
|
58,232
|
|
54,056
|
Total net
revenue
|
55,556
|
|
59,618
|
|
226,984
|
|
197,444
|
Provision for loan
losses
|
3,100
|
|
2,840
|
|
11,378
|
|
9,590
|
Non-interest
expense
|
|
|
|
|
|
|
|
Compensation and
benefits
|
16,736
|
|
18,862
|
|
71,134
|
|
64,081
|
Occupancy and
equipment
|
5,421
|
|
5,985
|
|
22,540
|
|
19,469
|
Technology and
communications
|
3,169
|
|
2,949
|
|
12,944
|
|
9,467
|
Marketing and
promotion
|
765
|
|
483
|
|
2,596
|
|
2,031
|
Professional
services
|
1,558
|
|
1,600
|
|
6,569
|
|
5,785
|
FDIC premiums and
assessments
|
899
|
|
919
|
|
3,473
|
|
3,377
|
Other real estate
owned and foreclosures
|
255
|
|
66
|
|
700
|
|
281
|
Amortization of
intangible assets
|
1,239
|
|
1,357
|
|
5,268
|
|
5,339
|
Merger, restructuring
and conversion related
expenses
|
2,493
|
|
7,497
|
|
14,848
|
|
18,019
|
Other
|
4,622
|
|
4,548
|
|
17,287
|
|
12,957
|
Total non-interest
expense
|
37,157
|
|
44,266
|
|
157,359
|
|
140,806
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income
taxes
|
15,299
|
|
12,512
|
|
58,247
|
|
47,048
|
Income tax
expense
|
4,762
|
|
3,183
|
|
17,104
|
|
13,223
|
Net income from
continuing operations
|
10,537
|
|
9,329
|
|
41,143
|
|
33,825
|
Loss from
discontinued operations before income taxes
|
|
|
|
|
|
|
|
(including gain on disposals
of $63)
|
-
|
|
-
|
|
-
|
|
(261)
|
Income tax
expense
|
-
|
|
-
|
|
-
|
|
376
|
Net loss from
discontinued operations
|
-
|
|
-
|
|
-
|
|
(637)
|
Net
income
|
$
10,537
|
|
$
9,329
|
|
$
41,143
|
|
$
33,188
|
|
|
|
|
|
|
|
|
Basic earnings per
share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.43
|
|
$
0.39
|
|
$
1.66
|
|
$
1.52
|
Discontinued
operations
|
-
|
|
-
|
|
-
|
|
(0.03)
|
Total basic
earnings per share
|
$
0.43
|
|
$
0.39
|
|
$
1.66
|
|
$
1.49
|
|
|
|
|
|
|
|
|
Diluted earnings
per share:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.42
|
|
$
0.38
|
|
$
1.65
|
|
$
1.52
|
Discontinued
operations
|
-
|
|
-
|
|
-
|
|
(0.03)
|
Total diluted
earnings per share
|
$
0.42
|
|
$
0.38
|
|
$
1.65
|
|
$
1.49
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
24,701
|
|
24,165
|
|
24,802
|
|
22,201
|
Diluted
|
24,857
|
|
24,396
|
|
24,965
|
|
22,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
43,566
|
|
$
50,025
|
|
$
45,443
|
|
$
47,081
|
|
$
47,601
|
|
Securities and
other
|
5,093
|
|
4,479
|
|
4,254
|
|
3,800
|
|
3,887
|
|
Total interest and
dividend income
|
48,659
|
|
54,504
|
|
49,697
|
|
50,881
|
|
51,488
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
5,166
|
|
5,278
|
|
5,052
|
|
5,363
|
|
5,870
|
|
Borrowings and
subordinated debentures
|
3,651
|
|
3,357
|
|
3,541
|
|
3,581
|
|
3,653
|
|
Total interest
expense
|
8,817
|
|
8,635
|
|
8,593
|
|
8,944
|
|
9,523
|
|
Net interest
income
|
39,842
|
|
45,869
|
|
41,104
|
|
41,937
|
|
41,965
|
|
Non-interest
income
|
|
|
|
|
|
|
|
|
|
|
Loan related
fees
|
1,578
|
|
1,308
|
|
2,644
|
|
2,717
|
|
1,162
|
|
Mortgage banking
fees
|
445
|
|
444
|
|
2,129
|
|
2,217
|
|
5,850
|
|
Deposit related
fees
|
4,717
|
|
4,559
|
|
4,805
|
|
4,259
|
|
4,355
|
|
Insurance commissions
and fees
|
2,143
|
|
2,473
|
|
2,407
|
|
2,997
|
|
2,565
|
|
Wealth management
fees
|
2,212
|
|
2,137
|
|
2,070
|
|
2,264
|
|
1,865
|
|
Total fee
income
|
11,095
|
|
10,921
|
|
14,055
|
|
14,454
|
|
15,797
|
|
Other
|
1,227
|
|
832
|
|
546
|
|
344
|
|
421
|
|
Gain on sale of
securities, net
|
3,392
|
|
361
|
|
1,005
|
|
-
|
|
293
|
|
Non-recurring
gain
|
-
|
|
-
|
|
-
|
|
-
|
|
1,142
|
|
Total non-interest
income
|
15,714
|
|
12,114
|
|
15,606
|
|
14,798
|
|
17,653
|
|
Total net
revenue
|
55,556
|
|
57,983
|
|
56,710
|
|
56,735
|
|
59,618
|
|
Provision for loan
losses
|
3,100
|
|
3,178
|
|
2,700
|
|
2,400
|
|
2,840
|
|
Non-interest
expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
16,736
|
|
18,506
|
|
18,151
|
|
17,741
|
|
18,862
|
|
Occupancy and
equipment
|
5,421
|
|
5,614
|
|
5,737
|
|
5,768
|
|
5,985
|
|
Technology and
communications
|
3,169
|
|
3,304
|
|
3,480
|
|
2,991
|
|
2,949
|
|
Marketing and
promotion
|
765
|
|
590
|
|
603
|
|
638
|
|
483
|
|
Professional
services
|
1,558
|
|
1,757
|
|
1,764
|
|
1,490
|
|
1,600
|
|
FDIC premiums and
assessments
|
899
|
|
856
|
|
890
|
|
828
|
|
919
|
|
Other real estate
owned and foreclosures
|
255
|
|
138
|
|
284
|
|
23
|
|
66
|
|
Amortization of
intangible assets
|
1,239
|
|
1,307
|
|
1,345
|
|
1,377
|
|
1,357
|
|
Merger, restructuring
and conversion related
expenses
|
2,493
|
|
6,516
|
|
775
|
|
5,064
|
|
7,497
|
|
Other
|
4,622
|
|
4,196
|
|
4,906
|
|
3,563
|
|
4,548
|
|
Total non-interest
expense
|
37,157
|
|
42,784
|
|
37,935
|
|
39,483
|
|
44,266
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income
taxes
|
15,299
|
|
12,021
|
|
16,075
|
|
14,852
|
|
12,512
|
|
Income tax
expense
|
4,762
|
|
3,917
|
|
4,038
|
|
4,387
|
|
3,183
|
|
Net
income
|
$
10,537
|
|
$
8,104
|
|
$
12,037
|
|
$
10,465
|
|
$
9,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.43
|
|
$
0.33
|
|
$
0.49
|
|
$
0.42
|
|
$
0.39
|
|
Discontinued
operations
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total basic
earnings per share
|
$
0.43
|
|
$
0.33
|
|
$
0.49
|
|
$
0.42
|
|
$
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share:
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.42
|
|
$
0.33
|
|
$
0.48
|
|
$
0.42
|
|
$
0.38
|
|
Discontinued
operations
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total diluted
earnings per share
|
$
0.42
|
|
$
0.33
|
|
$
0.48
|
|
$
0.42
|
|
$
0.38
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
24,701
|
|
24,748
|
|
24,779
|
|
24,927
|
|
24,165
|
|
Diluted
|
24,857
|
|
24,873
|
|
24,956
|
|
25,136
|
|
24,396
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The Company
acquired Beacon Federal Bancorp on October 19, 2012. The income
statements include operations of the acquired
|
institution as of that
date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-accruing
loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
|
|
$
7,867
|
|
$
8,487
|
|
$
5,945
|
|
$
8,818
|
|
$
7,466
|
|
Commercial
mortgages
|
|
|
13,739
|
|
13,800
|
|
14,948
|
|
12,396
|
|
12,617
|
|
Commercial business
loans
|
|
|
2,356
|
|
2,753
|
|
3,481
|
|
3,519
|
|
3,681
|
|
Consumer
loans
|
|
|
3,493
|
|
3,227
|
|
2,405
|
|
2,325
|
|
1,748
|
|
Total non-accruing
loans
|
|
|
27,455
|
|
28,267
|
|
26,779
|
|
27,058
|
|
25,512
|
|
Other real estate
owned
|
|
|
2,758
|
|
3,561
|
|
2,713
|
|
2,513
|
|
1,929
|
|
Total non-performing
assets
|
|
|
$
30,213
|
|
$
31,828
|
|
$
29,492
|
|
$
29,571
|
|
$
27,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-accruing
loans/total loans
|
|
|
0.66%
|
|
0.70%
|
|
0.69%
|
|
0.70%
|
|
0.64%
|
|
Total non-performing
assets/total assets
|
|
|
0.53%
|
|
0.58%
|
|
0.56%
|
|
0.56%
|
|
0.52%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND
ALLOWANCE FOR LOAN LOSSES
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
|
|
$
33,248
|
|
$
33,248
|
|
$
33,263
|
|
$
33,208
|
|
$
33,090
|
|
Charged-off
loans
|
|
|
(3,462)
|
|
(3,417)
|
|
(3,457)
|
|
(2,501)
|
|
(3,073)
|
|
Recoveries on
charged-off loans
|
|
|
437
|
|
239
|
|
742
|
|
156
|
|
351
|
|
Net loans
charged-off
|
|
|
(3,025)
|
|
(3,178)
|
|
(2,715)
|
|
(2,345)
|
|
(2,722)
|
|
Provision for loan
losses
|
|
|
3,100
|
|
3,178
|
|
2,700
|
|
2,400
|
|
2,840
|
|
Balance at end of
period
|
|
|
$
33,323
|
|
$
33,248
|
|
$
33,248
|
|
$
33,263
|
|
$
33,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses/total loans
|
|
|
0.80%
|
|
0.83%
|
|
0.86%
|
|
0.86%
|
|
0.83%
|
|
Allowance for loan
losses/non-accruing loans
|
|
|
121%
|
|
118%
|
|
124%
|
|
123%
|
|
130%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOAN
CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
|
|
$
(564)
|
|
$
(351)
|
|
$
(852)
|
|
$
(260)
|
|
$
(1,034)
|
|
Commercial
mortgages
|
|
|
(763)
|
|
(1,480)
|
|
(1,283)
|
|
(952)
|
|
(893)
|
|
Commercial business
loans
|
|
|
(1,042)
|
|
(940)
|
|
(93)
|
|
(631)
|
|
(496)
|
|
Home
equity
|
|
|
45
|
|
(174)
|
|
(121)
|
|
(199)
|
|
(22)
|
|
Other
consumer
|
|
|
(701)
|
|
(233)
|
|
(366)
|
|
(303)
|
|
(277)
|
|
Total, net
|
|
|
$
(3,025)
|
|
$
(3,178)
|
|
$
(2,715)
|
|
$
(2,345)
|
|
$
(2,722)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
|
0.31%
|
|
0.32%
|
|
0.27%
|
|
0.23%
|
|
0.28%
|
|
Net charge-offs (YTD
annualized)/average loans
|
|
0.29%
|
|
0.28%
|
|
0.26%
|
|
0.23%
|
|
0.26%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELINQUENT AND
NON-ACCRUING LOANS/TOTAL LOANS
|
|
|
|
|
|
|
|
|
|
30-89 Days
delinquent
|
|
|
0.51%
|
|
0.42%
|
|
0.70%
|
|
0.61%
|
|
0.63%
|
|
90+ Days delinquent
and still accruing
|
|
|
0.22%
|
|
0.29%
|
|
0.40%
|
|
0.47%
|
|
0.48%
|
|
Total accruing
delinquent loans
|
|
|
0.73%
|
|
0.71%
|
|
1.10%
|
|
1.08%
|
|
1.11%
|
|
Non-accruing
loans
|
|
|
0.66%
|
|
0.70%
|
|
0.69%
|
|
0.70%
|
|
0.64%
|
|
Total delinquent and
non-accruing loans
|
|
|
1.39%
|
|
1.41%
|
|
1.79%
|
|
1.78%
|
|
1.75%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE
DATA
|
|
|
|
|
|
|
|
|
|
|
|
Core earnings,
diluted
|
$
0.40
|
|
$
0.43
|
|
$
0.48
|
|
$
0.54
|
|
$
0.54
|
|
|
Net earnings,
diluted
|
0.42
|
|
0.33
|
|
0.48
|
|
0.42
|
|
0.38
|
|
|
Tangible book
value
|
16.27
|
|
16.08
|
|
15.96
|
|
15.87
|
|
15.63
|
|
|
Total book
value
|
27.08
|
|
26.98
|
|
26.82
|
|
26.68
|
|
26.53
|
|
|
Market price at
period end
|
27.27
|
|
25.11
|
|
27.76
|
|
25.54
|
|
23.86
|
|
|
Dividends
|
|
0.18
|
|
0.18
|
|
0.18
|
|
0.18
|
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
Core return on
assets
|
0.73
|
%
|
0.81
|
%
|
0.92
|
%
|
1.03
|
%
|
1.02
|
%
|
|
Return on
assets
|
0.77
|
|
0.61
|
|
0.93
|
|
0.80
|
|
0.72
|
|
|
Core return on
equity
|
5.87
|
|
6.29
|
|
7.13
|
|
8.10
|
|
8.32
|
|
|
Core return on
tangible equity
|
10.47
|
|
11.18
|
|
12.84
|
|
14.57
|
|
15.24
|
|
|
Return on
equity
|
6.18
|
|
4.74
|
|
7.21
|
|
6.28
|
|
5.86
|
|
|
Net interest margin,
fully taxable equivalent
|
3.26
|
|
3.93
|
|
3.63
|
|
3.73
|
|
3.67
|
|
|
Fee income/Net
interest and fee income
|
21.78
|
|
19.23
|
|
25.48
|
|
25.63
|
|
27.35
|
|
|
Efficiency
ratio
|
63.21
|
|
60.98
|
|
63.05
|
|
57.14
|
|
59.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROWTH
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial
loans, year-to-date (annualized)
|
5
|
%
|
1
|
%
|
(2)
|
%
|
0
|
%
|
29
|
%
|
|
Total loans,
year-to-date (annualized)
|
5
|
|
1
|
|
(6)
|
|
(10)
|
|
35
|
|
|
Total deposits,
year-to-date (annualized)
|
(6)
|
|
(7)
|
|
(14)
|
|
0
|
|
30
|
|
|
Total net revenues,
year-to-date, compared to prior year
|
15
|
|
24
|
|
28
|
|
39
|
|
39
|
|
|
Earnings per share,
year-to-date, compared to prior year
|
11
|
|
11
|
|
40
|
|
50
|
|
62
|
|
|
Core earnings per
share, year-to-date, compared to prior year
|
(6)
|
|
3
|
|
11
|
|
20
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL
DATA (In millions)
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
5,673
|
|
$
5,450
|
|
$
5,224
|
|
$
5,245
|
|
$
5,297
|
|
|
Total earning
assets
|
5,085
|
|
4,856
|
|
4,629
|
|
4,646
|
|
4,683
|
|
|
Total
loans
|
|
4,181
|
|
4,024
|
|
3,871
|
|
3,889
|
|
3,989
|
|
|
Allowance for loan
losses
|
33
|
|
33
|
|
33
|
|
33
|
|
33
|
|
|
Total intangible
assets
|
271
|
|
272
|
|
272
|
|
273
|
|
274
|
|
|
Total
deposits
|
|
3,849
|
|
3,882
|
|
3,815
|
|
4,101
|
|
4,100
|
|
|
Total stockholders'
equity
|
678
|
|
673
|
|
673
|
|
674
|
|
667
|
|
|
Total core
income
|
10.0
|
|
10.7
|
|
11.9
|
|
13.5
|
|
13.2
|
|
|
Total net
income
|
10.5
|
|
8.1
|
|
12.0
|
|
10.5
|
|
9.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(current quarter annualized)/average loans
|
0.31
|
%
|
0.32
|
%
|
0.27
|
%
|
0.23
|
%
|
0.28
|
%
|
|
Allowance for loan
losses/total loans
|
0.80
|
|
0.83
|
|
0.86
|
|
0.86
|
|
0.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
to total assets
|
11.95
|
%
|
12.35
|
%
|
12.88
|
%
|
12.85
|
%
|
12.60
|
%
|
|
Tangible
stockholders' equity to tangible assets
|
7.54
|
|
7.74
|
|
8.10
|
|
8.06
|
|
7.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
AVERAGE BALANCES -
(F-7)
|
|
|
|
Quarters
Ended
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
(In
thousands)
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
Assets
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
$
1,330,674
|
|
$
1,247,661
|
|
$
1,218,192
|
|
$
1,290,989
|
|
$
1,340,375
|
Commercial
mortgages
|
1,381,628
|
|
1,353,923
|
|
1,381,755
|
|
1,406,628
|
|
1,404,515
|
Commercial business
loans
|
673,292
|
|
647,939
|
|
627,591
|
|
601,695
|
|
580,436
|
Consumer
loans
|
687,540
|
|
651,565
|
|
634,715
|
|
644,674
|
|
598,802
|
Total
loans
|
4,073,134
|
|
3,901,088
|
|
3,862,253
|
|
3,943,986
|
|
3,924,128
|
Securities
|
813,417
|
|
735,307
|
|
655,396
|
|
591,304
|
|
572,268
|
Short-term
investments and loans held for sale
|
35,438
|
|
60,820
|
|
90,680
|
|
98,160
|
|
126,378
|
Total earning
assets
|
4,921,989
|
|
4,697,215
|
|
4,608,329
|
|
4,633,450
|
|
4,622,774
|
Goodwill and other
intangible assets
|
271,147
|
|
271,670
|
|
272,421
|
|
273,428
|
|
267,588
|
Other
assets
|
305,617
|
|
317,722
|
|
317,856
|
|
333,485
|
|
312,665
|
Total
assets
|
$
5,498,753
|
|
$
5,286,607
|
|
$
5,198,606
|
|
$
5,240,363
|
|
$
5,203,027
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
NOW
|
$
348,600
|
|
$
345,682
|
|
$
358,255
|
|
$
368,392
|
|
$
355,366
|
Money
market
|
1,392,570
|
|
1,329,591
|
|
1,358,590
|
|
1,477,497
|
|
1,404,113
|
Savings
|
435,766
|
|
442,408
|
|
449,296
|
|
441,547
|
|
422,447
|
Time
|
1,044,850
|
|
1,064,199
|
|
1,087,357
|
|
1,148,345
|
|
1,161,175
|
Total
interest-bearing deposits
|
3,221,786
|
|
3,181,880
|
|
3,253,498
|
|
3,435,781
|
|
3,343,101
|
Borrowings and
notes
|
857,848
|
|
708,798
|
|
574,822
|
|
423,739
|
|
519,831
|
Total
interest-bearing liabilities
|
4,079,634
|
|
3,890,678
|
|
3,828,320
|
|
3,859,520
|
|
3,862,932
|
Non-interest-bearing
demand deposits
|
681,368
|
|
658,568
|
|
636,469
|
|
645,923
|
|
635,044
|
Other
liabilities
|
56,261
|
|
52,874
|
|
65,568
|
|
68,509
|
|
68,475
|
Total
liabilities
|
4,817,263
|
|
4,602,120
|
|
4,530,357
|
|
4,573,952
|
|
4,566,451
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
681,490
|
|
684,487
|
|
668,249
|
|
666,411
|
|
636,576
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
5,498,753
|
|
$
5,286,607
|
|
$
5,198,606
|
|
$
5,240,363
|
|
$
5,203,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
Total non-maturity
deposits
|
$
2,858,304
|
|
$
2,776,249
|
|
$
2,802,610
|
|
$
2,933,359
|
|
$
2,816,970
|
Total
deposits
|
3,903,154
|
|
3,840,448
|
|
3,889,967
|
|
4,081,704
|
|
3,978,145
|
Fully taxable
equivalent income adjustment
|
639
|
|
652
|
|
644
|
|
629
|
|
667
|
Total average
tangible equity
|
410,343
|
|
412,817
|
|
395,828
|
|
392,983
|
|
368,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average balances
for securities available-for-sale are based on amortized
cost. Total loans include non-accruing loans.
|
|
|
(2) Total average
tangible equity results from the subtraction of average goodwill
and other intangible assets from total
average
|
stockholders'
equity.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
AVERAGE
YIELDS (Fully Taxable Equivalent - Annualized) -
(F-8)
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning
assets
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
3.98
|
%
|
3.99
|
%
|
4.19
|
%
|
4.04
|
%
|
4.00
|
%
|
Commercial
mortgages
|
4.73
|
|
5.80
|
|
5.27
|
|
5.45
|
|
5.78
|
|
Commercial business
loans
|
3.91
|
|
6.09
|
|
4.04
|
|
4.40
|
|
4.09
|
|
Consumer
loans
|
4.01
|
|
4.39
|
|
4.78
|
|
4.94
|
|
4.56
|
|
Total
loans
|
4.24
|
|
5.02
|
|
4.67
|
|
4.75
|
|
4.73
|
|
Securities
|
2.80
|
|
2.77
|
|
3.00
|
|
3.04
|
|
3.17
|
|
Short-term
investments and loans held for sale
|
1.92
|
|
4.05
|
|
2.02
|
|
1.83
|
|
2.86
|
|
Total earning
assets
|
3.97
|
|
4.66
|
|
4.38
|
|
4.51
|
|
4.49
|
|
|
|
|
|
|
|
|
|
|
|
|
Funding
liabilities
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
NOW
|
0.18
|
|
0.18
|
|
0.26
|
|
0.29
|
|
0.35
|
|
Money
market
|
0.44
|
|
0.44
|
|
0.39
|
|
0.39
|
|
0.43
|
|
Savings
|
0.16
|
|
0.16
|
|
0.17
|
|
0.18
|
|
0.20
|
|
Time
|
1.25
|
|
1.29
|
|
1.23
|
|
1.23
|
|
1.31
|
|
Total
interest-bearing deposits
|
0.64
|
|
0.66
|
|
0.62
|
|
0.63
|
|
0.70
|
|
Borrowings and
notes
|
1.69
|
|
1.88
|
|
2.47
|
|
3.43
|
|
2.80
|
|
Total
interest-bearing liabilities
|
0.86
|
|
0.88
|
|
0.90
|
|
0.94
|
|
0.98
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
spread
|
3.11
|
|
3.78
|
|
3.48
|
|
3.57
|
|
3.51
|
|
Net interest
margin
|
3.26
|
|
3.93
|
|
3.63
|
|
3.73
|
|
3.67
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
funds
|
0.73
|
|
0.75
|
|
0.77
|
|
0.81
|
|
0.84
|
|
Cost of
deposits
|
0.53
|
|
0.55
|
|
0.52
|
|
0.53
|
|
0.59
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cost of funds
includes all deposits and borrowings.
|
|
|
|
|
|
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)
|
|
2013
|
|
2013
|
|
2013
|
|
2013
|
|
2012
|
|
Net
income
|
|
$
10,537
|
|
$
8,104
|
|
$
12,037
|
|
$
10,465
|
|
$
9,329
|
|
Adj: Gain on sale of
securities and other non-recurring gain, net
|
(3,392)
|
|
(361)
|
|
(1,005)
|
|
-
|
|
(1,435)
|
|
Adj: Merger related
expenses
|
|
932
|
|
1,307
|
|
775
|
|
4,984
|
|
5,852
|
|
Adj: Restructuring
expenses
|
|
1,361
|
|
5,209
|
|
-
|
|
-
|
|
-
|
|
Adj: System
conversion and other expenses
|
|
200
|
|
-
|
|
-
|
|
80
|
|
1,645
|
|
Adj: Out of period
interest revenue adjustment (5)
|
|
-
|
|
(2,222)
|
|
-
|
|
-
|
|
-
|
|
Adj: Variable
compensation adjustment (5)
|
|
-
|
|
500
|
|
-
|
|
-
|
|
-
|
|
Adj: Income
taxes
|
|
364
|
|
(1,788)
|
|
93
|
|
(2,042)
|
|
(2,147)
|
|
Total core
income
|
(A)
|
$
10,002
|
|
$
10,749
|
|
$
11,900
|
|
$
13,487
|
|
$
13,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
|
$
55,556
|
|
$
57,983
|
|
$
56,710
|
|
$
56,735
|
|
$
59,618
|
|
Adj: Gain on sale of
securities and other non-recurring gain, net
|
(3,392)
|
|
(361)
|
|
(1,005)
|
|
-
|
|
(1,435)
|
|
Adj: Out of period
interest revenue adjustment
|
|
-
|
|
(2,222)
|
|
-
|
|
-
|
|
-
|
|
Total core
revenue
|
|
$
52,164
|
|
$
55,400
|
|
$
55,705
|
|
$
56,735
|
|
$
58,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
|
$
37,157
|
|
$
42,784
|
|
$
37,935
|
|
$
39,483
|
|
$
44,266
|
|
Less: Total non-core
expense (see above)
|
|
(2,493)
|
|
(6,516)
|
|
(775)
|
|
(5,064)
|
|
(7,497)
|
|
Adj: Variable
compensation adjustment (5)
|
|
-
|
|
(500)
|
|
-
|
|
-
|
|
-
|
|
Core non-interest
expense
|
|
$
34,664
|
|
$
35,768
|
|
$
37,160
|
|
$
34,419
|
|
$
36,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
(B)
|
$
5,499
|
|
$
5,287
|
|
$
5,199
|
|
$
5,240
|
|
$
5,203
|
|
Total average
stockholders'
equity
|
(C)
|
681
|
|
684
|
|
668
|
|
666
|
|
637
|
|
Total average
tangible stockholders'
equity
|
(D)
|
410
|
|
413
|
|
396
|
|
393
|
|
369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity, period-end
|
|
678
|
|
673
|
|
673
|
|
674
|
|
667
|
|
Less:
Intangible assets, period-end
|
|
(271)
|
|
(272)
|
|
(272)
|
|
(273)
|
|
(274)
|
|
Total tangible
stockholders' equity, period-end
|
(E)
|
$
407
|
|
$
401
|
|
$
401
|
|
$
401
|
|
$
393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shares
outstanding, period-end
(thousands)
|
(F)
|
25,036
|
|
24,952
|
|
25,096
|
|
25,254
|
|
25,148
|
|
Average diluted
shares outstanding (thousands)
|
(G)
|
24,857
|
|
24,873
|
|
24,956
|
|
25,136
|
|
24,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core earnings per
share, diluted
|
(A/G)
|
$
0.40
|
|
$
0.43
|
|
$
0.48
|
|
$
0.54
|
|
$
0.54
|
|
Tangible book value
per share, period-end
|
(E/F)
|
$
16.27
|
|
$
16.08
|
|
$
15.96
|
|
$
15.87
|
|
$
15.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core return
(annualized) on assets
|
(A/B)
|
0.73
|
%
|
0.81
|
%
|
0.92
|
%
|
1.03
|
%
|
1.02
|
%
|
Core return
(annualized) on equity
|
(A/C)
|
5.87
|
|
6.29
|
|
7.13
|
|
8.10
|
|
8.32
|
|
Core return
(annualized) on tangible equity (4)
|
(A/D)
|
10.47
|
|
11.18
|
|
12.84
|
|
14.57
|
|
15.24
|
|
Efficiency ratio
(1)
|
|
63.21
|
|
60.98
|
|
63.05
|
|
57.14
|
|
59.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
|
|
Tax credit benefit of
tax shelter investments
|
|
$
80
|
|
$
458
|
|
$
458
|
|
$
458
|
|
$
483
|
|
Intangible
amortization
|
|
$
(1,239)
|
|
$
(1,307)
|
|
$
(1,345)
|
|
$
(1,377)
|
|
$
(1,357)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 the out-of-period
adjustment recorded in the third quarter of 2013
|
|
|
|
|
and
rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Core return on
tangible equity is computed by dividing the total core income
adjusted for the tax-affected amortization of
|
|
|
|
intangible assets,
assuming a 40% marginal rate, by tangible equity.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) In the third
quarter of 2013, additional revenue was recorded following an
out-of-period adjustment. Based on this additional
revenue
|
|
|
|
variable compensation was
also adjusted accordingly in the third quarter.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
2013
|
|
2012
|
|
Net
income
|
|
$
41,143
|
|
$
33,188
|
|
Adj: Gain on sale of
securities and other non-recurring gain, net
|
|
(4,758)
|
|
(1,485)
|
|
Adj: Merger related
expenses
|
|
7,998
|
|
12,509
|
|
Adj: Restructuring
expenses
|
|
6,570
|
|
-
|
|
Adj: System
conversion and other expenses
|
|
280
|
|
6,147
|
|
Adj: Out of period
interest revenue adjustment (5)
|
|
(1,287)
|
|
-
|
|
Adj: Variable
compensation adjustment (5)
|
|
500
|
|
-
|
|
Adj: Income
taxes
|
|
(3,750)
|
|
(6,114)
|
|
Total core
income
|
(A)
|
$
46,696
|
|
$
44,245
|
|
|
|
|
|
|
|
Total
revenue
|
|
$
226,984
|
|
$
197,514
|
|
Adj: Gain on sale of
securities and other non-recurring gain, net
|
|
(4,758)
|
|
(1,485)
|
|
Adj: Out of period
interest revenue adjustment
|
|
(1,287)
|
|
-
|
|
Total core
revenue
|
|
$
220,939
|
|
$
196,029
|
|
|
|
|
|
|
|
Total non-interest
expense
|
|
$
157,359
|
|
$
141,136
|
|
Less: Total non-core
expense (see above)
|
|
(14,848)
|
|
(18,656)
|
|
Adj: Variable
compensation adjustment (5)
|
|
(500)
|
|
-
|
|
Core non-interest
expense
|
|
$
142,011
|
|
$
122,480
|
|
|
|
|
|
|
|
(Dollars in
millions, except per share data)
|
|
|
|
|
|
Total average
assets
|
(B)
|
$
5,306
|
|
$
4,529
|
|
Total average
stockholders'
equity
|
(C)
|
675
|
|
587
|
|
Total average
tangible stockholders'
equity
|
(D)
|
403
|
|
344
|
|
|
|
|
|
|
|
Total stockholders'
equity, period-end
|
|
678
|
|
667
|
|
Less: Intangible
assets, period-end
|
|
(271)
|
|
(274)
|
|
Total tangible
stockholders' equity, period-end
|
(E)
|
$
407
|
|
$
393
|
|
Total common shares
outstanding, period-end
(thousands)
|
(F)
|
25,036
|
|
25,148
|
|
Average diluted
common shares outstanding (thousands)
|
(G)
|
24,965
|
|
22,329
|
|
|
|
|
|
|
|
Core earnings per
common share, diluted
|
(A/G)
|
$
1.87
|
|
$
1.98
|
|
Tangible book value
per common share, period-end
|
(E/F)
|
$
16.27
|
|
$
15.63
|
|
|
|
|
|
|
|
Core return
(annualized) on assets
|
(A/B)
|
0.88
|
%
|
0.98
|
%
|
Core return
(annualized) on equity
|
(A/C)
|
6.92
|
|
7.54
|
|
Core return
(annualized) on tangible equity (4)
|
(A/D)
|
12.37
|
|
13.77
|
|
Efficiency ratio
(1)
|
|
60.79
|
|
58.71
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
GAAP return on
assets
|
|
0.78
|
%
|
0.73
|
%
|
GAAP return on
equity
|
|
6.09
|
|
5.66
|
|
Net interest
margin
|
|
3.63
|
|
3.62
|
|
Tax credit benefit of
tax shelter investments
|
|
$
1,455
|
|
$
1,976
|
|
Intangible
amortization
|
|
$
(5,268)
|
|
$
(5,346)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 the out-of-period
adjustment recorded in the third quarter of 2013
|
and
rounding.
|
|
|
|
|
|
|
|
|
|
|
|
(4) Core return on
tangible equity is computed by dividing the total core income
adjusted for the tax-affected amortization of
|
|
intangible assets,
assuming a 40% marginal rate, by tangible equity.
|
|
|
|
|
|
|
|
|
|
(5) In the third
quarter of 2013, additional revenue was recorded following an
out-of-period adjustment. Based on this additional
revenue
|
variable compensation was
also adjusted accordingly in the third quarter.
|
|
|
|
|
(6) Amounts related
to discontinued operations have not been reclassified on the above
schedule,
|
|
although they are
reclassified on the balance sheet and income
statement.
|
|
|
|
|
|
|
|
SOURCE Berkshire Hills Bancorp, Inc.