BOSTON, July 29, 2020 /PRNewswire/ -- Berkshire Hills
Bancorp, Inc. (NYSE: BHLB) today reported a second quarter
loss due to non-cash charges related to goodwill impairment and the
provision for credit losses, both stemming from the COVID-19
pandemic. These charges had no material impact on cash
flow, liquidity, or regulatory capital. Berkshire generated positive cash earnings
before these charges and the Bank continued to strengthen its
regulatory capital ratios and liquidity while growing its loans and
deposits.
Due to the macroeconomic impacts of the pandemic and the related
decline in the value of bank stocks, including the Company's stock,
the Company wrote off the goodwill on its balance sheet, which was
primarily related to past bank acquisitions. This
resulted in the Company recording a $554
million non-cash goodwill impairment charge, or $11.02 per share, during the second
quarter.
The Company also recorded a $30
million non-cash charge, or $0.59 per share, to provide for greater projected
credit losses related to the pandemic, in accordance with the
Current Expected Credit Losses ("CECL") accounting
methodology. Through midyear, the Company's overall credit
quality metrics remained within normal and historical industry
ranges.
Reflecting the above charges totaling $584 million, the Company recorded a second
quarter 2020 net loss of $549
million, or $10.93 per
share. The Company's core earnings, a non-GAAP
financial measure which includes the $30
million credit loss provision, was a loss of $6 million, or $0.13 per share.
Pre-tax pre-provision net revenue from continuing operations
("PPNR") was ($10.53). The
Company's measure of Core PPNR was $0.47 per share. Core measures are non-GAAP
financial measures of the Company's ongoing operations before
impairment, discontinued operations and securities
losses.
SECOND QUARTER FINANCIAL HIGHLIGHTS (Changes are
compared to the prior quarter-end. Measures identified as
non-GAAP are reconciled on pages F-9 and F-10)
- Total deposits up $704 million,
or 7%
- $706 million in PPP loans
outstanding at quarter-end
- Loans to deposits ratio improved to 87% from 92%
- Book value per share of $22.79;
tangible book value per share of $21.94 (non-GAAP)
- Equity/assets ratio of 8.9%; tangible equity/tangible assets
ratio of 8.6% (non-GAAP)
- Allowance for credit losses on loans of 1.49% (1.61% excluding
PPP loans)
- 0.17% annualized net charge-offs/loans
- 0.36% non-performing assets/assets
CEO Richard Marotta stated, "In a
challenging environment for many of our employees, customers and
the communities we serve and live in, Berkshire's ongoing transformation into an
innovative 21st century community bank has never been
more relevant to our stakeholders and the Bank's long-term
opportunity. Guided by our Be FIRST principles, last quarter
we continued to foster a more inclusive, innovative and supportive
culture, which is positioning Berkshire to deliver a differentiated and
compelling community banking experience to everyone in our
communities, including those who have been traditionally
underbanked.
"As we pursue this significant opportunity to realize our values
and profitably grow, we remain diligently focused on day-to-day
execution and strengthening the foundations of our business.
While last quarter Berkshire
recorded non-cash charges, including to write-off goodwill from
past acquisitions, that were ultimately related to the pandemic,
the Bank produced solid cash results in a challenging interest rate
environment. We continued to strengthen our liquidity and
regulatory capital metrics. We lowered our operating expenses
even while incurring costs to expedite a substantial volume of PPP
loans and to maintain our staff and compensation structure.
We are well positioned to continue serving our communities in the
current environment and to grow our core business results as public
health and the economy begin to improve."
Last quarter, Berkshire was
committed to safely supporting its communities, and its branches
are mostly back to normal operating availability. Berkshire provided borrower assistance through
the federal initiatives for Paycheck Protection Program ("PPP")
loans and short-term loan payment modifications. The Bank
continues to communicate closely with its borrowers, assessing the
sensitivities of its exposures, and adjusting its underwriting,
administration, and collections procedures as appropriate in the
current environment.
FINANCIAL CONDITION
Total assets held level at $13.1
billion in the second quarter, as earning asset growth was
generally offset by the impairment of goodwill. The balance
of PPP loans increased to $706
million and is included in commercial and industrial
loans. Net loans in other categories decreased due to
elevated prepayments and decreased loan demand, reflecting the
economic slowdown and higher customer liquidity including funds
from government programs. Commercial loans totaling
$43 million were recorded as held for
sale at period-end. Reflecting higher customer liquidity,
total deposits increased by $0.7
billion to $10.8 billion
during the quarter, with growth concentrated in demand deposit
accounts. As a result, the Company increased its holdings of
short-term investments and decreased its use of borrowed
funds. The Company's liquidity is well positioned and
remains adequate for all anticipated uses in all modeled liquidity
stress scenarios.
The majority of PPP loans were originated in the second quarter
to existing borrowers to provide payroll support during the
pandemic shutdown. Additionally, the Company provided loan
modifications in accordance with government guidelines, generally
consisting of three month deferrals of principal and interest
payments. Including the benefit of these programs, most
problem asset related metrics only changed modestly in the first
half of the year and remained within historical industry ranges,
including charge-offs, delinquencies, non-accruals, troubled debt
restructurings, criticized assets, and classified assets.
The Company recorded a $30 million
provision for credit losses in the second quarter. The
allowance for credit losses on loans increased by $26 million to $139
million, measuring 1.49% of total loans, compared to 1.22%
at the prior quarter-end. The allowance measured 1.61% of
total loans excluding PPP balances at midyear. The
increase in the allowance was mostly due to a more severe recession
included in the national economic baseline forecast at midyear
compared to the end of the first quarter. This took
into account the progression of the COVID-19 disease as well as the
benefit of government programs to support the economy.
As previously noted, the Company conducted a goodwill impairment
assessment during the most recent quarter. The Company had a
balance of $554 million in goodwill
primarily from past bank acquisitions which generally consisted of
an exchange of shares recorded based on stock market valuations at
the time of acquisition. Due to the pandemic, industry-wide
stock prices and earnings expectations have declined significantly,
and the Company concluded that the goodwill balance was no longer
supported by its estimate of the Company's fair value.
The entire goodwill balance was therefore written off as a non-cash
expense that was deemed non-core by the Company. This charge
had no material impact on cash flows, liquidity, tangible equity,
or regulatory capital.
The PPP loans are government guaranteed and the runoff of other
loan balances contributed positively to the Company's regulatory
capital ratios. The Company conducts equity stress analyses,
including severe adverse pandemic loss scenarios provided by third
parties, in addition to Dodd-Frank stress testing. The
Company believes that its capital is well cushioned above the Well
Capitalized metrics in the adverse modeling scenarios based on the
assumptions utilized.
RESULTS OF OPERATIONS
Berkshire reported a second
quarter 2020 GAAP net loss of $549
million, or $10.93 per
share. This included an impairment charge of
$554 million, or $11.02 per share, for the goodwill
write-off. Pre-tax pre-provision net revenue from
continuing operations ("PPNR") measured ($529) million, or ($10.53) per share. Second quarter
Core PPNR totaled $24 million, or
$0.47 per share, and excludes
goodwill impairment and the loss on discontinued
operations. Compared to the linked quarter, Core PPNR
decreased by $7 million, or
$0.14 per share, due to a
$9 million, or 10%, decrease in net
interest income. The net interest margin decreased to
2.62% from 3.04% in the prior quarter. This primarily
reflected a 0.58% decrease in the yield on earning assets related
to lower short-term rates, runoff of higher fixed rate assets, and
growth in lower yielding short-term investments and PPP
loans. The second quarter was the first full quarter to
reflect the impact of the 1.5% general decrease in short-term
interest rates that occurred in the first quarter. The
decline in asset yields was partially offset by a 0.17%
quarter-over-quarter decrease in average deposit costs to
0.79%. The balance of net deferred PPP loan origination fees
was $19 million at midyear; much of
this balance is expected to be recognized in net interest income
during the second half of the year. The revenue impact of
lower net interest income was partially offset by a $2 million increase in fee income over the first
quarter due to $3 million in mark to
market charges recorded in the first quarter. Second
quarter fee income benefited from higher loan origination and swap
volumes, which was offset by lower deposit fee revenue due to lower
activity and waived charges. The provision for credit
losses decreased quarter-over-quarter to $30
million from $35 million due a
decrease in total loans excluding PPP loans, and to lower net loan
charge-offs.
Non-interest expense increased quarter-over quarter by
$553 million due to the $554 million non-cash goodwill impairment
charge. Second quarter expense included $2 million in discretionary expense related to
PPP loans which was mostly the result of a bonus accrual to
compensate staff for expediting PPP loan processing.
Full-time equivalent staff in continuing
operations totaled 1,511 positions at midyear, compared to 1,550
positions at the start of the year. The Company recorded a
second quarter $16 million income tax
benefit from continuing operations which was mostly related to the
tax-deductible portion of the goodwill write-off. The Company
recorded a second quarter $6 million
net after-tax loss on discontinued operations representing
wind-down costs related to the sale and disposition of these
operations. This loss was reduced from $8 million in the prior quarter. The
Company plans to fully exit these operations by the end of
2020.
DIVIDEND UPDATE
Last quarter, the Board changed its procedure for declaring the
payment of dividends. Going forward, the Company will now
generally target the third month of the quarter to announce its
determinations regarding dividend declarations, rather than
concurrent with the earnings release.
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 and in its most recent Corporate
Responsibility Report.
Key developments in the quarter include:
- Supporting its People: Berkshire launched a series of employee
engagement and wellness initiatives including a health and wellness
resource group and is providing holistic support through its
employee assistance program. In addition, the You FIRST Employee
Assistance Fund, launched in May, is providing critical financial
support to employees facing hardships.
- Helping its Customers: As of June
30, Berkshire associates
contacted over 16,000 customers to ensure they were healthy, safe
and answer any financial questions. In addition, Berkshire continued to provide critical
funding to small businesses, including black and brown owned
enterprises and non-customers, through the Paycheck Protection
Program helping nearly 5,000 organizations with approximately
$706 million in loans.
- Investing in Recovery & Resiliency: Berkshire Bank
Foundation, the philanthropic arm of the bank, provided more than
$1 million in COVID-19 support,
exceeding its previously announced commitment in response to
widespread need. Berkshire
employees also came together to raise funds to support local
non-profit organizations and continued providing virtual volunteer
services to address community needs.
- Fostering Dialogue on Racial Equity: The "Reimagining
America Town Hall Series," hosted by Berkshire, featured The Future Of The Black
Economy, The Future Of The Latinx Economy and How to be a Strong
Ally. The town halls highlighted the significant racial injustices
and economic inequities that exist in the country and affirmed
Berkshire's commitment to serving
and creating economic opportunities for all members of the
community, especially those in the Black and Brown communities who
have been traditionally underserved by banks.
- Honoring Juneteenth: The Company dedicated June 19th, also known as Juneteenth – the oldest
national commemoration of the ending of slavery in the United States, as a day for intentional
learning, reflection and a holiday. Bank branches closed at
2PM and employees received a
"floating" day off to be used during the year. The Company also
hosted a conversation for its people managers on creating safe and
inclusive spaces for their teams.
- Launching ReevxLabs.com: Reevx Labs, powered by
Berkshire Bank, announced the launch of its new online hub,
ReevxLabs.com. Created for local communities and the people who
live and work in them, ReevxLabs.com offers resources and support
for emerging entrepreneurs, artists, and small non-profit
organizations. The Labs operate with a commitment to banking the
underbanked with dignity and a guiding belief that by disrupting
the traditional barriers to resources, the Labs can build new
economies that change communities and the world. The Reevx Labs
ecosystem provides many ways to get involved and support movements.
From utilizing the suite of socially responsible 21st century
banking products, to unique programs allowing for direct
contributions to local communities, Reevx Labs empowers everyone to
be part of the solution.
- ESG Ratings Updates: The Company enhanced its
Environmental, Social & Governance (ESG) disclosure scores from
prominent third parties, receiving an updated rating of 41.67 from
Bloomberg and an Environmental Quality Score of 2 and a Social
Quality Score of 1 from ISS. Both scores reflect above average
performance compared to peers.
INVESTOR CONFERENCE CALL AND INVESTOR PRESENTATION
Berkshire will conduct a conference
call/webcast at 10:00 a.m. eastern
time on Thursday, July 30, 2020 to discuss the
results for the quarter and provide guidance about expected future
results. Berkshire will also
place an investor 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/10146228. 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 Thursday, August 6, 2020 by dialing
877-344-7529 and entering access number 10146228. The webcast
will be available on Berkshire's website for an extended
period of time.
ABOUT BERKSHIRE HILLS
BANCORP
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 $13.1 billion in assets. Berkshire Bank serves
the underbanked through the Reevx Labs™
platform.
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 continued effects the 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
continued 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, goodwill impairment, and discontinued
operations. Discontinued operations are the Company's
national mortgage banking operations which the Company is exiting
pursuant to a sales agreement. 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 were 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.
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/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)
|
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 (1)
|
|
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
|
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019 (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE
DATA
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)/earnings
per common share, diluted
|
$ (10.93)
|
|
$
(0.40)
|
|
$
0.51
|
|
$
0.44
|
|
$
0.52
|
|
|
Core (loss)/earnings
per common share, diluted (3)
|
(0.13)
|
|
(0.07)
|
|
0.70
|
|
0.46
|
|
0.65
|
|
|
Total book value per
common share
|
22.79
|
|
33.90
|
|
34.65
|
|
34.36
|
|
34.05
|
|
|
Tangible book value
per common share (3)
|
21.94
|
|
22.00
|
|
22.56
|
|
22.42
|
|
22.25
|
|
|
Market price at
period end
|
11.02
|
|
14.86
|
|
32.88
|
|
29.29
|
|
31.39
|
|
|
Dividends per common
share
|
0.24
|
|
0.24
|
|
0.23
|
|
0.23
|
|
0.23
|
|
|
Dividends per
preferred share
|
0.48
|
|
0.48
|
|
0.46
|
|
0.46
|
|
0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE RATIOS
(4)
|
|
|
|
|
|
|
|
|
|
|
|
Return on
assets
|
(16.38)
|
%
|
(0.62)
|
%
|
0.78
|
%
|
0.67
|
%
|
0.79
|
%
|
|
Core return on assets
(3)
|
(0.19)
|
|
(0.11)
|
|
1.08
|
|
0.71
|
|
1.01
|
|
|
Return on
equity
|
(131.17)
|
|
(4.58)
|
|
5.90
|
|
5.12
|
|
6.07
|
|
|
Core return on equity
(3)
|
(1.54)
|
|
(0.84)
|
|
8.09
|
|
5.35
|
|
7.67
|
|
|
Core return on
tangible common equity (3)
|
(2.05)
|
|
(0.94)
|
|
13.12
|
|
8.74
|
|
12.21
|
|
|
Net interest margin,
fully taxable equivalent (FTE) (5)(6)
|
2.62
|
|
3.04
|
|
3.11
|
|
3.22
|
|
3.19
|
|
|
Fee income/Net
interest and fee income from continuing operations
|
18.45
|
|
15.46
|
|
18.11
|
|
17.61
|
|
16.20
|
|
|
Efficiency ratio
(3)
|
71.01
|
|
66.92
|
|
53.66
|
|
53.37
|
|
56.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGE
(Year-to-date)
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial
loans (organic, annualized)
|
12
|
%
|
(5)
|
%
|
(7)
|
%
|
(9)
|
%
|
(10)
|
%
|
|
Total loans (organic,
annualized)
|
(3)
|
|
(8)
|
|
(9)
|
|
(9)
|
|
(9)
|
|
|
Total deposits
(organic, annualized)
|
9
|
|
(10)
|
|
0
|
|
2
|
|
6
|
|
|
Total net revenues
from continuing operations (compared to prior year)
|
(14)
|
|
(14)
|
|
4
|
|
4
|
|
1
|
|
|
(Loss)/earnings per
common share (compared to prior year)
|
(1,200)
|
|
(178)
|
|
(14)
|
|
(26)
|
|
(20)
|
|
|
Core (loss)/earnings
per common share (compared to prior year)(3)
|
(116)
|
|
(112)
|
|
(14)
|
|
(18)
|
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$ 13,063
|
|
$ 13,122
|
|
$ 13,216
|
|
$ 13,532
|
|
$ 13,653
|
|
|
Total earning
assets
|
12,267
|
|
11,785
|
|
11,916
|
|
12,174
|
|
12,343
|
|
|
Total
securities
|
1,882
|
|
1,837
|
|
1,770
|
|
1,861
|
|
1,905
|
|
|
Total
loans
|
|
9,370
|
|
9,303
|
|
9,502
|
|
9,719
|
|
9,942
|
|
|
Allowance for credit
losses
|
139
|
|
114
|
|
64
|
|
62
|
|
62
|
|
|
Total intangible
assets
|
42
|
|
598
|
|
599
|
|
602
|
|
603
|
|
|
Total
deposits
|
|
10,776
|
|
10,072
|
|
10,336
|
|
10,423
|
|
10,566
|
|
|
Total shareholders'
equity
|
1,164
|
|
1,722
|
|
1,759
|
|
1,772
|
|
1,779
|
|
|
Net
(loss)/income
|
(549.4)
|
|
(19.9)
|
|
25.8
|
|
22.6
|
|
25.4
|
|
|
Core (loss)/income
(3)
|
(6.5)
|
|
(3.6)
|
|
35.3
|
|
23.7
|
|
32.1
|
|
|
Purchase accounting
accretion
|
2.1
|
|
3.1
|
|
5.1
|
|
4.8
|
|
3.2
|
|
|
Goodwill
impairment
|
553.8
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY AND
CONDITION RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(current quarter annualized)/average loans
|
0.17
|
%
|
0.45
|
%
|
0.17
|
%
|
0.92
|
%
|
0.14
|
%
|
|
Total non-performing
assets/total assets
|
0.36
|
|
0.40
|
|
0.31
|
|
0.28
|
|
0.27
|
|
|
Allowance for credit
losses/total loans
|
1.49
|
|
1.22
|
|
0.67
|
|
0.64
|
|
0.63
|
|
|
Loans/deposits
|
|
87
|
|
92
|
|
92
|
|
93
|
|
94
|
|
|
Shareholders' equity
to total assets
|
8.91
|
|
13.13
|
|
13.31
|
|
13.10
|
|
13.03
|
|
|
Tangible
shareholders' equity to tangible assets (3)
|
8.61
|
|
8.98
|
|
9.19
|
|
9.05
|
|
9.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Reconciliations of
non-GAAP financial measures, including all references to core and
tangible amounts, appear on pages F-9 and F-10.
|
(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 pages F-9 and
F-10 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: 0.07%, 0.11%, 0.17%, 0.16%,
0.11%.
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
BALANCE SHEETS - UNAUDITED - (F-2)
|
|
June 30,
|
|
March 31,
|
|
December
31,
|
|
(in
thousands)
|
2020
|
|
2020
|
|
2019
|
|
Assets
|
|
|
|
|
|
|
Cash and due from
banks
|
$
102,105
|
|
$
90,280
|
|
$
105,447
|
|
Short-term
investments
|
942,047
|
|
515,140
|
|
474,382
|
|
Total cash and
short-term investments
|
1,044,152
|
|
605,420
|
|
579,829
|
|
|
|
|
|
|
|
|
Trading
security
|
9,519
|
|
9,829
|
|
10,769
|
|
Marketable equity
securities, at fair value
|
33,263
|
|
32,283
|
|
41,556
|
|
Securities available
for sale, at fair value
|
1,458,036
|
|
1,403,858
|
|
1,311,555
|
|
Securities held to
maturity, at amortized cost
|
334,895
|
|
336,802
|
|
357,979
|
|
Federal Home Loan
Bank stock and other restricted securities
|
46,139
|
|
54,306
|
|
48,019
|
|
Total
securities
|
1,881,852
|
|
1,837,078
|
|
1,769,878
|
|
Less: Allowance for
credit losses on investment securities
|
(113)
|
|
(141)
|
|
-
|
|
Net
securities
|
1,881,739
|
|
1,836,937
|
|
1,769,878
|
|
|
|
|
|
|
|
|
Loans held for
sale
|
62,881
|
|
4,252
|
|
36,664
|
|
|
|
|
|
|
|
|
Total
loans
|
9,370,271
|
|
9,303,177
|
|
9,502,428
|
|
Less: Allowance for
credit losses on loans
|
(139,394)
|
|
(113,510)
|
|
(63,575)
|
|
Net loans
|
9,230,877
|
|
9,189,667
|
|
9,438,853
|
|
|
|
|
|
|
|
|
Premises and
equipment, net
|
118,722
|
|
120,667
|
|
120,398
|
|
Other real estate
owned
|
40
|
|
224
|
|
-
|
|
Goodwill
|
-
|
|
553,762
|
|
553,762
|
|
Other intangible
assets
|
42,477
|
|
44,035
|
|
45,615
|
|
Cash surrender value
of bank-owned life insurance
|
229,812
|
|
228,447
|
|
227,894
|
|
Other
assets
|
430,592
|
|
398,038
|
|
288,945
|
|
Assets from
discontinued operations
|
21,692
|
|
140,064
|
|
154,132
|
|
Total
assets
|
$
13,062,984
|
|
$
13,121,513
|
|
$
13,215,970
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
Demand
deposits
|
$
2,573,786
|
|
$
1,922,490
|
|
$
1,884,100
|
|
NOW and other
deposits
|
1,453,397
|
|
1,546,626
|
|
1,492,569
|
|
Money market
deposits
|
2,525,761
|
|
2,391,835
|
|
2,528,656
|
|
Savings
deposits
|
932,243
|
|
867,024
|
|
841,283
|
|
Time
deposits
|
3,290,721
|
|
3,343,700
|
|
3,589,369
|
|
Total
deposits
|
10,775,908
|
|
10,071,675
|
|
10,335,977
|
|
|
|
|
|
|
|
|
Senior
borrowings
|
719,638
|
|
944,053
|
|
730,501
|
|
Subordinated
borrowings
|
97,165
|
|
97,107
|
|
97,049
|
|
Total
borrowings
|
816,803
|
|
1,041,160
|
|
827,550
|
|
|
|
|
|
|
|
|
Other
liabilities
|
280,843
|
|
255,846
|
|
267,398
|
|
Liabilities from
discontinued operations
|
25,290
|
|
30,554
|
|
26,481
|
|
Total
liabilities
|
11,898,844
|
|
11,399,235
|
|
11,457,406
|
|
|
|
|
|
|
|
|
Preferred
shareholders' equity
|
20,325
|
|
20,325
|
|
40,633
|
|
Common shareholders'
equity
|
1,143,815
|
|
1,701,953
|
|
1,717,931
|
|
Total shareholders'
equity
|
1,164,140
|
|
1,722,278
|
|
1,758,564
|
|
Total liabilities and
shareholders' equity
|
$
13,062,984
|
|
$
13,121,513
|
|
$
13,215,970
|
|
|
|
|
|
|
|
|
Net common shares
outstanding
|
50,192
|
|
50,199
|
|
49,585
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED LOAN
& DEPOSIT ANALYSIS - UNAUDITED - (F-3)
|
LOAN
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Growth
%
|
(in
millions)
|
|
June 30, 2020
Balance
|
|
March 31, 2020
Balance
|
|
December 31, 2019
Balance
|
|
Quarter ended
June 30, 2020
|
|
Year to
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial real
estate
|
|
$
3,996
|
|
$
3,986
|
|
$
4,034
|
|
1
|
%
|
(2)
|
%
|
Commercial and
industrial loans
|
|
2,222
|
|
1,812
|
|
1,841
|
|
90
|
|
42
|
|
Total commercial
loans
|
|
6,218
|
|
5,798
|
|
5,875
|
|
29
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total residential
mortgages
|
|
2,320
|
|
2,604
|
|
2,685
|
|
(44)
|
|
(27)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity
|
|
364
|
|
378
|
|
381
|
|
(15)
|
|
(9)
|
|
Auto and
other
|
|
468
|
|
523
|
|
561
|
|
(42)
|
|
(33)
|
|
Total consumer
loans
|
|
832
|
|
901
|
|
942
|
|
(31)
|
|
(23)
|
|
Total
loans
|
|
$
9,370
|
|
$
9,303
|
|
$
9,502
|
|
3
|
%
|
(3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Growth
%
|
(in
millions)
|
|
June 30, 2020
Balance
|
|
March 31, 2020
Balance
|
|
December 31, 2019
Balance
|
|
Quarter ended
June 30, 2020
|
|
Year to
Date
|
|
Demand
|
|
$
2,574
|
|
$
1,922
|
|
$
1,884
|
|
136
|
%
|
73
|
%
|
NOW and
other
|
|
1,453
|
|
1,547
|
|
1,493
|
|
(24)
|
|
(5)
|
|
Money
market
|
|
2,526
|
|
2,392
|
|
2,529
|
|
22
|
|
(0)
|
|
Savings
|
|
932
|
|
867
|
|
841
|
|
30
|
|
22
|
|
Time
deposits
|
|
3,291
|
|
3,344
|
|
3,589
|
|
(6)
|
|
(17)
|
|
Total
deposits
|
|
$
10,776
|
|
$
10,072
|
|
$
10,336
|
|
28
|
%
|
9
|
%
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS - UNAUDITED - (F-4)
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
|
|
June 30,
|
(in thousands,
except per share data)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Interest and
dividend income from continuing
operations
|
|
|
|
|
|
|
|
Loans
|
$
90,876
|
|
$ 113,990
|
|
$
192,571
|
|
$ 219,641
|
Securities and
other
|
12,812
|
|
15,248
|
|
27,312
|
|
30,706
|
Total interest and
dividend income
|
103,688
|
|
129,238
|
|
219,883
|
|
250,347
|
Interest expense
from continuing operations
|
|
|
|
|
|
|
|
Deposits
|
20,552
|
|
28,273
|
|
44,390
|
|
54,895
|
Borrowings
|
5,546
|
|
9,370
|
|
11,475
|
|
18,398
|
Total interest
expense
|
26,098
|
|
37,643
|
|
55,865
|
|
73,293
|
Net interest
income from continuing operations
|
77,590
|
|
91,595
|
|
164,018
|
|
177,054
|
Non-interest
income from continuing operations
|
|
|
|
|
|
|
|
Mortgage banking
originations
|
1,644
|
|
278
|
|
2,603
|
|
324
|
Loan related
income
|
5,717
|
|
4,822
|
|
7,019
|
|
10,825
|
Deposit related
fees
|
5,373
|
|
7,525
|
|
13,320
|
|
14,383
|
Insurance commissions
and fees
|
2,767
|
|
2,738
|
|
5,791
|
|
5,591
|
Wealth management
fees
|
2,057
|
|
2,348
|
|
4,627
|
|
4,789
|
Total fee
income
|
17,558
|
|
17,711
|
|
33,360
|
|
35,912
|
Other
|
(999)
|
|
(216)
|
|
(1,435)
|
|
754
|
Securities
gains/(losses), net
|
822
|
|
17
|
|
(8,908)
|
|
2,568
|
Total non-interest
income
|
17,381
|
|
17,512
|
|
23,017
|
|
39,234
|
Total net revenue
from continuing operations
|
94,971
|
|
109,107
|
|
187,035
|
|
216,288
|
Provision for
credit losses
|
29,871
|
|
3,467
|
|
64,678
|
|
7,468
|
Non-interest
expense from continuing operations
|
|
|
|
|
|
|
|
Compensation and
benefits
|
39,403
|
|
34,779
|
|
76,312
|
|
68,279
|
Occupancy and
equipment
|
10,195
|
|
9,449
|
|
21,327
|
|
18,895
|
Technology and
communications
|
7,755
|
|
6,715
|
|
15,836
|
|
12,972
|
Marketing and
promotion
|
902
|
|
1,155
|
|
2,067
|
|
2,422
|
Professional
services
|
2,565
|
|
3,953
|
|
5,285
|
|
6,228
|
FDIC premiums and
assessments
|
1,658
|
|
1,751
|
|
3,140
|
|
3,390
|
Other real estate
owned and foreclosures
|
14
|
|
(2)
|
|
41
|
|
-
|
Amortization of
intangible assets
|
1,558
|
|
1,475
|
|
3,138
|
|
2,675
|
Goodwill
impairment
|
553,762
|
|
-
|
|
553,762
|
|
-
|
Merger, restructuring
and other expense
|
-
|
|
11,155
|
|
-
|
|
18,170
|
Other
|
6,463
|
|
6,138
|
|
14,692
|
|
15,528
|
Total non-interest
expense
|
624,275
|
|
76,568
|
|
695,600
|
|
148,559
|
|
|
|
|
|
|
|
|
(Loss)/income from
continuing operations before income
taxes
|
$(559,175)
|
|
$
29,072
|
|
$(573,243)
|
|
$
60,261
|
Income tax
(benefit)/expense
|
(16,130)
|
|
5,118
|
|
(18,126)
|
|
12,035
|
Net (loss)/income
from continuing operations
|
$(543,045)
|
|
$
23,954
|
|
$(555,117)
|
|
$
48,226
|
|
|
|
|
|
|
|
|
(Loss)/income from
discontinued operations before income taxes
|
$
(8,635)
|
|
$
2,082
|
|
$
(19,264)
|
|
$
1,228
|
Income tax
(benefit)/expense
|
(2,299)
|
|
588
|
|
(5,130)
|
|
371
|
Net (loss)/income
from discontinued operations
|
$
(6,336)
|
|
$
1,494
|
|
$
(14,134)
|
|
$
857
|
|
|
|
|
|
|
|
|
Net
(loss)/income
|
$(549,381)
|
|
$
25,448
|
|
$(569,251)
|
|
$
49,083
|
Preferred stock
dividend
|
130
|
|
240
|
|
255
|
|
480
|
(Loss)/income
available to common shareholders
|
$(549,511)
|
|
$
25,208
|
|
$(569,506)
|
|
$
48,603
|
|
|
|
|
|
|
|
|
Basic
(loss)/earnings per common share:
|
|
|
|
|
|
|
|
Continuing
Operations
|
$
(10.80)
|
|
$
0.49
|
|
$
(11.05)
|
|
$
1.01
|
Discontinued
Operations
|
(0.13)
|
|
0.03
|
|
(0.28)
|
|
0.02
|
Total
|
$
(10.93)
|
|
$
0.52
|
|
$
(11.33)
|
|
$
1.03
|
|
|
|
|
|
|
|
|
Diluted
(loss)/earnings per common share:
|
|
|
|
|
|
|
|
Continuing
Operations
|
$
(10.80)
|
|
$
0.49
|
|
$
(11.05)
|
|
$
1.01
|
Discontinued
Operations
|
(0.13)
|
|
0.03
|
|
(0.28)
|
|
0.02
|
Total
|
$
(10.93)
|
|
$
0.52
|
|
$
(11.33)
|
|
$
1.03
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
50,246
|
|
48,961
|
|
50,228
|
|
47,550
|
Diluted
|
50,246
|
|
49,114
|
|
50,228
|
|
47,700
|
|
|
|
|
|
|
|
|
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)
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
Interest and
dividend income from continuing
operations
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
90,876
|
|
$
101,695
|
|
$
110,915
|
|
$
118,371
|
|
$ 113,990
|
|
Securities and
other
|
12,812
|
|
14,500
|
|
14,526
|
|
15,354
|
|
15,248
|
|
Total interest and
dividend income
|
103,688
|
|
116,195
|
|
125,441
|
|
133,725
|
|
129,238
|
|
Interest expense
from continuing operations
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
20,552
|
|
23,838
|
|
28,797
|
|
31,501
|
|
28,273
|
|
Borrowings
|
5,546
|
|
5,929
|
|
5,311
|
|
5,353
|
|
9,370
|
|
Total interest
expense
|
26,098
|
|
29,767
|
|
34,108
|
|
36,854
|
|
37,643
|
|
Net interest
income from continuing operations
|
77,590
|
|
86,428
|
|
91,333
|
|
96,871
|
|
91,595
|
|
Non-interest
income from continuing operations
|
|
|
|
|
|
|
|
|
|
|
Mortgage banking
originations
|
1,644
|
|
959
|
|
172
|
|
292
|
|
278
|
|
Loan related
income
|
5,717
|
|
1,302
|
|
7,056
|
|
6,493
|
|
4,822
|
|
Deposit related
fees
|
5,373
|
|
7,947
|
|
8,264
|
|
8,705
|
|
7,525
|
|
Insurance commissions
and fees
|
2,767
|
|
3,024
|
|
2,471
|
|
2,895
|
|
2,738
|
|
Wealth management
fees
|
2,057
|
|
2,570
|
|
2,239
|
|
2,325
|
|
2,348
|
|
Total fee
income
|
17,558
|
|
15,802
|
|
20,202
|
|
20,710
|
|
17,711
|
|
Other
|
(999)
|
|
(436)
|
|
75
|
|
609
|
|
(216)
|
|
Securities
gains/(losses), net
|
822
|
|
(9,730)
|
|
1,734
|
|
87
|
|
17
|
|
Gain on sale of
business operations and assets, net
|
-
|
|
-
|
|
1,351
|
|
-
|
|
-
|
|
Total non-interest
income
|
17,381
|
|
5,636
|
|
23,362
|
|
21,406
|
|
17,512
|
|
Total net revenue
from continuing operations
|
94,971
|
|
92,064
|
|
114,695
|
|
118,277
|
|
109,107
|
|
Provision for
credit losses
|
29,871
|
|
34,807
|
|
5,351
|
|
22,600
|
|
3,467
|
|
Non-interest
expense from continuing operations
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
39,403
|
|
36,909
|
|
35,355
|
|
37,272
|
|
34,779
|
|
Occupancy and
equipment
|
10,195
|
|
11,132
|
|
10,798
|
|
9,893
|
|
9,449
|
|
Technology and
communications
|
7,755
|
|
8,081
|
|
6,702
|
|
6,849
|
|
6,715
|
|
Marketing and
promotion
|
902
|
|
1,165
|
|
1,046
|
|
1,006
|
|
1,155
|
|
Professional
services
|
2,565
|
|
2,720
|
|
2,288
|
|
2,282
|
|
3,953
|
|
FDIC premiums and
assessments
|
1,658
|
|
1,482
|
|
471
|
|
-
|
|
1,751
|
|
Other real estate
owned and foreclosures
|
14
|
|
27
|
|
4
|
|
150
|
|
(2)
|
|
Amortization of
intangible assets
|
1,558
|
|
1,580
|
|
1,582
|
|
1,526
|
|
1,475
|
|
Goodwill
impairment
|
553,762
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Merger, restructuring
and other expense
|
-
|
|
-
|
|
5,713
|
|
4,163
|
|
11,155
|
|
Other
|
6,463
|
|
8,229
|
|
6,328
|
|
7,870
|
|
6,138
|
|
Total non-interest
expense
|
624,275
|
|
71,325
|
|
70,287
|
|
71,011
|
|
76,568
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/income from
continuing operations before income taxes
|
$
(559,175)
|
|
$
(14,068)
|
|
$
39,057
|
|
$
24,666
|
|
$
29,072
|
|
Income tax
(benefit)/expense
|
(16,130)
|
|
(1,996)
|
|
6,421
|
|
4,007
|
|
5,118
|
|
Net (loss)/ income
from continuing operations
|
$
(543,045)
|
|
$
(12,072)
|
|
$
32,636
|
|
$
20,659
|
|
$
23,954
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/income from
discontinued operations before income taxes
|
$
(8,635)
|
|
$
(10,629)
|
|
$
(9,514)
|
|
$
2,747
|
|
$
2,082
|
|
Income tax
(benefit)/expense
|
(2,299)
|
|
(2,831)
|
|
(2,629)
|
|
790
|
|
588
|
|
Net (loss)/income
from discontinued operations
|
$
(6,336)
|
|
$
(7,798)
|
|
$
(6,885)
|
|
$
1,957
|
|
$
1,494
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss)/income
|
$
(549,381)
|
|
$
(19,870)
|
|
$
25,751
|
|
$
22,616
|
|
$
25,448
|
|
Preferred stock
dividend
|
130
|
|
125
|
|
240
|
|
240
|
|
240
|
|
(Loss)/income
available to common shareholders
|
$
(549,511)
|
|
$
(19,995)
|
|
$
25,511
|
|
$
22,376
|
|
$
25,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(loss)/earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
$
(10.80)
|
|
$
(0.24)
|
|
$
0.65
|
|
$
0.40
|
|
$
0.49
|
|
Discontinued
Operations
|
(0.13)
|
|
(0.16)
|
|
(0.14)
|
|
0.04
|
|
0.03
|
|
Total
|
$
(10.93)
|
|
$
(0.40)
|
|
$
0.51
|
|
$
0.44
|
|
$
0.52
|
|
|
|
|
|
|
|
|
|
Diluted
(loss)/earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
$
(10.80)
|
|
$
(0.24)
|
|
$
0.65
|
|
$
0.40
|
|
$
0.49
|
|
Discontinued
Operations
|
(0.13)
|
|
(0.16)
|
|
(0.14)
|
|
0.04
|
|
0.03
|
|
Total
|
$
(10.93)
|
|
$
(0.40)
|
|
$
0.51
|
|
$
0.44
|
|
$
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
50,246
|
|
50,204
|
|
50,494
|
|
51,422
|
|
48,961
|
|
Diluted
|
50,246
|
|
50,204
|
|
50,702
|
|
51,545
|
|
49,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earning
assets
|
|
|
|
|
|
|
|
|
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
3.78
|
%
|
4.41
|
%
|
4.80
|
%
|
4.92
|
%
|
5.01
|
%
|
Commercial and
industrial loans
|
|
4.02
|
|
5.03
|
|
5.35
|
|
5.58
|
|
5.79
|
|
Residential
mortgages
|
|
3.78
|
|
3.77
|
|
3.61
|
|
3.73
|
|
3.74
|
|
Consumer
loans
|
|
3.72
|
|
4.28
|
|
4.38
|
|
4.55
|
|
4.52
|
|
Total
loans
|
|
3.83
|
|
4.33
|
|
4.52
|
|
4.67
|
|
4.76
|
|
Securities
|
|
3.07
|
|
3.32
|
|
3.31
|
|
3.41
|
|
3.38
|
|
Short-term
investments and loans held for sale
|
|
0.50
|
|
1.78
|
|
3.15
|
|
4.11
|
|
3.37
|
|
Total earning
assets
|
|
3.50
|
|
4.08
|
|
4.27
|
|
4.45
|
|
4.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funding
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
NOW and
other
|
|
0.30
|
|
0.46
|
|
0.54
|
|
0.61
|
|
0.66
|
|
Money
market
|
|
0.58
|
|
0.98
|
|
1.18
|
|
1.27
|
|
1.27
|
|
Savings
|
|
0.10
|
|
0.13
|
|
0.14
|
|
0.13
|
|
0.15
|
|
Time
|
|
1.84
|
|
1.87
|
|
1.97
|
|
2.02
|
|
2.06
|
|
Total
interest-bearing deposits
|
|
1.01
|
|
1.18
|
|
1.35
|
|
1.43
|
|
1.44
|
|
Borrowings
|
|
2.38
|
|
2.60
|
|
2.77
|
|
3.12
|
|
2.92
|
|
Total
interest-bearing liabilities
|
|
1.16
|
|
1.33
|
|
1.48
|
|
1.57
|
|
1.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
spread
|
|
2.34
|
|
2.75
|
|
2.79
|
|
2.88
|
|
2.85
|
|
Net interest
margin
|
|
2.62
|
|
3.04
|
|
3.11
|
|
3.22
|
|
3.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of funds
(1)
|
|
0.92
|
|
1.11
|
|
1.23
|
|
1.32
|
|
1.41
|
|
Cost of
deposits
|
|
0.79
|
|
0.96
|
|
1.11
|
|
1.18
|
|
1.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 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)
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
$
4,005,018
|
|
$
4,000,461
|
|
$
4,056,244
|
|
$
3,998,144
|
|
$
3,716,130
|
|
Commercial and
industrial loans
|
2,152,820
|
|
1,795,813
|
|
1,768,039
|
|
1,951,205
|
|
2,056,384
|
|
Residential
mortgages
|
2,452,622
|
|
2,654,224
|
|
2,758,676
|
|
2,849,216
|
|
2,711,348
|
|
Consumer
loans
|
865,318
|
|
921,810
|
|
974,889
|
|
1,035,893
|
|
1,064,579
|
|
Total loans
(1)
|
9,475,778
|
|
9,372,308
|
|
9,557,848
|
|
9,834,458
|
|
9,548,441
|
|
Securities
(2)
|
1,793,381
|
|
1,744,635
|
|
1,752,968
|
|
1,846,985
|
|
1,893,298
|
|
Short-term
investments and loans held for sale
|
697,138
|
|
374,894
|
|
444,622
|
|
309,897
|
|
117,029
|
|
Total earning assets
(3)
|
11,966,297
|
|
11,491,837
|
|
11,755,438
|
|
11,991,340
|
|
11,558,768
|
|
Goodwill and other
intangible assets
|
590,672
|
|
598,347
|
|
601,192
|
|
603,762
|
|
555,606
|
|
Other
assets
|
751,702
|
|
663,056
|
|
737,396
|
|
668,218
|
|
593,917
|
|
Assets from
discontinued operations
|
109,923
|
|
98,528
|
|
176,251
|
|
204,339
|
|
192,466
|
|
Total
assets
|
$
13,418,594
|
|
$
12,851,768
|
|
$
13,270,277
|
|
$
13,467,659
|
|
$
12,900,757
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
NOW and
other
|
$
1,183,839
|
|
$
1,159,388
|
|
$
1,085,485
|
|
$
1,111,637
|
|
$
1,053,335
|
|
Money
market
|
2,672,066
|
|
2,752,465
|
|
2,688,766
|
|
2,624,639
|
|
2,474,071
|
|
Savings
|
901,218
|
|
846,942
|
|
835,209
|
|
838,445
|
|
780,797
|
|
Time
|
3,399,222
|
|
3,333,070
|
|
3,827,175
|
|
4,158,688
|
|
3,593,022
|
|
Total
interest-bearing deposits
|
8,156,345
|
|
8,091,865
|
|
8,436,635
|
|
8,733,409
|
|
7,901,225
|
|
Borrowings
|
942,033
|
|
949,316
|
|
853,911
|
|
805,035
|
|
1,415,614
|
|
Total
interest-bearing liabilities
|
9,098,378
|
|
9,041,181
|
|
9,290,546
|
|
9,538,444
|
|
9,316,839
|
|
Non-interest-bearing
demand deposits
|
2,343,173
|
|
1,849,295
|
|
1,898,045
|
|
1,864,964
|
|
1,673,560
|
|
Other
liabilities
|
272,690
|
|
203,797
|
|
304,504
|
|
267,922
|
|
215,704
|
|
Liabilities from
discontinued operations
|
28,988
|
|
23,799
|
|
30,446
|
|
28,206
|
|
18,434
|
|
Total
liabilities
|
11,743,229
|
|
11,118,072
|
|
11,523,541
|
|
11,699,536
|
|
11,224,537
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
shareholders' equity
|
20,325
|
|
20,548
|
|
40,633
|
|
40,633
|
|
40,633
|
|
Common shareholders'
equity
|
1,655,040
|
|
1,713,148
|
|
1,706,103
|
|
1,727,490
|
|
1,635,587
|
|
Total shareholders'
equity
|
1,675,365
|
|
1,733,696
|
|
1,746,736
|
|
1,768,123
|
|
1,676,220
|
|
Total liabilities and
shareholders' equity
|
$
13,418,594
|
|
$
12,851,768
|
|
$
13,270,277
|
|
$
13,467,659
|
|
$
12,900,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
|
Total average
non-maturity deposits
|
$
7,100,296
|
|
$
6,608,090
|
|
$
6,507,505
|
|
$
6,439,685
|
|
$
5,981,763
|
|
Total average
deposits
|
10,499,518
|
|
9,941,160
|
|
10,334,680
|
|
10,598,373
|
|
9,574,785
|
|
Fully taxable
equivalent income adjustment
|
1,580
|
|
1,824
|
|
1,934
|
|
1,826
|
|
1,882
|
|
Total average
tangible equity (4)
|
1,084,693
|
|
1,135,349
|
|
1,145,544
|
|
1,164,361
|
|
1,120,614
|
|
|
|
(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
|
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
(in
thousands)
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Non-accruing
loans:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
12,486
|
|
$
16,938
|
|
$ 20,119
|
|
$
15,829
|
|
$ 19,366
|
|
Commercial and
industrial loans
|
|
15,045
|
|
18,370
|
|
11,373
|
|
12,224
|
|
9,256
|
|
Residential
mortgages
|
|
9,840
|
|
9,636
|
|
3,343
|
|
3,062
|
|
3,579
|
|
Consumer
loans
|
|
7,513
|
|
6,172
|
|
4,805
|
|
5,191
|
|
3,570
|
|
Total non-accruing
loans
|
|
44,884
|
|
51,116
|
|
39,640
|
|
36,306
|
|
35,771
|
|
Other real estate
owned
|
|
517
|
|
224
|
|
-
|
|
-
|
|
154
|
|
Repossessed
assets
|
|
1,581
|
|
1,316
|
|
858
|
|
1,003
|
|
874
|
|
Total non-performing
assets
|
|
$
46,982
|
|
$
52,656
|
|
$ 40,498
|
|
$
37,309
|
|
$ 36,799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-accruing
loans/total loans
|
|
0.48%
|
|
0.55%
|
|
0.42%
|
|
0.37%
|
|
0.36%
|
|
Total non-performing
assets/total assets
|
|
0.36%
|
|
0.40%
|
|
0.31%
|
|
0.28%
|
|
0.27%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND
ALLOWANCE FOR CREDIT LOSSES ON LOANS
|
|
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
|
$ 113,510
|
|
$
63,575
|
|
$ 62,230
|
|
$
62,156
|
|
$ 62,038
|
|
Adoption of ASU No.
2016-13 (1)
|
|
-
|
|
25,434
|
|
-
|
|
-
|
|
-
|
|
Balance after
adoption of ASU No. 2016-13
|
|
113,510
|
|
89,009
|
|
62,230
|
|
62,156
|
|
62,038
|
|
Charged-off
loans
|
|
(7,274)
|
|
(12,432)
|
|
(4,485)
|
|
(23,524)
|
|
(3,966)
|
|
Recoveries on
charged-off loans
|
|
3,259
|
|
1,958
|
|
479
|
|
998
|
|
617
|
|
Net loans
charged-off
|
|
(4,015)
|
|
(10,474)
|
|
(4,006)
|
|
(22,526)
|
|
(3,349)
|
|
Provision for loan
credit losses
|
|
29,899
|
|
34,975
|
|
5,351
|
|
22,600
|
|
3,467
|
|
Balance at end of
period
|
|
$ 139,394
|
|
$ 113,510
|
|
$ 63,575
|
|
$
62,230
|
|
$ 62,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses/total loans
|
|
1.49%
|
|
1.22%
|
|
0.67%
|
|
0.64%
|
|
0.63%
|
|
Allowance for credit
losses/non-accruing loans
|
|
311%
|
|
222%
|
|
160%
|
|
171%
|
|
174%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOAN
CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
(1,679)
|
|
$
(5,990)
|
|
$ (1,419)
|
|
$
(2,759)
|
|
$ (1,235)
|
|
Commercial and
industrial loans
|
|
(1,059)
|
|
(3,728)
|
|
(1,495)
|
|
(18,850)
|
|
(995)
|
|
Residential
mortgages
|
|
(966)
|
|
(19)
|
|
(351)
|
|
(140)
|
|
(139)
|
|
Home
equity
|
|
(10)
|
|
(107)
|
|
(67)
|
|
(71)
|
|
(300)
|
|
Auto and other
consumer
|
|
(301)
|
|
(630)
|
|
(674)
|
|
(706)
|
|
(680)
|
|
Total, net
|
|
$
(4,015)
|
|
$ (10,474)
|
|
$ (4,006)
|
|
$(22,526)
|
|
$ (3,349)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
|
0.17%
|
|
0.45%
|
|
0.17%
|
|
0.92%
|
|
0.14%
|
|
Net charge-offs (YTD
annualized)/average loans
|
|
0.31%
|
|
0.45%
|
|
0.35%
|
|
0.41%
|
|
0.15%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELINQUENT AND
NON-ACCRUING LOANS/TOTAL LOANS
|
|
|
|
|
|
|
|
|
|
30-89 Days
delinquent
|
|
0.37%
|
|
0.43%
|
|
0.25%
|
|
0.26%
|
|
0.20%
|
|
90+ Days delinquent
and still accruing
|
|
0.14%
|
|
0.05%
|
|
0.29%
|
|
0.29%
|
|
0.28%
|
|
Total accruing
delinquent loans
|
|
0.51%
|
|
0.48%
|
|
0.54%
|
|
0.55%
|
|
0.48%
|
|
Non-accruing
loans
|
|
0.48%
|
|
0.55%
|
|
0.42%
|
|
0.37%
|
|
0.36%
|
|
Total delinquent and
non-accruing loans
|
|
0.99%
|
|
1.03%
|
|
0.96%
|
|
0.92%
|
|
0.84%
|
|
(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
|
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
(in
thousands)
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
Net
(loss)/income
|
|
$
(549,381)
|
|
$
(19,870)
|
|
$
25,751
|
|
$
22,616
|
|
$
25,448
|
|
Adj: Net securities
(gains)/losses (1)
|
|
(822)
|
|
9,730
|
|
(1,734)
|
|
(87)
|
|
(17)
|
|
Adj: Goodwill
impairment
|
|
553,762
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Adj: Merger and
acquisition expense
|
|
-
|
|
-
|
|
3,611
|
|
3,802
|
|
9,711
|
|
Adj: Restructuring
expense and other expense
|
|
-
|
|
-
|
|
2,102
|
|
361
|
|
1,444
|
|
Adj: Loss/(income)
from discontinued operations before income taxes
|
8,635
|
|
10,629
|
|
9,514
|
|
(2,747)
|
|
(2,082)
|
|
Adj: Income
taxes
|
|
(18,658)
|
|
(4,134)
|
|
(3,910)
|
|
(281)
|
|
(2,385)
|
|
Total core
(loss)/income (2)
|
(A)
|
$
(6,464)
|
|
$
(3,645)
|
|
$
35,334
|
|
$
23,664
|
|
$
32,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue from
continuing operations
|
|
$
94,971
|
|
$
92,064
|
|
$
114,695
|
|
$
118,277
|
|
$
109,107
|
|
Adj: Net securities
(gains)/losses (1)
|
|
(822)
|
|
9,730
|
|
(1,734)
|
|
(87)
|
|
(17)
|
|
Total core revenue
(2)
|
(B)
|
$
94,149
|
|
$
101,794
|
|
$
112,961
|
|
$
118,190
|
|
$
109,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense from continuing operations
|
|
$
624,275
|
|
$
71,325
|
|
$
70,287
|
|
$
71,011
|
|
$
76,568
|
|
Less: Merger,
restructuring and other expense (see above)
|
|
-
|
|
-
|
|
(5,713)
|
|
(4,163)
|
|
(11,155)
|
|
Less: Goodwill
impairment
|
|
(553,762)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Core non-interest
expense (2)
|
(C)
|
$
70,513
|
|
$
71,325
|
|
$
64,574
|
|
$
66,848
|
|
$
65,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
|
$
90,383
|
|
$
93,869
|
|
$
116,860
|
|
$
134,067
|
|
$
123,109
|
|
Total non-interest
expense
|
|
628,322
|
|
83,759
|
|
81,966
|
|
84,054
|
|
88,488
|
|
Pre-tax,
pre-provision net revenue (PPNR)
|
|
$
(537,939)
|
|
$
10,110
|
|
$
34,894
|
|
$
50,013
|
|
$
34,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue from
continuing operations
|
|
$
94,971
|
|
$
92,064
|
|
$
114,695
|
|
$
118,277
|
|
$
109,107
|
|
Total non-interest
expense from continuing operations
|
|
624,275
|
|
71,325
|
|
70,287
|
|
71,011
|
|
76,568
|
|
Pre-tax,
pre-provision net revenue (PPNR) from continuing
operations
|
$
(529,304)
|
|
$
20,739
|
|
$
44,408
|
|
$
47,266
|
|
$
32,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total core revenue
(2)
|
|
$
94,149
|
|
$
101,794
|
|
$
112,961
|
|
$
118,190
|
|
$
109,090
|
|
Core non-interest
expense (2)
|
|
70,513
|
|
71,325
|
|
64,574
|
|
66,848
|
|
65,413
|
|
Core pre-tax,
pre-provision net revenue (PPNR)
|
|
$
23,636
|
|
$
30,469
|
|
$
48,387
|
|
$
51,342
|
|
$
43,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
(D)
|
$
13,419
|
|
$
12,852
|
|
$
13,270
|
|
$
13,468
|
|
$
12,901
|
|
Total average
shareholders'
equity
|
(E)
|
1,675
|
|
1,734
|
|
1,747
|
|
1,768
|
|
1,676
|
|
Total average
tangible shareholders' equity
(2)
|
(F)
|
1,085
|
|
1,135
|
|
1,146
|
|
1,164
|
|
1,121
|
|
Total average
tangible common shareholders' equity
(2)
|
(G)
|
1,064
|
|
1,115
|
|
1,105
|
|
1,124
|
|
1,080
|
|
Total tangible
shareholders' equity, period-end (2)(3)
|
(H)
|
1,122
|
|
1,124
|
|
1,159
|
|
1,170
|
|
1,176
|
|
Total tangible common
shareholders' equity, period-end (2)(3)
|
(I)
|
1,101
|
|
1,104
|
|
1,119
|
|
1,130
|
|
1,136
|
|
Total tangible
assets, period-end (2)(3)
|
(J)
|
13,021
|
|
12,524
|
|
12,617
|
|
12,930
|
|
13,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, period-end
(thousands)
|
(K)
|
50,192
|
|
50,199
|
|
49,585
|
|
50,394
|
|
51,045
|
|
Average diluted
shares outstanding (thousands)
|
(L)
|
50,246
|
|
50,204
|
|
50,702
|
|
51,545
|
|
49,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core (loss)/earnings
per common share, diluted(2)
|
(A/L)
|
$
(0.13)
|
|
$
(0.07)
|
|
$
0.70
|
|
$
0.46
|
|
$
0.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PPNR per common
share, diluted (2)
|
|
(10.71)
|
|
0.20
|
|
0.69
|
|
0.97
|
|
0.70
|
|
PPNR from continuing
operations per common share, diluted (2)
|
|
(10.53)
|
|
0.41
|
|
0.88
|
|
0.92
|
|
0.66
|
|
Core PPNR per common
share, diluted (2)
|
|
0.47
|
|
0.61
|
|
0.95
|
|
1.00
|
|
0.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value
per common share, period-end (2)
|
(I/K)
|
21.94
|
|
22.00
|
|
22.56
|
|
22.42
|
|
22.25
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(H)/(J)
|
8.61
|
|
8.98
|
|
9.19
|
|
9.05
|
|
9.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance ratios
(4)
|
|
|
|
|
|
|
|
|
|
|
|
GAAP return on
assets
|
|
(16.38)
|
%
|
(0.62)
|
%
|
0.78
|
%
|
0.67
|
%
|
0.79
|
%
|
Core return on assets
(2)
|
|
(0.19)
|
|
(0.11)
|
|
1.08
|
|
0.71
|
|
1.01
|
|
GAAP return on
equity
|
|
(131.17)
|
|
(4.58)
|
|
5.90
|
|
5.12
|
|
6.07
|
|
Core return on equity
(2)
|
(A/E)
|
(1.54)
|
|
(0.84)
|
|
8.09
|
|
5.35
|
|
7.67
|
|
Core return on
tangible common equity (2)(5)
|
(A+O)/(G)
|
(2.05)
|
|
(0.94)
|
|
13.12
|
|
8.74
|
|
12.21
|
|
PPNR/assets
(2)
|
|
(16.04)
|
|
0.31
|
|
1.05
|
|
1.49
|
|
1.07
|
|
Core PPNR/assets
(2)
|
|
0.71
|
|
0.96
|
|
1.48
|
|
1.55
|
|
1.37
|
|
Efficiency ratio
(2)(6)
|
(C-O)/(B+M+P)
|
71.01
|
|
66.92
|
|
53.66
|
|
53.37
|
|
56.41
|
|
Net interest
margin
|
|
2.62
|
|
3.04
|
|
3.11
|
|
3.22
|
|
3.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary data
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (7)
|
(M)
|
$
1,379
|
|
$
608
|
|
$
2,503
|
|
$
2,382
|
|
$
2,381
|
|
Non-interest income
charge on tax-credit investments (8)
|
(N)
|
(1,097)
|
|
(486)
|
|
(1,996)
|
|
(1,942)
|
|
(1,938)
|
|
Net income on
tax-credit investments
|
(M+N)
|
282
|
|
122
|
|
507
|
|
440
|
|
443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(O)
|
$
1,558
|
|
$
1,580
|
|
$
1,582
|
|
$
1,526
|
|
$
1,475
|
|
Fully taxable
equivalent income adjustment
|
(P)
|
1,580
|
|
1,824
|
|
1,934
|
|
1,826
|
|
1,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net securities
(gains)/losses 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.
|
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)
|
|
2020
|
|
2019
|
|
Net
income
|
|
$(569,251)
|
|
$
49,083
|
|
Adj: Net
securities(gains)/losses (1)
|
|
8,908
|
|
(2,568)
|
|
Adj: Goodwill
impairment
|
|
553,762
|
|
-
|
|
Adj: Merger and
acquisition expenses
|
|
-
|
|
11,320
|
|
Adj: Restructuring
expense and other
|
|
-
|
|
6,850
|
|
Adj: Loss from
discontinued operations before income taxes
|
|
19,264
|
|
(1,228)
|
|
Adj: Income
taxes
|
|
(22,792)
|
|
(3,608)
|
|
Total core income
(2)
|
(A)
|
$
(10,109)
|
|
$
59,849
|
|
|
|
|
|
|
|
Total revenue from
continuing operations
|
|
$
187,035
|
|
$ 216,288
|
|
Adj: Net
securities(gains)/losses (1)
|
|
8,908
|
|
(2,568)
|
|
Total core
revenue(2)
|
(B)
|
$
195,943
|
|
$ 213,720
|
|
Total non-interest
expense from continuing operations
|
|
$
695,600
|
|
$ 148,559
|
|
Less: Merger,
restructuring and other expense (see above)
|
|
-
|
|
(18,170)
|
|
Less: Goodwill
impairment
|
|
(553,762)
|
|
-
|
|
Core non-interest
expense
(2)
|
(C)
|
$
141,838
|
|
$ 130,389
|
|
|
|
|
|
|
|
Total
revenue
|
|
$
184,252
|
|
$ 239,563
|
|
Total non-interest
expense
|
|
712,081
|
|
170,606
|
|
Pre-tax,
pre-provision net revenue (PPNR)
|
|
$(527,829)
|
|
$
68,957
|
|
|
|
|
|
|
|
Total revenue from
continuing operations
|
|
$
187,035
|
|
$ 216,288
|
|
Total non-interest
expense from continuing operations
|
|
695,600
|
|
148,559
|
|
Pre-tax,
pre-provision net revenue (PPNR) from continuing
operations
|
|
$(508,565)
|
|
$
67,729
|
|
|
|
|
|
|
|
Total core revenue
(2)
|
|
$
195,943
|
|
$ 213,720
|
|
Core non-interest
expense (2)
|
|
141,838
|
|
130,389
|
|
Core pre-tax,
pre-provision net revenue (PPNR)
|
|
$
54,105
|
|
$
83,331
|
|
|
|
|
|
|
|
(in millions,
except per share data)
|
|
|
|
|
|
Total average
assets
|
(D)
|
$
13,173
|
|
$
12,546
|
|
Total average
shareholders'
equity
|
(E)
|
1,705
|
|
1,630
|
|
Total average
tangible shareholders' equity
(2)
|
(F)
|
1,110
|
|
1,077
|
|
Total average
tangible common shareholders' equity
(2)
|
(G)
|
1,090
|
|
1,036
|
|
Total tangible
shareholders' equity, period-end (2)(3)
|
(H)
|
1,122
|
|
1,176
|
|
Total tangible common
shareholders' equity, period-end (2)(3)
|
(I)
|
1,101
|
|
1,136
|
|
Total tangible
assets, period-end (2)(3)
|
(J)
|
13,021
|
|
13,051
|
|
Total common shares
outstanding, period-end
(thousands)
|
(K)
|
50,192
|
|
51,045
|
|
Average diluted
shares outstanding (thousands)
|
(L)
|
50,228
|
|
47,700
|
|
Core earnings per
common share, diluted(2)
|
(A/L)
|
$
(0.20)
|
|
$
1.25
|
|
|
|
|
|
|
|
PPNR per common
share, diluted (2)
|
|
(10.51)
|
|
1.45
|
|
PPNR from continuing
operations per common share, diluted (2)
|
|
(10.13)
|
|
1.42
|
|
Core PPNR per common
share, diluted (2)
|
|
1.08
|
|
1.75
|
|
|
|
|
|
|
|
Tangible book value
per common share, period-end (2)
|
(I/K)
|
21.94
|
|
22.25
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(H)/(J)
|
8.61
|
|
9.01
|
|
|
|
|
|
|
|
Performance ratios
(4)
|
|
|
|
|
|
GAAP return on
assets
|
|
(8.67)
|
%
|
0.78
|
%
|
Core return on assets
(2)
|
(A/D)
|
(0.15)
|
|
0.97
|
|
GAAP return on
equity
|
|
(66.79)
|
|
6.02
|
|
Core return on equity
(2)
|
(A/E)
|
(1.19)
|
|
7.34
|
|
Core return on
tangible common equity (2)(5)
|
(A+O)/(G)
|
(1.48)
|
|
11.84
|
|
PPNR/assets
(2)
|
|
(8.01)
|
|
1.10
|
|
Core PPNR/assets
(2)
|
|
0.82
|
|
1.33
|
|
Efficiency ratio
(2)(6)
|
(C-O)/(B+M+P)
|
68.89
|
|
57.93
|
|
Net interest
margin
|
|
2.82
|
|
3.18
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
Tax benefit on
tax-credit investments (7)
|
(M)
|
$
1,987
|
|
$
3,065
|
|
Non-interest income
charge on tax-credit investments (8)
|
(N)
|
(1,583)
|
|
(2,517)
|
|
Net income on
tax-credit investments
|
(M+N)
|
404
|
|
548
|
|
|
|
|
|
|
|
Intangible
amortization
|
(O)
|
3,138
|
|
2,675
|
|
Fully taxable
equivalent income adjustment
|
(P)
|
3,404
|
|
3,691
|
|
|
(1)
|
Net securities
(gains)/losses 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% 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.