Berkshire Hills Bancorp Reports 11% Growth in Core Earnings, to a Record $5.0 Million for the First Quarter of 2007, Reporting $0.56 Per Share for Both Core and GAAP Earnings, with 25% Growth in Total Net Revenue

Berkshire Hills Bancorp, Inc. (the “Company”) (NASDAQ: BHLB), the holding company for Berkshire Bank (the “Bank”), reported first quarter 2007 core income of $5.0 million ($0.56 per diluted share), an increase of 11% from $4.5 million ($0.51 per diluted share) in the first quarter of 2006. Earnings in the most recent quarter included after-tax charges of $0.06 per share related to the New York de novo branch program, which the Company views as an investment in franchise expansion. First quarter GAAP net income was $4.9 million ($0.56 per diluted share) in 2007 compared to $4.8 million ($0.55 per diluted share) in 2006.

First quarter financial highlights include the following (income comparisons are to prior year first quarter):

• 450% increase in insurance fee income
• 21% increase in other fee income
• 12% annualized commercial loan growth
• 7% annualized total loan growth
• 7% annualized deposit growth excluding managed run-off of brokered time deposits (3% annualized growth in total deposits)
• 4% increase in net interest income
• Nonperforming loans were 0.39% of assets, compared to 0.35% at year-end 2006
• Annualized net charge-offs were 0.11% of average loans for the quarter

Michael P. Daly, President and Chief Executive Officer, stated, “We started the year with a clean, solid first quarter - continuing our strong growth momentum and producing a 25% increase in total net revenue. Insurance fees more than quadrupled due to our insurance agency acquisitions in the fourth quarter. This more than doubled our non-interest income, boosting non-interest income to 35% of total net revenue. This is an important milestone as we diversify our revenue sources, defend against a persistent inverted yield curve, and increase the product mix that we offer in our markets. Balance sheet growth was ongoing, led by 12% annualized growth in commercial loans, which resulted in 7% annualized growth of total loans. Deposits also grew by 7%, exclusive of managed run-off of brokered time deposits. Year-over-year first quarter average transaction deposits increased by 1%, and net interest income increased by 4%. Our emphasis on credit quality remains fundamental; we have no subprime lending programs and our annualized loan charge-off rate remained low at 0.11% in the first quarter of 2007.”

Mr. Daly continued, “We unveiled our new branding as “America’s Most Exciting Bank”SM in the first quarter, and we are encouraged by the initial response to our vision of creating an engaging and exciting financial services environment. We opened three new branches in our New York region during the quarter. With the imminent opening of an additional branch, we will now have ten branches operating in this promising market. Our total branch count will be 31, an increase of 15% from the beginning of the year. Our net income includes after-tax expenses of $0.06 per share related to the de novo branch program, which we view as an investment in franchise expansion. During the first quarter, we announced that Kevin P. Riley will become our Executive Vice President and Chief Financial Officer, effective August 1. Kevin was previously Executive Vice President and Chief Financial Officer of KeyBank National Association, KeyCorp’s flagship community bank. We also announced important leadership appointments in Commercial Banking, Retail Banking, and Consumer Lending. Our expanded leadership team is focused on delivering the strong, quality earnings growth that we announced in our 2007 guidance.”

DIVIDEND DECLARATION

The Board of Directors declared a quarterly cash dividend of $0.14 per share to be distributed to stockholders of record at the close of business on May 4, 2007, and payable on or about May 18, 2007.

FINANCIAL CONDITION

Total assets increased at a 5% annualized rate to $2.17 billion during the first quarter of 2007. Total loans increased by $31 million (7% annualized) to $1.73 billion, including growth in most categories. Loan growth was led by commercial mortgages, which increased by $23 million (16% annualized). A $6 million (16% annualized) decrease in home equity and other consumer loans was related in part to the expiration of certain introductory rate offerings. The Company introduced a home equity line campaign in the first quarter to promote growth in home equity borrowings.

Asset quality remained well controlled during the quarter. The Company does not offer subprime lending programs. The average FICO scores on its consumer auto loans have increased in each of the last four quarters, reaching an average of 728 in the first quarter of 2007. The annualized rate of net loan charge-offs was low at 0.11% during the quarter. Total nonperforming assets increased slightly during the quarter to 0.39% of total assets from 0.35% at year-end 2006. Nonperforming assets totaled $8.5 million, and included one $6.0 million commercial relationship, which is in bankruptcy. All other nonperforming assets were only 0.12% of total assets at quarter-end. Loans delinquent 30 – 90 days remained low at 0.28% of total loans at quarter-end, compared to 0.26% of total loans at year-end 2006. The loan loss allowance remained flat at 1.14% of total loans. The allowance included a $1.0 million impaired loan reserve on the above mentioned nonperforming commercial relationship; this reserve was increased by $500 thousand during the quarter. The Company had no foreclosed real estate at March 31, 2007.

Total deposits increased by $13 million to $1.54 billion during the first quarter of 2007. Excluding $13 million of planned run-off of brokered time deposits, total deposits increased by $26 million (7% annualized). Deposit growth included an increase of $14 million (51% annualized) to $122 million in the de novo New York branch program. Excluding the brokered time deposit runoff, Massachusetts deposits increased by $12 million (4% annualized). Balances of non-maturity accounts were flat during the quarter, with funds shifting into money market accounts from other non-maturity accounts. Growth in time deposits provided the overall deposit growth, with in-market time deposits increasing by $25 million (15% annualized) and more than offsetting the planned decline in brokered time deposits. Total borrowings increased by $7 million (8% annualized) to $352 million to provide supplemental funds for loan growth.

Stockholders’ equity increased by $5 million (8% annualized) to $263 million due primarily to the benefit of retained earnings. Tangible book value per share increased at an 11% annualized rate to $16.13, while total book value per share increased at a 3% annualized rate to $29.87. The ratio of tangible equity to assets increased during the quarter to 6.92% from 6.75%, while the ratio of total equity to assets increased to 12.10% from 12.01%. The Company repurchased 11,000 shares of common stock during the first quarter.

RESULTS OF OPERATIONS

First quarter core income increased by $500 thousand (11%) to $5.0 million in 2007 compared to $4.5 million in 2006. First quarter net income increased by $124 thousand (3%) from year-to-year. The increase in core income reflected the benefit of positive operating leverage, with a $4.7 million increase in net revenue, compared to a $4.2 million increase in non-interest expense. The increase in net revenue included a $582 thousand (4%) increase in net interest income, accompanied by a $4.6 million (143%) increase in fee income due primarily to insurance fee growth. Net income in 2006 included $333 thousand in net non-core income related to securities gains. The core return on tangible equity increased to 15.4% from 12.6%, while the net return on equity was unchanged at 7.6%. The return on assets decreased slightly to 0.92% in 2007 from 0.94% in 2006.

The 4% increase in net interest income was due to 5% growth in average earning assets in the first quarter of 2007, compared to the same quarter of 2006. The net interest margin decreased as expected to 3.24% from 3.27% for these periods due primarily to time account repricings, along with the ongoing impact of the shifting of funds into higher yielding money market and time accounts. The Company is promoting lower cost transaction accounts to help offset margin pressures and to provide increased cross-selling opportunities. The Company is also promoting money market accounts to provide more relationship benefits compared to time accounts. The net interest margin in the most recent quarter also included a negative impact of about 0.07% due to the cost of borrowings to finance the insurance agency acquisitions in the fourth quarter of 2006. The margin benefited from the securities restructuring at the beginning of the same quarter.

Total first quarter non-interest income increased by $4.1 million (101%) to $8.2 million in 2007 compared to $4.1 million in 2006. This increase was primarily due to a $4.1 million (450%) increase in insurance fee revenue, following the acquisition of five affiliated insurance agencies in the fourth quarter of 2006. Insurance revenues are seasonally weighted towards the first half of the year, primarily due to contingency revenues which are received in the first and second quarters. All other fee revenues increased by $474 thousand (21%) reflecting growth in all areas. Deposit service fee growth of 18% included the benefit of new fee based convenience services implemented in the fourth quarter of 2006. Wealth management fee growth of 22% resulted primarily from growth in assets under management, which increased at a 13% annualized rate during the quarter to $510 million at quarter-end.

The first quarter provision for loan losses totaled $750 thousand in 2007, compared to $290 thousand in 2006. This reflected a $267 thousand increase in net charge-offs, along with higher reserving ratios initiated in the third quarter of 2006. The first quarter loan loss provision of $750 thousand measured 160% of net charge-offs during the quarter.

First quarter non-interest expense increased by $4.2 million (37%) in 2007 compared to 2006. This increase reflected the acquisition of insurance agencies in the fourth quarter of 2006, along with the higher carrying costs related to the opening of six new branches since the beginning of 2006. This increase was more than offset by the benefit of positive operating leverage related to higher revenues previously noted. The efficiency ratio increased as expected to 61.1% from 57.5% due to the impact of different operating margins in the acquired insurance businesses. First quarter 2007 non-interest expense included nonrecurring charges totaling $153 thousand on the sale of swaps related to brokered time deposits. First quarter costs of the de novo branch program in New York totaled $837 thousand in 2007, compared to $230 thousand in 2006. These costs equated to $0.06 per share in 2007 and are viewed by the Company as an investment in franchise growth. The first quarter effective tax rate decreased to 32% in 2007 from 32.9% in 2006, and was consistent with the rate in the linked quarter.

CONFERENCE CALL

The Company will conduct a conference call at 10:00 A.M. eastern time on Wednesday, April 25, 2007. President and Chief Executive Officer Michael P. Daly and Interim Chief Financial Officer John S. Millet will discuss highlights of the Company's first quarter financial results, along with guidance about expected financial results. Information about the conference call follows:

Dial-in:                      1-877-407-8035
Replay Dial-in:               1-877-660-6853
Replay Access Codes:          Account #286; Conference ID #236317
                              (Both are needed to access the Replay)
Replay Dates:                 April 25, 2007 at 1:00 P.M. (ET) through
                              May 4, 2007 at 11:59 P.M. (ET)

All interested parties are welcome to access the conference call and are requested to call in a few minutes prior to 10:00 A.M. (ET) to register for the event. After the presentation by Messrs. Daly and Millet there will be an opportunity for questions and answers.

Live access to the call on a listen only basis will also be available on the internet at the Company’s website at www.berkshirebank.com by clicking on the Investor Relations link and then selecting the Webcast link on the Corporate Profile page. A replay of the call will also be available at the website for an extended period of time.

BACKGROUND

Berkshire Hills Bancorp, Inc. is the holding company for Berkshire Bank - America's Most Exciting BankSM. Established in 1846, Berkshire Bank is one of Massachusetts' oldest and largest independent banks and the largest banking institution based in Western Massachusetts. The Bank is headquartered in Pittsfield, Massachusetts with branches serving communities throughout Western Massachusetts and Northeastern New York. The Bank is transitioning into a regional bank, delivering exceptional customer service and a broad array of competitively priced deposit, loan, insurance, wealth management and trust services and investment products. For more information on Berkshire Hills Bancorp, Inc. or Berkshire Bank, visit www.berkshirebank.com or call 800-773-5601.

FORWARD-LOOKING STATEMENTS

Statements contained in this news release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and expectations of management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties, and assumptions. These risks and uncertainties include among others: changes in market interest rates and general and regional economic conditions; changes in government regulations; changes in accounting principles; the quality or composition of the loan and investment portfolios; and the achievement of anticipated future earnings benefits from recent acquisitions. In addition, the following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: adverse governmental or regulatory policies may be enacted; the risks associated with continued diversification of assets and adverse changes to credit quality; and difficulties associated with achieving expected future financial results. Additionally, other risks and uncertainties may be described in the Company’s quarterly reports on Form 10-Q for the quarters ended March 31, June 30, and September 30 and in its annual report on Form 10-K, each filed with the Securities and Exchange Commission, which are available at the Securities and Exchange Commission’s internet website (www.sec.gov) and to which reference is hereby made. Therefore, actual future results may differ significantly from results discussed in these forward-looking statements and undue reliance should not be placed on such statements. The Company assumes no obligation to update any forward-looking statements.

NON-GAAP FINANCIAL MEASURES

This press release contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). The Company’s management uses certain non-GAAP measures for operational and investment decisions and believes that these measures are among several useful measures for understanding its operating results, performance trends, and financial condition. These measures should not be construed as 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 in the accompanying financial tables and elsewhere in this release. 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 during the current fiscal period, and compared to the prior fiscal period. The core earnings measure is not intended to substitute for GAAP net income, but is an additional measure that the Company uses and believes is useful for understanding its operating results. During the third quarter of 2006, the Company identified charges related to the balance sheet repositioning and to the loan loss allowance adjustment as non-core in the computation of core earnings. The Company views these charges as infrequent and not specifically related to the Company’s operating activities during the year.