Exhibit 99.1
Berkshire Hills Reports Record Quarterly and Annual Core Earnings;
Dividend Announced; Annual Meeting Set
Pittsfield, MA — January 28, 2013 — Berkshire Hills Bancorp, Inc. (NYSE: BHLB) reported record core earnings of $13.2 million for the fourth quarter and $44.2 million for the year 2012. Berkshire produced $0.54 in core earnings per share during the quarter, which was a 23% improvement over the prior year fourth quarter and a 4% increase over the third quarter of 2012. For the full year 2012, Berkshire reported $1.98 in core earnings per share, which was a 29% increase over 2011 core results of $1.54. Berkshire has posted three years of consecutive quarterly core earnings growth due to ongoing business expansion and improved profitability.
Operations in the last two years have benefited from acquisitions, including Beacon Federal Bancorp which was acquired on October 19, 2012. GAAP earnings include the impact of net non-core charges for mergers and systems conversions. GAAP net income totaled $9.3 million ($0.38 per share) for the fourth quarter and a record $33.2 million ($1.49 per share) for the full year in 2012.
FOURTH QUARTER FINANCIAL HIGHLIGHTS
· 14% increase in total assets to $5.3 billion, compared to the prior quarter
· 23% increase in core earnings per share, compared to fourth quarter of 2011
· 4% increase in core earnings per share, compared to the prior quarter
· 20% revenue growth, compared to the prior quarter
· 3.67% net interest margin
· 13% annualized organic non-maturity deposit growth
· 10% organic demand deposit growth
· 0.52% non-performing assets/total assets
· 0.28% annualized net loan charge-offs/average loans
· 1.02% core ROA (0.72% GAAP ROA)
· 8.2% core ROE (5.8% GAAP ROE)
Berkshire Chairman and CEO Michael P. Daly stated, “The success of our business initiatives produced record core earnings and a double digit total stock return for our shareholders in 2012. We maintained strong organic growth while successfully integrating our bank acquisitions in Northern Connecticut and Central New York, and expanding our lending in Eastern Massachusetts. Our fourth quarter net interest margin increased and our core return on equity rose above 8%. With these achievements, we raised our quarterly dividend to the highest level in our history.”
Mr. Daly continued, “We have produced these results through positive core operating leverage based on disciplined growth. We achieved 49% year over year revenue growth in the fourth quarter. Our total assets reached $5.3 billion, placing us among the 100 largest exchange traded banks in the U.S. This scale has enabled ongoing infrastructure investment in products and services which we deliver with a responsive local focus in our regions. We have a competitive advantage that we expect will result in sustainable market share growth delivered with increased efficiency and profitability.”
Mr. Daly concluded, “We augmented our balance sheet strength in 2012 while improving our capital efficiency. Our performance oriented team is focused on the drivers of customer preference and shareholder returns. We recently set out ambitious three year goals to maintain our market and financial momentum, including double digit metrics for annual growth in per share core earnings and core return on shareholder equity by the end of the plan period. We are dedicated to delivering on the potential of this franchise and on the promise of our brand and culture as America’s Most Exciting Bank®.”
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 February 14, 2013, payable on February 28, 2013. The dividend was increased in the prior quarter by 6% from the previous $0.17 per share level. This dividend equates to a 3.1% annualized yield based on the $23.03 average closing price of Berkshire’s common stock in the fourth quarter of 2012.
ANNUAL MEETING DATE SET
The Board of Directors has voted that the Annual Meeting of Shareholders shall be held on May 9, 2013 at the Crowne Plaza Hotel, One West Street, Pittsfield, Massachusetts at 10:00 a.m. The date of March 14, 2013 was established as the record date for the determination of the shareholders entitled to notice of, and to vote at, the Annual Meeting.
FINANCIAL CONDITION
Assets totaled $5.3 billion at year-end 2012, including $0.8 billion from the Beacon acquisition in October. For the year 2012, total assets grew by $1.3 billion (33%) from $4.0 billion including the benefit of organic growth together with acquisitions. Overall measures of asset quality, capital, and liquidity remained strong throughout the year. Total shares outstanding increased in 2012 by 4 million (19%) to approximately 25.1 million shares primarily as a result of merger consideration.
For the year, organic loan growth was $156 million (5%), reflecting growth in commercial business loans and residential mortgages. Including merger impacts, total loan growth was 35% for the year and 17% for the fourth quarter. Most fourth quarter residential mortgage originations were sold to the secondary market in the low rate
environment, and selected commercial loans outstanding were reduced as the Company rebalanced the portfolio composition while absorbing merger related growth.
Berkshire continues to employ its capital to support the credit needs of its markets and generate shareholder returns. Organic commercial business loan growth totaled $101 million (25%) for the year. Berkshire is building business loan volume in its markets as it targets banking relationships with middle market customers who need a full range of products and services provided by a responsive local banking partner. Berkshire also expanded its small business lending program to facilitate lending across its footprint. Commercial business loans increased to $600 million during the year, comprising 30% of all commercial loans and 15% of total loans at year-end.
Organic residential mortgage loan growth totaled $125 million (12%) for the year, including the benefit of Berkshire’s expanded Eastern Massachusetts mortgage lending team. Berkshire’s mortgage loan originations exceeded $1.1 billion in 2012, responding to strong demand related to improved housing market conditions and low mortgage interest rates. With the Beacon acquisition, total consumer loans outstanding grew by $282 million (77%) in the fourth quarter. Beacon’s strong consumer lending operations are expected to be a significant new source of loan production for Berkshire as merger integration is accomplished in 2013.
Asset quality metrics remained favorable throughout the year and at year-end. Non-performing assets were 0.52% of year-end assets. Fourth quarter annualized net loan charge-offs were 0.28% of average loans Year-end accruing delinquent loans were 1.11% of loans, increasing modestly from 0.89% at the start of the year including the impact of acquired banks. The loan loss allowance increased by 2% during the year, while decreasing in comparison to total loans due to the impact of acquired loans recorded at net fair value, which comprised 34% of total year-end loans.
For the year, organic deposit growth totaled $166 million (5%) primarily due to an increase in low cost transaction account balances. This was principally in demand deposit balances which posted 27% organic growth for the year, with the largest increase coming in the fourth quarter. Demand deposits are the focus of relationship based business development for retail and business accounts. Total commercial deposits increased to $1.3 billion at year-end, providing nearly a third of total deposit funds. Reflecting customer liquidity preference in the current low rate environment, ongoing transfers of maturing time deposits combined with strong account growth to produce 8% organic savings deposit growth and 7% organic money market account growth for the year. During the fourth quarter, Berkshire opened additional New York branches in Slingerlands and Wilton, continuing its de novo branch expansion in the greater Albany market where it now has 17 total branch offices.
Total year-end shareholders’ equity increased to $666 million in 2012, including $90 million recorded for bank merger equity consideration. Year-end tangible book value per share increased to $15.56, as capital generation more than offset the impact of merger intangibles resulting from the accretive earnings streams acquired. Total book value per
share increased to $26.53 due mainly to retained earnings. Berkshire utilized subordinated debt as a significant source of merger consideration in order to take advantage of attractive fixed rate capital available in the low rate environment. This resulted in the more efficient utilization of equity capital. Tangible equity/assets remained strong at 7.8% at year-end, compared to 8.7% at the start of the year.
RESULTS OF OPERATIONS
Berkshire posted strong core growth in revenue, earnings, and earnings per share for the fourth quarter and the year 2012. Core profitability improved as a result of the positive operating leverage attributable to revenue growth and disciplined expense management. Berkshire is achieving these results while bearing the costs of maintaining its asset sensitive interest rate risk profile and absorbing the charges related to its branch and team expansion, and its investment in technology and other infrastructure. The fourth quarter was the first quarter to include the combined operations of the year’s acquisitions, and year-to-year increases include the impact of 2011 acquisitions.
The fourth quarter core return on equity was 8.2%. GAAP net income in most periods also reflected non-core charges which were primarily merger related, together with systems conversion costs. The reconciliation of net income and core income is shown on table F-9 of the financial tables. Non-core charges in the most recent quarter were primarily related to the Beacon merger. For the year, non-core charges were within the range of management expectations. The Company does not view these non-core items as a component of its ongoing operating costs. Including the impact of non-core items, the fourth quarter GAAP return on equity was 5.8%.
Berkshire’s total fourth quarter net revenue increased by $10.1 million to $59.6 million compared to the linked quarter. Higher revenues included the benefit of Beacon operations, which produced $6.6 million in revenue for the comparable period in the prior quarter (based on the number of days that Beacon was owned in the fourth quarter). Fourth quarter revenues also included $1.4 million in net securities gains primarily on Beacon stock held by Berkshire on the merger date. Excluding the non-core securities gains, core revenues were $58.2 million or $9.54 per share annualized in the most recent quarter. This is a 26% increase from $7.59 in the fourth quarter of 2011, demonstrating the top line accretive benefit to shareholders from acquisition activities and organic growth.
The net interest margin improved to 3.67% in the most recent quarter, compared to 3.50% in the prior quarter and to 3.61% in the fourth quarter of 2011. The total fourth quarter net benefit from loan purchase accounting accretion was $3.2 million compared to $1.1 million in the prior quarter. This increase contributed 0.18% to the fourth quarter net interest margin and was primarily due to cash recoveries on a small number of acquired impaired loans. The quarterly net interest margin has varied throughout the year based on the impact of loan prepayments and recoveries on deferred balances and purchase accounting entries. The cost of deposits decreased to 0.59% in the fourth quarter compared to 0.66% in the prior quarter. This included the benefit of demand
deposit growth, together with the Beacon deposits. Berkshire continues to maintain its asset sensitive interest rate risk profile in order to enhance its long-term earnings.
Fourth quarter fee income totaled $15.8 million, increasing by $1.9 million over the prior quarter. This was primarily due to the benefit of Beacon operations, which produced $1.2 million in fee income in the comparable period of the prior quarter. Berkshire’s fee income in the second half of 2012 has benefited from higher mortgage origination revenues related to increased refinancing demand in the current low rate environment. Net mortgage origination revenue totaled $5.9 million in the fourth quarter, compared to $4.3 million in the prior quarter. Fourth quarter insurance revenues increased compared to the prior year primarily due to a managed change in seasonal contingency income. Near-record quarterly wealth management revenue was achieved in the fourth quarter due to organic growth and improved market conditions.
The fourth quarter provision for loans losses increased to $2.8 million from $2.5 million in the prior quarter. Net loan charge-offs totaled $2.7 million and $2.3 million in these periods, respectively. There were no significant changes in the Bank’s favorable charge-off metrics or in the metrics related to the loan loss allowance, which increased by $0.1 million to $33.2 million during the quarter.
Fourth quarter core non-interest expense totaled $36.8 million, increasing by $6.8 million from the prior quarter. This included the impact of the Beacon operations which generated $4.3 million in non-interest expense in the comparable period of the prior quarter. As Berkshire completes the integration of Beacon operations in 2013, it expects to achieve annual net Beacon related cost savings of $5.5 million based on a 30% gross cost saving target. The efficiency ratio measured 59.7% in the most recent quarter, increasing from the prior quarter as the Company absorbed additional variable costs related to expansion and integration in anticipation of further efficiency gains in 2013. Fourth quarter non-recurring and merger related expense totaled $7.5 million and was primarily a result of Beacon merger related expense. The core effective income tax rate was 29% in the fourth quarter and 30% for the year 2012. The GAAP effective income tax rate on continuing operations was 25% and 28% for the same periods, respectively, reflecting the higher proportionate benefit of tax preference items on GAAP earnings net of non-core merger charges.
NOTE ON ACCOUNTING CORRECTION
Based on a review of its lease agreements in the most recent quarter, the Company determined that its net income had been overstated by an immaterial amount in prior periods. The expense recorded for leases with contractual cost escalators has been corrected to reflect a level cost over the contractual lease period, rather than based on the actual current period cost which was previously recorded. As a result, non-interest expense has been increased, and income tax expense has been decreased based on the tax rate effective for this correction. This correction was posted to 2012 income in the most recent quarter and to 2011 annual income; it was immaterial to prior quarterly results.
Related adjustments have been made to the balance sheets presented for retained earnings, other liabilities, and the tax asset.
CONFERENCE CALL
Berkshire will conduct a conference call/webcast at 10:00 a.m. eastern time on Tuesday, January 29, 2013 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: |
| 8255026 |
Webcast: |
| berkshirebank.com (investor relations link) |
A telephone replay of the call will be available through Tuesday, February 5, 2013 by calling 877-344-7529 and entering conference number: 10023105. The webcast and a podcast 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 approximately $5.3 billion in assets and 75 full service branch offices in Massachusetts, New York, Connecticut, and Vermont providing personal and business banking, insurance, and wealth management services. Berkshire Bank provides 100% deposit insurance protection for all deposit accounts, regardless of amount, based on a combination of FDIC insurance and the Depositors Insurance Fund (DIF).
FORWARD LOOKING STATEMENTS
This document may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. There are several factors that could cause actual results to differ significantly from expectations described in the forward-looking statements. For a discussion of such factors, please see Berkshire’s most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission and available on the SEC’s website at www.sec.gov. Berkshire does not undertake any obligation to update forward-looking statements made in this document.
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 merger costs, restructuring costs, and systems conversion costs. 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. Non-GAAP expense adjustments are primarily related to charges related to merger and acquisition activity. These charges consist primarily of severance/benefit related expenses, contract termination costs, and professional fees. There are additionally non-GAAP adjustments related to non-recurring securities gains, discontinued operations, the disposition of excess properties, and core systems conversion costs. Tax adjustments are based on an analysis of tax accruals for core income and for GAAP income, with the net difference included with non-core items and reflecting the timing impacts of tax expense estimates.
# # #
CONTACTS
Investor Relations Contact
David Gonci; Investor Relations Officer; 413-281-1973
Media Contact
Lori Gazzillo; AVP, Community Relations; 413-822-1695
BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-1)
|
| December 31, |
| September 30, |
| December 31, |
| |||
(In thousands) |
| 2012 |
| 2012 |
| 2011 |
| |||
Assets |
|
|
|
|
|
|
| |||
Cash and due from banks |
| $ | 63,382 |
| $ | 48,214 |
| $ | 46,713 |
|
Short-term investments |
| 34,862 |
| 33,834 |
| 28,646 |
| |||
Total cash and short-term investments |
| 98,244 |
| 82,048 |
| 75,359 |
| |||
|
|
|
|
|
|
|
| |||
Trading security |
| 16,893 |
| 17,237 |
| 17,395 |
| |||
Securities available for sale, at fair value |
| 466,169 |
| 467,444 |
| 419,756 |
| |||
Securities held to maturity, at amortized cost |
| 51,024 |
| 51,156 |
| 58,912 |
| |||
Federal Home Loan Bank stock and other restricted securities |
| 39,785 |
| 37,135 |
| 37,118 |
| |||
Total securities |
| 573,871 |
| 572,972 |
| 533,181 |
| |||
|
|
|
|
|
|
|
| |||
Loans held for sale |
| 85,368 |
| 114,698 |
| 1,455 |
| |||
|
|
|
|
|
|
|
| |||
Residential mortgages |
| 1,324,251 |
| 1,226,022 |
| 1,020,435 |
| |||
Commercial mortgages |
| 1,413,544 |
| 1,255,172 |
| 1,156,241 |
| |||
Commercial business loans |
| 600,126 |
| 568,781 |
| 410,292 |
| |||
Consumer loans |
| 650,733 |
| 368,417 |
| 369,602 |
| |||
Total loans |
| 3,988,654 |
| 3,418,392 |
| 2,956,570 |
| |||
Less: Allowance for loan losses |
| (33,208 | ) | (33,090 | ) | (32,444 | ) | |||
Net loans |
| 3,955,446 |
| 3,385,302 |
| 2,924,126 |
| |||
|
|
|
|
|
|
|
| |||
Premises and equipment, net |
| 86,461 |
| 70,707 |
| 60,139 |
| |||
Other real estate owned |
| 1,929 |
| 1,399 |
| 1,900 |
| |||
Goodwill |
| 255,199 |
| 220,688 |
| 202,391 |
| |||
Other intangible assets |
| 19,059 |
| 17,991 |
| 20,973 |
| |||
Cash surrender value of bank-owned life insurance |
| 88,198 |
| 76,904 |
| 75,009 |
| |||
Other assets |
| 131,313 |
| 92,578 |
| 92,362 |
| |||
Assets from discontinued operations |
| — |
| — |
| 5,362 |
| |||
Total assets |
| $ | 5,295,088 |
| $ | 4,635,287 |
| $ | 3,992,257 |
|
|
|
|
|
|
|
|
| |||
Liabilities and stockholders’ equity |
|
|
|
|
|
|
| |||
Demand deposits |
| $ | 673,921 |
| $ | 560,452 |
| $ | 447,414 |
|
NOW deposits |
| 379,880 |
| 296,219 |
| 272,204 |
| |||
Money market deposits |
| 1,388,514 |
| 1,183,247 |
| 1,055,306 |
| |||
Savings deposits |
| 487,505 |
| 381,604 |
| 350,517 |
| |||
Total non-maturity deposits |
| 2,929,820 |
| 2,421,522 |
| 2,125,441 |
| |||
Time deposits |
| 1,170,589 |
| 1,028,286 |
| 975,734 |
| |||
Total deposits |
| 4,100,409 |
| 3,449,808 |
| 3,101,175 |
| |||
|
|
|
|
|
|
|
| |||
Senior borrowings |
| 358,471 |
| 447,246 |
| 221,938 |
| |||
Subordinated notes |
| 89,617 |
| 89,602 |
| 15,464 |
| |||
Total borrowings |
| 448,088 |
| 536,848 |
| 237,402 |
| |||
|
|
|
|
|
|
|
| |||
Other liabilities |
| 81,047 |
| 59,267 |
| 46,368 |
| |||
Liabilities from discontinued operations |
| — |
| — |
| 55,504 |
| |||
Total liabilities |
| 4,629,544 |
| 4,045,923 |
| 3,440,449 |
| |||
|
|
|
|
|
|
|
| |||
Total common stockholders’ equity |
| 665,544 |
| 589,364 |
| 551,808 |
| |||
Total stockholders’ equity |
| 665,544 |
| 589,364 |
| 551,808 |
| |||
Total liabilities and stockholders’ equity |
| $ | 5,295,088 |
| $ | 4,635,287 |
| $ | 3,992,257 |
|
(1) | At year end 2011, four former Legacy New York branches were held for sale as discontinued operations and sold as of January 20, 2012. |
(2) | The Company acquired The Connecticut Bank and Trust Company (“CBT”) on April 20, 2012 with total assets of $0.3 billion. |
(3) | The Company purchased certain assets and assumed certain limited liabilities of Greenpark Mortgage Corporation (“Greenpark”) on April 30, 2012 with total assets of $0.1 billion. |
(4) | The Company acquired Beacon Federal Bancorp (“Beacon”) on October 19, 2012 with total assets of $0.8 billion. |
BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-2)
LOAN ANALYSIS
|
| Dec. 31, |
| Acquired |
| Sept. 30, |
| Acquired |
| Dec. 31, |
| Organic annualized growth % |
| |||||||
(Dollars in millions) |
| 2012 |
| Beacon |
| 2012 |
| CBT |
| 2011 |
| Quarter end |
| Year to date |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total residential mortgages |
| $ | 1,324 |
| $ | 169 |
| $ | 1,226 |
| $ | 10 |
| $ | 1,020 |
| (23 | )% | 12 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Commercial mortgages: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Construction |
| 168 |
| 9 |
| 156 |
| 12 |
| 124 |
| 7 |
| 18 |
| |||||
Single and multi-family |
| 124 |
| 50 |
| 91 |
| 18 |
| 106 |
| (76 | ) | (47 | ) | |||||
Commercial real estate |
| 1,122 |
| 114 |
| 1,008 |
| 99 |
| 926 |
| (0 | ) | (2 | ) | |||||
Total commercial mortgages |
| 1,414 |
| 173 |
| 1,255 |
| 129 |
| 1,156 |
| (5 | ) | (4 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total commercial business loans |
| 600 |
| 33 |
| 569 |
| 55 |
| 411 |
| (1 | ) | 25 |
| |||||
Total commercial loans |
| 2,014 |
| 206 |
| 1,824 |
| 184 |
| 1,567 |
| (4 | ) | 4 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Consumer loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Home equity |
| 325 |
| 33 |
| 302 |
| 8 |
| 298 |
| (13 | ) | (5 | ) | |||||
Other |
| 326 |
| 258 |
| 66 |
| 8 |
| 72 |
| 14 |
| (16 | ) | |||||
Total consumer loans |
| 651 |
| 291 |
| 368 |
| 16 |
| 370 |
| (9 | ) | (7 | ) | |||||
Total loans |
| $ | 3,989 |
| $ | 666 |
| $ | 3,418 |
| $ | 210 |
| $ | 2,957 |
| (11 | )% | 5 | % |
DEPOSIT ANALYSIS
|
| Dec. 31, |
| Acquired |
| Sept. 30, |
| Acquired |
| Dec. 31, |
| Organic annualized growth % |
| |||||||
(Dollars in millions) |
| 2012 |
| Beacon |
| 2012 |
| CBT |
| 2011 |
| Quarter end |
| Year to date |
| |||||
Demand |
| $ | 674 |
| $ | 56 |
| $ | 561 |
| $ | 51 |
| $ | 447 |
| 41 | % | 27 | % |
NOW |
| 380 |
| 65 |
| 296 |
| 26 |
| 272 |
| 26 |
| 6 |
| |||||
Money market |
| 1,388 |
| 201 |
| 1,182 |
| 60 |
| 1,055 |
| 2 |
| 7 |
| |||||
Savings |
| 488 |
| 107 |
| 382 |
| 2 |
| 351 |
| (1 | ) | 8 |
| |||||
Total non-maturity deposits |
| 2,930 |
| 429 |
| 2,421 |
| 139 |
| 2,125 |
| 13 |
| 11 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total time deposits |
| 1,170 |
| 195 |
| 1,028 |
| 72 |
| 976 |
| (20 | ) | (7 | ) | |||||
Total deposits |
| $ | 4,100 |
| $ | 624 |
| $ | 3,449 |
| $ | 211 |
| $ | 3,101 |
| 3 | % | 5 | % |
(1) | Organic annualized growth rates are calculated on organic growth only, which excludes the impact of mergers and divestitures. |
(2) | Quarterly data may not sum to annualized data due to rounding. |
BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - (F-3)
|
| Three Months Ended |
| Years Ended |
| ||||||||
|
| December 31, |
| December 31, |
| ||||||||
(In thousands, except per share data) |
| 2012 |
| 2011 |
| 2012 |
| 2011 |
| ||||
Interest and dividend income |
|
|
|
|
|
|
|
|
| ||||
Loans |
| $ | 47,601 |
| $ | 35,466 |
| $ | 160,936 |
| $ | 124,398 |
|
Securities and other |
| 3,887 |
| 3,562 |
| 15,003 |
| 13,862 |
| ||||
Total interest and dividend income |
| 51,488 |
| 39,028 |
| 175,939 |
| 138,260 |
| ||||
Interest expense |
|
|
|
|
|
|
|
|
| ||||
Deposits |
| 5,870 |
| 5,792 |
| 22,482 |
| 23,372 |
| ||||
Borrowings and subordinated debentures |
| 3,653 |
| 2,101 |
| 10,069 |
| 8,368 |
| ||||
Total interest expense |
| 9,523 |
| 7,893 |
| 32,551 |
| 31,740 |
| ||||
Net interest income |
| 41,965 |
| 31,135 |
| 143,388 |
| 106,520 |
| ||||
Non-interest income |
|
|
|
|
|
|
|
|
| ||||
Loan related fees |
| 7,012 |
| 856 |
| 17,555 |
| 3,160 |
| ||||
Deposit related fees |
| 4,355 |
| 3,848 |
| 15,593 |
| 13,641 |
| ||||
Insurance commissions and fees |
| 2,565 |
| 2,145 |
| 10,821 |
| 11,088 |
| ||||
Wealth management fees |
| 1,865 |
| 1,650 |
| 7,296 |
| 5,838 |
| ||||
Total fee income |
| 15,797 |
| 8,499 |
| 51,265 |
| 33,727 |
| ||||
Other |
| 421 |
| 318 |
| 1,306 |
| (37 | ) | ||||
Gain on sale of securities, net |
| 1,435 |
| 8 |
| 1,442 |
| 14 |
| ||||
Non-recurring (loss) gain |
| — |
| — |
| 43 |
| 2,099 |
| ||||
Total non-interest income |
| 17,653 |
| 8,825 |
| 54,056 |
| 35,803 |
| ||||
Total net revenue |
| 59,618 |
| 39,960 |
| 197,444 |
| 142,323 |
| ||||
Provision for loan losses |
| 2,840 |
| 2,263 |
| 9,590 |
| 7,563 |
| ||||
Non-interest expense |
|
|
|
|
|
|
|
|
| ||||
Compensation and benefits |
| 18,862 |
| 13,172 |
| 64,081 |
| 49,545 |
| ||||
Occupancy and equipment |
| 5,985 |
| 4,063 |
| 19,469 |
| 15,317 |
| ||||
Technology and communications |
| 2,949 |
| 2,464 |
| 9,467 |
| 7,457 |
| ||||
Marketing and promotion |
| 483 |
| 419 |
| 2,031 |
| 1,539 |
| ||||
Professional services |
| 1,600 |
| 1,146 |
| 5,785 |
| 4,669 |
| ||||
FDIC premiums and assessments |
| 919 |
| 542 |
| 3,377 |
| 3,205 |
| ||||
Other real estate owned and foreclosures |
| 66 |
| 153 |
| 281 |
| 2,003 |
| ||||
Amortization of intangible assets |
| 1,357 |
| 1,314 |
| 5,339 |
| 4,236 |
| ||||
Non-recurring and merger related expenses |
| 7,497 |
| 3,678 |
| 18,019 |
| 19,928 |
| ||||
Other |
| 4,548 |
| 2,579 |
| 12,957 |
| 8,543 |
| ||||
Total non-interest expense |
| 44,266 |
| 29,530 |
| 140,806 |
| 116,442 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income from continuing operations before income taxes |
| 12,512 |
| 8,167 |
| 47,048 |
| 18,318 |
| ||||
Income tax expense |
| 3,183 |
| 609 |
| 13,223 |
| 1,884 |
| ||||
Net income from continuing operations |
| 9,329 |
| 7,558 |
| 33,825 |
| 16,434 |
| ||||
(Loss) gain from discontinued operations before income taxes (including gain on disposals $4,962 in 2011 and $63 in 2012) |
| — |
| 4,692 |
| (261 | ) | 4,684 |
| ||||
Income tax expense |
| — |
| 3,773 |
| 376 |
| 3,770 |
| ||||
Net (loss) gain from discontinued operations |
| — |
| 919 |
| (637 | ) | 914 |
| ||||
Net income |
| $ | 9,329 |
| $ | 8,477 |
| $ | 33,188 |
| $ | 17,348 |
|
|
|
|
|
|
|
|
|
|
| ||||
Basic earnings per share: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| $ | 0.39 |
| $ | 0.36 |
| $ | 1.52 |
| $ | 0.92 |
|
Discontinued operations |
| — |
| 0.04 |
| (0.03 | ) | 0.05 |
| ||||
Total basic earnings per share |
| $ | 0.39 |
| $ | 0.40 |
| $ | 1.49 |
| $ | 0.97 |
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted earnings per share: |
|
|
|
|
|
|
|
|
| ||||
Continuing operations |
| $ | 0.38 |
| $ | 0.36 |
| $ | 1.52 |
| $ | 0.92 |
|
Discontinued operations |
| — |
| 0.04 |
| (0.03 | ) | 0.05 |
| ||||
Total diluted earnings per share |
| $ | 0.38 |
| $ | 0.40 |
| $ | 1.49 |
| $ | 0.97 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
Basic |
| 24,165 |
| 20,930 |
| 22,201 |
| 17,885 |
| ||||
Diluted |
| 24,396 |
| 21,043 |
| 22,329 |
| 17,952 |
| ||||
(1) | The Company acquired Rome Bancorp on April 1, 2011. The income statement includes operations from that date. |
(2) | The Company acquired Legacy Bancorp on July 21, 2011. The income statement includes operations from that date. |
(3) | The Company acquired CBT on April 20, 2012. The income statement includes operations from that date. |
(4) | The Company purchased certain assets and assumed certain limited liabilities of Greenpark on April 30, 2012. The income statement includes operations from that date. |
(5) | The Company acquired Beacon Federal Bancorp on October 19, 2012. The income statement includes operations from that date. |
BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - (F-4)
|
| Quarters Ended |
| |||||||||||||
|
| Dec. 31, |
| Sept. 30, |
| June 30, |
| Mar. 31, |
| Dec. 31, |
| |||||
(In thousands, except per share data) |
| 2012 |
| 2012 |
| 2012 |
| 2012 |
| 2011 |
| |||||
Interest and dividend income |
|
|
|
|
|
|
|
|
|
|
| |||||
Loans |
| $ | 47,601 |
| $ | 39,497 |
| $ | 38,787 |
| $ | 35,051 |
| $ | 35,466 |
|
Securities and other |
| 3,887 |
| 3,626 |
| 3,869 |
| 3,621 |
| 3,562 |
| |||||
Total interest and dividend income |
| 51,488 |
| 43,123 |
| 42,656 |
| 38,672 |
| 39,028 |
| |||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
| |||||
Deposits |
| 5,870 |
| 5,628 |
| 5,482 |
| 5,502 |
| 5,792 |
| |||||
Borrowings and subordinated debentures |
| 3,653 |
| 2,270 |
| 2,121 |
| 2,025 |
| 2,101 |
| |||||
Total interest expense |
| 9,523 |
| 7,898 |
| 7,603 |
| 7,527 |
| 7,893 |
| |||||
Net interest income |
| 41,965 |
| 35,225 |
| 35,053 |
| 31,145 |
| 31,135 |
| |||||
Non-interest income |
|
|
|
|
|
|
|
|
|
|
| |||||
Loan related fees |
| 7,012 |
| 5,646 |
| 3,524 |
| 1,373 |
| 856 |
| |||||
Deposit related fees |
| 4,355 |
| 3,775 |
| 3,963 |
| 3,500 |
| 3,848 |
| |||||
Insurance commissions and fees |
| 2,565 |
| 2,742 |
| 2,768 |
| 2,746 |
| 2,145 |
| |||||
Wealth management fees |
| 1,865 |
| 1,774 |
| 1,757 |
| 1,900 |
| 1,650 |
| |||||
Total fee income |
| 15,797 |
| 13,937 |
| 12,012 |
| 9,519 |
| 8,499 |
| |||||
Other |
| 421 |
| 375 |
| 269 |
| 241 |
| 318 |
| |||||
Gain on sale of securities, net |
| 1,435 |
| — |
| 7 |
| — |
| 8 |
| |||||
Non-recurring (loss) gain |
| — |
| 1 |
| — |
| 42 |
| — |
| |||||
Total non-interest income |
| 17,653 |
| 14,313 |
| 12,288 |
| 9,802 |
| 8,825 |
| |||||
Total net revenue |
| 59,618 |
| 49,538 |
| 47,341 |
| 40,947 |
| 39,960 |
| |||||
Provision for loan losses |
| 2,840 |
| 2,500 |
| 2,250 |
| 2,000 |
| 2,263 |
| |||||
Non-interest expense |
|
|
|
|
|
|
|
|
|
|
| |||||
Compensation and benefits |
| 18,862 |
| 15,992 |
| 15,638 |
| 13,589 |
| 13,172 |
| |||||
Occupancy and equipment |
| 5,985 |
| 4,599 |
| 4,490 |
| 4,395 |
| 4,063 |
| |||||
Technology and communications |
| 2,949 |
| 2,302 |
| 2,258 |
| 1,958 |
| 2,464 |
| |||||
Marketing and promotion |
| 483 |
| 419 |
| 778 |
| 351 |
| 419 |
| |||||
Professional services |
| 1,600 |
| 1,327 |
| 1,493 |
| 1,365 |
| 1,146 |
| |||||
FDIC premiums and assessments |
| 919 |
| 907 |
| 870 |
| 681 |
| 542 |
| |||||
Other real estate owned and foreclosures |
| 66 |
| 42 |
| (6 | ) | 179 |
| 153 |
| |||||
Amortization of intangible assets |
| 1,357 |
| 1,314 |
| 1,357 |
| 1,311 |
| 1,314 |
| |||||
Non-recurring and merger related expenses |
| 7,497 |
| 2,214 |
| 4,085 |
| 4,223 |
| 3,678 |
| |||||
Other |
| 4,548 |
| 3,046 |
| 3,221 |
| 2,142 |
| 2,579 |
| |||||
Total non-interest expense |
| 44,266 |
| 32,162 |
| 34,184 |
| 30,194 |
| 29,530 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Income from continuing operations before income taxes |
| 12,512 |
| 14,876 |
| 10,907 |
| 8,753 |
| 8,167 |
| |||||
Income tax expense |
| 3,183 |
| 4,847 |
| 2,921 |
| 2,272 |
| 609 |
| |||||
Net income from continuing operations |
| 9,329 |
| 10,029 |
| 7,986 |
| 6,481 |
| 7,558 |
| |||||
(Loss) gain from discontinued operations before income taxes (including gain on disposals $4,962 in 2011 and $63 in 2012) |
| — |
| — |
| — |
| (261 | ) | 4,692 |
| |||||
Income tax expense (benefit) |
| — |
| — |
| — |
| 376 |
| 3,773 |
| |||||
Net (loss) gain from discontinued operations |
| — |
| — |
| — |
| (637 | ) | 919 |
| |||||
Net income |
| $ | 9,329 |
| $ | 10,029 |
| $ | 7,986 |
| $ | 5,844 |
| $ | 8,477 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|
| |||||
Continuing operations |
| $ | 0.39 |
| $ | 0.46 |
| $ | 0.37 |
| $ | 0.31 |
| $ | 0.36 |
|
Discontinued operations |
| — |
| — |
| — |
| (0.03 | ) | 0.04 |
| |||||
Total basic earnings per share |
| $ | 0.39 |
| $ | 0.46 |
| $ | 0.37 |
| $ | 0.28 |
| $ | 0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
| |||||
Continuing operations |
| $ | 0.38 |
| $ | 0.46 |
| $ | 0.37 |
| $ | 0.31 |
| $ | 0.36 |
|
Discontinued operations |
| — |
| — |
| — |
| (0.03 | ) | 0.04 |
| |||||
Total diluted earnings per share |
| $ | 0.38 |
| $ | 0.46 |
| $ | 0.37 |
| $ | 0.28 |
| $ | 0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
| 24,165 |
| 21,921 |
| 21,742 |
| 20,955 |
| 20,930 |
| |||||
Diluted |
| 24,396 |
| 22,031 |
| 21,806 |
| 21,062 |
| 21,043 |
| |||||
(1) | See notes on pages F-1 and F-3 regarding merger, acquisitions and divestiture. |
BERKSHIRE HILLS BANCORP, INC.
ASSET QUALITY ANALYSIS - (F-5)
|
| At or for the Quarters Ended |
| |||||||||||||
|
| Dec. 31, |
| Sept. 30, |
| June 30, |
| Mar. 31, |
| Dec. 31, |
| |||||
(Dollars in thousands) |
| 2012 |
| 2012 |
| 2012 |
| 2012 |
| 2011 |
| |||||
NON-PERFORMING ASSETS |
|
|
|
|
|
|
|
|
|
|
| |||||
Non-accruing loans: |
|
|
|
|
|
|
|
|
|
|
| |||||
Residential mortgages |
| $ | 7,466 |
| $ | 8,440 |
| $ | 8,525 |
| $ | 8,281 |
| $ | 7,010 |
|
Commercial mortgages |
| 12,617 |
| 13,552 |
| 15,336 |
| 12,151 |
| 14,280 |
| |||||
Commercial business loans |
| 3,681 |
| 2,024 |
| 1,047 |
| 1,029 |
| 990 |
| |||||
Consumer loans |
| 1,748 |
| 1,823 |
| 1,209 |
| 1,411 |
| 1,954 |
| |||||
Total non-accruing loans |
| 25,512 |
| 25,839 |
| 26,117 |
| 22,872 |
| 24,234 |
| |||||
Other real estate owned |
| 1,929 |
| 1,399 |
| 827 |
| 439 |
| 1,900 |
| |||||
Total non-performing assets |
| $ | 27,441 |
| $ | 27,238 |
| $ | 26,944 |
| $ | 23,311 |
| $ | 26,134 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total non-accruing loans/total loans |
| 0.64 | % | 0.76 | % | 0.78 | % | 0.75 | % | 0.82 | % | |||||
Total non-performing assets/total assets |
| 0.52 | % | 0.59 | % | 0.60 | % | 0.58 | % | 0.65 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
PROVISION AND ALLOWANCE FOR LOAN LOSSES |
|
|
|
|
|
|
|
|
|
|
| |||||
Balance at beginning of period |
| $ | 33,090 |
| $ | 32,868 |
| $ | 32,657 |
| $ | 32,444 |
| $ | 32,181 |
|
Charged-off loans |
| (3,073 | ) | (2,353 | ) | (2,102 | ) | (1,923 | ) | (2,313 | ) | |||||
Recoveries on charged-off loans |
| 351 |
| 75 |
| 63 |
| 136 |
| 313 |
| |||||
Net loans charged-off |
| (2,722 | ) | (2,278 | ) | (2,039 | ) | (1,787 | ) | (2,000 | ) | |||||
Provision for loan losses |
| 2,840 |
| 2,500 |
| 2,250 |
| 2,000 |
| 2,263 |
| |||||
Balance at end of period |
| $ | 33,208 |
| $ | 33,090 |
| $ | 32,868 |
| $ | 32,657 |
| $ | 32,444 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Allowance for loan losses/total loans |
| 0.83 | % | 0.97 | % | 0.98 | % | 1.07 | % | 1.10 | % | |||||
Allowance for loan losses/non-accruing loans |
| 130 | % | 128 | % | 126 | % | 143 | % | 134 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
NET LOAN CHARGE-OFFS |
|
|
|
|
|
|
|
|
|
|
| |||||
Residential mortgages |
| $ | (1,034 | ) | $ | (243 | ) | $ | (886 | ) | $ | (381 | ) | $ | (449 | ) |
Commercial mortgages |
| (893 | ) | (1,790 | ) | (378 | ) | (1,116 | ) | (1,198 | ) | |||||
Commercial business loans |
| (496 | ) | (99 | ) | (2 | ) | (3 | ) | (244 | ) | |||||
Home equity |
| (22 | ) | (90 | ) | (707 | ) | (247 | ) | (90 | ) | |||||
Other consumer |
| (277 | ) | (56 | ) | (66 | ) | (40 | ) | (19 | ) | |||||
Total, net |
| $ | (2,722 | ) | $ | (2,278 | ) | $ | (2,039 | ) | $ | (1,787 | ) | $ | (2,000 | ) |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net charge-offs (QTD annualized)/average loans |
| 0.28 | % | 0.27 | % | 0.25 | % | 0.24 | % | 0.27 | % | |||||
Net charge-offs (YTD annualized)/average loans |
| 0.26 | % | 0.25 | % | 0.24 | % | 0.24 | % | 0.27 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS |
|
|
|
|
|
|
|
|
|
|
| |||||
30-89 Days delinquent |
| 0.63 | % | 0.62 | % | 0.41 | % | 0.55 | % | 0.55 | % | |||||
90+ Days delinquent and still accruing |
| 0.48 | % | 0.38 | % | 0.49 | % | 0.40 | % | 0.34 | % | |||||
Total accruing delinquent loans |
| 1.11 | % | 1.00 | % | 0.90 | % | 0.95 | % | 0.89 | % | |||||
Non-accruing loans |
| 0.64 | % | 0.76 | % | 0.78 | % | 0.75 | % | 0.82 | % | |||||
Total delinquent and non-accruing loans |
| 1.75 | % | 1.76 | % | 1.68 | % | 1.70 | % | 1.71 | % | |||||
(1) Amounts related to loans and deposits of discontinued operations have not been reclassified on the above schedule, although they are reclassified out of loans and deposits on the balance sheet and income statement.
BERKSHIRE HILLS BANCORP, INC.
SELECTED FINANCIAL HIGHLIGHTS - (F-6)
|
| At or for the Quarters Ended |
| |||||||||||||
|
| Dec. 31, |
| Sept. 30, |
| June 30, |
| Mar. 31, |
| Dec. 31, |
| |||||
|
| 2012 |
| 2012 |
| 2012 |
| 2012 |
| 2011 |
| |||||
PER SHARE DATA |
|
|
|
|
|
|
|
|
|
|
| |||||
Core earnings, diluted |
| $ | 0.54 |
| $ | 0.52 |
| $ | 0.47 |
| $ | 0.45 |
| $ | 0.44 |
|
Net earnings, diluted |
| 0.38 |
| 0.46 |
| 0.37 |
| 0.28 |
| 0.40 |
| |||||
Tangible book value |
| 15.56 |
| 15.86 |
| 15.49 |
| 15.81 |
| 15.51 |
| |||||
Total book value |
| 26.46 |
| 26.60 |
| 26.31 |
| 26.28 |
| 26.09 |
| |||||
Market price at period end |
| 23.86 |
| 22.88 |
| 22.00 |
| 22.92 |
| 22.19 |
| |||||
Dividends |
| 0.18 |
| 0.17 |
| 0.17 |
| 0.17 |
| 0.17 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
PERFORMANCE RATIOS |
|
|
|
|
|
|
|
|
|
|
| |||||
Core return on assets |
| 1.02 | % | 1.00 | % | 0.94 | % | 0.94 | % | 0.93 | % | |||||
Return on assets |
| 0.72 |
| 0.88 |
| 0.73 |
| 0.59 |
| 0.85 |
| |||||
Core return on equity |
| 8.23 |
| 7.81 |
| 7.13 |
| 6.80 |
| 6.74 |
| |||||
Return on equity |
| 5.79 |
| 6.89 |
| 5.58 |
| 4.23 |
| 6.16 |
| |||||
Net interest margin, fully taxable equivalent |
| 3.67 |
| 3.50 |
| 3.70 |
| 3.62 |
| 3.61 |
| |||||
Fee income/Net interest and fee income |
| 27.35 |
| 28.35 |
| 25.52 |
| 23.44 |
| 21.44 |
| |||||
Efficiency ratio |
| 59.68 |
| 56.54 |
| 59.29 |
| 59.27 |
| 59.44 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
GROWTH |
|
|
|
|
|
|
|
|
|
|
| |||||
Total commercial loans, year-to-date (annualized) |
| 29 | % | 22 | % | 30 | % | 3 | % | 29 | % | |||||
Total loans, year-to-date (annualized) |
| 35 |
| 21 |
| 27 |
| 11 |
| 38 |
| |||||
Total deposits, year-to-date (annualized) |
| 30 |
| 12 |
| 16 |
| 11 |
| 41 |
| |||||
Total net revenues, year-to-date, compared to prior year |
| 39 |
| 34 |
| 45 |
| 43 |
| 33 |
| |||||
Earnings per share, year-to-date, compared to prior year |
| 62 |
| 106 |
| 110 |
| 40 |
| (2 | ) | |||||
Core earnings per share, year-to-date, compared to prior year |
| 29 |
| 30 |
| 39 |
| 50 |
| 53 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
FINANCIAL DATA (In millions) |
|
|
|
|
|
|
|
|
|
|
| |||||
Total assets |
| $ | 5,295 |
| $ | 4,634 |
| $ | 4,508 |
| $ | 4,029 |
| $ | 3,992 |
|
Total loans |
| 3,989 |
| 3,418 |
| 3,366 |
| 3,039 |
| 2,957 |
| |||||
Allowance for loan losses |
| 33 |
| 33 |
| 33 |
| 33 |
| 32 |
| |||||
Total intangible assets |
| 274 |
| 239 |
| 240 |
| 222 |
| 223 |
| |||||
Total deposits |
| 4,100 |
| 3,450 |
| 3,410 |
| 3,184 |
| 3,101 |
| |||||
Total stockholders’ equity |
| 666 |
| 591 |
| 583 |
| 557 |
| 552 |
| |||||
Total core income |
| 13.2 |
| 11.4 |
| 10.2 |
| 9.4 |
| 9.3 |
| |||||
Total net income |
| 9.3 |
| 10.0 |
| 8.0 |
| 5.8 |
| 8.5 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
ASSET QUALITY RATIOS |
|
|
|
|
|
|
|
|
|
|
| |||||
Net charge-offs (current quarter annualized)/average loans |
| 0.28 | % | 0.27 | % | 0.25 | % | 0.24 | % | 0.27 | % | |||||
Non-performing assets/total assets |
| 0.52 |
| 0.59 |
| 0.60 |
| 0.58 |
| 0.65 |
| |||||
Allowance for loan losses/total loans |
| 0.83 |
| 0.97 |
| 0.98 |
| 1.07 |
| 1.10 |
| |||||
Allowance for loan losses/non-accruing loans |
| 130 |
| 128 |
| 126 |
| 143 |
| 134 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
CAPITAL RATIOS |
|
|
|
|
|
|
|
|
|
|
| |||||
Stockholders’ equity to total assets |
| 12.57 | % | 12.75 | % | 12.94 | % | 13.82 | % | 13.82 | % | |||||
Tangible stockholders’ equity to tangible assets |
| 7.79 |
| 8.01 |
| 8.04 |
| 8.80 |
| 8.70 |
| |||||
(1) Reconciliation of Non-GAAP financial measures, including all references to core and tangible amounts, appear on pages F-9 and F-10. 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) Amounts related to loans and deposits of discontinued operations have not been reclassified on the above schedule, although they are reclassified out of loans and deposits on the balance sheet and income statement.
BERKSHIRE HILLS BANCORP, INC.
AVERAGE BALANCES - (F-7)
|
| Quarters Ended |
| |||||||||||||
|
| Dec. 31, |
| Sept. 30, |
| June 30, |
| Mar. 31, |
| Dec. 31, |
| |||||
(In thousands) |
| 2012 |
| 2012 |
| 2012 |
| 2012 |
| 2011 |
| |||||
Assets |
|
|
|
|
|
|
|
|
|
|
| |||||
Loans: |
|
|
|
|
|
|
|
|
|
|
| |||||
Residential mortgages |
| $ | 1,340,375 |
| $ | 1,207,635 |
| $ | 1,167,007 |
| $ | 1,057,903 |
| $ | 1,039,025 |
|
Commercial mortgages |
| 1,404,515 |
| 1,276,909 |
| 1,250,741 |
| 1,153,690 |
| 1,166,989 |
| |||||
Commercial business loans |
| 580,436 |
| 545,988 |
| 490,983 |
| 412,237 |
| 392,542 |
| |||||
Consumer loans |
| 598,802 |
| 368,795 |
| 375,090 |
| 366,035 |
| 376,385 |
| |||||
Total loans |
| 3,924,128 |
| 3,399,327 |
| 3,283,821 |
| 2,989,865 |
| 2,974,941 |
| |||||
Securities |
| 572,268 |
| 559,116 |
| 549,479 |
| 525,109 |
| 515,128 |
| |||||
Short-term investments and loans held for sale |
| 126,378 |
| 115,835 |
| 47,302 |
| 15,107 |
| 20,748 |
| |||||
Total earning assets |
| 4,622,774 |
| 4,074,278 |
| 3,880,602 |
| 3,530,081 |
| 3,510,817 |
| |||||
Goodwill and other intangible assets |
| 267,588 |
| 239,186 |
| 235,961 |
| 223,930 |
| 230,864 |
| |||||
Other assets |
| 320,104 |
| 258,246 |
| 235,712 |
| 235,909 |
| 247,376 |
| |||||
Total assets |
| $ | 5,210,466 |
| $ | 4,571,710 |
| $ | 4,352,275 |
| $ | 3,989,920 |
| $ | 3,989,057 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
| |||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
| |||||
NOW |
| $ | 355,366 |
| $ | 291,158 |
| $ | 297,431 |
| $ | 272,239 |
| $ | 274,041 |
|
Money market |
| 1,362,868 |
| 1,170,840 |
| 1,136,161 |
| 1,084,948 |
| 953,162 |
| |||||
Savings |
| 463,692 |
| 376,064 |
| 370,182 |
| 359,859 |
| 446,672 |
| |||||
Time |
| 1,161,175 |
| 1,039,301 |
| 1,038,662 |
| 983,696 |
| 1,028,817 |
| |||||
Total interest-bearing deposits |
| 3,343,101 |
| 2,877,363 |
| 2,842,436 |
| 2,700,742 |
| 2,702,692 |
| |||||
Borrowings and debentures |
| 519,831 |
| 531,076 |
| 398,650 |
| 257,389 |
| 248,611 |
| |||||
Total interest-bearing liabilities |
| 3,862,932 |
| 3,408,439 |
| 3,241,086 |
| 2,958,131 |
| 2,951,303 |
| |||||
Non-interest-bearing demand deposits |
| 635,044 |
| 537,466 |
| 498,972 |
| 439,015 |
| 448,952 |
| |||||
Other liabilities |
| 68,447 |
| 43,047 |
| 39,665 |
| 40,039 |
| 38,110 |
| |||||
Total liabilities |
| 4,566,423 |
| 3,988,952 |
| 3,779,723 |
| 3,437,185 |
| 3,438,365 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total stockholders’ equity |
| 644,043 |
| 582,758 |
| 572,552 |
| 552,735 |
| 550,692 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total liabilities and stockholders’ equity |
| $ | 5,210,466 |
| $ | 4,571,710 |
| $ | 4,352,275 |
| $ | 3,989,920 |
| $ | 3,989,057 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Supplementary data |
|
|
|
|
|
|
|
|
|
|
| |||||
Total non-maturity deposits |
| $ | 2,816,970 |
| $ | 2,375,528 |
| $ | 2,302,746 |
| $ | 2,156,061 |
| $ | 2,122,827 |
|
Total deposits |
| 3,978,145 |
| 3,414,829 |
| 3,341,408 |
| 3,139,757 |
| 3,151,644 |
| |||||
Fully taxable equivalent income adj. |
| 667 |
| 623 |
| 638 |
| 669 |
| 674 |
| |||||
(1) Average balances for securities available-for-sale are based on amortized cost. Total loans include non-accruing loans.
(2) Amounts related to loans and deposits of discontinued operations have not been reclassified on the above schedule, although they are reclassified out of loans and deposits on the balance sheet and income statement.
BERKSHIRE HILLS BANCORP, INC.
AVERAGE YIELDS (Fully Taxable Equivalent - Annualized) - (F-8)
|
| Quarters Ended |
| ||||||||
|
| Dec. 31, |
| Sept. 30, |
| June 30, |
| Mar. 31, |
| Dec. 31, |
|
|
| 2012 |
| 2012 |
| 2012 |
| 2012 |
| 2011 |
|
Earning assets |
|
|
|
|
|
|
|
|
|
|
|
Loans: |
|
|
|
|
|
|
|
|
|
|
|
Residential mortgages |
| 4.00 | % | 4.28 | % | 4.58 | % | 4.63 | % | 4.68 | % |
Commercial loans |
| 5.29 |
| 4.85 |
| 5.00 |
| 4.89 |
| 4.98 |
|
Consumer loans |
| 4.56 |
| 3.97 |
| 3.93 |
| 3.98 |
| 4.03 |
|
Total loans |
| 4.73 |
| 4.62 |
| 4.75 |
| 4.72 |
| 4.74 |
|
Securities |
| 3.17 |
| 3.02 |
| 3.30 |
| 3.29 |
| 3.26 |
|
Short-term investments and loans held for sale |
| 2.86 |
| 2.15 |
| 0.63 |
| 0.07 |
| 0.14 |
|
Total earning assets |
| 4.49 |
| 4.27 |
| 4.49 |
| 4.48 |
| 4.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Funding liabilities |
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
NOW |
| 0.35 |
| 0.28 |
| 0.30 |
| 0.26 |
| 0.39 |
|
Money Market |
| 0.45 |
| 0.47 |
| 0.49 |
| 0.55 |
| 0.62 |
|
Savings |
| 0.18 |
| 0.18 |
| 0.18 |
| 0.20 |
| 0.19 |
|
Time |
| 1.31 |
| 1.48 |
| 1.44 |
| 1.51 |
| 1.52 |
|
Total interest-bearing deposits |
| 0.70 |
| 0.78 |
| 0.78 |
| 0.82 |
| 0.87 |
|
Borrowings and debentures |
| 2.80 |
| 1.70 |
| 2.14 |
| 3.16 |
| 3.35 |
|
Total interest-bearing liabilities |
| 0.98 |
| 0.92 |
| 0.95 |
| 1.02 |
| 1.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest spread |
| 3.51 |
| 3.35 |
| 3.54 |
| 3.46 |
| 3.43 |
|
Net interest margin |
| 3.67 |
| 3.50 |
| 3.70 |
| 3.62 |
| 3.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of funds |
| 0.84 |
| 0.80 |
| 0.82 |
| 0.89 |
| 0.92 |
|
Cost of deposits |
| 0.59 |
| 0.66 |
| 0.66 |
| 0.71 |
| 0.73 |
|
(1) Cost of funds includes all deposits and borrowings.
(2) Amounts related to loans and deposits of discontinued operations have not been reclassified on the above schedule, although they are reclassified out of loans and deposits on the balance sheet and income statement.
BERKSHIRE HILLS BANCORP, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - (F-9)
|
|
|
| At or for the Quarters Ended |
| |||||||||||||
|
|
|
| Dec. 31, |
| Sept. 30, |
| June 30, |
| Mar. 31, |
| Dec. 31, |
| |||||
(Dollars in thousands) |
|
|
| 2012 |
| 2012 |
| 2012 |
| 2012 |
| 2011 |
| |||||
Net income |
|
|
| $ | 9,329 |
| $ | 10,029 |
| $ | 7,986 |
| $ | 5,844 |
| $ | 8,477 |
|
Adj: Gain on sale of securities, net |
|
|
| (1,435 | ) | — |
| (7 | ) | — |
| (8 | ) | |||||
Adj: Other non-recurring gain |
|
|
| — |
| (1 | ) | — |
| (42 | ) | — |
| |||||
Plus: Non-recurring and merger related expense |
|
|
| 7,497 |
| 2,214 |
| 4,085 |
| 4,223 |
| 3,678 |
| |||||
Adj: Income taxes |
|
|
| (2,147 | ) | (859 | ) | (1,853 | ) | (1,255 | ) | (1,947 | ) | |||||
Adj: Net loss (income) from discontinued operations |
|
|
| — |
| — |
| — |
| 637 |
| (919 | ) | |||||
Total core income |
| (A) |
| $ | 13,244 |
| $ | 11,383 |
| $ | 10,211 |
| $ | 9,407 |
| $ | 9,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total non-interest income |
|
|
| $ | 17,653 |
| $ | 14,313 |
| $ | 12,288 |
| $ | 9,878 |
| $ | 8,825 |
|
Adj: Gain on sale of securities, net |
|
|
| (1,435 | ) | — |
| (7 | ) | — |
| (8 | ) | |||||
Adj: Other non-recurring gain |
|
|
| — |
| (1 | ) | — |
| (42 | ) | — |
| |||||
Total core non-interest income |
|
|
| 16,218 |
| 14,312 |
| 12,281 |
| 9,836 |
| 8,817 |
| |||||
Net interest income |
|
|
| 41,965 |
| 35,225 |
| 35,053 |
| 31,138 |
| 31,135 |
| |||||
Total core revenue |
|
|
| $ | 58,183 |
| $ | 49,537 |
| $ | 47,334 |
| $ | 40,974 |
| $ | 39,952 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total non-interest expense |
|
|
| $ | 44,266 |
| $ | 32,162 |
| $ | 34,184 |
| $ | 30,524 |
| $ | 29,533 |
|
Less: Non-recurring and merger related expense |
|
|
| (7,497 | ) | (2,214 | ) | (4,085 | ) | (4,223 | ) | (3,678 | ) | |||||
Core non-interest expense |
|
|
| 36,769 |
| 29,948 |
| 30,099 |
| 26,301 |
| 25,855 |
| |||||
Less: Amortization of intangible assets |
|
|
| (1,357 | ) | (1,314 | ) | (1,357 | ) | (1,318 | ) | (1,314 | ) | |||||
Total core tangible non-interest expense |
|
|
| $ | 35,412 |
| $ | 28,634 |
| $ | 28,742 |
| $ | 24,983 |
| $ | 24,541 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
(Dollars in millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total average assets |
| (B) |
| $ | 5,210 |
| $ | 4,572 |
| $ | 4,352 |
| $ | 3,990 |
| $ | 3,989 |
|
Total average stockholders’ equity |
| (C) |
| 644 |
| 583 |
| 573 |
| 553 |
| 551 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total stockholders’ equity, period-end |
|
|
| 666 |
| 591 |
| 583 |
| 557 |
| 552 |
| |||||
Less: Intangible assets, period-end |
|
|
| (274 | ) | (239 | ) | (240 | ) | (222 | ) | (224 | ) | |||||
Total tangible stockholders’ equity, period-end |
| (D) |
| $ | 392 |
| $ | 352 |
| $ | 343 |
| $ | 335 |
| $ | 328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total shares outstanding, period-end (thousands) |
| (E) |
| 25,149 |
| 22,213 |
| 22,169 |
| 21,191 |
| 21,147 |
| |||||
Average diluted shares outstanding (thousands) |
| (F) |
| 24,396 |
| 22,031 |
| 21,806 |
| 21,062 |
| 21,043 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Core earnings per share, diluted |
| (A/F) |
| $ | 0.54 |
| $ | 0.52 |
| $ | 0.47 |
| $ | 0.45 |
| $ | 0.44 |
|
Tangible book value per share, period-end |
| (D/E) |
| $ | 15.56 |
| $ | 15.86 |
| $ | 15.49 |
| $ | 15.81 |
| $ | 15.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Core return (annualized) on assets |
| (A/B) |
| 1.02 | % | 1.00 | % | 0.94 | % | 0.94 | % | 0.93 | % | |||||
Core return (annualized) on equity |
| (A/C) |
| 8.23 |
| 7.81 |
| 7.13 |
| 6.80 |
| 6.74 |
| |||||
Efficiency ratio (1) |
|
|
| 59.68 |
| 56.54 |
| 59.29 |
| 59.27 |
| 59.44 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Supplementary data |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Tax credit benefit of tax shelter investments |
|
|
| $ | 483 |
| $ | 483 |
| $ | 505 |
| $ | 505 |
| $ | 664 |
|
(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, which is used widely in the banking industry, 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 rounding.
(4) Amounts related to loans and deposits of discontinued operations have not been reclassified on the above schedule, although they are reclassified out of loans and deposits on the balance sheet and income statement.
BERKSHIRE HILLS BANCORP, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - (F-10)
|
|
|
| At or for the Years Ended |
| ||||
|
|
|
| December 31, |
| December 31, |
| ||
(Dollars in thousands) |
|
|
| 2012 |
| 2011 |
| ||
Net income |
|
|
| $ | 33,188 |
| $ | 17,348 |
|
Adj: Gain on sale of securities, net |
|
|
| (1,442 | ) | (14 | ) | ||
Adj: Other non-recurring gain |
|
|
| (43 | ) | (2,087 | ) | ||
Plus: Non-recurring and merger related expense |
|
|
| 18,019 |
| 19,928 |
| ||
Adj: Income taxes |
|
|
| (6,114 | ) | (6,547 | ) | ||
Adj: Net loss (income) from discontinued operations |
|
|
| 637 |
| (914 | ) | ||
Total core income |
| (A) |
| $ | 44,245 |
| $ | 27,714 |
|
|
|
|
|
|
|
|
| ||
Total non-interest income |
|
|
| $ | 54,132 |
| $ | 35,803 |
|
Adj: Gain on sale of securities, net |
|
|
| (1,442 | ) | (14 | ) | ||
Adj: Other non-recurring gain |
|
|
| (43 | ) | (2,087 | ) | ||
Total core non-interest income |
|
|
| 52,647 |
| 33,702 |
| ||
Net interest income |
|
|
| 143,381 |
| 106,520 |
| ||
Total core revenue |
|
|
| $ | 196,028 |
| $ | 140,222 |
|
|
|
|
|
|
|
|
| ||
Total non-interest expense |
|
|
| $ | 141,136 |
| $ | 116,055 |
|
Less: Non-recurring and merger related expense |
|
|
| (18,019 | ) | (19,928 | ) | ||
Core non-interest expense |
|
|
| 123,117 |
| 96,127 |
| ||
Less: Amortization of intangible assets |
|
|
| (5,346 | ) | (4,236 | ) | ||
Total core tangible non-interest expense |
|
|
| $ | 117,771 |
| $ | 91,891 |
|
|
|
|
|
|
|
|
| ||
(Dollars in millions, except per share data) |
|
|
|
|
|
|
| ||
Total average assets |
| (B) |
| $ | 4,531 |
| $ | 3,485 |
|
Total average stockholders’ equity |
| (C) |
| $ | 588 |
| $ | 481 |
|
|
|
|
|
|
|
|
| ||
Total stockholders’ equity, period-end |
|
|
| $ | 666 |
| $ | 552 |
|
Less: Intangible assets, period-end |
|
|
| (274 | ) | (224 | ) | ||
Total tangible stockholders’ equity, period-end |
| (D) |
| $ | 392 |
| $ | 328 |
|
|
|
|
|
|
|
|
| ||
Total common shares outstanding, period-end (thousands) |
| (E) |
| 25,149 |
| 21,147 |
| ||
Average diluted common shares outstanding (thousands) |
| (F) |
| 22,329 |
| 17,952 |
| ||
|
|
|
|
|
|
|
| ||
Core earnings per common share, diluted |
| (A/F) |
| $ | 1.98 |
| $ | 1.54 |
|
Tangible book value per common share, period-end |
| (D/E) |
| $ | 15.56 |
| $ | 15.51 |
|
|
|
|
|
|
|
|
| ||
Core return (annualized) on assets |
| (A/B) |
| 0.98 | % | 0.80 | % | ||
Core return (annualized) on equity |
| (A/C) |
| 7.52 |
| 5.76 |
| ||
Efficiency ratio (1) |
|
|
| 58.71 |
| 63.23 |
| ||
|
|
|
|
|
|
|
| ||
Supplementary data |
|
|
|
|
|
|
| ||
Tax credit benefit of tax shelter investments |
|
|
| $ | 1,976 |
| $ | 1,991 |
|
(1) Efficiency ratio is computed by dividing total core 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 adjusted to include tax credit benefit of tax shelter investments. The Company uses this non-GAAP measure, which is used widely in the banking industry, 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 rounding.
(4) Amounts related to loans and deposits of discontinued operations have not been reclassified on the above schedule, although they are reclassified out of loans and deposits on the balance sheet and income statement.