PITTSFIELD, Mass., July 19, 2017 /PRNewswire/ -- Berkshire Hills
Bancorp, Inc. (NYSE: BHLB) reported second quarter 2017 net income
of $19.7 million, or $0.53 per share. Core earnings
totaled $21.6 million, or
$0.58 per share. Net
income was up 23% year-over-year, while core earnings grew 31% due
to the benefit of business expansion. Net income per share
increased by 2%, while core EPS increased by 7%. Net income
was impacted by net non-core charges related primarily to
acquisitions.
SECOND QUARTER FINANCIAL HIGHLIGHTS (comparisons are to
prior quarter unless otherwise stated):
- 4% increase in net interest income
- 15% increase in fee income
- 10% annualized commercial loan growth
- 3.36% net interest margin
- 0.25% non-performing assets/assets
- 0.20% net loan charge-offs/average loans
CEO Michael Daly stated, "We had
a strong second quarter, extending the operating momentum from the
first quarter. We also conducted a successful stock offering
and completed an agreement to acquire Worcester based Commerce Bancshares.
These actions support our plan to cross the $10 billion asset threshold and provide the
capital resources to accelerate our growth. Total
assets increased at a 10% annualized rate in the first half,
reaching $9.6 billion at
midyear. We announced a planned move of our headquarters to
Boston and are accelerating our
business development in New England's largest and fastest growing
markets."
Mr. Daly continued, "Our net interest income advanced and fee
income grew by 15% to 32% of total revenue. Our strong and
diversified revenue sources produced a 42% year-over-year increase
in total revenue which now exceeds $400
million on an annualized basis. The resulting positive
operating leverage led to the achievement of a profitability
milestone, with core return on assets advancing to 92 basis points.
GAAP return on assets was 84 basis points after non-core
charges primarily related to merger activity."
Mr. Daly concluded, "Berkshire
is seeing early success in our new Boston branch, bringing our brand of
revolutionary banking to this market. Our Mid-Atlantic team
announced a strategic alliance with the Princeton Advisory Group,
which manages over $700 million in
client investments. Our Wealth Management group
recruited additional talent in Albany, NY. Berkshire's annual Xtraordinary Day of
community service events engaged 92% of our team in completing 65
community projects. Across our footprint, we are reaching out
for new market share and new opportunities to deliver on our
franchise promise to all of our constituencies."
DIVIDEND DECLARED
The Board of Directors voted to declare a cash dividend of
$0.21 per share to shareholders of
record at the close of business on August
10, 2017, payable on August
24, 2017. The dividend equates to a 2.3% annualized
yield based on the $35.98 average
closing price of Berkshire Hills Bancorp common stock during the
quarter.
FINANCIAL CONDITION
Total assets measured $9.6 billion
at June 30, 2017, increasing at a 10%
annualized rate in the first half of the year. The 10%
annualized first half loan growth included solid growth in all
major loan categories, led by a 13% annualized increase in
commercial loans. Average loan yields improved and included
the benefit of recent short term interest rate increases.
Deposit growth was 4% annualized in the most recent
quarter. Additionally, Berkshire issued 4.6 million shares and
received $153 million in net cash
proceeds from its May common stock offering. Together with
additional borrowings, these sources funded the loan growth as well
as a 3% increase in investment securities during the
quarter.
At midyear, the ratio of equity/assets increased to 13.2%, from
11.8% at the start of the year. The ratio of tangible
equity/assets increased to 9.2% from 7.6%. Book value per
share increased to $31.37, while
tangible book value improved to $20.96 per share. The ratio of
loans/deposits increased to 102%. The Commerce acquisition is
expected to further leverage the recently acquired capital and to
also provide new deposit funding sources to improve liquidity and
support loan portfolio growth. Delinquent and
non-accruing loans decreased to 0.70% of total loans, and
annualized net loan charge-offs remained at 0.20% of average loans
during the quarter.
RESULTS OF OPERATIONS
The growth in earnings and earnings per share included first
year results for the First Choice operations acquired at the end of
2016, along with the full period benefit of other 2016
acquisitions. Most measures of revenue and expense
increased year-over-year due to these business combinations.
Per share earnings included the impact of shares issued as merger
consideration and in the stock offering. Second quarter
non-core charges were mostly merger related, including First Choice
and Commerce.
Compared to the prior quarter, net interest income increased by
$2.7 million, or 4%, supported by
higher volume and margin expansion. The net interest
margin increased to 3.36% from 3.33%. Measured before
purchased loan accretion, the margin improved to 3.24% from
3.15%. The margin benefited from increased short term
interest rates, higher prepayment penalties, and the first quarter
balance sheet restructuring. The contribution from purchased
loan accretion decreased to $2.6
million from $3.7 million.
Second quarter fee income increased by $4.4 million, or 15%, including a $3.6 million increase in mortgage banking fees,
along with growth in other loan and deposit income. Mortgage
banking revenues increased by 28% over the prior quarter due
primarily to seasonally higher volume. Wealth and insurance
revenues declined from seasonally high first quarter levels.
Second quarter non-interest expense decreased by $4.8 million, or 6%, compared to the prior
quarter due to the restructuring charges and First Choice
integration costs recorded in the first quarter. Core
non-interest expense increased by $4.0
million, or 6%, primarily due to seasonal mortgage volume
growth. The efficiency ratio remained unchanged at 62%.
Full time equivalent staff totaled 1,756 positions at midyear,
compared to 1,731 at the start of the year. The
effective GAAP income tax rate was 29% and the core income tax rate
was 30% in the most recent quarter.
INVESTOR CONFERENCE CALL
Berkshire will conduct a
conference call/webcast at 10:00 a.m.
eastern time on Thursday, July 20,
2017 to discuss the results for the quarter and provide
guidance about expected future results. Participants
are encouraged to pre-register for the conference call using the
following link: http://dpregister.com/10109526. Callers who
pre-register will be given dial-in instructions and a unique PIN to
gain immediate access to the call. Participants may pre-register at
any time prior to the call, and will immediately receive simple
instructions via email. Additionally, investors may reach the
registration link and access the webcast by logging in through the
investor section of Berkshire's
website at http://ir.berkshirebank.com. Investors may
also participate at the above time by dialing 1-844-792-3726 and
asking the Operator to join the Berkshire Hills Bancorp (BHLB)
earnings call. A telephone replay of the call will be
available through Thursday, July 27,
2017 by dialing 877-344-7529 and entering access number
10109526. The webcast will be available on Berkshire's website for an extended period of
time.
BACKGROUND
Berkshire Hills Bancorp is the parent of Berkshire Bank -
America's Most Exciting Bank®. The Company has
approximately $9.6 billion in assets
and 97 full service branches in Massachusetts, New
York, Connecticut,
Vermont, New Jersey, and Pennsylvania providing personal and business
banking, insurance, and wealth management services. The Company
also offers mortgages and specialized commercial lending services
in targeted national markets. The Company has a pending agreement
to acquire Commerce Bancshares Corp., the parent company of
Commerce Bank and Trust Company, a $2.2
billion bank with 16 branches in the Worcester, MA and Boston, MA markets.
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 AND WHERE TO FIND IT
In connection with the proposed merger, Berkshire will file with the Securities and
Exchange Commission ("SEC") a Registration Statement on Form S-4
that will include a Proxy Statement of Commerce 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 when it
becomes available 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 Commerce, 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 (when they become available) 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
William Burke at Commerce at
508-797-6996.
PARTICIPANTS IN SOLICITATION
Berkshire and Commerce and
certain of their respective directors and executive officers may be
deemed to be participants in the solicitation of proxies from the
stockholders of Commerce 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
2017 annual meeting of stockholders, as filed with the SEC on a
Schedule 14A on April 7, 2017.
Information about the directors and executive officers of Commerce
will be set forth in the Proxy Statement/Prospectus. 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 to be 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 on page
F-9 in the accompanying financial tables. In all cases, it
should be understood that non-GAAP per share measures do not depict
amounts that accrue directly to the benefit of
shareholders.
The Company utilizes the non-GAAP measure of core earnings in
evaluating operating trends, including components for core revenue
and expense. These measures exclude items which the Company
does not view as related to its normalized operations. These
items primarily include securities gains/losses, merger costs, and
restructuring costs. Charges related to merger and
acquisition activity consist primarily of severance/benefit related
expenses, contract termination costs, systems conversion costs,
variable compensation expenses, and professional fees. These
charges are related to the following business combinations: First
Choice Bank, 44 Business Capital, financial planning assets, and
Commerce. Restructuring costs generally consist of costs and
losses associated with the disposition of assets and liabilities
and lease terminations, including costs related to branch
sales. Additionally, the Company recorded charges for hedge
terminations in the first quarter of 2017 and legal settlement
costs in the second quarter of 2017.
Non-core adjustments are presented net of an adjustment for
income tax expense. This adjustment is determined as the
difference between the GAAP tax rate and the effective tax rate
applicable to core income. The efficiency ratio is adjusted
for non-core revenue and expense items and for tax preference
items. The Company also calculates measures related to
tangible equity, which adjust equity (and assets where applicable)
to exclude intangible assets due to the importance of these
measures to the investment community. Of note, following
systems upgrades, non-material revisions were made in the first
quarter of 2017 to the calculations of the net interest margin and
efficiency ratio and prior period measures were revised to include
these changes.
CONTACTS
Investor Relations Contact
Allison O'Rourke; Executive Vice
President, Investor Relations Officer; 413-236-3149
Media Contact
Elizabeth Mach; Senior Vice
President, Marketing Officer; 413-445-8390
TABLE
INDEX
|
CONSOLIDATED
UNAUDITED FINANCIAL SCHEDULES
|
F-1
|
Selected Financial
Highlights
|
F-2
|
Balance
Sheets
|
F-3
|
Loan and Deposit
Analysis
|
F-4
|
Statements of
Income
|
F-5
|
Statements of
Income (Five Quarter Trend)
|
F-6
|
Average Yields and
Costs
|
F-7
|
Average
Balances
|
F-8
|
Asset Quality
Analysis
|
F-9
|
Reconciliation of
Non-GAAP Financial Measures (Five Quarter Trend)
|
|
and Supplementary
Data
|
F-10
|
Reconciliation of
Non-GAAP Financial Measures (Year-to-Date)
|
|
and Supplementary
Data
|
BERKSHIRE HILLS
BANCORP, INC.
|
SELECTED FINANCIAL
HIGHLIGHTS - UNAUDITED - (F-1)
|
|
|
|
|
At or for the
Quarters Ended (2)
|
|
|
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
|
|
|
|
2017
|
|
2017
|
|
2016 (3)
|
|
2016
|
|
2016 (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE
DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings,
diluted
|
$
0.53
|
|
$
0.44
|
|
$
0.32
|
|
$
0.53
|
|
$
0.52
|
|
|
|
Core earnings,
diluted (1)
|
0.58
|
|
0.55
|
|
0.56
|
|
0.57
|
|
0.54
|
|
|
|
Total book
value
|
31.37
|
|
30.77
|
|
30.65
|
|
29.97
|
|
29.64
|
|
|
|
Tangible book value
(5)
|
20.96
|
|
18.97
|
|
18.81
|
|
18.78
|
|
18.44
|
|
|
|
Market price at
period end
|
35.15
|
|
36.05
|
|
36.85
|
|
27.71
|
|
26.92
|
|
|
|
Dividends
|
|
0.21
|
|
0.21
|
|
0.20
|
|
0.20
|
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE RATIOS
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
assets
|
0.84
|
%
|
0.68
|
%
|
0.50
|
%
|
0.82
|
%
|
0.82
|
%
|
|
|
Core return on assets
(1)
|
0.92
|
|
0.85
|
|
0.87
|
|
0.88
|
|
0.85
|
|
|
|
Return on
equity
|
6.80
|
|
5.71
|
|
4.29
|
|
7.29
|
|
7.17
|
|
|
|
Core return on equity
(1)
|
7.45
|
|
7.17
|
|
7.49
|
|
7.75
|
|
7.42
|
|
|
|
Core return on
tangible equity (1)
|
11.96
|
|
12.05
|
|
12.23
|
|
12.99
|
|
12.45
|
|
|
|
Net interest margin,
fully taxable equivalent (FTE) (7)
|
3.36
|
|
3.33
|
|
3.21
|
|
3.27
|
|
3.32
|
|
|
|
Net interest margin
(FTE), excluding purchased loan accretion (5)
|
3.24
|
|
3.15
|
|
3.11
|
|
3.15
|
|
3.21
|
|
|
|
Fee income/Net
interest and fee income
|
32.23
|
|
30.04
|
|
24.99
|
|
23.81
|
|
21.16
|
|
|
|
Efficiency ratio
(5)
|
61.72
|
|
61.94
|
|
58.42
|
|
57.32
|
|
58.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROWTH
(Year-to-date)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial
loans (annualized)
|
13
|
%
|
15
|
%
|
18
|
%
|
9
|
%
|
11
|
%
|
|
|
Total loans
(annualized)
|
10
|
|
6
|
|
14
|
|
7
|
|
10
|
|
|
|
Total deposits
(annualized)
|
3
|
|
2
|
|
18
|
|
4
|
|
2
|
|
|
|
Total net revenues
(compared to prior year)
|
40
|
|
39
|
|
11
|
|
13
|
|
14
|
|
|
|
Earnings per share
(compared to prior year)
|
(8)
|
|
(15)
|
|
9
|
|
31
|
|
48
|
|
|
|
Core earnings per
share (compared to prior year)(1)
|
5
|
|
2
|
|
4
|
|
6
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
9,627
|
|
$
9,298
|
|
$
9,163
|
|
$
7,931
|
|
$
8,044
|
|
|
|
Total earning
assets
|
8,807
|
|
8,486
|
|
8,340
|
|
7,229
|
|
7,327
|
|
|
|
Total
investments
|
1,796
|
|
1,740
|
|
1,670
|
|
1,162
|
|
1,304
|
|
|
|
Total
loans
|
|
6,864
|
|
6,656
|
|
6,550
|
|
6,047
|
|
6,000
|
|
|
|
Allowance for loan
losses
|
47
|
|
46
|
|
44
|
|
43
|
|
41
|
|
|
|
Total intangible
assets
|
421
|
|
422
|
|
423
|
|
348
|
|
349
|
|
|
|
Total
deposits
|
|
6,715
|
|
6,656
|
|
6,622
|
|
5,750
|
|
5,657
|
|
|
|
Total shareholders'
equity
|
1,268
|
|
1,100
|
|
1,093
|
|
933
|
|
923
|
|
|
|
Net income
|
|
19.7
|
|
15.5
|
|
10.3
|
|
16.4
|
|
16.0
|
|
|
|
Core income
(1)
|
21.6
|
|
19.4
|
|
18.0
|
|
17.4
|
|
16.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY AND
CONDITION RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(current quarter annualized)/average loans
|
0.20
|
%
|
0.20
|
%
|
0.21
|
%
|
0.20
|
%
|
0.22
|
%
|
|
|
Total non-performing
assets/total assets
|
0.25
|
|
0.27
|
|
0.24
|
|
0.26
|
|
0.26
|
|
|
|
Allowance for loan
losses/total loans
|
0.69
|
|
0.69
|
|
0.67
|
|
0.71
|
|
0.69
|
|
|
|
Loans/deposits
|
102
|
|
100
|
|
99
|
|
105
|
|
106
|
|
|
|
Shareholders' equity
to total assets
|
13.17
|
|
11.83
|
|
11.93
|
|
11.76
|
|
11.48
|
|
|
|
Tangible
shareholders' equity to tangible assets (5)
|
9.20
|
|
7.64
|
|
7.68
|
|
7.70
|
|
7.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Core measurements are
non-GAAP financial measures that are adjusted to exclude net
non-core charges primarily related to acquisitions
and
|
|
|
|
restructuring
activities. See pages F-9 and F-10 for reconciliations of non-GAAP
financial measures.
|
|
|
|
|
|
|
(2)
|
Reconciliations of
non-GAAP financial measures, including all references to core and
tangible amounts, appear on pages F-9 and F-10.
|
|
|
(3)
|
The Company acquired
First Choice Bank on December 2, 2016.
|
|
|
|
|
|
|
(4)
|
The Company acquired
certain assets and operations related to 44 Business Capital on
April 29, 2016.
|
|
|
|
|
|
|
(5)
|
Non-GAAP financial
measure. See pages F-9 and F-10 for reconciliations of non-GAAP
financial measures.
|
|
|
|
|
|
|
(6)
|
All performance
ratios are annualized and are based on average balance sheet
amounts, where applicable.
|
|
|
|
|
|
|
(7)
|
Fully taxable
equivalent considers the impact of tax advantaged investment
securities and loans.
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
|
CONSOLIDATED
BALANCE SHEETS - UNAUDITED - (F-2)
|
|
|
June 30,
|
|
March
31,
|
|
December
31,
|
|
|
(in
thousands)
|
2017
|
|
2017
|
|
2016
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and due from
banks
|
$
78,407
|
|
$
67,580
|
|
$
71,494
|
|
|
Short-term
investments
|
23,426
|
|
25,763
|
|
41,581
|
|
|
Total cash and
short-term investments
|
101,833
|
|
93,343
|
|
113,075
|
|
|
|
|
|
|
|
|
|
|
Trading
security
|
12,837
|
|
12,966
|
|
13,229
|
|
|
Securities available
for sale, at fair value
|
1,329,993
|
|
1,293,683
|
|
1,209,537
|
|
|
Securities held to
maturity, at amortized cost
|
350,992
|
|
331,179
|
|
334,368
|
|
|
Federal Home Loan
Bank stock and other restricted securities
|
78,874
|
|
76,407
|
|
71,112
|
|
|
Total
securities
|
1,772,696
|
|
1,714,235
|
|
1,628,246
|
|
|
|
|
|
|
|
|
|
|
Loans held for sale,
at fair value
|
146,482
|
|
89,741
|
|
120,673
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
2,689,522
|
|
2,673,363
|
|
2,616,438
|
|
|
Commercial and
industrial loans
|
1,227,936
|
|
1,146,125
|
|
1,062,038
|
|
|
Residential
mortgages
|
1,934,068
|
|
1,850,684
|
|
1,893,131
|
|
|
Consumer
loans
|
1,012,956
|
|
985,761
|
|
978,180
|
|
|
Total
loans
|
6,864,482
|
|
6,655,933
|
|
6,549,787
|
|
|
Less: Allowance for
loan losses
|
(47,359)
|
|
(45,804)
|
|
(43,998)
|
|
|
Net loans
|
6,817,123
|
|
6,610,129
|
|
6,505,789
|
|
|
|
|
|
|
|
|
|
|
Premises and
equipment, net
|
94,354
|
|
95,203
|
|
93,215
|
|
|
Other real estate
owned
|
279
|
|
71
|
|
151
|
|
|
Goodwill
|
403,106
|
|
403,106
|
|
403,106
|
|
|
Other intangible
assets
|
17,874
|
|
18,644
|
|
19,445
|
|
|
Cash surrender value
of bank-owned life insurance
|
140,135
|
|
139,914
|
|
139,257
|
|
|
Deferred tax asset,
net
|
40,948
|
|
42,403
|
|
41,128
|
|
|
Other
assets
|
92,441
|
|
91,119
|
|
98,457
|
|
|
Total
assets
|
$
9,627,271
|
|
$
9,297,908
|
|
$
9,162,542
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
Demand
deposits
|
$
1,179,456
|
|
$
1,194,633
|
|
$
1,278,875
|
|
|
NOW
deposits
|
574,661
|
|
562,743
|
|
570,583
|
|
|
Money market
deposits
|
1,790,173
|
|
1,819,403
|
|
1,781,605
|
|
|
Savings
deposits
|
669,617
|
|
660,007
|
|
657,486
|
|
|
Time
deposits
|
2,500,947
|
|
2,419,268
|
|
2,333,543
|
|
|
Total
deposits
|
6,714,854
|
|
6,656,054
|
|
6,622,092
|
|
|
|
|
|
|
|
|
|
|
Senior
borrowings
|
1,382,974
|
|
1,294,721
|
|
1,224,836
|
|
|
Subordinated
borrowings
|
89,250
|
|
89,206
|
|
89,161
|
|
|
Total
borrowings
|
1,472,224
|
|
1,383,927
|
|
1,313,997
|
|
|
|
|
|
|
|
|
|
|
Other
liabilities
|
171,999
|
|
158,374
|
|
133,155
|
|
|
Total
liabilities
|
8,359,077
|
|
8,198,355
|
|
8,069,244
|
|
|
|
|
|
|
|
|
|
|
Total common
shareholders' equity
|
1,268,194
|
|
1,099,553
|
|
1,093,298
|
|
|
Total liabilities and
shareholders' equity
|
$
9,627,271
|
|
$
9,297,908
|
|
$
9,162,542
|
|
|
|
|
|
|
|
|
|
|
Net shares
outstanding
|
40,428
|
|
35,729
|
|
35,673
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED LOAN
& DEPOSIT ANALYSIS - UNAUDITED - (F-3)
|
LOAN
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Growth
%
|
(in
millions)
|
|
June 30, 2017
Balance
|
|
March 31, 2017
Balance
|
|
December 31, 2016
Balance
|
|
Quarter ended
June 30, 2017
|
|
Year to
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate - construction
|
|
$
291
|
|
$
306
|
|
$
288
|
|
(19)
|
%
|
3
|
%
|
Commercial real
estate - other
|
|
2,398
|
|
2,367
|
|
2,329
|
|
5
|
|
6
|
|
Total commercial real
estate
|
|
2,689
|
|
2,673
|
|
2,617
|
|
2
|
|
5
|
|
Commercial and
industrial loans
|
|
1,228
|
|
1,146
|
|
1,062
|
|
29
|
|
31
|
|
Total commercial
loans
|
|
3,917
|
|
3,819
|
|
3,679
|
|
10
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total residential
mortgages
|
|
1,934
|
|
1,851
|
|
1,893
|
|
18
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity
|
|
388
|
|
390
|
|
394
|
|
(2)
|
|
(3)
|
|
Auto and
other
|
|
625
|
|
596
|
|
584
|
|
19
|
|
14
|
|
Total consumer
loans
|
|
1,013
|
|
986
|
|
978
|
|
11
|
|
7
|
|
Total
loans
|
|
$
6,864
|
|
$
6,656
|
|
$
6,550
|
|
13
|
%
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Growth
%
|
(in
millions)
|
|
June 30, 2017
Balance
|
|
March 31, 2017
Balance
|
|
December 31, 2016
Balance
|
|
Quarter ended June
30, 2017
|
|
Year to
Date
|
|
Demand
|
|
$
1,179
|
|
$
1,195
|
|
$
1,279
|
|
(5)
|
%
|
(16)
|
%
|
NOW
|
|
575
|
|
563
|
|
571
|
|
9
|
|
1
|
|
Money
market
|
|
1,790
|
|
1,819
|
|
1,782
|
|
(6)
|
|
1
|
|
Savings
|
|
670
|
|
660
|
|
657
|
|
6
|
|
4
|
|
Time
deposits
|
|
2,501
|
|
2,419
|
|
2,333
|
|
14
|
|
14
|
|
Total
deposits
|
|
$
6,715
|
|
$
6,656
|
|
$
6,622
|
|
4
|
%
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
|
CONSOLIDATED
STATEMENTS OF INCOME - UNAUDITED - (F-4)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
|
|
June 30,
|
|
(in thousands,
except per share data)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
Loans
|
$
71,983
|
|
$
59,703
|
|
$
140,926
|
|
$
118,145
|
|
Securities and
other
|
12,683
|
|
9,315
|
|
24,449
|
|
19,349
|
|
Total interest and
dividend income
|
84,666
|
|
69,018
|
|
165,375
|
|
137,494
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
Deposits
|
9,971
|
|
7,378
|
|
19,069
|
|
14,537
|
|
Borrowings
|
5,150
|
|
4,199
|
|
9,875
|
|
7,819
|
|
Total interest
expense
|
15,121
|
|
11,577
|
|
28,944
|
|
22,356
|
|
Net interest
income
|
69,545
|
|
57,441
|
|
136,431
|
|
115,138
|
|
Non-interest
income
|
|
|
|
|
|
|
|
|
Mortgage banking
originations
|
16,281
|
|
1,335
|
|
28,959
|
|
2,156
|
|
Loan related
income
|
5,275
|
|
2,898
|
|
9,454
|
|
5,944
|
|
Deposit related
fees
|
6,645
|
|
6,291
|
|
12,849
|
|
12,400
|
|
Insurance commissions
and fees
|
2,588
|
|
2,660
|
|
5,724
|
|
5,553
|
|
Wealth management
fees
|
2,286
|
|
2,235
|
|
4,812
|
|
4,737
|
|
Total fee
income
|
33,075
|
|
15,419
|
|
61,798
|
|
30,790
|
|
Other
|
(276)
|
|
(851)
|
|
(183)
|
|
(628)
|
|
Securities (losses)
gains, net
|
(1)
|
|
(13)
|
|
12,569
|
|
23
|
|
Loss on termination
of hedges
|
-
|
|
-
|
|
(6,629)
|
|
-
|
|
Total non-interest
income
|
32,798
|
|
14,555
|
|
67,555
|
|
30,185
|
|
Total net
revenue
|
102,343
|
|
71,996
|
|
203,986
|
|
145,323
|
|
Provision for loan
losses
|
4,889
|
|
4,522
|
|
9,984
|
|
8,528
|
|
Non-interest
expense
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
36,997
|
|
24,664
|
|
73,116
|
|
50,378
|
|
Occupancy and
equipment
|
8,678
|
|
6,560
|
|
17,704
|
|
13,250
|
|
Technology and
communications
|
6,883
|
|
4,814
|
|
12,970
|
|
9,671
|
|
Marketing and
promotion
|
3,177
|
|
737
|
|
5,176
|
|
1,410
|
|
Professional
services
|
2,190
|
|
1,509
|
|
4,641
|
|
2,789
|
|
FDIC premiums and
assessments
|
1,588
|
|
1,203
|
|
2,886
|
|
2,436
|
|
Other real estate
owned and foreclosures
|
30
|
|
393
|
|
58
|
|
656
|
|
Amortization of
intangible assets
|
770
|
|
787
|
|
1,571
|
|
1,606
|
|
Merger, restructuring
and other expense
|
2,903
|
|
878
|
|
14,585
|
|
1,658
|
|
Other
|
6,307
|
|
4,723
|
|
11,142
|
|
9,514
|
|
Total non-interest
expense
|
69,523
|
|
46,268
|
|
143,849
|
|
93,368
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
27,931
|
|
21,206
|
|
50,153
|
|
43,427
|
|
Income tax
expense
|
8,237
|
|
5,249
|
|
14,999
|
|
11,469
|
|
Net
income
|
$
19,694
|
|
$
15,957
|
|
$
35,154
|
|
$
31,958
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.53
|
|
$
0.52
|
|
$
0.97
|
|
$
1.05
|
|
Diluted
|
$
0.53
|
|
$
0.52
|
|
$
0.96
|
|
$
1.04
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
37,324
|
|
30,605
|
|
36,305
|
|
30,561
|
|
Diluted
|
37,474
|
|
30,765
|
|
36,466
|
|
30,725
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS BANCORP,
INC.
|
CONSOLIDATED
STATEMENTS OF INCOME (5 Quarter Trend) - UNAUDITED -
(F-5)
|
|
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
(in thousands,
except per share data)
|
2017
|
|
2017
|
|
2016
|
|
2016
|
|
2016
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
71,983
|
|
$
68,943
|
|
$
62,884
|
|
$
61,571
|
|
$
59,703
|
|
Securities and
other
|
12,683
|
|
11,766
|
|
9,550
|
|
8,940
|
|
9,315
|
|
Total interest and
dividend income
|
84,666
|
|
80,709
|
|
72,434
|
|
70,511
|
|
69,018
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
9,971
|
|
9,098
|
|
8,556
|
|
7,790
|
|
7,378
|
|
Borrowings
|
5,150
|
|
4,725
|
|
4,720
|
|
4,750
|
|
4,199
|
|
Total interest
expense
|
15,121
|
|
13,823
|
|
13,276
|
|
12,540
|
|
11,577
|
|
Net interest
income
|
69,545
|
|
66,886
|
|
59,158
|
|
57,971
|
|
57,441
|
|
Non-interest
income
|
|
|
|
|
|
|
|
|
|
|
Mortgage banking
originations
|
16,281
|
|
12,678
|
|
3,537
|
|
1,862
|
|
1,335
|
|
Loan related
income
|
5,275
|
|
4,179
|
|
5,648
|
|
5,102
|
|
2,898
|
|
Deposit related
fees
|
6,645
|
|
6,204
|
|
6,285
|
|
6,278
|
|
6,291
|
|
Insurance commissions
and fees
|
2,588
|
|
3,136
|
|
2,323
|
|
2,601
|
|
2,660
|
|
Wealth management
fees
|
2,286
|
|
2,526
|
|
1,911
|
|
2,269
|
|
2,235
|
|
Total fee
income
|
33,075
|
|
28,723
|
|
19,704
|
|
18,112
|
|
15,419
|
|
Other
|
(276)
|
|
93
|
|
(2,849)
|
|
188
|
|
(851)
|
|
Securities (losses)
gains , net
|
(1)
|
|
12,570
|
|
(652)
|
|
78
|
|
(13)
|
|
Gain on sale of
business operations, net
|
-
|
|
-
|
|
522
|
|
563
|
|
-
|
|
Loss on termination
of hedges
|
-
|
|
(6,629)
|
|
-
|
|
-
|
|
-
|
|
Total non-interest
income
|
32,798
|
|
34,757
|
|
16,725
|
|
18,941
|
|
14,555
|
|
Total net
revenue
|
102,343
|
|
101,643
|
|
75,883
|
|
76,912
|
|
71,996
|
|
Provision for loan
losses
|
4,889
|
|
5,095
|
|
4,100
|
|
4,734
|
|
4,522
|
|
Non-interest
expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
36,997
|
|
36,119
|
|
28,103
|
|
26,119
|
|
24,664
|
|
Occupancy and
equipment
|
8,678
|
|
9,026
|
|
7,320
|
|
6,650
|
|
6,560
|
|
Technology and
communications
|
6,883
|
|
6,087
|
|
5,310
|
|
4,902
|
|
4,814
|
|
Marketing and
promotion
|
3,177
|
|
1,999
|
|
1,080
|
|
671
|
|
737
|
|
Professional
services
|
2,190
|
|
2,451
|
|
1,666
|
|
1,744
|
|
1,509
|
|
FDIC premiums and
assessments
|
1,588
|
|
1,298
|
|
1,422
|
|
1,208
|
|
1,203
|
|
Other real estate
owned and foreclosures
|
30
|
|
28
|
|
(11)
|
|
46
|
|
393
|
|
Amortization of
intangible assets
|
770
|
|
801
|
|
572
|
|
749
|
|
787
|
|
Merger, restructuring
and other expense
|
2,903
|
|
11,682
|
|
11,633
|
|
2,170
|
|
878
|
|
Other
|
6,307
|
|
4,835
|
|
3,995
|
|
4,585
|
|
4,723
|
|
Total non-interest
expense
|
69,523
|
|
74,326
|
|
61,090
|
|
48,844
|
|
46,268
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
27,931
|
|
22,222
|
|
10,693
|
|
23,334
|
|
21,206
|
|
Income tax
expense
|
8,237
|
|
6,762
|
|
362
|
|
6,953
|
|
5,249
|
|
Net
income
|
$
19,694
|
|
$
15,460
|
|
$
10,331
|
|
$
16,381
|
|
$
15,957
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.53
|
|
$
0.44
|
|
$
0.32
|
|
$
0.53
|
|
$
0.52
|
|
Diluted
|
$
0.53
|
|
$
0.44
|
|
$
0.32
|
|
$
0.53
|
|
$
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
37,324
|
|
35,280
|
|
32,185
|
|
30,621
|
|
30,605
|
|
Diluted
|
37,474
|
|
35,452
|
|
32,381
|
|
30,811
|
|
30,765
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
AVERAGE YIELDS AND
COSTS (Fully Taxable Equivalent - Annualized) - UNAUDITED -
(F-6)
|
|
|
Quarters
Ended
|
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
|
|
2017
|
|
2017
|
|
2016
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning
assets
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
4.41
|
%
|
4.58
|
%
|
4.17
|
%
|
4.25
|
%
|
4.42
|
%
|
Commercial and
industrial loans
|
|
5.30
|
|
4.86
|
|
4.88
|
|
5.06
|
|
4.85
|
|
Residential
mortgages
|
|
3.62
|
|
3.56
|
|
3.57
|
|
3.62
|
|
3.61
|
|
Consumer
loans
|
|
3.81
|
|
3.62
|
|
3.44
|
|
3.40
|
|
3.39
|
|
Total
loans
|
|
4.25
|
|
4.19
|
|
4.00
|
|
4.06
|
|
4.10
|
|
Securities
|
|
3.45
|
|
3.38
|
|
3.58
|
|
3.47
|
|
3.45
|
|
Short-term
investments and loans held for sale
|
|
3.07
|
|
2.40
|
|
2.13
|
|
1.68
|
|
1.37
|
|
Total earning
assets
|
|
4.07
|
|
4.00
|
|
3.91
|
|
3.95
|
|
3.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funding
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
NOW
|
|
0.23
|
|
0.22
|
|
0.16
|
|
0.12
|
|
0.13
|
|
Money
market
|
|
0.54
|
|
0.52
|
|
0.48
|
|
0.46
|
|
0.47
|
|
Savings
|
|
0.14
|
|
0.13
|
|
0.12
|
|
0.12
|
|
0.11
|
|
Time
|
|
1.13
|
|
1.08
|
|
1.14
|
|
1.10
|
|
1.06
|
|
Total
interest-bearing deposits
|
|
0.73
|
|
0.69
|
|
0.69
|
|
0.67
|
|
0.65
|
|
Borrowings
|
|
1.46
|
|
1.38
|
|
1.63
|
|
1.52
|
|
1.37
|
|
Total
interest-bearing liabilities
|
|
0.88
|
|
0.83
|
|
0.87
|
|
0.85
|
|
0.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
spread
|
|
3.19
|
|
3.17
|
|
3.04
|
|
3.10
|
|
3.17
|
|
Net interest
margin
|
|
3.36
|
|
3.33
|
|
3.21
|
|
3.27
|
|
3.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of funds
(1)
|
|
0.75
|
|
0.70
|
|
0.73
|
|
0.72
|
|
0.68
|
|
Cost of deposits
(2)
|
|
0.60
|
|
0.56
|
|
0.56
|
|
0.54
|
|
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.
|
AVERAGE BALANCES -
UNAUDITED - (F-7)
|
|
Quarters
Ended
|
|
June
30,
|
|
March
31,
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
(in
thousands)
|
2017
|
|
2017
|
|
2016
|
|
2016
(2)(4)
|
|
2016
(2)(4)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
$
2,691,804
|
|
$
2,631,281
|
|
$
2,442,515
|
|
$
2,260,482
|
|
$
2,173,539
|
|
Commercial and
industrial loans
|
1,130,384
|
|
1,072,716
|
|
998,543
|
|
1,009,581
|
|
1,047,866
|
|
Residential
mortgages
|
1,871,329
|
|
1,906,457
|
|
1,833,530
|
|
1,839,364
|
|
1,759,193
|
|
Consumer
loans
|
996,488
|
|
978,683
|
|
936,957
|
|
900,432
|
|
847,215
|
|
Total loans
(1)
|
6,690,005
|
|
6,589,137
|
|
6,211,545
|
|
6,009,859
|
|
5,827,813
|
|
Securities
(3)
|
1,701,443
|
|
1,625,769
|
|
1,255,207
|
|
1,197,760
|
|
1,247,357
|
|
Short-term
investments and loans held for sale
|
148,276
|
|
118,537
|
|
83,057
|
|
40,259
|
|
38,993
|
|
Total earning
assets
|
8,539,724
|
|
8,333,443
|
|
7,549,809
|
|
7,247,878
|
|
7,114,163
|
|
Goodwill and other
intangible assets
|
421,601
|
|
422,331
|
|
362,641
|
|
349,059
|
|
344,832
|
|
Other
assets
|
369,317
|
|
388,211
|
|
363,248
|
|
360,182
|
|
349,816
|
|
Total
assets
|
$
9,330,642
|
|
$
9,143,985
|
|
$
8,275,698
|
|
$
7,957,119
|
|
$
7,808,811
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
NOW
|
$
572,688
|
|
$
574,799
|
|
$
499,852
|
|
$
474,650
|
|
$
492,901
|
|
Money
market
|
1,794,693
|
|
1,804,738
|
|
1,612,160
|
|
1,448,108
|
|
1,403,629
|
|
Savings
|
667,863
|
|
648,839
|
|
620,092
|
|
608,365
|
|
612,261
|
|
Time
|
2,472,990
|
|
2,351,183
|
|
2,171,325
|
|
2,095,269
|
|
2,047,020
|
|
Total
interest-bearing deposits
|
5,508,234
|
|
5,379,559
|
|
4,903,429
|
|
4,626,392
|
|
4,555,811
|
|
Borrowings
|
1,398,653
|
|
1,374,620
|
|
1,144,846
|
|
1,235,065
|
|
1,223,629
|
|
Total
interest-bearing liabilities
|
6,906,887
|
|
6,754,179
|
|
6,048,275
|
|
5,861,457
|
|
5,779,440
|
|
Non-interest-bearing
demand deposits
|
1,155,533
|
|
1,178,790
|
|
1,178,308
|
|
1,084,786
|
|
1,032,951
|
|
Other
liabilities
|
110,367
|
|
128,573
|
|
85,951
|
|
111,743
|
|
105,948
|
|
Total
liabilities
|
8,172,787
|
|
8,061,542
|
|
7,312,534
|
|
7,057,986
|
|
6,918,339
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
1,157,855
|
|
1,082,443
|
|
963,164
|
|
899,133
|
|
890,472
|
|
Total liabilities and
shareholders' equity
|
$
9,330,642
|
|
$
9,143,985
|
|
$
8,275,698
|
|
$
7,957,119
|
|
$
7,808,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
|
Total non-maturity
deposits
|
$
4,190,777
|
|
$
4,207,166
|
|
$
3,910,412
|
|
$
3,615,909
|
|
$
3,541,742
|
|
Total
deposits
|
6,663,767
|
|
6,558,349
|
|
6,081,737
|
|
5,711,178
|
|
5,588,762
|
|
Fully taxable
equivalent income adjustment
|
2,644
|
|
2,511
|
|
2,228
|
|
2,004
|
|
1,972
|
|
Purchased loan
accretion
|
2,550
|
|
3,687
|
|
1,886
|
|
2,214
|
|
1,981
|
|
Total average
tangible equity (5)
|
736,254
|
|
660,112
|
|
600,523
|
|
550,074
|
|
545,640
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Total loans
include non-accruing loans.
|
|
|
|
|
|
(2) The average
balances of loans include loans associated with branch sales, which
are presented under loans held for sale on the consolidated balance
sheet.
|
(3) Average balances
for securities available-for-sale are based on amortized
cost.
|
|
|
|
|
|
(4) The average
balances of deposits include the deposits held for sale presented
under other liabilities on the consolidated balance
sheet.
|
|
(5) See page
F-9.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
ASSET QUALITY
ANALYSIS - UNAUDITED - (F-8)
|
|
|
At or for the
Quarters Ended
|
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
(in
thousands)
|
|
2017
|
|
2017
|
|
2016
|
|
2016
|
|
2016
|
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Non-accruing
loans:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
7,587
|
|
$
7,718
|
|
$
5,883
|
|
$
6,295
|
|
$
4,808
|
|
Commercial and
industrial loans
|
|
8,387
|
|
8,327
|
|
7,523
|
|
6,714
|
|
7,590
|
|
Residential
mortgages
|
|
3,245
|
|
3,971
|
|
3,795
|
|
4,374
|
|
4,882
|
|
Consumer
loans
|
|
4,977
|
|
5,109
|
|
4,833
|
|
3,281
|
|
3,376
|
|
Total non-accruing
loans
|
|
24,196
|
|
25,125
|
|
22,034
|
|
20,664
|
|
20,656
|
|
Other real estate
owned
|
|
279
|
|
71
|
|
151
|
|
80
|
|
595
|
|
Total non-performing
assets
|
|
$
24,475
|
|
$
25,196
|
|
$
22,185
|
|
$
20,744
|
|
$
21,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-accruing
loans/total loans
|
|
0.35%
|
|
0.38%
|
|
0.34%
|
|
0.34%
|
|
0.34%
|
|
Total non-performing
assets/total assets
|
|
0.25%
|
|
0.27%
|
|
0.24%
|
|
0.26%
|
|
0.26%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND
ALLOWANCE FOR LOAN LOSSES
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
|
$
45,804
|
|
$
43,998
|
|
$
43,105
|
|
$
41,397
|
|
$
40,055
|
|
Charged-off
loans
|
|
(3,430)
|
|
(3,623)
|
|
(3,488)
|
|
(3,441)
|
|
(3,393)
|
|
Recoveries on
charged-off loans
|
|
97
|
|
334
|
|
281
|
|
415
|
|
213
|
|
Net loans
charged-off
|
|
(3,333)
|
|
(3,289)
|
|
(3,207)
|
|
(3,026)
|
|
(3,180)
|
|
Provision for loan
losses
|
|
4,888
|
|
5,095
|
|
4,100
|
|
4,734
|
|
4,522
|
|
Balance at end of
period
|
|
$
47,359
|
|
$
45,804
|
|
$
43,998
|
|
$
43,105
|
|
$
41,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses/total loans
|
|
0.69%
|
|
0.69%
|
|
0.67%
|
|
0.71%
|
|
0.69%
|
|
Allowance for loan
losses/non-accruing loans
|
|
196%
|
|
182%
|
|
200%
|
|
209%
|
|
200%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOAN
CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
(1,472)
|
|
$
(633)
|
|
$
(676)
|
|
$
(547)
|
|
$
(534)
|
|
Commercial and
industrial loans
|
|
(626)
|
|
(1,634)
|
|
(1,148)
|
|
(1,610)
|
|
(1,720)
|
|
Residential
mortgages
|
|
(337)
|
|
(324)
|
|
(768)
|
|
(452)
|
|
(568)
|
|
Home
equity
|
|
(268)
|
|
(95)
|
|
(47)
|
|
(65)
|
|
(164)
|
|
Auto and other
consumer
|
|
(630)
|
|
(603)
|
|
(568)
|
|
(352)
|
|
(194)
|
|
Total, net
|
|
$
(3,333)
|
|
$
(3,289)
|
|
$
(3,207)
|
|
$
(3,026)
|
|
$
(3,180)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
0.20%
|
|
0.20%
|
|
0.21%
|
|
0.20%
|
|
0.22%
|
|
Net charge-offs (YTD
annualized)/average loans
|
0.20%
|
|
0.20%
|
|
0.21%
|
|
0.22%
|
|
0.22%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELINQUENT AND
NON-ACCRUING LOANS/TOTAL LOANS
|
|
|
|
|
|
|
|
|
|
30-89 Days
delinquent
|
|
0.23%
|
|
0.24%
|
|
0.35%
|
|
0.25%
|
|
0.25%
|
|
90+ Days delinquent
and still accruing
|
|
0.12%
|
|
0.16%
|
|
0.15%
|
|
0.09%
|
|
0.08%
|
|
Total accruing
delinquent loans
|
|
0.35%
|
|
0.40%
|
|
0.50%
|
|
0.34%
|
|
0.33%
|
|
Non-accruing
loans
|
|
0.35%
|
|
0.38%
|
|
0.34%
|
|
0.34%
|
|
0.34%
|
|
Total delinquent and
non-accruing loans
|
|
0.70%
|
|
0.78%
|
|
0.84%
|
|
0.68%
|
|
0.67%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED -
(F-9)
|
|
|
At or for the
Quarters Ended
|
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
(in
thousands)
|
|
2017
|
|
2017
|
|
2016
|
|
2016
|
|
2016
|
|
Net income
|
|
$
19,694
|
|
$
15,460
|
|
$
10,331
|
|
$
16,381
|
|
$
15,957
|
|
Adj: Net securities
losses/(gains) losses
|
|
1
|
|
(12,570)
|
|
652
|
|
(78)
|
|
13
|
|
Adj: Loss on
termination of hedges
|
|
-
|
|
6,629
|
|
-
|
|
-
|
|
-
|
|
Adj: Net (gains) on
sale of business operations
|
|
-
|
|
-
|
|
(522)
|
|
(563)
|
|
-
|
|
Adj: Merger and
acquisition expense
|
|
2,266
|
|
5,947
|
|
10,820
|
|
1,453
|
|
701
|
|
Adj: Restructuring
expense and other expense
|
|
637
|
|
5,735
|
|
1,113
|
|
717
|
|
177
|
|
Adj: Income
taxes
|
|
(1,039)
|
|
(1,801)
|
|
(4,373)
|
|
(492)
|
|
(334)
|
|
Total core
income
|
(A)
|
$
21,559
|
|
$
19,400
|
|
$
18,021
|
|
$
17,418
|
|
$
16,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
|
$
102,343
|
|
$
101,643
|
|
$
75,883
|
|
$
76,912
|
|
$
71,996
|
|
Adj: Net securities
losses/(gains) losses
|
|
1
|
|
(12,570)
|
|
652
|
|
(78)
|
|
13
|
|
Adj: Net (gains) on
sale of business operations
|
|
-
|
|
-
|
|
(522)
|
|
(563)
|
|
-
|
|
Adj: Loss on
termination of hedges
|
|
-
|
|
6,629
|
|
-
|
|
-
|
|
-
|
|
Total core
revenue
|
(B)
|
$
102,344
|
|
$
95,702
|
|
$
76,013
|
|
$
76,271
|
|
$
72,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
|
$
69,523
|
|
$
74,326
|
|
$
61,090
|
|
$
48,844
|
|
$
46,268
|
|
Less: Merger,
restructuring and other expense (see above)
|
|
(2,903)
|
|
(11,682)
|
|
(11,933)
|
|
(2,170)
|
|
(878)
|
|
Core non-interest
expense
|
(C)
|
$
66,620
|
|
$
62,644
|
|
$
49,157
|
|
$
46,674
|
|
$
45,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
(D)
|
$
9,331
|
|
$
9,144
|
|
$
8,276
|
|
$
7,957
|
|
$
7,809
|
|
Total average
shareholders'
equity
|
(E)
|
1,158
|
|
1,082
|
|
963
|
|
899
|
|
890
|
|
Total average
tangible shareholders'
equity
|
(F)
|
736
|
|
660
|
|
601
|
|
550
|
|
546
|
|
Total tangible
shareholders' equity, period-end (1)
|
(G)
|
847
|
|
678
|
|
671
|
|
584
|
|
574
|
|
Total tangible
assets, period-end (1)
|
(H)
|
9,206
|
|
8,876
|
|
8,740
|
|
7,583
|
|
7,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, period-end
(thousands)
|
(I)
|
40,428
|
|
35,729
|
|
35,673
|
|
31,122
|
|
31,156
|
|
Average diluted
shares outstanding (thousands)
|
(J)
|
37,474
|
|
35,452
|
|
32,381
|
|
30,811
|
|
30,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core earnings per
share, diluted
|
(A/J)
|
$
0.58
|
|
$
0.55
|
|
$
0.56
|
|
$
0.57
|
|
$
0.54
|
|
Tangible book value
per share, period-end
|
(G/I)
|
20.96
|
|
18.97
|
|
18.81
|
|
18.78
|
|
18.44
|
|
Total tangible
shareholders' equity/total tangible assets
|
(G)/(H)
|
9.20
|
|
7.64
|
|
7.68
|
|
7.70
|
|
7.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance ratios
(2)
|
|
|
|
|
|
|
|
|
|
|
|
GAAP return on
assets
|
|
0.84
|
%
|
0.68
|
%
|
0.50
|
%
|
0.82
|
%
|
0.82
|
%
|
Core return on
assets
|
(A/D)
|
0.92
|
|
0.85
|
|
0.87
|
|
0.88
|
|
0.85
|
|
GAAP return on
equity
|
|
6.80
|
|
5.71
|
|
4.29
|
|
7.29
|
|
7.17
|
|
Core return on
equity
|
(A/E)
|
7.45
|
|
7.17
|
|
7.49
|
|
7.75
|
|
7.42
|
|
Core return on
tangible equity (3)
|
(A/F)
|
11.96
|
|
12.05
|
|
12.23
|
|
12.99
|
|
12.45
|
|
Efficiency ratio
(4)(5)
(C-M)/(B+K+N)
|
61.72
|
|
61.94
|
|
58.42
|
|
57.32
|
|
58.11
|
|
Net interest
margin
|
|
3.36
|
|
3.33
|
|
3.21
|
|
3.27
|
|
3.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary data
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (6)
|
(K)
|
$
1,696
|
|
$
1,624
|
|
$
4,918
|
|
$
1,852
|
|
$
2,777
|
|
Non-interest income
charge on tax-credit investments (7)
|
(L)
|
(1,453)
|
|
(1,329)
|
|
(4,428)
|
|
(1,525)
|
|
(1,938)
|
|
Net income on
tax-credit investments
|
(K+L)
|
243
|
|
295
|
|
490
|
|
327
|
|
839
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(M)
|
$
770
|
|
$
801
|
|
$
572
|
|
$
749
|
|
$
787
|
|
Fully taxable
equivalent income adjustment
|
(N)
|
2,644
|
|
2,511
|
|
2,228
|
|
2,004
|
|
1,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Total tangible
shareholders' equity is computed by taking total shareholders'
equity less the intangible assets at period-end.
|
|
|
|
|
Total tangible assets
is computed by taking total assets less the intangible assets at
period-end.
|
|
|
|
|
|
|
|
(2) Ratios are
annualized and based on average balance sheet amounts, where
applicable. Quarterly data may not sum to year-to-date data
due
|
|
|
to
rounding.
|
|
|
|
|
|
|
|
|
|
|
|
(3) Core return on
tangible equity is computed by dividing the total core income
adjusted for the tax-effected amortization of intangible
assets,
|
|
|
assuming a 40%
marginal rate, by tangible equity.
|
|
|
|
|
|
|
|
|
|
|
|
(4) Non-GAAP
financial measure.
|
|
|
|
|
|
|
|
|
|
|
|
(5) 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.
|
|
|
|
|
(6) The tax benefit
is the direct reduction to the income tax provision due to tax
credits and deductions generated from investments in
historic
|
|
|
rehabilitation,
low-income housing, new market projects, and renewable energy
projects.
|
|
|
|
|
|
(7) The non-interest
income charge is the reduction to the tax-advantaged investments,
which are incurred as the tax credits are
generated.
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA - UNAUDITED -
(F-10)
|
|
|
|
At or for the Six
Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
(Dollars in
thousands)
|
|
2017
|
|
2016
|
|
|
Net
income
|
|
$
35,154
|
|
$
31,958
|
|
|
Adj: Net securities
losses (gains)
|
|
(12,569)
|
|
(23)
|
|
|
Adj: Loss on
termination of hedges
|
|
6,629
|
|
-
|
|
|
Adj: Merger and
acquisition expenses
|
|
8,213
|
|
1,228
|
|
|
Adj: Restructuring
expense and other
|
|
6,372
|
|
430
|
|
|
Adj: Income
taxes
|
|
(2,840)
|
|
(590)
|
|
|
Total core
income
|
(A)
|
$
40,959
|
|
$
33,003
|
|
|
Total
revenue
|
|
$
203,986
|
|
$
145,323
|
|
|
Adj: Net securities
losses (gains)
|
|
(12,569)
|
|
(23)
|
|
|
Adj: Loss on
termination of hedges
|
|
6,629
|
|
-
|
|
|
Total core
revenue
|
(B)
|
$
198,046
|
|
$
145,300
|
|
|
Total non-interest
expense
|
|
$
143,849
|
|
$
93,368
|
|
|
Less: Merger,
restructuring and conversion expense (see above)
|
|
(14,585)
|
|
(1,658)
|
|
|
Core non-interest
expense
|
(C)
|
$
129,264
|
|
$
91,710
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions, except per share data)
|
|
|
|
|
|
|
Total average
assets
|
(D)
|
$
9,238
|
|
$
7,800
|
|
|
Total average
shareholders'
equity
|
(E)
|
1,120
|
|
891
|
|
|
Total average
tangible shareholders'
equity
|
(F)
|
698
|
|
551
|
|
|
Total tangible
shareholders' equity, period-end (1)
|
(G)
|
847
|
|
574
|
|
|
Total tangible
assets, period-end (1)
|
(H)
|
9,206
|
|
7,695
|
|
|
Total common shares
outstanding, period-end
(thousands)
|
(I)
|
40,428
|
|
31,156
|
|
|
Average diluted
shares outstanding (thousands)
|
(J)
|
36,466
|
|
30,728
|
|
|
Core earnings per
common share, diluted
|
(A/J)
|
$
1.12
|
|
$
1.07
|
|
|
Tangible book value
per common share, period-end
|
(G/I)
|
20.96
|
|
18.44
|
|
|
Total tangible
shareholders' equity/total tangible assets
|
(G/H)
|
9.20
|
|
7.46
|
|
|
|
|
|
|
|
|
|
Performance ratios
(2)
|
|
|
|
|
|
|
GAAP return on
assets
|
|
0.76
|
%
|
0.82
|
%
|
|
Core return on
assets
|
(A/D)
|
0.89
|
|
0.85
|
|
|
GAAP return on
equity
|
|
6.28
|
|
7.18
|
|
|
Core return on
equity
|
(A/E)
|
7.31
|
|
7.41
|
|
|
Core return on
tangible equity (3)
|
(A/F)
|
12.01
|
|
12.32
|
|
|
Efficiency ratio
(4)(5)
(C-M)
|
/ (B+K+N)
|
61.83
|
|
58.69
|
|
|
Net interest
margin
|
|
3.35
|
|
3.32
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (6)
|
(K)
|
$
3,320
|
|
$
4,365
|
|
|
Non-interest income
charge on tax-credit investments (7)
|
(L)
|
(2,782)
|
|
(3,039)
|
|
|
Net income on
tax-credit investments
|
(K+L)
|
538
|
|
1,326
|
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(M)
|
1,571
|
|
1,606
|
|
|
Fully taxable
equivalent income adjustment
|
(N)
|
5,154
|
|
3,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Total tangible
shareholders' equity is computed by taking total shareholders'
equity less the intangible assets at period-end.
|
|
|
Total tangible assets
is computed by taking total assets less the intangible assets at
period-end.
|
|
|
|
(2) Ratios are
annualized and based on average balance sheet amounts, where
applicable. Quarterly data may not sum to year-to-date
data
|
|
due to
rounding.
|
|
|
|
|
|
(3) Core return on
tangible equity is computed by dividing the total core income
adjusted for the tax-effected amortization of
|
|
intangible assets,
assuming a 40% marginal rate, by tangible equity.
|
|
|
|
|
|
(4) Non-GAAP
financial measure.
|
|
|
|
|
|
(5) 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.
|
|
(6) The tax benefit
is the direct reduction to the income tax provision due to tax
credits and deductions generated from investments
in
|
|
historic
rehabilitation, low-income housing, new market projects, and
renewable energy.
|
|
|
|
(7) The non-interest
income charge is the reduction to the tax-advantaged investments,
which are incurred as the tax credits are
generated.
|
|
|
|
|
|
|
|
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SOURCE Berkshire Hills Bancorp, Inc.