BOSTON, Jan. 20, 2022 /PRNewswire/ -- Berkshire Hills
Bancorp, Inc. (NYSE: BHLB) today reported that fourth quarter
earnings per share (EPS) increased year-over-year by 40% to
$0.42 in 2021, and by 50% to
$0.42 on an adjusted non-GAAP basis.
For the year 2021, Berkshire
reported EPS of $2.39, or
$1.69 on an adjusted basis, compared
to a 2020 loss of ($10.60), or a
$0.60 profit, on an adjusted
basis.
Results for the quarter and full year 2021 demonstrate strong
improvement over the prior year and a solid start to Berkshire's Exciting Strategic Transformation
(BEST) plan that is targeted to significantly improve stakeholder
value while making Berkshire the
leading socially responsible Community Bank in New England and
beyond.
FOURTH QUARTER FINANCIAL HIGHLIGHTS (Comparisons are
to the prior year unless otherwise stated; non-GAAP measures are
reconciled on pages F-9 and F-10).
- 4% increase in non-interest income excluding gains/losses
-
- 18% increase excluding insurance operations sold in 2021
- 1% increase in commercial loans quarter-over-quarter
-
- 4% increase in commercial and industrial loans
- Total loans stable quarter-over-quarter; up 0.5% before
non-strategic run-off
- 45% decrease in non-performing assets, measuring 0.32% of total
year-end assets
- $3 million benefit to the credit
loss provision due to a release of the credit loss allowance
- 71% reduction in wholesale funding to 3% of assets (period-end
balance)
- Cost of deposits down year-over-year to 0.19% from 0.47%
CEO Nitin Mhatre stated, "We
posted commercial portfolio loan growth during the quarter and our
fee income demonstrated strong year-over-year momentum across most
business lines. We announced and executed several initiatives in
the most recent quarter which are targeted to strengthen our
franchise and further improve our future operating results as part
of our BEST plan. Berkshire
continued to hire strong new talent in our SBA lending, wealth
management and private banking divisions, and enhanced our business
banking and MyBanker teams as well. Our Board of Directors was
joined by former banking executive and digital, financial and risk
expert Nina Charnley. Berkshire expanded its consumer lending
solutions, providing more convenient and affordable access to
consumers in its markets. The Bank also expanded its wealth
management offerings with a suite of mission-aligned socially
responsible investing portfolios and is already seeing some early
success."
Mr. Mhatre concluded, "We're pleased with the strong
year-over-year improvement in net profit and are tracking ahead of
our BEST plan financial targets. Berkshire Bank's strong liquidity
and capital positions it well for higher expected interest rates
and planned business growth in 2022. I thank our Berkshire team for its commitment to
exceptional service to our customers and markets, its dedication to
community comeback, and for making our Company an award-winning
workplace and outstanding corporate citizen. We're pleased that our
shareholders have benefited from our endeavors as our share price
has reached a nearly two year high and appreciated at about twice
the growth rate of peers in 2021. Also, we announced yesterday that
our Board has authorized a share repurchase up to $140 million in total cost and we're targeting
further benefit to our shareholders from this plan in 2022."
ANNUAL MEETING
The Board of Directors determined that the Annual Meeting of
Shareholders will be held at 10:00 a.m. on Wednesday, May 18, 2022 and may be convened as a
virtual meeting. The date of Friday, March
25, 2022 was established as the record date for the
determination of shareholders entitled to notice of, and to vote
at, the Annual Meeting. Further information about the annual
meeting will be available in early April at the Company's website
at ir.berkshirebank.com.
RESULTS OF OPERATIONS
Earnings: Fourth quarter GAAP earnings per share
increased to $0.42 in 2021 from
$0.30 in 2020, and decreased from
$1.31 in the third quarter of 2021.
Berkshire's non-GAAP measure of
fourth quarter adjusted EPS was also $0.42 in 2021, which was a 504% increase
year-over-year primarily due to a benefit to the loan loss
provision reflecting improved credit performance in 2021. Adjusted
EPS decreased 21% quarter-over-quarter reflecting changes in
revenue mix as the Company is investing in new revenue generating
sources targeted to benefit future periods. Fourth quarter return
on equity increased year-over-year to 6.9% in 2021, and adjusted
return on tangible common equity improved to 7.3%. These results
included the benefit of the repurchase of 5% of outstanding shares
during 2021.
Revenue: Fourth quarter revenue decreased
year-over-year and quarter-over-quarter reflecting low interest
rates and constrained customer demand during the ongoing pandemic.
By accumulating lower yielding short term investments, the Company
accepted lower 2021 revenues and is positioned to benefit
from projected stronger loan demand and higher interest rates in
2022. Fourth quarter net interest income decreased 8%
year-over-year and 3% quarter-over-quarter, reflecting both volume
and margin changes, as well as the sale of the Company's
Mid-Atlantic branch operations. The fourth quarter 2021 net
interest margin was 2.60%, compared to 2.56% in the linked quarter,
and reflected the benefit of the reduction in higher cost wholesale
funding and the roll-down in the cost of maturing retail time
deposits.
Non-interest income excluding gains/losses increased by 4%
year-over-year, and by 18% excluding insurance operations sold in
2021, including 1% growth of this measure quarter-over-quarter.
Most ongoing categories of quarterly fee income increased
year-over-year, despite the sale of the Mid-Atlantic branch
operations. SBA lending revenue climbed again to $5.8 million, marking the third straight quarter
of record revenues for this business line. Full year SBA lending
non-interest revenue was a record $21
million. Wealth management revenue increased 10%
year-over-year, totaling $2.6 million
for the quarter. In recent months, the Company has recruited
seasoned bankers to support ongoing growth in both of these
business lines.
Provision for Credit Losses on Loans: Berkshire recorded a $3
million benefit to the fourth quarter provision, compared to
a charge of $10 million in the fourth
quarter of 2020 and a benefit of $4
million in the linked quarter. This resulted from a
$7 million release of the credit loss
allowance net of $4 million in net
loan charge-offs. The Company also utilizes the non-GAAP
financial measure of Pre-tax Pre-Provision Net Revenue ("PPNR") to
evaluate the results of operations before the impact of the
provision and tax expense. PPNR measured $21
million in the most recent quarter.
Expense: Fourth quarter 2021 non-interest expense
totaled $69 million, decreasing by 3%
year-over-year and measuring flat quarter-over-quarter.
Procurement initiatives have been deployed across the
company, contributing to lower expenses for occupancy and
professional services. Growth in compensation and technology costs
include the impacts of frontline banker hires and digital
initiatives. Full time equivalent staff totaled 1,319
positions at period-end, compared to 1,505 positions at the start
of the year. The effective tax rate was 17% in the final quarter of
2021, and the tax rate was 20% for the full year 2021 including the
impact of higher taxable income from third quarter sale gains. Tax
credit investments provided $0.01 in
EPS benefit in the most recent quarter, net of the related
amortization recorded to non-interest income. This was unchanged
from the prior quarter.
BALANCE SHEET (references are to period-end balances
unless otherwise stated)
Summary: Assets totaled $11.6 billion at year-end 2021. Total assets
decreased by 10% year-over-year due primarily to the sale of the
Mid-Atlantic branch operations and expected repayments of SBA
guaranteed commercial Paycheck Protection Program ("PPP") loans. In
the fourth quarter, liquidity was used to increase the investment
securities portfolio and further reduce higher cost wholesale funds
sources. Short-term investments remained elevated at 13% of total
assets at year-end, positioning the bank to benefit from expected
increases in interest rates. Capital metrics also remained
elevated, with tangible equity measuring 10.0% of total year-end
tangible assets. The Company's strong capital and liquidity
position it for future targeted loan growth and capital
distributions which are integral elements of its BEST strategic
plan.
Loans: Period-end loans were stable in the fourth
quarter of 2021, as 1% growth in commercial balances offset 4%
decreases in residential mortgage and consumer loan balances.
Commercial and industrial loan balances grew 4%, including
strong growth in asset-based lending. Quarterly results were
net of runoff in targeted portfolios. For the year, loans decreased
by 16%, including run-off in targeted portfolios consisting of a
$603 million decrease in PPP loans, a
$112 million decrease in indirect
auto loans, and a $158 million
decrease in commercial loans in COVID-sensitive industries. This
accounted for approximately half of the full year decline in loan
balances. Much of the remaining decline was due to runoff of
residential mortgages which were not replaced in the low yield
environment during the year. The Company has expanded its
commercial and business banking teams and is developing new
sourcing channels for residential mortgages and consumer loans in
its markets to support planned loan growth in 2022.
Asset Quality: Asset quality metrics remained favorable
and improving in the most recent quarter. Non-accruing loans
decreased year-over-year by 46% to $35
million, measuring 0.52% of total loans at year-end 2021.
Annualized fourth quarter net loan charge-offs measured 0.23%,
compared to 0.80% in 2020. Total delinquent and non-accruing loans
decreased 15% year-over-year, measuring 1.15% of total year-end
2021 loans. The allowance for credit losses on loans decreased
quarter-over-quarter by $7
million, measuring 1.55% of total loans, which was a
decrease from 1.65% in the linked quarter.
Deposits and Borrowings: Period-end total deposits
decreased by 1% year-over-year and 3% quarter-over-quarter.
Excluding brokered deposits, total deposits increased by 2%
year-over-year and decreased 2% quarter-over-quarter as businesses
used liquidity near year-end. The Bank has been running off
brokered deposits, which decreased by $383
million and $89 million
year-over-year and quarter-over-quarter, respectively. Full
year-deposit activity resulted in a shift in mix towards
non-interest-bearing deposits, which increased 21% year-over-year
and represented 30% of total year-end balances. The fourth
quarter deposit mix shifted from NOW accounts to money market
accounts due to year-end calendar timing related to payroll
deposits. Higher cost wholesale funds, consisting of brokered
deposits and borrowings, decreased by 71% year-over-year and 21%
quarter-over-quarter. Wholesale funds totaled $339 million at year-end 2021 and all other time
deposits totaled $1.45 billion. The
Company targets to further lower funding costs as most of these
higher cost balances mature in 2022.
Equity: Capital metrics improved in 2021, with
tangible common shareholders' equity/tangible assets increasing to
10.0% at year-end. During the second and third quarters of
2021, Berkshire repurchased
approximately 5% of outstanding shares, which decreased to 48.7
million at year-end 2021 from 50.8 million at the prior year-end.
For the year 2021, book value per share increased by 4% to
$24.30, and the non-GAAP measure of
tangible book value per share also increased by 4% to $23.69.
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 top-performing, leading
socially responsible community bank in New England and beyond.
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:
- Progress on the BEST Community Comeback: Berkshire previously announced its "BEST
Community Comeback", an aggressive ESG and community commitment to
fuel resilience and strengthen local economies. The multi-year plan
focuses on four key areas: fueling small businesses, community
financing and philanthropy, financial access and empowerment, and
funding environmental sustainability. As a result of the collective
efforts of its employees, Berkshire is showing early progress and
momentum towards achievement of its goals. The Company helped more
than 180,000 individuals through its financial wellness programming
and increased its use of renewable electricity to 83%. Additional
information can be found at berkshirebank.com/comeback.
- Enhancing ESG Oversight: Berkshire continued to enhance its oversight
of Environmental, Social and Governance matters by adding an ESG
Committee, chaired by its SVP, Corporate Responsibility &
Communications and including members of its executive management
team. The committee complements its existing comprehensive
management committee structure and provides an additional layer of
oversight to its enterprise-wide ESG and Corporate Responsibility
program.
- Current ESG Performance: The Company continued to
improve its Environmental, Social and Governance (ESG) ratings,
generally outperforming peers and moving into the top-quartile for
ESG performance, one of its five major BEST targets. As of
December 31, 2021 the Company
received ratings of: MSCI ESG- BBB; ISS ESG Quality Score -
Environment: 3, Social: 1, Governance: 2; and Bloomberg ESG
Disclosure- 47.81. The Company also received an improved rating
from Sustainalytics.
INVESTOR CONFERENCE CALL AND INVESTOR PRESENTATION
Berkshire will conduct a conference
call/webcast at 10:00 a.m. eastern
time on Thursday, January 20, 2022 to discuss results for
the quarter and provide guidance about expected future
results. The Company will also post an investor presentation
at its website at ir.berkshirebank.com with additional
financial information and other information about the quarter.
Participants are encouraged to pre-register for the conference
call using the following link:
https://www.incommglobalevents.com/registration/q4inc/9598/berkshire-hills-bancorp-q4-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: 738511.
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: 198914. 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 $11.6 billion in assets and operates 106 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 third
quarter net gain of $52 million on
the sale of the Company's insurance subsidiary and the Mid-Atlantic
branch operations. Expense adjustments in the first quarter 2021
were primarily related to branch consolidations. Third quarter 2021
adjustments included 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 fourth quarter 2021 revenue adjustment was
primarily related to trailing revenue on a previously reported
sale, and the expense adjustment was due primarily to branch
restructuring costs.
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)
|
|
|
|
|
|
|
|
|
|
Dec. 31,
|
|
March 31,
|
|
June 30,
|
|
Sept. 30,
|
|
Dec.
31,
|
|
|
|
|
|
2020
|
|
2021
|
|
2021
|
|
2021
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOMINAL AND PER
SHARE DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
common share, diluted
|
$
0.30
|
|
$
0.26
|
|
$
0.43
|
|
$
1.31
|
|
$
0.42
|
|
|
|
Adjusted earnings per
common share, diluted (2)
|
0.28
|
|
0.32
|
|
0.44
|
|
0.53
|
|
0.42
|
|
|
|
Net income,
(thousands)
|
15,009
|
|
13,031
|
|
21,636
|
|
63,749
|
|
20,248
|
|
|
|
Adjusted net
income,(thousands)(2)
|
14,062
|
|
16,015
|
|
22,104
|
|
25,695
|
|
20,172
|
|
|
|
Total common shares
outstanding, period-end (thousands)
|
50,833
|
|
50,988
|
|
50,453
|
|
48,657
|
|
48,667
|
|
|
|
Average diluted
shares, (thousands)
|
50,355
|
|
50,565
|
|
50,608
|
|
48,744
|
|
48,340
|
|
|
|
Total book value per
common share, (end of period)
|
23.37
|
|
23.05
|
|
23.30
|
|
24.21
|
|
24.30
|
|
|
|
Tangible book value
per common share, (end of period) (2)
|
22.68
|
|
22.39
|
|
22.66
|
|
23.58
|
|
23.69
|
|
|
|
Dividends per common
share
|
0.12
|
|
0.12
|
|
0.12
|
|
0.12
|
|
0.12
|
|
|
|
Full-time equivalent
staff, continuing operations
|
1,505
|
|
1,467
|
|
1,417
|
|
1,333
|
|
1,319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE RATIOS
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
equity
|
5.22
|
%
|
4.50
|
%
|
7.37
|
%
|
22.18
|
%
|
6.86
|
%
|
|
|
Adjusted return on
equity (2)
|
4.89
|
|
5.53
|
|
7.53
|
|
8.94
|
|
6.83
|
|
|
|
Return on tangible
common equity (2)
|
5.85
|
|
4.98
|
|
7.92
|
|
23.14
|
|
7.37
|
|
|
|
Adjusted return on
tangible common equity (2)
|
5.50
|
|
6.04
|
|
8.08
|
|
9.53
|
|
7.34
|
|
|
|
Return on
assets
|
0.48
|
|
0.42
|
|
0.70
|
|
2.14
|
|
0.71
|
|
|
|
Adjusted return on
assets (2)
|
0.45
|
|
0.51
|
|
0.71
|
|
0.86
|
|
0.71
|
|
|
|
Net interest margin,
fully taxable equivalent (FTE) (4)(5)
|
2.61
|
|
2.62
|
|
2.62
|
|
2.56
|
|
2.60
|
|
|
|
Efficiency ratio
(2)
|
71.03
|
|
71.32
|
|
67.82
|
|
68.76
|
|
71.98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA
(in millions, end of period)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$ 12,838
|
|
$
12,757
|
|
$ 12,273
|
|
$ 11,846
|
|
$
11,555
|
|
|
|
Total earning
assets
|
12,090
|
|
12,071
|
|
11,571
|
|
11,145
|
|
10,899
|
|
|
|
Total
loans
|
|
8,082
|
|
7,659
|
|
7,233
|
|
6,836
|
|
6,826
|
|
|
|
Total
deposits
|
|
10,216
|
|
10,244
|
|
9,914
|
|
10,365
|
|
10,069
|
|
|
|
Loans/deposits
(%)
|
79
|
%
|
75
|
%
|
73
|
%
|
66
|
%
|
68
|
%
|
|
|
Total shareholders'
equity
|
$
1,188
|
|
$
1,175
|
|
$
1,175
|
|
$
1,178
|
|
$
1,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET
QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses, (millions)
|
$
127
|
|
$
124
|
|
$
119
|
|
$
113
|
|
$
106
|
|
|
|
Net charge-offs,
(millions)
|
(17)
|
|
(10)
|
|
(5)
|
|
(2)
|
|
(4)
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
0.80
|
%
|
0.51
|
%
|
0.26
|
%
|
0.12
|
%
|
0.23
|
%
|
|
|
Provision
expense/(income), (millions)
|
$
10
|
|
$
7
|
|
$
-
|
|
$
(4)
|
|
$
(3)
|
|
|
|
Non-performing
assets, (millions)
|
67
|
|
58
|
|
49
|
|
39
|
|
37
|
|
|
|
Non-performing
loans/total loans
|
0.80
|
%
|
0.73
|
%
|
0.66
|
%
|
0.54
|
%
|
0.52
|
%
|
|
|
Allowance for credit
losses/non-performing loans
|
196
|
|
222
|
|
250
|
|
304
|
|
300
|
|
|
|
Allowance for credit
losses/total loans
|
1.58
|
|
1.62
|
|
1.65
|
|
1.65
|
|
1.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1
capital to risk weighted assets(6)
|
13.8
|
%
|
14.2
|
%
|
14.3
|
%
|
15.3
|
%
|
15.0
|
%
|
|
|
Tier 1 capital
leverage ratio(6)
|
9.4
|
|
9.5
|
|
9.5
|
|
9.9
|
|
10.5
|
|
|
|
Tangible common
shareholders' equity/tangible assets(2)
|
9.0
|
|
9.0
|
|
9.3
|
|
9.7
|
|
10.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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:
0.07%, 0.05%, 0.08%, 0.06%, 0.05%.
|
|
(6)
|
Presented as
projected for December 31, 2021 and actual for the remaining
periods.
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
BALANCE SHEETS - UNAUDITED - (F-2)
|
|
December
31,
|
September
30,
|
December
31,
|
|
(in
thousands)
|
2020
|
2021
|
2021
|
|
Assets
|
|
|
|
|
Cash and due from
banks
|
$
91,219
|
$
153,185
|
$
109,350
|
|
Short-term
investments
|
1,466,656
|
1,971,345
|
1,518,457
|
|
Total cash and
short-term investments
|
1,557,875
|
2,124,530
|
1,627,807
|
|
|
|
|
|
|
Trading
security
|
9,708
|
8,574
|
8,354
|
|
Marketable equity
securities, at fair value
|
18,513
|
15,601
|
15,453
|
|
Securities available
for sale, at fair value
|
1,695,232
|
1,643,965
|
1,877,585
|
|
Securities held to
maturity, at amortized cost
|
465,091
|
651,863
|
636,503
|
|
Federal Home Loan
Bank stock and other restricted securities
|
34,873
|
12,041
|
10,800
|
|
Total
securities
|
2,223,417
|
2,332,044
|
2,548,695
|
|
Less: Allowance for
credit losses on investment securities
|
(104)
|
(125)
|
(105)
|
|
Net
securities
|
2,223,313
|
2,331,919
|
2,548,590
|
|
|
|
|
|
|
Loans held for
sale
|
17,748
|
5,176
|
6,110
|
|
|
|
|
|
|
Total
loans
|
8,081,519
|
6,836,235
|
6,825,847
|
|
Less: Allowance for
credit losses on loans
|
(127,302)
|
(112,916)
|
(106,094)
|
|
Net loans
|
7,954,217
|
6,723,319
|
6,719,753
|
|
|
|
|
|
|
Premises and
equipment, net
|
112,663
|
99,233
|
94,383
|
|
Other real estate
owned
|
149
|
-
|
-
|
|
Goodwill and other
intangible assets
|
34,819
|
30,907
|
29,619
|
|
Other
assets
|
619,925
|
527,049
|
524,074
|
|
Assets held for sale
(1)
|
317,304
|
3,743
|
4,577
|
|
Total
assets
|
$
12,838,013
|
$
11,845,876
|
$
11,554,913
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
Demand
deposits
|
$
2,484,249
|
$
3,022,821
|
$
3,008,461
|
|
NOW and other
deposits
|
1,003,005
|
1,982,089
|
976,401
|
|
Money market
deposits
|
3,371,353
|
2,438,832
|
3,293,526
|
|
Savings
deposits
|
972,116
|
1,095,959
|
1,111,625
|
|
Time
deposits
|
2,385,085
|
1,825,714
|
1,678,940
|
|
Total
deposits
|
10,215,808
|
10,365,415
|
10,068,953
|
|
|
|
|
|
|
Senior
borrowings
|
474,357
|
13,369
|
13,331
|
|
Subordinated
borrowings
|
97,280
|
97,454
|
97,513
|
|
Total
borrowings
|
571,637
|
110,823
|
110,844
|
|
|
|
|
|
|
Other
liabilities
|
232,730
|
191,563
|
192,681
|
|
Liabilities held for
sale (1)
|
630,065
|
-
|
-
|
|
Total
liabilities
|
11,650,240
|
10,667,801
|
10,372,478
|
|
|
|
|
|
|
Preferred
shareholders' equity
|
-
|
-
|
-
|
|
Common shareholders'
equity
|
1,187,773
|
1,178,075
|
1,182,435
|
|
Total shareholders'
equity
|
1,187,773
|
1,178,075
|
1,182,435
|
|
Total liabilities and
shareholders' equity
|
$
12,838,013
|
$
11,845,876
|
$
11,554,913
|
|
(1) For 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
|
|
September 30,
2021
Balance
|
|
December 31, 2021
Balance
|
|
Quarter ended
December 31, 2021
|
|
Year to
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial real
estate
|
|
$
3,647
|
|
$
3,565
|
|
$
3,598
|
|
1
|
%
|
(1)
|
%
|
Commercial and
industrial loans
|
|
1,326
|
|
1,254
|
|
1,300
|
|
4
|
|
(2)
|
|
Paycheck Protection
Program (PPP) Loans
|
633
|
|
46
|
|
30
|
|
(35)
|
|
(95)
|
|
Total commercial
loans
|
|
5,606
|
|
4,865
|
|
4,928
|
|
1
|
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total residential
mortgages
|
|
1,813
|
|
1,443
|
|
1,392
|
|
(4)
|
|
(23)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home
equity
|
|
295
|
|
264
|
|
253
|
|
(4)
|
|
(14)
|
|
Auto and
other
|
|
368
|
|
264
|
|
253
|
|
(4)
|
|
(31)
|
|
Total consumer
loans
|
|
663
|
|
528
|
|
506
|
|
(4)
|
|
(24)
|
|
Total
loans
|
|
$
8,082
|
|
$
6,836
|
|
$
6,826
|
|
0
|
%
|
(16)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSIT
ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth %
|
(in
millions)
|
|
December 31, 2020
Balance
|
|
September 30,
2021
Balance
|
|
December 31, 2021
Balance
|
|
Quarter ended
December 31, 2021
|
|
Year to
Date
|
|
Non-interest
bearing
|
|
$
2,484
|
|
$
3,023
|
|
$
3,008
|
|
0
|
%
|
21
|
%
|
NOW and
other
|
|
1,003
|
|
1,982
|
|
976
|
|
(51)
|
|
(3)
|
|
Money
market
|
|
3,372
|
|
2,439
|
|
3,294
|
|
35
|
|
(2)
|
|
Savings
|
|
972
|
|
1,096
|
|
1,112
|
|
1
|
|
14
|
|
Time
deposits
|
|
2,385
|
|
1,825
|
|
1,679
|
|
(8)
|
|
(30)
|
|
Total deposits
(1)
|
|
$
10,216
|
|
$
10,365
|
|
$
10,069
|
|
(3)
|
%
|
(1)
|
%
|
(1) Included in total
deposits are brokered deposits of $228.1 million, $317.1 million
and $610.6 million at December 31, 2021, September 30,
2021, and December 31, 2020, respectively.
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS - UNAUDITED - (F-4)
|
|
Three Months
Ended
|
|
Years
Ended
|
|
December
31,
|
|
December
31,
|
(in thousands,
except per share data)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Interest
income
|
$
75,860
|
|
$
92,131
|
|
$
329,065
|
|
$
409,782
|
Interest
expense
|
6,548
|
|
16,422
|
|
37,899
|
|
93,000
|
Net interest income
from continuing operations, not FTE
|
69,312
|
|
75,709
|
|
291,166
|
|
316,782
|
Non-interest
income from continuing operations
|
|
|
|
|
|
|
|
Deposit related
fees
|
7,522
|
|
7,523
|
|
29,813
|
|
27,905
|
Loan fees and
revenue
|
9,098
|
|
4,833
|
|
35,060
|
|
16,840
|
Insurance commissions
and fees
|
-
|
|
2,319
|
|
7,003
|
|
10,770
|
Wealth management
fees
|
2,586
|
|
2,359
|
|
10,530
|
|
9,285
|
Mortgage banking
originations
|
259
|
|
543
|
|
2,056
|
|
5,190
|
Other
|
993
|
|
2,105
|
|
6,631
|
|
2,597
|
Total non-interest
income excluding gains/(losses)
|
20,458
|
|
19,682
|
|
91,093
|
|
72,587
|
Securities
(losses)/gains, net
|
(106)
|
|
2,405
|
|
(787)
|
|
(7,520)
|
Gain on sale of
business operations and assets, net
|
1,057
|
|
1,240
|
|
52,942
|
|
1,240
|
Total non-interest
income
|
21,409
|
|
23,327
|
|
143,248
|
|
66,307
|
Total net revenue
from continuing operations
|
90,721
|
|
99,036
|
|
434,414
|
|
383,089
|
Total net revenue
from continuing operations excluding (losses)/gains
|
89,770
|
|
95,391
|
|
382,259
|
|
389,369
|
|
|
|
|
|
|
|
|
Provision (benefit)
for credit losses
|
(3,000)
|
|
10,000
|
|
(500)
|
|
75,878
|
Non-interest
expense from continuing operations
|
|
|
|
|
|
|
|
Compensation and
benefits
|
37,816
|
|
36,719
|
|
150,589
|
|
147,840
|
Occupancy and
equipment
|
9,738
|
|
10,948
|
|
41,782
|
|
43,359
|
Technology and
communications
|
8,599
|
|
7,988
|
|
33,803
|
|
32,364
|
Professional
services
|
2,365
|
|
4,055
|
|
15,860
|
|
11,907
|
Other
expenses
|
10,025
|
|
11,563
|
|
38,078
|
|
45,168
|
Merger, restructuring
and other non-operating expenses
|
864
|
|
523
|
|
5,781
|
|
559,601
|
Total non-interest
expense
|
69,407
|
|
71,796
|
|
285,893
|
|
840,239
|
Total non-interest
expense excluding merger, restructuring and other
|
68,543
|
|
71,273
|
|
280,112
|
|
280,638
|
|
|
|
|
|
|
|
|
Income/(loss) from
continuing operations before income
taxes
|
$
24,314
|
|
$
17,240
|
|
$
149,021
|
|
$
(533,028)
|
Income tax
expense/(benefit)
|
4,066
|
|
(1,659)
|
|
30,357
|
|
(19,853)
|
Net income/(loss)
from continuing operations
|
$
20,248
|
|
$
18,899
|
|
$
118,664
|
|
$
(513,175)
|
|
|
|
|
|
|
|
|
(Loss) from
discontinued operations before income taxes
|
$
-
|
|
$
(5,114)
|
|
$
-
|
|
$
(26,855)
|
Income tax
(benefit)
|
-
|
|
(1,224)
|
|
-
|
|
(7,013)
|
Net (loss) from
discontinued operations
|
$
-
|
|
$
(3,890)
|
|
$
-
|
|
$
(19,842)
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
$
20,248
|
|
$
15,009
|
|
$
118,664
|
|
$
(533,017)
|
Preferred stock
dividend
|
-
|
|
-
|
|
-
|
|
313
|
Income/(loss)
available to common shareholders
|
$
20,248
|
|
$
15,009
|
|
$
118,664
|
|
$
(533,330)
|
|
|
|
|
|
|
|
|
Basic
earnings/(loss) per common share:
|
|
|
|
|
|
|
|
Continuing
Operations
|
$
0.42
|
|
$
0.38
|
|
$
2.41
|
|
$
(10.21)
|
Discontinued
Operations
|
-
|
|
(0.08)
|
|
-
|
|
(0.39)
|
Total
|
$
0.42
|
|
$
0.30
|
|
$
2.41
|
|
$
(10.60)
|
|
|
|
|
|
|
|
|
Diluted
earnings/(loss) per common share:
|
|
|
|
|
|
|
|
Continuing
Operations
|
$
0.42
|
|
$
0.38
|
|
$
2.39
|
|
$
(10.21)
|
Discontinued
Operations
|
-
|
|
(0.08)
|
|
-
|
|
(0.39)
|
Total
|
$
0.42
|
|
$
0.30
|
|
$
2.39
|
|
$
(10.60)
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
47,958
|
|
50,308
|
|
49,240
|
|
50,270
|
Diluted
|
48,340
|
|
50,355
|
|
49,554
|
|
50,270
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (5 Quarter Trend) - UNAUDITED -
(F-5)
|
|
|
|
|
|
|
|
|
|
|
|
Dec. 31,
|
|
March 31,
|
|
June 30,
|
|
Sept. 30,
|
|
Dec. 31,
|
|
(in thousands,
except per share data)
|
2020
|
|
2021
|
|
2021
|
|
2021
|
|
2021
|
|
Interest
income
|
$
92,131
|
|
$
88,153
|
|
$
85,364
|
|
$
79,688
|
|
$
75,860
|
|
Interest
expense
|
16,422
|
|
13,060
|
|
9,971
|
|
8,320
|
|
6,548
|
|
Net interest income
from continuing operations, not FTE
|
75,709
|
|
75,093
|
|
75,393
|
|
71,368
|
|
69,312
|
|
Non-interest income
from continuing operations
|
|
|
|
|
|
|
|
|
|
|
Deposit related
fees
|
7,523
|
|
7,126
|
|
7,508
|
|
7,657
|
|
7,522
|
|
Loan fees and
revenue
|
4,833
|
|
10,246
|
|
7,431
|
|
8,285
|
|
9,098
|
|
Insurance commissions
and fees
|
2,319
|
|
3,130
|
|
2,292
|
|
1,581
|
|
-
|
|
Wealth management
fees
|
2,359
|
|
2,772
|
|
2,519
|
|
2,653
|
|
2,586
|
|
Mortgage banking
originations
|
543
|
|
802
|
|
534
|
|
461
|
|
259
|
|
Other
|
2,105
|
|
2,148
|
|
2,211
|
|
1,279
|
|
993
|
|
Total non-interest
income excluding (losses)/gains
|
19,682
|
|
26,224
|
|
22,495
|
|
21,916
|
|
20,458
|
|
Securities
(losses)/gains, net
|
2,405
|
|
(31)
|
|
(484)
|
|
(166)
|
|
(106)
|
|
Gain on sale of
business operations and assets, net
|
1,240
|
|
-
|
|
-
|
|
51,885
|
|
1,057
|
|
Total non-interest
income
|
23,327
|
|
26,193
|
|
22,011
|
|
73,635
|
|
21,409
|
|
Total net revenue
from continuing operations
|
99,036
|
|
101,286
|
|
97,404
|
|
145,003
|
|
90,721
|
|
Total net revenue
from continuing operations excluding (losses)/gains
|
95,391
|
|
101,317
|
|
97,888
|
|
93,284
|
|
89,770
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for credit losses
|
10,000
|
|
6,500
|
|
-
|
|
(4,000)
|
|
(3,000)
|
|
Non-interest
expense from continuing operations
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
36,719
|
|
38,735
|
|
36,970
|
|
37,068
|
|
37,816
|
|
Occupancy and
equipment
|
10,948
|
|
11,024
|
|
10,599
|
|
10,421
|
|
9,738
|
|
Technology and
communications
|
7,988
|
|
8,593
|
|
8,214
|
|
8,397
|
|
8,599
|
|
Professional
services
|
4,055
|
|
6,614
|
|
3,701
|
|
3,180
|
|
2,365
|
|
Other
expenses
|
11,563
|
|
9,702
|
|
9,382
|
|
8,969
|
|
10,025
|
|
Merger, restructuring
and other non-operating expenses
|
523
|
|
3,486
|
|
6
|
|
1,425
|
|
864
|
|
Total non-interest
expense
|
71,796
|
|
78,154
|
|
68,872
|
|
69,460
|
|
69,407
|
|
Total non-interest
expense excluding merger, restructuring and other
|
71,273
|
|
74,668
|
|
68,866
|
|
68,035
|
|
68,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
$
17,240
|
|
$
16,632
|
|
$
28,532
|
|
$
79,543
|
|
$
24,314
|
|
Income tax
expense/(benefit)
|
(1,659)
|
|
3,601
|
|
6,896
|
|
15,794
|
|
4,066
|
|
Net income from
continuing operations
|
$
18,899
|
|
$
13,031
|
|
$
21,636
|
|
$
63,749
|
|
$
20,248
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) from
discontinued operations before income taxes
|
$
(5,114)
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
Income tax
(benefit)
|
(1,224)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Net (loss) from
discontinued operations
|
$
(3,890)
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
15,009
|
|
$
13,031
|
|
$
21,636
|
|
$
63,749
|
|
$
20,248
|
|
Preferred stock
dividend
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Income available to
common shareholders
|
$
15,009
|
|
$
13,031
|
|
$
21,636
|
|
$
63,749
|
|
$
20,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings/(loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
$
0.38
|
|
$
0.26
|
|
$
0.43
|
|
$
1.31
|
|
$
0.42
|
|
Discontinued
Operations
|
(0.08)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total
|
$
0.30
|
|
$
0.26
|
|
$
0.43
|
|
$
1.31
|
|
$
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
50,308
|
|
50,330
|
|
50,321
|
|
48,395
|
|
47,958
|
|
Diluted
|
50,355
|
|
50,565
|
|
50,608
|
|
48,744
|
|
48,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Dec. 31,
2021
|
|
|
|
|
|
|
|
(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
|
3,843
|
3.34
|
%
|
3,630
|
3.27
|
%
|
3,625
|
3.46
|
%
|
3,577
|
3.40
|
%
|
3,569
|
3.49
|
%
|
Commercial and
industrial loans
|
2,056
|
4.05
|
|
|
1,865
|
4.62
|
|
|
1,605
|
4.74
|
|
|
1,370
|
4.78
|
|
|
1,278
|
4.37
|
|
|
Residential
mortgages
|
1,971
|
3.78
|
|
|
1,740
|
3.71
|
|
|
1,604
|
3.79
|
|
|
1,499
|
3.65
|
|
|
1,403
|
3.82
|
|
|
Consumer
loans
|
726
|
3.41
|
|
|
634
|
3.79
|
|
|
582
|
3.80
|
|
|
545
|
3.95
|
|
|
516
|
3.96
|
|
|
Total loans
(1)
|
8,596
|
3.62
|
|
|
7,869
|
3.73
|
|
|
7,416
|
3.84
|
|
|
6,991
|
3.77
|
|
|
6,766
|
3.76
|
|
|
Securities
(2)
|
1,968
|
2.69
|
|
|
2,195
|
2.36
|
|
|
2,259
|
2.17
|
|
|
2,312
|
2.09
|
|
|
2,367
|
2.04
|
|
|
Short-term
investments and loans held for sale
|
977
|
0.14
|
|
|
1,351
|
0.13
|
|
|
1,750
|
0.10
|
|
|
1,762
|
0.17
|
|
|
1,609
|
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)
|
11,642
|
3.17
|
|
|
11,710
|
3.07
|
|
|
11,694
|
2.96
|
|
|
11,220
|
2.86
|
|
|
10,742
|
2.84
|
|
|
Goodwill and other
intangible assets
|
40
|
|
|
|
34
|
|
|
|
33
|
|
|
|
31
|
|
|
|
30
|
|
|
|
Other
assets
|
752
|
|
|
|
724
|
|
|
|
690
|
|
|
|
674
|
|
|
|
655
|
|
|
|
Assets from
discontinued operations
|
12
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Total
assets
|
12,446
|
|
|
|
12,468
|
|
|
|
12,417
|
|
|
|
11,925
|
|
|
|
11,427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and
other
|
1,279
|
0.17
|
%
|
1,325
|
0.15
|
%
|
1,389
|
0.07
|
%
|
1,316
|
0.05
|
%
|
1,331
|
0.05
|
%
|
Money
market
|
2,756
|
0.32
|
|
|
2,802
|
0.27
|
|
|
2,751
|
0.18
|
|
|
2,716
|
0.16
|
|
|
2,731
|
0.16
|
|
|
Savings
|
967
|
0.08
|
|
|
1,003
|
0.08
|
|
|
1,054
|
0.05
|
|
|
1,112
|
0.04
|
|
|
1,100
|
0.04
|
|
|
Time
|
2,629
|
1.35
|
|
|
2,266
|
1.12
|
|
|
2,013
|
0.94
|
|
|
1,893
|
0.86
|
|
|
1,750
|
0.80
|
|
|
Total
interest-bearing deposits
|
7,631
|
0.62
|
|
|
7,396
|
0.48
|
|
|
7,207
|
0.35
|
|
|
7,037
|
0.31
|
|
|
6,912
|
0.28
|
|
|
Borrowings
|
658
|
2.50
|
|
|
500
|
2.78
|
|
|
381
|
3.12
|
|
|
253
|
3.89
|
|
|
111
|
5.68
|
|
|
Mid-Atlantic region
interest-bearing deposits
|
180
|
0.80
|
|
|
518
|
0.60
|
|
|
517
|
0.51
|
|
|
306
|
0.51
|
|
|
-
|
-
|
|
|
Total
interest-bearing liabilities
|
8,469
|
0.77
|
|
|
8,414
|
0.63
|
|
|
8,105
|
0.49
|
|
|
7,596
|
0.43
|
|
|
7,023
|
0.37
|
|
|
Non-interest-bearing
demand deposits
|
2,542
|
|
|
|
2,537
|
|
|
|
2,787
|
|
|
|
2,901
|
|
|
|
3,038
|
|
|
|
Other liabilities
(4)
|
279
|
|
|
|
358
|
|
|
|
351
|
|
|
|
279
|
|
|
|
185
|
|
|
|
Liabilities from
discontinued operations
|
6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Total
liabilities
|
11,296
|
|
|
|
11,309
|
|
|
|
11,243
|
|
|
|
10,776
|
|
|
|
10,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
shareholders' equity
|
7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Common shareholders'
equity
|
1,143
|
|
|
|
1,159
|
|
|
|
1,174
|
|
|
|
1,149
|
|
|
|
1,181
|
|
|
|
Total shareholders'
equity
|
1,150
|
|
|
|
1,159
|
|
|
|
1,174
|
|
|
|
1,149
|
|
|
|
1,181
|
|
|
|
Total liabilities and
shareholders' equity
|
12,446
|
|
|
|
12,468
|
|
|
|
12,417
|
|
|
|
11,925
|
|
|
|
11,427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
spread
|
|
2.40
|
%
|
|
2.44
|
%
|
|
2.47
|
%
|
|
2.43
|
%
|
|
2.47
|
%
|
Net interest margin,
FTE (5)
|
|
2.61
|
|
|
|
2.62
|
|
|
|
2.62
|
|
|
|
2.56
|
|
|
|
2.60
|
|
|
Cost of
funds
|
|
0.60
|
|
|
|
0.48
|
|
|
|
0.36
|
|
|
|
0.31
|
|
|
|
0.26
|
|
|
Cost of
deposits
|
|
0.47
|
|
|
|
0.36
|
|
|
|
0.25
|
|
|
|
0.22
|
|
|
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income,
not FTE
|
76
|
|
|
|
75
|
|
|
|
75
|
|
|
|
71
|
|
|
|
69
|
|
|
|
Fully taxable
equivalent income adjustment
|
1
|
|
|
|
1
|
|
|
|
2
|
|
|
|
2
|
|
|
|
2
|
|
|
|
Net Interest
Income, FTE
|
77
|
|
|
|
77
|
|
|
|
77
|
|
|
|
73
|
|
|
|
71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average PPP
loans
|
685
|
|
|
|
546
|
|
|
|
321
|
|
|
|
90
|
|
|
|
37
|
|
|
|
Average loans
excluding PPP loans
|
7,911
|
|
|
|
7,323
|
|
|
|
7,095
|
|
|
|
6,901
|
|
|
|
6,729
|
|
|
|
Total PPP loans,
end of period
|
633
|
|
|
|
444
|
|
|
|
173
|
|
|
|
46
|
|
|
|
30
|
|
|
|
Total loans excluding
PPP loans, end of period
|
7,448
|
|
|
|
7,215
|
|
|
|
7,059
|
|
|
|
6,790
|
|
|
|
6,796
|
|
|
|
PPP interest
income
|
6
|
|
|
|
7
|
|
|
|
5
|
|
|
|
2
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average
non-maturity deposits
|
7,544
|
|
|
|
7,666
|
|
|
|
7,981
|
|
|
|
8,045
|
|
|
|
8,200
|
|
|
|
Total average
deposits
|
10,173
|
|
|
|
9,932
|
|
|
|
9,994
|
|
|
|
9,938
|
|
|
|
9,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased loan
accretion
|
2
|
|
|
|
1
|
|
|
|
2
|
|
|
|
2
|
|
|
|
2
|
|
|
|
Total average
tangible equity (6)
|
1,110
|
|
|
|
1,125
|
|
|
|
1,141
|
|
|
|
1,118
|
|
|
|
1,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
December 31, 2021 there were no Mid-Atlantic region average
non-interest bearing deposits. As of December 31, 2020, the
Mid-Atlantic region average non-interest bearing deposits were $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: ( 0.05%, 0.11%, 0.11%, 0.05%,
0.00%.) 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)
|
|
|
|
|
|
Dec. 31,
|
|
March 31,
|
|
June 30,
|
|
Sept. 30,
|
|
Dec. 31,
|
|
(in
thousands)
|
|
2020
|
|
2021
|
|
2021
|
|
2021
|
|
2021
|
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Non-accruing
loans:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
35,581
|
|
$
28,325
|
|
$
22,799
|
|
$
14,845
|
|
$
13,954
|
|
Commercial and
industrial loans
|
|
12,921
|
|
9,371
|
|
9,427
|
|
7,140
|
|
6,747
|
|
Residential
mortgages
|
|
8,347
|
|
10,674
|
|
9,238
|
|
9,763
|
|
9,825
|
|
Consumer
loans
|
|
8,099
|
|
7,447
|
|
6,141
|
|
5,399
|
|
4,800
|
|
Total non-accruing
loans
|
|
64,948
|
|
55,817
|
|
47,605
|
|
37,147
|
|
35,326
|
|
Other real estate
owned
|
|
149
|
|
149
|
|
85
|
|
-
|
|
-
|
|
Repossessed
assets
|
|
1,932
|
|
1,701
|
|
1,666
|
|
1,664
|
|
1,736
|
|
Total non-performing
assets
|
|
$
67,029
|
|
$
57,667
|
|
$
49,356
|
|
$
38,811
|
|
$
37,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-accruing
loans/total loans
|
|
0.80%
|
|
0.73%
|
|
0.66%
|
|
0.54%
|
|
0.52%
|
|
Total non-accruing
loans/total loans excluding PPP loans
|
|
0.87%
|
|
0.77%
|
|
0.67%
|
|
0.55%
|
|
0.52%
|
|
Total non-performing
assets/total assets
|
|
0.52%
|
|
0.45%
|
|
0.40%
|
|
0.33%
|
|
0.32%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND
ALLOWANCE FOR CREDIT LOSSES ON LOANS
|
|
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
|
$
134,414
|
|
$
127,302
|
|
$
123,800
|
|
$
119,044
|
|
$
112,916
|
|
Charged-off
loans
|
|
(18,314)
|
|
(11,460)
|
|
(7,248)
|
|
(4,334)
|
|
(7,976)
|
|
Recoveries on
charged-off loans
|
|
1,209
|
|
1,465
|
|
2,492
|
|
2,206
|
|
4,154
|
|
Net loans
charged-off
|
|
(17,105)
|
|
(9,995)
|
|
(4,756)
|
|
(2,128)
|
|
(3,822)
|
|
Provision (benefit)
for loan credit losses
|
|
9,993
|
|
6,493
|
|
-
|
|
(4,000)
|
|
(3,000)
|
|
Balance at end of
period
|
|
$
127,302
|
|
$
123,800
|
|
$
119,044
|
|
$
112,916
|
|
$
106,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses/total loans
|
|
1.58%
|
|
1.62%
|
|
1.65%
|
|
1.65%
|
|
1.55%
|
|
Allowance for credit
losses/total loans excluding PPP loans
|
1.71%
|
|
1.72%
|
|
1.69%
|
|
1.66%
|
|
1.56%
|
|
Allowance for credit
losses/non-accruing loans
|
|
196%
|
|
222%
|
|
250%
|
|
304%
|
|
300%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOAN
CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
(11,862)
|
|
$
(6,959)
|
|
$
(2,325)
|
|
$
(1,391)
|
|
$
(2,208)
|
|
Commercial and
industrial loans
|
|
(5,089)
|
|
(2,662)
|
|
(2,331)
|
|
110
|
|
(1,649)
|
|
Residential
mortgages
|
|
250
|
|
80
|
|
176
|
|
(677)
|
|
(2)
|
|
Home
equity
|
|
141
|
|
(42)
|
|
(136)
|
|
106
|
|
106
|
|
Auto and other
consumer
|
|
(545)
|
|
(412)
|
|
(140)
|
|
(276)
|
|
(69)
|
|
Total, net
|
|
$
(17,105)
|
|
$
(9,995)
|
|
$
(4,756)
|
|
$
(2,128)
|
|
$
(3,822)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
|
0.80%
|
|
0.51%
|
|
0.26%
|
|
0.12%
|
|
0.23%
|
|
Net charge-offs (YTD
annualized)/average loans
|
|
0.41%
|
|
0.51%
|
|
0.39%
|
|
0.30%
|
|
0.29%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
ASSET QUALITY
ANALYSIS - UNAUDITED (F-8)
|
|
|
|
|
December 31,
2020
|
|
March 31,
2021
|
|
June 30,
2021
|
|
September 30,
2021
|
|
December 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
|
|
$
16,310
|
|
0.20%
|
|
$
28,565
|
|
0.37%
|
|
$ 15,483
|
|
0.22%
|
|
$
18,365
|
0.27%
|
|
$
39,863
|
|
0.58%
|
|
90+ Days delinquent
and still accruing
|
|
11,450
|
|
0.14%
|
|
6,124
|
|
0.08%
|
|
3,129
|
|
0.04%
|
|
3,803
|
0.06%
|
|
3,270
|
|
0.05%
|
|
Total accruing
delinquent loans
|
|
27,760
|
|
0.34%
|
|
34,689
|
|
0.45%
|
|
18,612
|
|
0.26%
|
|
22,168
|
0.33%
|
|
43,133
|
|
0.63%
|
|
Non-accruing
loans
|
|
64,948
|
|
0.80%
|
|
55,817
|
|
0.73%
|
|
47,605
|
|
0.66%
|
|
37,147
|
0.54%
|
|
35,326
|
|
0.52%
|
|
Total delinquent and
non-accruing loans
|
|
$
92,708
|
|
1.14%
|
|
$
90,506
|
|
1.18%
|
|
$ 66,217
|
|
0.92%
|
|
$
59,315
|
0.87%
|
|
$
78,459
|
|
1.15%
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED -
(F-9)
|
|
|
|
|
|
Dec. 31,
|
|
March 31,
|
|
June 30,
|
|
Sept. 30,
|
|
Dec. 31,
|
|
(in
thousands)
|
|
2020
|
|
2021
|
|
2021
|
|
2021
|
|
2021
|
|
Total revenue from
continuing operations
|
(A)
|
$
99,036
|
|
$
101,286
|
|
$ 97,404
|
|
$
145,003
|
|
$
90,721
|
|
Adj: Net securities
losses/(gains) (1)
|
|
(2,405)
|
|
31
|
|
484
|
|
166
|
|
106
|
|
Adj: Net (gains) on
sale of business operations and assets
|
|
(1,240)
|
|
-
|
|
-
|
|
(51,885)
|
|
(1,057)
|
|
Total adjusted
revenue (2)
|
(B)
|
$
95,391
|
|
$
101,317
|
|
$ 97,888
|
|
$
93,284
|
|
$
89,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense from continuing operations
|
(C)
|
$
71,796
|
|
$
78,154
|
|
$ 68,872
|
|
$
69,460
|
|
$
69,407
|
|
Less: Merger,
restructuring and other expense
|
|
(523)
|
|
(3,486)
|
|
(6)
|
|
(1,425)
|
|
(864)
|
|
Adjusted non-interest
expense (2)
|
(D)
|
$
71,273
|
|
$
74,668
|
|
$ 68,866
|
|
$
68,035
|
|
$
68,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax,
pre-provision net revenue (PPNR) from continuing
operations
|
(A-C)
|
$
27,240
|
|
$
23,132
|
|
$ 28,532
|
|
$
75,543
|
|
$
21,314
|
|
Adjusted pre-tax,
pre-provision net revenue (PPNR)
|
(B-D)
|
24,118
|
|
26,649
|
|
29,022
|
|
25,249
|
|
21,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
15,009
|
|
$
13,031
|
|
$ 21,636
|
|
$
63,749
|
|
$
20,248
|
|
Adj: Net securities
losses/(gains) (1)
|
|
(2,405)
|
|
31
|
|
484
|
|
166
|
|
106
|
|
Adj: Net (gains) on
sale of business operations and assets
|
|
(1,240)
|
|
-
|
|
-
|
|
(51,885)
|
|
(1,057)
|
|
Adj: Restructuring
expense and other expense
|
|
523
|
|
3,486
|
|
6
|
|
1,425
|
|
864
|
|
Adj: Loss from
discontinued operations before income taxes
|
|
5,114
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Adj: Income taxes
benefit/(expense)
|
|
(2,939)
|
|
(533)
|
|
(22)
|
|
12,240
|
|
11
|
|
Total adjusted income
(2)
|
(E)
|
$
14,062
|
|
$
16,015
|
|
$ 22,104
|
|
$
25,695
|
|
$
20,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
(F)
|
$
12,446
|
|
$
12,468
|
|
$ 12,417
|
|
$
11,925
|
|
$
11,427
|
|
Total average
shareholders'
equity
|
(G)
|
1,150
|
|
1,159
|
|
1,174
|
|
1,149
|
|
1,181
|
|
Total average
tangible shareholders' equity
(2)(3)
|
(H)
|
1,110
|
|
1,125
|
|
1,141
|
|
1,118
|
|
1,151
|
|
Total average
tangible common shareholders' equity
(2)(3)
|
(I)
|
1,103
|
|
1,125
|
|
1,141
|
|
1,118
|
|
1,151
|
|
Total tangible
shareholders' equity, period-end (2)(3)
|
(J)
|
1,153
|
|
1,142
|
|
1,143
|
|
1,147
|
|
1,153
|
|
Total tangible common
shareholders' equity, period-end (2)(3)
|
(K)
|
1,153
|
|
1,142
|
|
1,143
|
|
1,147
|
|
1,153
|
|
Total tangible
assets, period-end (2)(3)
|
(L)
|
12,803
|
|
12,724
|
|
12,241
|
|
11,815
|
|
11,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, period-end
(thousands)
|
(M)
|
50,833
|
|
50,988
|
|
50,453
|
|
48,657
|
|
48,667
|
|
Average diluted
shares outstanding (thousands)
|
(N)
|
50,355
|
|
50,565
|
|
50,608
|
|
48,744
|
|
48,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings per
common share, diluted(2)
|
|
$
0.30
|
|
$
0.26
|
|
$
0.43
|
|
$
1.31
|
|
$
0.42
|
|
Adjusted earnings per
common share, diluted (2)
|
(E/N)
|
0.28
|
|
0.32
|
|
0.44
|
|
0.53
|
|
0.42
|
|
Tangible book value
per common share, period-end (2)
|
(K/M)
|
22.68
|
|
22.39
|
|
22.66
|
|
23.58
|
|
23.69
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(J/L)
|
9.01
|
|
8.98
|
|
9.34
|
|
9.71
|
|
10.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance ratios
(4)
|
|
|
|
|
|
|
|
|
|
|
|
GAAP return on
equity
|
|
5.22
|
%
|
4.50
|
%
|
7.37
|
%
|
22.18
|
%
|
6.86
|
%
|
Adjusted return on
equity (2)
|
(E/G)
|
4.89
|
|
5.53
|
|
7.53
|
|
8.94
|
|
6.83
|
|
Return on tangible
common equity (2)(5)
|
|
5.85
|
|
4.98
|
|
7.92
|
|
23.14
|
|
7.37
|
|
Adjusted return on
tangible common equity (2)(5)
|
(E+Q)/(I)
|
5.50
|
|
6.04
|
|
8.08
|
|
9.53
|
|
7.34
|
|
GAAP return on
assets
|
|
0.48
|
|
0.42
|
|
0.70
|
|
2.14
|
|
0.71
|
|
Adjusted return on
assets(2)
|
|
0.45
|
|
0.51
|
|
0.71
|
|
0.86
|
|
0.71
|
|
PPNR from continuing
operations/assets (2)
|
|
0.88
|
|
0.74
|
|
0.92
|
|
2.53
|
|
0.75
|
|
Adjusted PPNR/assets
(2)
|
|
0.78
|
|
0.85
|
|
0.93
|
|
0.85
|
|
0.74
|
|
Efficiency ratio
(2)(6)
|
(D-Q)/(B+O+R)
|
71.03
|
|
71.32
|
|
67.82
|
|
68.76
|
|
71.98
|
|
Net interest margin,
FTE
|
|
2.61
|
|
2.62
|
|
2.62
|
|
2.56
|
|
2.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary data
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (7)
|
(O)
|
$
1,334
|
|
$
41
|
|
$
79
|
|
$
2,195
|
|
$
2,057
|
|
Non-interest income
charge on tax-credit investments (8)
|
(P)
|
(971)
|
|
(33)
|
|
(175)
|
|
(1,789)
|
|
(1,448)
|
|
Net income on
tax-credit investments
|
(O+P)
|
363
|
|
9
|
|
(96)
|
|
406
|
|
609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(Q)
|
$
1,513
|
|
$
1,319
|
|
$
1,297
|
|
$
1,296
|
|
$
1,288
|
|
Fully taxable
equivalent income adjustment
|
(R)
|
1,485
|
|
1,494
|
|
1,660
|
|
1,586
|
|
1,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
|
|
Years
Ended
|
|
|
|
Dec. 31,
|
|
Dec. 31,
|
|
(in
thousands)
|
|
|
2020
|
|
2021
|
|
Total revenue from
continuing operations
|
(A)
|
|
$
383,089
|
|
$
434,414
|
|
Adj: Net securities
losses (1)
|
|
|
7,520
|
|
787
|
|
Adj: Net (gains) on
sale of business operations and assets
|
|
|
(1,240)
|
|
(52,942)
|
|
Total adjusted
revenue (2)
|
(B)
|
|
$
389,369
|
|
$
382,259
|
|
|
|
|
|
|
|
|
Total non-interest
expense from continuing operations
|
(C)
|
|
$
840,239
|
|
$
285,893
|
|
Less: Merger,
restructuring and other expense
|
|
|
(5,839)
|
|
(5,781)
|
|
Less: Goodwill
impairment
|
|
|
(553,762)
|
|
-
|
|
Adjusted non-interest
expense (2)
|
(D)
|
|
$
280,638
|
|
$
280,112
|
|
|
|
|
|
|
|
|
Pre-tax,
pre-provision net revenue (PPNR) from continuing
operations
|
(A-C)
|
|
$
(457,150)
|
|
$
148,521
|
|
Adjusted pre-tax,
pre-provision net revenue (PPNR)
|
(B-D)
|
|
108,731
|
|
102,147
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
|
|
$
(533,017)
|
|
$
118,664
|
|
Adj: Net securities
losses (1)
|
|
|
7,520
|
|
787
|
|
Adj: Goodwill
impairment
|
|
|
553,762
|
|
-
|
|
Adj: Net (gains) on
sale of business operations and assets
|
|
|
(1,240)
|
|
(52,942)
|
|
Adj: Restructuring
expense and other expense
|
|
|
5,839
|
|
5,781
|
|
Adj: Loss from
discontinued operations before income taxes
|
|
|
26,855
|
|
-
|
|
Adj: Income taxes
benefit/(expense)
|
|
|
(29,342)
|
|
11,696
|
|
Total adjusted
income/(loss) (2)
|
(E)
|
|
$
30,377
|
|
$
83,986
|
|
|
|
|
|
|
|
|
(in millions,
except per share data)
|
|
|
|
|
|
|
Total average
assets
|
(F)
|
|
$
12,861
|
|
$
12,056
|
|
Total average
shareholders'
equity
|
(G)
|
|
1,421
|
|
1,166
|
|
Total average
tangible shareholders' equity
(2)(3)
|
(H)
|
|
1,105
|
|
1,134
|
|
Total average
tangible common shareholders' equity
(2)(3)
|
(I)
|
|
1,088
|
|
1,134
|
|
Total tangible
shareholders' equity, period-end (2)(3)
|
(J)
|
|
1,153
|
|
1,153
|
|
Total tangible common
shareholders' equity, period-end (2)(3)
|
(K)
|
|
1,153
|
|
1,153
|
|
Total tangible
assets, period-end (2)(3)
|
(L)
|
|
12,803
|
|
11,525
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, period-end
(thousands)
|
(M)
|
|
50,833
|
|
48,667
|
|
Average diluted
shares outstanding (thousands)
|
(N)
|
|
50,308
|
|
49,554
|
|
|
|
|
|
|
|
|
GAAP earnings/(loss)
per common share, diluted(2)
|
|
|
$
(10.60)
|
|
$
2.39
|
|
Adjusted earnings per
common share, diluted (2)
|
(E/N)
|
|
0.60
|
|
1.69
|
|
Tangible book value
per common share, period-end (2)
|
(K/M)
|
|
22.68
|
|
23.69
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(J/L)
|
|
9.01
|
|
10.00
|
|
|
|
|
|
|
|
|
Performance ratios
(4)
|
|
|
|
|
|
|
GAAP return on
equity
|
|
|
(37.46)
|
%
|
10.18
|
%
|
Adjusted return on
equity (2)
|
(E/G)
|
|
2.14
|
|
7.20
|
|
Return on tangible
common equity (2)(5)
|
|
|
(48.60)
|
|
10.80
|
|
Adjusted return on
tangible common equity (2)(5)
|
(E+Q)/(I)
|
|
3.18
|
|
7.74
|
|
GAAP return on
assets
|
|
|
(4.15)
|
|
0.98
|
|
Adjusted return on
assets(2)
|
|
|
0.24
|
|
0.70
|
|
PPNR from continuing
operations/assets (2)
|
|
|
(3.55)
|
|
1.23
|
|
Adjusted PPNR/assets
(2)
|
|
|
0.85
|
|
0.85
|
|
Efficiency ratio
(2)(6)
|
(D-Q)/(B+O+R)
|
|
68.53
|
|
69.96
|
|
Net interest margin,
FTE
|
|
|
2.72
|
|
2.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary data
(in thousands)
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (7)
|
(O)
|
|
$
4,699
|
|
$
4,372
|
|
Non-interest income
charge on tax-credit investments (8)
|
(P)
|
|
(3,645)
|
|
(3,445)
|
|
Net income on
tax-credit investments
|
(O+P)
|
|
1,054
|
|
928
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(Q)
|
|
$
6,181
|
|
$
5,200
|
|
Fully taxable
equivalent income adjustment
|
(R)
|
|
6,402
|
|
6,344
|
|
|
|
|
|
|
|
|
(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.