PITTSFIELD, Mass., Oct. 27, 2014 /PRNewswire/ -- Berkshire
Hills Bancorp, Inc. (NYSE: BHLB) reported a 5% increase in core
earnings per share to $0.46 in the
third quarter of 2014 from $0.44 in
the prior quarter. Third quarter core EPS advanced by 7%
year-over-year. Berkshire
continues to generate higher revenue as it builds business volumes
across its regional markets. GAAP EPS was $0.48 in the third quarter of 2014 and
$0.46 in the prior quarter,
reflecting the $0.02 per share
quarterly benefit of a lower GAAP tax rate that resulted from
non-core branch acquisition related costs in the first quarter.
THIRD QUARTER FINANCIAL HIGHLIGHTS (comparisons are to
prior quarter):
- 5% increase in core earnings per share
- 5% annualized increase in net revenue
- 9% annualized increase in total loans
- 8% annualized increase in deposits
- 6% increase in demand deposits
- 0.44% non-performing assets/assets
- 0.28% net loan charge-offs/average loans
CEO Michael Daly stated, "Core
EPS has grown by $0.02 per share in
each of the last three quarters and is now up 15% compared to the
$0.40 result in the fourth quarter of
2013. We continue to generate solid revenue growth from
business expansion which is illustrated by balance sheet growth and
year-over-year gains in all categories of fee income."
Mr. Daly continued, "The Berkshire team was strengthened across our
franchise in the third quarter. A five person small business
banking team joined us in Albany, following our first quarter
branch purchase in New York. We recruited a
senior commercial real estate lender in Hartford and added wealth management
professionals in several Massachusetts markets. Our strong
electronic banking solution was enhanced with the addition of a
leading online fraud protection service, and we added to our
solutions for mobile customers. Our company's initiatives
were recognized with several marketing, communications and
philanthropic awards, and our growing small business banking team
was named the top SBA lender in Western Massachusetts. In
addition, we recently opened a new branch located within our
Westborough office, which serves
as the regional headquarters in our Central Massachusetts market."
Mr. Daly concluded, "Our management disciplines are evidenced by
improvement in our efficiency ratio and return on assets, together
with further strengthening of our asset quality metrics. I'm
excited about our many opportunities to deliver on our brand
promise to our markets and to further boost bottom line results for
our investors."
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 November
13, 2014, payable on November
26, 2014. This dividend equates to a 3.0% annualized
yield based on the $24.02 average
closing price of Berkshire's
common stock during the third quarter.
FINANCIAL CONDITION
In the most recent quarter, Berkshire produced annualized growth of 9% for
total loans and 8% for total deposits. Measures of capital,
asset quality, liquidity, and interest rate sensitivity remained
solid. Tangible book value per share increased during the
quarter by 2% to $16.67 and total
book value per share increased by 1% to $27.69. Berkshire's assets totaled $6.4 billion at quarter-end.
Berkshire recorded organic
growth in all major loan categories in the most recent
quarter. Total commercial loans increased at a 4% annualized
rate, bringing year-to-date annualized growth to 14%. Both
commercial real estate and commercial and industrial balances
advanced for the quarter and year-to-date. Commercial
activity has been spread across the franchise, with the strongest
third quarter production in Eastern
Massachusetts and New York. Residential mortgage
balances advanced on higher originations volume. Consumer
loan balances benefited from ongoing indirect auto originations
together with improved home equity outstandings. Total
consumer balances grew at an 18% annualized rate in the third
quarter, bringing the year-to-date annualized growth rate to
17%.
Asset quality metrics remained favorable. Annualized net
loan charge-offs measured 0.28% of average loans for the
quarter. Quarter-end non-performing assets decreased to
0.44% of total assets and accruing delinquent loans decreased to
0.44% of total loans. The loan loss allowance remained at
0.77% of total loans; approximately 18% of quarter-end loans were
balances recorded at fair value in recent bank acquisitions.
Annualized deposit growth of 8% in the third quarter was driven
primarily by demand deposits and time accounts. Demand
deposit balances increased at a strong 25% annualized rate,
including growth in commercial balances following the significant
increase in commercial lending balances over the year.
Berkshire promotes its
non-interest bearing checking accounts as a focus for relationship
acquisition and enhancement. Time deposit growth was
accompanied by a 7 basis point decrease in the cost of these
deposits during the quarter.
Investment securities, cash balances, and borrowings were all
reduced during the quarter. At quarter-end, the ratio of
loans/deposits stood at 100%. The ratio of equity/assets
increased to 11.0% and tangible equity/assets improved to 6.9%.
RESULTS OF OPERATIONS
Third quarter 2014 core earnings increased by 4% to $11.4 million, or $0.46 per share, from $10.9 million, or $0.44 per share, in the prior quarter.
Third quarter core earnings per share increased by 7% from
$0.43 in 2013. Non-core charges
related to the bank's recent charter change were offset by
securities gains. GAAP earnings in the most recent quarter
totaled $12.0 million, or
$0.48 per share. GAAP EPS
totaled $0.46 in the second quarter
of 2014 and $0.33 in the third
quarter of 2013.
The core return on tangible equity improved to 11.8% in the most
recent quarter, representing the third consecutive quarterly
increase in this metric. The GAAP return on equity improved
to 7.0% which was the highest result in the last five
quarters. The efficiency ratio improved to 62.89% from 62.96%
in the prior quarter.
Third quarter net revenue increased by 1% compared to the prior
quarter, including 1% increases in both net interest income and
non-interest income. Growth in net interest income was driven
by the 2% increase in average earning assets resulting from loan
growth. The net interest margin decreased to 3.20% in the
third quarter from 3.26% in the prior quarter. This decrease
was primarily due to lower interest rates on newly originated
mortgages and consumer loans reflecting the ongoing impact of the
interest rate environment. Net interest income includes
purchased loan accretion which is largely comprised of recoveries
on the resolution of impaired loans purchased in previous bank
acquisitions. This accretion totaled $1.2 million in the most recent quarter, compared
to $1.0 million in the prior quarter,
and it contributed 0.08% and 0.07% to the margin in these
respective quarters.
Third quarter fee income was unchanged from the prior
quarter. Mortgage banking revenue rose on higher business
volume which benefited from an expanded originations team and
product set. This growth offset the decrease in commercial
loan interest rate swap income related to the elevated second
quarter commercial loan growth. Total third quarter fee
income increased by 27% year-over-year. This included organic
growth in all major categories along with the benefit of the
New York branch acquisition in
January 2014.
The loan loss provision totaled $3.7
million in the third quarter, decreasing from $4.0 million in the prior quarter due to higher
second quarter loan growth. Third quarter net loan
charge-offs totaled $3.1 million, and
the loan loss allowance increased by $0.6
million.
Third quarter non-interest expense increased by 1% over the
prior quarter primarily due to increased compensation expense
related to business expansion. The core tax rate was 30% in
both periods and the GAAP tax rate was 26% due to the full year
impact of the first quarter branch acquisition charges.
CONFERENCE CALL
Berkshire will conduct a
conference call/webcast at 10:00 a.m.
eastern time on Tuesday, October 28,
2014 to discuss the results for the quarter and provide
guidance about expected future results. Participants should dial-in
to the call 10-15 minutes before it begins. Information about the
conference call follows:
Dial-in: 888-317-6003
Elite Entry Number: 4239712
Webcast: berkshirebank.com (investor relations link)
A telephone replay of the call will be available through
Wednesday, November 5, 2014 by
calling 877-344-7529 and entering conference number: 10053457. The
webcast will be available at Berkshire's website above for an extended
period of time. A print-friendly version of this news release
will be available at the web link shown above.
BACKGROUND
Berkshire Hills Bancorp is the parent of Berkshire Bank –
America's Most Exciting Bank®. The Company has
$6.4 billion in assets and 91
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
securities gains/losses, losses recorded for hedge terminations,
merger costs, restructuring costs, systems conversion costs, and
out-of-period adjustments. Non-core adjustments are presented
net of an adjustment for income tax expense. This adjustment
in 2013 was based on the marginal tax rate applied to the net
non-core pre-tax adjustments. In 2014, due to the comparative
magnitude of the non-core items, this adjustment was determined as
the difference between the GAAP tax rate and the effective tax rate
applicable to core income. Accordingly, GAAP net income
exceeded core income in the two most recent quarters due to the
higher effective full year tax rate on core income before the net
non-core charges. The efficiency ratio is adjusted for
non-core revenue and expense items and for tax preference
items. The Company also calculates measures related to
tangible equity, which adjust equity (and assets where applicable)
to exclude intangible assets due to the importance of these
measures to the investment community. Charges related to
merger and acquisition activity consist primarily of
severance/benefit related expenses, contract termination costs, and
professional fees. Systems conversion costs relate primarily
to the Company's core systems conversion and related systems
conversions costs. Restructuring costs primarily
consist of employee severance costs, as well as costs and losses
associated with the disposition of assets which were undertaken as
a project to right-size expenses following a decline in revenue in
2013. Out-of-period accounting adjustments for interest
income on acquired loans were recorded following systems
conversions and merger related accounting activity and were deemed
non-core. Other non-core expenses include variable rate
compensation related to non-core items as well as expenses related
to the Bank's charter change.
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)
|
|
|
|
September
30,
|
|
June 30,
|
|
December
31,
|
|
(In
thousands)
|
2014
|
|
2014
|
|
2013
|
|
Assets
|
|
|
|
|
|
|
Cash and due from
banks
|
$
58,624
|
|
$
81,642
|
|
$
56,841
|
|
Short-term
investments
|
12,201
|
|
31,236
|
|
18,698
|
|
Total cash and
short-term investments
|
70,825
|
|
112,878
|
|
75,539
|
|
|
|
|
|
|
|
|
Trading
security
|
14,745
|
|
14,971
|
|
14,840
|
|
Securities available
for sale, at fair value
|
1,058,965
|
|
1,080,668
|
|
760,048
|
|
Securities held to
maturity, at amortized cost
|
42,596
|
|
43,178
|
|
44,921
|
|
Federal Home Loan
Bank stock and other restricted securities
|
54,646
|
|
59,479
|
|
50,282
|
|
Total
securities
|
1,170,952
|
|
1,198,296
|
|
870,091
|
|
|
|
|
|
|
|
|
Loans held for sale,
at fair value
|
29,091
|
|
20,185
|
|
15,840
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
1,445,861
|
|
1,397,231
|
|
1,384,274
|
|
Commercial real
estate
|
1,595,400
|
|
1,579,500
|
|
1,417,120
|
|
Commercial and
industrial loans
|
732,960
|
|
727,959
|
|
687,293
|
|
Consumer
loans
|
778,561
|
|
745,613
|
|
691,836
|
|
Total
loans
|
4,552,782
|
|
4,450,303
|
|
4,180,523
|
|
Less: Allowance for
loan losses
|
(34,966)
|
|
(34,353)
|
|
(33,323)
|
|
Net loans
|
4,517,816
|
|
4,415,950
|
|
4,147,200
|
|
|
|
|
|
|
|
|
Premises and
equipment, net
|
87,166
|
|
86,936
|
|
84,459
|
|
Other real estate
owned
|
4,854
|
|
2,445
|
|
2,758
|
|
Goodwill
|
264,770
|
|
264,770
|
|
256,871
|
|
Other intangible
assets
|
12,524
|
|
13,761
|
|
13,791
|
|
Cash surrender value
of bank-owned life insurance
|
103,749
|
|
102,988
|
|
101,530
|
|
Deferred tax asset,
net
|
38,503
|
|
37,911
|
|
50,711
|
|
Other
assets
|
51,908
|
|
55,254
|
|
54,009
|
|
Total
assets
|
$
6,352,158
|
|
$
6,311,374
|
|
$
5,672,799
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
Demand
deposits
|
$
844,480
|
|
$
794,574
|
|
$
677,917
|
|
NOW
deposits
|
420,290
|
|
416,879
|
|
353,612
|
|
Money market
deposits
|
1,394,558
|
|
1,425,348
|
|
1,383,856
|
|
Savings
deposits
|
474,774
|
|
478,770
|
|
431,496
|
|
Time
deposits
|
1,429,231
|
|
1,362,992
|
|
1,001,648
|
|
Total
deposits
|
4,563,333
|
|
4,478,563
|
|
3,848,529
|
|
|
|
|
|
|
|
|
Senior
borrowings
|
951,105
|
|
964,179
|
|
974,428
|
|
Subordinated
borrowings
|
89,730
|
|
89,713
|
|
89,679
|
|
Total
borrowings
|
1,040,835
|
|
1,053,892
|
|
1,064,107
|
|
|
|
|
|
|
|
|
Other
liabilities
|
51,053
|
|
88,456
|
|
82,101
|
|
Total
liabilities
|
5,655,221
|
|
5,620,911
|
|
4,994,737
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
696,937
|
|
690,463
|
|
678,062
|
|
Total liabilities and
stockholders' equity
|
$
6,352,158
|
|
$
6,311,374
|
|
$
5,672,799
|
|
|
|
|
|
|
|
|
(1) The Company
acquired 20 branches in Central New York on January 17, 2014,
including $440 million in deposits
|
and $4 million in
loans.
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED LOAN
& DEPOSIT ANALYSIS - UNAUDITED - (F-2)
|
|
LOAN
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized growth
%
|
(Dollars in
millions)
|
|
Sept. 30, 2014
Balance
|
|
June 30, 2014
Balance
|
|
|
|
Dec. 31, 2013
Balance
|
|
Quarter ended
September 30, 2014
|
Year to
date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total residential
mortgages
|
|
$
1,446
|
|
$
1,397
|
|
|
|
$
1,384
|
|
14
|
%
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
1,595
|
|
1,579
|
|
|
|
1,417
|
|
4
|
|
17
|
|
Commercial and
industrial loans
|
|
733
|
|
728
|
|
|
|
688
|
|
3
|
|
9
|
|
Total commercial
loans
|
|
2,328
|
|
2,307
|
|
|
|
2,105
|
|
4
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity
|
|
316
|
|
310
|
|
|
|
307
|
|
8
|
|
4
|
|
Auto and
other
|
|
463
|
|
436
|
|
|
|
385
|
|
26
|
|
27
|
|
Total consumer
loans
|
|
779
|
|
746
|
|
|
|
692
|
|
18
|
|
17
|
|
Total
loans
|
|
$
4,553
|
|
$
4,450
|
|
|
|
$
4,181
|
|
9
|
%
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized growth
%
|
|
|
(Dollars in
millions)
|
|
Sept. 30, 2014
Balance
|
|
June 30, 2014
Balance
|
|
Acquired Balance
(1)
|
|
Dec. 31, 2013
Balance
|
|
Quarter ended
September 30, 2014
|
Year to
date
|
|
Demand
|
|
$
844
|
|
$
795
|
|
$
110
|
|
$
678
|
|
25
|
%
|
24
|
%
|
NOW
|
|
420
|
|
417
|
|
80
|
|
354
|
|
3
|
|
19
|
|
Money
market
|
|
1,395
|
|
1,425
|
|
124
|
|
1,384
|
|
(8)
|
|
1
|
|
Savings
|
|
475
|
|
479
|
|
36
|
|
431
|
|
(3)
|
|
10
|
|
Total non-maturity
deposits
|
|
3,134
|
|
3,116
|
|
350
|
|
2,847
|
|
2
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total time
deposits
|
|
1,429
|
|
1,363
|
|
90
|
|
1,002
|
|
19
|
|
43
|
|
Total
deposits
|
|
$
4,563
|
|
$
4,479
|
|
$
440
|
|
$
3,849
|
|
8
|
%
|
19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The Company
acquired 20 branches in Central New York on January 17, 2014,
including $440 million in deposits, as shown above,
|
and $4 million in
loans. Following the branch acquisition, year to date deposit
growth is not annualized.
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF INCOME - UNAUDITED - (F-3)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
(In thousands,
except per share data)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Interest and
dividend income
|
|
|
|
|
|
|
|
Loans
|
$
43,958
|
|
$
50,025
|
|
$
128,761
|
|
$
142,549
|
Securities and
other
|
8,098
|
|
4,479
|
|
24,265
|
|
12,533
|
Total interest and
dividend income
|
52,056
|
|
54,504
|
|
153,026
|
|
155,082
|
Interest
expense
|
|
|
|
|
|
|
|
Deposits
|
4,877
|
|
5,278
|
|
14,076
|
|
15,693
|
Borrowings
|
2,230
|
|
3,357
|
|
6,906
|
|
10,479
|
Total interest
expense
|
7,107
|
|
8,635
|
|
20,982
|
|
26,172
|
Net interest
income
|
44,949
|
|
45,869
|
|
132,044
|
|
128,910
|
Non-interest
income
|
|
|
|
|
|
|
|
Loan related
income
|
1,471
|
|
1,308
|
|
4,565
|
|
6,669
|
Mortgage banking
income
|
994
|
|
444
|
|
2,057
|
|
4,790
|
Deposit related
fees
|
6,449
|
|
4,559
|
|
18,498
|
|
13,623
|
Insurance commissions
and fees
|
2,632
|
|
2,473
|
|
8,141
|
|
7,877
|
Wealth management
fees
|
2,330
|
|
2,137
|
|
7,173
|
|
6,471
|
Total fee
income
|
13,876
|
|
10,921
|
|
40,434
|
|
39,430
|
Other
|
520
|
|
832
|
|
1,446
|
|
1,722
|
Gain on sale of
securities, net
|
245
|
|
361
|
|
482
|
|
1,366
|
Loss on termination
of hedges
|
-
|
|
-
|
|
(8,792)
|
|
-
|
Total non-interest
income
|
14,641
|
|
12,114
|
|
33,570
|
|
42,518
|
Total net
revenue
|
59,590
|
|
57,983
|
|
165,614
|
|
171,428
|
Provision for loan
losses
|
3,685
|
|
3,178
|
|
11,070
|
|
8,278
|
Non-interest
expense
|
|
|
|
|
|
|
|
Compensation and
benefits
|
20,665
|
|
18,506
|
|
60,803
|
|
54,398
|
Occupancy and
equipment
|
6,780
|
|
5,614
|
|
20,250
|
|
17,119
|
Technology and
communications
|
3,484
|
|
3,304
|
|
11,062
|
|
9,775
|
Marketing and
promotion
|
659
|
|
590
|
|
1,801
|
|
1,831
|
Professional
services
|
830
|
|
1,757
|
|
3,006
|
|
5,011
|
FDIC premiums and
assessments
|
1,163
|
|
856
|
|
3,201
|
|
2,574
|
Other real estate
owned and foreclosures
|
13
|
|
138
|
|
569
|
|
445
|
Amortization of
intangible assets
|
1,236
|
|
1,307
|
|
3,816
|
|
4,029
|
Merger, restructuring
and conversion expenses
|
238
|
|
6,516
|
|
6,729
|
|
12,355
|
Other
|
4,619
|
|
4,196
|
|
13,072
|
|
12,665
|
Total non-interest
expense
|
39,687
|
|
42,784
|
|
124,309
|
|
120,202
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
16,218
|
|
12,021
|
|
30,235
|
|
42,948
|
Income tax
expense
|
4,230
|
|
3,917
|
|
7,888
|
|
12,342
|
Net
income
|
$
11,988
|
|
$
8,104
|
|
$
22,347
|
|
$
30,606
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.48
|
|
$
0.33
|
|
$
0.90
|
|
$
1.23
|
Diluted
|
$
0.48
|
|
$
0.33
|
|
$
0.90
|
|
$
1.22
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
24,747
|
|
24,748
|
|
24,721
|
|
24,835
|
Diluted
|
24,861
|
|
24,873
|
|
24,835
|
|
25,001
|
|
|
|
|
|
|
|
|
(1) The Company
acquired 20 branches in Central New York on January 17, 2014. The
income statement for the three months ended
|
March 31, 2014
includes operations of the branch acquisition beginning on that
date.
|
(2) Merger,
restructuring and conversion expenses include branch acquisition
related expenses and bank charter change
related expenses.
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS - UNAUDITED - (F-4)
|
|
|
Quarters
Ended
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
(In thousands,
except per share data)
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
Loans
|
$ 43,958
|
|
$ 42,309
|
|
$ 42,494
|
|
$ 43,566
|
|
$ 50,025
|
Securities and
other
|
8,098
|
|
8,866
|
|
7,301
|
|
5,093
|
|
4,479
|
Total interest and
dividend income
|
52,056
|
|
51,175
|
|
49,795
|
|
48,659
|
|
54,504
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
Deposits
|
4,877
|
|
4,478
|
|
4,721
|
|
5,166
|
|
5,278
|
Borrowings
|
2,230
|
|
2,368
|
|
2,308
|
|
3,651
|
|
3,357
|
Total interest
expense
|
7,107
|
|
6,846
|
|
7,029
|
|
8,817
|
|
8,635
|
Net interest
income
|
44,949
|
|
44,329
|
|
42,766
|
|
39,842
|
|
45,869
|
Non-interest
income
|
|
|
|
|
|
|
|
|
|
Loan related
income
|
1,471
|
|
1,846
|
|
1,248
|
|
1,578
|
|
1,308
|
Mortgage banking
income
|
994
|
|
691
|
|
372
|
|
445
|
|
444
|
Deposit related
fees
|
6,449
|
|
6,610
|
|
5,439
|
|
4,717
|
|
4,559
|
Insurance commissions
and fees
|
2,632
|
|
2,460
|
|
3,049
|
|
2,143
|
|
2,473
|
Wealth management
fees
|
2,330
|
|
2,294
|
|
2,549
|
|
2,212
|
|
2,137
|
Total fee
income
|
13,876
|
|
13,901
|
|
12,657
|
|
11,095
|
|
10,921
|
Other
|
520
|
|
402
|
|
524
|
|
1,227
|
|
832
|
Gain on sale of
securities, net
|
245
|
|
203
|
|
34
|
|
3,392
|
|
361
|
Loss on termination
of hedges
|
-
|
|
-
|
|
(8,792)
|
|
-
|
|
-
|
Total non-interest
income
|
14,641
|
|
14,506
|
|
4,423
|
|
15,714
|
|
12,114
|
Total net
revenue
|
59,590
|
|
58,835
|
|
47,189
|
|
55,556
|
|
57,983
|
Provision for loan
losses
|
3,685
|
|
3,989
|
|
3,396
|
|
3,100
|
|
3,178
|
Non-interest
expense
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
20,665
|
|
20,279
|
|
19,859
|
|
16,736
|
|
18,506
|
Occupancy and
equipment
|
6,780
|
|
6,656
|
|
6,814
|
|
5,421
|
|
5,614
|
Technology and
communications
|
3,484
|
|
3,800
|
|
3,778
|
|
3,169
|
|
3,304
|
Marketing and
promotion
|
659
|
|
621
|
|
521
|
|
765
|
|
590
|
Professional
services
|
830
|
|
1,024
|
|
1,152
|
|
1,558
|
|
1,757
|
FDIC premiums and
assessments
|
1,163
|
|
1,029
|
|
1,009
|
|
899
|
|
856
|
Other real estate
owned and foreclosures
|
13
|
|
33
|
|
523
|
|
255
|
|
138
|
Amortization of
intangible assets
|
1,236
|
|
1,274
|
|
1,306
|
|
1,239
|
|
1,307
|
Merger, restructuring
and conversion expenses
|
238
|
|
190
|
|
6,301
|
|
2,493
|
|
6,516
|
Other
|
4,619
|
|
4,357
|
|
4,097
|
|
4,622
|
|
4,196
|
Total non-interest
expense
|
39,687
|
|
39,263
|
|
45,360
|
|
37,157
|
|
42,784
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
16,218
|
|
15,583
|
|
(1,567)
|
|
15,299
|
|
12,021
|
Income tax expense
(benefit)
|
4,230
|
|
4,119
|
|
(461)
|
|
4,762
|
|
3,917
|
Net income
(loss)
|
$ 11,988
|
|
$ 11,464
|
|
$ (1,106)
|
|
$ 10,537
|
|
$ 8,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses)
per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.48
|
|
$
0.46
|
|
$ (0.04)
|
|
$
0.43
|
|
$
0.33
|
Diluted
|
$
0.48
|
|
$
0.46
|
|
$ (0.04)
|
|
$
0.42
|
|
$
0.33
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
24,747
|
|
24,715
|
|
24,698
|
|
24,701
|
|
24,748
|
Diluted
|
24,861
|
|
24,809
|
|
24,698
|
|
24,857
|
|
24,873
|
|
|
|
|
|
|
|
|
|
|
(1) See notes on Page
F-3
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
ASSET QUALITY
ANALYSIS - UNAUDITED - (F-5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or for the
Quarters Ended
|
|
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
(Dollars in
thousands)
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Non-accruing
loans:
|
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
|
|
$
4,810
|
|
$
5,295
|
|
$
6,071
|
|
$
7,867
|
|
$
8,487
|
Commercial real
estate
|
|
|
12,192
|
|
12,583
|
|
13,036
|
|
13,739
|
|
13,800
|
Commercial and
industrial loans
|
|
|
2,225
|
|
4,821
|
|
2,411
|
|
2,356
|
|
2,753
|
Consumer
loans
|
|
|
3,660
|
|
3,359
|
|
3,846
|
|
3,493
|
|
3,227
|
Total non-accruing
loans
|
|
|
22,887
|
|
26,058
|
|
25,364
|
|
27,455
|
|
28,267
|
Other real estate
owned
|
|
|
4,854
|
|
2,445
|
|
2,418
|
|
2,758
|
|
3,561
|
Total non-performing
assets
|
|
|
$
27,741
|
|
$
28,503
|
|
$
27,782
|
|
$
30,213
|
|
$
31,828
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-accruing
loans/total loans
|
|
|
0.50%
|
|
0.59%
|
|
0.60%
|
|
0.66%
|
|
0.70%
|
Total non-performing
assets/total assets
|
|
|
0.44%
|
|
0.45%
|
|
0.46%
|
|
0.53%
|
|
0.58%
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND
ALLOWANCE FOR LOAN LOSSES
|
|
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
|
|
$
34,353
|
|
$
33,602
|
|
$
33,323
|
|
$
33,248
|
|
$
33,248
|
Charged-off
loans
|
|
|
(3,360)
|
|
(3,516)
|
|
(3,317)
|
|
(3,462)
|
|
(3,417)
|
Recoveries on
charged-off loans
|
|
|
288
|
|
278
|
|
200
|
|
437
|
|
239
|
Net loans
charged-off
|
|
|
(3,072)
|
|
(3,238)
|
|
(3,117)
|
|
(3,025)
|
|
(3,178)
|
Provision for loan
losses
|
|
|
3,685
|
|
3,989
|
|
3,396
|
|
3,100
|
|
3,178
|
Balance at end of
period
|
|
|
$
34,966
|
|
$
34,353
|
|
$
33,602
|
|
$
33,323
|
|
$
33,248
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses/total loans
|
|
|
0.77%
|
|
0.77%
|
|
0.79%
|
|
0.80%
|
|
0.83%
|
Allowance for loan
losses/non-accruing loans
|
|
153%
|
|
132%
|
|
132%
|
|
121%
|
|
118%
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOAN
CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
|
|
$
(394)
|
|
$
(602)
|
|
$
(1,055)
|
|
$
(564)
|
|
$
(351)
|
Commercial real
estate
|
|
|
(1,470)
|
|
(1,028)
|
|
(1,105)
|
|
(763)
|
|
(1,480)
|
Commercial and
industrial loans
|
|
|
(687)
|
|
(1,341)
|
|
(215)
|
|
(1,042)
|
|
(940)
|
Home
equity
|
|
|
(193)
|
|
(51)
|
|
(458)
|
|
45
|
|
(174)
|
Auto and other
consumer
|
|
|
(328)
|
|
(216)
|
|
(284)
|
|
(701)
|
|
(233)
|
Total, net
|
|
|
$
(3,072)
|
|
$
(3,238)
|
|
$
(3,117)
|
|
$
(3,025)
|
|
$
(3,178)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
|
0.28%
|
|
0.31%
|
|
0.30%
|
|
0.31%
|
|
0.32%
|
Net charge-offs (YTD
annualized)/average loans
|
|
0.29%
|
|
0.30%
|
|
0.30%
|
|
0.29%
|
|
0.28%
|
|
|
|
|
|
|
|
|
|
|
|
|
DELINQUENT AND
NON-ACCRUING LOANS/TOTAL LOANS
|
|
|
|
|
|
|
|
|
|
30-89 Days
delinquent
|
|
|
0.32%
|
|
0.34%
|
|
0.37%
|
|
0.51%
|
|
0.42%
|
90+ Days delinquent
and still accruing
|
|
|
0.12%
|
|
0.21%
|
|
0.22%
|
|
0.22%
|
|
0.29%
|
Total accruing
delinquent loans
|
|
|
0.44%
|
|
0.55%
|
|
0.59%
|
|
0.73%
|
|
0.71%
|
Non-accruing
loans
|
|
|
0.50%
|
|
0.59%
|
|
0.60%
|
|
0.66%
|
|
0.70%
|
Total delinquent and
non-accruing loans
|
|
|
0.94%
|
|
1.14%
|
|
1.19%
|
|
1.39%
|
|
1.41%
|
BERKSHIRE HILLS
BANCORP, INC.
|
SELECTED FINANCIAL
HIGHLIGHTS - UNAUDITED - (F-6)
|
|
|
|
|
|
|
|
|
|
At or for the
Quarters Ended
|
|
|
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE
DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
Core earnings,
diluted
|
$ 0.46
|
|
$ 0.44
|
|
$ 0.42
|
|
$ 0.40
|
|
$ 0.43
|
|
|
|
Net earnings,
diluted
|
0.48
|
|
0.46
|
|
(0.04)
|
|
0.42
|
|
0.33
|
|
|
|
Tangible book
value
|
16.67
|
|
16.40
|
|
15.84
|
|
16.27
|
|
16.08
|
|
|
|
Total book
value
|
27.69
|
|
27.49
|
|
26.99
|
|
27.08
|
|
26.98
|
|
|
|
Market price at
period end
|
23.49
|
|
23.22
|
|
25.88
|
|
27.27
|
|
25.11
|
|
|
|
Dividends
|
|
0.18
|
|
0.18
|
|
0.18
|
|
0.18
|
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
Core return on
assets
|
0.73
|
%
|
0.71
|
%
|
0.71
|
%
|
0.73
|
%
|
0.81
|
%
|
|
|
Return on
assets
|
0.77
|
|
0.75
|
|
(0.08)
|
|
0.77
|
|
0.61
|
|
|
|
Core return on
equity
|
6.59
|
|
6.32
|
|
6.02
|
|
5.87
|
|
6.29
|
|
|
|
Core return on
tangible equity
|
11.76
|
|
11.34
|
|
10.84
|
|
10.47
|
|
11.18
|
|
|
|
Return on
equity
|
6.95
|
|
6.64
|
|
(0.64)
|
|
6.18
|
|
4.74
|
|
|
|
Net interest margin,
fully taxable equivalent
|
3.20
|
|
3.26
|
|
3.35
|
|
3.26
|
|
3.93
|
|
|
|
Fee income/Net
interest and fee income
|
23.59
|
|
23.87
|
|
22.84
|
|
21.78
|
|
19.23
|
|
|
|
Efficiency
ratio
|
62.89
|
|
62.96
|
|
64.42
|
|
63.21
|
|
60.98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROWTH
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial
loans, year-to-date (annualized)
|
14
|
%
|
19
|
%
|
9
|
%
|
5
|
%
|
1
|
%
|
|
|
Total loans,
year-to-date (annualized)
|
12
|
|
13
|
|
6
|
|
5
|
|
1
|
|
|
|
Total net revenues,
year-to-date, compared to prior year
|
(3)
|
|
(7)
|
|
(17)
|
|
15
|
|
24
|
|
|
|
Earnings per share,
year-to-date, compared to prior year
|
(27)
|
|
(54)
|
|
(110)
|
|
11
|
|
11
|
|
|
|
Core earnings per
share, year-to-date, compared to prior year
|
(10)
|
|
(15)
|
|
(22)
|
|
(6)
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL
DATA (In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$ 6,352
|
|
$ 6,311
|
|
$ 6,010
|
|
$ 5,673
|
|
$ 5,450
|
|
|
|
Total earning
assets
|
5,765
|
|
5,700
|
|
5,408
|
|
5,085
|
|
4,856
|
|
|
|
Total
loans
|
|
4,553
|
|
4,450
|
|
4,243
|
|
4,181
|
|
4,024
|
|
|
|
Allowance for loan
losses
|
35
|
|
34
|
|
34
|
|
33
|
|
33
|
|
|
|
Total intangible
assets
|
277
|
|
279
|
|
280
|
|
271
|
|
272
|
|
|
|
Total
deposits
|
|
4,563
|
|
4,479
|
|
4,219
|
|
3,849
|
|
3,882
|
|
|
|
Total stockholders'
equity
|
697
|
|
690
|
|
678
|
|
678
|
|
673
|
|
|
|
Total core
income
|
11.4
|
|
10.9
|
|
10.4
|
|
10.0
|
|
10.7
|
|
|
|
Total net
income
|
12.0
|
|
11.5
|
|
(1.1)
|
|
10.5
|
|
8.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(current quarter annualized)/average loans
|
0.28
|
%
|
0.31
|
%
|
0.30
|
%
|
0.31
|
%
|
0.32
|
%
|
|
|
Allowance for loan
losses/total loans
|
0.77
|
|
0.77
|
|
0.79
|
|
0.80
|
|
0.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDITION
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
to total assets
|
10.97
|
%
|
10.94
|
%
|
11.27
|
%
|
11.95
|
%
|
12.35
|
%
|
|
|
Tangible
stockholders' equity to tangible assets
|
6.91
|
|
6.81
|
|
6.94
|
|
7.54
|
|
7.74
|
|
|
|
Investments to total
assets
|
18.43
|
|
18.99
|
|
19.05
|
|
15.34
|
|
14.48
|
|
|
|
Loans/deposits
|
100
|
|
99
|
|
101
|
|
109
|
|
104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Reconciliation of
Non-GAAP financial measures, including all references to core and
tangible amounts, appear on pages F-9 & 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)
|
See note on tangible
equity on pages F-9 & F-10.
|
BERKSHIRE HILLS
BANCORP, INC.
|
AVERAGE BALANCES -
UNAUDITED - (F-7)
|
|
|
|
Quarters
Ended
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Sept.
30,
|
(In
thousands)
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
Assets
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
$
1,412,720
|
|
$
1,379,625
|
|
$
1,379,266
|
|
$
1,330,674
|
|
$
1,247,661
|
Commercial real
estate
|
1,579,258
|
|
1,488,462
|
|
1,420,382
|
|
1,381,628
|
|
1,353,923
|
Commercial and
industrial loans
|
716,787
|
|
703,798
|
|
684,776
|
|
673,292
|
|
647,939
|
Consumer
loans
|
763,296
|
|
729,654
|
|
699,598
|
|
687,540
|
|
651,565
|
Total
loans
|
4,472,061
|
|
4,301,539
|
|
4,184,022
|
|
4,073,134
|
|
3,901,088
|
Securities
|
1,169,765
|
|
1,225,646
|
|
1,047,658
|
|
813,417
|
|
735,307
|
Short-term
investments and loans held for sale
|
39,496
|
|
28,426
|
|
28,631
|
|
35,438
|
|
60,820
|
Total earning
assets
|
5,681,322
|
|
5,555,611
|
|
5,260,311
|
|
4,921,989
|
|
4,697,215
|
Goodwill and other
intangible assets
|
277,775
|
|
279,024
|
|
278,386
|
|
271,147
|
|
271,670
|
Other
assets
|
305,698
|
|
311,176
|
|
312,145
|
|
305,617
|
|
317,722
|
Total
assets
|
$
6,264,795
|
|
$
6,145,811
|
|
$
5,850,842
|
|
$
5,498,753
|
|
$
5,286,607
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
NOW
|
$
417,802
|
|
$
425,824
|
|
$
409,631
|
|
$
348,600
|
|
$
345,682
|
Money
market
|
1,405,454
|
|
1,448,624
|
|
1,490,408
|
|
1,392,570
|
|
1,329,591
|
Savings
|
480,036
|
|
481,790
|
|
463,615
|
|
435,766
|
|
442,408
|
Time
|
1,406,914
|
|
1,152,651
|
|
1,069,987
|
|
1,044,850
|
|
1,064,199
|
Total
interest-bearing deposits
|
3,710,206
|
|
3,508,889
|
|
3,433,641
|
|
3,221,786
|
|
3,181,880
|
Borrowings
|
980,135
|
|
1,113,431
|
|
899,458
|
|
857,848
|
|
708,798
|
Total
interest-bearing liabilities
|
4,690,341
|
|
4,622,320
|
|
4,333,099
|
|
4,079,634
|
|
3,890,678
|
Non-interest-bearing
demand deposits
|
824,489
|
|
779,775
|
|
749,982
|
|
681,368
|
|
658,568
|
Other
liabilities
|
60,088
|
|
52,712
|
|
76,258
|
|
56,261
|
|
52,874
|
Total
liabilities
|
5,574,918
|
|
5,454,807
|
|
5,159,339
|
|
4,817,263
|
|
4,602,120
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
689,877
|
|
691,004
|
|
691,503
|
|
681,490
|
|
684,487
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
6,264,795
|
|
$
6,145,811
|
|
$
5,850,842
|
|
$
5,498,753
|
|
$
5,286,607
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
Total non-maturity
deposits
|
$
3,127,781
|
|
$
3,136,013
|
|
$
3,113,636
|
|
$
2,858,304
|
|
$
2,776,249
|
Total
deposits
|
4,534,695
|
|
4,288,664
|
|
4,183,623
|
|
3,903,154
|
|
3,840,448
|
Fully taxable
equivalent income adjustment
|
859
|
|
852
|
|
718
|
|
639
|
|
652
|
Total average
tangible equity
|
412,102
|
|
411,980
|
|
413,117
|
|
410,343
|
|
412,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
(3) The average
balances of deposits include the deposits held for sale presented
under other liabilities on the consolidated balance
sheet.
|
BERKSHIRE HILLS
BANCORP, INC.
|
AVERAGE
YIELDS (Fully Taxable Equivalent - Annualized) - UNAUDITED -
(F-8)
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning
assets
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
3.86
|
%
|
3.99
|
%
|
4.12
|
%
|
3.98
|
%
|
3.99
|
%
|
Commercial real
estate
|
4.21
|
|
4.16
|
|
4.44
|
|
4.73
|
|
5.80
|
|
Commercial and
industrial loans
|
3.79
|
|
3.82
|
|
3.97
|
|
3.91
|
|
6.09
|
|
Consumer
loans
|
3.34
|
|
3.49
|
|
3.56
|
|
4.01
|
|
4.39
|
|
Total
loans
|
3.91
|
|
3.96
|
|
4.13
|
|
4.26
|
|
5.02
|
|
Securities
|
2.98
|
|
3.13
|
|
3.04
|
|
2.72
|
|
2.77
|
|
Short-term
investments and loans held for sale
|
1.65
|
|
1.40
|
|
1.51
|
|
1.92
|
|
4.05
|
|
Total earning
assets
|
3.70
|
|
3.76
|
|
3.89
|
|
3.97
|
|
4.66
|
|
|
|
|
|
|
|
|
|
|
|
|
Funding
liabilities
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
NOW
|
0.17
|
|
0.15
|
|
0.15
|
|
0.18
|
|
0.18
|
|
Money
market
|
0.37
|
|
0.36
|
|
0.37
|
|
0.44
|
|
0.44
|
|
Savings
|
0.14
|
|
0.16
|
|
0.16
|
|
0.16
|
|
0.16
|
|
Time
|
0.91
|
|
0.98
|
|
1.15
|
|
1.25
|
|
1.29
|
|
Total
interest-bearing deposits
|
0.52
|
|
0.51
|
|
0.56
|
|
0.64
|
|
0.66
|
|
Borrowings
|
0.90
|
|
0.85
|
|
1.04
|
|
1.69
|
|
1.88
|
|
Total
interest-bearing liabilities
|
0.60
|
|
0.59
|
|
0.66
|
|
0.86
|
|
0.88
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
spread
|
3.10
|
|
3.17
|
|
3.23
|
|
3.11
|
|
3.78
|
|
Net interest
margin
|
3.20
|
|
3.26
|
|
3.35
|
|
3.26
|
|
3.93
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
funds
|
0.51
|
|
0.51
|
|
0.56
|
|
0.73
|
|
0.75
|
|
Cost of
deposits
|
0.43
|
|
0.42
|
|
0.46
|
|
0.53
|
|
0.55
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cost of funds
includes all deposits and borrowings.
|
(2) The average
yields of deposits include the deposits held for
sale.
|
BERKSHIRE HILLS
BANCORP, INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES - UNAUDITED - (F-9)
|
|
|
|
|
|
|
|
|
|
At or for the
Quarters Ended
|
|
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
Sept.
30,
|
|
(Dollars in
thousands)
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
Net income
(loss)
|
|
$ 11,988
|
|
$ 11,464
|
|
$ (1,106)
|
|
$ 10,537
|
|
$ 8,104
|
|
Adj: Gain on sale of
securities, net
|
|
(245)
|
|
(203)
|
|
(34)
|
|
(3,392)
|
|
(361)
|
|
Adj: Loss on
termination of hedges
|
|
-
|
|
-
|
|
8,792
|
|
-
|
|
-
|
|
Adj: Merger and
acquisition expenses
|
|
-
|
|
52
|
|
3,637
|
|
932
|
|
1,307
|
|
Adj: Restructuring,
conversion and other expenses (5)
|
|
238
|
|
138
|
|
2,665
|
|
1,561
|
|
5,709
|
|
Adj: Out-of-period
adjustment (6)
|
|
-
|
|
-
|
|
1,381
|
|
-
|
|
(2,222)
|
|
Adj: Income
taxes
|
|
(612)
|
|
(536)
|
|
(4,923)
|
|
364
|
|
(1,788)
|
|
Total core
income
|
(A)
|
$ 11,369
|
|
$ 10,915
|
|
$ 10,412
|
|
$ 10,002
|
|
$ 10,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
|
$ 59,590
|
|
$ 58,835
|
|
$ 47,189
|
|
$ 55,556
|
|
$ 57,983
|
|
Adj: Gain on sale of
securities, net
|
|
(245)
|
|
(203)
|
|
(34)
|
|
(3,392)
|
|
(361)
|
|
Adj: Loss on
termination of hedges
|
|
-
|
|
-
|
|
8,792
|
|
-
|
|
-
|
|
Adj: Out-of-period
adjustment (6)
|
|
-
|
|
-
|
|
1,381
|
|
-
|
|
(2,222)
|
|
Total core
revenue
|
|
$ 59,345
|
|
$ 58,632
|
|
$ 57,328
|
|
$ 52,164
|
|
$ 55,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
|
$ 39,687
|
|
$ 39,263
|
|
$ 45,360
|
|
$ 37,157
|
|
$ 42,784
|
|
Less: Total non-core
expense (see above)
|
|
(238)
|
|
(190)
|
|
(6,302)
|
|
(2,493)
|
|
(7,016)
|
|
Core non-interest
expense
|
|
$ 39,449
|
|
$ 39,073
|
|
$ 39,058
|
|
$ 34,664
|
|
$ 35,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
(B)
|
$ 6,265
|
|
$ 6,146
|
|
$ 5,851
|
|
$ 5,499
|
|
$ 5,287
|
|
Total average
stockholders'
equity
|
(C)
|
690
|
|
691
|
|
692
|
|
681
|
|
684
|
|
Total average
tangible stockholders' equity
|
(D)
|
412
|
|
412
|
|
413
|
|
410
|
|
413
|
|
Total tangible
stockholders' equity, period-end (7)
|
(E)
|
420
|
|
411
|
|
398
|
|
407
|
|
401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, period-end (thousands)
|
(F)
|
25,173
|
|
25,115
|
|
25,105
|
|
25,036
|
|
24,952
|
|
Average diluted
shares outstanding (thousands) (8)
|
(G)
|
24,861
|
|
24,809
|
|
24,833
|
|
24,857
|
|
24,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core earnings per
share, diluted
|
(A/G)
|
$ 0.46
|
|
$ 0.44
|
|
$ 0.42
|
|
$ 0.40
|
|
$ 0.43
|
|
Tangible book value
per share, period-end
|
(E/F)
|
$ 16.67
|
|
$ 16.40
|
|
$ 15.84
|
|
$ 16.27
|
|
$ 16.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core return on
assets
|
(A/B)
|
0.73
|
%
|
0.71
|
%
|
0.71
|
%
|
0.73
|
%
|
0.81
|
%
|
Core return on
equity
|
(A/C)
|
6.59
|
|
6.32
|
|
6.02
|
|
5.87
|
|
6.29
|
|
Core return on
tangible equity (4)
|
(A/D)
|
11.76
|
|
11.34
|
|
10.84
|
|
10.47
|
|
11.18
|
|
Efficiency ratio
(1)
|
|
62.89
|
|
62.96
|
|
64.42
|
|
63.21
|
|
60.98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
|
|
Tax credit benefit of
tax shelter investments
|
|
$
555
|
|
$
555
|
|
$
555
|
|
$
80
|
|
$
458
|
|
Intangible
amortization
|
|
$ 1,236
|
|
$ 1,274
|
|
$ 1,306
|
|
$ 1,239
|
|
$ 1,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 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) 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) Bank charter
change related expenses and prior period variable compensation are
shown above under restructuring, conversion and other
expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
(6) The out of period
adjustments shown above relate to interest income earned on loans
acquired in bank acquisitions.
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) Total tangible
stockholders' equity is computed by taking total stockholders'
equity less the intangible assets at period-end.
|
|
|
|
|
|
|
|
|
|
|
|
|
(8) Average diluted
shares computed for core earnings per share differ from GAAP
average diluted shares, in the first quarter of
2014,
|
due to the GAAP net
loss compared to core net income for the period.
|
BERKSHIRE HILLS
BANCORP, INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES - UNAUDITED - (F-10)
|
|
|
|
|
|
|
|
|
|
At or for the Nine
Months Ended
|
|
|
|
Sept.
30,
|
|
Sept.
30,
|
|
(Dollars in
thousands)
|
|
2014
|
|
2013
|
|
Net
income
|
|
$
22,347
|
|
$
30,606
|
|
Adj: Gain on sale of
securities, net
|
|
(482)
|
|
(1,366)
|
|
Adj: Loss on
termination of hedges
|
|
8,792
|
|
-
|
|
Adj: Merger and
acquisition expenses
|
|
3,689
|
|
12,355
|
|
Adj: Restructuring,
conversion and other expenses (5)
|
|
3,041
|
|
500
|
|
Adj: Out-of-period
adjustment (6)
|
|
1,381
|
|
(1,287)
|
|
Adj: Income
taxes
|
|
(6,071)
|
|
(4,116)
|
|
Total core
income
|
(A)
|
$
32,697
|
|
$
36,692
|
|
|
|
|
|
|
|
Total
revenue
|
|
$
165,614
|
|
$
171,428
|
|
Adj: Gain on sale of
securities and other non-recurring gain, net
|
|
(482)
|
|
(1,366)
|
|
Adj: Loss on
termination of hedges
|
|
8,792
|
|
-
|
|
Adj: Out-of-period
adjustment (6)
|
|
1,381
|
|
(1,287)
|
|
Total core
revenue
|
|
$
175,305
|
|
$
168,775
|
|
|
|
|
|
|
|
Total non-interest
expense
|
|
$
124,310
|
|
$
120,202
|
|
Less: Total non-core
expense (see above)
|
|
(6,730)
|
|
(12,855)
|
|
Core non-interest
expense
|
|
$
117,580
|
|
$
107,347
|
|
|
|
|
|
|
|
(Dollars in
millions, except per share data)
|
|
|
|
|
|
Total average
assets
|
(B)
|
$
6,087
|
|
$
5,242
|
|
Total average
stockholders'
equity
|
(C)
|
691
|
|
673
|
|
Total average
tangible stockholders'
equity
|
(D)
|
412
|
|
401
|
|
Total tangible
stockholders' equity, period-end (7)
|
(E)
|
420
|
|
401
|
|
Total common shares
outstanding, period-end (thousands)
|
(F)
|
25,173
|
|
24,952
|
|
Average diluted
common shares outstanding (thousands)
|
(G)
|
24,835
|
|
25,001
|
|
|
|
|
|
|
|
Core earnings per
common share, diluted
|
(A/G)
|
$
1.32
|
|
$
1.47
|
|
Tangible book value
per common share, period-end
|
(E/F)
|
$
16.67
|
|
$
16.08
|
|
|
|
|
|
|
|
Core return on
assets
|
(A/B)
|
0.72
|
%
|
0.93
|
%
|
Core return on
equity
|
(A/C)
|
6.31
|
|
7.27
|
|
Core return on
tangible equity (4)
|
(A/D)
|
11.31
|
|
13.02
|
|
Efficiency ratio
(1)
|
|
63.41
|
|
60.04
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
GAAP return on
assets
|
|
0.49
|
%
|
0.47
|
%
|
GAAP return on
equity
|
|
4.31
|
|
3.66
|
|
Net interest
margin
|
|
3.27
|
|
2.58
|
|
Tax credit benefit of
tax shelter investments
|
|
$
1,664
|
|
$
1,374
|
|
Intangible
amortization
|
|
$
3,816
|
|
$
4,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 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) 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) Bank charter
change related expenses and prior period variable compensation are
shown above under restructuring, conversion
and
other expenses.
|
|
|
|
|
|
|
(6) The out of period
adjustments shown above relate to interest income earned on loans
acquired in bank acquisitions.
|
|
|
|
|
|
|
(7) Total tangible
stockholders' equity is computed by taking total stockholders'
equity less the intangible assets at period-end.
|
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SOURCE Berkshire Hills Bancorp, Inc.