BOSTON, July 18, 2018 /PRNewswire/ -- Berkshire
Hills Bancorp, Inc. (NYSE: BHLB) reported second quarter 2018 net
income of $34 million, which was a
73% increase over 2017 second quarter net income of $20 million. This primarily reflected the
benefit of Berkshire's
Greater Boston expansion through
acquisition and business development, resulting in higher market
share, increased efficiency, and record profitability.
SECOND QUARTER FINANCIAL HIGHLIGHTS (income statement
comparisons are year over year and balance sheet growth is compared
to prior quarter-end):
- $0.74 EPS
- 9% annualized commercial loan growth
- 7% annualized deposit growth
- 18% increase in net revenue
- 19% increase in loan and deposit fee income
- 3.50% net interest margin
- 56.4% efficiency ratio
- 1.17% ROA
- 0.21% net loan charge-offs/average loans
- 0.20% non-performing assets/assets
CEO Michael Daly stated, "We
achieved record quarterly return on assets, with income increasing
by 35% over the prior quarter. Commercial loans grew strongly
and our new Boston corporate
headquarters teams are receiving good response to our expanded
presence in Greater Boston.
Our revenue growth and disciplined expense management
produced record quarterly earnings per share, positive operating
leverage, and improved returns on equity."
Mr. Daly continued, "The integration of acquired operations was
completed within plan in the second quarter and several
company-wide initiatives have been accelerated to support the
expansion of our deposit product set and delivery
channels. Our annual Xtraordinary Day of Service in
June tackled 74 community projects across our markets, totaling
nearly 7,000 volunteer hours and 92% of our workforce. Our
Foundation announced the appointment of a Corporate Social
Responsibility (CSR) Officer to expand our multiple community
engagement activities and implement an all-encompassing CSR
strategy. Our strengthened financial condition was recognized
with an A- bank deposit rating assigned by the KBRA Bond Rating
Agency. Berkshire's stock
was added to the S&P 600 SmallCapR index during the
quarter; this index tracks U.S. small cap companies and is included
in the S&P Composite 1500R index, facilitating an
expanded market for our stock."
DIVIDENDS DECLARED
The Board of Directors declared a quarterly cash dividend of
$0.22 per common share to
shareholders of record at the close of business on August 9, 2018, payable on August 23, 2018. The dividend equates to a
2.2% annualized yield based on the $39.47 average closing price of Berkshire Hills
Bancorp common stock during the second quarter. The Board
also declared a quarterly cash dividend of $0.44 per share of preferred stock, with the same
record and payment dates as above. The quarterly common and
preferred dividends were increased by 5% in the first quarter of
the year.
FINANCIAL CONDITION
Total assets measured $11.9
billion at midyear 2018. Second quarter loan growth
included a 9% annualized increase in commercial loans, with
increased originations in Greater
Boston, as well as asset based lending growth across the
franchise. Residential mortgage growth included the
impact of seasonally higher mortgage originations. The 7%
annualized increase in total deposits included higher growth of
transaction accounts. Asset quality, liquidity, and capital
metrics remained strong at midyear. Non-performing assets
decreased compared to the prior quarter and to the second quarter
of 2017. During the quarter, book value per share increased
to $32.49 and tangible book value per
common share increased to $20.27.
RESULTS OF OPERATIONS
Revenue and expense in 2018 include Commerce Bancshares Corp.
operations acquired in the fourth quarter of 2017. Most
categories of revenue and expense increased due to this
acquisition. Berkshire has
completed the integration of these operations and by midyear 2018
had accomplished its objectives for merger-related efficiencies,
which included cost saves originally targeted at 20%, or
approximately $8 million per
year.
Second quarter EPS increased by 40% year-over-year and by 35%
quarter-over-quarter, including the impact of shares issued for the
Commerce acquisition. There were negligible net non-core
items during the most recent quarter, and both GAAP EPS and the
non-GAAP core EPS measure totaled $0.74. Both of these measures were record
quarterly results. Core EPS increased by 28% year-over-year
and by 14% quarter-over-quarter. This improvement included the EPS
accretion from the Company's investment in expanded operations,
including the Commerce acquisition.
Second quarter revenue increased by 18% year-over-year and by 5%
compared to the prior quarter. This revenue growth
contributed to an improvement in the efficiency ratio to
56.4%. The return on assets increased to a record
1.17%. The return on equity improved to 8.9% and the
non-GAAP measure of core return on tangible common equity improved
to 14.8%. This is a measure of the Company's internal
generation of capital to support growth and dividends.
The net interest margin improved to 3.50% in the most recent
quarter, from 3.36% in the prior quarter. The contribution
from purchased loan accretion improved to 0.25% from 0.13% due to a
higher level of recoveries related to purchased credit impaired
loans. Asset yields and funding costs both increased
including the impact of higher short term interest
rates. Loan and deposit fees increased by 5% over the
prior quarter. Mortgage banking revenue was unchanged,
as a seasonal volume increase was offset by narrower margins due to
industry conditions. The loan loss provision increased,
exceeding net loan charge-offs, and adding to the loan loss
allowance in line with loan growth.
Second quarter non-interest expense decreased from the prior
quarter due to lower merger related charges. Excluding
non-core items, non-interest expense was flat, contributing to
positive operating leverage and benefiting from merger cost saves
and operating expense disciplines. Total full-time equivalent
staff measured 2,004 positions at midyear, compared to 1,992
positions at the start of the year. The second quarter
effective income tax rate was 20% in 2018 compared to 29% in 2017,
reflecting the benefit of federal income tax reform which became
effective in 2018.
INVESTOR CONFERENCE CALL
Berkshire will conduct a
conference call/webcast at 10:00 a.m.
eastern time on Thursday, July 19, 2018 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/10121614. 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. The BHLB earnings call will also be automatically scheduled
as an event in the participant's Outlook calendar.
Participants may also reach the registration link and access the
webcast by logging in through the investor section of Berkshire's website at
http://ir.berkshirebank.com. Those parties who do not have
internet access or are otherwise unable to pre-register for this
event, may still participate at the above time by dialing
1-844-792-3726 and asking the Operator to be joined to the
Berkshire Hills Bancorp (BHLB) earnings call. A telephone replay of
the call will be available through Thursday,
July 26, 2018 by dialing 877-344-7529 and entering access
number 10121614. 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
$11.9 billion in assets and 115 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.
FORWARD LOOKING STATEMENTS
This document contains forward-looking statements as defined in
the Private Securities Litigation Reform Act of 1995. There are
several factors that could cause actual results to differ
significantly from expectations described in the forward-looking
statements. For a discussion of such factors, please see
Berkshire's most recent reports on
Forms 10-K and 10-Q filed with the Securities and Exchange
Commission and available on the SEC's website at www.sec.gov.
Berkshire does not undertake any
obligation to update forward-looking statements.
NON-GAAP FINANCIAL MEASURES
This document contains certain non-GAAP financial measures in
addition to results presented in accordance with Generally Accepted
Accounting Principles ("GAAP"). These non-GAAP measures
provide supplemental perspectives on operating results, performance
trends, and financial condition. They are not a substitute
for GAAP measures; they should be read and used in conjunction with
the Company's GAAP financial information. A reconciliation of
non-GAAP financial measures to GAAP measures is included on pages
F-9 and F-10 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. Securities gains/losses include
unrealized gains/losses on equity securities beginning in the first
quarter of 2018. 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 in 2017 and
2018 are primarily related to the business combinations with First
Choice Bank and Commerce Bancshares Corp. 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 during the
year.
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.
CONTACTS
Investor Relations Contact
James M. Moses, Senior Executive
Vice President & CFO; 413-236-3379
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
Operations (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
and Supplementary Data (Five Quarter Trend)
|
F-10
|
Reconciliation of
Non-GAAP Financial Measures
and Supplementary Data (Year-to-Date)
|
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,
|
|
|
|
|
|
2018
|
|
2018
|
|
2017 (3)
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE
DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings/(loss),
diluted
|
$
0.74
|
|
$
0.55
|
|
$
(0.06)
|
|
$
0.57
|
|
$
0.53
|
|
|
|
Core earnings,
diluted (1)
|
0.74
|
|
0.65
|
|
0.58
|
|
0.59
|
|
0.58
|
|
|
|
Total book value per
common share
|
32.49
|
|
32.12
|
|
32.14
|
|
31.78
|
|
31.37
|
|
|
|
Tangible book value
per common share (1)
|
20.28
|
|
19.86
|
|
19.83
|
|
21.38
|
|
20.96
|
|
|
|
Market price at
period end
|
40.60
|
|
37.95
|
|
36.60
|
|
38.75
|
|
35.15
|
|
|
|
Dividends per common
share
|
0.22
|
|
0.22
|
|
0.21
|
|
0.21
|
|
0.21
|
|
|
|
Dividends per
preferred share
|
0.44
|
|
0.44
|
|
0.42
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE RATIOS
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
assets
|
1.17%
|
|
0.88%
|
|
(0.10)%
|
|
0.95%
|
|
0.84%
|
|
|
|
Core return on assets
(1)
|
1.17
|
|
1.04
|
|
0.94
|
|
0.98
|
|
0.92
|
|
|
|
Return on
equity
|
8.88
|
|
6.69
|
|
(0.77)
|
|
7.26
|
|
6.80
|
|
|
|
Core return on equity
(1)
|
8.89
|
|
7.92
|
|
7.16
|
|
7.47
|
|
7.45
|
|
|
|
Core return on
tangible common equity (1)
|
14.82
|
|
13.43
|
|
11.90
|
|
11.42
|
|
11.96
|
|
|
|
Net interest margin,
fully taxable equivalent (FTE) (5)
|
3.50
|
|
3.36
|
|
3.50
|
|
3.36
|
|
3.36
|
|
|
|
Fee income/Net
interest and fee income
|
24.25
|
|
25.51
|
|
25.91
|
|
29.96
|
|
32.23
|
|
|
|
Efficiency ratio
(1)
|
56.37
|
|
59.54
|
|
57.43
|
|
59.28
|
|
61.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROWTH
(Year-to-date)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial
loans (annualized)
|
5%
|
|
1%
|
|
38%
|
|
9%
|
|
13%
|
|
|
|
Total loans
(annualized)
|
10
|
|
4
|
|
27
|
|
8
|
|
10
|
|
|
|
Total deposits
(annualized)
|
2
|
|
(3)
|
|
32
|
|
3
|
|
3
|
|
|
|
Total net revenues
(compared to prior year)
|
16
|
|
13
|
|
41
|
|
37
|
|
40
|
|
|
|
Earnings per share
(compared to prior year)
|
33
|
|
25
|
|
(25)
|
|
(2)
|
|
(8)
|
|
|
|
Core earnings per
share (compared to prior year)(1)
|
24
|
|
18
|
|
4
|
|
4
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
11,902
|
|
$
11,519
|
|
$
11,571
|
|
$
9,767
|
|
$
9,627
|
|
|
|
Total earning
assets
|
10,827
|
|
10,442
|
|
10,509
|
|
8,944
|
|
8,807
|
|
|
|
Total
securities
|
1,920
|
|
1,932
|
|
1,899
|
|
1,824
|
|
1,773
|
|
|
|
Total
loans
|
|
8,710
|
|
8,376
|
|
8,299
|
|
6,947
|
|
6,864
|
|
|
|
Allowance for loan
losses
|
56
|
|
54
|
|
52
|
|
49
|
|
47
|
|
|
|
Total intangible
assets
|
555
|
|
556
|
|
558
|
|
420
|
|
421
|
|
|
|
Total
deposits
|
|
8,839
|
|
8,683
|
|
8,750
|
|
6,790
|
|
6,715
|
|
|
|
Total shareholders'
equity
|
1,516
|
|
1,498
|
|
1,496
|
|
1,285
|
|
1,268
|
|
|
|
Net
income/(loss)
|
34.0
|
|
25.2
|
|
(2.8)
|
|
22.9
|
|
19.7
|
|
|
|
Core income
(1)
|
34.1
|
|
29.9
|
|
26.3
|
|
23.6
|
|
21.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY AND
CONDITION RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(current quarter annualized)/average loans
|
0.21%
|
|
0.17%
|
|
0.17%
|
|
0.19%
|
|
0.20%
|
|
|
|
Total non-performing
assets/total assets
|
0.20
|
|
0.27
|
|
0.21
|
|
0.23
|
|
0.25
|
|
|
|
Allowance for loan
losses/total loans
|
0.64
|
|
0.64
|
|
0.62
|
|
0.71
|
|
0.69
|
|
|
|
Loans/deposits
|
99
|
|
96
|
|
95
|
|
102
|
|
102
|
|
|
|
Shareholders' equity
to total assets
|
12.74
|
|
13.00
|
|
12.93
|
|
13.15
|
|
13.17
|
|
|
|
Tangible
shareholders' equity to tangible assets (1)
|
8.47
|
|
8.59
|
|
8.52
|
|
9.25
|
|
9.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Non-GAAP financial
measure. 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
Commerce Bancshares Corp., the parent of Commerce Bank & Trust
Company, on October 13, 2017.
|
|
(4)
|
All performance
ratios are annualized and are based on average balance sheet
amounts, where applicable.
|
|
(5)
|
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)
|
2018
|
|
2018
|
|
2017
|
|
Assets
|
|
|
|
|
|
|
Cash and due from
banks
|
$
90,964
|
|
$
88,193
|
|
$
91,122
|
|
Short-term
investments
|
48,093
|
|
35,694
|
|
157,641
|
|
Total cash and
short-term investments
|
139,057
|
|
123,887
|
|
248,763
|
|
|
|
|
|
|
|
|
Trading
security
|
11,483
|
|
11,795
|
|
12,277
|
|
Marketable equity
securities, at fair value
|
59,726
|
|
59,261
|
|
45,185
|
|
Securities available
for sale, at fair value
|
1,393,250
|
|
1,401,399
|
|
1,380,914
|
|
Securities held to
maturity, at amortized cost
|
379,905
|
|
395,337
|
|
397,103
|
|
Federal Home Loan
Bank stock and other restricted securities
|
75,530
|
|
64,038
|
|
63,085
|
|
Total
securities
|
1,919,894
|
|
1,931,830
|
|
1,898,564
|
|
|
|
|
|
|
|
|
Loans held for sale,
at fair value
|
149,182
|
|
98,440
|
|
153,620
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
3,220,702
|
|
3,266,737
|
|
3,264,742
|
|
Commercial and
industrial loans
|
1,973,739
|
|
1,818,974
|
|
1,803,939
|
|
Residential
mortgages
|
2,397,192
|
|
2,181,807
|
|
2,102,807
|
|
Consumer
loans
|
1,118,333
|
|
1,108,899
|
|
1,127,850
|
|
Total
loans
|
8,709,966
|
|
8,376,417
|
|
8,299,338
|
|
Less: Allowance for
loan losses
|
(55,925)
|
|
(53,859)
|
|
(51,834)
|
|
Net loans
|
8,654,041
|
|
8,322,558
|
|
8,247,504
|
|
|
|
|
|
|
|
|
Premises and
equipment, net
|
112,217
|
|
111,237
|
|
109,352
|
|
Other real estate
owned
|
-
|
|
-
|
|
-
|
|
Goodwill
|
519,128
|
|
519,128
|
|
519,287
|
|
Other intangible
assets
|
35,838
|
|
37,085
|
|
38,296
|
|
Cash surrender value
of bank-owned life insurance
|
193,121
|
|
192,379
|
|
191,221
|
|
Deferred tax asset,
net
|
53,679
|
|
51,679
|
|
47,061
|
|
Other
assets
|
125,806
|
|
131,024
|
|
117,083
|
|
Total
assets
|
$
11,901,963
|
|
$
11,519,247
|
|
$
11,570,751
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
Demand
deposits
|
$
1,553,039
|
|
$
1,575,243
|
|
$
1,606,656
|
|
NOW and other
deposits
|
858,014
|
|
715,581
|
|
734,558
|
|
Money market
deposits
|
2,619,943
|
|
2,749,763
|
|
2,776,157
|
|
Savings
deposits
|
747,722
|
|
756,711
|
|
741,954
|
|
Time
deposits
|
3,060,034
|
|
2,885,969
|
|
2,890,205
|
|
Total
deposits
|
8,838,752
|
|
8,683,267
|
|
8,749,530
|
|
|
|
|
|
|
|
|
Senior
borrowings
|
1,274,342
|
|
1,125,860
|
|
1,047,736
|
|
Subordinated
borrowings
|
89,429
|
|
89,384
|
|
89,339
|
|
Total
borrowings
|
1,363,771
|
|
1,215,244
|
|
1,137,075
|
|
|
|
|
|
|
|
|
Other
liabilities
|
183,199
|
|
123,079
|
|
187,882
|
|
Total
liabilities
|
10,385,722
|
|
10,021,590
|
|
10,074,487
|
|
|
|
|
|
|
|
|
Total preferred
shareholders' equity
|
40,633
|
|
40,633
|
|
40,633
|
|
Total common
shareholders' equity
|
1,475,608
|
|
1,457,024
|
|
1,455,631
|
|
Total shareholders'
equity
|
1,516,241
|
|
1,497,657
|
|
1,496,264
|
|
Total liabilities and
shareholders' equity
|
$
11,901,963
|
|
$
11,519,247
|
|
$
11,570,751
|
|
|
|
|
|
|
|
|
Net common shares
outstanding
|
45,420
|
|
45,360
|
|
45,290
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED LOAN
& DEPOSIT ANALYSIS - UNAUDITED - (F-3)
|
LOAN
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Growth
%
|
(in
millions)
|
|
June 30, 2018
Balance
|
|
March 31, 2018
Balance
|
|
December 31, 2017
Balance
|
|
Quarter ended
June 30, 2018
|
|
Year to
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate - construction
|
|
$
295
|
|
$
347
|
|
$
354
|
|
(60)%
|
|
(33)%
|
|
Commercial real
estate - other
|
|
2,926
|
|
2,920
|
|
2,910
|
|
1
|
|
1
|
|
Total commercial real
estate
|
|
3,221
|
|
3,267
|
|
3,264
|
|
(6)
|
|
(3)
|
|
Commercial and
industrial loans
|
|
1,974
|
|
1,819
|
|
1,804
|
|
34
|
|
19
|
|
Total commercial
loans
|
|
5,195
|
|
5,086
|
|
5,068
|
|
9
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total residential
mortgages
|
|
2,397
|
|
2,181
|
|
2,103
|
|
40
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity
|
|
393
|
|
400
|
|
410
|
|
(7)
|
|
(8)
|
|
Auto and
other
|
|
725
|
|
709
|
|
718
|
|
9
|
|
2
|
|
Total consumer
loans
|
|
1,118
|
|
1,109
|
|
1,128
|
|
3
|
|
(2)
|
|
Total
loans
|
|
$
8,710
|
|
$
8,376
|
|
$
8,299
|
|
16%
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Growth
%
|
(in
millions)
|
|
June 30, 2018
Balance
|
|
March 31, 2018
Balance
|
|
December 31, 2017
Balance
|
|
Quarter ended
June 30, 2018
|
|
Year to
Date
|
|
Demand
|
|
$
1,553
|
|
$
1,575
|
|
$
1,606
|
|
(6)%
|
|
(7)%
|
|
NOW and
other
|
|
858
|
|
715
|
|
735
|
|
80
|
|
33
|
|
Money
market
|
|
2,620
|
|
2,750
|
|
2,776
|
|
(19)
|
|
(11)
|
|
Savings
|
|
748
|
|
757
|
|
742
|
|
(5)
|
|
2
|
|
Time
deposits
|
|
3,060
|
|
2,886
|
|
2,890
|
|
24
|
|
12
|
|
Total
deposits
|
|
$
8,839
|
|
$
8,683
|
|
$
8,749
|
|
7%
|
|
2%
|
|
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)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Interest and
dividend income
|
|
|
|
|
|
|
|
Loans
|
$
101,649
|
|
$
71,983
|
|
$
194,484
|
|
$
140,926
|
Securities and
other
|
15,230
|
|
12,683
|
|
29,635
|
|
24,449
|
Total interest and
dividend income
|
116,879
|
|
84,666
|
|
224,119
|
|
165,375
|
Interest
expense
|
|
|
|
|
|
|
|
Deposits
|
17,768
|
|
9,971
|
|
33,093
|
|
19,069
|
Borrowings
|
7,990
|
|
5,150
|
|
14,435
|
|
9,875
|
Total interest
expense
|
25,758
|
|
15,121
|
|
47,528
|
|
28,944
|
Net interest
income
|
91,121
|
|
69,545
|
|
176,591
|
|
136,431
|
Non-interest
income
|
|
|
|
|
|
|
|
Mortgage banking
originations
|
10,195
|
|
16,281
|
|
20,342
|
|
28,959
|
Loan related
income
|
6,549
|
|
5,275
|
|
11,987
|
|
9,454
|
Deposit related
fees
|
7,605
|
|
6,645
|
|
15,671
|
|
12,849
|
Insurance commissions
and fees
|
2,549
|
|
2,588
|
|
5,574
|
|
5,724
|
Wealth management
fees
|
2,280
|
|
2,286
|
|
4,877
|
|
4,812
|
Total fee
income
|
29,178
|
|
33,075
|
|
58,451
|
|
61,798
|
Other
|
155
|
|
(276)
|
|
1,423
|
|
(183)
|
Securities
gains/(losses), net
|
718
|
|
(1)
|
|
(784)
|
|
12,569
|
(Loss)/gain on sale
of business operations and assets, net
|
(21)
|
|
-
|
|
460
|
|
-
|
(Loss) on termination
of hedges
|
-
|
|
-
|
|
-
|
|
(6,629)
|
Total non-interest
income
|
30,030
|
|
32,798
|
|
59,550
|
|
67,555
|
Total net
revenue
|
121,151
|
|
102,343
|
|
236,141
|
|
203,986
|
Provision for loan
losses
|
6,532
|
|
4,889
|
|
12,107
|
|
9,984
|
Non-interest
expense
|
|
|
|
|
|
|
|
Compensation and
benefits
|
41,134
|
|
36,997
|
|
83,318
|
|
73,116
|
Occupancy and
equipment
|
10,230
|
|
8,678
|
|
20,312
|
|
17,704
|
Technology and
communications
|
7,359
|
|
6,883
|
|
14,189
|
|
12,970
|
Marketing and
promotion
|
2,369
|
|
3,177
|
|
4,981
|
|
5,176
|
Professional
services
|
1,139
|
|
2,190
|
|
3,192
|
|
4,641
|
FDIC premiums and
assessments
|
1,411
|
|
1,588
|
|
2,606
|
|
2,886
|
Other real estate
owned and foreclosures
|
1
|
|
30
|
|
68
|
|
58
|
Amortization of
intangible assets
|
1,246
|
|
770
|
|
2,514
|
|
1,571
|
Merger, restructuring
and other expense
|
847
|
|
2,903
|
|
5,940
|
|
14,585
|
Other
|
6,601
|
|
6,307
|
|
12,086
|
|
11,142
|
Total non-interest
expense
|
72,337
|
|
69,523
|
|
149,206
|
|
143,849
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
42,282
|
|
27,931
|
|
74,828
|
|
50,153
|
Income tax
expense
|
8,251
|
|
8,237
|
|
15,549
|
|
14,999
|
Net
income
|
$
34,031
|
|
$
19,694
|
|
$
59,279
|
|
$
35,154
|
Preferred stock
dividend
|
229
|
|
-
|
|
459
|
|
-
|
Income available
to common shareholders
|
$
33,802
|
|
$
19,694
|
|
$
58,820
|
|
$
35,154
|
|
|
|
|
|
|
|
|
Earnings per
common share:
|
|
|
|
|
|
|
|
Basic
|
$
0.74
|
|
$
0.53
|
|
$
1.29
|
|
$
0.97
|
Diluted
|
$
0.74
|
|
$
0.53
|
|
$
1.28
|
|
$
0.96
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
46,032
|
|
37,324
|
|
45,999
|
|
36,305
|
Diluted
|
46,215
|
|
37,474
|
|
46,206
|
|
36,466
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (5 Quarter Trend) - UNAUDITED -
(F-5)
|
|
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
(in thousands,
except per share data)
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
Interest and
dividend income
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
101,649
|
|
$
92,835
|
|
$
91,149
|
|
$
76,024
|
|
$
71,983
|
|
Securities and
other
|
15,230
|
|
14,405
|
|
14,674
|
|
13,036
|
|
12,683
|
|
Total interest and
dividend income
|
116,879
|
|
107,240
|
|
105,823
|
|
89,060
|
|
84,666
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
17,768
|
|
15,325
|
|
13,802
|
|
10,984
|
|
9,971
|
|
Borrowings
|
7,990
|
|
6,445
|
|
5,655
|
|
6,078
|
|
5,150
|
|
Total interest
expense
|
25,758
|
|
21,770
|
|
19,457
|
|
17,062
|
|
15,121
|
|
Net interest
income
|
91,121
|
|
85,470
|
|
86,366
|
|
71,998
|
|
69,545
|
|
Non-interest
income
|
|
|
|
|
|
|
|
|
|
|
Mortgage banking
originations
|
10,195
|
|
10,147
|
|
11,918
|
|
13,374
|
|
16,281
|
|
Loan related
income
|
6,549
|
|
5,438
|
|
5,866
|
|
6,081
|
|
5,275
|
|
Deposit related
fees
|
7,605
|
|
8,066
|
|
7,871
|
|
6,445
|
|
6,645
|
|
Insurance commissions
and fees
|
2,549
|
|
3,025
|
|
2,284
|
|
2,581
|
|
2,588
|
|
Wealth management
fees
|
2,280
|
|
2,597
|
|
2,268
|
|
2,315
|
|
2,286
|
|
Total fee
income
|
29,178
|
|
29,273
|
|
30,207
|
|
30,796
|
|
33,075
|
|
Other
|
155
|
|
1,268
|
|
(939)
|
|
(2,255)
|
|
(276)
|
|
Securities
gains/(losses), net
|
718
|
|
(1,502)
|
|
30
|
|
(1)
|
|
(1)
|
|
(Loss)/gain on sale
of business operations and assets, net
|
(21)
|
|
481
|
|
-
|
|
296
|
|
-
|
|
(Loss) on termination
of hedges
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total non-interest
income
|
30,030
|
|
29,520
|
|
29,298
|
|
28,836
|
|
32,798
|
|
Total net
revenue
|
121,151
|
|
114,990
|
|
115,664
|
|
100,834
|
|
102,343
|
|
Provision for loan
losses
|
6,532
|
|
5,575
|
|
6,141
|
|
4,900
|
|
4,889
|
|
Non-interest
expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
41,134
|
|
42,184
|
|
42,220
|
|
37,643
|
|
36,997
|
|
Occupancy and
equipment
|
10,230
|
|
10,082
|
|
9,451
|
|
8,267
|
|
8,678
|
|
Technology and
communications
|
7,359
|
|
6,830
|
|
6,286
|
|
6,644
|
|
6,883
|
|
Marketing and
promotion
|
2,369
|
|
2,612
|
|
4,573
|
|
2,128
|
|
3,177
|
|
Professional
services
|
1,139
|
|
2,053
|
|
2,277
|
|
2,247
|
|
2,190
|
|
FDIC premiums and
assessments
|
1,411
|
|
1,195
|
|
1,920
|
|
1,651
|
|
1,588
|
|
Other real estate
owned and foreclosures
|
1
|
|
67
|
|
9
|
|
(23)
|
|
30
|
|
Amortization of
intangible assets
|
1,246
|
|
1,268
|
|
1,183
|
|
739
|
|
770
|
|
Merger, restructuring
and other expense
|
847
|
|
5,093
|
|
15,553
|
|
1,420
|
|
2,903
|
|
Other
|
6,601
|
|
5,485
|
|
6,569
|
|
5,104
|
|
6,307
|
|
Total non-interest
expense
|
72,337
|
|
76,869
|
|
90,041
|
|
65,820
|
|
69,523
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
42,282
|
|
32,546
|
|
19,482
|
|
30,114
|
|
27,931
|
|
Income tax
expense
|
8,251
|
|
7,298
|
|
22,292
|
|
7,211
|
|
8,237
|
|
Net
income/(loss)
|
$
34,031
|
|
$
25,248
|
|
$
(2,810)
|
|
$
22,903
|
|
$
19,694
|
|
Preferred stock
dividend
|
229
|
|
230
|
|
219
|
|
-
|
|
-
|
|
Income/(loss)
available to common shareholders
|
$
33,802
|
|
$
25,018
|
|
$
(3,029)
|
|
$
22,903
|
|
$
19,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(loss)
per common share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.74
|
|
$
0.55
|
|
$
(0.06)
|
|
$
0.57
|
|
$
0.53
|
|
Diluted
|
$
0.74
|
|
$
0.55
|
|
$
(0.06)
|
|
$
0.57
|
|
$
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
46,032
|
|
45,966
|
|
45,122
|
|
39,984
|
|
37,324
|
|
Diluted
|
46,215
|
|
46,200
|
|
45,122
|
|
40,145
|
|
37,474
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning
assets
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
5.24%
|
|
4.76%
|
|
4.73%
|
|
4.64%
|
|
4.41%
|
|
Commercial and
industrial loans
|
|
5.43
|
|
5.19
|
|
5.25
|
|
5.09
|
|
5.30
|
|
Residential
mortgages
|
|
3.72
|
|
3.56
|
|
3.76
|
|
3.68
|
|
3.62
|
|
Consumer
loans
|
|
4.13
|
|
4.01
|
|
3.94
|
|
3.88
|
|
3.81
|
|
Total
loans
|
|
4.73
|
|
4.45
|
|
4.47
|
|
4.33
|
|
4.25
|
|
Securities
|
|
3.47
|
|
3.26
|
|
3.55
|
|
3.43
|
|
3.45
|
|
Short-term
investments and loans held for sale
|
|
3.86
|
|
3.43
|
|
2.90
|
|
3.40
|
|
3.07
|
|
Total earning
assets
|
|
4.48
|
|
4.21
|
|
4.27
|
|
4.13
|
|
4.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funding
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
NOW and
other
|
|
0.44
|
|
0.28
|
|
0.25
|
|
0.26
|
|
0.23
|
|
Money
market
|
|
0.88
|
|
0.73
|
|
0.66
|
|
0.57
|
|
0.54
|
|
Savings
|
|
0.14
|
|
0.14
|
|
0.14
|
|
0.14
|
|
0.14
|
|
Time
|
|
1.54
|
|
1.40
|
|
1.25
|
|
1.20
|
|
1.13
|
|
Total
interest-bearing deposits
|
|
1.02
|
|
0.90
|
|
0.82
|
|
0.78
|
|
0.73
|
|
Borrowings
|
|
2.29
|
|
2.02
|
|
1.81
|
|
1.65
|
|
1.46
|
|
Total
interest-bearing liabilities
|
|
1.23
|
|
1.08
|
|
0.97
|
|
0.96
|
|
0.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
spread
|
|
3.25
|
|
3.13
|
|
3.30
|
|
3.17
|
|
3.19
|
|
Net interest margin
(1)
|
|
3.50
|
|
3.36
|
|
3.50
|
|
3.36
|
|
3.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of funds
(2)
|
|
1.03
|
|
0.90
|
|
0.81
|
|
0.82
|
|
0.75
|
|
Cost of
deposits
|
|
0.83
|
|
0.73
|
|
0.66
|
|
0.64
|
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The effect of
purchased loan accretion on the quarterly net interest margin was
an increase in all quarters, which is shown sequentially as
follows beginning with the most
recent quarter and ending with the earliest quarter: 0.25%,
0.13%, 0.21%, 0.14%, 0.12%. See page F-7 for purchased
loan accretion.
|
(2) Cost of funds
includes all deposits and borrowings.
|
BERKSHIRE HILLS
BANCORP, INC.
|
AVERAGE BALANCES -
UNAUDITED - (F-7)
|
|
Quarters
Ended
|
|
June
30,
|
|
March
31,
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
(in
thousands)
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
$
3,217,862
|
|
$
3,250,861
|
|
$
3,161,902
|
|
$
2,669,558
|
|
$
2,691,804
|
|
Commercial and
industrial loans
|
1,872,342
|
|
1,811,433
|
|
1,645,719
|
|
1,183,980
|
|
1,130,384
|
|
Residential
mortgages
|
2,268,886
|
|
2,138,544
|
|
2,081,548
|
|
1,977,538
|
|
1,871,329
|
|
Consumer
loans
|
1,113,089
|
|
1,114,586
|
|
1,123,683
|
|
1,030,032
|
|
996,488
|
|
Total loans
(1)
|
8,472,179
|
|
8,315,424
|
|
8,012,852
|
|
6,861,108
|
|
6,690,005
|
|
Securities
(2)
|
1,931,104
|
|
1,933,002
|
|
1,921,724
|
|
1,779,379
|
|
1,701,443
|
|
Short-term
investments and loans held for sale
|
146,190
|
|
139,161
|
|
146,101
|
|
167,724
|
|
148,276
|
|
Total earning
assets
|
10,549,473
|
|
10,387,587
|
|
10,080,677
|
|
8,808,211
|
|
8,539,724
|
|
Goodwill and other
intangible assets
|
554,591
|
|
557,321
|
|
533,157
|
|
420,853
|
|
421,601
|
|
Other
assets
|
506,954
|
|
521,745
|
|
516,802
|
|
402,188
|
|
369,317
|
|
Total
assets
|
$
11,611,018
|
|
$
11,466,653
|
|
$
11,130,636
|
|
$
9,631,252
|
|
$
9,330,642
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
NOW and
other
|
$
819,166
|
|
$
712,181
|
|
$
702,353
|
|
$
570,864
|
|
$
572,688
|
|
Money
market
|
2,524,713
|
|
2,518,920
|
|
2,371,203
|
|
1,768,108
|
|
1,794,693
|
|
Savings
|
749,995
|
|
743,944
|
|
733,157
|
|
669,690
|
|
667,863
|
|
Time
|
2,878,846
|
|
2,913,512
|
|
2,906,423
|
|
2,587,702
|
|
2,472,990
|
|
Total
interest-bearing deposits
|
6,972,720
|
|
6,888,557
|
|
6,713,136
|
|
5,596,364
|
|
5,508,234
|
|
Borrowings
|
1,382,794
|
|
1,275,173
|
|
1,229,781
|
|
1,445,700
|
|
1,398,653
|
|
Total
interest-bearing liabilities
|
8,355,514
|
|
8,163,730
|
|
7,942,917
|
|
7,042,064
|
|
6,906,887
|
|
Non-interest-bearing
demand deposits
|
1,619,470
|
|
1,656,260
|
|
1,591,431
|
|
1,196,451
|
|
1,155,533
|
|
Other
liabilities
|
102,583
|
|
137,976
|
|
127,562
|
|
131,003
|
|
110,367
|
|
Total
liabilities
|
10,077,567
|
|
9,957,966
|
|
9,661,910
|
|
8,369,518
|
|
8,172,787
|
|
|
|
|
|
|
|
|
|
|
|
|
Total preferred
shareholders' equity
|
40,633
|
|
40,633
|
|
34,892
|
|
-
|
|
-
|
|
Total common
shareholders' equity
|
1,492,818
|
|
1,468,054
|
|
1,433,834
|
|
1,261,734
|
|
1,157,855
|
|
Total shareholders'
equity
|
1,533,451
|
|
1,508,687
|
|
1,468,726
|
|
1,261,734
|
|
1,157,855
|
|
Total liabilities and
shareholders' equity
|
$
11,611,018
|
|
$
11,466,653
|
|
$
11,130,636
|
|
$
9,631,252
|
|
$
9,330,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
|
Total average
non-maturity deposits
|
$
5,713,344
|
|
$
5,631,305
|
|
$
5,398,144
|
|
$
4,205,113
|
|
$
4,190,777
|
|
Total average
deposits
|
8,592,190
|
|
8,544,817
|
|
8,304,567
|
|
6,792,815
|
|
6,663,767
|
|
Fully taxable
equivalent income adjustment
|
2,033
|
|
1,820
|
|
3,122
|
|
2,950
|
|
2,644
|
|
Purchased loan
accretion
|
6,881
|
|
3,433
|
|
5,507
|
|
3,066
|
|
2,550
|
|
Total average
tangible equity (3)
|
978,860
|
|
951,366
|
|
935,569
|
|
840,881
|
|
736,254
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Total loans
include non-accruing loans.
|
|
|
|
|
|
|
(2) Average balances
for securities available-for-sale are based on amortized
cost.
|
|
|
|
|
(3) See page F-9 for
details on the calculation of total average tangible
equity.
|
|
|
|
|
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)
|
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Non-accruing
loans:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
10,338
|
|
$
10,084
|
|
$
7,266
|
|
$
5,228
|
|
$
7,587
|
|
Commercial and
industrial loans
|
|
4,029
|
|
7,430
|
|
7,311
|
|
9,681
|
|
8,387
|
|
Residential
mortgages
|
|
3,196
|
|
5,777
|
|
2,883
|
|
3,092
|
|
3,245
|
|
Consumer
loans
|
|
5,466
|
|
5,996
|
|
5,438
|
|
4,350
|
|
4,977
|
|
Total non-accruing
loans
|
|
23,029
|
|
29,287
|
|
22,898
|
|
22,351
|
|
24,196
|
|
Other real estate
owned
|
|
-
|
|
-
|
|
-
|
|
288
|
|
279
|
|
Repossessed
assets
|
|
1,241
|
|
1,241
|
|
1,147
|
|
-
|
|
-
|
|
Total non-performing
assets
|
|
$
24,270
|
|
$
30,528
|
|
$
24,045
|
|
$
22,639
|
|
$
24,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-accruing
loans/total loans
|
|
0.26%
|
|
0.35%
|
|
0.28%
|
|
0.32%
|
|
0.35%
|
|
Total non-performing
assets/total assets
|
|
0.20%
|
|
0.27%
|
|
0.21%
|
|
0.23%
|
|
0.25%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND
ALLOWANCE FOR LOAN LOSSES
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
|
$
53,859
|
|
$
51,834
|
|
$
49,004
|
|
$
47,359
|
|
$
45,804
|
|
Charged-off
loans
|
|
(5,714)
|
|
(3,791)
|
|
(3,734)
|
|
(3,796)
|
|
(3,431)
|
|
Recoveries on
charged-off loans
|
|
1,248
|
|
241
|
|
423
|
|
541
|
|
97
|
|
Net loans
charged-off
|
|
(4,466)
|
|
(3,550)
|
|
(3,311)
|
|
(3,255)
|
|
(3,334)
|
|
Provision for loan
losses
|
|
6,532
|
|
5,575
|
|
6,141
|
|
4,900
|
|
4,889
|
|
Balance at end of
period
|
|
$
55,925
|
|
$
53,859
|
|
$
51,834
|
|
$
49,004
|
|
$
47,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses/total loans
|
|
0.64%
|
|
0.64%
|
|
0.62%
|
|
0.71%
|
|
0.69%
|
|
Allowance for loan
losses/non-accruing loans
|
|
243%
|
|
184%
|
|
226%
|
|
219%
|
|
196%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOAN
CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
(2,079)
|
|
$
(817)
|
|
$
(881)
|
|
$
(1,425)
|
|
$
(1,474)
|
|
Commercial and
industrial loans
|
|
(1,193)
|
|
(972)
|
|
(960)
|
|
(573)
|
|
(625)
|
|
Residential
mortgages
|
|
(632)
|
|
(406)
|
|
(759)
|
|
130
|
|
(337)
|
|
Home
equity
|
|
108
|
|
(588)
|
|
(123)
|
|
(634)
|
|
(268)
|
|
Auto and other
consumer
|
|
(670)
|
|
(767)
|
|
(588)
|
|
(753)
|
|
(630)
|
|
Total, net
|
|
$
(4,466)
|
|
$
(3,550)
|
|
$
(3,311)
|
|
$
(3,255)
|
|
$
(3,334)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
0.21%
|
|
0.17%
|
|
0.17%
|
|
0.19%
|
|
0.20%
|
|
Net charge-offs (YTD
annualized)/average loans
|
0.19%
|
|
0.17%
|
|
0.19%
|
|
0.20%
|
|
0.20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELINQUENT AND
NON-ACCRUING LOANS/TOTAL LOANS
|
|
|
|
|
|
|
|
|
|
30-89 Days
delinquent
|
|
0.22%
|
|
0.39%
|
|
0.35%
|
|
0.25%
|
|
0.23%
|
|
90+ Days delinquent
and still accruing
|
|
0.40%
|
|
0.23%
|
|
0.20%
|
|
0.17%
|
|
0.12%
|
|
Total accruing
delinquent loans
|
|
0.62%
|
|
0.62%
|
|
0.55%
|
|
0.42%
|
|
0.35%
|
|
Non-accruing
loans
|
|
0.26%
|
|
0.35%
|
|
0.28%
|
|
0.32%
|
|
0.35%
|
|
Total delinquent and
non-accruing loans
|
|
0.88%
|
|
0.97%
|
|
0.83%
|
|
0.74%
|
|
0.70%
|
|
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)
|
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
Net
income/(loss)
|
|
$
34,031
|
|
$
25,248
|
|
$
(2,810)
|
|
$
22,903
|
|
$
19,694
|
|
Adj: Net securities
(gains)/losses (1)
|
|
(718)
|
|
1,502
|
|
(30)
|
|
1
|
|
1
|
|
Adj: Net
losses/(gains) on sale of business operations and assets
|
21
|
|
(481)
|
|
-
|
|
(296)
|
|
-
|
|
Adj: Merger and
acquisition expense
|
|
847
|
|
5,093
|
|
15,553
|
|
1,110
|
|
2,266
|
|
Adj: Restructuring
expense and other expense
|
|
-
|
|
-
|
|
-
|
|
310
|
|
637
|
|
Adj: Employee and
community investment
|
|
-
|
|
-
|
|
3,400
|
|
-
|
|
-
|
|
Adj: Deferred tax
asset impairment
|
|
-
|
|
-
|
|
18,145
|
|
-
|
|
-
|
|
Adj: Income
taxes
|
|
(105)
|
|
(1,481)
|
|
(7,963)
|
|
(474)
|
|
(1,039)
|
|
Total core income
(2)
|
(A)
|
$
34,076
|
|
$
29,881
|
|
$
26,295
|
|
$
23,554
|
|
$
21,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
|
$
121,151
|
|
$
114,990
|
|
$
115,664
|
|
$
100,834
|
|
$
102,343
|
|
Adj: Net securities
(gains)/losses (1)
|
|
(718)
|
|
1,502
|
|
(30)
|
|
1
|
|
1
|
|
Adj: Net
losses/(gains) on sale of business operations and assets
|
21
|
|
(481)
|
|
-
|
|
(296)
|
|
-
|
|
Total core revenue
(2)
|
(B)
|
$
120,454
|
|
$
116,011
|
|
$
115,634
|
|
$
100,539
|
|
$
102,344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
|
$
72,337
|
|
$
76,869
|
|
$
90,041
|
|
$
65,820
|
|
$
69,523
|
|
Less: Merger,
restructuring and other expense (see above)
|
|
(847)
|
|
(5,093)
|
|
(15,553)
|
|
(1,420)
|
|
(2,903)
|
|
Less: Employee and
community investment
|
|
-
|
|
-
|
|
(3,400)
|
|
-
|
|
-
|
|
Core non-interest
expense (2)
|
(C)
|
$
71,490
|
|
$
71,776
|
|
$
71,088
|
|
$
64,400
|
|
$
66,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
(D)
|
$
11,611
|
|
$
11,467
|
|
$
11,131
|
|
$
9,631
|
|
$
9,331
|
|
Total average
shareholders'
equity
|
(E)
|
1,533
|
|
1,509
|
|
1,469
|
|
1,262
|
|
1,158
|
|
Total average
tangible shareholders' equity
(2)
|
(F)
|
979
|
|
951
|
|
936
|
|
841
|
|
736
|
|
Total average
tangible common shareholders' equity
(2)
|
(G)
|
938
|
|
911
|
|
901
|
|
841
|
|
736
|
|
Total tangible
shareholders' equity, period-end (2)(3)
|
(H)
|
961
|
|
941
|
|
939
|
|
864
|
|
847
|
|
Total tangible common
shareholders' equity, period-end (2)(3)
|
(I)
|
921
|
|
901
|
|
898
|
|
864
|
|
847
|
|
Total tangible
assets, period-end (2)(3)
|
(J)
|
11,347
|
|
10,963
|
|
11,013
|
|
9,346
|
|
9,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, period-end
(thousands)
|
(K)
|
45,420
|
|
45,360
|
|
45,290
|
|
40,424
|
|
40,428
|
|
Average diluted
shares outstanding (thousands)
|
(L)
|
46,215
|
|
46,200
|
|
45,383
|
|
40,145
|
|
37,474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core earnings per
share, diluted(2)
|
(A/L)
|
$
0.74
|
|
$
0.65
|
|
$
0.58
|
|
$
0.59
|
|
$
0.58
|
|
Tangible book value
per common share, period-end (2)
|
(I/K)
|
20.28
|
|
19.86
|
|
19.83
|
|
21.38
|
|
20.96
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(H)/(J)
|
8.47
|
|
8.59
|
|
8.53
|
|
9.25
|
|
9.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance ratios
(4)
|
|
|
|
|
|
|
|
|
|
|
|
GAAP return on
assets
|
|
1.17%
|
|
0.88
|
|
(0.10)%
|
|
0.95%
|
|
0.84%
|
|
Core return on assets
(2)
|
(A/D)
|
1.17
|
|
1.04
|
|
0.94
|
|
0.98
|
|
0.92
|
|
GAAP return on
equity
|
|
8.88
|
|
6.69
|
|
(0.77)
|
|
7.26
|
|
6.80
|
|
Core return on equity
(2)
|
(A/E)
|
8.89
|
|
7.92
|
|
7.16
|
|
7.47
|
|
7.45
|
|
Core return on
tangible common equity (2)(5)
|
(A+O)/(G)
|
14.82
|
|
13.43
|
|
11.90
|
|
11.42
|
|
11.96
|
|
Efficiency ratio
(2)(6)
|
(C-O)/(B+M+P)
|
56.37
|
|
59.54
|
|
57.43
|
|
59.28
|
|
61.72
|
|
Net interest
margin
|
|
3.50
|
|
3.36
|
|
3.50
|
|
3.36
|
|
3.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary data
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (7)
|
(M)
|
$
2,119
|
|
$
596
|
|
$
2,957
|
|
$
3,905
|
|
$
1,696
|
|
Non-interest income
charge on tax-credit investments (8)
|
(N)
|
(1,594)
|
|
(506)
|
|
(2,564)
|
|
(3,347)
|
|
(1,453)
|
|
Net income on
tax-credit investments
|
(M+N)
|
525
|
|
90
|
|
393
|
|
558
|
|
243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(O)
|
$
1,246
|
|
$
1,268
|
|
$
1,183
|
|
$
739
|
|
$
770
|
|
Fully taxable
equivalent income adjustment
|
(P)
|
2,033
|
|
1,820
|
|
3,122
|
|
2,950
|
|
2,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net securities
(gains)/losses for the periods ending March 31, 2018 and June 30,
2018 include the change in fair value of the Company's equity
securities in compliance with the Company's adoption of ASU
2016-01.
|
|
(2) Non-GAAP
financial measure.
|
|
|
|
|
|
|
|
|
|
|
|
(3) 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.
|
|
|
|
|
(4) 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.
|
|
|
|
(5) Core return on
tangible equity is computed by dividing the total core income
adjusted for the tax-effected amortization of intangible assets,
assuming a 27.32% marginal rate for 2018 and a 40% marginal rate
for 2017, by tangible equity.
|
|
|
|
(6) 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.
|
|
|
|
(7) The tax benefit
is the direct reduction to the income tax provision due to tax
credits and deductions generated from investments in historic
rehabilitation and low-income housing.
|
|
|
|
(8) 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)
|
|
2018
|
|
2017
|
|
Net
income
|
|
$
59,279
|
|
$
35,154
|
|
Adj: Net securities
losses/(gains) (1)
|
|
784
|
|
(12,569)
|
|
Adj: Loss on
termination of hedges
|
|
-
|
|
6,629
|
|
Adj: Net (gains) on
sale of business operations
|
|
(460)
|
|
-
|
|
Adj: Merger and
acquisition expenses
|
|
5,940
|
|
8,213
|
|
Adj: Restructuring
expense and other
|
|
-
|
|
6,372
|
|
Adj: Income
taxes
|
|
(1,586)
|
|
(2,840)
|
|
Total core income
(2)
|
(A)
|
$
63,957
|
|
$
40,959
|
|
|
|
|
|
|
|
Total
revenue
|
|
$
236,141
|
|
$
203,986
|
|
Adj: Net securities
losses/(gains) (1)
|
|
784
|
|
(12,569)
|
|
Adj: Net (gains) on
sale of business operations
|
|
(460)
|
|
-
|
|
Adj: Loss on
termination of hedges
|
|
-
|
|
6,629
|
|
Total core
revenue(2)
|
(B)
|
$
236,465
|
|
$
198,046
|
|
Total non-interest
expense
|
|
$
149,206
|
|
$
143,849
|
|
Less: Merger,
restructuring and other expense (see above)
|
|
(5,940)
|
|
(14,585)
|
|
Core non-interest
expense
(2)
|
(C)
|
$
143,266
|
|
$
129,264
|
|
|
|
|
|
|
|
(in millions,
except per share data)
|
|
|
|
|
|
Total average
assets
|
(D)
|
$
11,567
|
|
$
9,238
|
|
Total average
shareholders'
equity
|
(E)
|
1,521
|
|
1,120
|
|
Total average
tangible shareholders' equity
(2)
|
(F)
|
965
|
|
698
|
|
Total average
tangible common shareholders' equity
(2)
|
(G)
|
925
|
|
698
|
|
Total tangible
shareholders' equity, period-end (2)(3)
|
(H)
|
961
|
|
847
|
|
Total tangible common
shareholders' equity, period-end (2)(3)
|
(I)
|
921
|
|
847
|
|
Total tangible
assets, period-end (2)(3)
|
(J)
|
11,347
|
|
9,206
|
|
Total common shares
outstanding, period-end
(thousands)
|
(K)
|
45,420
|
|
40,428
|
|
Average diluted
shares outstanding (thousands)
|
(L)
|
46,206
|
|
36,466
|
|
Core earnings per
common share, diluted(2)
|
(A/L)
|
$
1.38
|
|
$
1.12
|
|
Tangible book value
per common share, period-end (2)
|
(I/K)
|
20.28
|
|
20.96
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(H)/(J)
|
8.47
|
|
9.20
|
|
|
|
|
|
|
|
Performance ratios
(4)
|
|
|
|
|
|
GAAP return on
assets
|
|
1.03%
|
|
0.76%
|
|
Core return on assets
(2)
|
(A/D)
|
1.11
|
|
0.89
|
|
GAAP return on
equity
|
|
7.79
|
|
6.28
|
|
Core return on equity
(2)
|
(A/E)
|
8.41
|
|
7.31
|
|
Core return on
tangible common equity (2)(5)
|
(A+O)/(G)
|
14.13
|
|
12.01
|
|
Efficiency ratio
(2)(6)
|
(C-O)/(B+M+P)
|
57.91
|
|
61.83
|
|
Net interest
margin
|
|
3.43
|
|
3.35
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
Tax benefit on
tax-credit investments (7)
|
(M)
|
$
2,715
|
|
$
3,320
|
|
Non-interest income
charge on tax-credit investments (8)
|
(N)
|
(2,100)
|
|
(2,782)
|
|
Net income on
tax-credit investments
|
(M+N)
|
615
|
|
538
|
|
|
|
|
|
|
|
Intangible
amortization
|
(O)
|
2,514
|
|
1,571
|
|
Fully taxable
equivalent income adjustment
|
(P)
|
3,853
|
|
5,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net securities
losses/(gains) for the period ending June 30, 2018 includes the
change in fair value of the Company's equity securities in
compliance with
the Company's adoption of ASU 2016-01.
|
|
(2)
|
Non-GAAP financial
measure.
|
|
(3)
|
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.
|
|
(4)
|
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.
|
|
(5)
|
Core return on
tangible equity is computed by dividing the total core income
adjusted for the tax-effected amortization of intangible assets,
assuming a
27.32% marginal rate for 2018 and 40% marginal rate for 2017, by
tangible equity.
|
|
(6)
|
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.
|
|
(7)
|
The tax benefit is
the direct reduction to the income tax provision due to tax credits
and deductions generated from investments in historic
rehabilitation
and low-income housing.
|
|
(8)
|
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.