Berkshire Hills Reports 42 Cents First Quarter Core EPS; Dividend Declared

  Berkshire Hills Reports 42 Cents First Quarter Core EPS; Dividend Declared  PR Newswire  PITTSFIELD, Mass., April 28, 2014  PITTSFIELD, Mass., April 28, 2014 /PRNewswire/ --Berkshire Hills Bancorp, Inc. (NYSE: BHLB) reported that core earnings per share increased by 5% to $0.42 in the first quarter of 2014 compared to $0.40 in the previous quarter due to strong balance sheet growth. Core earnings per share decreased from $0.54 in the first quarter of 2013 due primarily to lower income on real estate related loans resulting from interest rate related market shifts in 2013.  LOGO  On January 17, 2014, Berkshire completed the acquisition of 20 branches in Central New York from Bank of America. During the first quarter, the Company recorded non-core charges totaling $0.46 per share after-tax, primarily related to one-time costs recorded with this acquisition. This included $0.25 per share from the Company's election to terminate interest rate swaps; these charges had no net impact on shareholders' equity. Including non-core charges, Berkshire recorded a GAAP loss of $0.04 per share during the first quarter of 2014, compared to per share income of $0.42 in the prior quarter and the first quarter of 2013.  FIRST QUARTER FINANCIAL HIGHLIGHTS (income related comparisons are to prior quarter):    o7% increase in net interest income   o14% increase in fee income   o9% annualized increase in commercial loans   o11% annualized increase in consumer loans   o10% increase in deposits, including acquired branches   o3.35% net interest margin, increased from 3.26% in the prior quarter   o0.46% non-performing assets/total assets   o0.30% net loan charge-offs/average loans  CEO Michael Daly stated, "We started the year with solid growth. Commercial loans increased at a near double digit annualized rate, as our lending teams continue to garner market share and new relationships across our footprint. We opened a new branch office in Loudonville, New York and continued to develop our consumer deposit and loan business. Our insurance and wealth management revenues improved and we are extending our reach in newer markets.  "We completed the acquisition of 20 Central New York branches near the start of the year. The integration of these new customers has been successful and our total branch count has increased to 90 full service offices, including 46 in New York. We also announced the recruitment of Scott Houghtaling as SVP/Commercial Leader for our expanded New York operations."  Mr. Daly concluded, "Our net interest margin improved as a result of the branch acquisition. While non-interest expense also increased, organic expense growth was mostly limited to seasonal factors. Our non-core costs were primarily due to the branch acquisition and related termination of interest rate swaps which were previously disclosed. Going forward, we anticipate that our net results will mirror our core operating profitability. We continue to be selective and disciplined in managing our revenue growth, with a goal of maintaining forward momentum in operating results."  DIVIDEND DECLARED  The Board of Directors voted to declare a cash dividend of $0.18 per share to shareholders of record at the close of business on May 15, 2014, payable on May 29, 2014. This dividend equates to a 2.8% annualized yield based on the $25.56 average closing price of Berkshire's common stock during the first quarter of 2014.  FINANCIAL CONDITION  Berkshire increased its total assets by $338 million (6%) in the most recent quarter due to growth in loans and investment securities. Acquired deposits were used to repay borrowings and to fund asset growth. At quarter-end, measures of asset quality, liquidity, interest rate sensitivity, and capital remained within targets.  As of March 31, 2014, tangible book value per share measured $15.84, compared to $16.27 at the start of the quarter due primarily to the impacts of the branch acquisition. Total book value per share measured $26.99 and $27.08 at these dates, respectively.  Investment securities increased by $275 million during the first quarter. Growth consisted primarily of medium term U.S. agency collateralized mortgage securities, along with municipal bonds and corporate equities.  Total loans increased by $62 million (6% annualized) including 9% annualized commercial loan growth and 11% annualized consumer loan growth. This follows the trend of double digit annualized growth in these loans reported in prior quarters. All regions contributed to commercial loan originations, with strong contributions from Berkshire County and Central and Eastern Massachusetts, as well as asset based lending. Consumer loan growth was primarily in automobile loans reflecting continued expansion by the Syracuse based consumer team. Most of the total loan growth was recorded in the final month of the quarter.  Asset quality metrics remained favorable. Annualized net loan charge-offs measured 0.30% of average loans. Quarter-end non-performing assets decreased to 0.46% of total assets and accruing delinquent loans decreased to 0.59% of total loans. The loan loss allowance measured 0.79% of total loans; approximately 23% of quarter-end loans were balances recorded at fair value in recent bank acquisitions.  Total deposits increased by $370 million (10%) during the first quarter. Deposits added from the New York branch acquisition were recorded at $440 million and acquired balances were retained during the quarter. In conjunction with the deposit acquisition, the Company has de-emphasized select municipal deposit sources and other higher cost deposits. Ongoing development of consumer relationships was demonstrated by a 5% organic increase in personal demand deposit balances, excluding acquired balances. Due to the deposit growth, the loans/deposits ratio decreased to 101% from 109% during the quarter.  Borrowings were initially reduced with the acquired funds and subsequently were increased to fund asset growth. In conjunction with the branch acquisition, the Company terminated all of its interest rate swaps associated with FHLB advances, which had a notional value of $410 million. During the quarter, the Company initiated $300 million in new medium term forward starting swaps.  The ratio of equity/assets measured 11.3% at quarter-end, decreasing from 12.0% at the start of the quarter due to the 6.0% increase in total assets following the branch acquisition. This transaction also increased goodwill and intangible assets. Excluding these assets, the ratio of tangible equity/assets decreased to 6.9% from 7.5%.  RESULTS OF OPERATIONS  First quarter 2014 core earnings totaled $10.4 million ($0.42 per share), compared to $10.0 million ($0.40 per share) in the prior quarter and to $13.5 million ($0.54 per share) in the first quarter of 2013. The core return on assets measured 0.71%, 0.73%, and 1.03% for these periods respectively. The branch acquisition resulted in higher core revenue and expenses in the most recent quarter, compared to the prior quarter.  GAAP earnings include the impact of net non-core charges. The reconciliation of net income and core income, together with related financial measures, is shown in financial table F-9. Non-core charges totaled $11.5 million ($0.46 per share) after-tax in the most recent quarter. These charges included $0.25 per share recorded as a loss on termination of interest rate swap hedges. This was a charge with no impact on shareholders' equity and was related to the branch acquisition. Other non-core charges included $0.10 per share in transaction and integration expenses for the branch acquisition, $0.07 per share in expenses for restructuring and systems conversions, and $0.04 per share for an out-of-period adjustment to interest income recorded on loans previously acquired in business combinations. Including these net non-core charges, first quarter 2014 GAAP results were a loss of $1.1 million ($0.04 per share). GAAP net income totaled $10.5 million ($0.42 per share) in both the prior quarter and in the first quarter of 2013. The GAAP loss resulted in a GAAP ROA of (0.08%) in the most recent quarter, compared to 0.77% and 0.80% in the prior periods, respectively.  Total net interest and fee revenue was $55.4 million in the most recent quarter, which was a 9% increase over the prior quarter, and 2% lower than the first quarter of the previous year due to the decline in residential mortgage fees. First quarter 2014 net interest income totaled $42.8 million, increasing by 7% over the prior quarter and 2% over the first quarter of 2013.  The net interest margin measured 3.35%, 3.26% and 3.73% for these periods, respectively. In the most recent quarter, the margin benefited from the lower cost of acquired deposits and lower interest cost on borrowings as a result of the swap terminations. The cost of funds decreased to 0.56% from 0.73% in the prior quarter and from 0.81% in the first quarter of 2013.  Net interest income includes purchased loan accretion related to loans acquired in business combinations, including recoveries on the collection of acquired impaired loans. Current period purchased loan accretion totaled $2.8 million in the most recent quarter, compared to $2.4 million in the prior quarter, and $3.8 million in the first quarter of 2013. Excluding current and out-of-period purchased loan accretion, the net interest margin was 3.24%, 3.07%, and 3.39% in these respective periods.  Fee income totaled $12.7 million, increasing by $1.6 million (14%) compared to the prior quarter and including the benefit of acquired branch operations and seasonal insurance contingency revenues. Fee income decreased by $1.8 million (12%) compared to the first quarter of 2013. Revenue from mortgage banking and loan related fee income decreased from elevated levels last year due to the midyear increase in interest rates in 2013. Wealth management fees increased by 13% over the first quarter of 2013 due to account growth and improved market conditions. Wealth management generated new business at a 9% annualized rate in the most recent quarter, and the portfolio totaled $1.3 billion at quarter-end. Insurance fees increased by 2% over this period.  The provision for loan losses totaled $3.4 million, continuing its gradual increasing trend as loan volume has increased and acquired loans season. Net charge-offs totaled $3.1 million during the quarter. The provision totaled $3.1 million in the prior quarter and $2.4 million in the first quarter of 2013.  First quarter 2014 core non-interest expense totaled $39.1 million. Including the 20 acquired branches, core expense increased by $4.4 million (13%) compared to the prior quarter and by a similar amount compared to the first quarter of 2013. First quarter expense includes seasonally higher benefits and maintenance expense. Expense growth in the most recent quarter also included targeted investment in commercial and retail market teams. Including net charges for non-core merger, conversion, and restructuring costs previously discussed, GAAP non-interest expense totaled $45.4 million in the most recent quarter. Full time equivalent staff totaled 1,050 at quarter-end, compared to 939 at the start of the quarter. During the first quarter, Berkshire consolidated two of the acquired New York branches which had overlap with existing locations. Additionally, two other branches have been consolidated in 2014 as part of the expense restructuring program. The effective income tax rate was 29% in the most recent quarter, unchanged from the effective rate for the year 2013.  CONFERENCE CALL  Berkshire will conduct a conference call/webcast at 10:00 a.m. eastern time on Tuesday, April 29, 2014 to discuss the results for the quarter and provide guidance about expected future results. Participants should dial-in to the call a few minutes before it begins. Information about the conference call follows:  Dial-in:            888-317-6003 Elite Entry Number: 0011655 Webcast:            berkshirebank.com (investor relations link)  A PDF version of this earnings release is available at the above link. A telephone replay of the call will be available through Wednesday, May 7, 2014 by calling 877-344-7529 and entering conference number: 10043772. The webcast will be available at Berkshire's website above for an extended period of time.  BACKGROUND  Berkshire Hills Bancorp is the parent of Berkshire Bank – America's Most Exciting Bank^®. The Company has $6.0 billion in assets and 90 full service branch offices in Massachusetts, New York, Connecticut, and Vermont providing personal and business banking, insurance, and wealth management services.  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 report on Form 10-K 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.  OUT OF PERIOD ADJUSTMENT  In the first quarter of 2014, the Company recorded a correction of an error to reduce interest income by $1.4 million representing interest income previously recorded on loans acquired in prior years. After evaluating the quantitative and qualitative aspects of these adjustments, the Company concluded that its prior period financial statements were not materially misstated and, therefore, no restatement was required.  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 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 amounts which the Company views as unrelated to its normalized operations, including securities gains/losses, losses recorded for hedge terminations, merger costs, restructuring costs, systems conversion costs, and out-of-period adjustments. Non-core adjustments are presented net of estimated income tax expense or benefit. Similarly, the efficiency ratio is also adjusted for these non-core items and for tax preference items. The Company also adjusts certain equity related measures 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, and professional fees. Systems conversion costs relate primarily to the Company's core systems conversion and systems conversions costs in conjunction with this which have been recorded in recent periods. Restructuring costs primarily consist of employee severance costs and costs and losses associated with the disposition of assets which were undertaken as a project to right-size expenses following a decline in revenue in 2013. Out-of-period accounting adjustments for interest income on acquired loans were recorded following systems conversions and merger related accounting activity and were deemed non-core. Non-core expenses include variable rate compensation related to non-core items. The Company evaluates GAAP, core, and non-core items to analyze its effective tax rate and to arrive at core income that is net of an effective core tax rate which is consistent with its analysis of expected core tax items for the year.  CONTACTS  Investor Relations Contact Allison O'Rourke, Vice President - Investor Relations; 413-236-3149  Media Contact Ray Smith, Assistant Vice President - Marketing; 413-236-3756    BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-1)                                       March 31,           December 31, (In thousands)                        2014                2013 Assets Cash and due from banks               $   60,023        $    56,841 Short-term investments                12,650              18,698 Total cash and short-term investments 72,673              75,539 Trading security                      14,923              14,840 Securities available for sale, at     1,033,637           760,048 fair value Securities held to maturity, at       43,159              44,921 amortized cost Federal Home Loan Bank stock and      53,124              50,282 other restricted securities Total securities                      1,144,843           870,091 Loans held for sale, at fair value    7,669               15,840 Residential mortgages                 1,377,771           1,384,274 Commercial real estate                1,456,976           1,417,120 Commercial and industrial loans       696,895             687,293 Consumer loans                        710,985             691,836 Total loans                           4,242,627           4,180,523 Less: Allowance for loan losses       (33,602)            (33,323) Net loans                             4,209,025           4,147,200 Premises and equipment, net           87,805              84,459 Other real estate owned               2,418               2,758 Goodwill                             264,770             256,871 Other intangible assets               15,035              13,791 Cash surrender value of bank-owned    102,343             101,530 life insurance Deferred tax asset, net               40,202              50,711 Other assets                          63,548              54,009 Total assets                          $ 6,010,331         $  5,672,799 Liabilities and stockholders' equity Demand deposits                       $  770,841         $   677,917 NOW deposits                          434,833             353,612 Money market deposits                 1,459,062           1,383,856 Savings deposits                      478,107             431,496 Time deposits                         1,075,740           1,001,648 Total deposits                        4,218,583           3,848,529 Senior borrowings                     936,747             974,428 Subordinated borrowings               89,696              89,679 Total borrowings                      1,026,443           1,064,107 Other liabilities                    87,715              82,101 Total liabilities                     5,332,741           4,994,737 Total stockholders' equity            677,590             678,062 Total liabilities and stockholders'   $ 6,010,331         $  5,672,799 equity (1) The Company acquired 20 branches in Central New York on January 17, 2014, including $440 million in deposits  and $4 million in loans from the branch acquisition as of that date.    BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-2) LOAN ANALYSIS                                                                 Annualized                                                                 growth % (Dollars in          Mar. 31,                      Dec. 31,     Quarter ended millions)            2014                          2013         March 31, 2014                      Balance                       Balance Total residential    $                         $        (2)      % mortgages            1,378                         1,384 Total commercial     1,457                         1,417        11 real estate Total commercial and industrial       697                           688          5 loans Total commercial     2,154                         2,105        9 loans Home equity         305                           307          (3) Auto and other       406                           385          22 Total consumer       711                           692          11 loans Total loans          $                         $        6        %                      4,243                         4,181 DEPOSIT ANALYSIS                                                                 Annualized                                                                 growth %                                   Branch (Dollars in          Mar. 31,                      Dec. 31,     Quarter ended millions)            2014         Acquisition      2013         March 31, 2014                      Balance                       Balance                                   Balance Demand               $       $         $       55       %                      771           110          678 NOW                  435          80               354          92 Money market         1,459        124              1,384        22 Savings              478          36               431          44 Total non-maturity   3,143        350              2,847        42 deposits Total time deposits  1,076        90               1,002        30 Total deposits       $        $         $        38       %                      4,219          440          3,849 (1) The Company acquired 20 branches in Central New York on January 17, 2014, including $440 million in deposits,  as shown above, and $4 million in loans from the branch acquisition as of that date.    BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - (F-3)                                          Three Months Ended                                          March 31, (In thousands, except per share data)    2014               2013 Interest and dividend income Loans                                    $ 42,494           $ 47,081 Securities and other                 7,301              3,800 Total interest and dividend income   49,795             50,881 Interest expense Deposits                                 4,721              5,363 Borrowings                               2,308              3,581 Total interest expense               7,029              8,944 Net interest income                      42,766             41,937 Non-interest income Loan related fees                        1,248              2,717 Mortgage banking fees                    372                2,217 Deposit related fees                     5,439              4,259 Insurance commissions and fees       3,049              2,997 Wealth management fees               2,549              2,264 Total fee income                     12,657             14,454 Other                                    524                344 Gain on sale of securities, net      34                 - Loss on termination of hedges            (8,792)            - Total non-interest income          4,423              14,798 Total net revenue                        47,189             56,735 Provision for loan losses             3,396              2,400 Non-interest expense Compensation and benefits                19,859             17,741 Occupancy and equipment             6,814              5,768 Technology and communications            3,778              2,991 Marketing and promotion             521                638 Professional services                    1,152              1,490 FDIC premiums and assessments            1,009              828 Other real estate owned and foreclosures 523                23 Amortization of intangible assets   1,306              1,377 Merger, restructuring and conversion     6,301              5,064 expenses Other                                    4,097              3,563 Total non-interest expense          45,360             39,483 (Loss) income before income taxes (1,567)            14,852 Income tax (benefit) expense             (461)              4,387 Net (loss) income                       $ (1,106)          $ 10,465 Basic and diluted (loss) earnings per    $ (0.04)          $  0.42 share: Weighted average shares outstanding: Basic                                    24,698             24,948 Diluted                                  24,698             25,143 (1) The Company acquired 20 branches in Central New York on January 17, 2014. The income statement for the  three months ended March 31, 2014 includes operations of the branch acquisition beginning on that date. (2) Merger, restructuring and conversion expenses include acquisition related expenses.    BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - (F-4)                           Quarters Ended                           Mar. 31,   Dec. 31,   Sept. 30,  June 30,  Mar. 31, (In thousands, except per 2014       2013       2013       2013      2013 share data) Interest and dividend income Loans                     $ 42,494   $ 43,566   $ 50,025   $ 45,443  $ 47,081 Securities and other  7,301      5,093      4,479      4,254     3,800 Total interest and        49,795     48,659     54,504     49,697    50,881 dividend income Interest expense Deposits                  4,721      5,166      5,278      5,052     5,363 Borrowings                2,308      3,651      3,357      3,541     3,581 Total interest            7,029      8,817      8,635      8,593     8,944 expense Net interest income       42,766     39,842     45,869     41,104    41,937 Non-interest income Loan related fees         1,248      1,578      1,308      2,644     2,717 Mortgage banking fees     372        445        444        2,129     2,217 Deposit related fees      5,439      4,717      4,559      4,805     4,259 Insurance commissions and 3,049      2,143      2,473      2,407     2,997 fees Wealth management         2,549      2,212      2,137      2,070     2,264 fees Total fee income      12,657     11,095     10,921     14,055    14,454 Other                     524        1,227      832        546       344 Gain on sale of           34         3,392      361        1,005     - securities, net Loss on termination of    (8,792)    -          -          -         - hedges Total non-interest        4,423      15,714     12,114     15,606    14,798 income Total net revenue         47,189     55,556     57,983     56,710    56,735 Provision for loan        3,396      3,100      3,178      2,700     2,400 losses Non-interest expense Compensation and benefits 19,859     16,736     18,506     18,151    17,741 Occupancy and             6,814      5,421      5,614      5,737     5,768 equipment Technology and            3,778      3,169      3,304      3,480     2,991 communications Marketing and promotion 521        765        590        603       638 Professional services     1,152      1,558      1,757      1,764     1,490 FDIC premiums and         1,009      899        856        890       828 assessments Other real estate owned   523        255        138        284       23 and foreclosures Amortization of           1,306      1,239      1,307      1,345     1,377 intangible assets Merger, restructuring and 6,301      2,493      6,516      775       5,064 conversion expenses Other                     4,097      4,622      4,196      4,906     3,563 Total non-interest        45,360     37,157     42,784     37,935    39,483 expense (Loss) income before      (1,567)    15,299     12,021     16,075    14,852 income taxes Income tax (benefit)      (461)      4,762      3,917      4,038     4,387 expense Net (loss) income        $ (1,106)  $ 10,537   $ 8,104   $ 12,037  $ 10,465 (Loss) earnings per share: Basic                    $ (0.04)  $  0.43  $  0.33  $        $                                                             0.49     0.42 Diluted                  $ (0.04)  $  0.42  $  0.33  $        $                                                             0.48     0.42 Weighted average shares outstanding: Basic                     24,698     24,701     24,748     24,779    24,948 Diluted                   24,698     24,857     24,873     24,956    25,143 (1) See notes on Page F-3    BERKSHIRE HILLS BANCORP, INC. ASSET QUALITY ANALYSIS - (F-5)                            At or for the Quarters Ended                            Mar. 31,   Dec. 31,   Sept.     June 30,  Mar. 31,                                                  30, (Dollars in thousands)     2014       2013       2013      2013      2013 NON-PERFORMING ASSETS Non-accruing loans: Residential mortgages      $ 6,071   $ 7,867   $ 8,487  $ 5,945  $ 8,818 Commercial real estate     13,036     13,739     13,800    14,948    12,396 Commercial and             2,411      2,356      2,753     3,481     3,519 industrial loans Consumer loans             3,846      3,493      3,227     2,405     2,325 Total non-accruing loans   25,364     27,455     28,267    26,779    27,058 Other real estate owned    2,418      2,758      3,561     2,713     2,513 Total non-performing       $ 27,782   $ 30,213   $ 31,828  $ 29,492  $ 29,571 assets Total non-accruing         0.60%      0.66%      0.70%     0.69%     0.70% loans/total loans Total non-performing       0.46%      0.53%      0.58%     0.56%     0.56% assets/total assets PROVISION AND ALLOWANCE FOR LOAN LOSSES Balance at beginning of    $ 33,323   $ 33,248   $ 33,248  $ 33,263  $ 33,208 period Charged-off loans          (3,317)    (3,462)    (3,417)   (3,457)   (2,501) Recoveries on              200        437        239       742       156 charged-off loans Net loans charged-off      (3,117)    (3,025)    (3,178)   (2,715)   (2,345) Provision for loan         3,396      3,100      3,178     2,700     2,400 losses Balance at end of period   $ 33,602   $ 33,323   $ 33,248  $ 33,248  $ 33,263 Allowance for loan         0.79%      0.80%      0.83%     0.86%     0.86% losses/total loans Allowance for loan losses/non-accruing        132%       121%       118%      124%      123% loans NET LOAN CHARGE-OFFS Residential mortgages      $ (1,055)  $  (564)  $        $        $                                                   (351)     (852)     (260) Commercial real estate     (1,105)    (763)      (1,480)   (1,283)   (952) Commercial and             (215)      (1,042)    (940)     (93)      (631) industrial loans Home equity               (458)      45         (174)     (121)     (199) Auto and other consumer    (284)      (701)      (233)     (366)     (303) Total, net                 $ (3,117)  $ (3,025)  $         $         $                                                  (3,178)   (2,715)   (2,345) Net charge-offs (QTD annualized)/average        0.30%      0.31%      0.32%     0.27%     0.23% loans Net charge-offs (YTD annualized)/average        0.30%      0.29%      0.28%     0.26%     0.23% loans DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS 30-89 Days delinquent      0.37%      0.51%      0.42%     0.70%     0.61% 90+ Days delinquent and    0.22%      0.22%      0.29%     0.40%     0.47% still accruing Total accruing             0.59%      0.73%      0.71%     1.10%     1.08% delinquent loans Non-accruing loans         0.60%      0.66%      0.70%     0.69%     0.70% Total delinquent and       1.19%      1.39%      1.41%     1.79%     1.78% non-accruing loans    BERKSHIRE HILLS BANCORP, INC. SELECTED FINANCIAL HIGHLIGHTS - (F-6)                                     At or for the Quarters Ended                                     Mar. 31,   Dec.    Sept.   June    Mar.                                                31,     30,     30,     31,                                     2014       2013    2013    2013    2013  PER SHARE DATA      Core earnings, diluted         $  0.42   $      $      $       $                                                 0.40    0.43    0.48   0.54      Net earnings, diluted          (0.04)     0.42    0.33    0.48    0.42      Tangible book value            15.84      16.27   16.08   15.96   15.87      Total book value               26.99      27.08   26.98   26.82   26.68      Market price at period end     25.88      27.27   25.11   27.76   25.54      Dividends                      0.18       0.18    0.18    0.18    0.18  PERFORMANCE RATIOS      Core return on assets          0.71     % 0.73  % 0.81  % 0.92  % 1.03  %      Return on assets               (0.08)     0.77    0.61    0.93    0.80      Core return on equity          6.02       5.87    6.29    7.13    8.10      Core return on tangible equity 10.84      10.47   11.18   12.84   14.57      Return on equity               (0.64)     6.18    4.74    7.21    6.28      Net interest margin, fully     3.35       3.26    3.93    3.63    3.73      taxable equivalent      Fee income/Net interest and    22.84      21.78   19.23   25.48   25.63      fee income      Efficiency ratio              64.42      63.21   60.98   63.05   57.14  GROWTH      Total commercial loans,        9        % 5     % 1     % (2)   % 0     %      year-to-date (annualized)      Total loans, year-to-date      6          5       1       (6)     (10)      (annualized)      Total deposits, year-to-date   38         (6)     (7)     (14)    0      (annualized)      Total net revenues,      year-to-date, compared to      (17)       15      24      28      39      prior year      Earnings per share,      year-to-date, compared to      (110)      11      11      40      50      prior year      Core earnings per share,      year-to-date, compared to      (22)       (6)     3       11      20      prior year  FINANCIAL DATA (In millions)      Total assets                   $ 6,010    $       $       $       $                                                5,673   5,450   5,224   5,245      Total earning assets           5,408      5,085   4,856   4,629   4,646      Total loans                    4,243      4,181   4,024   3,871   3,889      Allowance for loan losses      34         33      33      33      33      Total intangible assets        280        271     272     272     273      Total deposits                 4,219      3,849   3,882   3,815   4,101      Total stockholders' equity     678        678     673     673     674      Total core income             10.4       10.0    10.7    11.9    13.5      Total net income               (1.1)      10.5    8.1     12.0    10.5  ASSET QUALITY RATIOS      Net charge-offs (current      quarter annualized)/average    0.30     % 0.31  % 0.32  % 0.27  % 0.23  %      loans      Allowance for loan             0.79       0.80    0.83    0.86    0.86      losses/total loans  CONDITION RATIOS      Stockholders' equity to total  11.27    % 11.95 % 12.35 % 12.88 % 12.85 %      assets      Tangible stockholders' equity  6.94       7.54    7.74    8.10    8.06      to tangible assets      Investments to total assets    19.05      15.34   14.48   12.85   12.65      Loans/deposits                 101        109     104     101     95  (1) Reconciliation of Non-GAAP financial measures, including all references      to core and tangible amounts, appear on page F-9.      Tangible assets are total assets less total intangible assets.  (2) All performance ratios are annualized and are based on average balance      sheet amounts, where applicable.  (3) See note on Page F-9 on tangible equity.    BERKSHIRE HILLS BANCORP, INC. AVERAGE BALANCES - (F-7)                         Quarters Ended                         Mar. 31,  Dec. 31,  Sept.      June 30,  Mar. 31,                                               30, (In thousands)          2014       2013       2013       2013       2013 Assets Loans: Residential mortgages   $          $          $          $          $                         1,379,266  1,330,674  1,247,661  1,218,192  1,290,989 Commercial real estate  1,420,382  1,381,628  1,353,923  1,381,755  1,406,628 Commercial and          684,776    673,292    647,939    627,591    601,695 industrial loans Consumer loans          699,598    687,540    651,565    634,715    644,674 Total loans             4,184,022  4,073,134  3,901,088  3,862,253  3,943,986 Securities              1,047,658  813,417    735,307    655,396    591,304 Short-term investments  28,631     35,438     60,820     90,680     98,160 and loans held for sale Total earning assets    5,260,311  4,921,989  4,697,215  4,608,329  4,633,450 Goodwill and other      278,386    271,147    271,670    272,421    273,428 intangible assets Other assets            312,145    305,617    317,722    317,856    333,485 Total assets            $          $          $          $          $                         5,850,842  5,498,753  5,286,607  5,198,606  5,240,363 Liabilities and stockholders' equity Deposits: NOW                     $         $         $         $         $                          409,631    348,600    345,682    358,255    368,392 Money market            1,490,408  1,392,570  1,329,591  1,358,590  1,477,497 Savings                 463,615    435,766    442,408    449,296    441,547 Time                    1,069,987  1,044,850  1,064,199  1,087,357  1,148,345 Total interest-bearing  3,433,641  3,221,786  3,181,880  3,253,498  3,435,781 deposits Borrowings              899,458    857,848    708,798    574,822    423,739 Total interest-bearing  4,333,099  4,079,634  3,890,678  3,828,320  3,859,520 liabilities Non-interest-bearing    749,982    681,368    658,568    636,469    645,923 demand deposits Other liabilities      76,258     56,261     52,874     65,568     68,509 Total liabilities       5,159,339  4,817,263  4,602,120  4,530,357  4,573,952 Total stockholders'     691,503    681,490    684,487    668,249    666,411 equity Total liabilities and   $          $          $          $          $ stockholders' equity    5,850,842  5,498,753  5,286,607  5,198,606  5,240,363 Supplementary data Total non-maturity      $          $          $          $          $ deposits                3,113,636  2,858,304  2,776,249  2,802,610  2,933,359 Total deposits          4,183,623  3,903,154  3,840,448  3,889,967  4,081,704 Fully taxable equivalent income       718        639        652        644        629 adjustment Total average tangible  413,117    410,343    412,817    395,828    392,983 equity (1) Average balances for securities available-for-sale are based on amortized cost. Total loans include non-accruing loans. (2) Total average tangible equity results from the subtraction of average goodwill and other intangible assets from total average  stockholders' equity. (3) The average balances of deposits include the deposits held for sale presented under other liabilities on the consolidated balance sheet.    BERKSHIRE HILLS BANCORP, INC. AVERAGE YIELDS (Fully Taxable Equivalent - Annualized) - (F-8)                                    Quarters Ended                                    Mar. 31,   Dec. 31,   Sept.   June   Mar.                                                          30,     30,    31,                                    2014       2013       2013    2013   2013 Earning assets Loans: Residential mortgages              4.12     % 3.98     % 3.99  % 4.19 % 4.04 % Commercial real estate             4.44       4.73       5.80    5.27   5.45 Commercial and industrial loans    3.97       3.91       6.09    4.04   4.40 Consumer loans                     3.56       4.01       4.39    4.78   4.94 Total loans                        4.13       4.26       5.02    4.67   4.75 Securities                         3.04       2.72       2.77    3.00   3.04 Short-term investments and loans   1.51       1.92       4.05    2.02   1.83 held for sale Total earning assets               3.89       3.97       4.66    4.38   4.51 Funding liabilities Deposits: NOW                                0.15       0.18       0.18    0.26   0.29 Money market                       0.37       0.44       0.44    0.39   0.39 Savings                            0.16       0.16       0.16    0.17   0.18 Time                               1.15       1.25       1.29    1.23   1.23 Total interest-bearing deposits    0.56       0.64       0.66    0.62   0.63 Borrowings                         1.04       1.69       1.88    2.47   3.43 Total interest-bearing liabilities 0.66       0.86       0.88    0.90   0.94 Net interest spread                3.23       3.11       3.78    3.48   3.57 Net interest margin                3.35       3.26       3.93    3.63   3.73 Cost of funds                      0.56       0.73       0.75    0.77   0.81 Cost of deposits                   0.46       0.53       0.55    0.52   0.53 (1) Cost of funds includes all deposits and borrowings.    BERKSHIRE HILLS BANCORP, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - (F-9)                                                              At or for the Quarters Ended                                                              Mar.      Dec.      Sept.     June      Mar.                                                              31,      31,      30,      30,      31, (Dollars in thousands)                                       2014      2013      2013      2013      2013 Net income                                                  $         $         $         $         $                                                              (1,106)   10,537    8,104    12,037    10,465 Adj: Gain on sale of securities, net                         (34)      (3,392)   (361)     (1,005)   - Adj: Loss on termination of hedges                           8,792     -         -         -         - Adj: Merger and acquisition expenses                         3,637     932       1,307     775       4,984 Adj: Restructuring, conversion and other expenses (5)        2,665     1,561     5,709     -         80 Adj: Out-of-period adjustment (6)                           1,381     -         (2,222)   -         - Adj: Income taxes                                           (4,923)   364       (1,788)   93        (2,042) Total core income                                      (A)   $         $         $         $         $                                                              10,412    10,002    10,749    11,900    13,487 Total revenue                                               $         $         $         $         $                                                              47,189    55,556    57,983    56,710    56,735 Adj: Gain on sale of securities, net                         (34)      (3,392)   (361)     (1,005)   - Adj: Loss on termination of hedges                           8,792     -         -         -         - Adj: Out-of-period adjustment (6)                           1,381     -         (2,222)   -         - Total core revenue                                           $         $         $         $         $                                                              57,328    52,164    55,400    55,705    56,735 Total non-interest expense                                   $         $         $         $         $                                                              45,360    37,157    42,784    37,935    39,483 Less: Total non-core expense (see above)                     (6,302)   (2,493)   (7,016)   (775)     (5,064) Core non-interest                                            $         $         $         $         $ expense                  39,058    34,664    35,768    37,160    34,419 (Dollars in millions, except per share data) Total average                                          (B)   $         $         $         $         $ assets       5,851    5,499    5,287    5,199    5,240 Total average stockholders'                            (C)   692       681       684       668       666 equity Total average tangible stockholders'                   (D)   413       410       413       396       393 equity Total tangible stockholders' equity, period-end (7)    (E)   398       407       401       401       401 Total shares outstanding, period-end                   (F)   25,105    25,036    24,952    25,096    25,254 (thousands) Average diluted shares outstanding (thousands) (8)     (G)   24,833    24,857    24,873    24,956    25,143 Core earnings per share, diluted                      (A/G) $        $        $        $        $                                                               0.42     0.40     0.43     0.48     0.54 Tangible book value per share, period-end              (E/F) $         $         $         $         $                                                              15.84    16.27    16.08    15.96    15.87 Core return on assets                                  (A/B) 0.71    % 0.73    % 0.81    % 0.92    % 1.03    % Core return on equity                                 (A/C) 6.02      5.87      6.29      7.13      8.10 Core return on tangible equity (4)                     (A/D) 10.84     10.47     11.18     12.84     14.57 Efficiency ratio (1)                                         64.42     63.21     60.98     63.05     57.14 Supplementary data Tax credit benefit of tax shelter investments                $       $      $       $       $                                                                555       80        458       458       458 Intangible amortization                                      $         $         $         $         $                                                              1,306    1,239    1,307    1,345    1,377 (1) 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. (2) Ratios are annualized and based on average balance sheet amounts, where applicable. (3) Quarterly data may not sum to year-to-date data due to the out-of-period adjustment recorded in the third quarter of 2013  and rounding. (4) Core return on tangible equity is computed by dividing the total core income adjusted for the tax-affected amortization of  intangible assets, assuming a 40% marginal rate, by tangible equity. (5) Prior period variable compensation is shown above under restructuring, conversion and other expenses. (6) The out of period adjustments shown above relate to interest income earned on loans acquired in bank acquisitions. (7) Total tangible stockholders' equity is computed by taking total stockholders' equity less the intangible assets at period-end. (8) Average diluted shares computed for core earnings per share differ from GAAP average diluted shares due to the GAAP net loss compared to core net  income for the period.  Photo - http://photos.prnewswire.com/prnh/20120131/NE44966LOGO  SOURCE Berkshire Hills Bancorp  Website: http://www.berkshirebank.com  
Press spacebar to pause and continue. Press esc to stop.