Item 8.01 Other Events
On March 25, 2020, the Securities and Exchange Commission (the “SEC”) issued an order (Release No. 34-88465) which provides conditional
relief for public companies that are unable to timely comply with their filing obligations as a result of the novel coronavirus (COVID-19) pandemic. The SEC’s order provides that a registrant subject to the reporting requirements of Exchange Act
Section 13(a) or 15(d), and any person required to make any filings with respect to such registrant, is exempt from any requirement to file or furnish materials with the SEC under Exchange Act Sections 13(a), 13(f), 13(g), 14(a), 14(c), 14(f), 15(d)
and Regulations 13A, Regulation 13D-G (except for those provisions mandating the filing of Schedule 13D or amendments to Schedule 13D), 14A, 14C and 15D, and Exchange Act Rules 13f-1, and 14f-1, as applicable, if certain conditions are satisfied.
The Company has determined that it is prudent and appropriate in accordance with the SEC’s order to delay the filing of its Quarterly
Report on Form 10-Q for the quarter ended March 31, 2020 (the “Report”) due to circumstances related to the COVID-19 pandemic. Notwithstanding that the internal review of the Company’s financial results for the quarter ended March 31, 2020 is
substantially complete and the Company’s earnings were released on May 4, 2020, the Company will take advantage of the opportunity afforded by the SEC to extend the filing date for the Report. The preparation of regulatory reports and related
detailed disclosures occurs in conjunction with and following the internal review of financial results. The Company has also extended the time for filing of Berkshire Bank's quarterly filing of the Call Report, as allowed by recent FDIC guidance.
The disclosure processes for the Company’s quarterly reporting on Form 10-Q are integrated with and subsequent to its process for filing the Call Report, further supporting a delay in the filing of the Report. Circumstances affecting the timing of
the Report include:
In reliance on the SEC order, the Company plans to file the Report by May 29, 2020, which is within the 45-day extension period allowed by
the SEC order. The Company does not expect that the financial results included in the Report will differ in any material way from the results included in its May 4, 2020 earnings release.
In connection with the COVID-19 pandemic, and as required by the SEC order, the Company is supplementing the risk factors previously
disclosed in “Item 1A. Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 28, 2020, with the following risk factor:
The COVID-19 pandemic
is adversely affecting, and will likely continue to adversely affect, our business, financial condition, liquidity, and results of operations.
The COVID-19 pandemic has negatively impacted the U.S. and global economy; disrupted U.S. and global supply chains; lowered equity market
valuations; created significant volatility and disruption in financial markets; contributed to a decrease in the rates and yields on U.S. Treasury securities; resulted in ratings downgrades, credit deterioration, and defaults in many industries;
increased demands on capital and liquidity; and dramatically increased unemployment levels and decreased consumer confidence. In addition, the pandemic has resulted in temporary closures of many businesses and the institution of social distancing
and sheltering in place requirements in many states and communities, including those in our footprint. The pandemic has caused us, and could continue to cause us, to recognize credit losses in our loan portfolios and increases in our allowance for
credit losses. Some of the risks we face from the pandemic include, but are not limited to: the health and availability of our colleagues, the financial condition of our clients and the demand for our products and services, falling interest rates,
recognition of credit losses and increases in the allowance for credit losses, especially if businesses remain closed, unemployment continues to rise and clients and customers draw on their lines of credit or seek additional loans to help finance
their businesses, and a significant deterioration of business conditions in our markets. Furthermore, the pandemic could cause us to recognize impairment of our goodwill and our financial assets. Sustained adverse effects may also increase our cost of capital, prevent us from satisfying our minimum regulatory capital ratios and other supervisory requirements, or result in downgrades in our
credit rating. The extent to which the COVID-19 pandemic impacts our business, financial condition, liquidity and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and
duration of the pandemic, the continued effectiveness of our business continuity plan, the direct and indirect impact of the pandemic on our customers, colleagues, counterparties and service providers, and actions taken by governmental authorities
and other third parties in response to the pandemic.
Governmental authorities have taken significant measures to provide economic assistance to individual households and businesses, stabilize
the markets, and support economic growth. The success of these measures is unknown, and they may not be sufficient to mitigate the negative impact of the pandemic. Additionally, some measures, such as a deferment of loan
payments and the significant reduction in interest rates to near zero, will have a negative impact on our business, financial condition, liquidity, and
results of operations. We also face an increased risk of litigation and governmental and regulatory scrutiny as a result of the effects of the pandemic on market and economic conditions and actions governmental authorities take in response to those
conditions.
The length of the pandemic and the effectiveness of the measures being put in place to address it are unknown. Until the effects of the
pandemic subside, we expect continued draws on lines of credit, reduced revenues in our businesses, and increased customer defaults. Furthermore, the U.S. economy is likely to experience a recession as a result of the pandemic, and it is probable
that our business would be materially and adversely affected by such a recession, if prolonged. To the extent the pandemic adversely affects our business, financial condition, liquidity, or results of operations, it may also have the effect of
heightening many of the other risks described in the section entitled “Risk Factors” in our 2019 Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q.
Forward-Looking Statements
This Current Report on Form 8-K 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 review
the Company’s most recent reports on Forms 10-K and 10-Q, as filed with the SEC. Further, given its ongoing and dynamic nature, it is difficult to predict what effects the COVID-19 pandemic and related economic disruption will have on our business
and results of operations. Accordingly, you should not place undue reliance on forward-looking statements, which reflect our expectations only as of the date of this Current Report on Form 8-K. The Company does not undertake any obligation to
update forward-looking statements.