PITTSFIELD, Mass., Jan. 26, 2015 /PRNewswire/ -- Berkshire
Hills Bancorp, Inc. (NYSE: BHLB) reported a 20% increase in fourth
quarter core earnings per share to $0.48 in 2014 compared to $0.40 in 2013. Earnings growth was driven
by a 17% increase in core revenue as the Company expanded
operations in its footprint. Fourth quarter GAAP EPS
increased by 10% to $0.46 as earnings
in both years were impacted by non-core charges related primarily
to growth and restructuring.
For the year, core earnings per share totaled $1.80 in 2014. Core earnings decreased by
4% from $1.87 per share in 2013 as
volume growth was offset by lower margins in the first half of the
year. GAAP EPS totaled $1.36 in
2014 and $1.65 in 2013.
FOURTH QUARTER FINANCIAL HIGHLIGHTS (comparisons are to
prior quarter unless otherwise stated):
- 4% increase in core earnings per share
- 8% annualized increase in net revenue
- 17% year over year increase in fee income, with growth in all
major categories
- 11% annualized increase in total loans
- 8% annualized increase in deposits
- 12% annualized increase in demand deposits
- 0.37% non-performing assets/assets
- 0.29% net loan charge-offs/average loans
CEO Michael Daly stated, "We
finished the year on pace, with growth of 2
cents per share in core earnings in each of the last four
quarters. We delivered on the market share opportunities of
our expanded footprint. Momentum continued in the fourth
quarter, with strong growth in revenue, loans, and deposits
compared to the linked quarter."
Mr. Daly continued, "We are well-positioned for further
expansion in our footprint. During the fourth quarter,
Hampden Bancorp entered a merger agreement with us, which will
deepen our presence in the Springfield market and the Hartford/Springfield economic area. This merger
is targeted for completion in the second quarter of 2015. Our
Westborough branch opened in October, completing the build out of
this regional office serving the Worcester area and our Central Massachusetts market. Our teams
are building business volumes in Eastern
Massachusetts and in New
York, where earlier in the year we acquired 20 branches
serving our Central and Eastern New
York markets."
Mr. Daly concluded, "Our core return on assets improved during
the year as we leveraged our franchise investment. In the
fourth quarter, our active balance sheet management produced an
increase in our net interest margin, while our close focus on
expense control improved our efficiency ratio. We are
targeting to extend these gains as we integrate our in-market
merger with Hampden in 2015, and our teams across our franchise are
delivering the right solutions for our markets and our
investors. In recognition of our progress and prospects, I'm
pleased to also be announcing a 6% increase in our quarterly
dividend to shareholders."
DIVIDEND INCREASED
The Board of Directors voted to declare a cash dividend of
$0.19 per share to shareholders of
record at the close of business on February
12, 2015, payable on February
26, 2015. This is a penny increase from $0.18 and the new dividend equates to a 3.0%
annualized yield based on the $25.05
average closing price of Berkshire's common stock during the fourth
quarter.
ANNUAL MEETING DATE SET
The Board of Directors voted that the Annual Meeting of
Shareholders shall be held on May 7,
2015 at the Crowne Plaza Hotel, One
West Street, Pittsfield,
Massachusetts at 10:00 a.m.
The date of March 12, 2015 was
established as the record date for the determination of the
shareholders entitled to notice of, and to vote at, the Annual
Meeting.
FINANCIAL CONDITION
Fourth quarter results demonstrated strong loan growth funded by
solid deposit growth and supported by capital generation that also
strengthened the capital foundation. Loan growth was 11%
annualized in the fourth quarter and 12% for the year 2014.
Organic deposit growth was 8% annualized in the fourth
quarter. Including the deposits from acquired branches, total
deposits increased by 21% for the year. As a result, the
ratio of loans/deposits decreased during the year, measuring 101%
at year-end. The ratio of tangible equity to assets measured
7.0% at year-end, with total equity/assets measuring 10.9%.
Most capital ratios are targeted to increase with the acquisition
of Hampden Bancorp. Tangible book value per share increased
by 6% to $17.19 in 2014 while total
book value per share increased by 4% to $28.17. Berkshire continues to manage its balance
sheet with the objective of benefiting from expected future
interest rate increases.
Berkshire's 11% annualized
fourth quarter loan growth resulted primarily from 15% annualized
commercial loan growth, which matched the full year growth
rate. Commercial growth was concentrated in diversified
commercial and industrial loans in the fourth quarter, while for
the full year commercial balances increased primarily due to higher
commercial real estate loans. Residential mortgage balances
advanced at a 14% annualized rate in the fourth quarter, including
the benefit of stronger demand in the second half of the
year. Residential mortgage growth was 8% for the year.
Consumer loans grew by 11% for the year and declined by 5%
annualized in the fourth quarter due to a planned de-emphasis of
the auto loan portfolio.
Asset quality metrics remained favorable. Annualized net
loan charge-offs measured 0.29% of average loans for the
quarter. Quarter-end non-performing assets decreased to
0.37% of total assets and accruing delinquent loans measured 0.52%
of total loans. The loan loss allowance was 0.76% of total
loans; approximately 16% of quarter-end loans were balances
recorded at fair value in recent bank acquisitions.
Annualized fourth quarter deposit growth of 8% included
increases in all major categories. Growth was primarily in
relationship oriented transaction accounts, with a concentration in
new commercial balances. Full year deposit growth of 21%
included 11% related to balances totaling $440 million in acquired New York branches.
RESULTS OF OPERATIONS
The fourth quarter core return on tangible equity increased to
12.0% in 2014 compared to 10.5% in 2013. Net non-core charges
in both periods were primarily related to acquisition and
restructuring activity. GAAP return on equity improved to
6.5% from 6.2% in the above respective periods and the efficiency
ratio improved to 62.5% from 63.2%.
The 20% year over year increase in fourth quarter core earnings
per share reflected the benefit of 17% growth in core revenue, with
an identical percentage increase in both net interest income and
fee income. This resulted primarily from volume growth
in Berkshire's footprint,
particularly in newer markets in Eastern
Massachusetts and Central New York. Fee income grew in
all major categories, including a 30% increase in deposit related
fees primarily from the New York
branch acquisition.
Compared to the linked quarter, growth in core earnings per
share was primarily driven by 4% growth in net interest
income. This included the benefit of volume growth, together
with an expansion of the net interest margin to 3.23% compared to
3.20% in the linked quarter; the margin was 3.26% in the fourth
quarter of 2013. Net interest income includes purchased loan
accretion which is largely comprised of recoveries on the
resolution of impaired loans acquired in previous bank
acquisitions. This accretion totaled $1.7 million in the most recent quarter, compared
to $1.2 million in the linked quarter
and $2.4 million in the fourth
quarter of 2013. Fourth quarter non-interest income was down
3% from the linked quarter, with seasonally lower fee income mostly
offset by distributions from equity investments.
The loan loss provision totaled $3.9
million in the fourth quarter. Net loan charge-offs
were $3.2 million, and the loan loss
allowance increased by $0.7 million
to $35.7 million.
Fourth quarter core non-interest expense increased by 1% over
the prior quarter to $39.9
million. Non-core expense increased due to the pending
Hampden merger. Full time equivalent staff totaled 1,091 at
year-end. The core tax rate was 29% and the GAAP tax rate of
25% was 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, January 27,
2015 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: 1730849
Webcast: berkshirebank.com (investor relations link)
A telephone replay of the call will be available through
Wednesday, February 4, 2015 by
calling 877-344-7529 and entering conference number: 10058299 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
$6.5 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.
Berkshire has a pending agreement
to acquire Hampden Bancorp, the parent of Hampden Bank, which has $706 million in assets and operates ten offices
in the Springfield, Massachusetts
area.
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.
ADDITIONAL INFORMATION FOR STOCKHOLDERS
In connection with the proposed merger with Hampden Bancorp,
Berkshire has filed with the
Securities and Exchange Commission ("SEC") a Registration Statement
on Form S-4 that includes a Proxy Statement of Hampden and a
Prospectus of Berkshire, as well
as other relevant documents concerning the proposed merger.
Investors and stockholders are urged to read the Registration
Statement and the Proxy Statement/Prospectus regarding the proposed
merger and any other relevant documents filed with the SEC, as well
as any amendments or supplements to those documents, because they
will contain important information. A free copy of the Registration
Statement and Proxy Statement/Prospectus, as well as other filings
containing information about Berkshire and Hampden, when they become
available, may be obtained at the SEC's Internet site
(www.sec.gov). Copies of the Registration Statement and Proxy
Statement/Prospectus and the filings that will be incorporated by
reference therein may also be obtained, free of charge, from
Berkshire's website at
ir.berkshirebank.com or by contacting Berkshire Investor Relations
at 413-236-3149 or from Hampden's website at www.hampdenbank.com
and selecting the "Investor Relations" link or by contacting
Hampden Investor relations at 413-452-5150.
PARTICIPANTS IN SOLICITATION
Berkshire and Hampden and
certain of their respective directors and executive officers may be
deemed to be participants in the solicitation of proxies from the
stockholders of Hampden in connection with the proposed merger.
Information about the directors and executive officers of
Berkshire is set forth in the
proxy statement for Berkshire's
2014 annual meeting of stockholders, as filed with the SEC on a
Schedule 14A on April 1 and in the
Form 8-k filed with the SEC on June 30,
2014. Information about the directors and executive officers
of Hampden is set forth in the proxy statement for Hampden's 2014
annual meeting of stockholders, as filed with the SEC on a Schedule
14A on September 26, 2014 and
additional filings reporting results of the annual meeting on
November 4, 2014. Additional
information regarding the interests of those participants and other
persons who may be deemed participants in the transaction and a
description of their direct and indirect interests, by security
holdings or otherwise, may be obtained by reading the Proxy
Statement/Prospectus and other relevant documents regarding the
proposed merger filed with the SEC (when they become available).
Free copies of these documents may be obtained as described in the
preceding paragraph.
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 two 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, Senior 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)
|
2014
|
|
2014
|
|
2013
|
|
Assets
|
|
|
|
|
|
|
Cash and due from
banks
|
$
54,179
|
|
$
58,624
|
|
$
56,841
|
|
Short-term
investments
|
17,575
|
|
12,201
|
|
18,698
|
|
Total cash and
short-term investments
|
71,754
|
|
70,825
|
|
75,539
|
|
|
|
|
|
|
|
|
Trading
security
|
14,909
|
|
14,745
|
|
14,840
|
|
Securities available
for sale, at fair value
|
1,091,818
|
|
1,058,965
|
|
760,048
|
|
Securities held to
maturity, at amortized cost
|
43,347
|
|
42,596
|
|
44,921
|
|
Federal Home Loan
Bank stock and other restricted securities
|
55,720
|
|
54,646
|
|
50,282
|
|
Total
securities
|
1,205,794
|
|
1,170,952
|
|
870,091
|
|
|
|
|
|
|
|
|
Loans held for sale,
at fair value
|
19,493
|
|
29,091
|
|
15,840
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
1,496,204
|
|
1,445,861
|
|
1,384,274
|
|
Commercial real
estate
|
1,611,567
|
|
1,595,400
|
|
1,417,120
|
|
Commercial and
industrial loans
|
804,366
|
|
732,960
|
|
687,293
|
|
Consumer
loans
|
768,463
|
|
778,561
|
|
691,836
|
|
Total loans
(1)
|
4,680,600
|
|
4,552,782
|
|
4,180,523
|
|
Less: Allowance for
loan losses
|
(35,662)
|
|
(34,966)
|
|
(33,323)
|
|
Net loans
|
4,644,938
|
|
4,517,816
|
|
4,147,200
|
|
|
|
|
|
|
|
|
Premises and
equipment, net
|
87,279
|
|
87,166
|
|
84,459
|
|
Other real estate
owned
|
2,049
|
|
4,854
|
|
2,758
|
|
Goodwill
|
264,742
|
|
264,770
|
|
256,871
|
|
Other intangible
assets
|
11,528
|
|
12,524
|
|
13,791
|
|
Cash surrender value
of bank-owned life insurance
|
104,588
|
|
103,749
|
|
101,530
|
|
Deferred tax asset,
net
|
28,776
|
|
38,503
|
|
50,711
|
|
Other
assets
|
61,090
|
|
51,908
|
|
54,009
|
|
Total
assets
|
$
6,502,031
|
|
$
6,352,158
|
|
$
5,672,799
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
Demand
deposits
|
$
869,302
|
|
$
844,480
|
|
$
677,917
|
|
NOW
deposits
|
426,108
|
|
420,290
|
|
353,612
|
|
Money market
deposits
|
1,407,179
|
|
1,394,558
|
|
1,383,856
|
|
Savings
deposits
|
496,344
|
|
474,774
|
|
431,496
|
|
Time
deposits
|
1,455,746
|
|
1,429,231
|
|
1,001,648
|
|
Total deposits
(1)
|
4,654,679
|
|
4,563,333
|
|
3,848,529
|
|
|
|
|
|
|
|
|
Senior
borrowings
|
962,576
|
|
951,105
|
|
974,428
|
|
Subordinated
borrowings
|
89,747
|
|
89,730
|
|
89,679
|
|
Total
borrowings
|
1,052,323
|
|
1,040,835
|
|
1,064,107
|
|
|
|
|
|
|
|
|
Other
liabilities
|
85,742
|
|
51,053
|
|
82,101
|
|
Total
liabilities
|
5,792,744
|
|
5,655,221
|
|
4,994,737
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
709,287
|
|
696,937
|
|
678,062
|
|
Total liabilities and
stockholders' equity
|
$
6,502,031
|
|
$
6,352,158
|
|
$
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)
|
Dec. 31, 2014
Balance
|
|
Sept. 30, 2014
Balance
|
|
|
|
Dec. 31, 2013
Balance
|
|
Quarter ended
December 31, 2014
|
Year to
date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total residential
mortgages
|
$
1,496
|
|
$
1,446
|
|
|
|
$
1,384
|
|
14
|
%
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
1,612
|
|
1,595
|
|
|
|
1,417
|
|
4
|
|
14
|
|
Commercial and
industrial loans
|
804
|
|
733
|
|
|
|
688
|
|
39
|
|
17
|
|
Total commercial
loans
|
2,416
|
|
2,328
|
|
|
|
2,105
|
|
15
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity
|
319
|
|
316
|
|
|
|
307
|
|
3
|
|
4
|
|
Auto and
other
|
450
|
|
463
|
|
|
|
385
|
|
(12)
|
|
17
|
|
Total consumer
loans
|
769
|
|
779
|
|
|
|
692
|
|
(5)
|
|
11
|
|
Total
loans
|
$
4,681
|
|
$
4,553
|
|
|
|
$
4,181
|
|
11
|
%
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized growth
%
|
|
|
(Dollars in
millions)
|
Dec. 31, 2014
Balance
|
|
Sept. 30, 2014
Balance
|
|
Acquired
Balance (1)
|
|
Dec. 31, 2013
Balance
|
|
Quarter ended
December 31, 2014
|
Year to
date
|
|
Demand
|
$
869
|
|
$
844
|
|
$
110
|
|
$
678
|
|
12
|
%
|
28
|
%
|
NOW
|
426
|
|
420
|
|
80
|
|
354
|
|
6
|
|
20
|
|
Money
market
|
1,407
|
|
1,395
|
|
124
|
|
1,384
|
|
3
|
|
2
|
|
Savings
|
497
|
|
475
|
|
36
|
|
431
|
|
19
|
|
15
|
|
Total non-maturity
deposits
|
3,199
|
|
3,134
|
|
350
|
|
2,847
|
|
8
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total time
deposits
|
1,456
|
|
1,429
|
|
90
|
|
1,002
|
|
8
|
|
45
|
|
Total
deposits
|
$
4,655
|
|
$
4,563
|
|
$
440
|
|
$
3,849
|
|
8
|
%
|
21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
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)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Interest and
dividend income
|
|
|
|
|
|
|
|
Loans
|
$
45,706
|
|
$
43,566
|
|
$
174,467
|
|
$
186,115
|
Securities and
other
|
8,310
|
|
5,093
|
|
32,575
|
|
17,626
|
Total interest and
dividend income
|
54,016
|
|
48,659
|
|
207,042
|
|
203,741
|
Interest
expense
|
|
|
|
|
|
|
|
Deposits
|
5,109
|
|
5,166
|
|
19,185
|
|
20,859
|
Borrowings
|
2,260
|
|
3,651
|
|
9,166
|
|
14,130
|
Total interest
expense
|
7,369
|
|
8,817
|
|
28,351
|
|
34,989
|
Net interest
income
|
46,647
|
|
39,842
|
|
178,691
|
|
168,752
|
Non-interest
income
|
|
|
|
|
|
|
|
Loan related
income
|
1,763
|
|
1,578
|
|
6,328
|
|
8,247
|
Mortgage banking
income
|
504
|
|
445
|
|
2,561
|
|
5,235
|
Deposit related
fees
|
6,137
|
|
4,717
|
|
24,635
|
|
18,340
|
Insurance commissions
and fees
|
2,223
|
|
2,143
|
|
10,364
|
|
10,020
|
Wealth management
fees
|
2,373
|
|
2,212
|
|
9,546
|
|
8,683
|
Total fee
income
|
13,000
|
|
11,095
|
|
53,434
|
|
50,525
|
Other
|
1,200
|
|
1,227
|
|
2,646
|
|
2,949
|
Gain on sale of
securities, net
|
-
|
|
3,392
|
|
482
|
|
4,758
|
Loss on termination
of hedges
|
-
|
|
-
|
|
(8,792)
|
|
-
|
Total non-interest
income
|
14,200
|
|
15,714
|
|
47,770
|
|
58,232
|
Total net
revenue
|
60,847
|
|
55,556
|
|
226,461
|
|
226,984
|
Provision for loan
losses
|
3,898
|
|
3,100
|
|
14,968
|
|
11,378
|
Non-interest
expense
|
|
|
|
|
|
|
|
Compensation and
benefits
|
20,965
|
|
16,736
|
|
81,768
|
|
71,134
|
Occupancy and
equipment
|
6,655
|
|
5,421
|
|
26,905
|
|
22,540
|
Technology and
communications
|
3,702
|
|
3,169
|
|
14,764
|
|
12,944
|
Marketing and
promotion
|
771
|
|
765
|
|
2,572
|
|
2,596
|
Professional
services
|
1,205
|
|
1,558
|
|
4,211
|
|
6,569
|
FDIC premiums and
assessments
|
1,083
|
|
899
|
|
4,284
|
|
3,473
|
Other real estate
owned and foreclosures
|
232
|
|
255
|
|
801
|
|
700
|
Amortization of
intangible assets
|
996
|
|
1,239
|
|
4,812
|
|
5,268
|
Merger, restructuring
and conversion expenses
|
1,762
|
|
2,493
|
|
8,491
|
|
14,848
|
Other
|
4,305
|
|
4,622
|
|
17,378
|
|
17,287
|
Total non-interest
expense
|
41,676
|
|
37,157
|
|
165,986
|
|
157,359
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
15,273
|
|
15,299
|
|
45,507
|
|
58,247
|
Income tax
expense
|
3,875
|
|
4,762
|
|
11,763
|
|
17,104
|
Net
income
|
$
11,398
|
|
$
10,537
|
|
$
33,744
|
|
$
41,143
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.46
|
|
$
0.43
|
|
$
1.36
|
|
$
1.66
|
Diluted
|
$
0.46
|
|
$
0.42
|
|
$
1.36
|
|
$
1.65
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
24,758
|
|
24,701
|
|
24,730
|
|
24,802
|
Diluted
|
24,912
|
|
24,857
|
|
24,854
|
|
24,965
|
|
|
|
|
|
|
|
|
(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
|
|
|
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
(In thousands,
except per share data)
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$ 45,706
|
|
$ 43,958
|
|
$ 42,309
|
|
$ 42,494
|
|
$ 43,566
|
|
Securities and
other
|
8,310
|
|
8,098
|
|
8,866
|
|
7,301
|
|
5,093
|
|
Total interest and
dividend income
|
54,016
|
|
52,056
|
|
51,175
|
|
49,795
|
|
48,659
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
5,109
|
|
4,877
|
|
4,478
|
|
4,721
|
|
5,166
|
|
Borrowings
|
2,260
|
|
2,230
|
|
2,368
|
|
2,308
|
|
3,651
|
|
Total interest
expense
|
7,369
|
|
7,107
|
|
6,846
|
|
7,029
|
|
8,817
|
|
Net interest
income
|
46,647
|
|
44,949
|
|
44,329
|
|
42,766
|
|
39,842
|
|
Non-interest
income
|
|
|
|
|
|
|
|
|
|
|
Loan related
income
|
1,763
|
|
1,471
|
|
1,846
|
|
1,248
|
|
1,578
|
|
Mortgage banking
income
|
504
|
|
994
|
|
691
|
|
372
|
|
445
|
|
Deposit related
fees
|
6,137
|
|
6,449
|
|
6,610
|
|
5,439
|
|
4,717
|
|
Insurance commissions
and fees
|
2,223
|
|
2,632
|
|
2,460
|
|
3,049
|
|
2,143
|
|
Wealth management
fees
|
2,373
|
|
2,330
|
|
2,294
|
|
2,549
|
|
2,212
|
|
Total fee
income
|
13,000
|
|
13,876
|
|
13,901
|
|
12,657
|
|
11,095
|
|
Other
|
1,200
|
|
520
|
|
402
|
|
524
|
|
1,227
|
|
Gain on sale of
securities, net
|
-
|
|
245
|
|
203
|
|
34
|
|
3,392
|
|
Loss on termination
of hedges
|
-
|
|
-
|
|
-
|
|
(8,792)
|
|
-
|
|
Total non-interest
income
|
14,200
|
|
14,641
|
|
14,506
|
|
4,423
|
|
15,714
|
|
Total net
revenue
|
60,847
|
|
59,590
|
|
58,835
|
|
47,189
|
|
55,556
|
|
Provision for loan
losses
|
3,898
|
|
3,685
|
|
3,989
|
|
3,396
|
|
3,100
|
|
Non-interest
expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
20,965
|
|
20,665
|
|
20,279
|
|
19,859
|
|
16,736
|
|
Occupancy and
equipment
|
6,655
|
|
6,780
|
|
6,656
|
|
6,814
|
|
5,421
|
|
Technology and
communications
|
3,702
|
|
3,484
|
|
3,800
|
|
3,778
|
|
3,169
|
|
Marketing and
promotion
|
771
|
|
659
|
|
621
|
|
521
|
|
765
|
|
Professional
services
|
1,205
|
|
830
|
|
1,024
|
|
1,152
|
|
1,558
|
|
FDIC premiums and
assessments
|
1,083
|
|
1,163
|
|
1,029
|
|
1,009
|
|
899
|
|
Other real estate
owned and foreclosures
|
232
|
|
13
|
|
33
|
|
523
|
|
255
|
|
Amortization of
intangible assets
|
996
|
|
1,236
|
|
1,274
|
|
1,306
|
|
1,239
|
|
Merger, restructuring
and conversion expenses
|
1,762
|
|
238
|
|
190
|
|
6,301
|
|
2,493
|
|
Other
|
4,305
|
|
4,619
|
|
4,357
|
|
4,097
|
|
4,622
|
|
Total non-interest
expense
|
41,676
|
|
39,687
|
|
39,263
|
|
45,360
|
|
37,157
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
15,273
|
|
16,218
|
|
15,583
|
|
(1,567)
|
|
15,299
|
|
Income tax expense
(benefit)
|
3,875
|
|
4,230
|
|
4,119
|
|
(461)
|
|
4,762
|
|
Net income
(loss)
|
$ 11,398
|
|
$ 11,988
|
|
$ 11,464
|
|
$ (1,106)
|
|
$ 10,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.46
|
|
$
0.48
|
|
$
0.46
|
|
$ (0.04)
|
|
$
0.43
|
|
Diluted
|
$
0.46
|
|
$
0.48
|
|
$
0.46
|
|
$ (0.04)
|
|
$
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
24,758
|
|
24,747
|
|
24,715
|
|
24,698
|
|
24,701
|
|
Diluted
|
24,912
|
|
24,861
|
|
24,809
|
|
24,698
|
|
24,857
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See notes on Page
F-3
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
ASSET QUALITY
ANALYSIS - UNAUDITED - (F-5)
|
|
|
|
|
|
|
|
|
|
|
|
|
At or for the
Quarters Ended
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
(Dollars in
thousands)
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Non-accruing
loans:
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
$
3,908
|
|
$
4,810
|
|
$
5,295
|
|
$
6,071
|
|
$
7,867
|
|
Commercial real
estate
|
12,878
|
|
12,192
|
|
12,583
|
|
13,036
|
|
13,739
|
|
Commercial and
industrial loans
|
1,705
|
|
2,225
|
|
4,821
|
|
2,411
|
|
2,356
|
|
Consumer
loans
|
3,214
|
|
3,660
|
|
3,359
|
|
3,846
|
|
3,493
|
|
Total non-accruing
loans
|
21,705
|
|
22,887
|
|
26,058
|
|
25,364
|
|
27,455
|
|
Other real estate
owned
|
2,049
|
|
4,854
|
|
2,445
|
|
2,418
|
|
2,758
|
|
Total non-performing
assets
|
$
23,754
|
|
$
27,741
|
|
$
28,503
|
|
$
27,782
|
|
$
30,213
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-accruing
loans/total loans
|
0.46%
|
|
0.50%
|
|
0.59%
|
|
0.60%
|
|
0.66%
|
|
Total non-performing
assets/total assets
|
0.37%
|
|
0.44%
|
|
0.45%
|
|
0.46%
|
|
0.53%
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND
ALLOWANCE FOR LOAN LOSSES
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
$
34,966
|
|
$
34,353
|
|
$
33,602
|
|
$
33,323
|
|
$
33,248
|
|
Charged-off
loans
|
(3,660)
|
|
(3,360)
|
|
(3,516)
|
|
(3,317)
|
|
(3,462)
|
|
Recoveries on
charged-off loans
|
458
|
|
288
|
|
278
|
|
200
|
|
437
|
|
Net loans
charged-off
|
(3,202)
|
|
(3,072)
|
|
(3,238)
|
|
(3,117)
|
|
(3,025)
|
|
Provision for loan
losses
|
3,898
|
|
3,685
|
|
3,989
|
|
3,396
|
|
3,100
|
|
Balance at end of
period
|
$
35,662
|
|
$
34,966
|
|
$
34,353
|
|
$
33,602
|
|
$
33,323
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses/total loans
|
0.76%
|
|
0.77%
|
|
0.77%
|
|
0.79%
|
|
0.80%
|
|
Allowance for loan
losses/non-accruing loans
|
164%
|
|
153%
|
|
132%
|
|
132%
|
|
121%
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOAN
CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
$
(181)
|
|
$
(394)
|
|
$
(602)
|
|
$
(1,055)
|
|
$
(564)
|
|
Commercial real
estate
|
(1,810)
|
|
(1,470)
|
|
(1,028)
|
|
(1,105)
|
|
(763)
|
|
Commercial and
industrial loans
|
(540)
|
|
(687)
|
|
(1,341)
|
|
(215)
|
|
(1,042)
|
|
Home
equity
|
(240)
|
|
(193)
|
|
(51)
|
|
(458)
|
|
45
|
|
Auto and other
consumer
|
(431)
|
|
(328)
|
|
(216)
|
|
(284)
|
|
(701)
|
|
Total, net
|
$
(3,202)
|
|
$
(3,072)
|
|
$
(3,238)
|
|
$
(3,117)
|
|
$
(3,025)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
0.29%
|
|
0.28%
|
|
0.31%
|
|
0.30%
|
|
0.31%
|
|
Net charge-offs (YTD
annualized)/average loans
|
0.29%
|
|
0.29%
|
|
0.30%
|
|
0.30%
|
|
0.29%
|
|
|
|
|
|
|
|
|
|
|
|
|
DELINQUENT AND
NON-ACCRUING LOANS/TOTAL LOANS
|
|
|
|
|
|
|
|
|
|
|
30-89 Days
delinquent
|
0.42%
|
|
0.32%
|
|
0.34%
|
|
0.37%
|
|
0.51%
|
|
90+ Days delinquent
and still accruing
|
0.10%
|
|
0.12%
|
|
0.21%
|
|
0.22%
|
|
0.22%
|
|
Total accruing
delinquent loans
|
0.52%
|
|
0.44%
|
|
0.55%
|
|
0.59%
|
|
0.73%
|
|
Non-accruing
loans
|
0.46%
|
|
0.50%
|
|
0.59%
|
|
0.60%
|
|
0.66%
|
|
Total delinquent and
non-accruing loans
|
0.98%
|
|
0.94%
|
|
1.14%
|
|
1.19%
|
|
1.39%
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
SELECTED FINANCIAL
HIGHLIGHTS - UNAUDITED - (F-6)
|
|
|
|
|
|
|
|
At or for the
Quarters Ended
|
|
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
|
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE
DATA
|
|
|
|
|
|
|
|
|
|
|
|
Core earnings,
diluted
|
$ 0.48
|
|
$ 0.46
|
|
$ 0.44
|
|
$ 0.42
|
|
$ 0.40
|
|
|
Net earnings,
diluted
|
0.46
|
|
0.48
|
|
0.46
|
|
(0.04)
|
|
0.42
|
|
|
Tangible book
value
|
17.19
|
|
16.67
|
|
16.40
|
|
15.84
|
|
16.27
|
|
|
Total book
value
|
28.17
|
|
27.69
|
|
27.49
|
|
26.99
|
|
27.08
|
|
|
Market price at
period end
|
26.66
|
|
23.49
|
|
23.22
|
|
25.88
|
|
27.27
|
|
|
Dividends
|
|
0.18
|
|
0.18
|
|
0.18
|
|
0.18
|
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
Core return on
assets
|
0.75
|
%
|
0.73
|
%
|
0.71
|
%
|
0.71
|
%
|
0.73
|
%
|
|
Return on
assets
|
0.71
|
|
0.77
|
|
0.75
|
|
(0.08)
|
|
0.77
|
|
|
Core return on
equity
|
6.89
|
|
6.59
|
|
6.32
|
|
6.02
|
|
5.87
|
|
|
Core return on
tangible equity
|
11.96
|
|
11.76
|
|
11.34
|
|
10.84
|
|
10.47
|
|
|
Return on
equity
|
6.52
|
|
6.95
|
|
6.64
|
|
(0.64)
|
|
6.18
|
|
|
Net interest margin,
fully taxable equivalent
|
3.23
|
|
3.20
|
|
3.26
|
|
3.35
|
|
3.26
|
|
|
Fee income/Net
interest and fee income
|
21.79
|
|
23.59
|
|
23.87
|
|
22.84
|
|
21.78
|
|
|
Efficiency
ratio
|
62.46
|
|
62.89
|
|
62.96
|
|
64.42
|
|
63.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROWTH
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial
loans, year-to-date (annualized)
|
15
|
%
|
14
|
%
|
19
|
%
|
9
|
%
|
5
|
%
|
|
Total loans,
year-to-date (annualized)
|
12
|
|
12
|
|
13
|
|
6
|
|
5
|
|
|
Total net revenues,
year-to-date, compared to prior year
|
(0)
|
|
(3)
|
|
(7)
|
|
(17)
|
|
15
|
|
|
Core earnings per
share, year-to-date, compared to prior year
|
(4)
|
|
(10)
|
|
(15)
|
|
(22)
|
|
(6)
|
|
|
Earnings per share,
year-to-date, compared to prior year
|
(18)
|
|
(27)
|
|
(54)
|
|
(110)
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL
DATA (In millions)
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$ 6,502
|
|
$ 6,352
|
|
$ 6,311
|
|
$ 6,010
|
|
$ 5,673
|
|
|
Total earning
assets
|
5,923
|
|
5,765
|
|
5,700
|
|
5,408
|
|
5,085
|
|
|
Total
loans
|
|
4,681
|
|
4,553
|
|
4,450
|
|
4,243
|
|
4,181
|
|
|
Allowance for loan
losses
|
36
|
|
35
|
|
34
|
|
34
|
|
33
|
|
|
Total intangible
assets
|
276
|
|
277
|
|
279
|
|
280
|
|
271
|
|
|
Total
deposits
|
|
4,655
|
|
4,563
|
|
4,479
|
|
4,219
|
|
3,849
|
|
|
Total stockholders'
equity
|
709
|
|
697
|
|
690
|
|
678
|
|
678
|
|
|
Total core
income
|
12.0
|
|
11.4
|
|
10.9
|
|
10.4
|
|
10.0
|
|
|
Total net
income
|
11.4
|
|
12.0
|
|
11.5
|
|
(1.1)
|
|
10.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(current quarter annualized)/average loans
|
0.29
|
%
|
0.28
|
%
|
0.31
|
%
|
0.30
|
%
|
0.31
|
%
|
|
Allowance for loan
losses/total loans
|
0.76
|
|
0.77
|
|
0.77
|
|
0.79
|
|
0.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDITION
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
to total assets
|
10.91
|
%
|
10.97
|
%
|
10.94
|
%
|
11.27
|
%
|
11.95
|
%
|
|
Tangible
stockholders' equity to tangible assets
|
6.95
|
|
6.91
|
|
6.81
|
|
6.94
|
|
7.54
|
|
|
Investments to total
assets
|
18.54
|
|
18.43
|
|
18.99
|
|
19.05
|
|
15.34
|
|
|
Loans/deposits
|
101
|
|
100
|
|
99
|
|
101
|
|
109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
(In
thousands)
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
Assets
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
$
1,468,271
|
|
$
1,412,720
|
|
$
1,379,625
|
|
$
1,379,266
|
|
$
1,330,674
|
Commercial real
estate
|
1,611,343
|
|
1,579,258
|
|
1,488,462
|
|
1,420,382
|
|
1,381,628
|
Commercial and
industrial loans
|
733,750
|
|
716,787
|
|
703,798
|
|
684,776
|
|
673,292
|
Consumer
loans
|
782,584
|
|
763,296
|
|
729,654
|
|
699,598
|
|
687,540
|
Total
loans
|
4,595,948
|
|
4,472,061
|
|
4,301,539
|
|
4,184,022
|
|
4,073,134
|
Securities
|
1,190,182
|
|
1,169,765
|
|
1,225,646
|
|
1,047,658
|
|
813,417
|
Short-term
investments and loans held for sale
|
54,843
|
|
39,496
|
|
28,426
|
|
28,631
|
|
35,438
|
Total earning
assets
|
5,840,973
|
|
5,681,322
|
|
5,555,611
|
|
5,260,311
|
|
4,921,989
|
Goodwill and other
intangible assets
|
276,645
|
|
277,775
|
|
279,024
|
|
278,386
|
|
271,147
|
Other
assets
|
304,909
|
|
305,698
|
|
311,176
|
|
312,145
|
|
305,617
|
Total
assets
|
$
6,422,527
|
|
$
6,264,795
|
|
$
6,145,811
|
|
$
5,850,842
|
|
$
5,498,753
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
NOW
|
$
415,806
|
|
$
417,802
|
|
$
425,824
|
|
$
409,631
|
|
$
348,600
|
Money
market
|
1,426,722
|
|
1,405,454
|
|
1,448,624
|
|
1,490,408
|
|
1,392,570
|
Savings
|
479,988
|
|
480,036
|
|
481,790
|
|
463,615
|
|
435,766
|
Time
|
1,425,865
|
|
1,406,914
|
|
1,152,651
|
|
1,069,987
|
|
1,044,850
|
Total
interest-bearing deposits
|
3,748,381
|
|
3,710,206
|
|
3,508,889
|
|
3,433,641
|
|
3,221,786
|
Borrowings
|
1,053,884
|
|
980,135
|
|
1,113,431
|
|
899,458
|
|
857,848
|
Total
interest-bearing liabilities
|
4,802,265
|
|
4,690,341
|
|
4,622,320
|
|
4,333,099
|
|
4,079,634
|
Non-interest-bearing
demand deposits
|
863,795
|
|
824,489
|
|
779,775
|
|
749,982
|
|
681,368
|
Other
liabilities
|
56,805
|
|
60,088
|
|
52,712
|
|
76,258
|
|
56,261
|
Total
liabilities
|
5,722,865
|
|
5,574,918
|
|
5,454,807
|
|
5,159,339
|
|
4,817,263
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
699,662
|
|
689,877
|
|
691,004
|
|
691,503
|
|
681,490
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
6,422,527
|
|
$
6,264,795
|
|
$
6,145,811
|
|
$
5,850,842
|
|
$
5,498,753
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
Total non-maturity
deposits
|
$
3,186,311
|
|
$
3,127,781
|
|
$
3,136,013
|
|
$
3,113,636
|
|
$
2,858,304
|
Total
deposits
|
4,612,176
|
|
4,534,695
|
|
4,288,664
|
|
4,183,623
|
|
3,903,154
|
Fully taxable
equivalent income adjustment
|
887
|
|
859
|
|
852
|
|
718
|
|
639
|
Total average
tangible equity
|
423,017
|
|
412,102
|
|
411,980
|
|
413,117
|
|
410,343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning
assets
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
Residential
mortgages
|
3.88
|
%
|
3.86
|
%
|
3.99
|
%
|
4.12
|
%
|
3.98
|
%
|
Commercial real
estate
|
4.18
|
|
4.26
|
|
4.20
|
|
4.49
|
|
4.73
|
|
Commercial and
industrial loans
|
4.22
|
|
3.79
|
|
3.82
|
|
3.97
|
|
3.91
|
|
Consumer
loans
|
3.35
|
|
3.34
|
|
3.49
|
|
3.56
|
|
4.01
|
|
Total
loans
|
3.96
|
|
3.91
|
|
3.96
|
|
4.13
|
|
4.26
|
|
Securities
|
3.00
|
|
2.98
|
|
3.13
|
|
3.04
|
|
2.72
|
|
Short-term
investments and loans held for sale
|
1.37
|
|
1.65
|
|
1.40
|
|
1.51
|
|
1.92
|
|
Total earning
assets
|
3.73
|
|
3.70
|
|
3.76
|
|
3.89
|
|
3.97
|
|
|
|
|
|
|
|
|
|
|
|
|
Funding
liabilities
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
NOW
|
0.15
|
|
0.17
|
|
0.15
|
|
0.15
|
|
0.18
|
|
Money
market
|
0.42
|
|
0.37
|
|
0.36
|
|
0.37
|
|
0.44
|
|
Savings
|
0.14
|
|
0.14
|
|
0.16
|
|
0.16
|
|
0.16
|
|
Time
|
0.91
|
|
0.91
|
|
0.98
|
|
1.15
|
|
1.25
|
|
Total
interest-bearing deposits
|
0.54
|
|
0.52
|
|
0.51
|
|
0.56
|
|
0.64
|
|
Borrowings
|
0.85
|
|
0.90
|
|
0.85
|
|
1.04
|
|
1.69
|
|
Total
interest-bearing liabilities
|
0.61
|
|
0.60
|
|
0.59
|
|
0.66
|
|
0.86
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
spread
|
3.12
|
|
3.10
|
|
3.17
|
|
3.23
|
|
3.11
|
|
Net interest
margin
|
3.23
|
|
3.20
|
|
3.26
|
|
3.35
|
|
3.26
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
funds
|
0.52
|
|
0.51
|
|
0.51
|
|
0.56
|
|
0.73
|
|
Cost of
deposits
|
0.44
|
|
0.43
|
|
0.42
|
|
0.46
|
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cost of funds
includes all deposits and borrowings.
|
(2) The average cost
of deposits includes the deposits held for sale.
|
BERKSHIRE HILLS
BANCORP, INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES - UNAUDITED - (F-9)
|
|
|
|
|
|
|
|
|
|
At or for the
Quarters Ended
|
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
Mar.
31,
|
|
Dec.
31,
|
|
(Dollars in
thousands)
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
|
Net income
(loss)
|
|
$ 11,398
|
|
$ 11,988
|
|
$ 11,464
|
|
$ (1,106)
|
|
$ 10,537
|
|
Adj: Gain on sale of
securities, net
|
|
-
|
|
(245)
|
|
(203)
|
|
(34)
|
|
(3,392)
|
|
Adj: Loss on
termination of hedges
|
|
-
|
|
-
|
|
-
|
|
8,792
|
|
-
|
|
Adj: Merger and
acquisition expenses
|
|
1,708
|
|
-
|
|
52
|
|
3,637
|
|
932
|
|
Adj: Restructuring
and conversion expenses (5)
|
|
54
|
|
238
|
|
138
|
|
2,665
|
|
1,561
|
|
Adj: Out-of-period
adjustment (6)
|
|
-
|
|
-
|
|
-
|
|
1,381
|
|
-
|
|
Adj: Income
taxes
|
|
(1,114)
|
|
(612)
|
|
(536)
|
|
(4,923)
|
|
364
|
|
Total core
income
|
(A)
|
$ 12,046
|
|
$ 11,369
|
|
$ 10,915
|
|
$ 10,412
|
|
$ 10,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
|
$ 60,847
|
|
$ 59,590
|
|
$ 58,835
|
|
$ 47,189
|
|
$ 55,556
|
|
Adj: Gain on sale of
securities, net
|
|
-
|
|
(245)
|
|
(203)
|
|
(34)
|
|
(3,392)
|
|
Adj: Loss on
termination of hedges
|
|
-
|
|
-
|
|
-
|
|
8,792
|
|
-
|
|
Adj: Out-of-period
adjustment (6)
|
|
-
|
|
-
|
|
-
|
|
1,381
|
|
-
|
|
Total core
revenue
|
|
$ 60,847
|
|
$ 59,345
|
|
$ 58,632
|
|
$ 57,328
|
|
$ 52,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
|
$ 41,676
|
|
$ 39,687
|
|
$ 39,263
|
|
$ 45,360
|
|
$ 37,157
|
|
Less: Total non-core
expense (see above)
|
|
(1,762)
|
|
(238)
|
|
(190)
|
|
(6,302)
|
|
(2,493)
|
|
Core non-interest
expense
|
|
$ 39,914
|
|
$ 39,449
|
|
$ 39,073
|
|
$ 39,058
|
|
$ 34,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
(B)
|
$ 6,423
|
|
$ 6,265
|
|
$ 6,146
|
|
$ 5,851
|
|
$ 5,499
|
|
Total average
stockholders'
equity
|
(C)
|
700
|
|
690
|
|
691
|
|
692
|
|
681
|
|
Total average
tangible stockholders'
equity
|
(D)
|
423
|
|
412
|
|
412
|
|
413
|
|
410
|
|
Total tangible
stockholders' equity, period-end (7)
|
(E)
|
433
|
|
420
|
|
411
|
|
398
|
|
407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, period-end
(thousands)
|
(F)
|
25,183
|
|
25,173
|
|
25,115
|
|
25,105
|
|
25,036
|
|
Average diluted
shares outstanding (thousands) (8)
|
(G)
|
24,912
|
|
24,861
|
|
24,809
|
|
24,833
|
|
24,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core earnings per
share, diluted
|
(A/G)
|
$ 0.48
|
|
$ 0.46
|
|
$ 0.44
|
|
$ 0.42
|
|
$ 0.40
|
|
Tangible book value
per share, period-end
|
(E/F)
|
$ 17.19
|
|
$ 16.67
|
|
$ 16.40
|
|
$ 15.84
|
|
$ 16.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core return on
assets
|
(A/B)
|
0.75
|
%
|
0.73
|
%
|
0.71
|
%
|
0.71
|
%
|
0.73
|
%
|
Core return on
equity
|
(A/C)
|
6.89
|
|
6.59
|
|
6.32
|
|
6.02
|
|
5.87
|
|
Core return on
tangible equity (4)
|
(A/D)
|
11.96
|
|
11.76
|
|
11.34
|
|
10.84
|
|
10.47
|
|
Efficiency ratio
(1)
|
|
62.46
|
|
62.89
|
|
62.96
|
|
64.42
|
|
63.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
|
|
Tax credit benefit of
tax shelter investments
|
|
$
570
|
|
$
555
|
|
$
555
|
|
$
555
|
|
$
80
|
|
Intangible
amortization
|
|
$
996
|
|
$ 1,236
|
|
$ 1,274
|
|
$ 1,306
|
|
$ 1,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
and conversion
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 Years
Ended
|
|
|
|
Dec.
31,
|
|
Dec.
31,
|
|
(Dollars in
thousands)
|
|
2014
|
|
2013
|
|
Net
income
|
|
$
33,744
|
|
$
41,143
|
|
Adj: Gain on sale of
securities, net
|
|
(482)
|
|
(4,758)
|
|
Adj: Loss on
termination of hedges
|
|
8,792
|
|
-
|
|
Adj: Merger and
acquisition expenses
|
|
5,397
|
|
7,998
|
|
Adj: Restructuring
and conversion expenses (5)
|
|
3,095
|
|
7,350
|
|
Adj: Out-of-period
adjustment (6)
|
|
1,381
|
|
(1,287)
|
|
Adj: Income
taxes
|
|
(7,185)
|
|
(3,750)
|
|
Total core
income
|
(A)
|
$
44,742
|
|
$
46,696
|
|
|
|
|
|
|
|
Total
revenue
|
|
$
226,461
|
|
$
226,984
|
|
Adj: Gain on sale of
securities and other non-recurring gain, net
|
|
(482)
|
|
(4,758)
|
|
Adj: Loss on
termination of hedges
|
|
8,792
|
|
-
|
|
Adj: Out-of-period
adjustment (6)
|
|
1,381
|
|
(1,287)
|
|
Total core
revenue
|
|
$
236,152
|
|
$
220,939
|
|
|
|
|
|
|
|
Total non-interest
expense
|
|
$
165,986
|
|
$
157,359
|
|
Less: Total non-core
expense (see above)
|
|
(8,492)
|
|
(15,348)
|
|
Core non-interest
expense
|
|
$
157,494
|
|
$
142,011
|
|
|
|
|
|
|
|
(Dollars in
millions, except per share data)
|
|
|
|
|
|
Total average
assets
|
(B)
|
$
6,171
|
|
$
5,306
|
|
Total average
stockholders'
equity
|
(C)
|
693
|
|
675
|
|
Total average
tangible stockholders'
equity
|
(D)
|
415
|
|
403
|
|
Total tangible
stockholders' equity, period-end (7)
|
(E)
|
433
|
|
407
|
|
Total common shares
outstanding, period-end
(thousands)
|
(F)
|
25,183
|
|
25,036
|
|
Average diluted
common shares outstanding (thousands)
|
(G)
|
24,854
|
|
24,965
|
|
|
|
|
|
|
|
Core earnings per
common share, diluted
|
(A/G)
|
$
1.80
|
|
$
1.87
|
|
Tangible book value
per common share, period-end
|
(E/F)
|
$
17.19
|
|
$
16.27
|
|
|
|
|
|
|
|
Core return on
assets
|
(A/B)
|
0.73
|
%
|
0.88
|
%
|
Core return on
equity
|
(A/C)
|
6.46
|
|
6.92
|
|
Core return on
tangible equity (4)
|
(A/D)
|
11.48
|
|
12.37
|
|
Efficiency ratio
(1)
|
|
63.17
|
|
60.79
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
GAAP return on
assets
|
|
0.55
|
%
|
0.78
|
%
|
GAAP return on
equity
|
|
4.87
|
|
6.09
|
|
Net interest
margin
|
|
3.26
|
|
3.63
|
|
Tax credit benefit of
tax shelter investments
|
|
$
2,234
|
|
$
1,455
|
|
Intangible
amortization
|
|
$
4,812
|
|
$
5,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
and conversion
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.