Exhibit 99.1
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BERKSHIRE HILLS ANNOUNCES SECOND QUARTER RESULTS
Dividend Declared
Dividend Declared
Pittsfield, MA — July 21, 2009 — Berkshire Hills Bancorp (BHLB) reported second quarter 2009 net income of $2.3 million. The Company’s 2009 second quarter earnings per share totaled $0.24 before an FDIC special assessment and preferred stock dividends. The FDIC levied a special industry assessment which totaled $1.3 million for Berkshire, or $0.06 per share after-tax.
During the most recent quarter, Berkshire recorded a $3.0 million deemed dividend related to the repayment of its preferred stock to the U.S. Treasury. The deemed dividend, together with cash preferred stock dividends and accretion, reduced earnings available to common shareholders by $0.26 per share. After these charges of $0.06 per share for the FDIC assessment and $0.26 per share for preferred dividends, GAAP earnings per common share were ($0.08). The one-time deemed dividend had no impact on cash or on stockholders’ equity.
FINANCIAL HIGHLIGHTS
• | Strong growth in targeted loans and deposits |
• | 12% annualized second quarter commercial loan growth | ||
• | 3% annualized second quarter deposit growth; 13% annualized first half growth | ||
• | 16% second quarter growth in commercial checking account balances |
• | Continuing solid loan performance |
• | 0.42% nonperforming assets/assets and 0.66% accruing delinquent loans/loans at midyear |
• | 0.45% annualized net charge-offs to average loans in second quarter |
• | Further expense reductions— 5% decrease in second quarter non-interest expense before FDIC insurance expense (7% increase including FDIC), compared to 2008 second quarter |
• | Strong capital from common stock raise— 15% common equity to assets |
Michael P. Daly, President and Chief Executive Officer, stated, “We made solid progress in building our business in the second quarter and are optimistic about our prospects for sustained growth as we gain share from national competitors. Annualized commercial loan growth moved into double digits, with substantial contributions from our new team in New York; we had another solid quarter of deposit growth, while managing our deposit pricing to minimize the pressure on our net interest margin; and new business generation accelerated in our integrated wealth management and insurance services. Before FDIC insurance expense, we further reduced core non-interest expense, resuming the downward trend in linked quarter core expense begun a year ago. We are positioning our Company for higher earnings when economic conditions normalize. Additionally, our recent loan and securities growth occurred near the end of the second quarter and is expected to benefit net interest income beginning in the third quarter.”
BHLB — Berkshire Hills Bancorp | Page 1 | www.berkshirebank.com |
Mr. Daly continued, “We successfully issued $32 million in common stock through a public offering in May, following a successful nearly $40 million offering last October. Our strong capital and liquidity position us to be able to participate in expansion opportunities where we feel that the pricing and fit are appropriate. Our New England and New York markets are expected to provide attractive investment opportunities as we pursue growth as the largest locally headquartered regional bank.”
DIVIDEND DECLARED
The Board of Directors maintained the cash dividend on our common stock, declaring a dividend of $0.16 per share to stockholders of record at the close of business on August 6, 2009 and payable on August 20, 2009.
GLOBE 100 AWARD
Berkshire was named in May to the “Globe 100” list of top performing public companies in Massachusetts. The annual Boston Globe survey identifies the best businesses based on growth of revenues, profitability, return on shareholder equity, and size. This is the ninth year in a row that Berkshire has received this recognition, and Berkshire’s ranking was the highest among the local/regional banks which were named. Mr. Daly stated, “We had record earnings in 2008, with 21% growth in revenues and a 64% increase in earnings. This earned us a spot in the top 50 companies named by the Globe. We have a dedicated team of professionals who are delivering the promise ofAmerica’s Most Exciting BankSM to our customers and communities.”
FINANCIAL CONDITION
Total assets were $2.7 billion at June 30, 2009 which was little changed from the prior quarter and prior year-end. After accumulating short-term investments resulting from first quarter deposit growth, in the second quarter the Company used this liquidity to increase investment securities and pay-down borrowings. Loans declined slightly in both periods due to run-off of auto loans and residential mortgages. Total equity was flat for the first six months, with income and common stock offering proceeds offsetting the repayment of preferred stock.
Short term investments declined to $36 million at mid-year from $113 million at the end of the first quarter. Some of these proceeds were invested in high grade short duration debt securities, bringing total investment securities to $370 million from $344 million during the second quarter.
Total commercial loans increased at a 12% annualized rate in the second quarter of 2009, and at a 4% annualized rate for the first half of the year. Growth was concentrated in commercial real estate loans, which increased by $28 million for the first half of the year. Home equity line outstandings increased by $27 million in the first half of the year due primarily to new originations. Berkshire originates conforming home equity lines to a maximum LTV of 80%. Growth in commercial loans and home equity loans partially offset declines in auto loans and residential mortgages. Auto loans decreased by $32 million to $101 million in the first half of the year due to the planned run-off of the indirect auto portfolio. Residential mortgage loans decreased in the first half of 2009 due to a high volume of refinancings as a result of low fixed rates. Berkshire originated a total of $140 million in residential mortgages in the first half of the year; most of this volume was fixed rate mortgages which were sold to federal agencies.
BHLB — Berkshire Hills Bancorp | Page 2 | www.berkshirebank.com |
Nonperforming assets decreased to 0.42% of assets at quarter-end, compared to 0.47% at the start of the quarter and 0.48% at the beginning of the year. Performing delinquent loans increased modestly due primarily to higher commercial loan delinquencies. Performing delinquent loans measured 0.66% of total loans at midyear, compared to 0.46% at the start of the quarter and 0.51% at the beginning of the year. Annualized net loan charge-offs measured 0.45% in the second quarter and 0.48% for the first half of the year. The loan loss allowance remained flat at 1.16% of total loans during the quarter.
Total deposits increased by $13 million in the second quarter and $122 million in the first half. Demand deposits grew by $20 million in the second quarter, including 8% annualized growth of personal accounts. NOW account balances decreased primarily due to seasonal decreases in municipal balances. The cost of deposits decreased from 1.99% in the fourth quarter of 2008 to 1.81% in the most recent quarter, reflecting the Company’s pricing strategies and the impact of competitive market pricing floors in the current environment. During the first half of the year, proceeds from deposit growth were primarily used to reduce borrowings, which declined by $77 million over this time.
Total stockholders’ equity was $408 million at mid-year, which was unchanged from year-end 2008. During the second quarter, Berkshire raised $32 million in net proceeds from a public common stock offering and repaid $40 million in preferred stock previously issued to the U.S. Treasury. Additionally, Berkshire paid $1 million to repurchase the common stock warrant issued to the Treasury, thereby ending all involvement with financing from the Treasury. Stockholders’ equity also benefited from $6 million in net income and $6 million in comprehensive income as a result of improved securities prices. The ratio of tangible common equity to assets improved to a strong 9.2% at mid-year, while the ratio of total equity to assets measured 15.2%. Tangible book value per common share improved to $16.52 from $15.73 at the start of the year. Midyear total book value per share measured $29.29, compared to $30.33 at the start of the year.
RESULTS OF OPERATIONS
Second quarter 2009 net income was $2.3 million, compared to $5.7 million in the second quarter of 2008. For the first six months, net income was $6.2 million in 2009 compared to record earnings of $11.8 million in 2008. Major changes in the first six months included decreases of $2.5 million in net interest income and $2.1 million in fee income, together with increases of $3.0 million in FDIC insurance premiums and $2.8 million in the provision for loan losses.
The year-to-year decline in net interest income was due to margin compression. The net interest margin was 2.91% in the second quarter and 3.01% in the first half of 2009, compared to 3.45% and 3.43% in the same periods of 2008, respectively. This decline was primarily due to the impact of near-zero short term interest rates, which reduced the yields on assets, while deposit costs declined less due to competitive market floors. Berkshire is maintaining modest asset interest rate sensitivity in order to benefit from anticipated future interest rate increases. Net interest income also was affected by runoff of indirect auto loans and residential mortgages. Berkshire is exiting the indirect auto loan business; residential mortgage runoff reflects the refinancing of mortgages into fixed rate mortgages sold to federal agencies. Income was also reduced by the elimination in 2009 of dividends from the Federal Home Loan Bank of Boston; these dividends totaled $0.5 million in the first half of 2008. Growth in commercial loans and securities near the end of the second quarter is expected to benefit net interest income beginning in the third quarter.
BHLB — Berkshire Hills Bancorp | Page 3 | www.berkshirebank.com |
Fee income declined by $1.3 million and $2.1 million year-to-year in the second quarter and first half of 2009 compared to 2008. First half wealth management fees decreased $0.9 million mainly due to lower stock market prices on which these fees are based. Assets under management increased to $681 million in the first half of 2009 as a result of 15% annualized new business generation, and the new business pipeline was strong at mid-year. First half insurance income decreased $1.0 million, primarily reflecting lower contingency income due to changes in industry pricing conditions. Insurance fee income is seasonal, with most contingency income received in the first half of the year. Deposit and loan fee income declined slightly by $0.2 million in the first half. Non-recurring income totaled $1.2 million in 2009, primarily due to $1.0 million in fees related to the June termination of the merger agreement with CNB Financial Corp.
The loan loss provision increased by $1.1 million and $2.8 million year-to-year in the second quarter and first half. The 2009 loan loss provision exceeded net loan charge-offs, which measured an annualized 0.48% of average loans in 2009, increasing from 0.15% in the first half of 2008 primarily due to higher commercial loan charge-offs, which measured a modest 0.64% of average commercial loans in 2009. Second quarter commercial loan charge-offs included $0.6 million related to the Company’s decision to accelerate certain problem asset dispositions.
Total non-interest expense increased by $1.3 million and $1.7 million year-to-year for the second quarter and first half. This increase resulted from FDIC insurance expense increases of $2.3 million and $3.0 million respectively. Second quarter FDIC expense included a $1.3 million special industry assessment ($0.06 per share after tax). Excluding FDIC insurance expense, all other second quarter non-interest expense declined by $1.0 million (5%) in 2009 compared to 2008. The decrease was concentrated in compensation expense for both the second quarter and year-to-date. Non-core expense totaling $0.6 million in the most recent quarter included charges related to the terminated merger agreement with CNB Financial Corp, together with restructuring charges in the new Integrated Services division. The first half effective income tax rate decreased to 26% from 28% year-to-year due to lower pre-tax earnings in 2009.
CONFERENCE CALL
Berkshire will conduct a conference call/webcast at 10:00 A.M. eastern time on Wednesday, July 22, 2009 to discuss this news release and guidance about expected future results. Please call in a few minutes prior to the scheduled time to register for the event. A copy of the presentation for this call will be available prior to the call atwww.berkshirebank.com in the investor relations section. Information about the conference call follows:
Dial-in: | 800-860-2442 | |
Webcast: | www.berkshirebank.com (Investor Relations link) |
A telephone replay of the call will be available through July 29, 2009 by calling 877-344-7529 and entering replay passcode: 431997. The webcast and a podcast will be available at Berkshire’s website above for an extended period of time.
BHLB — Berkshire Hills Bancorp | Page 4 | www.berkshirebank.com |
BACKGROUND
Berkshire Hills Bancorp is headquartered in Pittsfield, Massachusetts. It has $2.7 billion in assets and is the parent of Berkshire Bank —America’s Most Exciting BankSM. The Company provides personal and business banking, insurance, wealth management, and investment services through 48 financial centers in western Massachusetts, northeastern New York, and southern Vermont. Berkshire Bank provides 100% deposit insurance protection, regardless of amount, based on a combination of FDIC insurance and the Depositors Insurance Fund (DIF). For more information, visitwww.berkshirebank.com or call 800-773-5601.
FORWARD LOOKING STATEMENTS
Statements in this news release regarding Berkshire Hills Bancorp that are not historical facts are “forward-looking statements”. These statements reflect management’s views of future events, and involve risks and uncertainties. For a discussion of factors that could cause actual results to differ materially from expectations, see “Forward Looking Statements” in the Company’s 2008 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available at the Securities and Exchange Commission’s Internet website (www.sec.gov) and to which reference is hereby made. Actual future results may differ significantly from results discussed in these forward-looking statements, and undue reliance should not be placed on such statements. Except as required by law, the Company assumes no obligation to update any forward-looking statements.
NON-GAAP FINANCIAL MEASURES
This news release 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 merger costs and restructuring costs. Similarly, the efficiency ratio is also adjusted for these non-core items. Additionally, the Company adjusts core income to exclude amortization of intangibles to arrive at a measure of the underlying operating cash return for the benefit of stockholders. The Company also adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community. In the first quarter of 2009, the Company adjusted core earnings per share and core return on tangible common equity to be net of preferred stock dividends. These measures were not adjusted in this manner in the second quarter of 2009. The second quarter deemed dividend was a nonrecurring non-cash charge with no impact on stockholders’ equity and did not reflect a core economic event in the Company’s view. Additionally, the Company held cash at near-zero interest rates in the second quarter while it awaited the approval of the U.S. Treasury to repay the preferred stock. Accordingly, the preferred stock cash dividend and accretion charges were viewed by the Company as non-core one-time charges against income available to common stockholders related to the process of repaying the preferred stock.
BHLB — Berkshire Hills Bancorp | Page 5 | www.berkshirebank.com |
# # #
CONTACTS
Investor Relations Contact
David H. Gonci
Corporate Finance Officer
413-281-1973
David H. Gonci
Corporate Finance Officer
413-281-1973
Media Contact
Fedelina Madrid
Vice President — Marketing
413-236-3733
Fedelina Madrid
Vice President — Marketing
413-236-3733
BHLB — Berkshire Hills Bancorp | Page 6 | www.berkshirebank.com |
BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED BALANCE SHEETS — UNAUDITED
CONSOLIDATED BALANCE SHEETS — UNAUDITED
June 30, | March 31, | December 31, | ||||||||||
(In thousands) | 2009 | 2009 | 2008 | |||||||||
Assets | ||||||||||||
Total cash and cash equivalents | $ | 30,746 | $ | 22,887 | $ | 26,582 | ||||||
Fed funds sold & short-term investments | 36,037 | 113,225 | 18,216 | |||||||||
Trading security | 16,247 | 17,565 | 18,144 | |||||||||
Securities available for sale, at fair value | 303,546 | 274,879 | 274,380 | |||||||||
Securities held to maturity, at amortized cost | 26,851 | 27,972 | 25,872 | |||||||||
Federal Home Loan Bank stock and other restricted securities | 23,120 | 23,120 | 23,120 | |||||||||
Total Securities | 369,764 | 343,536 | 341,516 | |||||||||
Loans held for sale | 8,901 | 5,276 | 1,768 | |||||||||
Residential mortgages | 627,958 | 651,507 | 677,254 | |||||||||
Commercial mortgages | 833,598 | 797,363 | 805,456 | |||||||||
Commercial business loans | 172,341 | 179,765 | 178,934 | |||||||||
Consumer loans | 334,882 | 340,743 | 345,508 | |||||||||
Total loans | 1,968,779 | 1,969,378 | 2,007,152 | |||||||||
Less: Allowance for loan losses | (22,917 | ) | (22,903 | ) | (22,908 | ) | ||||||
Net loans | 1,945,862 | 1,946,475 | 1,984,244 | |||||||||
Premises and equipment, net | 36,197 | 37,029 | 37,448 | |||||||||
Goodwill | 161,725 | 161,725 | 161,178 | |||||||||
Other intangible assets | 15,987 | 16,820 | 17,652 | |||||||||
Cash surrender value of life insurance policies | 36,267 | 35,964 | 35,668 | |||||||||
Other assets | 39,600 | 41,414 | 42,457 | |||||||||
Total assets | $ | 2,681,086 | $ | 2,724,351 | $ | 2,666,729 | ||||||
Liabilities and stockholders’ equity | ||||||||||||
Demand deposits | $ | 257,133 | $ | 237,619 | $ | 233,040 | ||||||
NOW deposits | 176,238 | 199,236 | 190,828 | |||||||||
Money market deposits | 506,100 | 505,937 | 448,238 | |||||||||
Savings deposits | 209,232 | 212,687 | 211,156 | |||||||||
Total non-maturity deposits | 1,148,703 | 1,155,479 | 1,083,262 | |||||||||
Time deposits | 802,691 | 782,601 | 746,318 | |||||||||
Total deposits | 1,951,394 | 1,938,080 | 1,829,580 | |||||||||
Borrowings | 281,860 | 327,160 | 359,157 | |||||||||
Junior subordinated debentures | 15,464 | 15,464 | 15,464 | |||||||||
Derivative liabilities | 13,838 | 22,485 | 24,068 | |||||||||
Due to broker | — | — | 19,895 | |||||||||
Other liabilities | 10,980 | 8,344 | 10,140 | |||||||||
Total liabilities | 2,273,536 | 2,311,533 | 2,258,304 | |||||||||
Total preferred stockholders’ equity | — | 36,959 | 36,822 | |||||||||
Total common stockholders’ equity | 407,550 | 375,859 | 371,603 | |||||||||
Total stockholders’ equity | 407,550 | 412,818 | 408,425 | |||||||||
Total liabilities and stockholders’ equity | $ | 2,681,086 | $ | 2,724,351 | $ | 2,666,729 | ||||||
F-1
BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED LOAN & DEPOSIT ANALYSIS — UNAUDITED
CONSOLIDATED LOAN & DEPOSIT ANALYSIS — UNAUDITED
LOAN ANALYSIS
June 30, 2009 | March 31, 2009 | December 31, 2008 | ||||||||||||||||||
Quarterly | Quarterly | |||||||||||||||||||
Annualized | Annualized | |||||||||||||||||||
(Dollars in millions) | Balance | Growth % | Balance | Growth % | Balance | |||||||||||||||
Residential mortgages: | ||||||||||||||||||||
Total residential mortgages | $ | 628 | (14 | ) | 651 | (16 | ) | 677 | ||||||||||||
Commercial mortgages: | ||||||||||||||||||||
Construction | 135 | 9 | 132 | 6 | 130 | |||||||||||||||
Single and multi-family | 67 | 6 | 66 | (23 | ) | 70 | ||||||||||||||
Other commercial mortgages | 632 | 22 | 599 | (4 | ) | 605 | ||||||||||||||
Total commercial mortgages | 834 | 19 | 797 | (4 | ) | 805 | ||||||||||||||
Commercial business loans | 172 | (18 | ) | 180 | 2 | 179 | ||||||||||||||
Total commercial loans | 1,006 | 12 | 977 | (3 | ) | 984 | ||||||||||||||
Consumer loans: | ||||||||||||||||||||
Auto | 101 | (52 | ) | 116 | (52 | ) | 133 | |||||||||||||
Home equity and other | 234 | 16 | 225 | 23 | 213 | |||||||||||||||
Total consumer loans | 335 | (7 | ) | �� | 341 | (6 | ) | 346 | ||||||||||||
Total loans | $ | 1,969 | — | % | $ | 1,969 | (8 | )% | $ | 2,007 | ||||||||||
DEPOSIT ANALYSIS
June 30, 2009 | March 31, 2009 | December 31, 2008 | ||||||||||||||||||
Quarterly | Quarterly | |||||||||||||||||||
Annualized | Annualized | |||||||||||||||||||
(Dollars in millions) | Balance | Growth % | Balance | Growth % | Balance | |||||||||||||||
Demand | $ | 257 | 34 | % | $ | 237 | 7 | % | $ | 233 | ||||||||||
NOW | 176 | (46 | ) | 199 | 17 | 191 | ||||||||||||||
Money market | 506 | — | 506 | 53 | 448 | |||||||||||||||
Savings | 209 | (8 | ) | 213 | 4 | 211 | ||||||||||||||
Total non-maturity deposits | 1,148 | (2 | ) | 1,155 | 27 | 1,083 | ||||||||||||||
Time less than $100,000 | 403 | 2 | 401 | 6 | 395 | |||||||||||||||
Time $100,000 or more | 400 | 19 | 382 | 36 | 351 | |||||||||||||||
Total time deposits | 803 | 10 | 783 | 20 | 746 | |||||||||||||||
Total deposits | $ | 1,951 | 3 | % | $ | 1,938 | 24 | % | $ | 1,829 | ||||||||||
F-2
BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME — UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME — UNAUDITED
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(In thousands, except per share data) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Interest and dividend income | ||||||||||||||||
Loans | $ | 25,370 | $ | 29,823 | $ | 51,802 | $ | 61,146 | ||||||||
Securities and other | 3,395 | 3,011 | 6,843 | 6,211 | ||||||||||||
Total interest and dividend income | 28,765 | 32,834 | 58,645 | 67,357 | ||||||||||||
Interest expense | ||||||||||||||||
Deposits | 8,677 | 10,521 | 17,150 | 22,809 | ||||||||||||
Borrowings and junior subordinated debentures | 3,364 | 3,666 | 7,060 | 7,607 | ||||||||||||
Total interest expense | 12,041 | 14,187 | 24,210 | 30,416 | ||||||||||||
Net interest income | 16,724 | 18,647 | 34,435 | 36,941 | ||||||||||||
Non-interest income | ||||||||||||||||
Insurance commissions and fees | 3,274 | 3,694 | 7,843 | 8,840 | ||||||||||||
Deposit service fees | 2,443 | 2,486 | 4,679 | 4,641 | ||||||||||||
Wealth management fees | 1,113 | 1,567 | 2,302 | 3,195 | ||||||||||||
Loan service and interest rate swap fees | (136 | ) | 228 | 255 | 465 | |||||||||||
Total fee income | 6,694 | 7,975 | 15,079 | 17,141 | ||||||||||||
Other | 468 | 562 | 820 | 880 | ||||||||||||
Gain (loss) on sale of securities, net | 3 | (26 | ) | 1 | (26 | ) | ||||||||||
Other non-recurring income | 1,240 | — | 1,177 | (12 | ) | |||||||||||
Total non-interest income | 8,405 | 8,511 | 17,077 | 17,983 | ||||||||||||
Total net revenue | 25,129 | 27,158 | 51,512 | 54,924 | ||||||||||||
Provision for loan losses | 2,200 | 1,105 | 4,700 | 1,930 | ||||||||||||
Non-interest expense | ||||||||||||||||
Salaries and employee benefits | 8,902 | 9,842 | 18,254 | 19,498 | ||||||||||||
Occupancy and equipment | 2,859 | 2,774 | 5,987 | 5,742 | ||||||||||||
Marketing, data processing, and professional services | 2,233 | 2,127 | 4,323 | 3,986 | ||||||||||||
FDIC premium and special assessment | 2,387 | 54 | 3,079 | 108 | ||||||||||||
Other non-recurring expense | 601 | 683 | 601 | 683 | ||||||||||||
Amortization of intangible assets | 833 | 1,019 | 1,666 | 2,103 | ||||||||||||
Other | 2,163 | 2,133 | 4,521 | 4,586 | ||||||||||||
Total non-interest expense | 19,978 | 18,632 | 38,431 | 36,706 | ||||||||||||
Income before income taxes | 2,951 | 7,421 | 8,381 | 16,288 | ||||||||||||
Income tax expense | 620 | 1,708 | 2,167 | 4,526 | ||||||||||||
Net income | $ | 2,331 | $ | 5,713 | $ | 6,214 | $ | 11,762 | ||||||||
Less: Cumulative preferred stock dividend and accretion | 393 | — | 1,030 | — | ||||||||||||
Less: Deemed dividend resulting from preferred stock repayment | 2,954 | — | 2,954 | — | ||||||||||||
Net income available to common stockholders | $ | (1,016 | ) | $ | 5,713 | $ | 2,230 | $ | 11,762 | |||||||
Basic earnings per common share | $ | (0.08 | ) | $ | 0.55 | $ | 0.18 | $ | 1.14 | |||||||
Diluted earnings per common share | $ | (0.08 | ) | $ | 0.55 | $ | 0.18 | $ | 1.13 | |||||||
Weighted average common shares outstanding | ||||||||||||||||
Basic | 12,946 | 10,302 | 12,556 | 10,344 | ||||||||||||
Diluted | 12,946 | 10,384 | 12,593 | 10,420 |
F-3
BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME — UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME — UNAUDITED
Quarters Ended | ||||||||||||||||||||
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
(In thousands, except per share data) | 2009 | 2009 | 2008 | 2008 | 2008 | |||||||||||||||
Interest and dividend income | ||||||||||||||||||||
Loans | $ | 25,370 | $ | 26,432 | $ | 29,343 | $ | 30,078 | $ | 29,823 | ||||||||||
Securities and other | 3,395 | 3,448 | 3,419 | 3,014 | 3,011 | |||||||||||||||
Total interest and dividend income | 28,765 | 29,880 | 32,762 | 33,092 | 32,834 | |||||||||||||||
Interest expense | ||||||||||||||||||||
Deposits | 8,677 | 8,473 | 9,248 | 9,676 | 10,521 | |||||||||||||||
Borrowings and junior subordinated debentures | 3,364 | 3,696 | 4,044 | 4,087 | 3,666 | |||||||||||||||
Total interest expense | 12,041 | 12,169 | 13,292 | 13,763 | 14,187 | |||||||||||||||
Net interest income | 16,724 | 17,711 | 19,470 | 19,329 | 18,647 | |||||||||||||||
Non-interest income | ||||||||||||||||||||
Insurance commissions and fees | 3,274 | 4,569 | 2,139 | 2,640 | 3,694 | |||||||||||||||
Deposit service fees | 2,443 | 2,236 | 2,623 | 2,518 | 2,486 | |||||||||||||||
Wealth management fees | 1,113 | 1,189 | 1,171 | 1,338 | 1,567 | |||||||||||||||
Loan service and interest rate swap fees | (136 | ) | 391 | 203 | 561 | 228 | ||||||||||||||
Total fee income | 6,694 | 8,385 | 6,136 | 7,057 | 7,975 | |||||||||||||||
Other | 468 | 352 | 241 | 174 | 562 | |||||||||||||||
Gain (loss) on sale of securities, net | 3 | (2 | ) | — | 4 | (26 | ) | |||||||||||||
Other non-recurring income | 1,240 | (63 | ) | — | — | — | ||||||||||||||
Total non-interest income | 8,405 | 8,672 | 6,377 | 7,235 | 8,511 | |||||||||||||||
Total net revenue | 25,129 | 26,383 | 25,847 | 26,564 | 27,158 | |||||||||||||||
Provision for loan losses | 2,200 | 2,500 | 1,400 | 1,250 | 1,105 | |||||||||||||||
Non-interest expense | ||||||||||||||||||||
Salaries and employee benefits | 8,902 | 9,352 | 8,988 | 9,796 | 9,842 | |||||||||||||||
Occupancy and equipment | 2,859 | 3,128 | 2,736 | 2,760 | 2,774 | |||||||||||||||
Marketing, data processing, and professional services | 2,233 | 2,090 | 1,803 | 2,003 | 2,127 | |||||||||||||||
FDIC premium and special assessment | 2,387 | 692 | 535 | 118 | 54 | |||||||||||||||
Other non-recurring expense | 601 | — | — | — | 683 | |||||||||||||||
Amortization of intangible assets | 833 | 833 | 838 | 889 | 1,019 | |||||||||||||||
Other | 2,163 | 2,358 | 2,356 | 2,171 | 2,133 | |||||||||||||||
Total non-interest expense | 19,978 | 18,453 | 17,256 | 17,737 | 18,632 | |||||||||||||||
Income before income taxes | 2,951 | 5,430 | 7,191 | 7,577 | 7,421 | |||||||||||||||
Income tax expense | 620 | 1,547 | 1,985 | 2,301 | 1,708 | |||||||||||||||
Net income | $ | 2,331 | $ | 3,883 | $ | 5,206 | $ | 5,276 | $ | 5,713 | ||||||||||
Less: Cumulative preferred stock dividend and accretion | 393 | 637 | — | — | — | |||||||||||||||
Less: Deemed dividend resulting from preferred stock repayment | 2,954 | — | — | — | — | |||||||||||||||
Net income available to common stockholders | $ | (1,016 | ) | $ | 3,246 | $ | 5,206 | $ | 5,276 | $ | 5,713 | |||||||||
Basic earnings per common share | $ | (0.08 | ) | $ | 0.27 | $ | 0.44 | $ | 0.51 | $ | 0.55 | |||||||||
Diluted earnings per common share | $ | (0.08 | ) | $ | 0.27 | $ | 0.44 | $ | 0.51 | $ | 0.55 | |||||||||
Weighted average common shares outstanding | ||||||||||||||||||||
Basic | 12,946 | 12,164 | 11,804 | 10,303 | 10,302 | |||||||||||||||
Diluted | 12,946 | 12,247 | 11,892 | 10,400 | 10,384 |
F-4
BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
ASSET QUALITY ANALYSIS
ASSET QUALITY ANALYSIS
At or for the Quarters Ended | ||||||||||||||||||||
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
(Dollars in thousands) | 2009 | 2009 | 2008 | 2008 | 2008 | |||||||||||||||
NON-PERFORMING ASSETS | ||||||||||||||||||||
Non-accruing loans: | ||||||||||||||||||||
Residential mortgages | $ | 2,396 | $ | 2,740 | $ | 1,646 | $ | 1,315 | $ | 763 | ||||||||||
Commercial mortgages | 6,087 | 7,276 | 7,738 | 6,178 | 5,329 | |||||||||||||||
Commercial business loans | 1,442 | 1,861 | 1,921 | 2,210 | 3,103 | |||||||||||||||
Consumer loans | 1,326 | 587 | 866 | 650 | 577 | |||||||||||||||
Total non-accruing loans | 11,251 | 12,464 | 12,171 | 10,353 | 9,772 | |||||||||||||||
Other real estate owned | 130 | 371 | 498 | 941 | 1,050 | |||||||||||||||
Total non-performing assets | $ | 11,381 | $ | 12,835 | $ | 12,669 | $ | 11,294 | $ | 10,822 | ||||||||||
Total non-accruing loans/total loans | 0.57 | % | 0.63 | % | 0.61 | % | 0.52 | % | 0.49 | % | ||||||||||
Total non-performing assets/total assets | 0.42 | % | 0.47 | % | 0.48 | % | 0.44 | % | 0.42 | % | ||||||||||
PROVISION AND ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||||||
Balance at beginning of period | $ | 22,903 | $ | 22,908 | $ | 22,886 | $ | 22,581 | $ | 22,130 | ||||||||||
Charged-off loans | (2,291 | ) | (2,643 | ) | (1,474 | ) | (1,331 | ) | (754 | ) | ||||||||||
Recoveries on charged-off loans | 105 | 138 | 96 | 386 | 100 | |||||||||||||||
Net loans charged-off | (2,186 | ) | (2,505 | ) | (1,378 | ) | (945 | ) | (654 | ) | ||||||||||
Provision for loan losses | 2,200 | 2,500 | 1,400 | 1,250 | 1,105 | |||||||||||||||
Balance at end of period | $ | 22,917 | $ | 22,903 | $ | 22,908 | $ | 22,886 | $ | 22,581 | ||||||||||
Allowance for loan losses/non-accruing loans | 204 | % | 184 | % | 188 | % | 221 | % | 231 | % | ||||||||||
Allowance for loan losses/total loans | 1.16 | % | 1.16 | % | 1.14 | % | 1.15 | % | 1.14 | % | ||||||||||
NET LOAN CHARGE-OFFS | ||||||||||||||||||||
Residential mortgages | $ | (27 | ) | $ | (117 | ) | $ | — | $ | (119 | ) | $ | — | |||||||
Commercial mortgages | (755 | ) | (1,448 | ) | (900 | ) | (63 | ) | (131 | ) | ||||||||||
Commercial business loans | (795 | ) | (150 | ) | (10 | ) | (265 | ) | (121 | ) | ||||||||||
Consumer loans | (609 | ) | (790 | ) | (468 | ) | (498 | ) | (402 | ) | ||||||||||
Total, net | $ | (2,186 | ) | $ | (2,505 | ) | $ | (1,378 | ) | $ | (945 | ) | $ | (654 | ) | |||||
Net charge-offs (annualized)/average loans | 0.45 | % | 0.51 | % | 0.27 | % | 0.19 | % | 0.13 | % | ||||||||||
Net charge-offs (YTD annualized)/average loans | 0.48 | % | 0.51 | % | 0.19 | % | 0.16 | % | 0.15 | % | ||||||||||
DELINQUENT LOANS/TOTAL LOANS | ||||||||||||||||||||
30-89 Days delinquent | 0.63 | % | 0.45 | % | 0.46 | % | 0.45 | % | 0.33 | % | ||||||||||
90+ Days delinquent and still accruing | 0.03 | % | 0.01 | % | 0.05 | % | 0.03 | % | 0.04 | % | ||||||||||
Total accruing delinquent loans | 0.66 | % | 0.46 | % | 0.51 | % | 0.48 | % | 0.37 | % | ||||||||||
Non-accruing loans | 0.57 | % | 0.63 | % | 0.61 | % | 0.52 | % | 0.49 | % | ||||||||||
Total delinquent loans | 1.23 | % | 1.09 | % | 1.12 | % | 1.00 | % | 0.86 | % | ||||||||||
F-5
BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
SELECTED FINANCIAL HIGHLIGHTS
At or for the Quarters Ended | ||||||||||||||||||||
June 30, | Mar. 31, | Dec. 31, | Sep. 30, | June 30, | ||||||||||||||||
2009 | 2009 | 2008 | 2008 | 2008 | ||||||||||||||||
PERFORMANCE RATIOS | ||||||||||||||||||||
Core return on tangible assets | 0.45 | % | 0.77 | % | 0.98 | % | 1.03 | % | 1.16 | % | ||||||||||
Return on total assets | 0.35 | 0.59 | 0.79 | 0.82 | 0.91 | |||||||||||||||
Core return on tangible common equity | 5.23 | 8.54 | 12.70 | 15.85 | 17.89 | |||||||||||||||
Return on total common equity | 2.38 | 3.52 | 5.62 | 6.26 | 6.89 | |||||||||||||||
Net interest margin, fully taxable equivalent | 2.91 | 3.11 | 3.41 | 3.48 | 3.45 | |||||||||||||||
Core tangible non-interest income to tangible assets | 1.15 | 1.42 | 1.04 | 1.21 | 1.47 | |||||||||||||||
Non-interest income to assets | 1.26 | 1.32 | 0.97 | 1.13 | 1.36 | |||||||||||||||
Core tangible non-interest expense to tangible assets | 2.97 | 2.86 | 2.68 | 2.82 | 2.91 | |||||||||||||||
Non-interest expense to assets | 2.99 | 2.80 | 2.62 | 2.76 | 2.97 | |||||||||||||||
Efficiency ratio | 75.85 | 65.23 | 62.24 | 62.18 | 61.08 | |||||||||||||||
GROWTH | ||||||||||||||||||||
Total loans, year-to-date (annualized) | (4 | )% | (8 | )% | 3 | % | 3 | % | 4 | % | ||||||||||
Total deposits, year-to-date (annualized) | 13 | 24 | — | 1 | (1 | ) | ||||||||||||||
Total revenues, year-to-year YTD | (6 | ) | (5 | ) | 21 | 29 | 21 | |||||||||||||
FINANCIAL DATA(In millions) | ||||||||||||||||||||
Total assets | $ | 2,681 | $ | 2,724 | $ | 2,667 | $ | 2,566 | $ | 2,547 | ||||||||||
Total loans | 1,969 | 1,969 | 2,007 | 1,922 | 1,978 | |||||||||||||||
Total intangible assets | 178 | 179 | 179 | 180 | 181 | |||||||||||||||
Total deposits | 1,951 | 1,938 | 1,830 | 1,837 | 1,811 | |||||||||||||||
Total stockholders’ equity | 408 | 413 | 408 | 333 | 330 | |||||||||||||||
Total common stockholders’ equity | 408 | 376 | 372 | 333 | 330 | |||||||||||||||
Total core income | 2.0 | 3.9 | 5.2 | 5.3 | 5.7 | |||||||||||||||
Total net income | 2.3 | 3.9 | 5.2 | 5.3 | 5.7 | |||||||||||||||
ASSET QUALITY RATIOS | ||||||||||||||||||||
Net charge-offs (annualized)/average loans | 0.45 | % | 0.51 | % | 0.27 | % | 0.19 | % | 0.13 | % | ||||||||||
Non-performing assets/total assets | 0.42 | 0.47 | 0.48 | 0.44 | 0.42 | |||||||||||||||
Loan loss allowance/total loans | 1.16 | 1.16 | 1.14 | 1.15 | 1.14 | |||||||||||||||
Loan loss allowance/nonperforming loans | 2.04 | x | 1.84 | x | 1.88 | x | 2.21 | x | 2.31 | x | ||||||||||
PER COMMON SHARE DATA | ||||||||||||||||||||
Core earnings, diluted | $ | 0.15 | $ | 0.27 | $ | 0.44 | $ | 0.51 | $ | 0.55 | ||||||||||
Net earnings, diluted | (0.08 | ) | 0.27 | 0.44 | 0.51 | 0.55 | ||||||||||||||
Tangible common book value | 16.52 | 16.02 | 15.73 | 14.58 | 14.36 | |||||||||||||||
Total common book value | 29.29 | 30.54 | 30.33 | 31.71 | 31.78 | |||||||||||||||
Market price at period end | 20.78 | 22.92 | 30.86 | 32.00 | 23.65 | |||||||||||||||
Dividends | 0.16 | 0.16 | 0.16 | 0.16 | 0.16 | |||||||||||||||
CAPITAL RATIOS | ||||||||||||||||||||
Common stockholders’ equity to total assets | 15.20 | % | 13.80 | % | 13.82 | % | 12.97 | % | 12.96 | % | ||||||||||
Tangible common stockholders’ equity to tangible assets | 9.18 | 7.74 | 7.62 | 6.41 | 6.30 | |||||||||||||||
Stockholders’ equity to total assets | 15.20 | 15.15 | 15.32 | 12.97 | 12.96 | |||||||||||||||
Tangible stockholders’ equity to tangible assets | 9.18 | 9.20 | 9.23 | 6.41 | 6.30 |
(1) | Reconciliations 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. |
F-6
BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
AVERAGE BALANCES
AVERAGE BALANCES
Quarters Ended | ||||||||||||||||||||
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
(In thousands) | 2009 | 2009 | 2008 | 2008 | 2008 | |||||||||||||||
Assets | ||||||||||||||||||||
Loans | ||||||||||||||||||||
Residential mortgages | $ | 637,232 | $ | 675,905 | $ | 679,000 | $ | 672,363 | $ | 665,407 | ||||||||||
Commercial mortgages | 810,421 | 804,109 | 808,308 | 787,543 | 745,727 | |||||||||||||||
Commercial business loans | 173,486 | 173,055 | 185,434 | 192,065 | 196,962 | |||||||||||||||
Consumer loans | 338,506 | 343,296 | 343,894 | 346,068 | 354,321 | |||||||||||||||
Total loans | 1,959,645 | 1,996,365 | 2,016,636 | 1,998,039 | 1,962,417 | |||||||||||||||
Securities | 346,274 | 335,414 | 304,466 | 266,720 | 260,046 | |||||||||||||||
Fed funds sold & short-term investments | 73,874 | 49,966 | 15,345 | 4,384 | 12,633 | |||||||||||||||
Total earning assets | 2,379,793 | 2,381,745 | 2,336,447 | 2,269,143 | 2,235,096 | |||||||||||||||
Goodwill & other intangible assets | 178,164 | 178,711 | 179,187 | 180,387 | 181,705 | |||||||||||||||
Other assets | 125,446 | 113,471 | 105,097 | 105,937 | 105,109 | |||||||||||||||
Total assets | $ | 2,683,403 | $ | 2,673,927 | $ | 2,620,731 | $ | 2,555,467 | $ | 2,521,910 | ||||||||||
Liabilities and stockholders’ equity | ||||||||||||||||||||
Deposits | ||||||||||||||||||||
NOW | $ | 187,174 | $ | 193,038 | $ | 196,326 | $ | 193,192 | $ | 202,747 | ||||||||||
Money market | 483,302 | 462,518 | 453,977 | 447,184 | 491,945 | |||||||||||||||
Savings | 210,678 | 213,074 | 220,565 | 221,746 | 212,680 | |||||||||||||||
Time | 795,155 | 762,940 | 746,913 | 734,195 | 705,305 | |||||||||||||||
Total interest-bearing deposits | 1,676,309 | 1,631,570 | 1,617,781 | 1,596,317 | 1,612,677 | |||||||||||||||
Borrowings and debentures | 310,323 | 365,833 | 382,015 | 380,453 | 343,816 | |||||||||||||||
Total interest-bearing liabilities | 1,986,632 | 1,997,403 | 1,999,796 | 1,976,770 | 1,956,493 | |||||||||||||||
Non-interest-bearing demand deposits | 251,565 | 232,480 | 229,175 | 232,762 | 221,471 | |||||||||||||||
Other liabilities | 30,146 | 32,960 | 17,566 | 10,804 | 10,780 | |||||||||||||||
Total liabilities | 2,268,343 | 2,262,843 | 2,246,537 | 2,220,336 | 2,188,744 | |||||||||||||||
Total stockholders’ common equity | 392,321 | 374,207 | 368,991 | 335,131 | 333,166 | |||||||||||||||
Total stockholders’ preferred equity | 22,739 | 36,877 | 5,203 | — | — | |||||||||||||||
Total stockholders’ equity | 415,060 | 411,084 | 374,194 | 335,131 | 333,166 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,683,403 | $ | 2,673,927 | $ | 2,620,731 | $ | 2,555,467 | $ | 2,521,910 | ||||||||||
Supplementary data | ||||||||||||||||||||
Total non-maturity deposits | $ | 1,132,719 | $ | 1,101,110 | $ | 1,100,043 | $ | 1,094,884 | $ | 1,128,843 | ||||||||||
Total deposits | 1,927,874 | 1,864,050 | 1,846,956 | 1,829,079 | 1,834,148 | |||||||||||||||
Fully taxable equivalent income adj. | 562 | 566 | 532 | 532 | 532 |
(1) | Average balances for securities available-for-sale are based on amortized cost. |
F-7
BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
AVERAGE YIELDS (Fully Taxable Equivalent — Annualized)
AVERAGE YIELDS (Fully Taxable Equivalent — Annualized)
Quarters Ended | ||||||||||||||||||||
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2009 | 2009 | 2008 | 2008 | 2008 | ||||||||||||||||
Earning assets | ||||||||||||||||||||
Loans | ||||||||||||||||||||
Residential mortgages | 5.46 | % | 5.56 | % | 5.64 | % | 5.65 | % | 5.66 | % | ||||||||||
Commercial mortgages | 5.17 | 5.39 | 6.01 | 6.24 | 6.44 | |||||||||||||||
Commercial business loans | 5.76 | 5.96 | 5.99 | 6.41 | 6.57 | |||||||||||||||
Consumer loans | 4.46 | 4.64 | 5.46 | 5.86 | 6.02 | |||||||||||||||
Total loans | 5.19 | 5.37 | 5.79 | 5.99 | 6.11 | |||||||||||||||
Securities | 4.58 | 4.85 | 5.14 | 5.27 | 5.39 | |||||||||||||||
Federal funds sold and short-term investments | 0.24 | 0.17 | 0.54 | 1.45 | 1.78 | |||||||||||||||
Total earning assets | 4.94 | 5.18 | 5.67 | 5.89 | 6.00 | |||||||||||||||
Funding liabilities | ||||||||||||||||||||
Deposits | ||||||||||||||||||||
NOW | 0.45 | 0.40 | 0.52 | 0.64 | 0.73 | |||||||||||||||
Money Market | 1.42 | 1.40 | 1.73 | 1.86 | 2.14 | |||||||||||||||
Savings | 0.34 | 0.44 | 0.68 | 0.61 | 0.71 | |||||||||||||||
Time | 3.32 | 3.43 | 3.54 | 3.76 | 4.08 | |||||||||||||||
Total interest-bearing deposits | 2.08 | 2.11 | 2.27 | 2.41 | 2.62 | |||||||||||||||
Borrowings and debentures | 4.35 | 4.10 | 4.21 | 4.27 | 4.29 | |||||||||||||||
Total interest-bearing liabilities | 2.43 | 2.47 | 2.64 | 2.77 | 2.91 | |||||||||||||||
Net interest spread | 2.51 | 2.71 | 3.03 | 3.12 | 3.09 | |||||||||||||||
Net interest margin | 2.91 | 3.11 | 3.41 | 3.48 | 3.45 | |||||||||||||||
Cost of funds | 2.16 | 2.21 | 2.37 | 2.48 | 2.62 | |||||||||||||||
Cost of deposits | 1.81 | 1.84 | 1.99 | 2.10 | 2.31 |
(1) | Average balances and yields for securities available-for-sale are based on amortized cost. | |
(2) | Cost of funds includes all deposits and borrowings. |
F-8
BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
At or for the Quarters Ended | ||||||||||||||||||||||||
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||||||
(Dollars in thousands) | 2009 | 2009 | 2008 | 2008 | 2008 | |||||||||||||||||||
Net income | $ | 2,331 | $ | 3,883 | $ | 5,206 | $ | 5,276 | $ | 5,713 | ||||||||||||||
Adj: Loss (gain) on sale of securities, net | (3 | ) | 2 | — | (4 | ) | 26 | |||||||||||||||||
Less: Merger termination fee | (970 | ) | — | — | — | — | ||||||||||||||||||
Less: Other non-recurring income | (270 | ) | 63 | — | — | — | ||||||||||||||||||
Plus: Merger related expenses | 215 | — | — | — | — | |||||||||||||||||||
Plus: Other non-recurring expense | 386 | — | — | — | 683 | |||||||||||||||||||
Adj: Income taxes | 269 | (27 | ) | — | 2 | (701 | ) | |||||||||||||||||
Total core income | (A | ) | $ | 1,958 | $ | 3,921 | $ | 5,206 | $ | 5,274 | $ | 5,721 | ||||||||||||
Plus: Amortization of intangible assets | 833 | 833 | 838 | 889 | 1,019 | |||||||||||||||||||
Total tangible core income | (B | ) | $ | 2,791 | $ | 4,754 | $ | 6,044 | $ | 6,163 | $ | 6,740 | ||||||||||||
Total non-interest income | $ | 8,405 | $ | 8,672 | $ | 6,377 | $ | 7,235 | $ | 8,511 | ||||||||||||||
Adj: Loss (gain) on sale of securities, net | (3 | ) | 2 | — | (4 | ) | 26 | |||||||||||||||||
Less: Merger termination fee | (970 | ) | — | — | — | — | ||||||||||||||||||
Less: Other non-recurring income | (270 | ) | 63 | — | — | — | ||||||||||||||||||
Total core non-interest income | (C | ) | 7,162 | 8,737 | 6,377 | 7,231 | 8,537 | |||||||||||||||||
Net interest income | 16,724 | 17,711 | 19,470 | 19,329 | 18,647 | |||||||||||||||||||
Total core revenue | (D | ) | $ | 23,886 | $ | 26,448 | $ | 25,847 | $ | 26,560 | $ | 27,184 | ||||||||||||
Total non-interest expense | $ | 19,978 | $ | 18,453 | $ | 17,256 | $ | 17,737 | $ | 18,632 | ||||||||||||||
Less: Merger related expenses | (215 | ) | — | — | — | — | ||||||||||||||||||
Less: Other non-recurring expense | (386 | ) | — | — | — | (683 | ) | |||||||||||||||||
Core non-interest expense | (E | ) | 19,377 | 18,453 | 17,256 | 17,737 | 17,949 | |||||||||||||||||
Less: Amortization of intangible assets | (833 | ) | (833 | ) | (838 | ) | (889 | ) | (1,019 | ) | ||||||||||||||
Total core tangible non-interest expense | (F | ) | $ | 18,544 | $ | 17,620 | $ | 16,418 | $ | 16,848 | $ | 16,930 | ||||||||||||
(Dollars in millions, except per share data) | ||||||||||||||||||||||||
Total average assets | $ | 2,683 | $ | 2,674 | $ | 2,621 | $ | 2,555 | $ | 2,522 | ||||||||||||||
Less: Average intangible assets | (178 | ) | (179 | ) | (179 | ) | (180 | ) | (182 | ) | ||||||||||||||
Total average tangible assets | (G | ) | $ | 2,505 | $ | 2,495 | $ | 2,442 | $ | 2,375 | $ | 2,340 | ||||||||||||
Total average stockholders’ equity | $ | 415 | $ | 411 | $ | 374 | $ | 335 | $ | 333 | ||||||||||||||
Less: Average intangible assets | (178 | ) | (179 | ) | (179 | ) | (180 | ) | (182 | ) | ||||||||||||||
Total average tangible stockholders’ equity | 237 | 232 | 195 | 155 | 151 | |||||||||||||||||||
Less: Average preferred equity | (23 | ) | (37 | ) | (6 | ) | — | — | ||||||||||||||||
Total average tangible common stockholders’ equity | (H | ) | $ | 214 | $ | 195 | $ | 189 | $ | 155 | $ | 151 | ||||||||||||
Total stockholders’ equity, period-end | $ | 408 | $ | 413 | $ | 408 | $ | 335 | $ | 330 | ||||||||||||||
Less: Intangible assets, period-end | (178 | ) | (179 | ) | (179 | ) | (180 | ) | (181 | ) | ||||||||||||||
Total tangible stockholders’ equity, period-end | 230 | 234 | 229 | 155 | 149 | |||||||||||||||||||
Less: Preferred equity, period-end | — | (37 | ) | (37 | ) | — | — | |||||||||||||||||
Total tangible common stockholders’ equity, period-end | (I | ) | $ | 230 | $ | 197 | $ | 192 | $ | 155 | $ | 149 | ||||||||||||
Total common shares outstanding, period-end (thousands) | (J | ) | 13,916 | 12,306 | 12,253 | 10,493 | 10,385 | |||||||||||||||||
Average diluted common shares outstanding (thousands) | (K | ) | 12,946 | 12,247 | 11,892 | 10,400 | 10,384 | |||||||||||||||||
Core earnings per common share, diluted (1) | (A/K | ) | $ | 0.15 | $ | 0.27 | $ | 0.44 | $ | 0.51 | $ | 0.55 | ||||||||||||
Tangible book value per common share, period-end | (I/J | ) | $ | 16.52 | $ | 16.02 | $ | 15.73 | $ | 14.58 | $ | 14.36 | ||||||||||||
Core return on tangible assets | (B/G | ) | 0.45 | % | 0.77 | % | 0.98 | % | 1.03 | % | 1.16 | |||||||||||||
Core return on tangible common equity (1) | (B/H | ) | 5.23 | 8.54 | 12.70 | 15.85 | 17.89 | |||||||||||||||||
Core tangible non-interest income to tangible assets | (C/G | ) | 1.15 | 1.42 | 1.04 | 1.21 | 1.47 | |||||||||||||||||
Core tangible non-interest expense to tangible assets | (F/G | ) | 2.97 | 2.86 | 2.68 | 2.82 | 2.91 | |||||||||||||||||
Efficiency ratio (2) | 75.85 | 65.23 | 62.24 | 62.18 | 61.08 |
(1) | March 31, 2009 ratios include a $637,000 reduction in core income and tangible core income related to cumulative preferred stock dividend and accretion. Preferred dividend charges recorded in Q2 were deemed non-core due to preferred stock repayment. | |
(2) | Efficiency ratio is computed by dividing total tangible core non-interest expense by the sum of total net interest income on a fully taxable equivalent basis and total core non-interest income. The Company uses this non-GAAP measure, which is used widely in the banking industry, to provide important information regarding its operational efficiency. | |
(3) | Ratios are annualized and based on average balance sheet amounts, where applicable. | |
(4) | Quarterly data may not sum to year-to-date data due to rounding. |
Other Non Core Items | ||||
Merger Termination Fee from CNB | 970 |
F-9
BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
At or for the Six Months Ended | ||||||||||||
June 30, | June 30, | |||||||||||
(Dollars in thousands) | 2009 | 2008 | ||||||||||
Net income | $ | 6,214 | $ | 11,762 | ||||||||
Adj: Loss (gain) on sale of securities, net | (1 | ) | 26 | |||||||||
Less: Merger termination fee | (970 | ) | — | |||||||||
Less: Other non-recurring income | (207 | ) | — | |||||||||
Plus: Merger related expenses | 215 | — | ||||||||||
Plus: Other non-recurring expense | 386 | 683 | ||||||||||
Adj: Income taxes | 242 | (701 | ) | |||||||||
Total core income | (A | ) | $ | 5,879 | $ | 11,770 | ||||||
Plus: Amortization of intangible assets | 1,666 | 2,103 | ||||||||||
Total tangible core income | (B | ) | $ | 7,545 | $ | 13,873 | ||||||
Total non-interest income | $ | 17,077 | $ | 17,983 | ||||||||
Adj: Loss (gain) on sale of securities, net | (1 | ) | 26 | |||||||||
Less: Merger termination fee | (970 | ) | — | |||||||||
Less: Other non-recurring income | (207 | ) | — | |||||||||
Total core non-interest income | (C | ) | 15,899 | 18,009 | ||||||||
Net interest income | 34,435 | 36,941 | ||||||||||
Total core revenue | (D | ) | $ | 50,334 | $ | 54,950 | ||||||
Total non-interest expense | $ | 38,431 | $ | 36,706 | ||||||||
Less: Merger related expenses | (215 | ) | — | |||||||||
Less: Other non-recurring expense | (386 | ) | (683 | ) | ||||||||
Core non-interest expense | (E | ) | 37,830 | 36,023 | ||||||||
Less: Amortization of intangible assets | (1,666 | ) | (2,103 | ) | ||||||||
Total core tangible non-interest expense | (F | ) | $ | 36,164 | $ | 33,920 | ||||||
(Dollars in millions, except per share data) | ||||||||||||
Total average assets | $ | 2,679 | $ | 2,511 | ||||||||
Less: Average intangible assets | (178 | ) | (182 | ) | ||||||||
Total average tangible assets | (G | ) | $ | 2,501 | $ | 2,329 | ||||||
Total average stockholders’ equity | $ | 413 | $ | 331 | ||||||||
Less: Average intangible assets | (178 | ) | (182 | ) | ||||||||
Total average tangible stockholders’ equity | 235 | 149 | ||||||||||
Less: Average preferred equity | (30 | ) | — | |||||||||
Total average tangible common stockholders’ equity | (H | ) | $ | 205 | $ | 149 | ||||||
Total stockholders’ equity, period-end | $ | 410 | $ | 330 | ||||||||
Less: Intangible assets, period-end | (178 | ) | (181 | ) | ||||||||
Total tangible stockholders’ equity, period-end | 232 | 149 | ||||||||||
Less: Preferred equity, period-end | (18 | ) | — | |||||||||
Total tangible common stockholders’ equity, period-end | (I | ) | $ | 214 | $ | 149 | ||||||
Total common shares outstanding, period-end (thousands) | (J | ) | 13,916 | 10,385 | ||||||||
Average diluted common shares outstanding (thousands) | (K | ) | 12,593 | 10,420 | ||||||||
Core earnings per common share, diluted (1) | (A/K | ) | $ | 0.42 | $ | 1.13 | ||||||
Tangible book value per common share, period-end | (I/J | ) | $ | 15.38 | $ | 14.36 | ||||||
Core return on tangible assets | (B/G | ) | 0.61 | % | 1.20 | |||||||
Core return on tangible common equity (1) | (B/H | ) | 7.11 | 18.52 | ||||||||
Core tangible non-interest income to tangible assets | (C/G | ) | 1.28 | 1.55 | ||||||||
Core tangible non-interest expense to tangible assets | (F/G | ) | 2.92 | 2.92 | ||||||||
Efficiency ratio (2) | 70.27 | 60.60 |
(1) | June 30, 2009 ratios include a $637,000 reduction in core income and tangible core income for cumulative preferred stock dividend and accretion accumulated during Q1 2009. Preferred dividend charges recorded in Q2 were deemed non-core due to preferred stock repayment. | |
(2) | Efficiency ratio is computed by dividing total tangible core non-interest expense by the sum of total net interest income on a fully taxable equivalent basis and total core non-interest income. The Company uses this non-GAAP measure, which is used widely in the banking industry, to provide important information regarding its operational efficiency. | |
(3) | Ratios are annualized and based on average balance sheet amounts, where applicable. | |
(4) | Quarterly data may not sum to year-to-date data due to rounding. |
Other Non Core Items | ||||
Merger Termination Fee from CNB | 970 |
F-10