Berkshire Hills Announces Third Quarter Results

BOSTON, Oct. 26, 2020 /PRNewswire/ -- Berkshire Hills Bancorp, Inc. (NYSE: BHLB) today announced third quarter net income of $21 million, or $0.42 per share, in 2020 compared to $23 million, or $0.44 per share, in 2019.  The non-GAAP measure of core earnings totaled $26 million, or $0.53 per share, in the third quarter of 2020 compared to $24 million, or $0.46, per share in the third quarter of 2019.  Compared to the linked quarter, results benefited from higher revenue and lower expense as the Company continues to adjust operations to improve operating profitability.

(PRNewsfoto/Berkshire Hills Bancorp, Inc.)

THIRD QUARTER FINANCIAL HIGHLIGHTS (Changes are compared to the prior quarter.  Measures identified as non-GAAP are reconciled on pages F-9 and F-10)

  • Revenue increased by 2%
  • Fee income increased by 9%
  • Non-interest expense decreased by 88%, while core non-interest expense decreased by 4% (non-GAAP measure which excludes second quarter goodwill impairment charge)
  • Efficiency ratio improved to 65% from 71% (non-GAAP measure)
  • Equity/assets ratio improved to 9.3% from 8.9%
  • Tangible equity/tangible assets ratio improved to 9.1% from 8.6% (non-GAAP measure)
  • 0.27% annualized net charge-offs/loans
  • 0.39% non-performing assets/assets

Acting CEO and President Sean Gray stated, "In the first half of the year, our priority was to quickly address the needs of our team members, customers, and communities being impacted by COVID-19.  Starting in the third quarter, we began normalizing our operations and nearly returning to regular retail hours, while continuing to support higher digital transaction volumes. During the quarter, we continued our focus on managing our expenses and further strengthening our capital and liquidity metrics.   We're working closely with our borrowers as they progress in normalizing their operations and meeting their credit obligations. This is reflected in our stable loan performance and resumption of regular payment schedules for most of the borrowers who initially requested deferrals at the outset of the pandemic."

Mr. Gray concluded, "Berkshire is evolving and adapting to the current environment, by having made investments that will support our customers and our Company today and into the future. We recently launched a best-in-class digital account opening experience that will extend our market outreach, improve customer experience, reduce fraud and allow us to operate more cost effectively.  This is another step in building a 21st-century community bank that provides everyone equal access to the products and services they need to bank with dignity, achieve upward economic mobility and live healthier financial lives."

In addition to introducing its new digital account opening experience, the Company promoted Jason White, a recent Boston area CIO of the Year winner, to EVP- Chief Information Officer.  The Company also announced the promotions of two leaders to the role of Regional President.  Wealth Management Director Kate Hersey now leads the Boston region and Foundation Director Lori Gazzillo Kiely now leads the Berkshire County region.  Now half of those holding the title of Regional President are women, furthering Berkshire's work in support of its Be FIRST Commitment. Berkshire Bank has also been recognized with the North American Inspiring Workplaces Award. 

FINANCIAL CONDITION

Berkshire's balance sheet continued to strengthen during the most recent quarter.  Total assets decreased by approximately $450 million, or 3%, to $12.6 billion in the third quarter of 2020.  This was primarily due to a $388 million, or 4%, decrease in total loans reflecting continued runoff in all major loan categories.  The biggest change was a $198 million, or 9%, decrease in residential mortgage balances due to accelerated prepayments in the low interest rate environment.  Commercial loans outstanding included $708 million in Paycheck Protection Program ("PPP") loans, which were stable from the prior quarter-end.  Total deposits decreased by $309 million, or 3%, to $10.5 billion primarily due to a $270 million decrease in brokered balances to $814 million.  Other deposit balances shifted from higher rate maturing time deposits into non-maturity products due to current low interest rates.  This contributed to a decrease in the cost of deposits to 0.61% from 0.79%.  Wholesale funds decreased to $1.5 billion from $1.9 billion during the quarter.  Retained earnings increased book value to $23.03 per common share and the non-GAAP measure of tangible book value to $22.22 per common share.  Capital metrics also improved due to the earnings benefit and reduction in total assets. The Company has received notice for the conversion of its remaining outstanding preferred stock to common stock, which is not expected to have a material impact on the Company's financial condition and per share metrics.

Total delinquent accruing loans decreased to 0.45% of loans from 0.51% of loans during the most recent quarter, while non-accruing loans increased to 0.53% from 0.48%.  Year-to-date net loan charge-offs measuring 0.29% of total loans remained below the levels recorded for the same period in 2019.   Middle market commercial loan modifications have included an underwriting review and assessment of accrual status.  Loans with payment modifications are expected to decrease further in the fourth quarter from levels previously reported.  The allowance for credit losses on loans was little changed, measuring 1.50% of total loans at quarter-end, and 1.62% of loans excluding government-guaranteed PPP loans. 

RESULTS OF OPERATIONS

Berkshire's operating profitability strengthened during the most recent quarter.  Berkshire reported third quarter 2020 GAAP EPS of $0.42 per share.  The Company's non-GAAP measure of core EPS totaled $0.53 per share.  Measures of pre-tax pre-provision net revenue ("PPNR") also improved.   Non-core charges primarily consisted of costs related to executive separation expense, together with losses on discontinued operations and securities. 

Operating results were improved from the prior quarter due to higher revenues and lower expenses.  Fee income growth of 9% primarily reflected higher deposit fees as transaction volumes increased.  Non-interest income also benefited from recovery in financial instrument fair value adjustments following negative pandemic impacts in the first half of the year.  Net interest income decreased by 1% in the third quarter due primarily to loan runoff.  The net interest margin was little changed at 2.61%, as loan yields and deposit costs both declined due to the ongoing low interest rate environment. 

Third quarter results benefited from lower operating expenses in part because second quarter expenses were elevated by $2.6 million in one-time awards accrued to compensate staff for expediting PPP loan processing to support businesses and paychecks during the economic lockdowns.  Other compensation costs were also reduced during the quarter.  The efficiency ratio, a non-GAAP financial measure, improved to 65% from 71% as a result of these improvements in revenue and expenses.  Full time equivalent staff in continuing operations totaled 1,507 positions at period-end, compared to 1,550 positions at the start of the year.  The credit loss provision decreased to $1 million, reflecting an improved economic outlook after the original pandemic downturn was recognized with high credit loss provisions in the first half of the year.   The effective tax rate was a benefit of 4% due primarily to the impact of first half of the year expenses lowering the taxable income for the year.

BE FIRST CORPORATE RESPONSIBILITY UPDATE

Berkshire is committed to purpose-driven performance. Learn more about the steps Berkshire is taking to be a values-based brand for all its stakeholders at www.berkshirebank.com/csr and in its most recent Corporate Responsibility Report.

Key developments in the quarter include:

  • Investing in Community Recovery & Resiliency: As people and small businesses in neighborhoods across the Company's footprint struggle through the impacts of the COVID-19 pandemic, Berkshire's Foundation is responding and has provided nearly $3 million in grant funding to more than 400 organizations through the end of the third quarter. These critical investments are ensuring access to resources for underserved populations to become college and career ready, ensuring quality affordable housing and supporting small business growth and entrepreneurship. In addition, 75% of Berkshire's employees, through its award-winning XTEAM volunteer program contributed more than 6,000 hours of service.
     
  • Transitioning to a Low-Carbon Future: Berkshire is working towards transitioning its electricity to 100% renewable sources. The Company announced an agreement with Nexamp to subscribe to a community solar project in Massachusetts, lowering its carbon footprint and increasing the percentage of its energy supply procured from renewables while also reducing costs.
     
  • Enhancing Environmental & Social Governance Practices: The Company completed updates to its Responsible & Sustainable Business Policy to improve the quality and clarity of its policy and disclosure. The update included new language to address Fraud Reporting & Suspicious Activity as well as Conflict of Interest. In addition, the Company enhanced its Social and Environmental Credit Risk Framework by incorporating new policy and procedure into the existing Commercial Loan Policy to more effectively mitigate the social and environmental risks associated with highly sensitive industries.
     
  • Enhancing Protected Leave For Gender-Based Violence: Under the leadership of EVP, Chief Human Resources & Culture Officer Jackie Courtwright and through a unique collaboration with the non-profit FreeFrom, Berkshire enhanced protections for its employees experiencing gender-based violence by providing 15 days of paid leave a year to deal with the consequences of intimate partner violence, sexual assault, and human trafficking. This policy allows employees the ability to seek medical care, attend court proceedings, and relocate – all without missing a paycheck or depleting their accrued sick or vacation days.
     
  • Recognizing Impact & Results: Berkshire was named the winner of the North American Inspiring Workplaces Award for its diversity and culture programming recognizing the efforts of its Be FIRST Commitment and internal diversity work. The Company was also named one of Massachusetts Most Charitable Companies by the Boston Business Journal for the eighth consecutive year.

INVESTOR CONFERENCE CALL AND INVESTOR PRESENTATION

Berkshire will conduct a conference call/webcast at 10:00 a.m. eastern time on Tuesday, October 27, 2020 to discuss the results for the quarter and provide guidance about expected future results.  Participants are encouraged to pre-register for the conference call using the following link:  https://dpregister.com/sreg/10148654/da6d986a50.  Callers who pre-register will be given dial-in instructions and a unique PIN to gain immediate access to the call.  Participants may pre-register at any time prior to the call and will immediately receive simple instructions via email.  Additionally, participants may reach the registration link and access the webcast by logging in through the investor section of Berkshire's website at http://ir.berkshirebank.com.  Those parties who do not have internet access or are otherwise unable to pre-register for this event, may still participate at the above time by dialing 1-844-792-3726 and asking the Operator to join the Berkshire Hills Bancorp (BHLB) earnings call.  Participants are requested to dial-in a few minutes before the scheduled start of the call.   A telephone replay of the call will be available through Tuesday, November 3, 2020 by dialing 877-344-7529 and entering access number 10148654.  The webcast will be available on Berkshire's website for an extended period of time.

ABOUT BERKSHIRE HILLS BANCORP

Berkshire Hills Bancorp is the parent of Berkshire Bank which is transforming into a 21st century community bank pursuing purpose driven performance based on its Be FIRST corporate responsibility culture.  Headquartered in Boston, Berkshire operates 130 banking offices in seven Northeastern states, with approximately $12.6 billion in assets. Berkshire Bank serves the underbanked through the Reevx LabsTM platform.

FORWARD LOOKING STATEMENTS

This document contains "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. You can identify these statements from the use of the words "may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," "target" and similar expressions. There are many factors that could cause actual results to differ significantly from expectations described in the forward-looking statements. For a discussion of such factors, please see Berkshire's most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission and available on the SEC's website at www.sec.gov.

Further, given its ongoing and dynamic nature, it is difficult to predict what continued effects the COVID-19 pandemic will have on our business and results of operations. The pandemic and the related local and national economic disruption may result in a continued decline in demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; an increase in our allowance for loan losses; a decline in the value of loan collateral, including real estate; a greater decline in the yield on our interest-earning assets than the decline in the cost of our interest-bearing liabilities; and increased cybersecurity risks, as employees increasingly work remotely.

Accordingly, you should not place undue reliance on forward-looking statements, which reflect our expectations only as of the date of this document. Berkshire does not undertake any obligation to update forward-looking statements.

NON-GAAP FINANCIAL MEASURES

This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles ("GAAP").  These non-GAAP measures provide supplemental perspectives on operating results, performance trends, and financial condition.  They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company's GAAP financial information.  A reconciliation of non-GAAP financial measures to GAAP measures is included on 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 core earnings in evaluating operating trends, including components for core revenue and expense.  These measures exclude items which the Company does not view as related to its normalized operations.  These items primarily include securities gains/losses, merger costs, restructuring costs, goodwill impairment, and discontinued operations.  Discontinued operations are the Company's national mortgage banking operations which the Company is exiting pursuant to a sales agreement.  Merger costs consist primarily of severance/benefit related expenses, contract termination costs, systems conversion costs, variable compensation expenses, and professional fees.  Merger costs in 2019 were primarily related to the acquisition of SI Financial Group.  Restructuring costs generally consist of costs and losses associated with the disposition of assets and liabilities and lease terminations, including costs related to branch sales.  Restructuring costs also include severance and consulting expenses related to the Company's strategic review.  They also include costs related to the consolidation of branches, including eight branches for the full year of 2019.  The Company recorded a full impairment its goodwill in the second quarter of 2020, which was classified as noncore.  Noncore charges in the third quarter of 2020 were primarily related to executive separation expense, which was principally the result of the separation with the CEO. 

The Company has introduced the measure of Core Pre-Provision Net Revenue ("Core PPNR") which measures core income before credit loss provision and tax expense.  Due to the non-cash projections introduced into the calculation of income by the new CECL accounting standard, the investment community is placing more emphasis on PPNR in order to measure the results of operations and to compare them across banks which may have widely varying estimates of future economic conditions that affect their provision expense and reported earnings.  The Company also calculates core PPNR/assets in order to utilize the PPNR measure in assessing its comparative operating profitability.

Non-core adjustments are presented net of an adjustment for income tax expense.  This adjustment is determined as the difference between the GAAP tax rate and the effective tax rate applicable to core income.  The efficiency ratio is adjusted for non-core revenue and expense items and for tax preference items.  The Company also calculates measures related to tangible equity, which adjust equity (and assets where applicable) to exclude intangible assets due to the importance of these measures to the investment community. References to organic growth and organic change exclude balances acquired in bank mergers. 

CONTACTS
Investor Relations Contact 
David Gonci; Capital Markets Director; 413-281-1973

Media Contacts:
John Lovallo
Email: jlovallo@levick.com 
Tel: (917) 612-8419

Cate Cronin
Email: ccronin@levick.com 
Tel: (202) 738-7302

TABLE

INDEX

CONSOLIDATED UNAUDITED FINANCIAL SCHEDULES

F-1

Selected Financial Highlights

F-2

Balance Sheets

F-3

Loan and Deposit Analysis

F-4

Statements of Operations

F-5

Statements of Operations (Five Quarter Trend)

F-6

Average Yields and Costs

F-7

Average Balances

F-8

Asset Quality Analysis

F-9

Reconciliation of Non-GAAP Financial Measures and Supplementary Data (Five Quarter Trend)

F-10

Reconciliation of Non-GAAP Financial Measures and Supplementary Data (Year-to-Date)

 

BERKSHIRE HILLS BANCORP, INC.

SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1)





At or for the Quarters Ended (1)





Sept. 30,


June 30,


March 31,


Dec. 31,


Sept. 30,






2020


2020


2020


2019


2019

















PER SHARE DATA













Net earnings/(loss) per common share, diluted

$          0.42


$      (10.93)


$        (0.40)


$          0.51


$          0.44




Core earnings/(loss) per common share, diluted (2)

0.53


(0.13)


(0.07)


0.70


0.46




Total book value per common share

23.03


22.79


33.90


34.65


34.36




Tangible book value per common share (2)

22.22


21.94


22.00


22.56


22.42




Market price at period end

10.11


11.02


14.86


32.88


29.29




Dividends per common share

0.12


0.24


0.24


0.23


0.23




Dividends per preferred share

0.24


0.48


0.48


0.46


0.46

















PERFORMANCE RATIOS (3)













Return on assets

0.67

%

(16.38)

%

(0.62)

%

0.78

%

0.67

%



Core return on assets (2)

0.84


(0.19)


(0.11)


1.08


0.71




Return on equity

7.50


(131.17)


(4.58)


5.90


5.12




Core return on equity (2)

9.33


(1.54)


(0.84)


8.09


5.35




Core return on tangible common equity (2)

10.27


(2.05)


(0.94)


13.12


8.74




Net interest margin, fully taxable equivalent (FTE) (4)(5)

2.61


2.62


3.04


3.11


3.22




Fee income/Net interest and fee income from continuing operations

19.82


18.45


15.46


18.11


17.61




Efficiency ratio (2)

65.39


71.01


66.92


53.66


53.37

















CHANGE (Year-to-date)













Total commercial loans (organic, annualized)

5

%

12

%

(5)

%

(7)

%

(9)

%



Total loans (organic, annualized)

(7)


(3)


(8)


(9)


(9)




Total deposits (organic, annualized)

2


9


(10)


0


2




Total net revenues from continuing operations (compared to prior year)

(15)


(14)


(14)


4


4




(Loss)/earnings per common share (compared to prior year) 

(847)


(1,200)


(178)


(14)


(26)




Core earnings/(loss) per common share (compared to prior year)(2)

(81)


(116)


(112)


(14)


(18)

















FINANCIAL DATA (in millions)













Total assets


$      12,614


$      13,063


$      13,122


$      13,216


$      13,532




Total earning assets

11,832


12,267


11,785


11,916


12,174




Total securities

1,988


1,882


1,837


1,770


1,861




Total loans


8,982


9,370


9,303


9,502


9,719




Allowance for credit losses

134


139


114


64


62




Total intangible assets

41


42


598


599


602




Total deposits


10,467


10,776


10,072


10,336


10,423




Total shareholders' equity

1,179


1,164


1,722


1,759


1,772




Net income/(loss)

21.2


(549.4)


(19.9)


25.8


22.6




Core income/(loss) (2)

26.4


(6.5)


(3.6)


35.3


23.7




Purchase accounting accretion

2.5


2.1


3.1


5.1


4.8




Goodwill impairment

-


553.8


-


-


-

















ASSET QUALITY AND CONDITION RATIOS 













Net charge-offs (current quarter annualized)/average loans

0.27

%

0.17

%

0.45

%

0.17

%

0.92

%



Total non-performing assets/total assets

0.39


0.36


0.40


0.31


0.28




Allowance for credit losses/total loans

1.50


1.49


1.22


0.67


0.64




Loans/deposits

86


87


92


92


93




Shareholders' equity to total assets

9.35


8.91


13.13


13.31


13.10




Tangible shareholders' equity to tangible assets (2)

9.05


8.61


8.98


9.19


9.05































(1)

Reconciliations of non-GAAP financial measures, including all references to core and tangible amounts, appear on pages F-9 and F-10.





(2)

Non-GAAP financial measure. Core measurements are non-GAAP financial measures that are adjusted to exclude net non-core charges primarily  




 related to acquisitions and restructuring activities. See pages F-9 and F-10 for reconciliations of non-GAAP financial measures.






(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 most recent quarter and ending with the earliest quarter: 0.08%, 0.07%, 0.11%, 0.17%, 0.16%.


 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2)


September 30,


June 30,


December 31,


(in thousands)

2020


2020


2019


Assets







Cash and due from banks

$           90,537


$       102,105


$        105,447


Short-term investments

844,755


942,047


474,382


Total cash and short-term investments

935,292


1,044,152


579,829









Trading security

9,525


9,519


10,769


Marketable equity securities, at fair value

31,993


33,263


41,556


Securities available for sale, at fair value

1,575,289


1,458,036


1,311,555


Securities held to maturity, at amortized cost

330,197


334,895


357,979


Federal Home Loan Bank stock and other restricted securities

40,520


46,139


48,019


Total securities

1,987,524


1,881,852


1,769,878


Less: Allowance for credit losses on investment securities

(96)


(113)


-


Net securities

1,987,428


1,881,739


1,769,878









Loans held for sale

15,854


62,881


36,664









Total loans

8,982,336


9,370,271


9,502,428


Less: Allowance for credit losses on loans 

(134,414)


(139,394)


(63,575)


Net loans

8,847,922


9,230,877


9,438,853









Premises and equipment, net

117,116


118,722


120,398


Other real estate owned

40


40


-


Goodwill 

-


-


553,762


Other intangible assets

40,947


42,477


45,615


Cash surrender value of bank-owned life insurance

231,217


229,812


227,894


Other assets

425,675


430,592


288,945


Assets from discontinued operations

12,966


21,692


154,132


Total assets 

$    12,614,457


$  13,062,984


$   13,215,970









Liabilities and shareholders' equity







Demand deposits

$      2,585,173


$    2,573,786


$     1,884,100


NOW and other deposits

1,522,289


1,453,397


1,492,569


Money market deposits

2,516,168


2,525,761


2,528,656


Savings deposits

952,836


932,243


841,283


Time deposits

2,890,093


3,290,721


3,589,369


Total deposits

10,466,559


10,775,908


10,335,977









Senior borrowings

605,483


719,638


730,501


Subordinated borrowings

97,223


97,165


97,049


Total borrowings

702,706


816,803


827,550









Other liabilities 

251,220


280,843


267,398


Liabilities from discontinued operations

14,947


25,290


26,481


Total liabilities

11,435,432


11,898,844


11,457,406









Preferred shareholders' equity

20,325


20,325


40,633


Common shareholders' equity

1,158,700


1,143,815


1,717,931


Total shareholders' equity

1,179,025


1,164,140


1,758,564


Total liabilities and shareholders' equity

$    12,614,457


$  13,062,984


$   13,215,970









Net common shares outstanding 

50,306


50,192


49,585









 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-3)

LOAN ANALYSIS

































Annualized Growth %

(in millions)


September 30, 2020
Balance


June 30, 2020
Balance


December 31, 2019
Balance


Quarter ended
September 30, 2020


Year to Date  














Total commercial real estate


$                      3,943


$                      3,996


$                       4,034


(5)

%

(3)

%

Commercial and industrial loans 


2,147


2,222


1,841


(14)


22


Total commercial loans 


6,090


6,218


5,875


(8)


5














Total residential mortgages


2,122


2,320


2,685


(34)


(28)














Home equity 


350


364


381


(15)


(11)


Auto and other


420


468


561


(41)


(34)


Total consumer loans


770


832


942


(30)


(24)


Total loans


$                      8,982


$                      9,370


$                       9,502


(17)

%

(7)

%









































































DEPOSIT ANALYSIS




















Annualized Growth %

(in millions)


September 30, 2020
Balance


June 30, 2020
Balance


December 31, 2019
Balance


Quarter ended
September 30, 2020


Year to Date


Demand


$                      2,585


$                      2,574


$                       1,884


2

%

50

%

NOW and other


1,523


1,453


1,493


19


3


Money market


2,516


2,526


2,529


(2)


(1)


Savings


953


932


841


9


18


Time deposits


2,890


3,291


3,589


(49)


(26)


Total deposits 


$                    10,467


$                    10,776


$                     10,336


(11)

%

2

%

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - (F-4)


Three Months Ended


Nine Months Ended


September 30,


September 30,

(in thousands, except per share data)

2020


2019


2020


2019

Interest and dividend income from continuing operations    








Loans

$           85,688


$         118,371


$           278,259


$            338,012

Securities and other    

12,080


15,354


39,392


46,060

Total interest and dividend income    

97,768


133,725


317,651


384,072

Interest expense from continuing operations 








Deposits

16,070


31,501


60,460


86,396

Borrowings

4,643


5,353


16,118


23,751

Total interest expense    

20,713


36,854


76,578


110,147

Net interest income from continuing operations

77,055


96,871


241,073


273,925

Non-interest income from continuing operations 








Mortgage banking originations

2,044


292


4,647


616

Loan related income

4,988


6,493


12,007


17,318

Deposit related fees

7,062


8,705


20,382


23,088

Insurance commissions and fees    

2,660


2,895


8,451


8,486

Wealth management fees    

2,299


2,325


6,926


7,114

Total fee income    

19,053


20,710


52,413


56,622

Other

1,927


609


492


1,363

Securities (losses)/gains, net     

(1,017)


87


(9,925)


2,655

Total non-interest income      

19,963


21,406


42,980


60,640

Total net revenue from continuing operations

97,018


118,277


284,053


334,565

Provision for credit losses   

1,200


22,600


65,878


30,068

Non-interest expense from continuing operations








Compensation and benefits

34,809


37,272


111,121


105,551

Occupancy and equipment     

11,084


9,893


32,411


28,788

Technology and communications

8,540


6,849


24,376


19,821

Marketing and promotion     

1,002


1,006


3,069


3,428

Professional services

2,567


2,282


7,852


8,510

FDIC premiums and assessments

1,518


-


4,658


3,390

Other real estate owned and foreclosures

40


150


81


150

Amortization of intangible assets     

1,530


1,526


4,668


4,201

Goodwill impairment

-


-


553,762


-

Merger, restructuring and other expense 

5,316


4,163


5,316


22,333

Other

6,437


7,870


21,129


23,398

Total non-interest expense     

72,843


71,011


768,443


219,570









Income/(loss) from continuing operations before income taxes       

$           22,975


$           24,666


$         (550,268)


$              84,927

Income tax (benefit)/expense

(68)


4,007


(18,194)


16,042

Net income/(loss) from continuing operations

$           23,043


$           20,659


$         (532,074)


$              68,885









(Loss)/income from discontinued operations before income taxes

$           (2,477)


$             2,747


$           (21,741)


$                3,975

Income tax (benefit)/expense

(659)


790


(5,789)


1,161

Net (loss)/income from discontinued operations

$           (1,818)


$             1,957


$           (15,952)


$                2,814









Net income/(loss)

$           21,225


$           22,616


$         (548,026)


$              71,699

Preferred stock dividend

58


240


313


720

Income/(loss) available to common shareholders

$           21,167


$           22,376


$         (548,339)


$              70,979









Basic earnings/(loss) per common share:








Continuing Operations

$               0.46


$               0.40


$             (10.58)


$                  1.41

Discontinued Operations

(0.04)


0.04


(0.32)


0.06

Total

$               0.42


$               0.44


$             (10.90)


$                  1.47









Diluted earnings/(loss) per common share:




Continuing Operations

$               0.46


$               0.40


$             (10.58)


$                  1.40

Discontinued Operations

(0.04)


0.04


(0.32)


0.06

Total

$               0.42


$               0.44


$             (10.90)


$                  1.46









Weighted average shares outstanding:      








Basic

50,329


51,422


50,256


48,846

Diluted

50,329


51,545


50,256


48,987









 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend) - UNAUDITED - (F-5)




Sept. 30,


June 30,


March 31,


Dec. 31,


Sept. 30,


(in thousands, except per share data)

2020


2020


2020


2019


2019


Interest and dividend income from continuing operations    











Loans

$        85,688


$        90,876


$      101,695


$      110,915


$      118,371


Securities and other    

12,080


12,812


14,500


14,526


15,354


Total interest and dividend income    

97,768


103,688


116,195


125,441


133,725


Interest expense from continuing operations











Deposits

16,070


20,552


23,838


28,797


31,501


Borrowings

4,643


5,546


5,929


5,311


5,353


Total interest expense    

20,713


26,098


29,767


34,108


36,854


Net interest income from continuing operations

77,055


77,590


86,428


91,333


96,871


Non-interest income from continuing operations











Mortgage banking originations

2,044


1,644


959


172


292


Loan related income

4,988


5,717


1,302


7,056


6,493


Deposit related fees

7,062


5,373


7,947


8,264


8,705


Insurance commissions and fees    

2,660


2,767


3,024


2,471


2,895


Wealth management fees    

2,299


2,057


2,570


2,239


2,325


Total fee income    

19,053


17,558


15,802


20,202


20,710


Other

1,927


(999)


(436)


75


609


Securities (losses)/gains, net     

(1,017)


822


(9,730)


1,734


87


Gain on sale of business operations and assets, net

-


-


-


1,351


-


Total non-interest income      

19,963


17,381


5,636


23,362


21,406


Total net revenue from continuing operations

97,018


94,971


92,064


114,695


118,277


Provision for credit losses   

1,200


29,871


34,807


5,351


22,600


Non-interest expense from continuing operations











Compensation and benefits

34,809


39,403


36,909


35,355


37,272


Occupancy and equipment     

11,084


10,195


11,132


10,798


9,893


Technology and communications

8,540


7,755


8,081


6,702


6,849


Marketing and promotion  

1,002


902


1,165


1,046


1,006


Professional services

2,567


2,565


2,720


2,288


2,282


FDIC premiums and assessments

1,518


1,658


1,482


471


-


Other real estate owned and foreclosures

40


14


27


4


150


Amortization of intangible assets     

1,530


1,558


1,580


1,582


1,526


Goodwill impairment

-


553,762


-


-


-


Merger, restructuring and other expense 

5,316


-


-


5,713


4,163


Other

6,437


6,463


8,229


6,328


7,870


Total non-interest expense     

72,843


624,275


71,325


70,287


71,011













Income/(loss) from continuing operations before income taxes

$        22,975


$     (559,175)


$       (14,068)


$        39,057


$        24,666


Income tax (benefit)/expense

(68)


(16,130)


(1,996)


6,421


4,007


Net income/(loss) from continuing operations

$        23,043


$     (543,045)


$       (12,072)


$        32,636


$        20,659













(Loss)/income from discontinued operations before income taxes

$         (2,477)


$         (8,635)


$       (10,629)


$         (9,514)


$          2,747


Income tax (benefit)/expense

(659)


(2,299)


(2,831)


(2,629)


790


Net (loss)/income from discontinued operations

$         (1,818)


$         (6,336)


$         (7,798)


$         (6,885)


$          1,957













Net income/(loss)

$        21,225


$     (549,381)


$       (19,870)


$        25,751


$        22,616


Preferred stock dividend

58


130


125


240


240


Income/(loss) available to common shareholders

$        21,167


$     (549,511)


$       (19,995)


$        25,511


$        22,376
























Basic earnings/(loss) per common share:











Continuing Operations

$            0.46


$         (10.80)


$           (0.24)


$            0.65


$            0.40


Discontinued Operations

(0.04)


(0.13)


(0.16)


(0.14)


0.04


Total

$            0.42


$         (10.93)


$           (0.40)


$            0.51


$            0.44












Diluted earnings/(loss) per common share:











Continuing Operations

$            0.46


$         (10.80)


$           (0.24)


$            0.65


$            0.40


Discontinued Operations

(0.04)


(0.13)


(0.16)


(0.14)


0.04


Total

$            0.42


$         (10.93)


$           (0.40)


$            0.51


$            0.44













Weighted average shares outstanding:      











Basic

50,329


50,246


50,204


50,494


51,422


Diluted

50,329


50,246


50,204


50,702


51,545
























 

BERKSHIRE HILLS BANCORP, INC.

AVERAGE YIELDS AND COSTS (Fully Taxable Equivalent - Annualized) - UNAUDITED - (F-6)



Quarters Ended



Sept. 30,


June 30,


March 31,


Dec. 31,


Sept. 30,




2020


2020


2020


2019


2019














Earning assets 












Loans:












Commercial real estate


3.52

%

3.78

%

4.41

%

4.80

%

4.92

%

Commercial and industrial loans


3.88


4.02


5.03


5.35


5.58


Residential mortgages


3.78


3.78


3.77


3.61


3.73


Consumer loans


3.59


3.72


4.28


4.38


4.55


Total loans


3.68


3.83


4.33


4.52


4.67


Securities


2.78


3.07


3.32


3.31


3.41


Short-term investments and loans held for sale


0.21


0.50


1.78


3.15


4.11


Total earning assets


3.31


3.50


4.08


4.27


4.45














Funding liabilities












Deposits:












NOW and other


0.24


0.30


0.46


0.54


0.61


Money market


0.38


0.58


0.98


1.18


1.27


Savings


0.10


0.10


0.13


0.14


0.13


Time


1.63


1.84


1.87


1.97


2.02


Total interest-bearing deposits


0.81


1.01


1.18


1.35


1.43


Borrowings


2.36


2.38


2.60


2.77


3.12


Total interest-bearing liabilities


0.95


1.16


1.33


1.48


1.57














Net interest spread


2.36


2.34


2.75


2.79


2.88


Net interest margin


2.61


2.62


3.04


3.11


3.22














Cost of funds (1)


0.73


0.92


1.11


1.23


1.32


Cost of deposits 


0.61


0.79


0.96


1.11


1.18














(1) Cost of funds includes all deposits and borrowings.

















 

BERKSHIRE HILLS BANCORP, INC.

AVERAGE BALANCES - UNAUDITED - (F-7)


Quarters Ended


Sept. 30, 


June 30, 


March 31, 


Dec. 31, 


Sept. 30, 


(in thousands)

2020


2020


2020


2019


2019


Assets











Loans











Commercial real estate

$            3,986,424


$            4,005,018


$            4,000,461


$            4,056,244


$            3,998,144


Commercial and industrial loans

2,191,749


2,152,820


1,795,813


1,768,039


1,951,205


Residential mortgages

2,224,132


2,452,622


2,654,224


2,758,676


2,849,216


Consumer loans

800,824


865,318


921,810


974,889


1,035,893


Total loans (1) 

9,203,129


9,475,778


9,372,308


9,557,848


9,834,458


Securities (2)

1,873,533


1,793,381


1,744,635


1,752,968


1,846,985


Short-term investments and loans held for sale

766,447


697,138


374,894


444,622


309,897


Total earning assets (3)

11,843,109


11,966,297


11,491,837


11,755,438


11,991,340


Goodwill and other intangible assets

41,460


590,672


598,347


601,192


603,762


Other assets

759,534


751,702


663,056


737,396


668,218


Assets from discontinued operations

16,041


109,923


98,528


176,251


204,339


Total assets

$          12,660,144


$          13,418,594


$          12,851,768


$          13,270,277


$          13,467,659













Liabilities and shareholders' equity











Deposits 











NOW and other

$            1,243,487


$            1,183,839


$            1,159,388


$            1,085,485


$            1,111,637


Money market

2,673,567


2,672,066


2,752,465


2,688,766


2,624,639


Savings

940,488


901,218


846,942


835,209


838,445


Time

3,056,419


3,399,222


3,333,070


3,827,175


4,158,688


Total interest-bearing deposits

7,913,961


8,156,345


8,091,865


8,436,635


8,733,409


Borrowings

777,369


942,033


949,316


853,911


805,035


Total interest-bearing liabilities

8,691,330


9,098,378


9,041,181


9,290,546


9,538,444


Non-interest-bearing demand deposits

2,558,981


2,343,173


1,849,295


1,898,045


1,864,964


Other liabilities 

254,273


272,690


203,797


304,504


267,922


Liabilities from discontinued operations

22,805


28,988


23,799


30,446


28,206


Total liabilities

11,527,389


11,743,229


11,118,072


11,523,541


11,699,536













Preferred shareholders' equity

20,325


20,325


20,548


40,633


40,633


Common shareholders' equity

1,112,430


1,655,040


1,713,148


1,706,103


1,727,490


Total shareholders' equity

1,132,755


1,675,365


1,733,696


1,746,736


1,768,123


Total liabilities and shareholders' equity

$          12,660,144


$          13,418,594


$          12,851,768


$          13,270,277


$          13,467,659
























Supplementary data











Total average non-maturity deposits

$            7,416,523


$            7,100,296


$            6,608,090


$            6,507,505


$            6,439,685


Total average deposits 

10,472,942


10,499,518


9,941,160


10,334,680


10,598,373


Fully taxable equivalent income adjustment

1,512


1,580


1,824


1,934


1,826


Total average tangible equity (4)

1,091,295


1,084,693


1,135,349


1,145,544


1,164,361













(1) Total loans include non-accruing loans.


(2) Average balances for securities available-for-sale are based on amortized cost.


(3) Excludes discontinued operations for presentation purposes. Performance ratios are calculated including the impact of discontinued operations. 


(4) See page F-9 for details on the calculation of total average tangible equity.


 

BERKSHIRE HILLS BANCORP, INC.

ASSET QUALITY ANALYSIS - UNAUDITED - (F-8)



At or for the Quarters Ended



Sept. 30,


June 30,


March 31,


Dec. 31,


Sept. 30,


(in thousands)


2020


2020


2020


2019


2019


NON-PERFORMING ASSETS












Non-accruing loans:












Commercial real estate


$          14,777


$          12,486


$          16,938


$          20,119


$          15,829


Commercial and industrial loans


15,035


15,045


18,370


11,373


12,224


Residential mortgages


7,928


9,840


9,636


3,343


3,062


Consumer loans


9,650


7,513


6,172


4,805


5,191


Total non-accruing loans


47,390


44,884


51,116


39,640


36,306


Other real estate owned


401


517


224


-


-


Repossessed assets


1,646


1,581


1,316


858


1,003


Total non-performing assets


$          49,437


$          46,982


$          52,656


$          40,498


$          37,309














Total non-accruing loans/total loans


0.53%


0.48%


0.55%


0.42%


0.37%


Total non-performing assets/total assets


0.39%


0.36%


0.40%


0.31%


0.28%














PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS










Balance at beginning of period


$        139,394


$        113,510


$          63,575


$          62,230


$          62,156


Adoption of ASU No. 2016-13 (1)


-


-


25,434


-


-


Balance after adoption of ASU No. 2016-13


139,394


113,510


89,009


62,230


62,156


Charged-off loans


(7,776)


(7,274)


(12,432)


(4,485)


(23,524)


Recoveries on charged-off loans


1,580


3,259


1,958


479


998


Net loans charged-off


(6,196)


(4,015)


(10,474)


(4,006)


(22,526)


Provision for loan credit losses


1,216


29,899


34,975


5,351


22,600


Balance at end of period


$        134,414


$        139,394


$        113,510


$          63,575


$          62,230














Allowance for credit losses/total loans


1.50%


1.49%


1.22%


0.67%


0.64%


Allowance for credit losses/non-accruing loans

284%


311%


222%


160%


171%














NET LOAN CHARGE-OFFS












Commercial real estate


$             (635)


$          (1,679)


$          (5,990)


$          (1,419)


$          (2,759)


Commercial and industrial loans


(5,551)


(1,059)


(3,728)


(1,495)


(18,850)


Residential mortgages


517


(966)


(19)


(351)


(140)


Home equity 


(57)


(10)


(107)


(67)


(71)


Auto and other consumer


(470)


(301)


(630)


(674)


(706)


Total, net


$          (6,196)


$          (4,015)


$        (10,474)


$          (4,006)


$        (22,526)














Net charge-offs (QTD annualized)/average loans 

0.27%


0.17%


0.45%


0.17%


0.92%


Net charge-offs (YTD annualized)/average loans 

0.29%


0.31%


0.45%


0.35%


0.41%














DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS










30-89 Days delinquent


0.31%


0.37%


0.43%


0.25%


0.26%


90+ Days delinquent and still accruing


0.14%


0.14%


0.05%


0.29%


0.29%


Total accruing delinquent loans


0.45%


0.51%


0.48%


0.54%


0.55%


Non-accruing loans


0.53%


0.48%


0.55%


0.42%


0.37%


Total delinquent and non-accruing loans


0.98%


0.99%


1.03%


0.96%


0.92%


(1) This balance includes $12 million of PCD confirmed losses as of January 1, 2020.



 

BERKSHIRE HILLS BANCORP, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED - (F-9)



At or for the Quarters Ended



Sept. 30,


June 30,


March 31,


Dec. 31,


Sept. 30,


(in thousands)


2020


2020


2020


2019


2019


Net income/(loss)


$       21,225


$   (549,381)


$     (19,870)


$       25,751


$       22,616


Adj: Net securities losses/(gains) (1)


1,017


(822)


9,730


(1,734)


(87)


Adj: Goodwill impairment


-


553,762


-


-


-


Adj: Net (gains) on sale of business operations and assets


-


-


-


-


-


Adj: Merger and acquisition expense


-


-


-


3,611


3,802


Adj: Restructuring expense and other expense


5,316


-


-


2,102


361


Adj: Loss/(income) from discontinued operations before income taxes

2,477


8,635


10,629


9,514


(2,747)


Adj: Income taxes


(3,611)


(18,658)


(4,134)


(3,910)


(281)


Total core income/(loss) (2)

(A)

$       26,424


$       (6,464)


$       (3,645)


$       35,334


$       23,664














Total revenue from continuing operations


$       97,018


$       94,971


$       92,064


$     114,695


$     118,277


Adj: Net securities losses/(gains) (1)


1,017


(822)


9,730


(1,734)


(87)


Total core revenue (2)

(B)

$       98,035


$       94,149


$     101,794


$     112,961


$     118,190














Total non-interest expense from continuing operations


$       72,843


$     624,275


$       71,325


$       70,287


$       71,011


Less: Merger, restructuring and other expense (see above)


(5,316)


-


-


(5,713)


(4,163)


Less: Goodwill impairment


-


(553,762)


-


-


-


Core non-interest expense (2)                                    

(C)

$       67,527


$       70,513


$       71,325


$       64,574


$       66,848














Total revenue


$       96,752


$       90,383


$       93,869


$     116,860


$     134,067


Total non-interest expense


75,054


628,322


83,759


81,966


84,054


Pre-tax, pre-provision net revenue (PPNR)


$       21,698


$   (537,939)


$       10,110


$       34,894


$       50,013














Total revenue from continuing operations


$       97,018


$       94,971


$       92,064


$     114,695


$     118,277


Total non-interest expense from continuing operations


72,843


624,275


71,325


70,287


71,011


Pre-tax, pre-provision net revenue (PPNR) from continuing operations 

$       24,175


$   (529,304)


$       20,739


$       44,408


$       47,266














Total core revenue (2)


$       98,035


$       94,149


$     101,794


$     112,961


$     118,190


Core non-interest expense (2)                                    


67,527


70,513


71,325


64,574


66,848


Core pre-tax, pre-provision net revenue (PPNR)


$       30,508


$       23,636


$       30,469


$       48,387


$       51,342














(in millions, except per share data)












Total average assets                                                

(D)

$       12,660


$       13,419


$       12,852


$       13,270


$       13,468


Total average shareholders' equity                         

(E)

1,133


1,675


1,734


1,747


1,768


Total average tangible shareholders' equity (2)                        

(F)

1,091


1,085


1,135


1,146


1,164


Total average tangible common shareholders' equity (2)                        

(G)

1,071


1,064


1,115


1,105


1,124


Total tangible shareholders' equity, period-end (2)(3)

(H)

1,138


1,122


1,124


1,159


1,170


Total tangible common shareholders' equity, period-end (2)(3)

(I)

1,118


1,101


1,104


1,119


1,130


Total tangible assets, period-end (2)(3)

(J)

12,574


13,021


12,524


12,617


12,930














Total common shares outstanding, period-end (thousands)               

(K)

50,306


50,192


50,199


49,585


50,394


Average diluted shares outstanding (thousands)

(L)

50,329


50,246


50,204


50,702


51,545














Core earnings/(loss) per common share, diluted(2)

(A/L)

$           0.53


$         (0.13)


$         (0.07)


$           0.70


$           0.46


Tangible book value per common share, period-end (2)

(I/K)

22.22


21.94


22.00


22.56


22.42


Total tangible shareholders' equity/total tangible assets (2)

(H)/(J)

9.05


8.61


8.98


9.19


9.05














Performance ratios (4)












GAAP return on assets


0.67

%

(16.38)

%

(0.62)

%

0.78

%

0.67

%

Core return on assets (2)


0.84


(0.19)


(0.11)


1.08


0.71


GAAP return on equity 


7.50


(131.17)


(4.58)


5.90


5.12


Core return on equity (2)

(A/E)

9.33


(1.54)


(0.84)


8.09


5.35


Core return on tangible common equity (2)(5)

(A+O)/(G)

10.27


(2.05)


(0.94)


13.12


8.74


PPNR/assets (2)


0.69


(16.04)


0.31


1.05


1.49


Core PPNR/assets (2)


0.97


0.71


0.96


1.48


1.55


Efficiency ratio (2)(6)                                                                                

(C-O)/(B+M+P)

65.39


71.01


66.92


53.66


53.37


Net interest margin


2.61


2.62


3.04


3.11


3.22














Supplementary data (in thousands)












Tax benefit on tax-credit investments (7)

(M)

$         1,377


$         1,379


$            608


$         2,503


$         2,382


Non-interest income charge on tax-credit investments (8)

(N)

(1,090)


(1,097)


(486)


(1,996)


(1,942)


Net income on tax-credit investments

(M+N)

287


282


122


507


440














Intangible amortization

(O)

$         1,530


$         1,558


$         1,580


$         1,582


$         1,526


Fully taxable equivalent income adjustment 

(P)

1,512


1,580


1,824


1,934


1,826






































(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 total assets less the intangible assets at period-end.  


(4) Ratios are annualized and based on average balance sheet amounts, where applicable. Quarterly data may not sum to year-to-date data due to rounding.


(5) Core return on tangible equity is computed by dividing the total core income/(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 core tangible non-interest expense by the sum of total net interest income on a fully  taxable equivalent basis and total core non-interest income adjusted to include tax credit benefit of tax shelter investments.  The Company uses this non-GAAP measure to provide important information regarding its operational efficiency.


(7) The tax benefit is the direct reduction to the income tax provision due to tax credits and deductions generated from investments in historic rehabilitation and low-income housing.


(8) The non-interest income charge is the reduction to the tax-advantaged investments, which are incurred as the tax credits are generated. 


 


BERKSHIRE HILLS BANCORP, INC.


RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA - UNAUDITED - (F-10)




At or for the Nine Months Ended




Sept. 30,


Sept. 30,



(Dollars in thousands)


2020


2019



Net (loss)/income 


$  (548,026)


$    71,699



Adj: Net securities losses/(gains) (1)


9,925


(2,655)



Adj: Goodwill impairment


553,762


-



Adj: Merger and acquisition expenses


-


15,122



Adj: Restructuring expense and other


5,316


7,211



Adj: Loss/(income) from discontinued operations before income taxes


21,741


(3,975)



Adj: Income taxes


(26,403)


(3,889)



Total core income (2)

(A)

$      16,315


$    83,513










Total revenue from continuing operations


$    284,053


$  334,565



Adj: Net securities losses/(gains) (1)


9,925


(2,655)



Total core revenue(2)

(B)

$    293,978


$  331,910



Total non-interest expense from continuing operations


$    768,443


$  219,570



Less: Merger, restructuring and other expense (see above)


(5,316)


(22,333)



Less: Goodwill impairment


(553,762)


-



Core non-interest expense (2)                                    

(C)

$    209,365


$  197,237










Total revenue


$    281,004


$  373,630



Total non-interest expense


787,135


254,660



Pre-tax, pre-provision net revenue (PPNR)


$  (506,131)


$  118,970










Total revenue from continuing operations


$    284,053


$  334,565



Total non-interest expense from continuing operations


768,443


219,570



Pre-tax, pre-provision net revenue (PPNR) from continuing operations 

$  (484,390)


$  114,995










Total core revenue (2)


$    293,978


$  331,910



Core non-interest expense (2)                                    


209,365


197,237



Core pre-tax, pre-provision net revenue (PPNR)


$      84,613


$  134,673










(in millions, except per share data)







Total average assets                                                

(D)

$      13,001


$    12,857



Total average shareholders' equity                         

(E)

1,513


1,677



Total average tangible shareholders' equity (2)                        

(F)

1,104


1,106



Total average tangible common shareholders' equity (2)                        

(G)

1,083


1,066



Total tangible shareholders' equity, period-end (2)(3)

(H)

1,138


1,170



Total tangible common shareholders' equity, period-end (2)(3)

(I)

1,118


1,130



Total tangible assets, period-end (2)(3)

(J)

12,574


12,930



Total common shares outstanding, period-end (thousands)               

(K)

50,306


50,394



Average diluted shares outstanding (thousands)

(L)

50,290


48,987



Core earnings per common share, diluted(2)

(A/L)

$          0.32


$        1.70



Tangible book value per common share, period-end (2)

(I/K)

22.22


22.42



Total tangible shareholders' equity/total tangible assets (2)

(H)/(J)

9.05


9.05










Performance ratios (4)







GAAP return on assets


(5.63)

%

0.74

%


Core return on assets (2)

(A/D)

0.17


0.88



GAAP return on equity 


(48.26)


5.70



Core return on equity (2)

(A/E)

1.44


6.64



Core return on tangible common equity (2)(5)

(A+O)/(G)

2.39


10.74



PPNR/assets (2)


(5.19)


1.23



Core PPNR/assets (2)


0.87


1.40



Efficiency ratio (2)(6)                                                                               

(C-O)/(B+M+P)

67.72


56.30



Net interest margin


2.75


3.19










Supplementary data







Tax benefit on tax-credit investments (7)

(M)

$        3,364


$      5,447



Non-interest income charge on tax-credit investments (8)

(N)

(2,673)


(4,459)



Net income on tax-credit investments

(M+N)

691


988










Intangible amortization

(O)

4,668


4,201



Fully taxable equivalent income adjustment

(P)

4,917


5,517























(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 total assets less the intangible assets at period-end. 

(4) Ratios are annualized and based on average balance sheet amounts, where applicable. Quarterly data may not sum to year-to-date data due to rounding.

(5) Core return on tangible equity is computed by dividing the total core income adjusted for the tax-effected amortization of intangible assets, assuming a 27% marginal rate, by tangible equity.

(6) Efficiency ratio is computed by dividing total core tangible non-interest expense by the sum of total net interest income on a fully taxable equivalent basis and total core non-interest income adjusted to include tax credit benefit of tax shelter investments.  The Company uses this non-GAAP measure to provide important information regarding its operational efficiency.

(7) The tax benefit is the direct reduction to the income tax provision due to tax credits and deductions generated from investments in historic rehabilitation and low-income housing.

(8) The non-interest income charge is the reduction to the tax-advantaged investments, which are incurred as the tax credits are generated. 

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/berkshire-hills-announces-third-quarter-results-301159871.html

SOURCE Berkshire Hills Bancorp, Inc.

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