Berkshire Hills Reports First Quarter Earnings; Dividend Declared

PITTSFIELD, Mass., April 24, 2017 /PRNewswire/ -- Berkshire Hills Bancorp, Inc. (NYSE: BHLB) reported first quarter 2017 earnings of $15.5 million, or 44 cents per share.  Core earnings totaled $19.4 million, or $0.55 per share.  Net income increased by 50% over the prior quarter and core earnings increased by 8% including the first full quarter benefit of the acquired First Choice operations.  Non-core after-tax merger charges totaled $0.12 per share for the quarter. 

FIRST QUARTER FINANCIAL HIGHLIGHTS (comparisons are to prior quarter unless otherwise stated): 

  • 34% increase in total net revenue
  • 46% increase in fee income
  • 15% annualized commercial loan growth
  • 6% annualized total loan growth
  • 2% annualized deposit growth
  • 3.33% net interest margin, increased from 3.21% in the prior quarter
  • 0.27% non-performing assets/assets
  • 0.20% net loan charge-offs/average loans

CEO Michael Daly stated, "Berkshire is off to a strong start for the year, having delivered double-digit commercial loan growth, an expanded NIM, and a successful systems integration of First Choice on time and on plan. The First Choice operations drove our revenue gains while organic business development contributed to balance sheet growth. We opened our first Boston branch which will support our growing commercial business in Greater Boston. During the quarter we completed the consolidation of three branches and identified a fourth branch, along with other leasehold reductions, for further consolidation. We remain focused on delivering on the disciplined expansion of our business model. Across our regions, our teams have solid momentum for business growth and profitability improvement in 2017."

DIVIDEND DECLARED

The Board of Directors voted to declare a cash dividend of $0.21 per share to shareholders of record at the close of business on May 11, 2017, payable on May 25, 2017.  The dividend equates to a 2.4% annualized yield based on the $35.38 average closing price of Berkshire Hills Bancorp common stock during the quarter.

FINANCIAL CONDITION

Total assets measured $9.3 billion at March 31, 2017. The 6% annualized loan growth was concentrated in 15% annualized commercial loan growth.  The largest gain was in commercial and industrial loans, which benefited from improved activity across several regions.  Deposit growth was concentrated in time account growth, providing additional protection in the event of further interest rate increases, while transaction account balances decreased seasonally.  Berkshire terminated its $300 million in fixed rate interest rate swaps during the quarter in conjunction with the integration of acquired First Choice Bank assets and liabilities.  The Company continues to maintain a modestly asset sensitive profile for net interest income.    

At quarter-end, the ratio of loans/deposits stood at 100%.   The ratio of equity/assets was 11.8% and the ratio of tangible equity/assets was 7.6%.  At quarter-end, book value per share increased to $30.77 and tangible book value per share increased to $18.97.  Tangible equity/assets and tangible book value are non-GAAP financial measures. Delinquent and non-accruing loans decreased to 0.78% of total loans, and annualized net loan charge-offs decreased to 0.20% of average loans during the quarter. 

RESULTS OF OPERATIONS

The 50% increase in GAAP earnings and 8% increase in core earnings compared to the prior quarter primarily reflected the impact of the acquired First Choice operations.  Per share results included the impact of the 4.4 million shares issued as merger consideration.  GAAP earnings per share increased by $0.12 to $0.44, while core earnings per share decreased by $0.01 to $0.55.  The First Choice acquisition is targeted to be accretive to earnings per share after integration is completed including targeted cost saves from combined efficiencies.  During the most recent quarter, the GAAP return on assets measured 0.68% and core return on assets measured 0.85%.

Core earnings is a non-GAAP financial measure excluding non-core items viewed as not related to normalized operations.  The $0.11 difference between core and GAAP EPS in the first quarter included $0.12 per share in after-tax merger related charges.  Other net non-core gains/losses and expense restructuring items were mostly offsetting.  Non-core gains of $13 million were realized on the sale of equity securities, and were offset by a $7 million loss recorded on the termination of the interest rate swaps and $6 million in other non-core costs primarily related to restructuring charges. 

Most categories of revenue and expense increased over the prior quarter due to the full period impact of the First Choice acquisition.   Total revenue increased by 34% and core revenue increased by 26%.  The first quarter 2017 net interest margin increased to 3.33% and measured 3.15% excluding purchased loan accretion.  The comparable measures in the prior quarter were 3.21% and 3.11%, respectively.   The improvement in the margin included the benefit of the December rate hike and a decrease in funding costs following the First Choice acquisition.  Fee income increased to 30% of total interest and fee revenue from 25% in the prior quarter, including the benefit of the acquired First Choice mortgage origination operations.    

First quarter non-interest expense increased by 22% over the prior quarter including the costs of newly acquired operations, while core non-interest expense increased by 27%.  The efficiency ratio measured 62%, compared to 58% in the prior quarter, reflecting the lower operating margin associated with mortgage originations.   Full time equivalent staff totaled 1,728 positions at quarter-end, compared to 1,731 at the start of the year.  

The effective GAAP income tax rate was 30% and the core income tax rate was 31% in the most recent quarter.  The Company received $0.01 per share in net earnings benefit from its investment in tax credit related projects during the quarter, compared to $0.02 in the prior quarter.

INVESTOR CONFERENCE CALL

Berkshire will conduct a conference call/webcast at 10:00 a.m. eastern time on Tuesday, April 25, 2017 to discuss its 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: dpregister.com/10104927.  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.  Participants may also reach the registration link and access the webcast by logging in through the investor section of our website at ir.berkshirebank.com.  Participants may also participate at the above time by dialing 1-844-792-3726 and asking the Operator to be joined to the Berkshire Hills Bancorp (BHLB) earnings call.  A telephone replay of the call will be available through Tuesday, May 2, 2017 by dialing 877-344-7529 and entering access number 10104927. The webcast will be available on Berkshire's website for an extended period of time.

BACKGROUND

Berkshire Hills Bancorp is the parent of Berkshire Bank – America's Most Exciting Bank®. Berkshire has approximately $9.3 billion in assets and 97 full-service branch offices in Massachusetts, New York, Connecticut, Vermont, Pennsylvania and New Jersey providing personal and business banking, insurance, and wealth management services.  The Company also offers mortgages and specialized commercial lending services in targeted national markets.  For more information, visit www.berkshirebank.com.

FORWARD LOOKING STATEMENTS

This document contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. There are several 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. 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 page F-9 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 include securities gains/losses, merger costs, restructuring costs, and systems conversion costs.  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.  Charges related to merger and acquisition activity consist primarily of severance/benefit related expenses, contract termination costs, systems conversion costs, variable compensation expenses, and professional fees.  These charges are related to the following business 2016 combinations: First Choice Bank, 44 Business Capital, and RNLPC.  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.  Non-core items recorded in the first quarter of 2017 included gains realized on the sale of equity securities and costs related to the termination of the Company's interest rate swaps.  Of note, following systems upgrades, non-material revisions were made to the calculations of the net interest margin and efficiency ratio and prior period measures were revised to include these changes.  

CONTACTS
Investor Relations Contact
Allison O'Rourke; Executive Vice President, Investor Relations Officer; 413-236-3149

Media Contact
Elizabeth Mach; Senior Vice President, Marketing Officer; 413-445-8390

 

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 Income

F-5

Statements of Income  (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 (Five Quarter Trend) and Supplementary Data

 

BERKSHIRE HILLS BANCORP, INC.

SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1)





At or for the Quarters Ended (2)





March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,






2017


2016 (3)


2016


2016 (4)


2016

















PER SHARE DATA













Net earnings, diluted

$          0.44


$          0.32


$          0.53


$          0.52


$          0.52




Core earnings, diluted (1)

0.55


0.56


0.57


0.54


0.54




Total book value

30.77


30.65


29.97


29.64


29.18




Tangible book value (5)

18.97


18.81


18.78


18.44


18.44




Market price at period end

36.05


36.85


27.71


26.92


26.89




Dividends


0.21


0.20


0.20


0.20


0.20

















PERFORMANCE RATIOS (6)













Return on assets

0.68

%

0.50

%

0.82

%

0.82

%

0.82

%



Core return on assets (1)

0.85


0.87


0.88


0.85


0.85




Return on equity

5.71


4.29


7.29


7.17


7.19




Core return on equity (1)

7.17


7.49


7.75


7.42


7.40




Core return on tangible equity (1)

12.05


12.23


12.99


12.45


12.20




Net interest margin, fully taxable equivalent (FTE) (7)(8)

3.33


3.21


3.27


3.32


3.33




Net interest margin (FTE), excluding purchased loan accretion (5)(8)

3.15


3.11


3.15


3.21


3.22




Fee income/Net interest and fee income

30.04


24.99


23.81


21.16


21.04




Efficiency ratio (5)(8)

61.94


58.42


57.32


58.11


59.27

















GROWTH (Year-to-date)













Total commercial loans (annualized)

15

%

18

%

9

%

11

%

6

%



Total loans (annualized)

6


14


7


10


0




Total deposits (annualized)

2


18


4


2


0




Total net revenues (compared to prior year)

39


11


13


14


26




Earnings per share (compared to prior year) 

(15)


9


31


48


49




Core earnings per share (compared to prior year)(1)

2


4


6


5


8

















FINANCIAL DATA (in millions)













Total assets


$        9,298


$        9,163


$        7,931


$        8,044


$        7,808




Total earning assets

8,486


8,340


7,229


7,327


7,142




Total investments

1,740


1,670


1,162


1,304


1,399




Total loans


6,656


6,550


6,047


6,000


5,727




Allowance for loan losses

46


44


43


41


40




Total intangible assets

422


423


348


349


334




Total deposits


6,656


6,622


5,750


5,657


5,584




Total shareholders' equity

1,100


1,093


933


923


906




Net income


15.5


10.3


16.4


16.0


16.0




Core income (1)

19.4


18.0


17.4


16.5


16.5

















ASSET QUALITY AND CONDITION RATIOS 













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

0.20

%

0.21

%

0.20

%

0.22

%

0.23

%



Total non-performing assets/total assets

0.27


0.24


0.26


0.26


0.28




Allowance for loan losses/total loans

0.69


0.67


0.71


0.69


0.70




Loans/deposits

100


99


105


106


103




Shareholders' equity to total assets

11.83


11.93


11.76


11.48


11.60




Tangible shareholders' equity to tangible assets (5)

7.64


7.68


7.70


7.46


7.66

















(1)

Core measurements are non-GAAP financial measures that are adjusted to exclude net non-core charges primarily related to acquisitions and 




 restructuring activities. See page F-9 for reconciliations of non-GAAP financial measures.









(2)

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





(3)

The Company acquired First Choice Bank on December 2, 2016. 







(4)

The Company acquired certain assets and operations related to 44 Business Capital on April 29, 2016. 







(5)

Non-GAAP financial measure. See page F-9 for reconciliations of non-GAAP financial measures. 








(6)

All performance ratios are annualized and are based on average balance sheet amounts, where applicable.







(7)

Fully taxable equivalent considers the impact of tax advantaged investment securities and loans.





(8)

Revisions were made to the calculations of the net interest margin, efficiency ratio, and yields for the interest annualization and the fully




taxable equivalent calculations. Prior period measures were revised to include these changes.





 

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2)


March 31,


December 31,


(in thousands)

2017


2016


Assets





Cash and due from banks

$              67,580


$              71,494


Short-term investments

25,763


41,581


Total cash and short-term investments

93,343


113,075







Trading security

12,966


13,229


Securities available for sale, at fair value

1,293,683


1,209,537


Securities held to maturity, at amortized cost

331,179


334,368


Federal Home Loan Bank stock and other restricted securities

76,407


71,112


Total securities

1,714,235


1,628,246







Loans held for sale, at fair value

89,741


120,673







Commercial real estate

2,673,363


2,616,438


Commercial and industrial loans

1,146,125


1,062,038


Residential mortgages

1,850,684


1,893,131


Consumer loans

985,761


978,180


Total loans

6,655,933


6,549,787


Less: Allowance for loan losses

(45,804)


(43,998)


Net loans

6,610,129


6,505,789







Premises and equipment, net

95,203


93,215


Other real estate owned

71


151


Goodwill 

403,106


403,106


Other intangible assets

18,644


19,445


Cash surrender value of bank-owned life insurance

139,914


139,257


Deferred tax asset, net

42,403


41,128


Other assets

91,119


98,457


Total assets 

$         9,297,908


$         9,162,542







Liabilities and shareholders' equity





Demand deposits

$         1,194,633


$         1,278,875


NOW deposits

562,743


570,583


Money market deposits

1,819,403


1,781,605


Savings deposits

660,007


657,486


Time deposits

2,419,268


2,333,543


Total deposits

6,656,054


6,622,092







Senior borrowings

1,294,721


1,224,836


Subordinated borrowings

89,206


89,161


Total borrowings

1,383,927


1,313,997







Other liabilities 

158,374


133,155


Total liabilities

8,198,355


8,069,244







Total common shareholders' equity

1,099,553


1,093,298


Total liabilities and shareholders' equity

$         9,297,908


$         9,162,542







Net shares outstanding 

35,729


35,673


 

 

BERKSHIRE HILLS BANCORP, INC.

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

LOAN ANALYSIS























Annualized Growth %


(in millions)


March 31, 2017
Balance


December 31, 2016
Balance


Quarter ended
March 31, 2017


















Commercial real estate - construction


$                         306


$                          288


26

%

Commercial real estate - other


2,367


2,329


7


Total commercial real estate


2,673


2,617


9


Commercial and industrial loans 


1,146


1,062


32


Total commercial loans 


3,819


3,679


15










Total residential mortgages


1,851


1,893


(9)










Home equity 


390


394


(4)


Auto and other


596


584


8


Total consumer loans


986


978


3


Total loans


$                      6,656


$                       6,550


6

%

















































DEPOSIT ANALYSIS














Annualized Growth %

(in millions)


March 31, 2017
Balance


December 31, 2016
Balance


Quarter ended
March 31, 2017


Demand


$                      1,195


$                       1,279


(26)

%

NOW


563


571


(6)


Money market


1,819


1,782


8


Savings


660


657


2


Total non-maturity deposits


4,237


4,289


(5)










Total time deposits


2,419


2,333


15


Total deposits


$                      6,656


$                       6,622


2

%

 

 

BERKSHIRE HILLS BANCORP, INC.

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


Three Months Ended



March 31,


(in thousands, except per share data)

2017


2016


Interest and dividend income    





Loans

$           68,943


$           58,442


Securities and other    

11,766


10,034


Total interest and dividend income    

80,709


68,476


Interest expense





Deposits

9,098


7,159


Borrowings

4,725


3,620


Total interest expense    

13,823


10,779


Net interest income

66,886


57,697


Non-interest income





Mortgage banking originations

12,678


821


Loan related income

4,179


3,046


Deposit related fees

6,204


6,109


Insurance commissions and fees    

3,136


2,893


Wealth management fees    

2,526


2,502


Total fee income    

28,723


15,371


Other

93


223


Securities gains, net     

12,570


36


Loss on termination of hedges

(6,629)


-


Total non-interest income      

34,757


15,630


Total net revenue

101,643


73,327


Provision for loan losses   

5,095


4,006


Non-interest expense





Compensation and benefits

36,119


25,714


Occupancy and equipment     

9,026


6,690


Technology and communications

6,087


4,857


Marketing and promotion     

1,999


673


Professional services

2,451


1,280


FDIC premiums and assessments

1,298


1,233


Other real estate owned and foreclosures

28


263


Amortization of intangible assets     

801


819


Merger, restructuring and conversion expense 

11,682


780


Other

4,835


4,791


Total non-interest expense     

74,326


47,100







Income before income taxes       

22,222


22,221


Income tax expense

6,762


6,220


Net income 

$           15,460


$           16,001







Earnings per share:





Basic

$               0.44


$               0.52


Diluted

$               0.44


$               0.52







Weighted average shares outstanding:      





Basic

35,280


30,511


Diluted

35,452


30,688







 

 

BERKSHIRE HILLS BANCORP, INC.

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




March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,


(in thousands, except per share data)

2017


2016


2016


2016


2016


Interest and dividend income    











Loans

$        68,943


$        62,884


$        61,571


$        59,703


$        58,442


Securities and other    

11,766


9,550


8,940


9,315


10,034


Total interest and dividend income    

80,709


72,434


70,511


69,018


68,476


Interest expense











Deposits

9,098


8,556


7,790


7,378


7,159


Borrowings

4,725


4,720


4,750


4,199


3,620


Total interest expense    

13,823


13,276


12,540


11,577


10,779


Net interest income

66,886


59,158


57,971


57,441


57,697


Non-interest income











Mortgage banking originations

12,678


3,537


1,862


1,335


821


Loan related income

4,179


5,648


5,102


2,898


3,046


Deposit related fees

6,204


6,285


6,278


6,291


6,109


Insurance commissions and fees    

3,136


2,323


2,601


2,660


2,893


Wealth management fees    

2,526


1,911


2,269


2,235


2,502


Total fee income    

28,723


19,704


18,112


15,419


15,371


Other

93


(2,849)


188


(851)


223


Securities gains (losses), net     

12,570


(652)


78


(13)


36


Gain on sale of business operations, net

-


522


563


-


-


Loss on termination of hedges

(6,629)


-


-


-


-


Total non-interest income      

34,757


16,725


18,941


14,555


15,630


Total net revenue

101,643


75,883


76,912


71,996


73,327


Provision for loan losses   

5,095


4,100


4,734


4,522


4,006


Non-interest expense











Compensation and benefits

36,119


28,103


26,119


24,664


25,714


Occupancy and equipment     

9,026


7,320


6,650


6,560


6,690


Technology and communications

6,087


5,310


4,902


4,814


4,857


Marketing and promotion  

1,999


1,080


671


737


673


Professional services

2,451


1,666


1,744


1,509


1,280


FDIC premiums and assessments

1,298


1,422


1,208


1,203


1,233


Other real estate owned and foreclosures

28


(11)


46


393


263


Amortization of intangible assets     

801


572


749


787


819


Merger, restructuring and conversion expense 

11,682


11,633


2,170


878


780


Other

4,835


3,995


4,585


4,723


4,791


Total non-interest expense     

74,326


61,090


48,844


46,268


47,100













Income before income taxes

22,222


10,693


23,334


21,206


22,221


Income tax expense 

6,762


362


6,953


5,249


6,220


Net income

$        15,460


$        10,331


$        16,381


$        15,957


$        16,001













Earnings per share:











Basic 

$            0.44


$            0.32


$            0.53


$            0.52


$            0.52


Diluted 

$            0.44


$            0.32


$            0.53


$            0.52


$            0.52













Weighted average shares outstanding:      











Basic

35,280


32,185


30,621


30,605


30,511


Diluted

35,452


32,381


30,811


30,765


30,688
























 

 

BERKSHIRE HILLS BANCORP, INC.

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



Quarters Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,




2017


2016


2016


2016


2016














Earning assets (1)












Loans:












Commercial real estate


4.58

%

4.17

%

4.25

%

4.42

%

4.14

%

Commercial and industrial loans


4.86


4.88


5.06


4.85


4.96


Residential mortgages


3.55


3.57


3.62


3.61


3.84


Consumer loans


3.62


3.44


3.40


3.39


3.43


Total loans


4.24


4.03


4.08


4.11


4.10


Securities


3.38


3.58


3.47


3.45


3.42


Short-term investments and loans held for sale


2.71


2.13


1.68


1.29


0.91


Total earning assets


4.00


3.91


3.95


3.97


3.94














Funding liabilities(1)












Deposits:












NOW


0.22


0.16


0.12


0.13


0.13


Money market


0.52


0.48


0.46


0.47


0.49


Savings


0.13


0.12


0.12


0.11


0.13


Time


1.08


1.14


1.10


1.06


0.99


Total interest-bearing deposits


0.69


0.69


0.67


0.65


0.63


Borrowings


1.38


1.63


1.52


1.37


1.18


Total interest-bearing liabilities


0.83


0.87


0.85


0.80


0.75














Net interest spread


3.17


3.04


3.10


3.17


3.19


Net interest margin


3.33


3.21


3.27


3.32


3.33














Cost of funds (2)


0.70


0.73


0.72


0.68


0.63


Cost of deposits (3)


0.56


0.56


0.54


0.53


0.51















(1)

Revisions were made to the calculations of the net interest margin, efficiency ratio, and yields for the interest annualization  and the fully taxable equivalent calculations. Prior period measures were revised to include these changes.

(2)

Cost of funds includes all deposits and borrowings.

(3)

The average cost of deposits includes the deposits held for sale.

 

 

BERKSHIRE HILLS BANCORP, INC.

AVERAGE BALANCES - UNAUDITED - (F-7)


Quarters Ended


March 31, 


Dec. 31, 


Sept. 30, 


June 30, 


March 31, 


(in thousands)

2017


2016


2016 (2)(4)


2016 (2)(4)


2016 (2)(4)


Assets











Loans











Commercial real estate

$            2,631,281


$            2,442,515


$            2,260,482


$            2,173,539


$            2,079,001


Commercial and industrial loans

1,072,716


998,543


1,009,581


1,047,866


1,027,257


Residential mortgages

1,886,734


1,833,530


1,839,364


1,759,193


1,798,034


Consumer loans

978,683


936,957


900,432


844,759


807,888


Total loans (1) 

6,569,414


6,211,545


6,009,859


5,825,357


5,712,180


Securities (3)

1,625,769


1,255,207


1,197,760


1,247,357


1,342,590


Short-term investments and loans held for sale

137,619


83,057


40,259


41,449


56,042


Total earning assets

8,332,802


7,549,809


7,247,878


7,114,163


7,110,812


Goodwill and other intangible assets

422,331


362,641


349,059


344,832


333,948


Other assets

388,852


363,248


360,182


349,816


346,327


Total assets

$            9,143,985


$            8,275,698


$            7,957,119


$            7,808,811


$            7,791,087













Liabilities and shareholders' equity











Deposits 











NOW

$               574,799


$               499,852


$               474,650


$               492,901


$               484,334


Money market

1,804,738


1,612,160


1,448,108


1,403,629


1,417,068


Savings

648,839


620,092


608,365


612,261


602,414


Time

2,351,183


2,171,325


2,095,269


2,047,020


2,063,712


Total interest-bearing deposits

5,379,559


4,903,429


4,626,392


4,555,811


4,567,528


Borrowings

1,374,620


1,144,846


1,235,065


1,223,629


1,222,288


Total interest-bearing liabilities

6,754,179


6,048,275


5,861,457


5,779,440


5,789,816


Non-interest-bearing demand deposits

1,178,790


1,178,308


1,084,786


1,032,951


1,026,447


Other liabilities 

128,573


85,951


111,743


105,948


84,042


Total liabilities

8,061,542


7,312,534


7,057,986


6,918,339


6,900,305













Total shareholders' equity

1,082,443


963,164


899,133


890,472


890,782


Total liabilities and shareholders' equity

$            9,143,985


$            8,275,698


$            7,957,119


$            7,808,811


$            7,791,087
























Supplementary data











Total non-maturity deposits

$            4,207,166


$            3,910,412


$            3,615,909


$            3,541,742


$            3,530,263


Total deposits 

6,558,349


6,081,737


5,711,178


5,588,762


5,593,975


Fully taxable equivalent income adjustment

2,511


2,228


2,004


1,972


1,894


Purchased loan accretion

3,687


1,886


2,214


1,981


2,069


Total average tangible equity (5)

660,112


600,523


550,074


545,640


556,834













(1) Total loans include non-accruing loans.









(2) The average balances of loans include loans associated with branch sales, which are presented under loans held for sale on the consolidated balance sheet.

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








(4) The average balances of deposits include the deposits held for sale presented under other liabilities on the consolidated balance sheet.


(5) See page F-9.











 

 

BERKSHIRE HILLS BANCORP, INC.

ASSET QUALITY ANALYSIS - UNAUDITED - (F-8)



At or for the Quarters Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,


(in thousands)


2017


2016


2016


2016


2016


NON-PERFORMING ASSETS












Non-accruing loans:












Commercial real estate


$            7,718


$            5,883


$            6,295


$            4,808


$            5,001


Commercial and industrial loans


8,327


7,523


6,714


7,590


7,480


Residential mortgages


3,971


3,795


4,374


4,882


4,732


Consumer loans


5,109


4,833


3,281


3,376


3,588


Total non-accruing loans


25,125


22,034


20,664


20,656


20,801


Other real estate owned


71


151


80


595


1,440


Total non-performing assets


$          25,196


$          22,185


$          20,744


$          21,251


$          22,241














Total non-accruing loans/total loans


0.38%


0.34%


0.34%


0.34%


0.36%


Total non-performing assets/total assets


0.27%


0.24%


0.26%


0.26%


0.28%














PROVISION AND ALLOWANCE FOR LOAN LOSSES











Balance at beginning of period


$          43,998


$          43,105


$          41,397


$          40,055


$          39,308


Charged-off loans


(3,623)


(3,488)


(3,441)


(3,393)


(3,704)


Recoveries on charged-off loans


334


281


415


213


445


Net loans charged-off


(3,289)


(3,207)


(3,026)


(3,180)


(3,259)


Provision for loan losses


5,095


4,100


4,734


4,522


4,006


Balance at end of period


$          45,804


$          43,998


$          43,105


$          41,397


$          40,055














Allowance for loan losses/total loans


0.69%


0.67%


0.71%


0.69%


0.70%


Allowance for loan losses/non-accruing loans


182%


200%


209%


200%


193%














NET LOAN CHARGE-OFFS












Commercial real estate


$             (633)


$             (676)


$             (547)


$             (534)


$          (1,043)


Commercial and industrial loans


(1,634)


(1,148)


(1,610)


(1,720)


(847)


Residential mortgages


(324)


(768)


(452)


(568)


(774)


Home equity 


(95)


(47)


(65)


(164)


(221)


Auto and other consumer


(603)


(568)


(352)


(194)


(374)


Total, net


$          (3,289)


$          (3,207)


$          (3,026)


$          (3,180)


$          (3,259)














Net charge-offs (QTD annualized)/average loans 

0.20%


0.21%


0.20%


0.22%


0.23%


Net charge-offs (YTD annualized)/average loans 

0.20%


0.21%


0.22%


0.22%


0.23%














DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS










30-89 Days delinquent


0.24%


0.35%


0.25%


0.25%


0.26%


90+ Days delinquent and still accruing


0.16%


0.15%


0.09%


0.08%


0.07%


Total accruing delinquent loans


0.40%


0.50%


0.34%


0.33%


0.33%


Non-accruing loans


0.38%


0.34%


0.34%


0.34%


0.36%


Total delinquent and non-accruing loans


0.78%


0.84%


0.68%


0.67%


0.69%


 

 

BERKSHIRE HILLS BANCORP, INC.

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



At or for the Quarters Ended



March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,


(in thousands)


2017


2016


2016


2016


2016


Net income


$       15,460


$       10,331


$    16,381


$   15,957


$   16,001


Adj: Net securities (gains) losses 


(12,570)


652


(78)


13


(36)


Adj. Loss on termination of hedges


6,629


-


-


-


-


Adj: Net (gains) on sale of business operations


-


(522)


(563)


-


-


Adj: Merger and acquisition expense


5,947


10,820


1,453


701


527


Adj: Restructuring expense and other expense


5,735


1,113


717


177


253


Adj:  Income taxes


(1,801)


(4,373)


(492)


(334)


(256)


Total core income

(A)

$       19,400


$       18,021


$    17,418


$   16,514


$   16,489














Total revenue 


$     101,643


$       75,883


$    76,912


$   71,996


$   73,327


Adj: Net securities (gains) losses 


(12,570)


652


(78)


13


(36)


Adj: Net (gains) on sale of business operations


-


(522)


(563)


-


-


Adj. Loss on termination of hedges


6,629


-


-


-


-


Total core revenue

(B)

$       95,702


$       76,013


$    76,271


$   72,009


$   73,291














Total non-interest expense


$       74,326


$       61,090


$    48,844


$   46,268


$   47,100


Less: Total non-core expense (see above)


(11,682)


(11,933)


(2,170)


(878)


(780)


Core non-interest expense                                    

(C)

$       62,644


$       49,157


$    46,674


$   45,390


$   46,320














(in millions, except per share data)












Total average assets                                                

(D)

$         9,144


$         8,276


$      7,957


$     7,809


$     7,791


Total average shareholders' equity                         

(E)

1,082


963


899


890


891


Total average tangible shareholders' equity                         

(F)

660


601


550


546


557


Total tangible shareholders' equity, period-end (1)

(G)

678


671


584


574


572


Total tangible assets, period-end (1)

(H)

8,876


8,740


7,583


7,695


7,474














Total common shares outstanding, period-end (thousands)               

(I)

35,729


35,673


31,122


31,156


31,039


Average diluted shares outstanding (thousands)

(J)

35,452


32,381


30,811


30,765


30,688














Core earnings per share, diluted 

(A/J)

$           0.55


$           0.56


$        0.57


$       0.54


$       0.54


Tangible book value per share, period-end

(G/I)

18.97


18.81


18.78


18.44


18.44


Total tangible shareholders' equity/total tangible assets

(G)/(H)

7.64


7.68


7.70


7.46


7.66














Performance ratios (2)












GAAP return on assets


0.68

%

0.50

%

0.82

%

0.82

%

0.82

%

Core return on assets

(A/D)

0.85


0.87


0.88


0.85


0.85


GAAP return on equity 


5.71


4.29


7.29


7.17


7.19


Core return on equity 

(A/E)

7.17


7.49


7.75


7.42


7.40


Core return on tangible equity (3)

(A/F)

12.05


12.23


12.99


12.45


12.20


Efficiency ratio (4)(5)(6)                                                                        

(C-M)/(B+K+N)

61.94


58.42


57.32


58.11


59.27


Net interest margin(6)


3.33


3.21


3.27


3.32


3.33














Supplementary data (in thousands)












Tax benefit on tax-credit investments (7)

(K)

$         1,624


$         4,918


$      1,852


$     2,777


$     1,588


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

(L)

(1,329)


(4,428)


(1,525)


(1,938)


(1,101)


Net income on tax-credit investments

(K+L)

295


490


327


839


487














Intangible amortization

(M)

$            801


$            572


$         749


$        787


$        819


Fully taxable equivalent income adjustment (6)

(N)

2,511


2,228


2,004


1,972


1,894


























(1) 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.  








(2) 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.












(3) Core return on tangible equity is computed by dividing the total core income adjusted for the tax-effected amortization of intangible assets,



      assuming a 40% marginal rate, by tangible equity.












(4) Non-GAAP financial measure.












(5) 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.







(6) Revisions were made to the calculations of the net interest margin, efficiency ratio, and yields for the interest annualization and the fully




      taxable equivalent calculations. Prior period measures were revised to include these changes.









(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, low-income housing, new market projects, and renewable energy projects.










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




 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/berkshire-hills-reports-first-quarter-earnings-dividend-declared-300444523.html

SOURCE Berkshire Hills Bancorp, Inc.

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