Operating Income of $22
Million, or $0.50 per
Share
- Average loan growth of 2% linked quarter; average deposit
growth of 1%
- Operating expense flat linked quarter
- Net loan charge-offs decreased $0.3
million linked quarter
- TCE ratio of 7.7% and CET1 ratio of 12.1%; stock repurchases
were $4 million
BOSTON, Oct. 20,
2023 /PRNewswire/ -- Berkshire Hills Bancorp, Inc.
(NYSE: BHLB) today reported results for the third quarter of 2023.
These results along with comparison periods are summarized
below:
($ in millions, except
per share data)
|
|
Three
Months Ended
|
|
|
Sep. 30,
2023
|
|
Jun. 30,
2023
|
|
Sep. 30,
2022
|
|
|
|
|
|
|
|
Net income
|
$
|
19.5
|
$
|
23.9
|
$
|
$18.7
|
Per
share
|
|
0.45
|
|
0.55
|
|
0.42
|
Operating
earnings1
|
|
21.5
|
|
23.9
|
|
27.9
|
Per share
|
|
0.50
|
|
0.55
|
|
0.62
|
|
|
|
|
|
|
|
Net interest income,
non FTE
|
$
|
90.3
|
$
|
92.8
|
$
|
92.1
|
Net interest income,
FTE
|
|
92.3
|
|
94.7
|
|
93.8
|
Net interest margin, FTE
|
|
3.18 %
|
|
3.24 %
|
|
3.48 %
|
Non-interest
income
|
|
17.5
|
|
17.1
|
|
16.3
|
Operating non-interest
income1
|
|
17.5
|
|
17.1
|
|
16.7
|
|
|
|
|
|
|
|
Non-interest
expense
|
$
|
76.5
|
$
|
74.0
|
$
|
81.7
|
Operating non-interest
expense1
|
|
73.9
|
|
74.0
|
|
70.2
|
Efficiency
ratio1
|
|
65.1 %
|
|
63.6 %
|
|
62.0 %
|
|
|
|
|
|
|
|
Average
balances
|
|
|
|
|
|
|
Loans
|
$
|
8,952
|
$
|
8,791
|
$
|
7,888
|
Deposits
|
|
9,630
|
|
9,568
|
|
9,669
|
|
|
|
|
|
|
|
Period-end
balances
|
|
|
|
|
|
|
Loans
|
|
8,984
|
|
8,882
|
|
7,943
|
Deposits
|
|
9,981
|
|
10,068
|
|
9,988
|
|
1. See non-GAAP
financial measures and reconciliation to GAAP measures beginning on
page 12.
|
Berkshire CEO Nitin Mhatre
stated, "We continue to make steady progress in a challenging
interest rate environment. We posted modest balance sheet growth in
the quarter and recorded higher year-to-date net income and
operating earnings compared to last year. Economic activity
continues to expand in our markets albeit at a slower pace, and our
teams are generating attractive new business and improving the
Bank's market position. We maintained strong asset quality,
liquidity and capital levels, and continued expense optimization
initiatives. During the quarter, we continued to recruit
experienced talent following the industry disruption, and we also
welcomed Mary Anne Callahan to our
Board of Directors. Mary Anne brings
a deep industry knowledge and has close familiarity with our
markets."
CFO David Rosato added, "Third
quarter operating earnings were $21.5
million, decreasing $2.4
million linked quarter. Net interest margin of 3.18
percent decreased 6 basis points linked quarter, which improved
from the 34 basis point decrease posted in the prior
quarter. Net interest income decreased $2.4 million, as funding cost increases outpaced
loan yield expansion and average earning assets decreased 2%.
Operating non-interest income advanced 2 percent
quarter-over-quarter while operating non-interest expense was flat.
GAAP non-interest expense included $2.6
million in non-operating restructuring charges primarily for
branch consolidations. I'm pleased that several of the cost
saving initiatives we've instituted to-date are starting to have an
impact and will continue to provide benefits in 2024 and
beyond."
|
As of and For the
Three Months Ended
|
|
Sep. 30,
2023
|
|
Jun. 30,
2023
|
|
Sep. 30,
2022
|
Asset
Quality
|
|
|
|
|
|
Net loan charge-offs to
average loans
|
0.24 %
|
|
0.26 %
|
|
0.30 %
|
Non-performing loans to
total loans
|
0.30 %
|
|
0.32 %
|
|
0.48 %
|
|
|
|
|
|
|
Returns
|
|
|
|
|
|
Return on average
assets
|
0.66 %
|
|
0.79 %
|
|
0.67 %
|
Return on tangible
common equity,
including
unrealized losses on AFS securities 1
|
8.45 %
|
|
10.09 %
|
|
7.88 %
|
Return on tangible
common equity,
excluding
unrealized losses on AFS securities 1
|
6.76 %
|
|
8.26 %
|
|
6.76 %
|
|
|
|
|
|
|
Capital
Ratios2
|
|
|
|
|
|
Tangible common
equity/tangible assets1
|
7.7 %
|
|
7.9 %
|
|
8.1 %
|
Tier 1
leverage
|
9.8 %
|
|
9.6 %
|
|
10.1 %
|
Common equity Tier
1
|
12.1 %
|
|
12.1 %
|
|
12.7 %
|
Tier 1
risk-based
|
12.4 %
|
|
12.3 %
|
|
13.0 %
|
Total
risk-based
|
14.4 %
|
|
14.4 %
|
|
15.1 %
|
|
|
|
1. See non-GAAP
measures and reconciliation to GAAP beginning on beginning on page
12.
All performance ratios are annualized and
are based on average balance sheet amounts, where
applicable.
2. Presented as estimated for September 30, 2023 and actual for the
remaining periods.
|
|
|
|
|
|
|
|
|
Headquartered in Boston,
Berkshire Hills Bancorp is the parent of Berkshire Bank. Providing
a wide range of financial solutions through its consumer banking,
commercial banking and wealth management divisions, the Bank has
approximately $12.1 billion in total
assets and a community-based footprint of 96 financial centers in
Massachusetts, New York, Vermont, Connecticut and Rhode Island. Access more information about
Berkshire Hills Bancorp at ir.berkshirebank.com.
3Q 2023 Financial Highlights
Income Statement
- GAAP earnings totaled $19.5 million, or $0.45 per share.
- Operating earnings totaled $21.5
million, or $0.50 per
share.
- Net interest income totaled $90.3
million in 3Q23 compared to $92.8 million in 2Q23.
- One additional calendar day in 3Q23 (1% increase in net
interest income).
- Net interest margin decreased 6 basis points from 2Q23 to 3.18%
reflecting:
- Higher cost of funds (increase of 21 basis points).
- Includes higher deposit costs (increase of 30 basis
points).
- Higher yields on the loan portfolio (increase of 11 basis
points).
- Provision for credit losses on loans totaled $8.0 million.
- Allowance for credit losses on loans increased $2.6 million.
- Net loan charge-offs totaled $5.4
million.
- Net annualized loan charge-off ratio of 0.24%.
- Non-interest income totaled $17.5 million in 3Q23
compared to $17.1 million in 2Q23.
- Deposit related fee revenue increased $221 thousand.
- Loan related non-interest revenue decreased $310 thousand.
- Gain on SBA loan sales decreased $362
thousand.
- Wealth management revenue decreased $102
thousand. At September 30, 2023, wealth assets under
management were $1.4 billion.
- Other non-interest income increased $1.4
million due primarily to lower tax credit amortization
charges (offset by lower income tax benefit).
- Non-interest expense in 3Q23 totaled $76.5 million on
a GAAP basis and $73.9 million on an
operating basis. Both GAAP and operating non-interest expense in
2Q23 totaled $74.0 million.
- Non-operating expense totaled $2.6
million in 3Q23, and was primarily related to the
consolidation of four Massachusetts branches.
- Compensation and benefits expense increased $195 thousand.
- Occupancy and equipment expense decreased $154 thousand.
- Technology and communications expense increased $151 thousand.
- Professional services expense decreased $103 thousand.
- The efficiency ratio was 65.1% for 3Q23 compared to 63.6% for
2Q23.
- The effective income tax rate was 16.1% for 3Q23 and 15.7% for
the first nine months of 2023 compared to 18.7% for the full year
of 2022.
Loans
- Commercial real estate loans totaled $4.5 billion
at September 30, 2023, a $138
million increase from June 30, 2023.
- Average commercial real estate loans totaled $4.4 billion in 3Q23, a $102 million increase from 2Q23.
- Commercial and industrial loans totaled $1.4 billion at September
30, 2023, an $81 million
decrease from June 30, 2023.
- Average commercial and industrial loans totaled $1.4 billion in 3Q23, a $60 million decrease from 2Q23.
- Residential mortgage loans totaled $2.6
billion at September 30, 2023, a $55
million increase from June 30, 2023.
- Average residential mortgage loans totaled $2.6 billion in 3Q23, a $129 million increase from 2Q23.
- Consumer loans totaled $507 million at September
30, 2023, an $11
million decrease from June 30,
2023.
- Average consumer loans totaled $513 million in 3Q23,
an $11 million decrease from 2Q23.
- Non-performing loans to total loans was 0.30% at September 30, 2023 compared to 0.32% at
June 30, 2023.
- The allowance for credit losses to total loans was 1.14% at
September 30, 2023, compared to 1.13%
at June 30, 2023
Deposits
- Non-interest bearing deposits totaled $2.5 billion at September
30, 2023, a $64 million
decrease from June 30,
2023.
-
- Average non-interest bearing deposits totaled $2.6 billion in 3Q23, a $41 million decrease from 2Q23.
- Time deposits totaled $2.4
billion at September 30, 2023,
$10 million increase from
June 30, 2023.
-
- Average time deposits totaled $2.4
billion in 3Q23, a $154
million increase from 2Q23.
3Q 2023 ESG & Corporate Responsibility Highlights
Berkshire is a performance and
purpose-driven, values-guided, community-centered bank.
Berkshire's corporate
responsibility and sustainability activities are integral to its
mission.
- Berkshire launched a new Down
Payment Assistance Program to increase homeownership amongst
low-to-moderate income and first-time homebuyers.
- Berkshire's annual
Xtraordinary Day of Service featured 47 volunteer events in which
more than 1,000 employees contributed 4,000 hours of service to
lift-up local communities.
- Berkshire maintained its top
quartile ESG rating performance and was named a Top Charitable
Contributor by the Boston Business Journal for the 11th
consecutive year.
Conference Call and Investor Presentation.
Berkshire will conduct a conference
call/webcast at 9:00 a.m. eastern time on
Friday, October 20, 2023 to discuss
results for the quarter and provide guidance about expected future
results. Instructions for listening to the call may be found
at the Company's website at ir.berkshirebank.com. Additional
materials relating to the call may also be accessed at this
website. The call will be archived at the website and will be
available for an extended period of time.
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," "remain," "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.
INVESTOR CONTACT
Kevin
Conn
Investor Relations
617.641.9206
kaconn@berkshirebank.com
MEDIA CONTACT
Gary
Levante
Corporate Communications
413.447.1737
glevante@berkshirebank.com
BERKSHIRE HILLS BANCORP, INC
|
|
SELECTED FINANCIAL HIGHLIGHTS
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
|
|
|
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOMINAL AND PER SHARE DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common
share, diluted
|
$
0.45
|
|
$
0.55
|
|
$
0.63
|
|
$
0.69
|
|
$
0.42
|
|
|
|
|
Operating earnings per
common share, diluted (2)(3)
|
0.50
|
|
0.55
|
|
0.63
|
|
0.64
|
|
0.62
|
|
|
|
|
Net income,
(thousands)
|
19,545
|
|
23,861
|
|
27,637
|
|
30,505
|
|
18,717
|
|
|
|
|
Operating net income,
(thousands) (2)(3)
|
21,516
|
|
23,878
|
|
27,608
|
|
28,254
|
|
27,928
|
|
|
|
|
Net interest income,
(thousands) non FTE
|
90,334
|
|
92,759
|
|
97,533
|
|
102,092
|
|
92,084
|
|
|
|
|
Net interest income,
FTE (5)
|
92,314
|
|
94,721
|
|
99,441
|
|
103,937
|
|
93,799
|
|
|
|
|
Total common shares
outstanding, end of period (thousands)
|
43,822
|
|
44,033
|
|
44,411
|
|
44,361
|
|
45,040
|
|
|
|
|
Average diluted shares,
(thousands)
|
43,347
|
|
43,532
|
|
44,036
|
|
44,484
|
|
45,034
|
|
|
|
|
Total book value per
common share, end of period
|
21.70
|
|
22.11
|
|
22.42
|
|
21.51
|
|
20.93
|
|
|
|
|
Tangible book value per
common share, end of period (2)(3)
|
21.23
|
|
21.60
|
|
21.89
|
|
20.95
|
|
20.36
|
|
|
|
|
Dividends per common
share
|
0.18
|
|
0.18
|
|
0.18
|
|
0.18
|
|
0.12
|
|
|
|
|
Dividend payout
ratio
|
|
40.56
|
%
|
33.47
|
%
|
28.98
|
%
|
26.59
|
%
|
29.35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE RATIOS (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity,
including unrealized losses on AFS securities
|
7.91
|
%
|
9.51
|
%
|
11.31
|
%
|
12.63
|
%
|
7.31
|
%
|
|
|
|
Return on equity,
excluding unrealized losses on AFS securities
|
6.35
|
|
7.82
|
|
9.11
|
|
10.06
|
|
6.30
|
|
|
|
|
Operating return on
equity, including unrealized losses on AFS securities
(2)(3)
|
8.71
|
|
9.51
|
|
11.30
|
|
11.70
|
|
10.92
|
|
|
|
|
Operating return on
equity, excluding unrealized losses on AFS securities
(2)(3)
|
6.99
|
|
7.82
|
|
9.10
|
|
9.32
|
|
9.40
|
|
|
|
|
Return on tangible
common equity, including unrealized losses on AFS securities
(2)(3)
|
8.45
|
|
10.09
|
|
11.96
|
|
13.36
|
|
7.88
|
|
|
|
|
Return on tangible
common equity, excluding unrealized losses on AFS securities
(2)(3)
|
6.76
|
|
8.26
|
|
9.59
|
|
10.59
|
|
6.76
|
|
|
|
|
Operating return on
tangible common equity, including unrealized losses on AFS
securities (2)(3)
|
9.27
|
|
10.09
|
|
11.96
|
|
12.40
|
|
11.57
|
|
|
|
|
Operating return on
tangible common equity, excluding unrealized losses on AFS
securities (2)(3)
|
7.41
|
|
8.27
|
|
9.59
|
|
9.83
|
|
9.92
|
|
|
|
|
Return on
assets
|
|
0.66
|
|
0.79
|
|
0.96
|
|
1.10
|
|
0.67
|
|
|
|
|
Operating return on
assets (2)(3)
|
0.73
|
|
0.79
|
|
0.95
|
|
1.02
|
|
1.00
|
|
|
|
|
Net interest margin,
FTE (5)
|
3.18
|
|
3.24
|
|
3.58
|
|
3.84
|
|
3.48
|
|
|
|
|
Efficiency ratio
(3)
|
|
65.05
|
|
63.57
|
|
59.51
|
|
58.25
|
|
62.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA (in millions, end of
period)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$ 12,140
|
|
$
12,090
|
|
$
12,320
|
|
$ 11,663
|
|
$ 11,317
|
|
|
|
|
Total earning
assets
|
|
11,400
|
|
11,370
|
|
11,615
|
|
10,913
|
|
10,604
|
|
|
|
|
Total loans
|
|
8,984
|
|
8,882
|
|
8,682
|
|
8,335
|
|
7,943
|
|
|
|
|
Total
deposits
|
|
9,981
|
|
10,068
|
|
10,068
|
|
10,327
|
|
9,988
|
|
|
|
|
Loans/deposits
(%)
|
|
90
|
%
|
88
|
%
|
86
|
%
|
81
|
%
|
80
|
%
|
|
|
|
Total accumulated other
comprehensive (loss) net of tax, end of period
|
$
(218)
|
|
$
(186)
|
|
$
(159)
|
|
$
(181)
|
|
$
(188)
|
|
|
|
|
Total shareholders'
equity
|
951
|
|
973
|
|
995
|
|
954
|
|
943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses, (millions)
|
$
103
|
|
$
100
|
|
$
98
|
|
$
96
|
|
$
96
|
|
|
|
|
Net charge-offs,
(millions)
|
(5)
|
|
(6)
|
|
(7)
|
|
(12)
|
|
(6)
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
0.24
|
%
|
0.26
|
%
|
0.32
|
%
|
0.58
|
%
|
0.30
|
%
|
|
|
|
Provision expense,
(millions)
|
$
8
|
|
$
8
|
|
$
9
|
|
$
12
|
|
$
3
|
|
|
|
|
Non-performing assets,
(millions)
|
29
|
|
31
|
|
29
|
|
33
|
|
40
|
|
|
|
|
Non-performing
loans/total loans
|
0.30
|
%
|
0.32
|
%
|
0.31
|
%
|
0.37
|
%
|
0.48
|
%
|
|
|
|
Allowance for credit
losses/non-performing loans
|
386
|
|
353
|
|
363
|
|
309
|
|
254
|
|
|
|
|
Allowance for credit
losses/total loans
|
1.14
|
|
1.13
|
|
1.13
|
|
1.15
|
|
1.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk weighted assets,
(millions)(6)
|
$
9,581
|
|
$ 9,523
|
|
$ 9,454
|
|
$
9,151
|
|
$
8,823
|
|
|
|
|
Common equity Tier 1
capital to risk weighted assets (6)
|
12.1
|
%
|
12.1
|
%
|
12.1
|
%
|
12.4
|
%
|
12.7
|
%
|
|
|
|
Tier 1 capital leverage
ratio (6)
|
9.8
|
|
9.6
|
|
9.9
|
|
10.2
|
|
10.1
|
|
|
|
|
Tangible common
shareholders' equity/tangible assets (3)
|
7.7
|
|
7.9
|
|
7.9
|
|
8.0
|
|
8.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
All financial tables
presented are unaudited.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Reconciliations of
non-GAAP financial measures, including all references to operating
and tangible amounts, appear on pages 13 and 14.
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Non-GAAP financial
measure. Operating measurements are non-GAAP financial measures
that are adjusted to exclude net non-operating charges
|
|
|
primarily related to
acquisitions and restructuring activities. See pages 13 and 14 for
reconciliations of non-GAAP financial measures.
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
All performance ratios
are annualized and are based on average balance sheet amounts,
where applicable.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
Fully taxable
equivalent considers the impact of tax advantaged investment
securities and loans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
Presented as projected
for September 30, 2023 and actual for the remaining
periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED BALANCE
SHEETS
|
|
September
30,
|
June 30,
|
December 31,
|
September
30,
|
(in
thousands)
|
2023
|
2023
|
2022
|
2022
|
Assets
|
|
|
|
|
Cash and due from
banks
|
$
120,634
|
$
120,285
|
$
145,342
|
$
128,509
|
Short-term
investments
|
542,836
|
520,315
|
540,013
|
566,404
|
Total cash and cash
equivalents
|
663,470
|
640,600
|
685,355
|
694,913
|
|
|
|
|
|
Trading securities, at
fair value
|
6,171
|
6,405
|
6,708
|
6,812
|
Equity securities, at
fair value
|
12,325
|
12,868
|
12,856
|
12,790
|
Securities available
for sale, at fair value
|
1,260,391
|
1,340,331
|
1,423,200
|
1,470,949
|
Securities held to
maturity, at amortized cost
|
552,981
|
563,765
|
583,453
|
592,503
|
Federal Home Loan Bank
stock
|
38,912
|
34,714
|
7,219
|
7,264
|
Total
securities
|
1,870,780
|
1,958,083
|
2,033,436
|
2,090,318
|
Less: Allowance for
credit losses on investment securities
|
(69)
|
(71)
|
(91)
|
(95)
|
Net
securities
|
1,870,711
|
1,958,012
|
2,033,345
|
2,090,223
|
|
|
|
|
|
Loans held for
sale
|
2,342
|
8,708
|
4,311
|
4,124
|
|
|
|
|
|
Commercial real estate
loans
|
4,453,573
|
4,315,202
|
4,095,079
|
3,902,422
|
Commercial and
industrial loans
|
1,384,038
|
1,464,922
|
1,473,316
|
1,435,070
|
Residential
mortgages
|
2,640,210
|
2,584,959
|
2,216,410
|
2,032,899
|
Consumer
loans
|
506,556
|
517,319
|
550,504
|
573,090
|
Total loans
|
8,984,377
|
8,882,402
|
8,335,309
|
7,943,481
|
Less: Allowance for
credit losses on loans
|
(102,792)
|
(100,219)
|
(96,270)
|
(96,013)
|
Net loans
|
8,881,585
|
8,782,183
|
8,239,039
|
7,847,468
|
|
|
|
|
|
Premises and equipment,
net
|
70,042
|
76,903
|
85,217
|
86,809
|
Other intangible
assets
|
20,869
|
22,074
|
24,483
|
25,761
|
Other assets
|
619,777
|
593,621
|
587,854
|
563,946
|
Assets held for
sale
|
11,157
|
8,220
|
3,260
|
3,830
|
Total assets
|
$
12,139,953
|
$ 12,090,321
|
$ 11,662,864
|
$ 11,317,074
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
Non-interest bearing
deposits
|
$
2,530,441
|
$
2,594,528
|
$
2,852,127
|
$
2,896,659
|
NOW and other
deposits
|
843,032
|
944,775
|
1,054,596
|
1,045,970
|
Money market
deposits
|
3,075,307
|
3,005,081
|
3,723,570
|
3,388,932
|
Savings
deposits
|
1,086,329
|
1,088,405
|
1,063,269
|
1,111,304
|
Time
deposits
|
2,445,435
|
2,435,618
|
1,633,707
|
1,545,256
|
Total
deposits
|
9,980,544
|
10,068,407
|
10,327,269
|
9,988,121
|
|
|
|
|
|
Federal Home Loan Bank
advances
|
804,295
|
674,345
|
4,445
|
4,494
|
Subordinated
borrowings
|
121,300
|
121,238
|
121,064
|
121,001
|
Total
borrowings
|
925,595
|
795,583
|
125,509
|
125,495
|
|
|
|
|
|
Other
liabilities
|
282,805
|
252,950
|
256,024
|
260,896
|
Total
liabilities
|
11,188,944
|
11,116,940
|
10,708,802
|
10,374,512
|
|
|
|
|
|
Common shareholders'
equity
|
951,009
|
973,381
|
954,062
|
942,562
|
Total shareholders'
equity
|
951,009
|
973,381
|
954,062
|
942,562
|
Total liabilities and
shareholders' equity
|
$
12,139,953
|
$ 12,090,321
|
$ 11,662,864
|
$ 11,317,074
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE
HILLS BANCORP, INC.
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
(in thousands,
except per share data)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Interest
income
|
$
148,021
|
|
$
103,671
|
|
$
425,762
|
|
$
265,873
|
|
Interest
expense
|
57,687
|
|
11,587
|
|
145,136
|
|
23,368
|
|
Net interest income,
non FTE
|
90,334
|
|
92,084
|
|
280,626
|
|
242,505
|
|
Non-interest
income
|
|
|
|
|
|
|
|
|
Deposit related
fees
|
8,792
|
|
8,377
|
|
25,674
|
|
23,733
|
|
Loan fees and
other
|
2,879
|
|
1,292
|
|
8,537
|
|
7,344
|
|
Gain on SBA loan
sales
|
2,548
|
|
2,551
|
|
7,952
|
|
9,515
|
|
Wealth management
fees
|
2,481
|
|
2,353
|
|
7,803
|
|
7,753
|
|
Other
|
1,232
|
|
2,154
|
|
1,454
|
|
7,132
|
|
Total non-interest
income excluding (losses)/gains
|
17,932
|
|
16,727
|
|
51,420
|
|
55,477
|
|
Fair value adjustments
on securities
|
(467)
|
|
(476)
|
|
(255)
|
|
(2,194)
|
|
Total non-interest
income
|
17,465
|
|
16,251
|
|
51,165
|
|
53,283
|
|
Total net
revenue
|
107,799
|
|
108,335
|
|
331,791
|
|
295,788
|
|
|
|
|
|
|
|
|
|
|
Provision
expense/(benefit) for credit losses
|
8,000
|
|
3,000
|
|
24,999
|
|
(1,000)
|
|
Non-interest
expense
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
40,155
|
|
39,422
|
|
119,186
|
|
114,773
|
|
Occupancy and
equipment
|
8,816
|
|
8,702
|
|
27,165
|
|
28,207
|
|
Technology and
communications
|
10,616
|
|
8,719
|
|
30,552
|
|
25,857
|
|
Professional
services
|
2,423
|
|
3,285
|
|
8,226
|
|
8,890
|
|
Other
expenses
|
11,896
|
|
10,076
|
|
34,795
|
|
29,449
|
|
Merger, restructuring
and other non-operating expenses
|
2,607
|
|
11,473
|
|
2,592
|
|
11,526
|
|
Total non-interest
expense
|
76,513
|
|
81,677
|
|
222,516
|
|
218,702
|
|
Total non-interest
expense excluding merger, restructuring and other
|
73,906
|
|
70,204
|
|
219,924
|
|
207,176
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
23,286
|
|
$
23,658
|
|
$
84,276
|
|
$
78,086
|
|
Income tax
expense
|
3,741
|
|
4,941
|
|
13,233
|
|
16,058
|
|
Net
income
|
$
19,545
|
|
$
18,717
|
|
$
71,043
|
|
$
62,028
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share
|
$
0.45
|
|
$
0.42
|
|
$
1.64
|
|
$
1.35
|
|
Diluted earnings per
common share
|
$
0.45
|
|
$
0.42
|
|
$
1.63
|
|
$
1.34
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
43,164
|
|
44,700
|
|
43,435
|
|
46,056
|
|
Diluted
|
43,347
|
|
45,034
|
|
43,640
|
|
46,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE
HILLS BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF INCOME (5 Quarter Trend)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sept.
30,
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
(in thousands,
except per share data)
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2022
|
|
Interest
income
|
|
$ 148,021
|
|
$ 145,425
|
|
$ 132,316
|
|
$ 121,384
|
|
$ 103,671
|
|
Interest
expense
|
|
57,687
|
|
52,666
|
|
34,783
|
|
19,292
|
|
11,587
|
|
Net interest income,
non FTE
|
|
90,334
|
|
92,759
|
|
97,533
|
|
102,092
|
|
92,084
|
|
Non-interest
income
|
|
|
|
|
|
|
|
|
|
|
|
Deposit related
fees
|
|
8,792
|
|
8,571
|
|
8,311
|
|
8,293
|
|
8,377
|
|
Loan fees and
other
|
|
2,879
|
|
3,189
|
|
2,469
|
|
2,123
|
|
1,292
|
|
Gain on SBA loan
sales
|
|
2,548
|
|
2,910
|
|
2,494
|
|
2,979
|
|
2,551
|
|
Wealth management
fees
|
|
2,481
|
|
2,583
|
|
2,739
|
|
2,255
|
|
2,353
|
|
Other
|
|
1,232
|
|
(137)
|
|
359
|
|
(159)
|
|
2,154
|
|
Total non-interest
income excluding (losses)/gains
|
|
17,932
|
|
17,116
|
|
16,372
|
|
15,491
|
|
16,727
|
|
Fair value adjustments
on securities
|
|
(467)
|
|
(22)
|
|
234
|
|
163
|
|
(476)
|
|
Total non-interest
income
|
|
17,465
|
|
17,094
|
|
16,606
|
|
15,654
|
|
16,251
|
|
Total net
revenue
|
|
107,799
|
|
109,853
|
|
114,139
|
|
117,746
|
|
108,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision expense for
credit losses
|
|
8,000
|
|
8,000
|
|
8,999
|
|
12,000
|
|
3,000
|
|
Non-interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
40,155
|
|
39,960
|
|
39,071
|
|
37,968
|
|
39,422
|
|
Occupancy and
equipment
|
|
8,816
|
|
8,970
|
|
9,379
|
|
9,431
|
|
8,702
|
|
Technology and
communications
|
|
10,616
|
|
10,465
|
|
9,471
|
|
9,729
|
|
8,719
|
|
Professional
services
|
|
2,423
|
|
2,526
|
|
3,277
|
|
3,153
|
|
3,285
|
|
Other
expenses
|
|
11,896
|
|
12,106
|
|
10,793
|
|
12,350
|
|
10,076
|
|
Merger, restructuring
and other non-operating expenses
|
|
2,607
|
|
21
|
|
(36)
|
|
(2,617)
|
|
11,473
|
|
Total non-interest
expense
|
|
76,513
|
|
74,048
|
|
71,955
|
|
70,014
|
|
81,677
|
|
Total non-interest
expense excluding merger, restructuring and other
|
|
73,906
|
|
74,027
|
|
71,991
|
|
72,631
|
|
70,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
$
23,286
|
|
$
27,805
|
|
$
33,185
|
|
$
35,732
|
|
$
23,658
|
|
Income tax
expense
|
|
3,741
|
|
3,944
|
|
5,548
|
|
5,227
|
|
4,941
|
|
Net
income
|
|
$
19,545
|
|
$
23,861
|
|
$
27,637
|
|
$
30,505
|
|
$
18,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
|
$
0.45
|
|
$
0.55
|
|
$
0.63
|
|
$
0.69
|
|
$
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
43,164
|
|
43,443
|
|
43,693
|
|
44,105
|
|
44,700
|
|
Diluted
|
|
43,347
|
|
43,532
|
|
44,036
|
|
44,484
|
|
45,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE
HILLS BANCORP, INC.
|
|
AVERAGE BALANCES AND
AVERAGE YIELDS AND COSTS
|
|
|
Quarters
Ended
|
|
|
|
September 30,
2023
|
|
June 30,
2023
|
|
September 30,
2022
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
Average
Balance
|
Interest
(1)
|
Average
Yield/Rate
|
|
|
Average
Balance
|
Interest (1)
|
Average
Yield/Rate
|
|
|
Average
Balance
|
Interest (1)
|
Average
Yield/Rate
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
4,385
|
$
71
|
6.32
|
%
|
|
$
4,283
|
$
67
|
6.16
|
%
|
|
$
3,926
|
$
46
|
4.53
|
%
|
|
|
Commercial and
industrial loans
|
|
1,436
|
27
|
7.48
|
|
|
1,496
|
27
|
7.27
|
|
|
1,449
|
19
|
5.21
|
|
|
|
Residential
mortgages
|
|
2,618
|
26
|
3.97
|
|
|
2,488
|
24
|
3.87
|
|
|
1,926
|
17
|
3.53
|
|
|
|
Consumer
loans
|
|
513
|
9
|
7.33
|
|
|
524
|
9
|
7.28
|
|
|
587
|
9
|
6.24
|
|
|
|
Total
loans
|
|
8,952
|
133
|
5.88
|
|
|
8,791
|
127
|
5.77
|
|
|
7,888
|
91
|
4.54
|
|
|
|
Securities
(2)
|
|
2,171
|
13
|
2.40
|
|
|
2,236
|
13
|
2.27
|
|
|
2,400
|
13
|
2.13
|
|
|
|
Short-term investments
and loans HFS
|
|
267
|
3
|
4.76
|
|
|
560
|
7
|
4.94
|
|
|
342
|
2
|
1.96
|
|
|
|
Total earning
assets
|
|
11,390
|
149
|
5.19
|
|
|
11,587
|
147
|
5.05
|
|
|
10,630
|
106
|
3.91
|
|
|
|
Goodwill and other
intangible assets
|
|
21
|
|
|
|
|
22
|
|
|
|
|
26
|
|
|
|
|
|
Other assets
|
|
449
|
|
|
|
|
448
|
|
|
|
|
494
|
|
|
|
|
|
Total
assets
|
|
$
11,860
|
|
|
|
|
$
12,057
|
|
|
|
|
$
11,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
demand deposits
|
|
$
2,553
|
$
0
|
-
|
%
|
|
$
2,594
|
$
0
|
-
|
%
|
|
$
2,913
|
$
0
|
-
|
%
|
|
|
NOW and
other
|
|
858
|
2
|
1.15
|
|
|
1,055
|
4
|
1.35
|
|
|
1,362
|
2
|
0.48
|
|
|
|
Money market
|
|
2,697
|
18
|
2.69
|
|
|
2,555
|
14
|
2.13
|
|
|
2,737
|
3
|
0.46
|
|
|
|
Savings
|
|
1,082
|
2
|
0.77
|
|
|
1,077
|
-
|
0.50
|
|
|
1,129
|
0
|
0.03
|
|
|
|
Time
|
|
2,440
|
22
|
3.43
|
|
|
2,287
|
18
|
3.07
|
|
|
1,528
|
3
|
0.85
|
|
|
|
Total
deposits
|
|
9,630
|
44
|
1.81
|
|
|
9,568
|
36
|
1.51
|
|
|
9,669
|
8
|
0.48
|
|
|
|
Borrowings
(3)
|
|
1,010
|
14
|
5.32
|
|
|
1,288
|
17
|
5.14
|
|
|
251
|
4
|
5.46
|
|
|
|
Total funding
liabilities
|
|
10,640
|
58
|
2.15
|
|
|
10,856
|
53
|
1.94
|
|
|
9,920
|
12
|
0.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
liabilities
|
|
232
|
|
|
|
|
197
|
|
|
|
|
206
|
|
|
|
|
|
Total
liabilities
|
|
10,872
|
|
|
|
|
11,053
|
|
|
|
|
10,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shareholders'
equity (4)
|
|
988
|
|
|
|
|
1,004
|
|
|
|
|
1,024
|
|
|
|
|
|
Total shareholders'
equity
|
|
988
|
|
|
|
|
1,004
|
|
|
|
|
1,024
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
$
11,860
|
|
|
|
|
$
12,057
|
|
|
|
|
$
11,150
|
|
|
|
|
|
Net interest margin,
FTE
|
|
|
|
3.18
|
|
|
|
|
3.24
|
|
|
|
|
3.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income,
non FTE
|
|
90.334
|
|
|
|
|
92.759
|
|
|
|
|
92.084
|
|
|
|
|
|
FTE income
adjustment
|
|
1.980
|
|
|
|
|
1.962
|
|
|
|
|
1.715
|
|
|
|
|
|
Net Interest Income,
FTE
|
|
92.314
|
|
|
|
|
94.721
|
|
|
|
|
93.799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Interest
income and expense presented on a fully taxable equivalent
basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Average balances
for securities available-for-sale are based on amortized
cost.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Average balances
for borrowings includes the financing lease obligation which is
presented under other liabilities on the consolidated balance
sheet.
|
|
|
|
|
(4) As of September 30,
2023 unrealized gains and losses, net of tax, are included in
average equity. Prior period balances and financial metrics have
been updated to reflect the current presentation.
|
BERKSHIRE HILLS
BANCORP, INC.
|
|
ASSET QUALITY
ANALYSIS
|
|
|
|
|
|
Sept.
30,
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
|
(in
thousands)
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2022
|
|
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
$
5,288
|
|
$
1,509
|
|
$
2,546
|
|
$
2,434
|
|
$
2,976
|
|
|
Commercial and
industrial loans
|
11,028
|
|
15,597
|
|
12,155
|
|
17,023
|
|
21,008
|
|
|
Residential
mortgages
|
8,060
|
|
8,722
|
|
9,442
|
|
8,612
|
|
10,407
|
|
|
Consumer
loans
|
2,260
|
|
2,560
|
|
2,848
|
|
3,045
|
|
3,463
|
|
|
Total non-performing
loans
|
26,636
|
|
28,388
|
|
26,991
|
|
31,114
|
|
37,854
|
|
|
Repossessed
assets
|
2,548
|
|
2,549
|
|
2,462
|
|
2,209
|
|
2,175
|
|
|
Total non-performing
assets
|
$
29,184
|
|
$ 30,937
|
|
$
29,453
|
|
$
33,323
|
|
$
40,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-performing
loans/total loans
|
0.30 %
|
|
0.32 %
|
|
0.31 %
|
|
0.37 %
|
|
0.48 %
|
|
|
Total non-performing
assets/total assets
|
0.24 %
|
|
0.26 %
|
|
0.24 %
|
|
0.29 %
|
|
0.35 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND
ALLOWANCE FOR CREDIT LOSSES ON LOANS
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of
period
|
$
100,219
|
|
$ 97,991
|
|
$
96,270
|
|
$
96,013
|
|
$
99,021
|
|
|
Adoption of ASU No.
2022-02
|
-
|
|
-
|
|
(401)
|
|
-
|
|
-
|
|
|
Balance after adoption
of ASU No. 2022-02
|
100,219
|
|
97,991
|
|
95,869
|
|
96,013
|
|
99,021
|
|
|
Charged-off
loans
|
(6,744)
|
|
(7,686)
|
|
(7,936)
|
|
(12,995)
|
|
(7,424)
|
|
|
Recoveries on
charged-off loans
|
1,317
|
|
1,914
|
|
1,059
|
|
1,252
|
|
1,416
|
|
|
Net loans
charged-off
|
(5,427)
|
|
(5,772)
|
|
(6,877)
|
|
(11,743)
|
|
(6,008)
|
|
|
Provision
(benefit)/expense for loan credit losses
|
8,000
|
|
8,000
|
|
8,999
|
|
12,000
|
|
3,000
|
|
|
Balance at end of
period
|
$
102,792
|
|
$
100,219
|
|
$
97,991
|
|
$
96,270
|
|
$
96,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses/total loans
|
1.14 %
|
|
1.13 %
|
|
1.13 %
|
|
1.15 %
|
|
1.21 %
|
|
|
Allowance for credit
losses/non-performing loans
|
386 %
|
|
353 %
|
|
363 %
|
|
309 %
|
|
254 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOAN
CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
$
97
|
|
$
664
|
|
$
122
|
|
$
187
|
|
$
(854)
|
|
|
Commercial and
industrial loans
|
(3,345)
|
|
(4,146)
|
|
(5,695)
|
|
(10,914)
|
|
(4,931)
|
|
|
Residential
mortgages
|
23
|
|
(143)
|
|
305
|
|
192
|
|
122
|
|
|
Home
equity
|
208
|
|
126
|
|
16
|
|
(128)
|
|
1
|
|
|
Auto and other
consumer
|
(2,410)
|
|
(2,273)
|
|
(1,625)
|
|
(1,080)
|
|
(346)
|
|
|
Total, net
|
$
(5,427)
|
|
$ (5,772)
|
|
$
(6,877)
|
|
$
(11,743)
|
|
$
(6,008)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
0.24 %
|
|
0.26 %
|
|
0.32 %
|
|
0.58 %
|
|
0.30 %
|
|
|
Net charge-offs (YTD
annualized)/average loans
|
0.28 %
|
|
0.29 %
|
|
0.32 %
|
|
0.27 %
|
|
0.16 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELINQUENT AND
NON-PERFORMING LOANS
|
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
|
$
18,700
|
0.21 %
|
$ 15,147
|
0.17 %
|
$
14,210
|
0.16 %
|
$
12,162
|
0.15 %
|
$
14,662
|
0.18 %
|
|
90+ Days delinquent and
still accruing
|
5,744
|
0.06 %
|
7,812
|
0.09 %
|
6,937
|
0.08 %
|
7,038
|
0.08 %
|
6,285
|
0.08 %
|
|
Total accruing
delinquent loans
|
24,444
|
0.27 %
|
22,959
|
0.26 %
|
21,147
|
0.24 %
|
19,200
|
0.23 %
|
20,947
|
0.26 %
|
|
Non-performing
loans
|
26,636
|
0.30 %
|
28,399
|
0.32 %
|
26,991
|
0.31 %
|
31,114
|
0.37 %
|
37,854
|
0.48 %
|
|
Total delinquent and
non-performing loans
|
$
51,080
|
0.57 %
|
$ 51,358
|
0.58 %
|
$
48,138
|
0.55 %
|
$
50,314
|
0.60 %
|
$
58,801
|
0.74 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS BANCORP,
INC.
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 are
intended to provide the reader with additional supplemental
perspectives on operating results, performance trends, and
financial condition. Non-GAAP financial measures 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
provided below. In all cases, it should be understood that non-GAAP
measures do not depict amounts that accrue directly to the benefit
of shareholders. An item which management excludes when computing
non-GAAP operating earnings can be of substantial importance to the
Company's results for any particular quarter or year. The Company's
non-GAAP operating earnings information set forth is not
necessarily comparable to non- GAAP information which may be
presented by other companies. Each non-GAAP measure used by the
Company in this report as supplemental financial data should be
considered in conjunction with the Company's GAAP financial
information.
The Company utilizes the non-GAAP measure of operating earnings
in evaluating operating trends, including components for operating
revenue and expense. These measures exclude amounts which the
Company views as unrelated to its normalized operations. These
items primarily include restructuring costs. Restructuring costs
generally consist of costs and losses associated with the
disposition of assets and liabilities and lease terminations,
including costs related to branch consolidations.
The Company also calculates operating earnings per share based
on its measure of operating earnings and diluted common shares. The
Company views these amounts as important to understanding its
operating trends, particularly due to the impact of accounting
standards related to merger and acquisition activity. Analysts also
rely on these measures in estimating and evaluating the Company's
performance. Expense adjustments in 2023 and 2022 were primarily
related to branch consolidations. For 2022, fair value adjustments
on securities were primarily due to unrealized equity securities
losses due to changes in market conditions. Starting March 31, 2023 fair value adjustments on
securities are included in operating income.
Management believes that the computation of non-GAAP operating
earnings and operating earnings per share may facilitate the
comparison of the Company to other companies in the financial
services industry. The Company also adjusts certain equity related
measures to exclude intangible assets due to the importance of
these measures to the investment community.
BERKSHIRE HILLS
BANCORP, INC.
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sept.
30,
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
|
(in
thousands)
|
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2022
|
|
|
Total non-interest
income
|
|
|
$
17,465
|
|
$ 17,094
|
|
$ 16,606
|
|
$ 15,654
|
|
$
16,251
|
|
|
Adj: Fair value
adjustments on securities (1)
|
|
|
-
|
|
-
|
|
-
|
|
(163)
|
|
476
|
|
|
Total operating
non-interest income (2)
|
|
|
$
17,465
|
|
$ 17,094
|
|
$ 16,606
|
|
$ 15,491
|
|
$
16,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
(A)
|
|
$
107,799
|
|
$
109,853
|
|
$
114,139
|
|
$
117,746
|
|
$ 108,335
|
|
|
Adj: Fair value
adjustments on securities (1)
|
|
|
-
|
|
-
|
|
-
|
|
(163)
|
|
476
|
|
|
Total operating revenue
(2)
|
(B)
|
|
$
107,799
|
|
$
109,853
|
|
$
114,139
|
|
$
117,583
|
|
$ 108,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
(C)
|
|
$
76,513
|
|
$ 74,048
|
|
$ 71,955
|
|
$ 70,014
|
|
$
81,677
|
|
|
Adj: Merger,
restructuring and other non-operating expenses
|
|
|
(2,607)
|
|
(21)
|
|
36
|
|
2,617
|
|
(11,473)
|
|
|
Operating non-interest
expense (2)
|
(D)
|
|
$
73,906
|
|
$ 74,027
|
|
$ 71,991
|
|
$ 72,631
|
|
$
70,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax, pre-provision
net revenue (PPNR)
|
(A-C)
|
|
$
31,286
|
|
$ 35,805
|
|
$ 42,184
|
|
$ 47,732
|
|
$
26,658
|
|
|
Operating pre-tax,
pre-provision net revenue (PPNR) (2)
|
(B-D)
|
|
33,893
|
|
35,826
|
|
42,148
|
|
44,952
|
|
38,607
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
19,545
|
|
$ 23,861
|
|
$ 27,637
|
|
$ 30,505
|
|
$
18,717
|
|
|
Adj: Fair value
adjustments on securities (1)
|
|
|
-
|
|
-
|
|
-
|
|
(163)
|
|
476
|
|
|
Adj: Restructuring
expense and other non-operating expenses
|
|
|
2,607
|
|
21
|
|
(36)
|
|
(2,617)
|
|
11,473
|
|
|
Adj: Income taxes
(expense)/benefit
|
|
|
(636)
|
|
(4)
|
|
7
|
|
529
|
|
(2,738)
|
|
|
Total operating income
(2)
|
(E)
|
|
$
21,516
|
|
$ 23,878
|
|
$ 27,608
|
|
$ 28,254
|
|
$
27,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
(F)
|
|
$
11,860
|
|
$ 12,057
|
|
$ 11,569
|
|
$ 11,074
|
|
$
11,150
|
|
|
Total average
shareholders' equity, including unrealized losses on AFS
securities
|
(G)
|
|
988
|
|
1,004
|
|
978
|
|
966
|
|
1,023
|
|
|
Total average
shareholders' equity, excluding unrealized losses on AFS
securities
|
(H)
|
|
1,231
|
|
1,221
|
|
1,214
|
|
1,213
|
|
1,189
|
|
|
Total average tangible
shareholders' equity, including unrealized losses on AFS securities
(2)
|
(I)
|
|
967
|
|
981
|
|
954
|
|
941
|
|
998
|
|
|
Total average tangible
shareholders' equity, excluding unrealized losses on AFS securities
(2)
|
(J)
|
|
1,210
|
|
1,198
|
|
1,190
|
|
1,188
|
|
1,164
|
|
|
Total accumulated other
comprehensive (loss) net of tax, end of period
|
|
|
(218)
|
|
(186)
|
|
(159)
|
|
(181)
|
|
(188)
|
|
|
Total tangible
shareholders' equity, end of period (2)
|
(K)
|
|
930
|
|
951
|
|
972
|
|
930
|
|
917
|
|
|
Total tangible assets,
end of period (2)
|
(L)
|
|
12,119
|
|
12,068
|
|
12,297
|
|
11,638
|
|
11,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, end of period
(thousands)
|
(M)
|
|
43,822
|
|
44,033
|
|
44,411
|
|
44,361
|
|
45,040
|
|
|
Average diluted shares
outstanding (thousands)
|
(N)
|
|
43,347
|
|
43,532
|
|
44,036
|
|
44,484
|
|
45,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share, diluted (2)
|
|
|
$
0.45
|
|
$
0.55
|
|
$
0.63
|
|
$
0.69
|
|
$ 0.42
|
|
|
Operating earnings per
common share, diluted (2)
|
(E/N)
|
|
0.50
|
|
0.55
|
|
0.63
|
|
0.64
|
|
0.62
|
|
|
Tangible book value per
common share, end of period (2)
|
(K/M)
|
|
21.23
|
|
21.60
|
|
21.89
|
|
20.95
|
|
20.36
|
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(K/L)
|
|
7.68
|
|
7.88
|
|
7.91
|
|
7.99
|
|
8.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance
ratios (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity,
including unrealized losses on AFS securities
|
|
|
7.91
|
%
|
9.51
|
%
|
11.31
|
%
|
12.63
|
%
|
7.31
|
%
|
|
Return on equity,
excluding unrealized losses on AFS
securities
|
|
|
6.35
|
|
7.82
|
|
9.11
|
|
10.06
|
|
6.30
|
|
|
Operating return on
equity, including unrealized losses on AFS securities
(2)
|
(E/G)
|
|
8.71
|
|
9.51
|
|
11.30
|
|
11.70
|
|
10.92
|
|
|
Operating return on
equity, excluding unrealized losses on AFS
securities
|
(E/H)
|
|
6.99
|
|
7.82
|
|
9.10
|
|
9.32
|
|
9.40
|
|
|
Return on tangible
common equity, including unrealized losses on AFS securities
(2)(4)
|
|
|
8.45
|
|
10.09
|
|
11.96
|
|
13.36
|
|
7.88
|
|
|
Return on tangible
common equity, excluding unrealized losses on AFS securities
(2)(4)
|
|
|
6.76
|
|
8.26
|
|
9.59
|
|
10.59
|
|
6.76
|
|
|
Operating return on
tangible common equity, including unrealized losses on AFS
securities (2)(4)
|
(E+Q)/(I)
|
|
9.27
|
|
10.09
|
|
11.96
|
|
12.40
|
|
11.57
|
|
|
Operating return on
tangible common equity, excluding unrealized losses on AFS
securities (2)(4)
|
(E+Q)/(J)
|
|
7.41
|
|
8.27
|
|
9.59
|
|
9.83
|
|
9.92
|
|
|
Return on
assets
|
|
|
0.66
|
|
0.79
|
|
0.96
|
|
1.10
|
|
0.67
|
|
|
Operating return on
assets (2)
|
(E/F)
|
|
0.73
|
|
0.79
|
|
0.95
|
|
1.02
|
|
1.00
|
|
|
Efficiency ratio
(2)
|
(D-Q)/(B+O+R)
|
|
65.05
|
|
63.57
|
|
59.51
|
|
58.25
|
|
62.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (5)
|
(O)
|
|
$
1,979
|
|
$
2,735
|
|
$
2,897
|
|
$
3,068
|
|
$
620
|
|
|
Non-interest income
tax-credit investments amortization (6)
|
(P)
|
|
(1,463)
|
|
(2,210)
|
|
(2,285)
|
|
(2,355)
|
|
(445)
|
|
|
Net income on
tax-credit investments
|
(O+P)
|
|
516
|
|
525
|
|
612
|
|
713
|
|
175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(Q)
|
|
$
1,205
|
|
$
1,205
|
|
$
1,205
|
|
$
1,277
|
|
$ 1,285
|
|
|
Fully taxable
equivalent income adjustment
|
(R)
|
|
1,980
|
|
1,962
|
|
1,908
|
|
1,845
|
|
1,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Starting March 31,
2023, fair value adjustments on securities are included in
operating income.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Non-GAAP financial
measure.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Amortization of
intangible assets is adjusted assuming a 27% marginal tax
rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) The tax benefit is
the direct reduction to the income tax provision due to tax credit
investments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6) The non-interest
income amortization is the reduction to the tax-advantaged
investments and are incurred as the tax credits are
generated.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY
DATA- UNAUDITED
|
|
|
At or for the Nine
Months Ended
|
|
|
|
Sept.
30,
|
|
Sept. 30,
|
|
(in
thousands)
|
|
|
2023
|
|
2022
|
|
Total non-interest
income
|
|
|
$
51,165
|
|
$
53,283
|
|
Adj: Fair value
adjustments on securities (1)
|
|
|
-
|
|
2,194
|
|
Total operating
non-interest income (2)
|
|
|
$
51,165
|
|
$
55,477
|
|
|
|
|
|
|
|
|
Total
revenue
|
(A)
|
|
$
331,791
|
|
$
295,788
|
|
Adj: Fair value
adjustments on securities (1)
|
|
|
-
|
|
2,194
|
|
Total operating revenue
(2)
|
(B)
|
|
$
331,791
|
|
$
297,982
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
(C)
|
|
$
222,516
|
|
$
218,702
|
|
Less: Merger,
restructuring and other non-operating expenses
|
|
|
(2,592)
|
|
(11,526)
|
|
Operating non-interest
expense (2)
|
(D)
|
|
$
219,924
|
|
$
207,176
|
|
|
|
|
|
|
|
|
Pre-tax, pre-provision
net revenue (PPNR)
|
(A-C)
|
|
$
109,275
|
|
$
77,086
|
|
Operating pre-tax,
pre-provision net revenue (PPNR) (2)
|
(B-D)
|
|
111,867
|
|
90,806
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
71,043
|
|
$
62,028
|
|
Adj: Fair value
adjustments on securities (1)
|
|
|
-
|
|
2,194
|
|
Adj: Restructuring
expense and other non-operating expenses
|
|
|
2,592
|
|
11,526
|
|
Adj: Income taxes
(expense)/benefit
|
|
|
(633)
|
|
(3,469)
|
|
Total operating income
(2)
|
(E)
|
|
$
73,002
|
|
$
72,279
|
|
|
|
|
|
|
|
|
(in millions, except
per share data)
|
|
|
|
|
|
|
Total average
assets
|
(F)
|
|
$
11,830
|
|
$
11,264
|
|
Total average
shareholders' equity, including unrealized losses on AFS
securities
|
(G)
|
|
990
|
|
1,096
|
|
Total average
shareholders' equity, excluding unrealized losses on AFS
securities
|
(H)
|
|
1,222
|
|
1,187
|
|
Total average tangible
shareholders' equity, including unrealized losses on AFS securities
(2)
|
(I)
|
|
967
|
|
1,068
|
|
Total average tangible
shareholders' equity, excluding unrealized losses on AFS securities
(2)
|
(J)
|
|
1,199
|
|
1,159
|
|
Total accumulated other
comprehensive (loss) net of tax, end of period
|
|
|
(218)
|
|
(188)
|
|
Total tangible
shareholders' equity, end of period (2)
|
(K)
|
|
930
|
|
917
|
|
Total tangible assets,
end of period (2)
|
(L)
|
|
12,119
|
|
11,291
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, end of period
(thousands)
|
(M)
|
|
43,822
|
|
45,040
|
|
Average diluted shares
outstanding (thousands)
|
(N)
|
|
43,640
|
|
46,396
|
|
|
|
|
|
|
|
|
Earnings/(loss) per
common share, diluted (2)
|
|
|
$
1.63
|
|
$
1.34
|
|
Operating earnings per
common share, diluted (2)
|
(E/N)
|
|
1.67
|
|
1.56
|
|
Tangible book value per
common share, end of period (2)
|
(K/M)
|
|
21.22
|
|
20.36
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(K/L)
|
|
7.67
|
|
8.12
|
|
|
|
|
|
|
|
|
Performance
ratios (3)
|
|
|
|
|
|
|
Return on equity,
including unrealized losses on AFS securities
|
|
|
9.57
|
%
|
7.55
|
%
|
Return on equity,
excluding unrealized losses on AFS
securities
|
|
|
7.75
|
|
6.97
|
|
Operating return on
equity, including unrealized losses on AFS securities
(2)
|
(E/G)
|
|
9.83
|
|
8.80
|
|
Operating return on
equity, excluding unrealized losses on AFS securities
(2)
|
(E/H)
|
|
7.97
|
|
8.12
|
|
Return on tangible
common equity, including unrealized losses on AFS securities
(2)(4)
|
|
|
10.16
|
|
8.10
|
|
Return on tangible
common equity, excluding unrealized losses on AFS securities
(2)(4)
|
|
|
8.19
|
|
7.46
|
|
Operating return on
tangible common equity, including unrealized losses on AFS
securities (2)(4)
|
(E+Q)/(I)
|
|
10.43
|
|
9.37
|
|
Operating return on
tangible common equity, excluding unrealized losses on AFS
securities (2)(4)
|
(E+Q)/(J)
|
|
8.41
|
|
8.64
|
|
Return on
assets
|
|
|
0.80
|
|
0.73
|
|
Operating return on
assets (2)
|
(E/F)
|
|
0.82
|
|
0.86
|
|
Efficiency ratio
(2)
|
(D-Q)/(B+O+R)
|
|
62.65
|
|
66.75
|
|
Net interest margin,
FTE
|
|
|
3.33
|
|
3.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data (in thousands)
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (5)
|
(O)
|
|
$
7,611
|
|
$
1,811
|
|
Non-interest income
charge on tax-credit investments (6)
|
(P)
|
|
(5,959)
|
|
(1,153)
|
|
Net income on
tax-credit investments
|
(O+P)
|
|
1,652
|
|
658
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(Q)
|
|
$
3,615
|
|
$
3,857
|
|
Fully taxable
equivalent income adjustment
|
(R)
|
|
5,850
|
|
4,799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Starting March 31,
2023, fair value adjustments on securities are included in
operating income.
|
|
|
|
|
|
|
|
(2) Non-GAAP financial
measure.
|
|
|
|
|
|
|
|
(3) 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.
|
|
|
|
|
|
|
(4) Amortization of
intangible assets is adjusted assuming a 27% marginal tax
rate.
|
|
|
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(5) The tax benefit is
the direct reduction to the income tax provision due to tax credit
investments.
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(6) The non-interest
income amortization is the reduction to the tax-advantaged
investments and are incurred as the tax credits are
generated.
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View original content to download
multimedia:https://www.prnewswire.com/news-releases/berkshire-hills-reports-third-quarter-net-income-of-20-million-or-0-45-earnings-per-share-301962766.html
SOURCE Berkshire Hills Bancorp, Inc.