BOSTON, April 28, 2021 /PRNewswire/ -- Berkshire
Hills Bancorp, Inc. (NYSE: BHLB) today announced first quarter
2021 net income of $13 million, or
$0.26 per share, compared to
$15 million, or $0.30 per share, in the prior quarter. The
first quarter non-GAAP measure of adjusted earnings totaled
$16 million, or $0.32 per share, compared to $14 million, or $0.28 per share, in the prior quarter.
First quarter adjusted income excludes $3 million in restructuring and other
expenses. Quarterly results benefited from higher revenues
and lower credit loss provision expense.
FIRST QUARTER FINANCIAL HIGHLIGHTS (Comparisons are
to the prior quarter unless otherwise stated; non-GAAP measures are
reconciled on page F-8)
- 33% increase in total non-interest income excluding
gains/(losses)
- 13% decrease in GAAP income; 14% increase in adjusted income
(non-GAAP measure)
- 2.62% net interest margin, stable for last four quarters
- 35% reduction in provision for credit losses on loans
- 42% reduction in annualized net loan charge-offs to 0.51% of
loans from 0.80%
- 86% decrease in COVID-19 loan modifications compared to
June 30, 2020
- 26% reduction in wholesale funding to 7% of assets
- $23.05 book value per share;
$22.39 tangible book value per share
(non-GAAP measure)
CEO Nitin Mhatre stated,
"Berkshire's operating results
improved in the first quarter, driven primarily by higher
loan-related fees and revenues. The quarter also benefited
from growth in demand deposits and the paydown of higher cost wholesale
funding. This increase in our lending and deposit activities
reflected the benefit of our engagement with our customers in
processing government lending and fiscal relief to support further
economic recovery in our markets from pandemic conditions. We
also consolidated nine of our branch offices during the quarter as
part of our branch optimization plan. This resulted in
restructuring charges which reduced our GAAP results."
Mr. Mhatre continued, "Public health and the economic outlook
improved in our footprint during the quarter. Key measures of
loan performance improved, resulting in reductions in net loan
charge-offs, nonperforming loans, and loans with COVID-19 related
modifications. Our loan loss provision decreased
quarter-over-quarter, contributing to our improved operating
results."
Mr. Mhatre concluded, "During the quarter we announced key
appointments to further strengthen the Company, including welcoming
Subhadeep Basu to the position of
SEVP/Chief Financial Officer, and Kevin
Conn, as SVP/Investor Relations and Corporate
Development. We announced other senior hires supporting our
financial planning and our diversity, equity, and inclusion
program. We also recently recruited new senior hires in our
growing asset based lending and private banking business lines and
added to our business banking team. Consistent with our
longstanding emphasis on diversity and replenishment, we are
nominating two new directors to our board. Our management
team and board are focused on the development of our transformational strategic plan, which we
plan to announce on May 18, 2021. This plan will make our
purpose-driven community-dedicated bank better and stronger, faster; with the goal of enhancing
results for all stakeholders."
BALANCE SHEET
Total assets remained steady at $12.8
billion in the first quarter, and there was further progress
in improving the structure and composition of the balance
sheet.
Investments: Short-term investments increased by
$352 million to $1.82 billion in the first quarter due to the
funds inflows from loan paydowns. The Company is targeting to
use some of these balances to settle the planned branch sale and
also to fund payoffs of maturing wholesale funds. The
portfolio of investment securities increased by $68 million to $2.29
billion.
Loans: Total loans decreased by $423 million, or 5%, including $189 million attributable to the forgiveness of
SBA guaranteed Paycheck Protection Program ("PPP") loans.
Through its relationship with a funding third party, Berkshire participated in the origination of
$206 million of new PPP loans during
the quarter, many of which provided further assistance to existing
borrowers. Loan balances decreased in the other major loan
categories reflecting targeted runoff and impacts from the pandemic
and government relief programs. Included in assets held for
sale are $284 million in Mid-Atlantic
loan balances which are targeted to be sold as part of the planned
branch sale.
Asset Quality: Most loan performance metrics
improved during the first quarter. Total net loan charge-offs
decreased by 42% to $10 million from
$17 million in the prior quarter.
Total non-performing loans decreased by 14% to $56 million due primarily to loans exited during
the quarter. Total COVID-19 related loan modifications,
including in-process modifications, decreased to $214 million, or 2.8% of total loans from
$350 million, or 4.3% of total loans,
at the start of the quarter.
The Company's estimate of expected credit losses at quarter-end
resulted in a ratio of the allowance to total loans measuring
1.62%, which was little changed from 1.58% at the start of the
quarter. Excluding the $444
million balance of PPP loans, the allowance was also little
changed, measuring 1.72% of total loans at quarter-end.
Deposits and Borrowings: The Company continues to
pay off maturing brokered deposits, which decreased by $179 million to $431
million during the quarter. Higher cost retail deposit
accounts decreased by $102 million
and daily fluctuating payroll balances decreased by $81 million to $965
million. Growth of other deposits was concentrated in
non-interest bearing deposits, which increased by $266 million. Payroll balances shifted from
money market accounts to NOW accounts due to calendar impacts
related to payroll cycles. Due to deposit growth and the
reduction in total loans, the ratio of loans/deposits decreased to
75% at quarter-end. Wholesale funds, which include brokered
deposits and borrowings, decreased during the quarter by
$303 million to $880 million, or 7% of total assets. At
period-end, liabilities held for sale included $647 million in Mid-Atlantic branch deposit
balances which are targeted for sale in the second quarter.
Equity: Quarter-end book value per share totaled
$23.05 and the non-GAAP measure of
tangible book value per share measured $22.39. Capital metrics remained strong,
with equity/assets measuring 9.2% and the non-GAAP measure of
tangible equity/tangible assets was 9.0%. Changes in
shareholders' equity included the impact of lower unrealized bond
gains on accumulated comprehensive income due to the increase in
medium term interest rates during the quarter.
RESULTS OF OPERATIONS
Earnings: Berkshire reported $0.26 in GAAP EPS and $0.32 in the non-GAAP measure of adjusted EPS in
the first quarter of 2021. GAAP EPS decreased by $0.04, or 13%, quarter-over-quarter primarily due
to $3 million in charges related to
the consolidation of nine branch offices during the quarter.
Adjusted EPS increased by $0.04, or
14%, and benefited from the 6% increase in revenue before gains and
losses. The impact of a higher tax rate was partially offset
by the benefit of a lower credit loss provision.
Adjusted earnings exclude restructuring and certain other
expenses. GAAP Pre-tax Pre-Provision Net Revenue ("PPNR")
totaled $23 million, while Adjusted
PPNR totaled $27 million. The
measure of ROTCE was 5.0%, and adjusted ROTCE was 6.0%. GAAP
ROA was 0.42% and Adjusted ROA was 0.51%.
Revenue: First quarter results benefited from
Berkshire's engagement with its
markets in bringing federal pandemic support to customers.
The Company processed nearly $200
million in PPP loan forgiveness requests to the SBA,
resulting in recognition of deferred interest income. It
handled more than $200 million in new
PPP loan requests, which provided new fee income in the
quarter. Funds from these loans and other support programs
contributed to growth in non-interest bearing balances, which
lowered funding costs and supported net interest income.
Total net revenue increased quarter-over-quarter by $2 million to $101
million. Total revenue excluding gains and losses
increased quarter-over-quarter by $6
million to $101 million due
primarily to a $5 million increase in
loan fees and revenue. This included $1.5 million related to new PPP loan requests
handled in the quarter. This also included a $3 million increase in revenue related to fair
valued instruments as a result of the increase in medium term
interest rates during the quarter. Net interest income
decreased by $1 million due to the
decrease in total loans. The first quarter net interest
margin of 2.62% was little changed from 2.61% in the prior
quarter. The cost of deposits was reduced by 0.11% to
0.36% due to the paydown of higher cost time deposits, including
brokered deposits. First quarter gross interest income included
$3.5 million in deferred PPP fees
recognized from loan forgiveness, compared to $1.5 million in the prior quarter. The
unamortized balance of deferred PPP fees decreased to $7 million from $13
million during the quarter.
Credit Loss Provision: The provision for expected
credit losses on loans decreased to $6.5
million from $10 million in
the prior quarter. The provision expense is an amount
sufficient to maintain the allowance for expected credit losses on
loans. The decrease in the provision primarily reflects the
impact on the allowance of the decrease in the loan portfolio
during the quarter. The allowance also reflects improvements
in economic conditions and non-accruing loans.
Expense: Non-interest expense increased
quarter-over-quarter by $6 million,
or 9%, including a $3 million
increase in restructuring expenses primarily related to branch
consolidation. Excluding these expenses, the non-GAAP measure
of adjusted non-interest expense increased by $3 million, or 5%. This was primarily due
to a $3 million increase in
professional services expense, including legal, financial, and
other advisory services related to management and board matters
during the quarter. During the first quarter, the
Company completed the consolidation of nine branch offices,
reducing its total branch count from 130 offices at the start of
the quarter to 121 offices at the end of the quarter.
Full-time equivalent staff decreased to 1,467 positions at
quarter-end, compared to 1,505 positions at year-end 2020.
The first quarter effective income tax rate was 22%.
CORPORATE RESPONSIBILITY UPDATE
Berkshire is committed to
purpose-driven, community-dedicated banking that enhances value for
all its stakeholders. Learn more about the steps Berkshire is taking
at www.berkshirebank.com/csr and in its most recent Corporate
Responsibility Report.
Key developments in the quarter include:
- Corporate Responsibility Report- Earlier this month, the
Company released its 2020 Corporate Responsibility Report,
Meaningful Moments: Answering the Call. The report
highlights how the Company's 175 year heritage guided its response
to the COVID-19 pandemic as well as its environmental, social, and
governance performance. Berkshire
seeks to enhance its purpose-driven, community-dedicated approach
to banking to be the leading socially responsible bank in the
communities it serves.
- Chief Diversity Officer- As the Bank continues to
build on its efforts to be a diverse, inclusive and equitable
Company, it has appointed Angela
Dixon, a 30-year veteran in the Human Resources and the
Diversity, Equity, Inclusion space to the role of Chief Diversity
Officer. As Chief Diversity Officer, Dixon will be responsible for
driving the Company's diversity, equity and inclusion strategy in
collaboration with executive management and each of Berkshire's business lines. She will also work
to enhance the impact of Berkshire's existing diversity initiatives and
programs.
- Bloomberg Gender Equality Index – Berkshire Bank's
focus on diversity, ensuring gender equality and pay equity was
highlighted as Bloomberg announced the company would be included in
the 2021 Bloomberg Gender-Equality Index (GEI) for the second
consecutive year. The GEI tracks the performance of public
companies committed to disclosing their efforts to support gender
equality through policy development, representation and
transparency and rewards the top performing companies with
inclusion in the index.
- Human Rights Campaign Best Places to Work for LGBTQ
Equality- Berkshire received
the top adjusted score of 100 on
the Human Rights Campaign Foundation's 2021 Corporate Equality
Index (CEI), the nation's foremost benchmarking survey and report
measuring corporate policies and practices related to LGBTQ
workplace equality. The CEI rates employers providing these crucial
protections across four central pillars including
non-discrimination policies; equitable benefits for LGBTQ workers
and their families; supporting an inclusive culture; and corporate
social responsibility
INVESTOR CONFERENCE CALL AND INVESTOR PRESENTATION
Berkshire will post an investor
presentation at its website at ir.berkshirebank.com with additional
financial information and other information about the quarter.
Berkshire will also conduct a conference
call/webcast at 10:00 a.m. Eastern
time on Thursday, April 29, 2021 to discuss the results
for the quarter and provide guidance about expected future
results. Participants are encouraged to pre-register for the
conference call using the following link:
https://dpregister.com/sreg/10153685/e58f650abb. 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 Berkshire's website
at http://ir.berkshirebank.com. Those parties who do not
have Internet access or are otherwise unable to pre-register for
this event, may still participate at the above time by dialing
1-844-792-3726 and asking the Operator to 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 6, 2021 by dialing 877-344-7529
and entering access number 10153685. 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 committed to purpose-driven, community-dedicated banking and to
be the leading socially responsible omni-channel bank in the
communities it serves. Headquartered in Boston, Berkshire operates 121 banking offices
primarily in New England and New York.
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.
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-8 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 adjusted earnings
in evaluating operating trends, including components for adjusted
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. In 2020, the Company
recorded a full impairment of its goodwill and exited its
discontinued national mortgage banking operations. Other
non-adjusted expense in 2020 was primarily related to costs of the
separation with the former CEO, as well as consulting for the CEO
succession process. A 2020 non-adjusted gain was recognized
on the sale of a specialty commercial insurance business
line. In 2021, restructuring expense was primarily related to
branch consolidation costs.
The Company measures of Adjusted Pre-Provision Net Revenue
("Adjusted PPNR") which measures adjusted income before credit loss
provision and tax expense. PPNR is used by the investment
community due to the volatility and variability across banks
related to credit loss provision expense under the Current Expected
Credit Loss accounting standard. The Company also calculates
adjusted PPNR/assets in order to utilize the PPNR measure in
assessing its comparative operating profitability.
Non-adjusted 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 adjusted income. The efficiency ratio is
adjusted for non-adjusted revenue and expense items and for tax
preference items. The Company also calculates measures
related to tangible equity, which adjust equity (and assets where
applicable) to exclude intangible assets due to the importance of
these measures to the investment community.
CONTACTS
Investor Relations Contacts
Kevin Conn, SVP, Investor
Relations & Corporate Development
Email: KAConn2@berkshirebank.com
Tel: (617) 641-9206
David Gonci, Capital Markets
Director
Email: dgonci@berkshirebank.com
Tel: (413) 281-1973
Media Contacts:
John Lovallo
Email: jlavollo@levick.com
Tel: (917) 612-8419
Cate Cronin
Email: ccronin@levick.com
Tel: (202) 738-7302
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 (Five Quarter Trend)
|
F-5
|
Average Balances and Average
Yields and Costs
|
F-6
|
Asset Quality
Analysis
|
F-7
|
Asset Quality
Analysis (continued)
|
F-8
|
Reconciliation of
Non-GAAP Financial Measures and Supplementary Data (Five Quarter
Trend)
|
BERKSHIRE HILLS
BANCORP, INC.
SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1)
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
June 30,
|
|
Sept. 30,
|
|
Dec. 31,
|
|
March 31,
|
|
|
|
|
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOMINAL AND PER
SHARE DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings/(loss)
per common share, diluted
|
$
(0.40)
|
|
$
(10.93)
|
|
$
0.42
|
|
$
0.30
|
|
$
0.26
|
|
|
|
|
Adjusted
earnings/(loss) per common share, diluted (2)
|
(0.07)
|
|
(0.13)
|
|
0.53
|
|
0.28
|
|
0.32
|
|
|
|
|
Net income/(loss),
(thousands)
|
(19,870)
|
|
(549,381)
|
|
21,225
|
|
15,009
|
|
13,031
|
|
|
|
|
Adjusted net
income/(loss), (thousands)(2)
|
(3,645)
|
|
(6,464)
|
|
26,424
|
|
14,062
|
|
16,015
|
|
|
|
|
Total common shares
outstanding, period-end
(thousands)
|
50,199
|
|
50,192
|
|
50,306
|
|
50,833
|
|
50,988
|
|
|
|
|
Average diluted
shares, (thousands)
|
50,204
|
|
50,246
|
|
50,329
|
|
50,355
|
|
50,565
|
|
|
|
|
Total book value per
common share, (end of period)
|
33.90
|
|
22.79
|
|
23.03
|
|
23.37
|
|
23.05
|
|
|
|
|
Tangible book value
per common share, (end of period) (2)
|
22.00
|
|
21.94
|
|
22.22
|
|
22.68
|
|
22.39
|
|
|
|
|
Dividends per common
share
|
0.24
|
|
0.24
|
|
0.12
|
|
0.12
|
|
0.12
|
|
|
|
|
Full-time equivalent
staff, continuing operations
|
1,548
|
|
1,511
|
|
1,507
|
|
1,505
|
|
1,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE RATIOS
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
equity
|
(4.58)
|
%
|
(131.17)
|
%
|
7.50
|
%
|
5.22
|
%
|
4.50
|
%
|
|
|
|
Adjusted return on
equity (2)
|
(0.84)
|
|
(1.54)
|
|
9.33
|
|
4.89
|
|
5.53
|
|
|
|
|
Return on tangible
common equity (2)
|
(6.76)
|
|
(206.08)
|
|
8.32
|
|
5.85
|
|
4.98
|
|
|
|
|
Adjusted return on
tangible common equity (2)
|
(0.94)
|
|
(2.05)
|
|
10.27
|
|
5.50
|
|
6.04
|
|
|
|
|
Return on
assets
|
(0.62)
|
|
(16.38)
|
|
0.67
|
|
0.48
|
|
0.42
|
|
|
|
|
Adjusted return on
assets (2)
|
(0.11)
|
|
(0.19)
|
|
0.84
|
|
0.45
|
|
0.51
|
|
|
|
|
Net interest margin,
fully taxable equivalent (FTE) (4)(5)
|
3.04
|
|
2.62
|
|
2.61
|
|
2.61
|
|
2.62
|
|
|
|
|
Efficiency ratio
(2)
|
66.92
|
|
71.01
|
|
65.39
|
|
71.03
|
|
71.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA
(in millions, end of period)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
13,122
|
|
$
13,063
|
|
$
12,614
|
|
$
12,838
|
|
$
12,757
|
|
|
|
|
Total earning
assets
|
11,785
|
|
12,267
|
|
11,832
|
|
12,090
|
|
12,071
|
|
|
|
|
Total
loans
|
|
9,303
|
|
9,370
|
|
8,982
|
|
8,082
|
|
7,659
|
|
|
|
|
Allowance for credit
losses
|
114
|
|
139
|
|
134
|
|
127
|
|
124
|
|
|
|
|
Total
deposits
|
|
10,072
|
|
10,776
|
|
10,467
|
|
10,216
|
|
10,244
|
|
|
|
|
Loans/deposits
(%)
|
92
|
%
|
87
|
%
|
86
|
%
|
79
|
%
|
75
|
%
|
|
|
|
Total shareholders'
equity
|
$
1,722
|
|
$
1,164
|
|
$
1,179
|
|
$
1,188
|
|
$
1,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET
QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses, (millions)
|
$
114
|
|
$
139
|
|
$
134
|
|
$
127
|
|
$
124
|
|
|
|
|
Net charge-offs,
(millions)
|
(10)
|
|
(4)
|
|
(6)
|
|
(17)
|
|
(10)
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
0.45
|
%
|
0.17
|
%
|
0.27
|
%
|
0.80
|
%
|
0.51
|
%
|
|
|
Provision expense,
(millions)
|
$
35
|
|
$
30
|
|
$
1
|
|
$
10
|
|
$
7
|
|
|
|
|
Non-performing
assets, (millions)
|
53
|
|
47
|
|
49
|
|
67
|
|
58
|
|
|
|
|
Non-performing
loans/total loans
|
0.55
|
%
|
0.48
|
%
|
0.53
|
%
|
0.80
|
%
|
0.73
|
%
|
|
|
Allowance for credit
losses/non-performing loans
|
222
|
|
311
|
|
284
|
|
196
|
|
222
|
|
|
|
|
Allowance for credit
losses/total loans
|
1.22
|
|
1.49
|
|
1.50
|
|
1.58
|
|
1.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1
capital to risk weighted assets(6)
|
12.0
|
%
|
12.7
|
%
|
13.2
|
%
|
13.8
|
%
|
14.0
|
%
|
|
|
Tier 1 capital
leverage ratio(6)
|
9.4
|
|
8.6
|
|
9.2
|
|
9.4
|
|
9.2
|
|
|
|
|
Tangible common
shareholders' equity/tangible assets(2)
|
8.8
|
|
8.5
|
|
8.9
|
|
9.0
|
|
9.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Reconciliations of
non-GAAP financial measures, including all references to adjusted
and tangible amounts, appear on page F-8.
|
|
|
|
|
(2)
|
Non-GAAP financial
measure. adjusted measurements are non-GAAP financial measures that
are adjusted to exclude net non-adjusted charges
primarily related to acquisitions and restructuring
activities. See page F-8 for reconciliations of non-GAAP financial
measures.
|
|
(3)
|
All performance
ratios are annualized and are based on average balance sheet
amounts, where applicable.
|
|
|
|
|
(4)
|
Fully taxable
equivalent considers the impact of tax advantaged investment
securities and loans.
|
|
|
|
|
|
(5)
|
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 earliest quarter and ending with the most recent quarter:
0.11%, 0.07%, 0.08%, 0.07%, 0.05%.
|
|
(6)
|
Presented as
projected for March 31, 2021 and actual for the remaining
periods.
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
BALANCE SHEETS - UNAUDITED - (F-2)
|
|
March 31,
|
December
31,
|
March 31,
|
|
(in
thousands)
|
2020
|
2020
|
2021
|
|
Assets
|
|
|
|
|
Cash and due from
banks
|
$
90,280
|
$
91,219
|
$
81,285
|
|
Short-term
investments
|
515,140
|
1,466,656
|
1,818,323
|
|
Total cash and
short-term investments
|
605,420
|
1,557,875
|
1,899,608
|
|
|
|
|
|
|
Trading
security
|
9,829
|
9,708
|
9,350
|
|
Marketable equity
securities, at fair value
|
32,283
|
18,513
|
15,801
|
|
Securities available
for sale, at fair value
|
1,403,858
|
1,695,232
|
1,627,330
|
|
Securities held to
maturity, at amortized cost
|
336,802
|
465,091
|
610,637
|
|
Federal Home Loan
Bank stock and other restricted securities
|
54,306
|
34,873
|
28,680
|
|
Total
securities
|
1,837,078
|
2,223,417
|
2,291,798
|
|
Less: Allowance for
credit losses on investment securities
|
(141)
|
(104)
|
(111)
|
|
Net
securities
|
1,836,937
|
2,223,313
|
2,291,687
|
|
|
|
|
|
|
Loans held for
sale
|
4,252
|
17,748
|
18,377
|
|
|
|
|
|
|
Total
loans
|
9,303,177
|
8,081,519
|
7,658,778
|
|
Less: Allowance for
credit losses on loans
|
(113,510)
|
(127,302)
|
(123,800)
|
|
Net loans
|
9,189,667
|
7,954,217
|
7,534,978
|
|
|
|
|
|
|
Premises and
equipment, net
|
120,667
|
112,663
|
108,538
|
|
Other real estate
owned
|
224
|
149
|
149
|
|
Goodwill and other
intangible assets
|
597,797
|
34,819
|
33,500
|
|
Other
assets
|
626,485
|
619,925
|
566,809
|
|
Assets held for
sale(1)
|
-
|
317,304
|
303,697
|
|
Assets from
discontinued operations
|
140,064
|
-
|
-
|
|
Total
assets
|
$
13,121,513
|
$
12,838,013
|
$
12,757,343
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
Demand
deposits
|
$
1,922,490
|
$
2,484,249
|
$
2,750,393
|
|
NOW and other
deposits
|
1,546,626
|
1,003,005
|
1,856,988
|
|
Money market
deposits
|
2,391,835
|
3,371,353
|
2,486,261
|
|
Savings
deposits
|
867,024
|
972,116
|
1,047,506
|
|
Time
deposits
|
3,343,700
|
2,385,085
|
2,103,222
|
|
Total
deposits
|
10,071,675
|
10,215,808
|
10,244,370
|
|
|
|
|
|
|
Senior
borrowings
|
944,053
|
474,357
|
351,354
|
|
Subordinated
borrowings
|
97,107
|
97,280
|
97,338
|
|
Total
borrowings
|
1,041,160
|
571,637
|
448,692
|
|
|
|
|
|
|
Other
liabilities
|
255,846
|
232,730
|
229,832
|
|
Liabilities held for
sale(1)
|
-
|
630,065
|
659,310
|
|
Liabilities from
discontinued operations
|
30,554
|
-
|
-
|
|
Total
liabilities
|
11,399,235
|
11,650,240
|
11,582,204
|
|
|
|
|
|
|
Preferred
shareholders' equity
|
20,325
|
-
|
-
|
|
Common shareholders'
equity
|
1,701,953
|
1,187,773
|
1,175,139
|
|
Total shareholders'
equity
|
1,722,278
|
1,187,773
|
1,175,139
|
|
Total liabilities and
shareholders' equity
|
$
13,121,513
|
$
12,838,013
|
$
12,757,343
|
|
|
|
|
|
|
(1) Includes loans
and deposits from planned branch sales in the Mid-Atlantic
region.
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED LOAN
& DEPOSIT ANALYSIS - UNAUDITED - (F-3)
|
LOAN
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth %
|
(in
millions)
|
|
December 31, 2020
Balance
|
|
March 31, 2021
Balance
|
|
Quarter ended March
31, 2021
|
|
|
|
|
|
|
|
|
|
Total commercial real
estate
|
|
$
3,647
|
|
$
3,645
|
|
-
|
%
|
Commercial and
industrial loans
|
|
1,959
|
|
1,741
|
|
(11)
|
|
Total commercial
loans
|
|
5,606
|
|
5,386
|
|
(4)
|
|
|
|
|
|
|
|
|
|
Total residential
mortgages
|
|
1,813
|
|
1,668
|
|
(8)
|
|
|
|
|
|
|
|
|
|
Home
equity
|
|
295
|
|
280
|
|
(5)
|
|
Auto and
other
|
|
368
|
|
325
|
|
(12)
|
|
Total consumer
loans
|
|
663
|
|
605
|
|
(9)
|
|
Total
loans
|
|
$
8,082
|
|
$
7,659
|
|
(5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth %
|
(in
millions)
|
|
December 31, 2020
Balance
|
|
March 31, 2021
Balance
|
|
Quarter ended
March 31, 2021
|
|
Demand
|
|
$
2,484
|
|
$
2,750
|
|
11
|
%
|
NOW and
other
|
|
1,003
|
|
1,857
|
|
85
|
|
Money
market
|
|
3,372
|
|
2,486
|
|
(26)
|
|
Savings
|
|
972
|
|
1,048
|
|
8
|
|
Time
deposits
|
|
2,385
|
|
2,103
|
|
(12)
|
|
Total
deposits
|
|
$
10,216
|
|
$
10,244
|
|
-
|
%
|
BERKSHIRE HILLS
BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend) - UNAUDITED
- (F-4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
June 30,
|
|
Sept. 30,
|
|
Dec. 31,
|
|
March 31,
|
|
(in thousands,
except per share data)
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2021
|
|
Interest
income
|
|
116,195
|
|
103,688
|
|
97,768
|
|
92,131
|
|
88,153
|
|
Interest
expense
|
|
29,767
|
|
26,098
|
|
20,713
|
|
16,422
|
|
13,060
|
|
Net interest income
from continuing operations, not FTE
|
|
86,428
|
|
77,590
|
|
77,055
|
|
75,709
|
|
75,093
|
|
Non-interest income
from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
Deposit related
fees
|
|
7,947
|
|
5,373
|
|
7,062
|
|
7,523
|
|
7,126
|
|
Insurance commissions
and fees
|
|
3,024
|
|
2,767
|
|
2,660
|
|
2,319
|
|
3,130
|
|
Wealth management
fees
|
|
2,570
|
|
2,057
|
|
2,299
|
|
2,359
|
|
2,772
|
|
Mortgage banking
originations
|
|
959
|
|
1,644
|
|
2,044
|
|
543
|
|
802
|
|
Loan fees and
revenue
|
|
1,302
|
|
5,717
|
|
4,988
|
|
4,833
|
|
10,246
|
|
Other
|
|
(436)
|
|
(999)
|
|
1,927
|
|
2,105
|
|
2,148
|
|
Total non-interest
income excluding (losses)/gains
|
|
15,366
|
|
16,559
|
|
20,980
|
|
19,682
|
|
26,224
|
|
Securities
(losses)/gains, net
|
|
(9,730)
|
|
822
|
|
(1,017)
|
|
2,405
|
|
(31)
|
|
Gain on sale of
business operations and assets, net
|
|
-
|
|
-
|
|
-
|
|
1,240
|
|
-
|
|
Total non-interest
income
|
|
5,636
|
|
17,381
|
|
19,963
|
|
23,327
|
|
26,193
|
|
Total net revenue
from continuing operations
|
|
92,064
|
|
94,971
|
|
97,018
|
|
99,036
|
|
101,286
|
|
Total net revenue
from continuing operations excluding (losses)/gains
|
101,794
|
|
94,149
|
|
98,035
|
|
95,391
|
|
101,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit
losses
|
|
34,807
|
|
29,871
|
|
1,200
|
|
10,000
|
|
6,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
36,909
|
|
39,403
|
|
34,809
|
|
36,719
|
|
38,735
|
|
Occupancy and
equipment
|
|
11,132
|
|
10,195
|
|
11,084
|
|
10,948
|
|
11,024
|
|
Technology and
communications
|
|
8,081
|
|
7,755
|
|
8,540
|
|
7,988
|
|
8,593
|
|
Professional
services
|
|
2,720
|
|
2,565
|
|
2,567
|
|
4,055
|
|
6,614
|
|
Other
expenses
|
|
12,483
|
|
10,595
|
|
10,527
|
|
11,563
|
|
9,702
|
|
Merger, restructuring
and other non-operating expenses
|
|
-
|
|
553,762
|
|
5,316
|
|
523
|
|
3,486
|
|
Total non-interest
expense
|
|
71,325
|
|
624,275
|
|
72,843
|
|
71,796
|
|
78,154
|
|
Total non-interest
expense excluding merger, restructuring and other
|
|
71,325
|
|
70,513
|
|
67,527
|
|
71,273
|
|
74,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) from
continuing operations before income taxes
|
|
$
(14,068)
|
|
$
(559,175)
|
|
$
22,975
|
|
$
17,240
|
|
$
16,632
|
|
Income tax
expense/(benefit)
|
|
(1,996)
|
|
(16,130)
|
|
(68)
|
|
(1,659)
|
|
3,601
|
|
Net income/(loss)
from continuing operations
|
|
$
(12,072)
|
|
$
(543,045)
|
|
$
23,043
|
|
$
18,899
|
|
$
13,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) from
discontinued operations before income taxes
|
|
$
(10,629)
|
|
$
(8,635)
|
|
$
(2,477)
|
|
$
(5,114)
|
|
$
-
|
|
Income tax
(benefit)
|
|
(2,831)
|
|
(2,299)
|
|
(659)
|
|
(1,224)
|
|
-
|
|
Net (loss) from
discontinued operations
|
|
$
(7,798)
|
|
$
(6,336)
|
|
$
(1,818)
|
|
$
(3,890)
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
|
$
(19,870)
|
|
$
(549,381)
|
|
$
21,225
|
|
$
15,009
|
|
$
13,031
|
|
Preferred stock
dividend
|
|
125
|
|
130
|
|
58
|
|
-
|
|
-
|
|
Income/(loss)
available to common shareholders
|
|
$
(19,995)
|
|
$
(549,511)
|
|
$
21,167
|
|
$
15,009
|
|
$
13,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings/(loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
|
$
(0.24)
|
|
$
(10.80)
|
|
$
0.46
|
|
$
0.38
|
|
$
0.26
|
|
Discontinued
Operations
|
|
(0.16)
|
|
(0.13)
|
|
(0.04)
|
|
(0.08)
|
|
-
|
|
Total
|
|
$
(0.40)
|
|
$
(10.93)
|
|
$
0.42
|
|
$
0.30
|
|
$
0.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
50,204
|
|
50,246
|
|
50,329
|
|
50,308
|
|
50,330
|
|
Diluted
|
|
50,204
|
|
50,246
|
|
50,329
|
|
50,355
|
|
50,565
|
|
BERKSHIRE HILLS
BANCORP, INC.
AVERAGE BALANCES AND AVERAGE YIELDS AND COSTS - UNAUDITED -
(F-5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec. 31,
2020
|
|
March 31,
2021
|
|
|
|
|
|
March 31,
2020
|
|
June 30,
2020
|
|
Sept. 30,
2020
|
|
|
|
|
|
|
(in
millions)
|
Average
Balance
|
Average
Yield/Rate
|
|
|
Average
Balance
|
Average
Yield/Rate
|
|
|
Average
Balance
|
Average
Yield/Rate
|
|
|
Average
Balance
|
Average
Yield/Rate
|
|
|
Average
Balance
|
Average
Yield/Rate
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
4,000
|
4.41
|
%
|
|
4,005
|
3.78
|
%
|
|
3,986
|
3.52
|
%
|
3,843
|
3.34
|
%
|
3,630
|
3.27
|
%
|
|
|
|
Commercial and
industrial loans
|
1,796
|
5.03
|
|
|
2,153
|
4.02
|
|
|
2,192
|
3.88
|
|
|
2,056
|
4.05
|
|
|
1,865
|
4.62
|
|
|
|
|
|
Residential
mortgages
|
2,654
|
3.77
|
|
|
2,453
|
3.78
|
|
|
2,224
|
3.78
|
|
|
1,971
|
3.78
|
|
|
1,740
|
3.71
|
|
|
|
|
|
Consumer
loans
|
922
|
4.28
|
|
|
865
|
3.72
|
|
|
801
|
3.59
|
|
|
726
|
3.41
|
|
|
634
|
3.79
|
|
|
|
|
|
Total loans
(1)
|
9,372
|
4.33
|
|
|
9,476
|
3.83
|
|
|
9,203
|
3.68
|
|
|
8,596
|
3.62
|
|
|
7,869
|
3.73
|
|
|
|
|
|
Securities
(2)
|
1,745
|
3.32
|
|
|
1,793
|
3.07
|
|
|
1,874
|
2.78
|
|
|
1,968
|
2.69
|
|
|
2,195
|
2.36
|
|
|
|
|
|
Short-term
investments and loans held for sale
|
375
|
1.78
|
|
|
697
|
0.50
|
|
|
766
|
0.21
|
|
|
977
|
0.57
|
|
|
1,351
|
0.13
|
|
|
|
|
|
Mid-Atlantic region
loans held for sale
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
101
|
|
|
|
295
|
|
|
|
|
|
|
Total earning
assets (3)
|
11,492
|
4.08
|
|
|
11,966
|
3.50
|
|
|
11,843
|
3.31
|
|
|
11,642
|
3.17
|
|
|
11,710
|
3.07
|
|
|
|
|
|
Goodwill and other
intangible assets
|
598
|
|
|
|
591
|
|
|
|
41
|
|
|
|
40
|
|
|
|
34
|
|
|
|
|
|
|
Other
assets
|
663
|
|
|
|
752
|
|
|
|
760
|
|
|
|
752
|
|
|
|
724
|
|
|
|
|
|
|
Assets from
discontinued operations
|
99
|
|
|
|
110
|
|
|
|
16
|
|
|
|
12
|
|
|
|
-
|
|
|
|
|
|
|
Total
assets
|
12,852
|
|
|
|
13,419
|
|
|
|
12,660
|
|
|
|
12,446
|
|
|
|
12,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and
other
|
1,159
|
0.46
|
%
|
1,184
|
0.30
|
%
|
1,244
|
0.24
|
%
|
1,279
|
0.17
|
%
|
1,325
|
0.15
|
%
|
|
|
|
Money
market
|
2,753
|
0.98
|
|
|
2,672
|
0.58
|
|
|
2,674
|
0.38
|
|
|
2,756
|
0.32
|
|
|
2,802
|
0.27
|
|
|
|
|
|
Savings
|
847
|
0.13
|
|
|
901
|
0.10
|
|
|
940
|
0.10
|
|
|
967
|
0.08
|
|
|
1,003
|
0.08
|
|
|
|
|
|
Time
|
3,333
|
1.87
|
|
|
3,399
|
1.84
|
|
|
3,056
|
1.63
|
|
|
2,629
|
1.35
|
|
|
2,266
|
1.12
|
|
|
|
|
|
Total
interest-bearing deposits
|
8,092
|
1.18
|
|
|
8,156
|
1.01
|
|
|
7,914
|
0.81
|
|
|
7,631
|
0.62
|
|
|
7,396
|
0.48
|
|
|
|
|
|
Borrowings
|
949
|
2.60
|
|
|
942
|
2.38
|
|
|
777
|
2.36
|
|
|
658
|
2.50
|
|
|
500
|
2.78
|
|
|
|
|
|
Mid-Atlantic region
interest-bearing deposits
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
180
|
|
|
|
518
|
|
|
|
|
|
|
Total
interest-bearing liabilities
|
9,041
|
1.33
|
|
|
9,098
|
1.16
|
|
|
8,691
|
0.95
|
|
|
8,469
|
0.77
|
|
|
8,414
|
0.63
|
|
|
|
|
|
Non-interest-bearing
demand deposits
|
1,849
|
|
|
|
2,343
|
|
|
|
2,559
|
|
|
|
2,542
|
|
|
|
2,537
|
|
|
|
|
|
|
Other liabilities
(4)
|
204
|
|
|
|
274
|
|
|
|
254
|
|
|
|
279
|
|
|
|
358
|
|
|
|
|
|
|
Liabilities from
discontinued operations
|
24
|
|
|
|
29
|
|
|
|
23
|
|
|
|
6
|
|
|
|
-
|
|
|
|
|
|
|
Total
liabilities
|
11,118
|
|
|
|
11,744
|
|
|
|
11,527
|
|
|
|
11,296
|
|
|
|
11,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
shareholders' equity
|
21
|
|
|
|
20
|
|
|
|
20
|
|
|
|
7
|
|
|
|
-
|
|
|
|
|
|
|
Common shareholders'
equity
|
1,713
|
|
|
|
1,655
|
|
|
|
1,113
|
|
|
|
1,143
|
|
|
|
1,159
|
|
|
|
|
|
|
Total shareholders'
equity
|
1,734
|
|
|
|
1,675
|
|
|
|
1,133
|
|
|
|
1,150
|
|
|
|
1,159
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
12,852
|
|
|
|
13,419
|
|
|
|
12,660
|
|
|
|
12,446
|
|
|
|
12,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
spread
|
|
2.75
|
%
|
|
2.34
|
%
|
|
2.36
|
%
|
|
2.40
|
%
|
|
2.44
|
%
|
|
|
|
Net interest margin
(5)
|
|
3.04
|
|
|
|
2.62
|
|
|
|
2.61
|
|
|
|
2.61
|
|
|
|
2.62
|
|
|
|
|
|
Cost of
funds
|
|
1.11
|
|
|
|
0.92
|
|
|
|
0.73
|
|
|
|
0.60
|
|
|
|
0.48
|
|
|
|
|
|
Cost of
deposits
|
|
0.96
|
|
|
|
0.79
|
|
|
|
0.61
|
|
|
|
0.47
|
|
|
|
0.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average PPP
loans
|
-
|
|
|
|
461
|
|
|
|
707
|
|
|
|
685
|
|
|
|
546
|
|
|
|
|
|
|
Average loans
excluding PPP loans
|
9,372
|
|
|
|
9,015
|
|
|
|
8,496
|
|
|
|
7,911
|
|
|
|
7,323
|
|
|
|
|
|
|
Total PPP loans,
end of period
|
-
|
|
|
|
706
|
|
|
|
708
|
|
|
|
633
|
|
|
|
444
|
|
|
|
|
|
|
Total loans excluding
PPP loans, end of period
|
9,303
|
|
|
|
8,664
|
|
|
|
8,274
|
|
|
|
7,448
|
|
|
|
7,215
|
|
|
|
|
|
|
Total average
non-maturity deposits
|
6,608
|
|
|
|
7,100
|
|
|
|
7,417
|
|
|
|
7,544
|
|
|
|
7,666
|
|
|
|
|
|
|
Total average
deposits
|
9,941
|
|
|
|
10,500
|
|
|
|
10,473
|
|
|
|
10,173
|
|
|
|
9,932
|
|
|
|
|
|
|
Fully taxable
equivalent income adjustment
|
2
|
|
|
|
2
|
|
|
|
2
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
|
Total average
tangible equity (6)
|
1,135
|
|
|
|
1,085
|
|
|
|
1,091
|
|
|
|
1,110
|
|
|
|
1,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) Includes
the Mid-Atlantic region non-interesting bearing deposits. As of
March 31, 2021 and December 31, 2020, the Mid-Atlantic region
average non-interest bearing deposits were $119 million and $37
million, respectively.
|
(5) The effect
of PPP loans on the quarterly net interest margin as of March 31,
2021 and December 31, 2020 was an increase and the effect was a
decrease as of September 31, 2020. There was no impact as of June
30, 2020
|
and March 31,
2020. This is shown sequentially as follows beginning with the
earliest quarter and ending with the most recent quarter: 0.00%,
0.00%, (0.01%), 0.05%, 0.11%. This calculation excludes gross
interest
|
income on PPP
loans and average PPP loan balances.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6) See page
F-8 for details on the calculation of total average tangible
equity.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
ASSET QUALITY ANALYSIS - UNAUDITED - (F-6)
|
|
|
|
March 31,
|
|
June 30,
|
|
Sept. 30,
|
|
Dec. 31,
|
|
March 31,
|
|
(in
thousands)
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2021
|
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
Non-accruing
loans:
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate (1)
|
$
16,938
|
|
$
12,486
|
|
$
14,777
|
|
$
35,581
|
|
$
28,325
|
|
Commercial and
industrial loans
|
18,370
|
|
15,045
|
|
15,035
|
|
12,921
|
|
9,371
|
|
Residential
mortgages
|
9,636
|
|
9,840
|
|
7,928
|
|
8,347
|
|
10,674
|
|
Consumer
loans
|
6,172
|
|
7,513
|
|
9,650
|
|
8,099
|
|
7,447
|
|
Total non-accruing
loans
|
51,116
|
|
44,884
|
|
47,390
|
|
64,948
|
|
55,817
|
|
Other real estate
owned
|
224
|
|
517
|
|
401
|
|
149
|
|
149
|
|
Repossessed
assets
|
1,316
|
|
1,581
|
|
1,646
|
|
1,932
|
|
1,701
|
|
Total non-performing
assets
|
$
52,656
|
|
$
46,982
|
|
$
49,437
|
|
$
67,029
|
|
$
57,667
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-accruing
loans/total loans
|
0.55%
|
|
0.48%
|
|
0.53%
|
|
0.80%
|
|
0.73%
|
|
Total non-accruing
loans/total loans excluding PPP loans
|
0.55%
|
|
0.52%
|
|
0.57%
|
|
0.87%
|
|
0.77%
|
|
Total non-performing
assets/total assets
|
0.40%
|
|
0.36%
|
|
0.39%
|
|
0.52%
|
|
0.45%
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND
ALLOWANCE FOR CREDIT LOSSES ON LOANS
|
|
|
|
|
|
|
Balance at beginning
of period
|
$
63,575
|
|
$
113,510
|
|
$
139,394
|
|
$
134,414
|
|
$
127,302
|
|
Adoption of ASU No.
2016-13 (2)
|
25,434
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Balance after
adoption of ASU No. 2016-13
|
89,009
|
|
113,510
|
|
139,394
|
|
134,414
|
|
127,302
|
|
Charged-off
loans
|
(12,432)
|
|
(7,274)
|
|
(7,776)
|
|
(18,314)
|
|
(11,460)
|
|
Recoveries on
charged-off loans
|
1,958
|
|
3,259
|
|
1,580
|
|
1,209
|
|
1,465
|
|
Net loans
charged-off
|
(10,474)
|
|
(4,015)
|
|
(6,196)
|
|
(17,105)
|
|
(9,995)
|
|
Provision for loan
credit losses
|
34,975
|
|
29,899
|
|
1,216
|
|
9,993
|
|
6,493
|
|
Balance at end of
period
|
$
113,510
|
|
$
139,394
|
|
$
134,414
|
|
$
127,302
|
|
$
123,800
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses/total loans
|
1.22%
|
|
1.49%
|
|
1.50%
|
|
1.58%
|
|
1.62%
|
|
Allowance for credit
losses/total loans excluding PPP loans
|
1.22%
|
|
1.61%
|
|
1.62%
|
|
1.71%
|
|
1.72%
|
|
Allowance for credit
losses/non-accruing loans
|
222%
|
|
311%
|
|
284%
|
|
196%
|
|
222%
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOAN
CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
$
(5,990)
|
|
$
(1,679)
|
|
$
(635)
|
|
$
(11,862)
|
|
$
(6,959)
|
|
Commercial and
industrial loans
|
(3,728)
|
|
(1,059)
|
|
(5,551)
|
|
(5,089)
|
|
(2,662)
|
|
Residential
mortgages
|
(19)
|
|
(966)
|
|
517
|
|
250
|
|
80
|
|
Home
equity
|
(107)
|
|
(10)
|
|
(57)
|
|
141
|
|
(42)
|
|
Auto and other
consumer
|
(630)
|
|
(301)
|
|
(470)
|
|
(545)
|
|
(412)
|
|
Total, net
|
$
(10,474)
|
|
$
(4,015)
|
|
$
(6,196)
|
|
$
(17,105)
|
|
$
(9,995)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
0.45%
|
|
0.17%
|
|
0.27%
|
|
0.80%
|
|
0.51%
|
|
Net charge-offs (YTD
annualized)/average loans
|
0.45%
|
|
0.31%
|
|
0.29%
|
|
0.41%
|
|
0.51%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This balance
includes $17 million of PCD loans.
|
|
|
|
|
|
|
|
(2) This balance
includes $12 million of PCD confirmed losses as of January 1,
2020.
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
ASSET QUALITY ANALYSIS - UNAUDITED (F-7)
|
|
|
|
March 31,
2020
|
|
June 30,
2020
|
|
September 30,
2020
|
|
December 31,
2020
|
|
March 31,
2021
|
|
(in
thousands)
|
Balance
|
|
Percent of Total
Loans
|
|
Balance
|
|
Percent of Total
Loans
|
|
Balance
|
|
Percent of Total
Loans
|
|
Balance
|
|
Percent of Total
Loans
|
|
Balance
|
|
Percent of Total
Loans
|
|
30-89 Days
delinquent
|
$
39,583
|
|
0.43%
|
|
$
35,128
|
|
0.37%
|
|
$
27,626
|
|
0.31%
|
|
$
16,310
|
|
0.20%
|
|
$
28,565
|
|
0.37%
|
|
90+ Days delinquent
and still accruing
|
5,052
|
|
0.05%
|
|
13,056
|
|
0.14%
|
|
12,876
|
|
0.14%
|
|
11,450
|
|
0.14%
|
|
6,124
|
|
0.08%
|
|
Total accruing
delinquent loans
|
44,635
|
|
0.48%
|
|
48,184
|
|
0.51%
|
|
40,502
|
|
0.45%
|
|
27,760
|
|
0.34%
|
|
34,689
|
|
0.45%
|
|
Non-accruing
loans
|
51,116
|
|
0.55%
|
|
44,884
|
|
0.48%
|
|
47,390
|
|
0.53%
|
|
64,948
|
|
0.80%
|
|
55,817
|
|
0.73%
|
|
Total delinquent and
non-accruing loans
|
$
95,751
|
|
1.03%
|
|
$
93,068
|
|
0.99%
|
|
$
87,892
|
|
0.98%
|
|
$
92,708
|
|
1.14%
|
|
$
90,506
|
|
1.18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY
DATA- UNAUDITED - (F-8)
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
June 30,
|
|
Sept. 30,
|
|
Dec. 31,
|
|
March 31,
|
|
|
|
(in
thousands)
|
|
2020
|
|
2020
|
|
2020
|
|
2020
|
|
2021
|
|
|
|
Total revenue from
continuing operations
|
(A)
|
$
92,064
|
|
$
94,971
|
|
$
97,018
|
|
$
99,036
|
|
$
101,286
|
|
|
|
Adj: Net securities
(gains)/losses (1)
|
|
9,730
|
|
(822)
|
|
1,017
|
|
(2,405)
|
|
31
|
|
|
|
Adj: Net (gains) on
sale of business operations and assets
|
|
-
|
|
-
|
|
-
|
|
(1,240)
|
|
-
|
|
|
|
Total adjusted
revenue (2)
|
(B)
|
$
101,794
|
|
$
94,149
|
|
$
98,035
|
|
$
95,391
|
|
$
101,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense from continuing operations
|
(C)
|
$
71,325
|
|
$
624,275
|
|
$
72,843
|
|
$
71,796
|
|
$
78,154
|
|
|
|
Less: Merger,
restructuring and other expense (see above)
|
|
-
|
|
-
|
|
(5,316)
|
|
(523)
|
|
(3,486)
|
|
|
|
Less: Goodwill
impairment
|
|
-
|
|
(553,762)
|
|
-
|
|
-
|
|
-
|
|
|
|
Adjusted non-interest
expense (2)
|
(D)
|
$
71,325
|
|
$
70,513
|
|
$
67,527
|
|
$
71,273
|
|
$
74,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax,
pre-provision net revenue (PPNR) from continuing
operations
|
(A-C)
|
$
20,739
|
|
$
(529,304)
|
|
$
24,175
|
|
$
27,240
|
|
$
23,132
|
|
|
|
Adjusted pre-tax,
pre-provision net revenue (PPNR)
|
(B-D)
|
30,469
|
|
23,636
|
|
30,508
|
|
24,118
|
|
26,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
|
$
(19,870)
|
|
$
(549,381)
|
|
$
21,225
|
|
$
15,009
|
|
$
13,031
|
|
|
|
Adj: Net securities
(gains)/losses (1)
|
|
9,730
|
|
(822)
|
|
1,017
|
|
(2,405)
|
|
31
|
|
|
|
Adj: Goodwill
impairment
|
|
-
|
|
553,762
|
|
-
|
|
-
|
|
-
|
|
|
|
Adj: Net (gains) on
sale of business operations and assets
|
|
-
|
|
-
|
|
-
|
|
(1,240)
|
|
-
|
|
|
|
Adj: Restructuring
expense and other expense
|
|
-
|
|
-
|
|
5,316
|
|
523
|
|
3,486
|
|
|
|
Adj: Loss from
discontinued operations before income taxes
|
|
10,629
|
|
8,635
|
|
2,477
|
|
5,114
|
|
-
|
|
|
|
Adj: Income taxes
benefit/(expense)
|
|
(4,134)
|
|
(18,658)
|
|
(3,611)
|
|
(2,939)
|
|
(533)
|
|
|
|
Total adjusted
income/(loss) (2)
|
(E)
|
$
(3,645)
|
|
$
(6,464)
|
|
$
26,424
|
|
$
14,062
|
|
$
16,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
(F)
|
$
12,852
|
|
$
13,419
|
|
$
12,660
|
|
$
12,446
|
|
$
12,468
|
|
|
|
Total average
shareholders'
equity
|
(G)
|
1,734
|
|
1,675
|
|
1,133
|
|
1,150
|
|
1,159
|
|
|
|
Total average
tangible shareholders' equity
(2)(3)
|
(H)
|
1,135
|
|
1,085
|
|
1,091
|
|
1,110
|
|
1,125
|
|
|
|
Total average
tangible common shareholders' equity
(2)(3)
|
(I)
|
1,115
|
|
1,064
|
|
1,071
|
|
1,103
|
|
1,125
|
|
|
|
Total tangible
shareholders' equity, period-end (2)(3)
|
(J)
|
1,124
|
|
1,122
|
|
1,138
|
|
1,153
|
|
1,142
|
|
|
|
Total tangible common
shareholders' equity, period-end (2)(3)
|
(K)
|
1,104
|
|
1,101
|
|
1,118
|
|
1,153
|
|
1,142
|
|
|
|
Total tangible
assets, period-end (2)(3)
|
(L)
|
12,524
|
|
13,021
|
|
12,574
|
|
12,803
|
|
12,724
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, period-end
(thousands)
|
(M)
|
50,199
|
|
50,192
|
|
50,306
|
|
50,833
|
|
50,988
|
|
|
|
Average diluted
shares outstanding (thousands)
|
(N)
|
50,204
|
|
50,246
|
|
50,329
|
|
50,355
|
|
50,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings/(loss)
per common share, diluted(2)
|
|
$
(0.40)
|
|
$
(10.93)
|
|
$
0.42
|
|
$
0.30
|
|
$
0.26
|
|
|
|
Adjusted
earnings/(loss) per common share, diluted (2)
|
(E/N)
|
(0.07)
|
|
(0.13)
|
|
0.53
|
|
0.28
|
|
0.32
|
|
|
|
Tangible book value
per common share, period-end (2)
|
(K/M)
|
22.00
|
|
21.94
|
|
22.22
|
|
22.68
|
|
22.39
|
|
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(J/L)
|
8.98
|
|
8.61
|
|
9.05
|
|
9.01
|
|
8.98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance ratios
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP return on
equity
|
|
(4.58)
|
%
|
(131.17)
|
%
|
7.50
|
%
|
5.22
|
%
|
4.50
|
%
|
|
|
Adjusted return on
equity (2)
|
(E/G)
|
(0.84)
|
|
(1.54)
|
|
9.33
|
|
4.89
|
|
5.53
|
|
|
|
Return on tangible
common equity (2)(5)
|
|
(6.76)
|
|
(206.08)
|
|
8.32
|
|
5.85
|
|
4.98
|
|
|
|
Adjusted return on
tangible common equity (2)(5)
|
(E+Q)/(I)
|
(0.94)
|
|
(2.05)
|
|
10.27
|
|
5.50
|
|
6.04
|
|
|
|
GAAP return on
assets
|
|
(0.62)
|
|
(16.38)
|
|
0.67
|
|
0.48
|
|
0.42
|
|
|
|
Adjusted return on
assets(2)
|
|
(0.11)
|
|
(0.19)
|
|
0.84
|
|
0.45
|
|
0.51
|
|
|
|
PPNR from continuing
operations/assets (2)
|
|
0.65
|
|
(15.78)
|
|
0.76
|
|
0.88
|
|
0.74
|
|
|
|
Adjusted PPNR/assets
(2)
|
|
0.96
|
|
0.71
|
|
0.97
|
|
0.78
|
|
0.85
|
|
|
|
Efficiency ratio
(2)(6)
|
(D-Q)/(B+O+R)
|
66.92
|
|
71.01
|
|
65.39
|
|
71.03
|
|
71.32
|
|
|
|
Net interest
margin
|
|
3.04
|
|
2.62
|
|
2.61
|
|
2.61
|
|
2.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary data
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (7)
|
(O)
|
$
608
|
|
$
1,379
|
|
$
1,377
|
|
$
1,334
|
|
$
41
|
|
|
|
Non-interest income
charge on tax-credit investments (8)
|
(P)
|
(486)
|
|
(1,097)
|
|
(1,090)
|
|
(971)
|
|
(33)
|
|
|
|
Net income on
tax-credit investments
|
(O+P)
|
122
|
|
282
|
|
287
|
|
363
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(Q)
|
$
1,580
|
|
$
1,558
|
|
$
1,530
|
|
$
1,513
|
|
$
1,319
|
|
|
|
Fully taxable
equivalent income adjustment
|
(R)
|
1,824
|
|
1,580
|
|
1,512
|
|
1,485
|
|
1,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
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) Adjusted
return on tangible equity is computed by dividing the total
adjusted income/(loss) 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 adjusted tangible non-interest
expense by the sum of total net interest income on a fully taxable
equivalent basis and
|
|
|
total adjusted
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.