BOSTON,
May 4, 2020 /PRNewswire/
-- Berkshire Hills Bancorp, Inc. (NYSE: BHLB)
today reported a first quarter 2020 net loss of $0.40 per share. The non-GAAP measure of
core EPS was a loss of $0.07.
First quarter results reflect a non-cash $0.69 per share pre-tax provision for projected
future credit losses primarily related to the COVID-19
pandemic. The company's core pre-provision net revenue ("Core
PPNR"), was $0.61 per share.
This is a non-GAAP financial measure of the Company's ongoing
operations before provision and tax expense, and before
discontinued operations and securities losses. Berkshire's liquidity and regulatory capital
metrics continued to strengthen during the quarter, supporting its
21st century community bank mission.
In response to the pandemic, Berkshire took decisive actions to protect the
health and safety of its team, customers and the communities it
serves during the first quarter, including adjusting its operations
to ensure the continued availability of essential banking services
for all customers, providing support and financial flexibility to
customers potentially impacted by the pandemic, and providing
funding to minority-owned small businesses through the Berkshire
Bank Foundation and its community-based partners. The company
also processed $650 million in loan
approvals under the first round of the Paycheck
Protection Program ("PPP").
FIRST QUARTER FINANCIAL HIGHLIGHTS
- $0.40 GAAP net loss per
share, including $0.69 pre-tax
non-cash credit loss provision
- $0.07 core loss per
share
- $0.61 Core PPNR per share
(non-GAAP financial measure)
- 3.02% net interest margin
- 1.22% credit loss allowance/loans
- 92% loans/deposits
- 8.8% tangible equity/tangible assets (non-GAAP financial
measure)
- $33.72 book value per
common share; $21.82 tangible book
value per common share (non-GAAP financial measure)
COVID-19 RESPONSE
- Servicing $650 million
first round Paycheck Protection Program ("PPP") loan
approvals
- Processing payment forbearances for $1.3 billion in loans to 4,000
customers
- Providing $3 million to
assist small businesses through The Futures Fund with BECMA and
MALGBT Chamber
- Providing $1 million in
grants through Berkshire Bank Foundation, including $500,000 in small business assistance through
non-profit partners
- Supporting remote work from home for 86% of the
non-branch workforce
- Maintaining full pay for all staff
CEO Richard Marotta stated,
"Our teams are working hard to safely and responsibly meet the
needs of our customers during this pandemic, which has shined a
light on community banks' essential role in our economy.
Berkshire's number one priority
has been to help the communities we serve, especially minority
ones, weather this storm and rebuild as soon as it is safe to do
so. We are proud to offer additional support and financial
flexibility to our customers who may have been impacted, and are
also funding significant programs to help small businesses.
We continue to maintain a strong balance sheet, with ample
liquidity and regulatory capital to ensure we continue to perform
our essential role. We intend to continue to lead, supporting
our customers and neighbors throughout this pandemic, because we
know that in the long haul when our communities prosper,
Berkshire does too."
DIVIDEND GUIDANCE
The Board of Directors intends to declare and pay a
regular quarterly cash dividend of $0.24 per common share in the second
quarter. In conjunction with changes in the regulatory
reporting schedule this quarter, the Board plans to make the formal
dividend declaration after the completion of regulatory reporting
and other related regulatory actions regarding such
declaration. The Board also plans to declare and pay the
regular preferred stock dividend as part of this intended future
declaration.
FINANCIAL CONDITION
Total assets remained unchanged at $13.2 billion at the end of the first quarter of
2020, compared to year-end 2019. Total loans declined by 2%,
decreasing in all major categories, as the Company continued to
implement its balance sheet restructuring program, focusing on its
local markets and building short-term investments. These
funds are intended for the $650
million in Phase I PPP loans which are currently in
process. Total deposits decreased by 3% primarily due to
changes in fluctuating payroll deposit balances and brokered
deposits. Organic deposits decreased by 1% before these
changes, primarily due to some commercial accounts which utilized
liquid funds for other business purposes in response to current
conditions. The period-end ratio of loans/deposits remained
at 92% and liquid investments were increased during the
quarter.
The allowance for credit losses on loans increased to
1.22% of loans from 0.67% at year-end 2019. In accordance
with changes in generally accepted accounting principles, the
Company adopted the new credit loss accounting standard known as
"CECL" on January 1, 2020. The
allowance was increased by $26
million to 0.94% of loans on this effective
date. Under CECL, the credit loss allowance is based on
projected credit losses rather than on losses incurred. At
quarter-end, the Company projected additional future credit losses
resulting primarily from an economic contraction arising from the
COVID pandemic. As a result, the Company recorded a
$35 million first quarter provision
for credit losses, and the allowance increased to $114 million, or 1.22% of total loans at
quarter-end. Actual future credit losses may be more or less
than the Company's projections about pandemic related credit
losses. The first quarter increase in the credit loss
allowance was a non-cash adjustment which had no significant impact
on total regulatory risk-based capital. The Company has a
separate $8 million allowance for
losses on unfunded credit commitments which is included in other
liabilities.
The Company has granted loan modifications on more than
4,000 loans with balances of $1.3
billion as of April 21,
representing approximately 21% of outstanding commercial loan
balances, 3% of residential mortgages, and 2% of consumer
loans. Forbearances made in accordance with regulatory
guidelines will not be reported as delinquencies or as troubled
debts. The increase in net loan charge-offs reflects the
final resolution of one commercial real estate loan which had been
in foreclosure for two years. Nonperforming loans increased
primarily due to a $13 million
write-up under CECL of purchased credit deteriorated
loans. This increase was offset by an increase in the credit
loss allowance and had no impact on net loans or capital.
Loans delinquent over 90 days and accruing decreased primarily due
to adjustments to purchased credit impaired loans at the time of
the CECL adoption. Also as part of this adoption,
Company recorded an $8 million
increase in the estimated liability for losses on unfunded loan
commitments.
Total equity decreased in the first quarter due to the
non-cash impacts of CECL on the January
1 adoption date and the credit loss provision recorded
against income at the end of the quarter. Most of these
charges did not impact the Company's regulatory risk-based
capital. Book value per share totaled $33.72 at quarter-end, compared to $34.65 at year-end 2019. The non-GAAP
measure of tangible book value per share measured $21.82, compared to $22.56 at those respective dates. The
Company projects the total risk-based capital ratio to be 13.9% at
quarter-end, exceeding the 10% threshold for the highest regulatory
"well capitalized" category.
RESULTS OF OPERATIONS
Berkshire reported a
first quarter 2020 GAAP net loss of $20
million, or $0.40 per share,
compared to net income of $26
million, or $0.51 per share,
in the prior quarter. Core earnings was a loss of
$4 million, or $0.07 per share, compared to core earnings of
$35 million, or $0.70 per share, in the prior quarter. Core
PPNR totaled $30 million, or
$0.61 per share, in the first quarter
compared to $48 million, or
$0.95 per share, in the prior
quarter. Core PPNR measures operating results before the
impact of the credit loss provision, which is a multiyear
projection of future credit losses under the new CECL accounting
standard. As a core measure, it excludes net charges not
viewed as related to ongoing operations. In the most recent
quarter, these net charges were primarily due to discontinued
national mortgage banking operations and unrealized equity
securities losses due to the stock market decline. Most of
the Company's $32 million equities
portfolio remained in a net unrealized gain position at
quarter-end.
The $18 million
quarter-over-quarter decrease in Core PPNR was primarily due to the
impact of the COVID pandemic on revenue and
expense:
- Net interest income decreased by $5 million including the impact of lower loan
balances, low yield investments held for PPP funding, and lower
interest rates resulting from federal monetary stimulus. Also,
the contribution from purchased loan accretion decreased by
$2 million as the credit for
accretion on recoveries was shifted to the credit loss allowance
based on the new CECL accounting standard.
- Non-interest income decreased, including $6 million due to noncash charges related to
changes in valuations of credit related instruments as a result of
pandemic related conditions. This includes a $3 million decrease to loan fees related to
interest rate swaps, and $2 million
in charges to other non-interest income related to fair valued
loans. Additionally, volumes for fee based loan and deposit
activities declined. Loan fee revenue related to swaps and SBA loan
originations decreased $3 million,
more than offsetting seasonal increases in wealth and insurance
revenues.
- Despite the lower revenue sources, the Company maintained
staffing levels and increased technology spending as it converted
most operations to work-from-home and focused on responding to
borrower needs.
Quarter-over quarter expense changes also included
seasonal increases in benefits and occupancy costs, along with the
expiration of FDIC insurance expense credits utilized in the prior
quarter. Quarterly non-interest expense includes targeted
increases in compensation, health benefits, technology costs, and
social initiatives as the Company continues to pursue its goals for
developing as a 21st century community bank.
Full-time equivalent staff in continuing operations was generally
unchanged, and totaled 1,548 positions at quarter-end. The
Company maintained its employee compensation despite changes in
workflows and schedules during the quarter, with no
layoffs. The Company recorded a $5 million tax benefit in the first
quarter. The effective tax benefit on continuing operations
was 14%.
Berkshire moved forward
with its planned exit from the origination of mortgages in its
discontinued national mortgage banking operations in the first
quarter and has entered into an agreement with a buyer to complete
this exit and for other asset and license transfers to be completed
by the end of the year. The Company reported an $8 million after-tax net loss on these operations
during the most recent quarter, consisting primarily of pre-tax
charges of $4 million to write-down
mortgage servicing rights and $4
million in severance costs. The Company is targeting
to reduce the net loss related to this business in successive
quarters, with a complete exit by the end of the year. These
results are treated as non-core items in the Company's statement of
operations.
BE FIRST CORPORATE RESPONSIBILITY UPDATE
Berkshire is committed to
delivering purpose-driven performance. Learn more about the steps
Berkshire is taking to be a
values-based brand for all its stakeholders at
www.berkshirebank.com/csr .
COVID-19 Response - Faced
with the unprecedented outbreak of the COVID-19 pandemic,
Berkshire is harnessing its assets
and Be FIRST culture to navigate and ensure the health, safety and
economic resiliency of its employees, customers and
communities.
- Support for its People: Protecting
the health and safety of Berkshire's frontline workers, and supporting
their ability to serve customers, is a top priority. As a result,
the bank suspended non-essential business travel, reduced branch
hours, increased safety precautions including enhanced cleaning,
provided protective masks, and provided additional paid sick time.
The company currently has 86% of non-branch staff working from
home. The bank is also ensuring financial stability, protecting pay
for those employees who are unable to work their normal scheduled
hours and launched an employee assistance fund to help those facing
hardships. The company is leveraging its employee networks
including Employee Resource Groups and Regional Cultural Councils
to collect feedback, maintain culture, morale and
productivity.
- Helping its Customers : Berkshire knows this pandemic has had a
serious economic impact on most individuals and businesses. The
bank took swift steps to provide additional financial flexibility
to customers facing financial hardships including the launch of
customer assistance programs that increase debit card limits, waive
penalties for early CD withdrawals, waive foreign ATM fees and
provide options for loan forbearance. The company participates in
the Paycheck Protection Program to assist small businesses.
Berkshire continues to encourage
customers to leverage its mobile, telephonic and digital banking
solutions as well as its' My Bankers to conduct
business.
- Investing in Community Recovery &
Resiliency : Berkshire remains committed to the economic
resiliency of its communities and engaging directly with
stakeholders through virtual community conversations to inform its
response. The bank is providing $3
million to assist small businesses through The Futures
Fund with the Black Economic Council of Massachusetts and the Massachusetts LGBT
Chamber of Commerce. Berkshire's
Foundation is providing $1 million in
COVID-19 support, including $500,000
in small business assistance and offering flexibility for
non-profits to redirect prior grant funding. The bank is evaluating
strategic sponsorships and other advertising assets for
re-deployment to community partners. In addition, Berkshire will harness its XTEAM volunteer
program to raise funds and deploy employees through virtual skills
based volunteer events with a focus on financial health, job
training and other critical non-profit needs.
Corporate Responsibility Report -
Earlier this month, the company released its 2019 Corporate
Responsibility Report, Leading the Way Forward:
Purpose-Driven Performance . The report highlights
the company's environmental, social, governance and cultural
programs and serves as a guide for how Berkshire will navigate the current
environment while supporting all its stakeholders and its vision of
a 21st century community bank that delivers
purpose-driven performance.
INVESTOR CONFERENCE CALL AND INFORMATION
PRESENTATION
Berkshire will conduct a conference
call/webcast at 10:00 a.m. eastern
time on Tuesday, May 5, 2020 to discuss the results
for the quarter and provide guidance about expected future
results. Berkshire will also
place an information presentation at its website at
ir.berkshirebank.com before the conference call. Participants
are encouraged to pre-register for the conference call using the
following link:
http://dpregister.com/10141779. 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,
participants may reach the registration link and access the webcast
by logging in through the investor section of our 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 join the
Berkshire Hills Bancorp (BHLB) earnings call. Participants
are requested to dial-in a few minutes before the scheduled start
of the call. A telephone replay of the call will be available
through Tuesday, May 12, 2020 by dialing 877-344-7529 and
entering access number 10141779. 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
which is transforming into a 21st century community bank
pursuing purpose driven performance based on its Be FIRST corporate
responsibility culture. Headquartered in Boston, Berkshire operates 130 banking offices in
seven Northeastern states, with approximately $13.2 billion in assets.
FORWARD LOOKING STATEMENTS
This document contains "forward-looking statements" within
the meaning of section 27A of the Securities Act of 1933, as
amended, and section 21E of the Securities Exchange Act of 1934, as
amended. You can identify these statements from the use of the
words "may," "will," "should," "could," "would," "plan,"
"potential," "estimate," "project," "believe," "intend,"
"anticipate," "expect," "target" and similar expressions. There are
many 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.
Further, given its ongoing and dynamic nature, it is
difficult to predict what effects the novel coronavirus (COVID-19)
pandemic will have on our business and results of operations. The
pandemic and the related local and national economic disruption may
result in a decline in demand for our products and services;
increased levels of loan delinquencies, problem assets and
foreclosures; an increase in our allowance for loan losses; a
decline in the value of loan collateral, including real estate; a
greater decline in the yield on our interest-earning assets than
the decline in the cost of our interest-bearing liabilities; and
increased cybersecurity risks, as employees increasingly work
remotely.
Accordingly, you should not place undue reliance on
forward-looking statements, which reflect our expectations only as
of the date of this document. 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 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, restructuring costs, and discontinued
operations. Merger costs consist primarily of
severance/benefit related expenses, contract termination costs,
systems conversion costs, variable compensation expenses, and
professional fees. Merger costs in 2019 are primarily related
to the acquisition of SI Financial Group. 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. Restructuring costs
also include severance and consulting expenses related to the
Company's strategic review. They also include costs related
to the consolidation of branches, including eight branches for the
full year of 2019. Discontinued operations are the Company's
national mortgage banking operations for which the Company is
pursuing sale opportunities.
The Company has introduced the measure of Core
Pre-Provision Net Revenue ("Core PPNR") to which measures core
income before credit loss provision and tax expense.
Due to the non-cash projections introduced into the calculation of
income by the new CECL accounting standard, the investment
community is placing more emphasis on PPNR in order to measure the
results of operations and to compare them across banks which may
have widely varying estimates of future economic conditions that
affect their provision expense and reported earnings. The
Company also calculates core PPNR per share and core PPNR return on
assets in order to utilize the PPNR measure in assessing its
comparative operating profitability.
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. References to organic growth
and organic change exclude balances acquired in bank
mergers.
CONTACTS
Investor Relations Contact
David Gonci; Capital
Markets Director; 413-281-1973
Media Contact
Jeffrey Mathews;
Communications Contact; (646) 569-5711
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
Operations
|
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)
|
BERKSHIRE
HILLS BANCORP, INC.
|
SELECTED FINANCIAL
HIGHLIGHTS - UNAUDITED - (F-1)
|
|
|
|
|
At or for the
Quarters Ended (1)
|
|
|
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
|
|
|
|
2020
|
|
2019
|
|
2019
|
|
2019 (2)
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE
DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)/earnings
per common share, diluted
|
$
(0.40)
|
|
$
0.51
|
|
$
0.44
|
|
$
0.52
|
|
$
0.51
|
|
|
|
Core (loss)/earnings
per common share, diluted (3)
|
(0.07)
|
|
0.70
|
|
0.46
|
|
0.65
|
|
0.60
|
|
|
|
Total book value per
common share
|
33.72
|
|
34.65
|
|
34.36
|
|
34.05
|
|
33.75
|
|
|
|
Tangible book value
per common share (3)
|
21.82
|
|
22.56
|
|
22.42
|
|
22.25
|
|
21.66
|
|
|
|
Market price at
period end
|
14.86
|
|
32.88
|
|
29.29
|
|
31.39
|
|
27.24
|
|
|
|
Dividends per common
share
|
0.24
|
|
0.23
|
|
0.23
|
|
0.23
|
|
0.23
|
|
|
|
Dividends per
preferred share
|
0.48
|
|
0.46
|
|
0.46
|
|
0.46
|
|
0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE RATIOS
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
assets
|
(0.62)
|
%
|
0.78
|
%
|
0.67
|
%
|
0.79
|
%
|
0.78
|
%
|
|
|
Core return on assets
(3)
|
(0.11)
|
|
1.08
|
|
0.71
|
|
1.01
|
|
0.92
|
|
|
|
Return on
equity
|
(4.61)
|
|
5.90
|
|
5.12
|
|
6.07
|
|
5.97
|
|
|
|
Core return on equity
(3)
|
(0.85)
|
|
8.09
|
|
5.35
|
|
7.67
|
|
7.00
|
|
|
|
Core return on
tangible common equity (3)
|
(0.95)
|
|
13.12
|
|
8.74
|
|
12.21
|
|
11.44
|
|
|
|
Net interest margin,
fully taxable equivalent (FTE) (5)(6)
|
3.02
|
|
3.11
|
|
3.22
|
|
3.19
|
|
3.17
|
|
|
|
Fee income/Net
interest and fee income from continuing operations
|
15.46
|
|
18.11
|
|
17.61
|
|
16.20
|
|
17.56
|
|
|
|
Efficiency ratio
(3)
|
66.92
|
|
53.66
|
|
53.37
|
|
56.41
|
|
59.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGE
(Year-to-date)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial
loans (organic, annualized)
|
(5)
|
%
|
(7)
|
%
|
(9)
|
%
|
(10)
|
%
|
(3)
|
%
|
|
|
Total loans (organic,
annualized)
|
(8)
|
|
(9)
|
|
(9)
|
|
(9)
|
|
(4)
|
|
|
|
Total deposits
(organic, annualized)
|
(10)
|
|
0
|
|
2
|
|
6
|
|
8
|
|
|
|
Total net revenues
from continuing operations (compared to prior year)
|
(14)
|
|
4
|
|
4
|
|
1
|
|
3
|
|
|
|
(Loss)/earnings per
common share (compared to prior year)
|
(178)
|
|
(14)
|
|
(26)
|
|
(20)
|
|
(7)
|
|
|
|
Core (loss)/earnings
per common share (compared to prior year)(3)
|
(112)
|
|
(14)
|
|
(18)
|
|
(9)
|
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
13,221
|
|
$
13,216
|
|
$
13,532
|
|
$
13,653
|
|
$
12,173
|
|
|
|
Total earning
assets
|
11,894
|
|
11,916
|
|
12,174
|
|
12,343
|
|
11,039
|
|
|
|
Total
securities
|
1,837
|
|
1,770
|
|
1,861
|
|
1,905
|
|
1,881
|
|
|
|
Total
loans
|
|
9,303
|
|
9,502
|
|
9,719
|
|
9,942
|
|
8,947
|
|
|
|
Allowance for credit
losses
|
114
|
|
64
|
|
62
|
|
62
|
|
62
|
|
|
|
Total intangible
assets
|
598
|
|
599
|
|
602
|
|
603
|
|
551
|
|
|
|
Total
deposits
|
|
10,072
|
|
10,336
|
|
10,423
|
|
10,566
|
|
9,166
|
|
|
|
Total shareholders'
equity
|
1,713
|
|
1,759
|
|
1,772
|
|
1,779
|
|
1,577
|
|
|
|
Net
(loss)/income
|
(19.9)
|
|
25.8
|
|
22.6
|
|
25.4
|
|
23.6
|
|
|
|
Core (loss)/income
(3)
|
(3.6)
|
|
35.3
|
|
23.7
|
|
32.1
|
|
27.7
|
|
|
|
Purchase accounting
accretion
|
3.1
|
|
5.1
|
|
4.8
|
|
3.2
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY AND
CONDITION RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(current quarter annualized)/average loans
|
0.45
|
%
|
0.17
|
%
|
0.92
|
%
|
0.14
|
%
|
0.15
|
%
|
|
|
Total non-performing
assets/total assets
|
0.40
|
|
0.31
|
|
0.28
|
|
0.27
|
|
0.26
|
|
|
|
Allowance for credit
losses/total loans
|
1.22
|
|
0.67
|
|
0.64
|
|
0.63
|
|
0.69
|
|
|
|
Loans/deposits
|
|
92
|
|
92
|
|
93
|
|
94
|
|
98
|
|
|
|
Shareholders' equity
to total assets
|
12.96
|
|
13.31
|
|
13.10
|
|
13.03
|
|
12.95
|
|
|
|
Tangible
shareholders' equity to tangible assets (3)
|
8.84
|
|
9.19
|
|
9.05
|
|
9.01
|
|
8.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Reconciliations of
non-GAAP financial measures, including all references to core and
tangible amounts, appear on page F-9.
|
|
|
(2)
|
The Company acquired
SI Financial Group, Inc. on May 17, 2019.
|
|
|
(3)
|
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 page F-9 for
reconciliations of non-GAAP financial measures.
|
|
|
(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.
|
|
|
(6)
|
The effect of
purchase accounting accretion for loans, time deposits, and
borrowings 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:
0.11%, 0.17%, 0.16%, 0.11%, 0.05%.
|
|
|
|
|
|
BERKSHIRE
HILLS BANCORP, INC.
|
CONSOLIDATED
BALANCE SHEETS - UNAUDITED - (F-2)
|
|
March 31,
|
|
December
31,
|
|
(in
thousands)
|
2020
|
|
2019
|
|
Assets
|
|
|
|
|
Cash and due from
banks
|
$
90,280
|
|
$
105,447
|
|
Short-term
investments
|
624,064
|
|
474,382
|
|
Total cash and
short-term investments
|
714,344
|
|
579,829
|
|
|
|
|
|
|
Trading
security
|
9,829
|
|
10,769
|
|
Marketable equity
securities, at fair value
|
32,283
|
|
41,556
|
|
Securities available
for sale, at fair value
|
1,403,858
|
|
1,311,555
|
|
Securities held to
maturity, at amortized cost
|
336,802
|
|
357,979
|
|
Federal Home Loan
Bank stock and other restricted securities
|
54,306
|
|
48,019
|
|
Total
securities
|
1,837,078
|
|
1,769,878
|
|
Less: Allowance for
credit losses on investment securities
|
(141)
|
|
-
|
|
Net
securities
|
1,836,937
|
|
1,769,878
|
|
|
|
|
|
|
Loans held for
sale
|
4,252
|
|
36,664
|
|
|
|
|
|
|
Commercial real
estate loans
|
3,985,856
|
|
4,034,269
|
|
Commercial and
industrial loans
|
1,812,445
|
|
1,840,508
|
|
Residential
mortgages
|
2,604,390
|
|
2,685,472
|
|
Consumer
loans
|
900,486
|
|
942,179
|
|
Total
loans
|
9,303,177
|
|
9,502,428
|
|
Less: Allowance for
credit losses on loans
|
(113,510)
|
|
(63,575)
|
|
Net loans
|
9,189,667
|
|
9,438,853
|
|
|
|
|
|
|
Premises and
equipment, net
|
120,667
|
|
120,398
|
|
Other real estate
owned
|
224
|
|
-
|
|
Goodwill
|
553,762
|
|
553,762
|
|
Other intangible
assets
|
44,035
|
|
45,615
|
|
Cash surrender value
of bank-owned life insurance
|
228,447
|
|
227,894
|
|
Deferred tax asset,
net
|
44,575
|
|
51,017
|
|
Other
assets
|
344,470
|
|
239,872
|
|
Assets from
discontinued operations
|
140,064
|
|
152,188
|
|
Total
assets
|
$
13,221,444
|
|
$
13,215,970
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
Demand
deposits
|
$
1,922,490
|
|
$
1,884,100
|
|
NOW and other
deposits
|
1,546,626
|
|
1,492,569
|
|
Money market
deposits
|
2,391,835
|
|
2,528,656
|
|
Savings
deposits
|
867,024
|
|
841,283
|
|
Time
deposits
|
3,343,700
|
|
3,589,369
|
|
Total
deposits
|
10,071,675
|
|
10,335,977
|
|
|
|
|
|
|
Senior
borrowings
|
944,053
|
|
730,501
|
|
Subordinated
borrowings
|
97,107
|
|
97,049
|
|
Total
borrowings
|
1,041,160
|
|
827,550
|
|
|
|
|
|
|
Other
liabilities
|
364,770
|
|
267,398
|
|
Liabilities from
discontinued operations
|
30,554
|
|
26,481
|
|
Total
liabilities
|
11,508,159
|
|
11,457,406
|
|
|
|
|
|
|
Preferred
shareholders' equity
|
20,325
|
|
40,633
|
|
Common shareholders'
equity
|
1,692,960
|
|
1,717,931
|
|
Total shareholders'
equity
|
1,713,285
|
|
1,758,564
|
|
Total liabilities and
shareholders' equity
|
$
13,221,444
|
|
$
13,215,970
|
|
|
|
|
|
|
Net common shares
outstanding
|
50,199
|
|
49,585
|
|
BERKSHIRE
HILLS BANCORP, INC.
|
CONSOLIDATED LOAN
& DEPOSIT ANALYSIS - UNAUDITED - (F-3)
|
LOAN
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Growth
%
|
(in
millions)
|
|
March 31, 2020
Balance
|
|
December 31, 2019
Balance
|
|
Quarter ended
March 31, 2020
|
|
|
|
|
|
|
|
|
|
Total commercial real
estate
|
|
$
3,986
|
|
$
4,034
|
|
(5)
|
%
|
Commercial and
industrial loans
|
|
1,812
|
|
1,841
|
|
(6)
|
|
Total commercial
loans
|
|
5,798
|
|
5,875
|
|
(5)
|
|
|
|
|
|
|
|
|
|
Total residential
mortgages
|
|
2,604
|
|
2,685
|
|
(12)
|
|
|
|
|
|
|
|
|
|
Home
equity
|
|
378
|
|
381
|
|
(3)
|
|
Auto and
other
|
|
523
|
|
561
|
|
(27)
|
|
Total consumer
loans
|
|
901
|
|
942
|
|
(16)
|
|
Total
loans
|
|
$
9,303
|
|
$
9,502
|
|
(8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Growth
%
|
(in
millions)
|
|
March 31, 2020
Balance
|
|
December 31, 2019
Balance
|
|
Quarter ended
March 31, 2020
|
|
Demand
|
|
$
1,922
|
|
$
1,884
|
|
8
|
%
|
NOW and
other
|
|
1,547
|
|
1,493
|
|
14
|
|
Money
market
|
|
2,392
|
|
2,529
|
|
(22)
|
|
Savings
|
|
867
|
|
841
|
|
12
|
|
Time
deposits
|
|
3,344
|
|
3,589
|
|
(27)
|
|
Total
deposits
|
|
$
10,072
|
|
$
10,336
|
|
(10)
|
%
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS - UNAUDITED - (F-4)
|
|
Three Months
Ended
|
|
|
March 31,
|
|
(in thousands,
except per share data)
|
2020
|
|
2019
|
|
Interest and
dividend income from continuing
operations
|
|
|
|
|
Loans
|
$
101,695
|
|
$
105,651
|
|
Securities and
other
|
14,500
|
|
15,458
|
|
Total interest and
dividend income
|
116,195
|
|
121,109
|
|
Interest expense
from continuing operations
|
|
|
|
|
Deposits
|
23,838
|
|
26,622
|
|
Borrowings
|
5,929
|
|
9,028
|
|
Total interest
expense
|
29,767
|
|
35,650
|
|
Net interest
income from continuing operations
|
86,428
|
|
85,459
|
|
Non-interest
income from continuing operations
|
|
|
|
|
Mortgage banking
originations
|
959
|
|
46
|
|
Loan related
income
|
1,302
|
|
6,003
|
|
Deposit related
fees
|
7,947
|
|
6,858
|
|
Insurance commissions
and fees
|
3,024
|
|
2,853
|
|
Wealth management
fees
|
2,570
|
|
2,441
|
|
Total fee
income
|
15,802
|
#
|
18,201
|
#
|
Other
|
(436)
|
|
970
|
|
Securities
(losses)/gains, net
|
(9,730)
|
|
2,551
|
|
Total non-interest
income
|
5,636
|
|
21,722
|
|
Total net revenue
from continuing operations
|
92,064
|
|
107,181
|
|
Provision for
credit losses
|
34,807
|
|
4,001
|
|
Non-interest
expense from continuing operations
|
|
|
|
|
Compensation and
benefits
|
36,909
|
|
33,500
|
|
Occupancy and
equipment
|
11,132
|
|
9,446
|
|
Technology and
communications
|
8,081
|
|
6,257
|
|
Marketing and
promotion
|
1,165
|
|
1,267
|
|
Professional
services
|
2,720
|
|
2,275
|
|
FDIC premiums and
assessments
|
1,482
|
|
1,639
|
|
Other real estate
owned and foreclosures
|
27
|
|
2
|
|
Amortization of
intangible assets
|
1,580
|
|
1,200
|
|
Merger, restructuring
and other expense
|
-
|
|
7,015
|
|
Other
|
8,229
|
|
9,390
|
|
Total non-interest
expense
|
71,325
|
|
71,991
|
|
|
|
|
|
|
(Loss)/income from
continuing operations before income
taxes
|
$
(14,068)
|
|
$
31,189
|
|
Income tax
(benefit)/expense
|
(1,996)
|
|
6,917
|
|
Net (loss)/income
from continuing operations
|
$
(12,072)
|
|
$
24,272
|
|
|
|
|
|
|
(Loss)/income from
discontinued operations before income taxes
|
$
(10,629)
|
|
$
(854)
|
|
Income tax
(benefit)/expense
|
(2,831)
|
|
(217)
|
|
Net (loss)/income
from discontinued operations
|
$
(7,798)
|
|
$
(637)
|
|
|
|
|
|
|
Net
(loss)/income
|
$
(19,870)
|
|
$
23,635
|
|
Preferred stock
dividend
|
125
|
|
240
|
|
(Loss)/income
available to common shareholders
|
$
(19,995)
|
|
$
23,395
|
|
|
|
|
|
|
Basic
(loss)/earnings per common share:
|
|
|
|
|
Continuing
Operations
|
$
(0.24)
|
|
$
0.52
|
|
Discontinued
Operations
|
(0.16)
|
|
(0.01)
|
|
Total
|
$
(0.40)
|
|
$
0.51
|
|
|
|
|
|
|
Diluted
(loss)/earnings per common share:
|
|
|
|
|
Continuing
Operations
|
$
(0.24)
|
|
$
0.52
|
|
Discontinued
Operations
|
(0.16)
|
|
(0.01)
|
|
Total
|
$
(0.40)
|
|
$
0.51
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
Basic
|
50,204
|
|
46,113
|
|
Diluted
|
50,204
|
|
46,261
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (5 Quarter Trend) - UNAUDITED -
(F-5)
|
|
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
(in thousands,
except per share data)
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
|
Interest and
dividend income from continuing
operations
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
101,695
|
|
$
110,915
|
|
$
118,371
|
|
$
113,990
|
|
$
105,651
|
|
Securities and
other
|
14,500
|
|
14,526
|
|
15,354
|
|
15,248
|
|
15,458
|
|
Total interest and
dividend income
|
116,195
|
|
125,441
|
|
133,725
|
|
129,238
|
|
121,109
|
|
Interest expense
from continuing operations
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
23,838
|
|
28,797
|
|
31,501
|
|
28,273
|
|
26,622
|
|
Borrowings
|
5,929
|
|
5,311
|
|
5,353
|
|
9,370
|
|
9,028
|
|
Total interest
expense
|
29,767
|
|
34,108
|
|
36,854
|
|
37,643
|
|
35,650
|
|
Net interest
income from continuing operations
|
86,428
|
|
91,333
|
|
96,871
|
|
91,595
|
|
85,459
|
|
Non-interest
income from continuing operations
|
|
|
|
|
|
|
|
|
|
|
Mortgage banking
originations
|
959
|
|
172
|
|
292
|
|
278
|
|
46
|
|
Loan related
income
|
1,302
|
|
7,056
|
|
6,493
|
|
4,822
|
|
6,003
|
|
Deposit related
fees
|
7,947
|
|
8,264
|
|
8,705
|
|
7,525
|
|
6,858
|
|
Insurance commissions
and fees
|
3,024
|
|
2,471
|
|
2,895
|
|
2,738
|
|
2,853
|
|
Wealth management
fees
|
2,570
|
|
2,239
|
|
2,325
|
|
2,348
|
|
2,441
|
|
Total fee
income
|
15,802
|
|
20,202
|
|
20,710
|
|
17,711
|
|
18,201
|
|
Other
|
(436)
|
|
75
|
|
609
|
|
(216)
|
|
970
|
|
Securities
(losses)/gains, net
|
(9,730)
|
|
1,734
|
|
87
|
|
17
|
|
2,551
|
|
Gain on sale of
business operations and assets, net
|
-
|
|
1,351
|
|
-
|
|
-
|
|
-
|
|
Total non-interest
income
|
5,636
|
|
23,362
|
|
21,406
|
|
17,512
|
|
21,722
|
|
Total net revenue
from continuing operations
|
92,064
|
|
114,695
|
|
118,277
|
|
109,107
|
|
107,181
|
|
Provision for
credit losses
|
34,807
|
|
5,351
|
|
22,600
|
|
3,467
|
|
4,001
|
|
Non-interest
expense from continuing operations
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
36,909
|
|
35,355
|
|
37,272
|
|
34,779
|
|
33,500
|
|
Occupancy and
equipment
|
11,132
|
|
10,798
|
|
9,893
|
|
9,449
|
|
9,446
|
|
Technology and
communications
|
8,081
|
|
6,702
|
|
6,849
|
|
6,715
|
|
6,257
|
|
Marketing and
promotion
|
1,165
|
|
1,046
|
|
1,006
|
|
1,155
|
|
1,267
|
|
Professional
services
|
2,720
|
|
2,288
|
|
2,282
|
|
3,953
|
|
2,275
|
|
FDIC premiums and
assessments
|
1,482
|
|
471
|
|
-
|
|
1,751
|
|
1,639
|
|
Other real estate
owned and foreclosures
|
27
|
|
4
|
|
150
|
|
(2)
|
|
2
|
|
Amortization of
intangible assets
|
1,580
|
|
1,582
|
|
1,526
|
|
1,475
|
|
1,200
|
|
Merger, restructuring
and other expense
|
-
|
|
5,713
|
|
4,163
|
|
11,155
|
|
7,015
|
|
Other
|
8,229
|
|
6,328
|
|
7,870
|
|
6,138
|
|
9,390
|
|
Total non-interest
expense
|
71,325
|
|
70,287
|
|
71,011
|
|
76,568
|
|
71,991
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/income from
continuing operations before income taxes
|
$
(14,068)
|
|
$
39,057
|
|
$
24,666
|
|
$
29,072
|
|
$
31,189
|
|
Income tax
(benefit)/expense
|
(1,996)
|
|
6,421
|
|
4,007
|
|
5,118
|
|
6,917
|
|
Net (loss)/ income
from continuing operations
|
$
(12,072)
|
|
$
32,636
|
|
$
20,659
|
|
$
23,954
|
|
$
24,272
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/income from
discontinued operations before income taxes
|
$
(10,629)
|
|
$
(9,514)
|
|
$
2,747
|
|
$
2,082
|
|
$
(854)
|
|
Income tax
(benefit)/expense
|
(2,831)
|
|
(2,629)
|
|
790
|
|
588
|
|
(217)
|
|
Net (loss)/income
from discontinued operations
|
$
(7,798)
|
|
$
(6,885)
|
|
$
1,957
|
|
$
1,494
|
|
$
(637)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss)/income
|
$
(19,870)
|
|
$
25,751
|
|
$
22,616
|
|
$
25,448
|
|
$
23,635
|
|
Preferred stock
dividend
|
125
|
|
240
|
|
240
|
|
240
|
|
240
|
|
(Loss)/income
available to common shareholders
|
$
(19,995)
|
|
$
25,511
|
|
$
22,376
|
|
$
25,208
|
|
$
23,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(loss)/earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
$
(0.24)
|
|
$
0.65
|
|
$
0.40
|
|
$
0.49
|
|
$
0.52
|
|
Discontinued
Operations
|
(0.16)
|
|
(0.14)
|
|
0.04
|
|
0.03
|
|
(0.01)
|
|
Total
|
$
(0.40)
|
|
$
0.51
|
|
$
0.44
|
|
$
0.52
|
|
$
0.51
|
|
|
|
|
|
|
|
Diluted
(loss)/earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
$
(0.24)
|
|
$
0.65
|
|
$
0.40
|
|
$
0.49
|
|
$
0.52
|
|
Discontinued
Operations
|
(0.16)
|
|
(0.14)
|
|
0.04
|
|
0.03
|
|
(0.01)
|
|
Total
|
$
(0.40)
|
|
$
0.51
|
|
$
0.44
|
|
$
0.52
|
|
$
0.51
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
50,204
|
|
50,494
|
|
51,422
|
|
48,961
|
|
46,113
|
|
Diluted
|
50,204
|
|
50,702
|
|
51,545
|
|
49,114
|
|
46,261
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS BANCORP, INC.
|
AVERAGE YIELDS AND
COSTS (Fully Taxable Equivalent - Annualized) - UNAUDITED -
(F-6)
|
|
|
Quarters
Ended
|
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning
assets
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
4.41
|
%
|
4.80
|
%
|
4.92
|
%
|
5.01
|
%
|
4.91
|
%
|
Commercial and
industrial loans
|
|
5.03
|
|
5.35
|
|
5.58
|
|
5.79
|
|
5.83
|
|
Residential
mortgages
|
|
3.77
|
|
3.61
|
|
3.73
|
|
3.74
|
|
3.74
|
|
Consumer
loans
|
|
4.28
|
|
4.38
|
|
4.55
|
|
4.52
|
|
4.45
|
|
Total
loans
|
|
4.33
|
|
4.52
|
|
4.67
|
|
4.76
|
|
4.73
|
|
Securities
|
|
3.32
|
|
3.31
|
|
3.41
|
|
3.38
|
|
3.46
|
|
Short-term
investments and loans held for sale
|
|
1.52
|
|
3.15
|
|
4.11
|
|
3.37
|
|
3.59
|
|
Total earning
assets
|
|
4.05
|
|
4.27
|
|
4.45
|
|
4.51
|
|
4.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funding
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
NOW and
other
|
|
0.46
|
|
0.54
|
|
0.61
|
|
0.66
|
|
0.65
|
|
Money
market
|
|
0.98
|
|
1.18
|
|
1.27
|
|
1.27
|
|
1.23
|
|
Savings
|
|
0.13
|
|
0.14
|
|
0.13
|
|
0.15
|
|
0.18
|
|
Time
|
|
1.87
|
|
1.97
|
|
2.02
|
|
2.06
|
|
2.07
|
|
Total
interest-bearing deposits
|
|
1.18
|
|
1.35
|
|
1.43
|
|
1.44
|
|
1.44
|
|
Borrowings
|
|
2.60
|
|
2.77
|
|
3.12
|
|
2.92
|
|
2.85
|
|
Total
interest-bearing liabilities
|
|
1.33
|
|
1.48
|
|
1.57
|
|
1.66
|
|
1.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
spread
|
|
2.72
|
|
2.79
|
|
2.88
|
|
2.85
|
|
2.84
|
|
Net interest
margin
|
|
3.02
|
|
3.11
|
|
3.22
|
|
3.19
|
|
3.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of funds
(1)
|
|
1.11
|
|
1.23
|
|
1.32
|
|
1.41
|
|
1.41
|
|
Cost of
deposits
|
|
0.96
|
|
1.11
|
|
1.18
|
|
1.18
|
|
1.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cost of funds
includes all deposits and borrowings.
|
|
|
|
|
|
BERKSHIRE
HILLS BANCORP, INC.
|
AVERAGE BALANCES -
UNAUDITED - (F-7)
|
|
Quarters
Ended
|
|
March
31,
|
|
Dec.
31,
|
|
Sept.
30,
|
|
June
30,
|
|
March
31,
|
|
(in
thousands)
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
$
4,000,461
|
|
$
4,056,244
|
|
$
3,998,144
|
|
$
3,716,130
|
|
$
3,377,902
|
|
Commercial and
industrial loans
|
1,795,813
|
|
1,768,039
|
|
1,951,205
|
|
2,056,384
|
|
1,986,792
|
|
Residential
mortgages
|
2,654,224
|
|
2,758,676
|
|
2,849,216
|
|
2,711,348
|
|
2,556,299
|
|
Consumer
loans
|
921,810
|
|
974,889
|
|
1,035,893
|
|
1,064,579
|
|
1,079,583
|
|
Total loans
(1)
|
9,372,308
|
|
9,557,848
|
|
9,834,458
|
|
9,548,441
|
|
9,000,576
|
|
Securities
(2)
|
1,744,635
|
|
1,752,968
|
|
1,846,985
|
|
1,893,298
|
|
1,895,768
|
|
Short-term
investments and loans held for sale
|
450,197
|
|
444,622
|
|
309,897
|
|
117,029
|
|
67,367
|
|
Total earning assets
(3)
|
11,567,140
|
|
11,755,438
|
|
11,991,340
|
|
11,558,768
|
|
10,963,711
|
|
Goodwill and other
intangible assets
|
598,347
|
|
601,192
|
|
603,762
|
|
555,606
|
|
550,966
|
|
Other
assets
|
654,063
|
|
737,396
|
|
668,218
|
|
593,917
|
|
557,442
|
|
Assets from
discontinued operations
|
98,528
|
|
176,251
|
|
204,339
|
|
192,466
|
|
115,721
|
|
Total
assets
|
$
12,918,078
|
|
$
13,270,277
|
|
$
13,467,659
|
|
$
12,900,757
|
|
$
12,187,840
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
NOW and
other
|
$
1,159,388
|
|
$
1,085,485
|
|
$
1,111,637
|
|
$
1,053,335
|
|
$
963,043
|
|
Money
market
|
2,752,465
|
|
2,688,766
|
|
2,624,639
|
|
2,474,071
|
|
2,378,496
|
|
Savings
|
846,942
|
|
835,209
|
|
838,445
|
|
780,797
|
|
736,707
|
|
Time
|
3,333,070
|
|
3,827,175
|
|
4,158,688
|
|
3,593,022
|
|
3,429,375
|
|
Total
interest-bearing deposits
|
8,091,865
|
|
8,436,635
|
|
8,733,409
|
|
7,901,225
|
|
7,507,621
|
|
Borrowings
|
949,316
|
|
853,911
|
|
805,035
|
|
1,415,614
|
|
1,351,834
|
|
Total
interest-bearing liabilities
|
9,041,181
|
|
9,290,546
|
|
9,538,444
|
|
9,316,839
|
|
8,859,455
|
|
Non-interest-bearing
demand deposits
|
1,849,295
|
|
1,898,045
|
|
1,864,964
|
|
1,673,560
|
|
1,538,767
|
|
Other
liabilities
|
279,100
|
|
304,504
|
|
267,922
|
|
215,704
|
|
192,119
|
|
Liabilities from
discontinued operations
|
23,799
|
|
30,446
|
|
28,206
|
|
18,434
|
|
13,962
|
|
Total
liabilities
|
11,193,375
|
|
11,523,541
|
|
11,699,536
|
|
11,224,537
|
|
10,604,303
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
shareholders' equity
|
20,548
|
|
40,633
|
|
40,633
|
|
40,633
|
|
40,633
|
|
Common shareholders'
equity
|
1,704,155
|
|
1,706,103
|
|
1,727,490
|
|
1,635,587
|
|
1,542,904
|
|
Total shareholders'
equity
|
1,724,703
|
|
1,746,736
|
|
1,768,123
|
|
1,676,220
|
|
1,583,537
|
|
Total liabilities and
shareholders' equity
|
$
12,918,078
|
|
$
13,270,277
|
|
$
13,467,659
|
|
$
12,900,757
|
|
$
12,187,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
|
Total average
non-maturity deposits
|
$
6,608,090
|
|
$
6,507,505
|
|
$
6,439,685
|
|
$
5,981,763
|
|
$
5,617,013
|
|
Total average
deposits
|
9,941,160
|
|
10,334,680
|
|
10,598,373
|
|
9,574,785
|
|
9,046,388
|
|
Fully taxable
equivalent income adjustment
|
1,824
|
|
1,934
|
|
1,826
|
|
1,882
|
|
1,809
|
|
Total average
tangible equity (4)
|
1,126,356
|
|
1,145,544
|
|
1,164,361
|
|
1,120,614
|
|
1,032,571
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Total loans
include non-accruing loans.
|
|
(2) Average balances
for securities available-for-sale are based on amortized
cost.
|
|
(3) Excludes
discontinued operations for presentation purposes. Performance
ratios are calculated including the impact of discontinued
operations.
|
|
(4) 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
|
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
(in
thousands)
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Non-accruing
loans:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
16,938
|
|
$
20,119
|
|
$
15,829
|
|
$
19,366
|
|
$
18,513
|
|
Commercial and
industrial loans
|
|
18,370
|
|
11,373
|
|
12,224
|
|
9,256
|
|
5,614
|
|
Residential
mortgages
|
|
9,636
|
|
3,343
|
|
3,062
|
|
3,579
|
|
2,341
|
|
Consumer
loans
|
|
6,172
|
|
4,805
|
|
5,191
|
|
3,570
|
|
4,038
|
|
Total non-accruing
loans
|
|
51,116
|
|
39,640
|
|
36,306
|
|
35,771
|
|
30,506
|
|
Other real estate
owned
|
|
224
|
|
-
|
|
-
|
|
154
|
|
-
|
|
Repossessed
assets
|
|
1,316
|
|
858
|
|
1,003
|
|
874
|
|
742
|
|
Total non-performing
assets
|
|
$
52,656
|
|
$
40,498
|
|
$
37,309
|
|
$
36,799
|
|
$
31,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-accruing
loans/total loans
|
|
0.55%
|
|
0.42%
|
|
0.37%
|
|
0.36%
|
|
0.34%
|
|
Total non-performing
assets/total assets
|
|
0.40%
|
|
0.31%
|
|
0.28%
|
|
0.27%
|
|
0.26%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND
ALLOWANCE FOR CREDIT LOSSES ON LOANS
|
|
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
|
$
63,575
|
|
$
62,230
|
|
$
62,156
|
|
$
62,038
|
|
$
61,469
|
|
Adoption of ASU No.
2016-13 (1)
|
|
25,434
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Balance after
adoption of ASU No. 2016-13
|
|
89,009
|
|
62,230
|
|
62,156
|
|
62,038
|
|
61,469
|
|
Charged-off
loans
|
|
(12,432)
|
|
(4,485)
|
|
(23,524)
|
|
(3,966)
|
|
(4,579)
|
|
Recoveries on
charged-off loans
|
|
1,958
|
|
479
|
|
998
|
|
617
|
|
1,147
|
|
Net loans
charged-off
|
|
(10,474)
|
|
(4,006)
|
|
(22,526)
|
|
(3,349)
|
|
(3,432)
|
|
Provision for loan
credit losses
|
|
34,975
|
|
5,351
|
|
22,600
|
|
3,467
|
|
4,001
|
|
Balance at end of
period
|
|
$
113,510
|
|
$
63,575
|
|
$
62,230
|
|
$
62,156
|
|
$
62,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses/total loans
|
|
1.22%
|
|
0.67%
|
|
0.64%
|
|
0.63%
|
|
0.69%
|
|
Allowance for credit
losses/non-accruing loans
|
|
222%
|
|
160%
|
|
171%
|
|
174%
|
|
203%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOAN
CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
(5,990)
|
|
$
(1,419)
|
|
$
(2,759)
|
|
$
(1,235)
|
|
$
(752)
|
|
Commercial and
industrial loans
|
|
(3,728)
|
|
(1,495)
|
|
(18,850)
|
|
(995)
|
|
(1,580)
|
|
Residential
mortgages
|
|
(19)
|
|
(351)
|
|
(140)
|
|
(139)
|
|
(95)
|
|
Home
equity
|
|
(107)
|
|
(67)
|
|
(71)
|
|
(300)
|
|
(257)
|
|
Auto and other
consumer
|
|
(630)
|
|
(674)
|
|
(706)
|
|
(680)
|
|
(748)
|
|
Total, net
|
|
$
(10,474)
|
|
$
(4,006)
|
|
$
(22,526)
|
|
$
(3,349)
|
|
$
(3,432)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
|
0.45%
|
|
0.17%
|
|
0.92%
|
|
0.14%
|
|
0.15%
|
|
Net charge-offs (YTD
annualized)/average loans
|
|
0.45%
|
|
0.35%
|
|
0.41%
|
|
0.15%
|
|
0.15%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELINQUENT AND
NON-ACCRUING LOANS/TOTAL LOANS
|
|
|
|
|
|
|
|
|
|
30-89 Days
delinquent
|
|
0.43%
|
|
0.25%
|
|
0.26%
|
|
0.20%
|
|
0.22%
|
|
90+ Days delinquent
and still accruing
|
|
0.05%
|
|
0.29%
|
|
0.29%
|
|
0.28%
|
|
0.23%
|
|
Total accruing
delinquent loans
|
|
0.48%
|
|
0.54%
|
|
0.55%
|
|
0.48%
|
|
0.45%
|
|
Non-accruing
loans
|
|
0.55%
|
|
0.42%
|
|
0.37%
|
|
0.36%
|
|
0.34%
|
|
Total delinquent and
non-accruing loans
|
|
1.03%
|
|
0.96%
|
|
0.92%
|
|
0.84%
|
|
0.79%
|
|
(1) This balance
includes $12 million of PCD confirmed losses as of January 1,
2020.
|
|
BERKSHIRE
HILLS BANCORP, INC.
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED -
(F-9)
|
|
|
At or for the
Quarters Ended
|
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
(in
thousands)
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
|
Net
(loss)/income
|
|
$
(19,870)
|
|
$
25,751
|
|
$
22,616
|
|
$
25,448
|
|
$
23,635
|
|
Adj: Net securities
losses/(gains) (1)
|
|
9,730
|
|
(1,734)
|
|
(87)
|
|
(17)
|
|
(2,551)
|
|
Adj: Merger and
acquisition expense
|
|
-
|
|
3,611
|
|
3,802
|
|
9,711
|
|
1,609
|
|
Adj: Restructuring
expense and other expense
|
|
-
|
|
2,102
|
|
361
|
|
1,444
|
|
5,406
|
|
Adj: Loss/(income)
from discontinued operations before income taxes
|
10,629
|
|
9,514
|
|
(2,747)
|
|
(2,082)
|
|
854
|
|
Adj: Income
taxes
|
|
(4,134)
|
|
(3,910)
|
|
(281)
|
|
(2,385)
|
|
(1,223)
|
|
Total core
(loss)/income (2)
|
(A)
|
$
(3,645)
|
|
$
35,334
|
|
$
23,664
|
|
$
32,119
|
|
$
27,730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue from
continuing operations
|
|
$
92,064
|
|
$
114,695
|
|
$
118,277
|
|
$
109,107
|
|
$
107,181
|
|
Adj: Net securities
losses/(gains) (1)
|
|
9,730
|
|
(1,734)
|
|
(87)
|
|
(17)
|
|
(2,551)
|
|
Total core revenue
(2)
|
(B)
|
$
101,794
|
|
$
112,961
|
|
$
118,190
|
|
$
109,090
|
|
$
104,630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense from continuing operations
|
|
$
71,325
|
|
$
70,287
|
|
$
71,011
|
|
$
76,568
|
|
$
71,991
|
|
Less: Merger,
restructuring and other expense (see above)
|
|
-
|
|
(5,713)
|
|
(4,163)
|
|
(11,155)
|
|
(7,015)
|
|
Core non-interest
expense (2)
|
(C)
|
$
71,325
|
|
$
64,574
|
|
$
66,848
|
|
$
65,413
|
|
$
64,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
|
$
93,869
|
|
$
116,860
|
|
$
134,067
|
|
$
123,109
|
|
$
116,454
|
|
Total non-interest
expense
|
|
83,759
|
|
81,966
|
|
84,054
|
|
88,488
|
|
82,118
|
|
Pre-tax,
pre-provision net revenue
|
|
$
10,110
|
|
$
34,894
|
|
$
50,013
|
|
$
34,621
|
|
$
34,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue from
continuing operations
|
|
$
92,064
|
|
$
114,695
|
|
$
118,277
|
|
$
109,107
|
|
$
107,181
|
|
Total non-interest
expense from continuing operations
|
|
71,325
|
|
70,287
|
|
71,011
|
|
76,568
|
|
71,991
|
|
Pre-tax,
pre-provision net revenue from continuing operations
|
|
$
20,739
|
|
$
44,408
|
|
$
47,266
|
|
$
32,539
|
|
$
35,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total core revenue
(2)
|
|
$
101,794
|
|
$
112,961
|
|
$
118,190
|
|
$
109,090
|
|
$
104,630
|
|
Core non-interest
expense (2)
|
|
71,325
|
|
64,574
|
|
66,848
|
|
65,413
|
|
64,976
|
|
Core pre-tax,
pre-provision net revenue
|
|
$
30,469
|
|
$
48,387
|
|
$
51,342
|
|
$
43,677
|
|
$
39,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
(D)
|
$
12,918
|
|
$
13,270
|
|
$
13,468
|
|
$
12,901
|
|
$
12,188
|
|
Total average
shareholders'
equity
|
(E)
|
1,725
|
|
1,747
|
|
1,768
|
|
1,676
|
|
1,584
|
|
Total average
tangible shareholders' equity
(2)
|
(F)
|
1,126
|
|
1,146
|
|
1,164
|
|
1,121
|
|
1,033
|
|
Total average
tangible common shareholders' equity
(2)
|
(G)
|
1,106
|
|
1,105
|
|
1,124
|
|
1,080
|
|
992
|
|
Total tangible
shareholders' equity, period-end (2)(3)
|
(H)
|
1,115
|
|
1,159
|
|
1,170
|
|
1,176
|
|
1,026
|
|
Total tangible common
shareholders' equity, period-end (2)(3)
|
(I)
|
1,095
|
|
1,119
|
|
1,130
|
|
1,136
|
|
986
|
|
Total tangible
assets, period-end (2)(3)
|
(J)
|
12,624
|
|
12,617
|
|
12,930
|
|
13,051
|
|
11,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, period-end
(thousands)
|
(K)
|
50,199
|
|
49,585
|
|
50,394
|
|
51,045
|
|
45,522
|
|
Average diluted
shares outstanding (thousands)
|
(L)
|
50,204
|
|
50,702
|
|
51,545
|
|
49,114
|
|
46,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core (loss)/earnings
per common share, diluted(2)
|
(A/L)
|
$
(0.07)
|
|
$
0.70
|
|
$
0.46
|
|
$
0.65
|
|
$
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax,
pre-provision net revenue per common share, diluted (2)
|
|
0.20
|
|
0.69
|
|
0.97
|
|
0.70
|
|
0.74
|
|
Core pre-tax,
pre-provision net revenue per common share, diluted (2)
|
0.61
|
|
0.95
|
|
1.00
|
|
0.89
|
|
0.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value
per common share, period-end (2)
|
(I/K)
|
21.82
|
|
22.56
|
|
22.42
|
|
22.25
|
|
21.66
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(H)/(J)
|
8.84
|
|
9.19
|
|
9.05
|
|
9.01
|
|
8.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance ratios
(4)
|
|
|
|
|
|
|
|
|
|
|
|
GAAP return on
assets
|
|
(0.62)
|
%
|
0.78
|
%
|
0.67
|
%
|
0.79
|
%
|
0.78
|
%
|
Core return on assets
(2)
|
|
(0.11)
|
|
1.08
|
|
0.71
|
|
1.01
|
|
0.92
|
|
GAAP return on
equity
|
|
(4.61)
|
|
5.90
|
|
5.12
|
|
6.07
|
|
5.97
|
|
Core return on equity
(2)
|
(A/E)
|
(0.85)
|
|
8.09
|
|
5.35
|
|
7.67
|
|
7.00
|
|
Core return on
tangible common equity (2)(5)
|
(A+O)/(G)
|
(0.95)
|
|
13.12
|
|
8.74
|
|
12.21
|
|
11.44
|
|
Pre-tax,
pre-provision net revenue to average assets (2)
|
|
0.08
|
|
0.26
|
|
0.37
|
|
0.27
|
|
0.28
|
|
Core pre-tax,
pre-provision net revenue to average assets (2)
|
|
0.24
|
|
0.36
|
|
0.38
|
|
0.34
|
|
0.33
|
|
Efficiency ratio
(2)(6)
|
(C-O)/(B+M+P)
|
66.92
|
|
53.66
|
|
53.37
|
|
56.41
|
|
59.54
|
|
Net interest
margin
|
|
3.02
|
|
3.11
|
|
3.22
|
|
3.19
|
|
3.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary data
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (7)
|
(M)
|
$
608
|
|
$
2,503
|
|
$
2,382
|
|
$
2,381
|
|
$
684
|
|
Non-interest income
charge on tax-credit investments (8)
|
(N)
|
(486)
|
|
(1,996)
|
|
(1,942)
|
|
(1,938)
|
|
(579)
|
|
Net income on
tax-credit investments
|
(M+N)
|
122
|
|
507
|
|
440
|
|
443
|
|
105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(O)
|
$
1,580
|
|
$
1,582
|
|
$
1,526
|
|
$
1,475
|
|
$
1,200
|
|
Fully taxable
equivalent income adjustment
|
(P)
|
1,824
|
|
1,934
|
|
1,826
|
|
1,882
|
|
1,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net securities
losses/(gains) 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
(loss)/income adjusted for the tax-effected amortization of
intangible assets, assuming a 27% marginal rate, 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.