BOSTON, Oct. 21, 2021 /PRNewswire/ -- Berkshire
Hills Bancorp, Inc. (NYSE: BHLB) today reported that third
quarter 2021 earnings per share increased year-over-year by 212% to
$1.31 compared to $0.42 in 2020, and compared to $0.43 in the prior quarter. Results in the
most recent quarter included $0.78
per share in net non-operating income, consisting primarily of net
gains on the sales of the assets and operations of the Company's
insurance subsidiary and Berkshire Bank's Mid-Atlantic branches.
Excluding these amounts, Berkshire's non-GAAP measure of third quarter
adjusted net income totaled $0.53 per
share, which was unchanged from the prior year and up 20% from
$0.44 in the prior quarter. Results
in the most recent quarter included a $4
million benefit ($0.06 per
share after-tax) to the provision for credit losses. Per share
earnings also benefited in the most recent quarter from the
completion of the 2.5 million share repurchase program that was
approved by the Board in April
2021.
THIRD QUARTER FINANCIAL HIGHLIGHTS (Comparisons are
to the prior year unless otherwise stated; non-GAAP measures are
reconciled on pages F-9 and F-10).
- $52 million net gain on the sale
of insurance and Mid-Atlantic branch operations
- 4% increase in total non-interest income excluding
gains/(losses)
- 66% decrease in net loan charge-offs to $2 million
- $4 million benefit to credit loss
provision expense due to a release of credit loss allowance
- 72% reduction in wholesale funding to 4% of assets, including
prepayment of most Federal Home Loan Bank borrowings (period-end
balance)
- Deposit costs down year-over-year to 0.22% from 0.61%
- Stock repurchases of 1,755,058 shares (3.5% of outstanding
stock)
- Returned $54 million of capital
to shareholders through buybacks and dividends amounting to 211% of
adjusted net income
CEO Nitin Mhatre stated, "These
solid results reflect the growing momentum associated with the
second-quarter rollout of Berkshire's Exciting Strategic Transformation
(BEST). This comprehensive transformation plan, designed to enhance
value for all our stakeholders, has already led to improved focus
on our long-term efficiency, our customers, and our
communities."
"Exiting our Mid-Atlantic and insurance operations was a step in
optimizing our operations and produced $52
million in net sale gains which bolstered third-quarter
income. We completed our 2.5 million share repurchase program far
ahead of the authorized time, returning a total of nearly
$75 million in excess capital to
shareholders through the repurchase of approximately 5% of our
shares. We're well positioned to support other BEST
initiatives in development including our recently announced
consumer lending partnership with the fin-tech Upstart. We
also announced our BEST Community Comeback initiative that will
lend and invest to strengthen the economic health of our
communities, an industry-leading commitment given the relative size
of the program and our organization. We continued to record strong
deposit growth during the quarter and our expanded banking teams
are focused on building loan origination volumes."
Mr. Mhatre concluded: "Key measures of asset quality improved as
our markets continue to recover from pandemic conditions and we are
prepared to profitably serve that recovery. We announced further
refreshment of our board of directors, welcoming David Brunelle into the position of Board Chair
and Jeffrey Kip as a new director.
And we're experiencing continued strong interest from customers and
added several experienced, market-facing professionals to our team,
demonstrating the value of our focus on social responsibility and
strategy as other institutions focus on mergers."
RESULTS OF OPERATIONS
Earnings: Third quarter GAAP earnings per share
(EPS) increased in 2021 to $1.31 from
$0.42 in 2020, and from $0.43 in the second quarter of 2021. The increase
in EPS was primarily due to the gains recorded on the sale in the
most recent quarter of insurance operations and the Mid-Atlantic
branches. Adjusted EPS, a non-GAAP measure which excludes these
gains, totaled $0.53 in the third
quarter of 2021, which was stable year-over-year and a 20% increase
quarter-over-quarter from $0.44. This
included a $4 million benefit
($0.06 per share after-tax) to the
provision for credit losses on loans in the most recent quarter.
For the most recent quarter, GAAP return on equity measured 22.2%
and the GAAP return on assets was 2.14%. The non-GAAP measure of
adjusted return on equity measured 8.9% and the adjusted return on
assets measured 0.86%.
Revenue: Third quarter net interest income
decreased year-over-year by $6
million, or 7%, and by $4
million, or 5%, compared to the linked quarter. The
year-over-year change reflected lower loan balances. The
quarter-over-quarter change was primarily due to a $3 million decrease in deferred fee income
recognized on Paycheck Protection Program ("PPP") loans due to the
completion of most loan forgiveness under the SBA guarantee
program. It also reflected the 4% quarter-over-quarter decrease in
average earning assets, including the impact of the branch
sale.
The net interest margin decreased to 2.56% from 2.61% in the
third quarter of 2020 and from 2.62% in the linked quarter. The
Company further reduced deposits costs, which declined to 0.22%
from 0.61% and 0.25% for the above respective periods. For these
periods, the cost of funds decreased to 0.31% from 0.73% and
0.36%.
Total third quarter non-interest income excluding gains/(losses)
on sales of securities and business operations increased
year-over-year by $936 thousand, or
4%, and decreased quarter-over-quarter by $579 thousand, or 3%. In the most recent quarter,
Berkshire's SBA lending revenue of
$5 million exceeded the record result
in the prior quarter due to continued strong volume and margins,
and increased from $3 million in the
third quarter of 2020. Wealth management fees increased by
15% year-over-year, and 5% quarter-over-quarter. The Company has
recently announced the recruitment of seasoned bankers to support
ongoing growth in both of these business lines. Insurance
revenue decreased by $711 thousand
quarter-over-quarter following the sale of insurance
operations.
Other non-interest revenue declined due to $1.6 million in
higher amortization expense related to new tax credit investment
projects initiated during the most recent quarter. This was more
than offset by the $2.2 million
increase in investment tax credit benefits included as a component
of income tax expense.
Credit Loss Provision: Berkshire recorded a $4
million benefit to the third quarter provision, compared to
a charge of $1 million in the third
quarter of 2020 and no provision in the linked quarter. This
resulted from a $4 million release of
the credit loss allowance due to stronger expected economic
conditions and a reduction in loans and net charge-offs.
Expense: Third quarter non-interest expense decreased by
$3.4 million, or 5%, year-over-year
and increased quarter-over-quarter by $588
thousand, or 1%, to $69.5
million. These changes were primarily due to changes in
merger, restructuring and other non-operating expenses which
totaled $1.4 million in the most
recent quarter. These charges are excluded from the Company's
non-GAAP measure of adjusted non-interest expense. In the third
quarter, these charges included $0.9
million related to the prepayment of Federal Home Loan Bank
borrowings and $0.5 million of
restructuring charges including reclassifying certain real estate
premises to held for sale as part of the Company's consolidation of
its operations. These initiatives are components of Berkshire's BEST strategic plan for optimizing
profitability.
The non-GAAP measure of adjusted non-interest expense increased
by 1% year-over-year and decreased by 1% quarter-over-quarter,
measuring $68 million in the most
recent quarter. These changes were primarily due to changes in
professional services during these periods. Total branches have
been reduced to 107 offices from 130 at the start of the year. Full
time equivalent staff totaled 1,333 positions at period-end,
compared to 1,507 positions at the start of the year. The effective
income tax rate decreased quarter-over-quarter to 20% from 24% due
to the increase in tax credit investments during the quarter. Tax
credit investments provided $0.01 in
EPS benefit in the most recent quarter, net of the related
amortization recorded to non-interest income.
BALANCE SHEET (references are to period-end balances
unless otherwise stated)
Assets: Total assets decreased during the third
quarter by $0.4 billion, or 3%, to
$11.8 billion due primarily to the
sale of the Mid-Atlantic branch operations. The balances for these
operations which were reported as held for sale at midyear 2021
included $253 million in loan
balances and $633 million in deposit
balances. At the third quarter-end, higher period-end payroll
deposit balances were invested in short-term investments. Proceeds
from third quarter loan runoff helped fund payoffs of borrowings,
including prepayments of Federal Home Loan Bank borrowings. The
ratio of loans/deposits decreased to 66% from 73% at the start of
the quarter. Reflecting the sale gains recorded in the quarter, the
ratio of equity/assets increased to 9.9% from 9.6% at the start of
the quarter. Common stock repurchases distributed excess
capital released by the reduction in assets. Per share measures of
book value and the non-GAAP measure of tangible book value both
increased by 4% compared to the start of the quarter.
Loans: Total period-end loans decreased in the
third quarter by $396 million, or 5%,
to $6.84 billion. The
$246 million decrease in commercial
loans was primarily due to a $127
million reduction in PPP loans and an $88 million reduction in loans outstanding to
COVID sensitive commercial borrowers. The PPP loan balance
decreased to $46 million from
$173 million at the start of the
quarter due to payoffs through forgiveness under the SBA guarantee
program. Berkshire announced the
recruitment of experienced bankers during the quarter as it
positions to gain share based on its strong positioning to attract
customers as current markets are impacted by merger activities of
competitors. Consumer loans decreased by $35
million due primarily to ongoing targeted runoff of indirect
auto loans. Residential mortgages decreased by $116 million. The Company is expanding its
mortgage lending team and developing correspondent bank
sources.
Asset Quality: Asset quality metrics continued to improve
toward pre-pandemic levels during the third quarter. Total
delinquent and non-accruing loans decreased year-over-year by 33%
to $59 million, measuring 0.87% of
total loans. Non-accruing loans decreased year-over-year by 22% to
$37 million, measuring 0.54% of total
loans, due primarily to $10 million
in resolutions in the most recent quarter. Total COVID-19 related
loan modifications decreased by 34% during the quarter to
$65 million, measuring under 1% of
period-end loans. The allowance for credit losses on loans
decreased by $6 million during the
quarter to $113 million, measuring
1.65% of total loans, which was unchanged from midyear.
Deposits and Borrowings: Total deposits increased
in the third quarter by $452 million,
or 5%, to $10.4 billion due primarily
to a $369 million increase in
period-end payroll deposit balances. Non-interest bearing
demand deposit account balances increased by 7%, while higher cost
time deposit balances decreased by 6%. Higher cost senior
borrowings decreased by $204 million
to $13 million, as most Federal Home
Loan Bank borrowings were prepaid near the end of the quarter.
Total higher cost wholesale funds decreased year-over-year to 4% of
total assets from 12%. Quarter-over-quarter, the cost of deposits
decreased to 0.22% from 0.25%, and the cost of funds decreased to
0.31% from 0.36%.
Equity: During the third quarter, Berkshire repurchased 1.755 million shares,
completing the 2.5 million repurchase authorization approved by the
Board in April, which totaled approximately 5% of outstanding
shares for the full authorization. The third quarter repurchases
were made at an average price of $27.33, totaling $48
million. The common equity tier 1 capital ratio increased to
an estimated 15.3% from 14.3% in the prior quarter. During the most
recent quarter, book value per share increased by 4% to
$24.21 and the non-GAAP measure of
tangible book value per share increased by 4% to $23.58.
ESG & CORPORATE RESPONSIBILITY UPDATE
Berkshire Bank is committed to purpose-driven,
community-centered banking that enhances value for all stakeholders
as it pursues its vision of being the leading socially responsible
community bank. Learn more about the steps Berkshire is taking
at berkshirebank.com/csr and in its most
recent Corporate Responsibility Report.
Key developments in the quarter include:
- Launch of the BEST Community Comeback: Berkshire announced its "BEST Community
Comeback" a $5 billion multi-year ESG
and community commitment to fuel resilience and strengthen local
communities. The multi-year plan focuses on four key areas: fueling
small businesses, community financing and philanthropy, financial
access and empowerment, and funding environmental sustainability.
Additional information can be found at
berkshirebank.com/comeback.
- Xtraordinary Day: As a kickoff to the Bank's "BEST
Community Comeback," Berkshire Bank hosted its 5th
annual "Xtraordinary Day of Service." Berkshire Bank employees were
deployed in a virtual setting, volunteering for causes that support
the small business ecosystem, equity and inclusion and basic
community needs. More than 75% of Berkshire's workforce participated in the
day.
- Current ESG Performance: The Company continued to
improve its Environmental, Social and Governance (ESG) ratings,
generally outperforming peers. As of September 30, 2021 the Company received ratings
of: MSCI ESG- BBB; ISS ESG Quality Score - Environment: 2, Social:
1, Governance: 2; and Bloomberg ESG Disclosure- 47.81. The Company
is also rated by Sustainalytics.
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 conduct a conference
call/webcast at 10:00 a.m. Eastern
Time on Thursday, October 21, 2021 to discuss 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://www.incommglobalevents.com/registration/q4inc/8879/berkshire-hills-bancorp-q3-earnings-release-conference-call/
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
relations section of Berkshire's
website at 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 844-200-6205 and using participant access
code: 066744. 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 for one week by dialing 866-813-9403 and
using access code: 331614. 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 what it means to bank its neighbors socially,
humanly, and digitally to empower the financial potential of
people, families, and businesses in its communities as it pursues
its vision of being the leading socially responsible omni-channel
community bank in the markets it serves. Berkshire Bank provides
business and consumer banking, mortgage, wealth management, and
investment services. Headquartered in Boston, Berkshire has approximately $11.8 billion in assets and operates 107 branch
offices in New England and New
York, and is a member of the Bloomberg Gender-Equality
Index. To learn more, call 800-773-5601 or follow us on Facebook,
Twitter, Instagram, and LinkedIn.
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.
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 pages F-9 and
F-10 in the accompanying financial tables. In all cases, it
should be understood that non-GAAP per share measures do not depict
amounts that accrue directly to the benefit of shareholders.
The Company utilizes the non-GAAP measure of 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, other
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 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 adjusted gain was recognized on the sale of a
specialty commercial insurance business line. In 2021, the Company
recorded a net gain of $52 million on
the sale of the insurance subsidiary and the Mid-Atlantic branch
operations. Expense adjustments in the first quarter were primarily
related to branch consolidations. Adjustments of $1.4 million in the third quarter Federal Home
Loan Bank borrowings prepayment costs. They also included
other restructuring charges for efficiency initiatives in
operations areas including writedowns on real estate moved to held
for sale and severance related to staff reductions.
The Company utilizes 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-GAAP 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 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: KAConn@berkshirebank.com
Tel: (617) 641-9206
David Gonci, Capital Markets
Director
Email: dgonci@berkshirebank.com
Tel: (413) 281-1973
Media Contact:
Gary Levante, SVP, Corporate
Responsibility & Culture
Email: glevante@berkshirebank.com
Tel: (413) 447-1737
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 Balances and
Average Yields and Costs
|
F-7
|
Asset Quality
Analysis
|
F-8
|
Asset Quality
Analysis (continued)
|
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)
|
|
|
|
|
|
|
|
|
|
Sept. 30,
|
|
Dec. 31,
|
|
March 31,
|
|
June 30,
|
|
Sept.
30,
|
|
|
|
|
|
2020
|
|
2020
|
|
2021
|
|
2021
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOMINAL AND PER
SHARE DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
common share, diluted
|
$
0.42
|
|
$
0.30
|
|
$
0.26
|
|
$
0.43
|
|
$
1.31
|
|
|
|
Adjusted earnings per
common share, diluted (2)
|
0.53
|
|
0.28
|
|
0.32
|
|
0.44
|
|
0.53
|
|
|
|
Net income,
(thousands)
|
21,225
|
|
15,009
|
|
13,031
|
|
21,636
|
|
63,749
|
|
|
|
Adjusted net
income,(thousands)(2)
|
26,424
|
|
14,062
|
|
16,015
|
|
22,104
|
|
25,695
|
|
|
|
Total common shares
outstanding, period-end (thousands)
|
50,306
|
|
50,833
|
|
50,988
|
|
50,453
|
|
48,657
|
|
|
|
Average diluted
shares, (thousands)
|
50,329
|
|
50,355
|
|
50,565
|
|
50,608
|
|
48,744
|
|
|
|
Total book value per
common share, (end of period)
|
23.03
|
|
23.37
|
|
23.05
|
|
23.30
|
|
24.21
|
|
|
|
Tangible book value
per common share, (end of period) (2)
|
22.22
|
|
22.68
|
|
22.39
|
|
22.66
|
|
23.58
|
|
|
|
Dividends per common
share
|
0.12
|
|
0.12
|
|
0.12
|
|
0.12
|
|
0.12
|
|
|
|
Full-time equivalent
staff, continuing operations
|
1,507
|
|
1,505
|
|
1,467
|
|
1,417
|
|
1,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE RATIOS
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
equity
|
7.50
|
%
|
5.22
|
%
|
4.50
|
%
|
7.37
|
%
|
22.18
|
%
|
|
|
Adjusted return on
equity (2)
|
9.33
|
|
4.89
|
|
5.53
|
|
7.53
|
|
8.94
|
|
|
|
Return on tangible
common equity (2)
|
8.32
|
|
5.85
|
|
4.98
|
|
7.92
|
|
23.14
|
|
|
|
Adjusted return on
tangible common equity (2)
|
10.27
|
|
5.50
|
|
6.04
|
|
8.08
|
|
9.53
|
|
|
|
Return on
assets
|
0.67
|
|
0.48
|
|
0.42
|
|
0.70
|
|
2.14
|
|
|
|
Adjusted return on
assets (2)
|
0.84
|
|
0.45
|
|
0.51
|
|
0.71
|
|
0.86
|
|
|
|
Net interest margin,
fully taxable equivalent (FTE) (4)(5)
|
2.61
|
|
2.61
|
|
2.62
|
|
2.62
|
|
2.56
|
|
|
|
Efficiency ratio
(2)
|
65.39
|
|
71.03
|
|
71.32
|
|
67.82
|
|
68.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA
(in millions, end of period)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
12,614
|
|
$
12,838
|
|
$
12,757
|
|
$
12,273
|
|
$
11,846
|
|
|
|
Total earning
assets
|
11,832
|
|
12,090
|
|
12,071
|
|
11,571
|
|
11,145
|
|
|
|
Total
loans
|
|
8,982
|
|
8,082
|
|
7,659
|
|
7,233
|
|
6,836
|
|
|
|
Total
deposits
|
10,467
|
|
10,216
|
|
10,244
|
|
9,914
|
|
10,365
|
|
|
|
Loans/deposits
(%)
|
86
|
%
|
79
|
%
|
75
|
%
|
73
|
%
|
66
|
%
|
|
|
Total shareholders'
equity
|
$
1,179
|
|
$
1,188
|
|
$
1,175
|
|
$
1,175
|
|
$
1,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET
QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses, (millions)
|
$
134
|
|
$
127
|
|
$
124
|
|
$
119
|
|
$
113
|
|
|
|
Net charge-offs,
(millions)
|
(6)
|
|
(17)
|
|
(10)
|
|
(5)
|
|
(2)
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
0.27
|
%
|
0.80
|
%
|
0.51
|
%
|
0.26
|
%
|
0.12
|
%
|
|
|
Provision
expense/(income), (millions)
|
$
1
|
|
$
10
|
|
$
7
|
|
$
-
|
|
$
(4)
|
|
|
|
Non-performing
assets, (millions)
|
49
|
|
67
|
|
58
|
|
49
|
|
39
|
|
|
|
Non-performing
loans/total loans
|
0.53
|
%
|
0.80
|
%
|
0.73
|
%
|
0.66
|
%
|
0.54
|
%
|
|
|
Allowance for credit
losses/non-performing loans
|
284
|
|
196
|
|
222
|
|
250
|
|
304
|
|
|
|
Allowance for credit
losses/total loans
|
1.50
|
|
1.58
|
|
1.62
|
|
1.65
|
|
1.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1
capital to risk weighted assets(6)
|
13.2
|
%
|
13.8
|
%
|
14.2
|
%
|
14.3
|
%
|
15.3
|
%
|
|
|
Tier 1 capital
leverage ratio(6)
|
9.2
|
|
9.4
|
|
9.5
|
|
9.5
|
|
9.9
|
|
|
|
Tangible common
shareholders' equity/tangible assets(2)
|
8.9
|
|
9.0
|
|
9.0
|
|
9.3
|
|
9.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Reconciliations of non-GAAP financial
measures, including all references to adjusted and tangible
amounts, appear on pages F-9 and F-10.
|
|
(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 pages F-9 and F-10 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: 0.08%, 0.07%,
0.05%, 0.08%, 0.06%.
|
|
|
(6)
Presented as projected for September 30,
2021 and actual for the remaining periods.
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
BALANCE SHEETS - UNAUDITED - (F-2)
|
|
September
30,
|
December
31,
|
June 30,
|
September
30,
|
(in
thousands)
|
2020
|
2020
|
2021
|
2021
|
Assets
|
|
|
|
|
Cash and due from
banks
|
$
90,537
|
$
91,219
|
$
98,262
|
$
153,185
|
Short-term
investments
|
844,755
|
1,466,656
|
1,728,419
|
1,971,345
|
Total cash and
short-term investments
|
935,292
|
1,557,875
|
1,826,681
|
2,124,530
|
|
|
|
|
|
Trading
security
|
9,525
|
9,708
|
8,853
|
8,574
|
Marketable equity
securities, at fair value
|
31,993
|
18,513
|
15,709
|
15,601
|
Securities available
for sale, at fair value
|
1,575,289
|
1,695,232
|
1,640,512
|
1,643,965
|
Securities held to
maturity, at amortized cost
|
330,197
|
465,091
|
665,786
|
651,863
|
Federal Home Loan
Bank stock and other restricted securities
|
40,520
|
34,873
|
19,638
|
12,041
|
Total
securities
|
1,987,524
|
2,223,417
|
2,350,498
|
2,332,044
|
Less: Allowance for
credit losses on investment securities
|
(96)
|
(104)
|
(130)
|
(125)
|
Net
securities
|
1,987,428
|
2,223,313
|
2,350,368
|
2,331,919
|
|
|
|
|
|
Loans held for
sale
|
15,854
|
17,748
|
6,494
|
5,176
|
|
|
|
|
|
Total
loans
|
8,982,336
|
8,081,519
|
7,232,591
|
6,836,235
|
Less: Allowance for
credit losses on loans
|
(134,414)
|
(127,302)
|
(119,044)
|
(112,916)
|
Net loans
|
8,847,922
|
7,954,217
|
7,113,547
|
6,723,319
|
|
|
|
|
|
Premises and
equipment, net
|
117,116
|
112,663
|
104,680
|
99,233
|
Other real estate
owned
|
40
|
149
|
85
|
-
|
Goodwill and other
intangible assets
|
40,947
|
34,819
|
32,203
|
30,907
|
Other
assets
|
656,892
|
619,925
|
562,691
|
527,049
|
Assets held for sale
(1)
|
-
|
317,304
|
276,576
|
3,743
|
Assets from
discontinued operations
|
12,966
|
-
|
-
|
-
|
Total
assets
|
$
12,614,457
|
$
12,838,013
|
$
12,273,325
|
$
11,845,876
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
Demand
deposits
|
$
2,585,173
|
$
2,484,249
|
$
2,819,012
|
$
3,022,821
|
NOW and other
deposits
|
1,522,289
|
1,003,005
|
1,696,762
|
1,982,089
|
Money market
deposits
|
2,516,168
|
3,371,353
|
2,398,256
|
2,438,832
|
Savings
deposits
|
952,836
|
972,116
|
1,065,428
|
1,095,959
|
Time
deposits
|
2,890,093
|
2,385,085
|
1,934,442
|
1,825,714
|
Total
deposits
|
10,466,559
|
10,215,808
|
9,913,900
|
10,365,415
|
|
|
|
|
|
Senior
borrowings
|
605,483
|
474,357
|
217,847
|
13,369
|
Subordinated
borrowings
|
97,223
|
97,280
|
97,396
|
97,454
|
Total
borrowings
|
702,706
|
571,637
|
315,243
|
110,823
|
|
|
|
|
|
Other
liabilities
|
251,220
|
232,730
|
222,105
|
191,563
|
Liabilities held for
sale (1)
|
-
|
630,065
|
646,688
|
-
|
Liabilities from
discontinued operations
|
14,947
|
-
|
-
|
-
|
Total
liabilities
|
11,435,432
|
11,650,240
|
11,097,936
|
10,667,801
|
|
|
|
|
|
Preferred
shareholders' equity
|
20,325
|
-
|
-
|
-
|
Common shareholders'
equity
|
1,158,700
|
1,187,773
|
1,175,389
|
1,178,075
|
Total shareholders'
equity
|
1,179,025
|
1,187,773
|
1,175,389
|
1,178,075
|
Total liabilities and
shareholders' equity
|
$
12,614,457
|
$
12,838,013
|
$
12,273,325
|
$
11,845,876
|
|
|
|
|
|
(1) For June 30, 2021
and December 31, 2020, balance includes loans and deposits from
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
|
|
June 30, 2021
Balance
|
|
September 30,
2021
Balance
|
|
Quarter ended
September 30, 2021
|
|
Year to
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial real
estate
|
|
$
3,647
|
|
$
3,652
|
|
$
3,565
|
|
(2)
|
%
|
(2)
|
%
|
Commercial and
industrial loans
|
1,326
|
|
1,286
|
|
1,254
|
|
(2)
|
|
(5)
|
|
Paycheck Protection
Program (PPP) Loans
|
633
|
|
173
|
|
46
|
|
(73)
|
|
(93)
|
|
Total commercial
loans
|
|
5,606
|
|
5,111
|
|
4,865
|
|
(5)
|
|
(13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total residential
mortgages
|
|
1,813
|
|
1,559
|
|
1,443
|
|
(7)
|
|
(20)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity
|
|
295
|
|
270
|
|
264
|
|
(2)
|
|
(11)
|
|
Auto and
other
|
|
368
|
|
293
|
|
264
|
|
(10)
|
|
(28)
|
|
Total consumer
loans
|
|
663
|
|
563
|
|
528
|
|
(6)
|
|
(20)
|
|
Total
loans
|
|
$
8,082
|
|
$
7,233
|
|
$
6,836
|
|
(5)
|
%
|
(15)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth %
|
(in
millions)
|
|
December 31, 2020
Balance
|
|
June 30, 2021
Balance
|
|
September 30,
2021
Balance
|
|
Quarter ended
September 30, 2021
|
|
Year to
Date
|
|
Non-interest
bearing
|
|
$
2,484
|
|
$
2,819
|
|
$
3,023
|
|
7
|
%
|
22
|
%
|
NOW and
other
|
|
1,003
|
|
1,697
|
|
1,982
|
|
17
|
|
98
|
|
Money
market
|
|
3,372
|
|
2,398
|
|
2,439
|
|
2
|
|
(28)
|
|
Savings
|
|
972
|
|
1,065
|
|
1,096
|
|
3
|
|
13
|
|
Time
deposits
|
|
2,385
|
|
1,935
|
|
1,825
|
|
(6)
|
|
(23)
|
|
Total deposits
(1)
|
|
$
10,216
|
|
$
9,914
|
|
$
10,365
|
|
5
|
%
|
1
|
%
|
(1) Included in total
deposits are brokered deposits of $317.1 million, $358.4 million
and $610.6 million at September 30, 2021, June 30,
2021, and December 31, 2020,
respectively.
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS - UNAUDITED - (F-4)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
(in thousands,
except per share data)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Interest
income
|
79,688
|
|
97,768
|
|
253,205
|
|
317,651
|
Interest
expense
|
8,320
|
|
20,713
|
|
31,351
|
|
76,578
|
Net interest income
from continuing operations, not FTE
|
71,368
|
|
77,055
|
|
221,854
|
|
241,073
|
Non-interest
income from continuing operations
|
|
|
|
|
|
|
|
Deposit related
fees
|
7,657
|
|
7,062
|
|
22,291
|
|
20,382
|
Loan fees and
revenue
|
8,285
|
|
4,988
|
|
25,962
|
|
12,007
|
Insurance commissions
and fees
|
1,581
|
|
2,660
|
|
7,003
|
|
8,451
|
Wealth management
fees
|
2,653
|
|
2,299
|
|
7,944
|
|
6,926
|
Mortgage banking
originations
|
461
|
|
2,044
|
|
1,797
|
|
4,647
|
Other
|
1,279
|
|
1,927
|
|
5,638
|
|
492
|
Total non-interest
income excluding gains/(losses)
|
21,916
|
|
20,980
|
|
70,635
|
|
52,905
|
Securities
(losses)/gains, net
|
(166)
|
|
(1,017)
|
|
(681)
|
|
(9,925)
|
Gain on sale of
business operations and assets, net
|
51,885
|
|
-
|
|
51,885
|
|
-
|
Total non-interest
income
|
73,635
|
|
19,963
|
|
121,839
|
|
42,980
|
Total net revenue
from continuing operations
|
145,003
|
|
97,018
|
|
343,693
|
|
284,053
|
Total net revenue
from continuing operations excluding (losses)/gains
|
93,284
|
|
98,035
|
|
292,489
|
|
293,978
|
|
|
|
|
|
|
|
|
Provision for credit
losses
|
(4,000)
|
|
1,200
|
|
2,500
|
|
65,878
|
Non-interest
expense from continuing operations
|
|
|
|
|
|
|
|
Compensation and
benefits
|
37,068
|
|
34,809
|
|
112,773
|
|
111,121
|
Occupancy and
equipment
|
10,421
|
|
11,084
|
|
32,044
|
|
32,411
|
Technology and
communications
|
8,397
|
|
8,540
|
|
25,204
|
|
24,376
|
Professional
services
|
3,180
|
|
2,567
|
|
13,495
|
|
7,852
|
Other
expenses
|
8,969
|
|
10,527
|
|
28,053
|
|
33,605
|
Merger, restructuring
and other non-operating expenses
|
1,425
|
|
5,316
|
|
4,917
|
|
559,078
|
Total non-interest
expense
|
69,460
|
|
72,843
|
|
216,486
|
|
768,443
|
Total non-interest
expense excluding merger, restructuring and other
|
68,035
|
|
67,527
|
|
211,569
|
|
209,365
|
|
|
|
|
|
|
|
|
Income/(loss) from
continuing operations before income
taxes
|
$
79,543
|
|
$
22,975
|
|
$
124,707
|
|
$
(550,268)
|
Income tax
expense/(benefit)
|
15,794
|
|
(68)
|
|
26,291
|
|
(18,194)
|
Net income/(loss)
from continuing operations
|
$
63,749
|
|
$
23,043
|
|
$
98,416
|
|
$
(532,074)
|
|
|
|
|
|
|
|
|
(Loss) from
discontinued operations before income taxes
|
$
-
|
|
$
(2,477)
|
|
$
-
|
|
$
(21,741)
|
Income tax
(benefit)
|
-
|
|
(659)
|
|
-
|
|
(5,789)
|
Net (loss) from
discontinued operations
|
$
-
|
|
$
(1,818)
|
|
$
-
|
|
$
(15,952)
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
$
63,749
|
|
$
21,225
|
|
$
98,416
|
|
$
(548,026)
|
Preferred stock
dividend
|
-
|
|
58
|
|
-
|
|
313
|
Income/(loss)
available to common shareholders
|
$
63,749
|
|
$
21,167
|
|
$
98,416
|
|
$
(548,339)
|
|
|
|
|
|
|
|
|
Basic
earnings/(loss) per common share:
|
|
|
|
|
|
|
|
Continuing
Operations
|
$
1.32
|
|
$
0.46
|
|
$
1.98
|
|
$
(10.58)
|
Discontinued
Operations
|
-
|
|
(0.04)
|
|
-
|
|
(0.32)
|
Total
|
$
1.32
|
|
$
0.42
|
|
$
1.98
|
|
$
(10.90)
|
|
|
|
|
|
|
|
|
Diluted
earnings/(loss) per common share:
|
|
|
|
|
|
|
|
Continuing
Operations
|
$
1.31
|
|
$
0.46
|
|
$
1.97
|
|
$
(10.58)
|
Discontinued
Operations
|
-
|
|
(0.04)
|
|
-
|
|
(0.32)
|
Total
|
$
1.31
|
|
$
0.42
|
|
$
1.97
|
|
$
(10.90)
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
48,395
|
|
50,329
|
|
49,672
|
|
50,256
|
Diluted
|
48,744
|
|
50,329
|
|
49,963
|
|
50,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (5 Quarter Trend) - UNAUDITED -
(F-5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sept. 30,
|
|
Dec. 31,
|
|
March 31,
|
|
June 30,
|
|
Sept. 30,
|
|
(in thousands,
except per share data)
|
|
|
2020
|
|
2020
|
|
2021
|
|
2021
|
|
2021
|
|
Interest
income
|
|
|
97,768
|
|
92,131
|
|
88,153
|
|
85,364
|
|
79,688
|
|
Interest
expense
|
|
|
20,713
|
|
16,422
|
|
13,060
|
|
9,971
|
|
8,320
|
|
Net interest income
from continuing operations, not FTE
|
77,055
|
|
75,709
|
|
75,093
|
|
75,393
|
|
71,368
|
|
Non-interest income
from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit related
fees
|
|
|
7,062
|
|
7,523
|
|
7,126
|
|
7,508
|
|
7,657
|
|
Loan fees and
revenue
|
|
|
4,988
|
|
4,833
|
|
10,246
|
|
7,431
|
|
8,285
|
|
Insurance commissions
and fees
|
|
|
2,660
|
|
2,319
|
|
3,130
|
|
2,292
|
|
1,581
|
|
Wealth management
fees
|
|
|
2,299
|
|
2,359
|
|
2,772
|
|
2,519
|
|
2,653
|
|
Mortgage banking
originations
|
|
|
2,044
|
|
543
|
|
802
|
|
534
|
|
461
|
|
Other
|
|
|
1,927
|
|
2,105
|
|
2,148
|
|
2,211
|
|
1,279
|
|
Total non-interest
income excluding (losses)/gains
|
|
|
20,980
|
|
19,682
|
|
26,224
|
|
22,495
|
|
21,916
|
|
Securities
(losses)/gains, net
|
|
|
(1,017)
|
|
2,405
|
|
(31)
|
|
(484)
|
|
(166)
|
|
Gain on sale of
business operations and assets, net
|
|
|
-
|
|
1,240
|
|
-
|
|
-
|
|
51,885
|
|
Total non-interest
income
|
|
|
19,963
|
|
23,327
|
|
26,193
|
|
22,011
|
|
73,635
|
|
Total net revenue
from continuing operations
|
|
|
97,018
|
|
99,036
|
|
101,286
|
|
97,404
|
|
145,003
|
|
Total net revenue
from continuing operations excluding (losses)/gains
|
98,035
|
|
95,391
|
|
101,317
|
|
97,888
|
|
93,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit
losses
|
|
|
1,200
|
|
10,000
|
|
6,500
|
|
-
|
|
(4,000)
|
|
Non-interest
expense from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
34,809
|
|
36,719
|
|
38,735
|
|
36,970
|
|
37,068
|
|
Occupancy and
equipment
|
|
|
11,084
|
|
10,948
|
|
11,024
|
|
10,599
|
|
10,421
|
|
Technology and
communications
|
|
|
8,540
|
|
7,988
|
|
8,593
|
|
8,214
|
|
8,397
|
|
Professional
services
|
|
|
2,567
|
|
4,055
|
|
6,614
|
|
3,701
|
|
3,180
|
|
Other
expenses
|
|
|
10,527
|
|
11,563
|
|
9,702
|
|
9,382
|
|
8,969
|
|
Merger, restructuring
and other non-operating expenses
|
|
|
5,316
|
|
523
|
|
3,486
|
|
6
|
|
1,425
|
|
Total non-interest
expense
|
|
|
72,843
|
|
71,796
|
|
78,154
|
|
68,872
|
|
69,460
|
|
Total non-interest
expense excluding merger, restructuring and other
|
67,527
|
|
71,273
|
|
74,668
|
|
68,866
|
|
68,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
|
|
$
22,975
|
|
$
17,240
|
|
$
16,632
|
|
$
28,532
|
|
$
79,543
|
|
Income tax
expense/(benefit)
|
|
|
(68)
|
|
(1,659)
|
|
3,601
|
|
6,896
|
|
15,794
|
|
Net income from
continuing operations
|
|
|
$
23,043
|
|
$
18,899
|
|
$
13,031
|
|
$
21,636
|
|
$
63,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) from
discontinued operations before income taxes
|
|
|
$
(2,477)
|
|
$
(5,114)
|
|
$
-
|
|
$
-
|
|
$
-
|
|
Income tax
(benefit)
|
|
|
(659)
|
|
(1,224)
|
|
-
|
|
-
|
|
-
|
|
Net (loss) from
discontinued operations
|
|
|
$
(1,818)
|
|
$
(3,890)
|
|
$
-
|
|
$
-
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
21,225
|
|
$
15,009
|
|
$
13,031
|
|
$
21,636
|
|
$
63,749
|
|
Preferred stock
dividend
|
|
|
58
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Income available to
common shareholders
|
|
|
$
21,167
|
|
$
15,009
|
|
$
13,031
|
|
$
21,636
|
|
$
63,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings/(loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
|
|
$
0.46
|
|
$
0.38
|
|
$
0.26
|
|
$
0.43
|
|
$
1.31
|
|
Discontinued
Operations
|
|
|
(0.04)
|
|
(0.08)
|
|
-
|
|
-
|
|
-
|
|
Total
|
|
|
$
0.42
|
|
$
0.30
|
|
$
0.26
|
|
$
0.43
|
|
$
1.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
50,329
|
|
50,308
|
|
50,330
|
|
50,321
|
|
48,395
|
|
Diluted
|
|
|
50,329
|
|
50,355
|
|
50,565
|
|
50,608
|
|
48,744
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
|
AVERAGE BALANCES
AND AVERAGE YIELDS AND COSTS - UNAUDITED - (F-6)
|
|
|
|
|
|
|
|
|
Dec. 31,
2020
|
|
March 31,
2021
|
|
June 30,
2021
|
|
Sept. 30,
2021
|
|
|
|
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
|
|
3,986
|
3.52
|
%
|
3,843
|
3.34
|
%
|
3,630
|
3.27
|
%
|
3,625
|
3.46
|
%
|
3,577
|
3.40
|
%
|
Commercial and
industrial loans
|
|
2,192
|
3.88
|
|
|
2,056
|
4.05
|
|
|
1,865
|
4.62
|
|
|
1,605
|
4.74
|
|
|
1,370
|
4.78
|
|
|
Residential
mortgages
|
|
2,224
|
3.78
|
|
|
1,971
|
3.78
|
|
|
1,740
|
3.71
|
|
|
1,604
|
3.79
|
|
|
1,499
|
3.65
|
|
|
Consumer
loans
|
|
801
|
3.59
|
|
|
726
|
3.41
|
|
|
634
|
3.79
|
|
|
582
|
3.80
|
|
|
545
|
3.95
|
|
|
Total loans
(1)
|
|
9,203
|
3.68
|
|
|
8,596
|
3.62
|
|
|
7,869
|
3.73
|
|
|
7,416
|
3.84
|
|
|
6,991
|
3.77
|
|
|
Securities
(2)
|
|
1,874
|
2.78
|
|
|
1,968
|
2.69
|
|
|
2,195
|
2.36
|
|
|
2,259
|
2.17
|
|
|
2,312
|
2.09
|
|
|
Short-term
investments and loans held for sale
|
766
|
0.21
|
|
|
977
|
0.14
|
|
|
1,351
|
0.13
|
|
|
1,750
|
0.10
|
|
|
1,762
|
0.17
|
|
|
Mid-Atlantic region
loans held for sale
|
-
|
-
|
|
|
101
|
4.27
|
|
|
295
|
4.09
|
|
|
269
|
3.96
|
|
|
155
|
3.82
|
|
|
Total earning
assets (3)
|
|
11,843
|
3.31
|
|
|
11,642
|
3.17
|
|
|
11,710
|
3.07
|
|
|
11,694
|
2.96
|
|
|
11,220
|
2.86
|
|
|
Goodwill and other
intangible assets
|
|
41
|
|
|
|
40
|
|
|
|
34
|
|
|
|
33
|
|
|
|
31
|
|
|
|
Other
assets
|
|
760
|
|
|
|
752
|
|
|
|
724
|
|
|
|
690
|
|
|
|
674
|
|
|
|
Assets from
discontinued operations
|
|
16
|
|
|
|
12
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Total
assets
|
|
12,660
|
|
|
|
12,446
|
|
|
|
12,468
|
|
|
|
12,417
|
|
|
|
11,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and
other
|
|
1,244
|
0.24
|
%
|
1,279
|
0.17
|
%
|
1,325
|
0.15
|
%
|
1,389
|
0.07
|
%
|
1,316
|
0.05
|
%
|
Money
market
|
|
2,674
|
0.38
|
|
|
2,756
|
0.32
|
|
|
2,802
|
0.27
|
|
|
2,751
|
0.18
|
|
|
2,716
|
0.16
|
|
|
Savings
|
|
940
|
0.10
|
|
|
967
|
0.08
|
|
|
1,003
|
0.08
|
|
|
1,054
|
0.05
|
|
|
1,112
|
0.04
|
|
|
Time
|
|
3,056
|
1.63
|
|
|
2,629
|
1.35
|
|
|
2,266
|
1.12
|
|
|
2,013
|
0.94
|
|
|
1,893
|
0.86
|
|
|
Total
interest-bearing deposits
|
|
7,914
|
0.81
|
|
|
7,631
|
0.62
|
|
|
7,396
|
0.48
|
|
|
7,207
|
0.35
|
|
|
7,037
|
0.31
|
|
|
Borrowings
|
|
777
|
2.36
|
|
|
658
|
2.50
|
|
|
500
|
2.78
|
|
|
381
|
3.12
|
|
|
253
|
3.89
|
|
|
Mid-Atlantic region
interest-bearing deposits
|
-
|
-
|
|
|
180
|
0.80
|
|
|
518
|
0.60
|
|
|
517
|
0.51
|
|
|
306
|
0.51
|
|
|
Total
interest-bearing liabilities
|
|
8,691
|
0.95
|
|
|
8,469
|
0.77
|
|
|
8,414
|
0.63
|
|
|
8,105
|
0.49
|
|
|
7,596
|
0.43
|
|
|
Non-interest-bearing
demand deposits
|
|
2,559
|
|
|
|
2,542
|
|
|
|
2,537
|
|
|
|
2,787
|
|
|
|
2,901
|
|
|
|
Other liabilities
(4)
|
|
254
|
|
|
|
279
|
|
|
|
358
|
|
|
|
351
|
|
|
|
279
|
|
|
|
Liabilities from
discontinued operations
|
23
|
|
|
|
6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Total
liabilities
|
|
11,527
|
|
|
|
11,296
|
|
|
|
11,309
|
|
|
|
11,243
|
|
|
|
10,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
shareholders' equity
|
|
20
|
|
|
|
7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Common shareholders'
equity
|
|
1,113
|
|
|
|
1,143
|
|
|
|
1,159
|
|
|
|
1,174
|
|
|
|
1,149
|
|
|
|
Total shareholders'
equity
|
|
1,133
|
|
|
|
1,150
|
|
|
|
1,159
|
|
|
|
1,174
|
|
|
|
1,149
|
|
|
|
Total liabilities and
shareholders' equity
|
12,660
|
|
|
|
12,446
|
|
|
|
12,468
|
|
|
|
12,417
|
|
|
|
11,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
spread
|
|
|
2.36
|
%
|
|
2.40
|
%
|
|
2.44
|
%
|
|
2.47
|
%
|
|
2.43
|
%
|
Net interest margin,
FTE (5)
|
|
|
2.61
|
|
|
|
2.61
|
|
|
|
2.62
|
|
|
|
2.62
|
|
|
|
2.56
|
|
|
Cost of
funds
|
|
|
0.73
|
|
|
|
0.60
|
|
|
|
0.48
|
|
|
|
0.36
|
|
|
|
0.31
|
|
|
Cost of
deposits
|
|
|
0.61
|
|
|
|
0.47
|
|
|
|
0.36
|
|
|
|
0.25
|
|
|
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income,
not FTE
|
|
77
|
|
|
|
76
|
|
|
|
75
|
|
|
|
75
|
|
|
|
71
|
|
|
|
Fully taxable
equivalent income adjustment
|
2
|
|
|
|
1
|
|
|
|
1
|
|
|
|
2
|
|
|
|
2
|
|
|
|
Net Interest
Income, FTE
|
|
79
|
|
|
|
77
|
|
|
|
77
|
|
|
|
77
|
|
|
|
73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average PPP
loans
|
|
707
|
|
|
|
685
|
|
|
|
546
|
|
|
|
321
|
|
|
|
90
|
|
|
|
Average loans
excluding PPP loans
|
|
8,496
|
|
|
|
7,911
|
|
|
|
7,323
|
|
|
|
7,095
|
|
|
|
6,901
|
|
|
|
Total PPP loans,
end of period
|
|
708
|
|
|
|
633
|
|
|
|
444
|
|
|
|
173
|
|
|
|
46
|
|
|
|
Total loans excluding
PPP loans, end of period
|
8,274
|
|
|
|
7,448
|
|
|
|
7,215
|
|
|
|
7,059
|
|
|
|
6,790
|
|
|
|
PPP interest
income
|
|
4
|
|
|
|
6
|
|
|
|
7
|
|
|
|
5
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average
non-maturity deposits
|
|
7,417
|
|
|
|
7,544
|
|
|
|
7,666
|
|
|
|
7,981
|
|
|
|
8,045
|
|
|
|
Total average
deposits
|
|
10,473
|
|
|
|
10,173
|
|
|
|
9,932
|
|
|
|
9,994
|
|
|
|
9,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased loan
accretion
|
|
3
|
|
|
|
2
|
|
|
|
1
|
|
|
|
2
|
|
|
|
2
|
|
|
|
Total average
tangible equity (6)
|
|
1,091
|
|
|
|
1,110
|
|
|
|
1,125
|
|
|
|
1,141
|
|
|
|
1,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
September 30, 2021 and December 31, 2020, the Mid-Atlantic region
average non-interest bearing deposits were $78 million and $37
million, respectively.
|
(5) The effect of PPP
loans on the quarterly net interest margin is shown sequentially as
follows beginning with the earliest quarter and ending with the
most recent quarter: (0.01%), 0.05%, 0.11%, 0.11%,
0.05%. This calculation excludes gross interest income on PPP
loans and average PPP loan balances.
|
(6) See page F-9 for
details on the calculation of total average tangible
equity.
|
BERKSHIRE
HILLS BANCORP, INC.
|
|
ASSET QUALITY
ANALYSIS - UNAUDITED - (F-7)
|
|
|
|
|
Sept. 30,
|
|
Dec. 31,
|
|
March 31,
|
|
June 30,
|
|
Sept. 30,
|
|
(in
thousands)
|
|
2020
|
|
2020
|
|
2021
|
|
2021
|
|
2021
|
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Non-accruing
loans:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
14,777
|
|
$
35,581
|
|
$
28,325
|
|
$
22,799
|
|
$
14,845
|
|
Commercial and
industrial loans
|
|
15,035
|
|
12,921
|
|
9,371
|
|
9,427
|
|
7,140
|
|
Residential
mortgages
|
|
7,928
|
|
8,347
|
|
10,674
|
|
9,238
|
|
9,763
|
|
Consumer
loans
|
|
9,650
|
|
8,099
|
|
7,447
|
|
6,141
|
|
5,399
|
|
Total non-accruing
loans
|
|
47,390
|
|
64,948
|
|
55,817
|
|
47,605
|
|
37,147
|
|
Other real estate
owned
|
|
401
|
|
149
|
|
149
|
|
85
|
|
-
|
|
Repossessed
assets
|
|
1,646
|
|
1,932
|
|
1,701
|
|
1,666
|
|
1,664
|
|
Total non-performing
assets
|
|
$
49,437
|
|
$
67,029
|
|
$
57,667
|
|
$
49,356
|
|
$
38,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-accruing
loans/total loans
|
|
0.53%
|
|
0.80%
|
|
0.73%
|
|
0.66%
|
|
0.54%
|
|
Total non-accruing
loans/total loans excluding PPP loans
|
0.57%
|
|
0.87%
|
|
0.77%
|
|
0.67%
|
|
0.55%
|
|
Total non-performing
assets/total assets
|
|
0.39%
|
|
0.52%
|
|
0.45%
|
|
0.40%
|
|
0.33%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND
ALLOWANCE FOR CREDIT LOSSES ON LOANS
|
|
|
|
|
|
Balance at beginning
of period
|
|
$
139,394
|
|
$
134,414
|
|
$
127,302
|
|
$
123,800
|
|
$
119,044
|
|
Charged-off
loans
|
|
(7,776)
|
|
(18,314)
|
|
(11,460)
|
|
(7,248)
|
|
(4,334)
|
|
Recoveries on
charged-off loans
|
|
1,580
|
|
1,209
|
|
1,465
|
|
2,492
|
|
2,206
|
|
Net loans
charged-off
|
|
(6,196)
|
|
(17,105)
|
|
(9,995)
|
|
(4,756)
|
|
(2,128)
|
|
Provision for loan
credit losses
|
|
1,216
|
|
9,993
|
|
6,493
|
|
-
|
|
(4,000)
|
|
Balance at end of
period
|
|
$
134,414
|
|
$
127,302
|
|
$
123,800
|
|
$
119,044
|
|
$
112,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses/total loans
|
|
1.50%
|
|
1.58%
|
|
1.62%
|
|
1.65%
|
|
1.65%
|
|
Allowance for credit
losses/total loans excluding PPP loans
|
1.62%
|
|
1.71%
|
|
1.72%
|
|
1.69%
|
|
1.66%
|
|
Allowance for credit
losses/non-accruing loans
|
284%
|
|
196%
|
|
222%
|
|
250%
|
|
304%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOAN
CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
(635)
|
|
$
(11,862)
|
|
$
(6,959)
|
|
$
(2,325)
|
|
$
(1,391)
|
|
Commercial and
industrial loans
|
|
(5,551)
|
|
(5,089)
|
|
(2,662)
|
|
(2,331)
|
|
110
|
|
Residential
mortgages
|
|
517
|
|
250
|
|
80
|
|
176
|
|
(677)
|
|
Home
equity
|
|
(57)
|
|
141
|
|
(42)
|
|
(136)
|
|
106
|
|
Auto and other
consumer
|
|
(470)
|
|
(545)
|
|
(412)
|
|
(140)
|
|
(276)
|
|
Total, net
|
|
$
(6,196)
|
|
$
(17,105)
|
|
$
(9,995)
|
|
$
(4,756)
|
|
$
(2,128)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
0.27%
|
|
0.80%
|
|
0.51%
|
|
0.26%
|
|
0.12%
|
|
Net charge-offs (YTD
annualized)/average loans
|
0.29%
|
|
0.41%
|
|
0.51%
|
|
0.39%
|
|
0.30%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE
HILLS BANCORP, INC.
|
ASSET QUALITY
ANALYSIS - UNAUDITED (F-8)
|
|
|
|
|
September 30,
2020
|
|
December 31,
2020
|
|
March 31,
2021
|
|
June 30,
2021
|
|
September 30,
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
|
|
$
27,626
|
|
0.31%
|
|
$
16,310
|
|
0.20%
|
|
$
28,565
|
|
0.37%
|
|
$
15,483
|
|
0.22%
|
|
$
18,365
|
|
0.27%
|
|
90+ Days delinquent
and still accruing
|
|
12,876
|
|
0.14%
|
|
11,450
|
|
0.14%
|
|
6,124
|
|
0.08%
|
|
3,129
|
|
0.04%
|
|
3,803
|
|
0.06%
|
|
Total accruing
delinquent loans
|
|
40,502
|
|
0.45%
|
|
27,760
|
|
0.34%
|
|
34,689
|
|
0.45%
|
|
18,612
|
|
0.26%
|
|
22,168
|
|
0.33%
|
|
Non-accruing
loans
|
|
47,390
|
|
0.53%
|
|
64,948
|
|
0.80%
|
|
55,817
|
|
0.73%
|
|
47,605
|
|
0.66%
|
|
37,147
|
|
0.54%
|
|
Total delinquent and
non-accruing loans
|
|
$
87,892
|
|
0.98%
|
|
$
92,708
|
|
1.14%
|
|
$
90,506
|
|
1.18%
|
|
$
66,217
|
|
0.92%
|
|
$
59,315
|
|
0.87%
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED -
(F-9)
|
|
|
|
|
|
|
Sept. 30,
|
|
Dec. 31,
|
|
March 31,
|
|
June 30,
|
|
Sept. 30,
|
|
(in
thousands)
|
|
|
2020
|
|
2020
|
|
2021
|
|
2021
|
|
2021
|
|
Total revenue from
continuing operations
|
(A)
|
|
$
97,018
|
|
$
99,036
|
|
$
101,286
|
|
$
97,404
|
|
$
145,003
|
|
Adj: Net securities
losses/(gains) (1)
|
|
|
1,017
|
|
(2,405)
|
|
31
|
|
484
|
|
166
|
|
Adj: Net (gains) on
sale of business operations and assets
|
|
-
|
|
(1,240)
|
|
-
|
|
-
|
|
(51,885)
|
|
Total adjusted
revenue (2)
|
(B)
|
|
$
98,035
|
|
$
95,391
|
|
$
101,317
|
|
$
97,888
|
|
$
93,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense from continuing operations
|
(C)
|
|
$
72,843
|
|
$
71,796
|
|
$
78,154
|
|
$
68,872
|
|
$
69,460
|
|
Less: Merger,
restructuring and other expense
|
|
|
(5,316)
|
|
(523)
|
|
(3,486)
|
|
(6)
|
|
(1,425)
|
|
Adjusted non-interest
expense (2)
|
(D)
|
|
$
67,527
|
|
$
71,273
|
|
$
74,668
|
|
$
68,866
|
|
$
68,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax,
pre-provision net revenue (PPNR) from continuing
operations
|
(A-C)
|
|
$
24,175
|
|
$
27,240
|
|
$
23,132
|
|
$
28,532
|
|
$
75,543
|
|
Adjusted pre-tax,
pre-provision net revenue (PPNR)
|
(B-D)
|
|
30,508
|
|
24,118
|
|
26,649
|
|
29,022
|
|
25,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
21,225
|
|
$
15,009
|
|
$
13,031
|
|
$
21,636
|
|
$
63,749
|
|
Adj: Net securities
losses/(gains) (1)
|
|
|
1,017
|
|
(2,405)
|
|
31
|
|
484
|
|
166
|
|
Adj: Net (gains) on
sale of business operations and assets
|
|
-
|
|
(1,240)
|
|
-
|
|
-
|
|
(51,885)
|
|
Adj: Restructuring
expense and other expense
|
|
|
5,316
|
|
523
|
|
3,486
|
|
6
|
|
1,425
|
|
Adj: Loss from
discontinued operations before income taxes
|
|
2,477
|
|
5,114
|
|
-
|
|
-
|
|
-
|
|
Adj: Income taxes
benefit/(expense)
|
|
|
(3,611)
|
|
(2,939)
|
|
(533)
|
|
(22)
|
|
12,240
|
|
Total adjusted income
(2)
|
(E)
|
|
$
26,424
|
|
$
14,062
|
|
$
16,015
|
|
$
22,104
|
|
$
25,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
(F)
|
|
$
12,660
|
|
$
12,446
|
|
$
12,468
|
|
$
12,417
|
|
$
11,925
|
|
Total average
shareholders'
equity
|
(G)
|
|
1,133
|
|
1,150
|
|
1,159
|
|
1,174
|
|
1,149
|
|
Total average
tangible shareholders' equity
(2)(3)
|
(H)
|
|
1,091
|
|
1,110
|
|
1,125
|
|
1,141
|
|
1,118
|
|
Total average
tangible common shareholders' equity
(2)(3)
|
(I)
|
|
1,071
|
|
1,103
|
|
1,125
|
|
1,141
|
|
1,118
|
|
Total tangible
shareholders' equity, period-end (2)(3)
|
(J)
|
|
1,138
|
|
1,153
|
|
1,142
|
|
1,143
|
|
1,147
|
|
Total tangible common
shareholders' equity, period-end (2)(3)
|
(K)
|
|
1,118
|
|
1,153
|
|
1,142
|
|
1,143
|
|
1,147
|
|
Total tangible
assets, period-end (2)(3)
|
(L)
|
|
12,574
|
|
12,803
|
|
12,724
|
|
12,241
|
|
11,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, period-end
(thousands)
|
(M)
|
|
50,306
|
|
50,833
|
|
50,988
|
|
50,453
|
|
48,657
|
|
Average diluted
shares outstanding (thousands)
|
(N)
|
|
50,329
|
|
50,355
|
|
50,565
|
|
50,608
|
|
48,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings per
common share, diluted(2)
|
|
|
$
0.42
|
|
$
0.30
|
|
$
0.26
|
|
$
0.43
|
|
$
1.31
|
|
Adjusted earnings per
common share, diluted (2)
|
(E/N)
|
|
0.53
|
|
0.28
|
|
0.32
|
|
0.44
|
|
0.53
|
|
Tangible book value
per common share, period-end (2)
|
(K/M)
|
|
22.22
|
|
22.68
|
|
22.39
|
|
22.66
|
|
23.58
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(J/L)
|
|
9.05
|
|
9.01
|
|
8.98
|
|
9.34
|
|
9.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance ratios
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP return on
equity
|
|
|
7.50
|
%
|
5.22
|
%
|
4.50
|
%
|
7.37
|
|
22.18
|
%
|
Adjusted return on
equity (2)
|
(E/G)
|
|
9.33
|
|
4.89
|
|
5.53
|
|
7.53
|
|
8.94
|
|
Return on tangible
common equity (2)(5)
|
|
|
8.32
|
|
5.85
|
|
4.98
|
|
7.92
|
|
23.14
|
|
Adjusted return on
tangible common equity (2)(5)
|
(E+Q)/(I)
|
|
10.27
|
|
5.50
|
|
6.04
|
|
8.08
|
|
9.53
|
|
GAAP return on
assets
|
|
|
0.67
|
|
0.48
|
|
0.42
|
|
0.70
|
|
2.14
|
|
Adjusted return on
assets(2)
|
|
|
0.84
|
|
0.45
|
|
0.51
|
|
0.71
|
|
0.86
|
|
PPNR from continuing
operations/assets (2)
|
|
|
0.76
|
|
0.88
|
|
0.74
|
|
0.92
|
|
2.53
|
|
Adjusted PPNR/assets
(2)
|
|
|
0.97
|
|
0.78
|
|
0.85
|
|
0.93
|
|
0.85
|
|
Efficiency ratio
(2)(6)
|
(D-Q)/(B+O+R)
|
|
65.39
|
|
71.03
|
|
71.32
|
|
67.82
|
|
68.76
|
|
Net interest margin,
FTE
|
|
|
2.61
|
|
2.61
|
|
2.62
|
|
2.62
|
|
2.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary data
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (7)
|
(O)
|
|
$
1,377
|
|
$
1,334
|
|
$
41
|
|
$
79
|
|
$
2,195
|
|
Non-interest income
charge on tax-credit investments (8)
|
(P)
|
|
(1,090)
|
|
(971)
|
|
(33)
|
|
(175)
|
|
(1,789)
|
|
Net income on
tax-credit investments
|
(O+P)
|
|
287
|
|
363
|
|
9
|
|
(96)
|
|
406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(Q)
|
|
$
1,530
|
|
$
1,513
|
|
$
1,319
|
|
$
1,297
|
|
$
1,296
|
|
Fully taxable
equivalent income adjustment
|
(R)
|
|
1,512
|
|
1,485
|
|
1,494
|
|
1,660
|
|
1,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net securities
losses/(gains) include the change in fair value of the Company's
equity securities in compliance with the Company's adoption of ASU
2016-01.
|
(2) Non-GAAP
financial measure.
|
(3) Total tangible
shareholders' equity is computed by taking total shareholders'
equity less the intangible assets at period-end. Total tangible
assets is computed by taking 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.
|
BERKSHIRE HILLS
BANCORP, INC.
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED -
(F-10)
|
|
|
At or for the Nine
Months Ended
|
|
|
|
Sept. 30,
|
|
Sept. 30,
|
|
(in
thousands)
|
|
|
2020
|
|
2021
|
|
Total revenue from
continuing operations
|
(A)
|
|
$
284,053
|
|
$
343,693
|
|
Adj: Net securities
losses (1)
|
|
|
9,925
|
|
681
|
|
Adj: Net (gains) on
sale of business operations and assets
|
|
-
|
|
(51,885)
|
|
Total adjusted
revenue (2)
|
(B)
|
|
$
293,978
|
|
$
292,489
|
|
|
|
|
|
|
|
|
Total non-interest
expense from continuing operations
|
(C)
|
|
$
768,443
|
|
$
216,486
|
|
Less: Merger,
restructuring and other expense
|
|
|
(5,316)
|
|
(4,917)
|
|
Less: Goodwill
impairment
|
|
|
(553,762)
|
|
-
|
|
Adjusted non-interest
expense (2)
|
(D)
|
|
$
209,365
|
|
$
211,569
|
|
|
|
|
|
|
|
|
Pre-tax,
pre-provision net revenue (PPNR) from continuing
operations
|
(A-C)
|
|
$
(484,390)
|
|
$
127,207
|
|
Adjusted pre-tax,
pre-provision net revenue (PPNR)
|
(B-D)
|
|
84,613
|
|
80,920
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
|
|
$
(548,026)
|
|
$
98,416
|
|
Adj: Net securities
losses (1)
|
|
|
9,925
|
|
681
|
|
Adj: Goodwill
impairment
|
|
|
553,762
|
|
-
|
|
Adj: Net (gains) on
sale of business operations and assets
|
|
-
|
|
(51,885)
|
|
Adj: Restructuring
expense and other expense
|
|
|
5,316
|
|
4,917
|
|
Adj: Loss from
discontinued operations before income taxes
|
|
21,741
|
|
-
|
|
Adj: Income taxes
benefit/(expense)
|
|
|
(26,403)
|
|
11,685
|
|
Total adjusted
income/(loss) (2)
|
(E)
|
|
$
16,315
|
|
$
63,814
|
|
|
|
|
|
|
|
|
(in millions,
except per share data)
|
|
|
|
|
|
|
Total average
assets
|
(F)
|
|
$
13,001
|
|
$
12,268
|
|
Total average
shareholders'
equity
|
(G)
|
|
1,513
|
|
1,161
|
|
Total average
tangible shareholders' equity
(2)(3)
|
(H)
|
|
1,104
|
|
1,128
|
|
Total average
tangible common shareholders' equity
(2)(3)
|
(I)
|
|
1,083
|
|
1,128
|
|
Total tangible
shareholders' equity, period-end (2)(3)
|
(J)
|
|
1,138
|
|
1,147
|
|
Total tangible common
shareholders' equity, period-end (2)(3)
|
(K)
|
|
1,118
|
|
1,147
|
|
Total tangible
assets, period-end (2)(3)
|
(L)
|
|
12,574
|
|
11,815
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, period-end
(thousands)
|
(M)
|
|
50,306
|
|
48,657
|
|
Average diluted
shares outstanding (thousands)
|
(N)
|
|
50,290
|
|
49,963
|
|
|
|
|
|
|
|
|
GAAP earnings/(loss)
per common share, diluted(2)
|
|
|
$
(10.90)
|
|
$
1.97
|
|
Adjusted earnings per
common share, diluted (2)
|
(E/N)
|
|
0.32
|
|
1.28
|
|
Tangible book value
per common share, period-end (2)
|
(K/M)
|
|
22.22
|
|
23.58
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(J/L)
|
|
9.05
|
|
9.71
|
|
|
|
|
|
|
|
|
Performance ratios
(4)
|
|
|
|
|
|
|
GAAP return on
equity
|
|
|
(48.26)
|
%
|
11.30
|
%
|
Adjusted return on
equity (2)
|
(E/G)
|
|
1.44
|
|
7.33
|
|
Return on tangible
common equity (2)(5)
|
|
|
(67.09)
|
|
11.97
|
|
Adjusted return on
tangible common equity (2)(5)
|
(E+Q)/(I)
|
|
2.39
|
|
7.88
|
|
GAAP return on
assets
|
|
|
(5.63)
|
|
1.07
|
|
Adjusted return on
assets(2)
|
|
|
0.17
|
|
0.69
|
|
PPNR from continuing
operations/assets (2)
|
|
|
(4.97)
|
|
1.38
|
|
Adjusted PPNR/assets
(2)
|
|
|
0.87
|
|
0.88
|
|
Efficiency ratio
(2)(6)
|
(D-Q)/(B+O+R)
|
|
67.72
|
|
69.32
|
|
Net interest margin,
FTE
|
|
|
2.75
|
|
2.60
|
|
|
|
|
|
|
|
|
Supplementary data
(in thousands)
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (7)
|
(O)
|
|
$
3,364
|
|
$
2,315
|
|
Non-interest income
charge on tax-credit investments (8)
|
(P)
|
|
(2,673)
|
|
(1,996)
|
|
Net income on
tax-credit investments
|
(O+P)
|
|
691
|
|
319
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(Q)
|
|
$
4,668
|
|
$
3,912
|
|
Fully taxable
equivalent income adjustment
|
(R)
|
|
4,917
|
|
4,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.