Berkshire Hills Reports 50% First Quarter Core EPS Growth
Dividend Declared
Pittsfield, MA – April 24, 2012 –Berkshire Hills Bancorp, Inc. (NASDAQ:BHLB) reported $0.45 in first quarter core earnings per share, a 50% increase over first quarter 2011 core earnings of $0.30 per share. This increase resulted from ongoing business expansion together with the benefit of the acquisitions of Rome Bancorp and Legacy Bancorp. GAAP net income included nonrecurring and merger related expenses, together with income from discontinued operations. These non-core items together equated to a first quarter after-tax charge of $0.17 per share in 2012 compared to $0.10 per share in 2011. Including these non-core items, first quarter GAAP net income was $0.28 per share, compared to $0.20 per share in the first quarter of 2011.
FIRST QUARTER FINANCIAL HIGHLIGHTS
| · | 50% increase in core earnings per share, compared to first quarter of 2011 |
| · | 10% annualized revenue growth, compared to linked quarter |
| · | 11% annualized loan growth |
| · | 11% annualized deposit growth |
| · | 3.62% net interest margin |
| · | 0.58% non-performing assets/total assets |
| · | 0.24% annualized net loan charge-offs/average loans |
| · | 0.94% core ROA (0.59% GAAP ROA) |
Berkshire President and CEO, Michael P. Daly, stated, “We maintained strong momentum as we started the year, including a 9% annualized increase in core EPS compared to the prior quarter. We continue to have strong growth in our balance sheet, while maintaining a solid net interest margin. Our fee revenue also grew strongly during the quarter, while our focused expense discipline resulted in operating costs a little better than our expectations. Our core profitability improved and we are generating positive core operating leverage, with revenue growth exceeding expense growth. Our loan performance metrics remain favorable and improving. We are maintaining the momentum we need to achieve our earnings growth targets and to generate revenue growth through further market share gains.”
| BHLB - Berkshire Hills Bancorp | Page 1 | www.berkshirebank.com |
Mr. Daly continued, “We are pleased with the progress of our strategic acquisitions of the operations of Greenpark Mortgage Corporation and CBT – The Connecticut Bank and Trust Company. We look forward to having the well regarded Greenpark team join us in the current quarter, and our partnership with them contributed to our first quarter results. The Connecticut Bank and Trust Company acquisition was completed on schedule on April 20. We are now operating 8 branches in the Greater Hartford area, bringing our total branch count to 68, and introducing our brand and products into this attractive market. We look forward to additional revenue and earnings growth from both of these strategic initiatives, along with the benefits to all of our business lines from this further expansion of our footprint.”
DIVIDEND DECLARED
The Board of Directors voted to declare a cash dividend of $0.17 per share to shareholders of record at the close of business on May 10, 2012, payable on May 24, 2012. This dividend equated to a 3.0% yield based on the $22.67 average closing price of Berkshire’s common stock in the first quarter of 2012.
FINANCIAL CONDITION
Total assets increased at a 4% annualized rate during the first quarter of 2012 including 11% annualized loan growth. The $82 million increase in loans primarily resulted from increased bookings of Massachusetts residential mortgages relating to the partnership with Greenpark Mortgage during the transition period prior to the planned acquisition in the second quarter. Commercial business loans increased at an 18% annualized rate, and the pipeline of pending commercial loans grew including the benefit of Berkshire’s recent expansion in Central/Eastern Massachusetts with the opening of its Westborough commercial lending office. The Bank plans to continue to maintain an asset sensitive interest rate profile based on commercial loan growth and the integration of the CBT balance sheet. All major categories of deposit account balances increased, with growth continuing to come primarily from Berkshire’s expanding New York region, including a new office in Colonie, New York. In January, the Company completed the divestiture of the deposits of four former Legacy New York offices which were reported as discontinued operations at the end of 2011.
Asset performance remained favorable and improving in the most recent quarter, with non-performing assets decreasing to 0.58% of total assets, and the annualized ratio of net loan charge-offs/average loans decreasing to 0.24%. The allowance for loan losses increased slightly to $32.7 million, measuring 1.07% of loans and 143% of non-performing loans at the end of the quarter.
Capital ratios were little changed during the most recent quarter, with tangible equity/assets measuring 8.8% and total equity/assets measuring 13.8% at quarter-end. Tangible book value per share increased to $15.81 from $15.60 during the quarter, while total book value per share increased to $26.28 from $26.17.
| BHLB - Berkshire Hills Bancorp | Page 2 | www.berkshirebank.com |
RESULTS OF OPERATIONS
First quarter results in 2012 included the operations of Rome Bancorp (acquired on April 1, 2011) and Legacy Bancorp (acquired on July 21, 2011), along with the per share impact of shares issued as merger consideration for those acquisitions. Most first quarter categories of income and expense increased from year-to-year due to these acquisitions. This discussion therefore primarily compares the most recent quarter to the fourth quarter of 2011, which also included these acquired operations. The core return on assets increased to 0.94% in the most recent quarter from 0.93% in the prior quarter. The GAAP ROA was 0.59% compared to 0.85% for these periods, respectively, including noncore expense charges.
Total net revenue increased by $1.0 million (10% annualized) in the most recent quarter, compared to the linked quarter. This growth was due to an increase in fee income, including the benefit of increases in mortgage secondary market income, insurance income, and wealth management income. These increases included increased business volume in these areas, along with some seasonal and pricing related factors. Net interest income was stable compared to the prior quarter, and the net interest margin increased slightly to 3.62%. Loan growth was weighted towards the latter part of the quarter and is expected to produce a higher proportionate revenue benefit in the second quarter. The provision for loan losses decreased to $2.0 million in the most recent quarter from $2.3 million in the prior quarter. Net loan charge-offs totaled $1.8 million during the quarter.
Core non-interest expense increased by $0.4 million (7% annualized) in the most recent quarter, compared to the linked quarter. Expense growth included the impact of office expansion in retail and commercial banking. The efficiency ratio remained unchanged at 59%. Net non-recurring and merger related expense totaled $2.9 million after-tax in the most recent quarter. This included merger related expenses for the Legacy and CBT acquisitions, disposition costs of excess premises in Pittsfield following the Legacy integration, and systems conversion costs related to the core systems conversion planned for later in 2012. Additionally, the Company recorded a $0.6 million after-tax non-core charge related to the divestiture of four New York branches in January. This charge included $0.4 million in income tax expense due to the non-deductibility of the goodwill associated with these branches. The effective income tax rate on core income from continuing operations was 27% in the most recent quarter, compared to a 24% effective tax rate for the year 2011, reflecting the expectation of higher core income in 2012.
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS OF CBT – THE CONNECTICUT BANK AND TRUST COMPANY
Included in the financial exhibits to this news release are unaudited selected first quarter financial highlights of CBT. This information does not include all items which may affect the final financial statements of CBT as of March 31, 2012 and it does not include non-core charges related to the merger of CBT into Berkshire. Additional financial information about CBT will be provided in the notes to the financial statements of Berkshire as of June 30, 2012, which will reflect the acquisition of CBT as of April 20, 2012.
| BHLB - Berkshire Hills Bancorp | Page 3 | www.berkshirebank.com |
CONFERENCE CALL
Berkshire will conduct a conference call/webcast at 10:00 A.M. eastern time on Wednesday, April 25, 2012 to discuss the results for the quarter and 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: 866-843-0890
Elite Entry Number: 3494596
| Webcast: | www.berkshirebank.com (investor relations link) |
A telephone replay of the call will be available through May 2, 2012 by calling 877-344- 7529 and entering access code: 10011976. 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(SM). Including the recently acquired operations of CBT, Berkshire has $4.3 billion in assets and 68 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). For more information, visitwww.berkshirebank.com or call 800-773-5601.
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 atwww.sec.gov. Berkshire does not undertake any obligation to update forward-looking statements made in this document.
| BHLB - Berkshire Hills Bancorp | Page 4 | www.berkshirebank.com |
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
| BHLB - Berkshire Hills Bancorp | Page 5 | www.berkshirebank.com |
| BERKSHIRE HILLS BANCORP, INC. |
| CONSOLIDATED BALANCE SHEETS - UNAUDITED - F-1 |
| | | | |
| | | March 31, | | | December 31, | |
| (In thousands) | | 2012 | | | 2011 | |
| Assets | | | | | | | | |
| Cash and due from banks | | $ | 34,117 | | | $ | 46,713 | |
| Short-term investments | | | 11,186 | | | | 28,646 | |
| | | | | | | | | |
| Trading security | | | 16,847 | | | | 17,395 | |
| Securities available for sale, at fair value | | | 423,580 | | | | 419,756 | |
| Securities held to maturity, at amortized cost | | | 59,533 | | | | 58,912 | |
| Federal Home Loan Bank stock and other restricted securities | | | 35,282 | | | | 37,118 | |
| Total securities | | | 535,242 | | | | 533,181 | |
| | | | | | | | | |
| Loans held for sale | | | - | | | | 1,455 | |
| | | | | | | | | |
| Residential mortgages | | | 1,100,663 | | | | 1,020,435 | |
| Commercial mortgages | | | 1,147,455 | | | | 1,156,241 | |
| Commercial business loans | | | 429,627 | | | | 410,292 | |
| Consumer loans | | | 361,255 | | | | 369,602 | |
| Total loans | | | 3,039,000 | | | | 2,956,570 | |
| Less: Allowance for loan losses | | | (32,657 | ) | | | (32,444 | ) |
| Net loans | | | 3,006,343 | | | | 2,924,126 | |
| | | | | | | | | |
| Premises and equipment, net | | | 61,661 | | | | 60,139 | |
| Other real estate owned | | | 439 | | | | 1,900 | |
| Goodwill | | | 202,397 | | | | 202,391 | |
| Other intangible assets | | | 19,662 | | | | 20,973 | |
| Cash surrender value of bank-owned life insurance | | | 75,652 | | | | 75,009 | |
| Other assets | | | 82,628 | | | | 91,309 | |
| Assets from discontinued operations | | | - | | | | 5,362 | |
| Total assets | | $ | 4,029,327 | | | $ | 3,991,204 | |
| | | | | | | | | |
| Liabilities and stockholders' equity | | | | | | | | |
| Demand deposits | | $ | 450,497 | | | $ | 447,414 | |
| NOW deposits | | | 294,411 | | | | 272,204 | |
| Money market deposits | | | 1,089,742 | | | | 1,055,306 | |
| Savings deposits | | | 365,289 | | | | 350,517 | |
| Total non-maturity deposits | | | 2,199,939 | | | | 2,125,441 | |
| Time deposits | | | 984,228 | | | | 975,734 | |
| Total deposits | | | 3,184,167 | | | | 3,101,175 | |
| | | | | | | | | |
| Borrowings | | | 236,240 | | | | 221,938 | |
| Junior subordinated debentures | | | 15,464 | | | | 15,464 | |
| Total borrowings | | | 251,704 | | | | 237,402 | |
| | | | | | | | | |
| Other liabilities | | | 36,622 | | | | 43,758 | |
| Liabilities from discontinued operations | | | - | | | | 55,504 | |
| Total liabilities | | | 3,472,493 | | | | 3,437,839 | |
| | | | | | | | | |
| Total stockholders' equity | | | 556,834 | | | | 553,365 | |
| Total liabilities and stockholders' equity | | $ | 4,029,327 | | | $ | 3,991,204 | |
| (1) | At year end 2011, four branches were held for sale as discontinued operations and sold in the first quarter of 2012 |
| BERKSHIRE HILLS BANCORP, INC. |
| CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - F-2 |
| | | | | | | | | | |
| LOAN ANALYSIS |
| | | | | | | | | | |
| | | | | | | | | Organic annualized
growth % | |
| (Dollars in millions) | | March 31,
2012
Balance | | | December 31,
2011
Balance | | | First
Quarter
2012 | |
| | | | | | | | | | | | | |
| Total residential mortgages | | $ | 1,101 | | | $ | 1,020 | | | | 32 | % |
| | | | | | | | | | | | | |
| Total commercial mortgages | | | 1,147 | | | | 1,156 | | | | (3 | ) |
| Total commercial business loans | | | 430 | | | | 411 | | | | 18 | |
| Total commercial loans | | | 1,577 | | | | 1,567 | | | | 3 | |
| | | | | | | | | | | | | |
| Total consumer loans | | | 361 | | | | 370 | | | | (9 | ) |
| Total loans | | $ | 3,039 | | | $ | 2,957 | | | | 11 | % |
| | | | | | | | | | | | | |
| DEPOSIT ANALYSIS |
| | | | | | | | | | |
| | | | | | | | | Organic annualized
growth % | |
| (Dollars in millions) | | March 31,
2012
Balance | | | December 31,
2011
Balance | | | First
Quarter
2012 | |
| Demand | | $ | 451 | | | $ | 447 | | | | 4 | % |
| NOW | | | 294 | | | | 272 | | | | 32 | |
| Money market | | | 1,090 | | | | 1,055 | | | | 13 | |
| Savings | | | 365 | | | | 351 | | | | 16 | |
| Total non-maturity deposits | | | 2,200 | | | | 2,125 | | | | 14 | |
| | | | | | | | | | | | | |
| Time less than $100,000 | | | 479 | | | | 487 | | | | (7 | ) |
| Time $100,000 or more | | | 505 | | | | 489 | | | | 13 | |
| Total time deposits | | | 984 | | | | 976 | | | | 3 | |
| Total deposits | | $ | 3,184 | | | $ | 3,101 | | | | 11 | % |
| (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 | |
| | | March 31, | |
| (In thousands, except per share data) | | 2012 | | | 2011 | |
| Interest and dividend income | | | | | | | | |
| Loans | | $ | 35,051 | | | $ | 24,606 | |
| Securities and other | | | 3,621 | | | | 3,307 | |
| Total interest and dividend income | | | 38,672 | | | | 27,913 | |
| Interest expense | | | | | | | | |
| Deposits | | | 5,502 | | | | 5,715 | |
| Borrowings and junior subordinated debentures | | | 2,025 | | | | 2,052 | |
| Total interest expense | | | 7,527 | | | | 7,767 | |
| Net interest income | | | 31,145 | | | | 20,146 | |
| Non-interest income | | | | | | | | |
| Loan related fees | | | 1,373 | | | | 591 | |
| Deposit related fees | | | 3,500 | | | | 2,541 | |
| Insurance commissions and fees | | | 2,746 | | | | 3,730 | |
| Wealth management fees | | | 1,900 | | | | 1,192 | |
| Total fee income | | | 9,519 | | | | 8,054 | |
| Other | | | 241 | | | | 80 | |
| Non-recurring gain | | | 42 | | | | - | |
| Total non-interest income | | | 9,802 | | | | 8,134 | |
| Total net revenue | | | 40,947 | | | | 28,280 | |
| Provision for loan losses | | | 2,000 | | | | 1,600 | |
| Non-interest expense | | | | | | | | |
| Compensation and benefits | | | 13,589 | | | | 11,151 | |
| Occupancy and equipment | | | 4,395 | | | | 3,435 | |
| Technology and communications | | | 1,958 | | | | 1,466 | |
| Marketing and professional services | | | 1,716 | | | | 1,213 | |
| Supplies, postage and delivery | | | 562 | | | | 454 | |
| FDIC premiums and assessments | | | 681 | | | | 1,027 | |
| Other real estate owned | | | 179 | | | | 609 | |
| Amortization of intangible assets | | | 1,311 | | | | 716 | |
| Nonrecurring and merger related expenses | | | 4,223 | | | | 1,708 | |
| Other | | | 1,580 | | | | 1,410 | |
| Total non-interest expense | | | 30,194 | | | | 23,189 | |
| | | | | | | | | |
| Income from continuing operations before income taxes | | | 8,753 | | | | 3,491 | |
| Income tax expense | | | 2,272 | | | | 656 | |
| Net income from continuing operations | | | 6,481 | | | | 2,835 | |
| Loss from discontinued operations before income taxes (including gain on disposal of $63) | | | (261 | ) | | | - | |
| Income tax expense | | | 376 | | | | - | |
| Net loss from discontinued operations | | | (637 | ) | | | - | |
| Net income | | $ | 5,844 | | | $ | 2,835 | |
| | | | | | | | | |
| Basic and diluted earnings per share: | | | | | | | | |
| Continuing operations | | $ | 0.31 | | | $ | 0.20 | |
| Discontinued operations | | | (0.03 | ) | | | - | |
| Total basic and diluted earnings per share | | $ | 0.28 | | | $ | 0.20 | |
| | | | | | | | | |
| Weighted average shares outstanding: | | | | | | | | |
| Basic | | | 20,955 | | | | 13,943 | |
| Diluted | | | 21,062 | | | | 13,981 | |
| | | | | | | | | |
| (1) | Discontinued operations are described in Note 3 on Page F-1. Loss from discontinued operations includes operating losses in the first quarter of 2012 (including divestiture costs), and the gain on the sale of four branches in the same quarter, net of taxes |
| BERKSHIRE HILLS BANCORP, INC. |
| CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - F-4 |
| | | | |
| | | Quarters Ended | |
| | | Mar. 31, | | | Dec. 31, | | | Sept. 30, | | | June 30, | | | Mar. 31, | |
| (In thousands, except per share data) | | 2012 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | |
| Interest and dividend income | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 35,051 | | | $ | 35,466 | | | $ | 35,719 | | | $ | 28,607 | | | $ | 24,606 | |
| Securities and other | | | 3,621 | | | | 3,562 | | | | 3,547 | | | | 3,446 | | | | 3,307 | |
| Total interest and dividend income | | | 38,672 | | | | 39,028 | | | | 39,266 | | | | 32,053 | | | | 27,913 | |
| Interest expense | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 5,502 | | | | 5,792 | | | | 6,097 | | | | 5,768 | | | | 5,715 | |
| Borrowings and junior subordinated debentures | | | 2,025 | | | | 2,101 | | | | 2,131 | | | | 2,084 | | | | 2,052 | |
| Total interest expense | | | 7,527 | | | | 7,893 | | | | 8,228 | | | | 7,852 | | | | 7,767 | |
| Net interest income | | | 31,145 | | | | 31,135 | | | | 31,038 | | | | 24,201 | | | | 20,146 | |
| Non-interest income | | | | | | | | | | | | | | | | | | | | |
| Loan related fees | | | 1,373 | | | | 856 | | | | 934 | | | | 780 | | | | 591 | |
| Deposit related fees | | | 3,500 | | | | 3,848 | | | | 3,885 | | | | 3,366 | | | | 2,541 | |
| Insurance commissions and fees | | | 2,746 | | | | 2,145 | | | | 2,431 | | | | 2,782 | | | | 3,730 | |
| Wealth management fees | | | 1,900 | | | | 1,650 | | | | 1,607 | | | | 1,389 | | | | 1,192 | |
| Total fee income | | | 9,519 | | | | 8,499 | | | | 8,857 | | | | 8,317 | | | | 8,054 | |
| Other | | | 241 | | | | 318 | | | | (158 | ) | | | (277 | ) | | | 80 | |
| Gain on sale of securities, net | | | - | | | | 8 | | | | - | | | | 6 | | | | - | |
| Non-recurring gain | | | 42 | | | | - | | | | 1,975 | | | | 124 | | | | - | |
| Total non-interest income | | | 9,802 | | | | 8,825 | | | | 10,674 | | | | 8,170 | | | | 8,134 | |
| Total net revenue | | | 40,947 | | | | 39,960 | | | | 41,712 | | | | 32,371 | | | | 28,280 | |
| Provision for loan losses | | | 2,000 | | | | 2,263 | | | | 2,200 | | | | 1,500 | | | | 1,600 | |
| Non-interest expense | | | | | | | | | | | | | | | | | | | | |
| Compensation and benefits | | | 13,589 | | | | 13,172 | | | | 13,195 | | | | 12,027 | | | | 11,151 | |
| Occupancy and equipment | | | 4,395 | | | | 4,063 | | | | 3,883 | | | | 3,546 | | | | 3,435 | |
| Technology and communications | | | 1,958 | | | | 2,464 | | | | 1,996 | | | | 1,531 | | | | 1,466 | |
| Marketing and professional services | | | 1,716 | | | | 1,565 | | | | 1,873 | | | | 1,557 | | | | 1,213 | |
| Supplies, postage and delivery | | | 562 | | | | 555 | | | | 545 | | | | 507 | | | | 454 | |
| FDIC premiums and assessments | | | 681 | | | | 542 | | | | 923 | | | | 741 | | | | 1,027 | |
| Other real estate owned | | | 179 | | | | 153 | | | | 541 | | | | 700 | | | | 609 | |
| Amortization of intangible assets | | | 1,311 | | | | 1,314 | | | | 1,271 | | | | 935 | | | | 716 | |
| Nonrecurring and merger related expenses | | | 4,223 | | | | 3,678 | | | | 9,091 | | | | 5,451 | | | | 1,708 | |
| Other | | | 1,580 | | | | 2,024 | | | | 1,392 | | | | 1,627 | | | | 1,410 | |
| Total non-interest expense | | | 30,194 | | | | 29,530 | | | | 34,710 | | | | 28,623 | | | | 23,189 | |
| | | | | | | | | | | | | | | | | | | | | |
| Income from continuing operations before income taxes | | | 8,753 | | | | 8,167 | | | | 4,802 | | | | 2,248 | | | | 3,491 | |
| Income tax expense | | | 2,272 | | | | 609 | | | | 405 | | | | 371 | | | | 656 | |
| Net income fro\m continuing operations | | | 6,481 | | | | 7,558 | | | | 4,397 | | | | 1,877 | | | | 2,835 | |
| (Loss) gain from discontinued operations before income taxes (including gain on disposals) | | | (261 | ) | | | 4,692 | | | | (8 | ) | | | - | | | | - | |
| Income tax expense (benefit) | | | 376 | | | | 3,773 | | | | (3 | ) | | | - | | | | - | |
| Net (loss) gain from discontinued operations | | | (637 | ) | | | 919 | | | | (5 | ) | | | - | | | | - | |
| Net income | | $ | 5,844 | | | $ | 8,477 | | | $ | 4,392 | | | $ | 1,877 | | | $ | 2,835 | |
| | | | | | | | | | | | | | | | | | | | | |
| Basic and diluted earnings per share: | | | | | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | 0.31 | | | $ | 0.36 | | | $ | 0.22 | | | $ | 0.11 | | | $ | 0.20 | |
| Discontinued operations | | | (0.03 | ) | | | 0.04 | | | | - | | | | - | | | | - | |
| Total basic and diluted earnings per share | | $ | 0.28 | | | $ | 0.44 | | | $ | 0.22 | | | $ | 0.11 | | | $ | 0.20 | |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding: | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 20,955 | | | | 20,930 | | | | 20,009 | | | | 16,580 | | | | 13,943 | |
| Diluted | | | 21,062 | | | | 21,043 | | | | 20,105 | | | | 16,601 | | | | 13,981 | |
| | | | | | | | | | | | | | | | | | | | | |
| (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. |
| BERKSHIRE HILLS BANCORP, INC. |
| ASSET QUALITY ANALYSIS - F-5 |
| | | | | | | | | | | | | | | | |
| | | At or for the Quarters Ended | |
| | | Mar. 31, | | | Dec. 31, | | | Sept. 30, | | | June 30, | | | Mar. 31, | |
| (Dollars in thousands) | | 2012 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | |
| NON-PERFORMING ASSETS | | | | | | | | | | | | | | | | | | | | |
| Non-accruing loans: | | | | | | | | | | | | | | | | | | | | |
| Residential mortgages | | $ | 8,281 | | | $ | 7,010 | | | $ | 4,750 | | | $ | 2,811 | | | $ | 1,529 | |
| Commercial mortgages | | | 12,151 | | | | 14,280 | | | | 13,721 | | | | 9,600 | | | | 9,510 | |
| Commercial business loans | | | 1,029 | | | | 990 | | | | 1,399 | | | | 1,764 | | | | 1,507 | |
| Consumer loans | | | 1,411 | | | | 1,954 | | | | 1,834 | | | | 862 | | | | 763 | |
| Total non-accruing loans | | | 22,872 | | | | 24,234 | | | | 21,704 | | | | 15,037 | | | | 13,309 | |
| Other real estate owned | | | 439 | | | | 1,900 | | | | 2,200 | | | | 1,700 | | | | 2,400 | |
| Total non-performing assets | | $ | 23,311 | | | $ | 26,134 | | | $ | 23,904 | | | $ | 16,737 | | | $ | 15,709 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total non-accruing loans/total loans | | | 0.75 | % | | | 0.82 | % | | | 0.72 | % | | | 0.61 | % | | | 0.62 | % |
| Total non-performing assets/total assets | | | 0.58 | % | | | 0.65 | % | | | 0.58 | % | | | 0.52 | % | | | 0.54 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PROVISION AND ALLOWANCE FOR LOAN LOSSES | | | | | | | | | | | | | | | | | | | | |
| Balance at beginning of period | | $ | 32,444 | | | $ | 32,181 | | | $ | 31,919 | | | $ | 31,898 | | | $ | 31,898 | |
| Charged-off loans | | | (1,923 | ) | | | (2,313 | ) | | | (2,061 | ) | | | (1,564 | ) | | | (1,758 | ) |
| Recoveries on charged-off loans | | | 136 | | | | 313 | | | | 123 | | | | 85 | | | | 158 | |
| Net loans charged-off | | | (1,787 | ) | | | (2,000 | ) | | | (1,938 | ) | | | (1,479 | ) | | | (1,600 | ) |
| Provision for loan losses | | | 2,000 | | | | 2,263 | | | | 2,200 | | | | 1,500 | | | | 1,600 | |
| Balance at end of period | | $ | 32,657 | | | $ | 32,444 | | | $ | 32,181 | | | $ | 31,919 | | | $ | 31,898 | |
| | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses/total loans | | | 1.07 | % | | | 1.10 | % | | | 1.07 | % | | | 1.30 | % | | | 1.49 | % |
| Allowance for loan losses/non-accruing loans | | | 143 | % | | | 134 | % | | | 148 | % | | | 212 | % | | | 240 | % |
| | | | | | | | | | | | | | | | | | | | | |
| NET LOAN CHARGE-OFFS | | | | | | | | | | | | | | | | | | | | |
| Residential mortgages | | $ | (381 | ) | | $ | (449 | ) | | $ | (292 | ) | | $ | (225 | ) | | $ | (124 | ) |
| Commercial mortgages | | | (1,116 | ) | | | (1,198 | ) | | | (1,099 | ) | | | (597 | ) | | | (963 | ) |
| Commercial business loans | | | (3 | ) | | | (244 | ) | | | (463 | ) | | | (435 | ) | | | (222 | ) |
| Home equity | | | (247 | ) | | | (90 | ) | | | 7 | | | | (68 | ) | | | (79 | ) |
| Other consumer | | | (40 | ) | | | (19 | ) | | | (91 | ) | | | (154 | ) | | | (212 | ) |
| Total, net | | $ | (1,787 | ) | | $ | (2,000 | ) | | $ | (1,938 | ) | | $ | (1,479 | ) | | $ | (1,600 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net charge-offs (QTD annualized)/average loans | | | 0.24 | % | | | 0.27 | % | | | 0.27 | % | | | 0.24 | % | | | 0.30 | % |
| Net charge-offs (YTD annualized)/average loans | | | 0.24 | % | | | 0.27 | % | | | 0.27 | % | | | 0.27 | % | | | 0.30 | % |
| | | | | | | | | | | | | | | | | | | | | |
| DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS | | | | | | | | | | | | | | | | |
| 30-89 Days delinquent | | | 0.55 | % | | | 0.55 | % | | | 0.79 | % | | | 0.50 | % | | | 0.59 | % |
| 90+ Days delinquent and still accruing | | | 0.40 | % | | | 0.34 | % | | | 0.22 | % | | | 0.12 | % | | | 0.11 | % |
| Total accruing delinquent loans | | | 0.95 | % | | | 0.89 | % | | | 1.01 | % | | | 0.62 | % | | | 0.70 | % |
| Non-accruing loans | | | 0.75 | % | | | 0.82 | % | | | 0.72 | % | | | 0.61 | % | | | 0.62 | % |
| Total delinquent and non-accruing loans | | | 1.70 | % | | | 1.71 | % | | | 1.73 | % | | | 1.23 | % | | | 1.32 | % |
| (1) | The above schedule includes balances associated with discontinued operations |
| |
| | | | |
| | | At or for the Quarters Ended | |
| | | Mar. 31, | | | Dec. 31, | | | Sept. 30, | | | June 30, | | | Mar. 31, | |
| | | 2012 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | |
| | | | | | | | | | | | | | | | |
| PERFORMANCE RATIOS | | | | | | | | | | | | | | | | | | | | |
| Core return on assets | | | 0.94 | % | | | 0.93 | % | | | 0.89 | % | | | 0.72 | % | | | 0.59 | % |
| Return on assets | | | 0.59 | | | | 0.85 | | | | 0.45 | | | | 0.23 | | | | 0.39 | |
| Core return on equity | | | 6.80 | | | | 6.74 | | | | 6.50 | | | | 5.15 | | | | 4.31 | |
| Return on equity | | | 4.23 | | | | 6.16 | | | | 3.31 | | | | 1.67 | | | | 2.89 | |
| Net interest margin, fully taxable equivalent | | | 3.62 | | | | 3.61 | | | | 3.74 | | | | 3.52 | | | | 3.30 | |
| Fee income/Net interest and fee income | | | 23.44 | | | | 21.44 | | | | 22.20 | | | | 25.58 | | | | 28.56 | |
| Efficiency ratio | | | 59.27 | | | | 59.44 | | | | 59.62 | | | | 66.22 | | | | 71.03 | |
| | | | | | | | | | | | | | | | | | | | | |
| GROWTH | | | | | | | | | | | | | | | | | | | | |
| Total commercial loans, year-to-date (annualized) | | | 3 | % | | | 29 | % | | | 38 | % | | | 20 | % | | | - | % |
| Total loans, year-to-date (annualized) | | | 11 | | | | 38 | | | | 54 | | | | 29 | | | | - | |
| Total deposits, year-to-date (annualized) | | | 11 | | | | 41 | | | | 63 | | | | 26 | | | | 7 | |
| Total net revenues, year-to-date, compared to prior year | | | 43 | | | | 33 | | | | 28 | | | | 15 | | | | 6 | |
| Earnings per share, year-to-date, compared to prior year | | | 40 | | | | (2 | ) | | | (26 | ) | | | (37 | ) | | | (17 | ) |
| Core earnings per share, year-to-date, compared to prior year | | | 50 | | | | 53 | | | | 50 | | | | 33 | | | | 25 | |
| | | | | | | | | | | | | | | | | | | | | |
| FINANCIAL DATA(In millions) | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 4,029 | | | $ | 3,991 | | | $ | 4,087 | | | $ | 3,226 | | | $ | 2,886 | |
| Total loans | | | 3,039 | | | | 2,957 | | | | 3,003 | | | | 2,452 | | | | 2,145 | |
| Allowance for loan losses | | | 33 | | | | 32 | | | | 32 | | | | 32 | | | | 32 | |
| Total intangible assets | | | 222 | | | | 223 | | | | 233 | | | | 193 | | | | 172 | |
| Total deposits | | | 3,184 | | | | 3,101 | | | | 3,249 | | | | 2,486 | | | | 2,241 | |
| Total stockholders' equity | | | 557 | | | | 553 | | | | 547 | | | | 445 | | | | 391 | |
| Total core income | | | 9.4 | | | | 9.3 | | | | 8.6 | | | | 5.8 | | | | 4.2 | |
| Total net income | | | 5.8 | | | | 8.5 | | | | 4.4 | | | | 1.9 | | | | 2.8 | |
| | | | | | | | | | | | | | | | | | | | | |
| ASSET QUALITY RATIOS | | | | | | | | | | | | | | | | | | | | |
| Net charge-offs (current quarter annualized)/average loans | | | 0.24 | % | | | 0.27 | % | | | 0.27 | % | | | 0.24 | % | | | 0.30 | % |
| Non-performing assets/total assets | | | 0.58 | | | | 0.65 | | | | 0.58 | | | | 0.52 | | | | 0.54 | |
| Allowance for loan losses/total loans | | | 1.07 | | | | 1.10 | | | | 1.07 | | | | 1.30 | | | | 1.49 | |
| Allowance for loan losses/non-accruing loans | | | 143 | | | | 134 | | | | 148 | | | | 212 | | | | 240 | |
| | | | | | | | | | | | | | | | | | | | | |
| PER SHARE DATA | | | | | | | | | | | | | | | | | | | | |
| Core earnings, diluted | | $ | 0.45 | | | $ | 0.44 | | | $ | 0.43 | | | $ | 0.35 | | | $ | 0.30 | |
| Net earnings, diluted | | | 0.28 | | | | 0.40 | | | | 0.22 | | | | 0.11 | | | | 0.20 | |
| Tangible book value | | | 15.81 | | | | 15.60 | | | | 14.86 | | | | 15.07 | | | | 15.52 | |
| Total book value | | | 26.28 | | | | 26.17 | | | | 25.87 | | | | 26.61 | | | | 27.69 | |
| Market price at period end | | | 22.92 | | | | 22.19 | | | | 18.47 | | | | 22.39 | | | | 20.83 | |
| Dividends | | | 0.17 | | | | 0.17 | | | | 0.16 | | | | 0.16 | | | | 0.16 | |
| | | | | | | | | | | | | | | | | | | | | |
| CAPITAL RATIOS | | | | | | | | | | | | | | | | | | | | |
| Stockholders' equity to total assets | | | 13.82 | % | | | 13.86 | % | | | 13.38 | % | | | 13.80 | % | | | 13.54 | % |
| Tangible stockholders' equity to tangible assets | | | 8.80 | | | | 8.76 | | | | 8.15 | | | | 8.31 | | | | 8.07 | |
| | | | | | | | | | | | | | | | | | | | | |
| (1) | Reconciliation of Non-GAAP financial measures, including all references to core and tangible amounts, appear on pages F-9 Tangible assets are total assets less total intangible assets |
| (2) | All performance ratios are annualized and are based on average balance sheet amounts, where applicable |
| (3) | The above schedule does not reclassify balances associated with discontinued operations, which are reclassified from period end balances on the balance sheet |
| BERKSHIRE HILLS BANCORP, INC. |
| AVERAGE BALANCES - F-7 |
| | | | |
| | | Quarters Ended | |
| | | Mar. 31, | | | Dec. 31, | | | Sept. 30, | | | June 30, | | | Mar. 31, | |
| (In thousands) | | 2012 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | |
| Assets | | | | | | | | | | | | | | | | | | | | |
| Loans: | | | | | | | | | | | | | | | | | | | | |
| Residential mortgages | | $ | 1,057,903 | | | $ | 1,039,025 | | | $ | 1,004,950 | | | $ | 802,460 | | | $ | 651,059 | |
| Commercial mortgages | | | 1,153,690 | | | | 1,166,989 | | | | 1,140,691 | | | | 973,557 | | | | 929,564 | |
| Commercial business loans | | | 412,237 | | | | 392,542 | | | | 383,059 | | | | 333,700 | | | | 283,747 | |
| Consumer loans | | | 366,035 | | | | 376,385 | | | | 376,754 | | | | 311,057 | | | | 281,069 | |
| Total loans | | | 2,989,865 | | | | 2,974,941 | | | | 2,905,454 | | | | 2,420,774 | | | | 2,145,439 | |
| Securities | | | 525,109 | | | | 515,128 | | | | 474,435 | | | | 405,670 | | | | 403,549 | |
| Short-term investments | | | 15,107 | | | | 20,748 | | | | 34,293 | | | | 4,688 | | | | 12,035 | |
| Total earning assets | | | 3,530,081 | | | | 3,510,817 | | | | 3,414,182 | | | | 2,831,132 | | | | 2,561,023 | |
| Goodwill and other intangible assets | | | 223,930 | | | | 230,864 | | | | 229,594 | | | | 196,292 | | | | 172,653 | |
| Other assets | | | 235,909 | | | | 247,376 | | | | 226,757 | | | | 186,785 | | | | 142,789 | |
| Total assets | | $ | 3,989,920 | | | $ | 3,989,057 | | | $ | 3,870,533 | | | $ | 3,214,209 | | | $ | 2,876,465 | |
| | | | | | | | | | | | | | | | | | | | | |
| Liabilities and stockholders' equity | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | |
| NOW | | $ | 272,239 | | | $ | 274,041 | | | $ | 256,662 | | | $ | 229,980 | | | $ | 215,191 | |
| Money market | | | 1,084,948 | | | | 953,162 | | | | 853,128 | | | | 778,055 | | | | 746,366 | |
| Savings | | | 359,859 | | | | 446,672 | | | | 476,230 | | | | 317,232 | | | | 234,838 | |
| Time | | | 983,696 | | | | 1,028,817 | | | | 1,029,555 | | | | 809,768 | | | | 737,551 | |
| Total interest-bearing deposits | | | 2,700,742 | | | | 2,702,692 | | | | 2,615,575 | | | | 2,135,035 | | | | 1,933,946 | |
| Borrowings and debentures | | | 257,389 | | | | 248,611 | | | | 253,018 | | | | 269,665 | | | | 229,878 | |
| Total interest-bearing liabilities | | | 2,958,131 | | | | 2,951,303 | | | | 2,868,593 | | | | 2,404,700 | | | | 2,163,824 | |
| Non-interest-bearing demand deposits | | | 439,015 | | | | 448,952 | | | | 432,381 | | | | 334,171 | | | | 293,895 | |
| Other liabilities | | | 40,039 | | | | 38,110 | | | | 38,431 | | | | 25,268 | | | | 26,862 | |
| Total liabilities | | | 3,437,185 | | | | 3,438,365 | | | | 3,339,405 | | | | 2,764,139 | | | | 2,484,581 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total stockholders' equity | | | 552,735 | | | | 550,692 | | | | 531,128 | | | | 450,070 | | | | 391,884 | |
| Total liabilities and stockholders' equity | | $ | 3,989,920 | | | $ | 3,989,057 | | | $ | 3,870,533 | | | $ | 3,214,209 | | | $ | 2,876,465 | |
| | | | | | | | | | | | | | | | | | | | | |
| Supplementary data | | | | | | | | | | | | | | | | | | | | |
| Total non-maturity deposits | | $ | 2,156,061 | | | $ | 2,122,827 | | | $ | 2,018,401 | | | $ | 1,659,438 | | | $ | 1,490,290 | |
| Total deposits | | | 3,139,757 | | | | 3,151,644 | | | | 3,047,956 | | | | 2,469,206 | | | | 2,227,841 | |
| Fully taxable equivalent income adj. | | | 669 | | | | 674 | | | | 673 | | | | 675 | | | | 679 | |
| | | | | | | | | | | | | | | | | | | | | |
| (1) | The above schedule does not reclassify balances associated with discontinued operations, which are reclassified from period end balances on the balance sheet |
| BERKSHIRE HILLS BANCORP, INC. |
| AVERAGE YIELDS (Fully Taxable Equivalent - Annualized) - F-8 |
| | | | | | | | | | | | | | | | |
| | | Quarters Ended | |
| | | Mar. 31, | | | Dec. 31, | | | Sept. 30, | | | June 30, | | | Mar. 31, | |
| | | 2012 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | |
| | | | | | | | | | | | | | | | |
| Earning assets | | | | | | | | | | | | | | | | | | | | |
| Loans: | | | | | | | | | | | | | | | | | | | | |
| Residential mortgages | | | 4.63 | % | | | 4.68 | % | | | 4.82 | % | | | 4.97 | % | | | 5.04 | % |
| Commercial mortgages | | | 5.01 | | | | 5.17 | | | | 5.44 | | | | 4.74 | | | | 4.68 | |
| Commercial business loans | | | 4.76 | | | | 4.44 | | | | 4.78 | | | | 4.89 | | | | 4.69 | |
| Consumer loans | | | 3.98 | | | | 4.03 | | | | 4.17 | | | | 3.97 | | | | 3.63 | |
| Total loans | | | 4.72 | | | | 4.74 | | | | 4.97 | | | | 4.74 | | | | 4.65 | |
| Securities | | | 3.29 | | | | 3.26 | | | | 3.53 | | | | 4.07 | | | | 4.01 | |
| Short-term investments | | | 0.07 | | | | 0.14 | | | | 0.03 | | | | 0.19 | | | | 0.13 | |
| Total earning assets | | | 4.48 | | | | 4.49 | | | | 4.72 | | | | 4.64 | | | | 4.53 | |
| | | | | | | | | | | | | | | | | | | | | |
| Funding liabilities | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | |
| NOW | | | 0.26 | | | | 0.39 | | | | 0.49 | | | | 0.31 | | | | 0.33 | |
| Money Market | | | 0.55 | | | | 0.62 | | | | 0.66 | | | | 0.69 | | | | 0.75 | |
| Savings | | | 0.20 | | | | 0.19 | | | | 0.18 | | | | 0.26 | | | | 0.31 | |
| Time | | | 1.51 | | | | 1.52 | | | | 1.67 | | | | 2.00 | | | | 2.19 | |
| Total interest-bearing deposits | | | 0.82 | | | | 0.87 | | | | 0.95 | | | | 1.08 | | | | 1.20 | |
| Borrowings and debentures | | | 3.16 | | | | 3.35 | | | | 3.34 | | | | 3.10 | | | | 3.62 | |
| Total interest-bearing liabilities | | | 1.02 | | | | 1.06 | | | | 1.16 | | | | 1.31 | | | | 1.46 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net interest spread | | | 3.46 | | | | 3.43 | | | | 3.56 | | | | 3.33 | | | | 3.07 | |
| Net interest margin | | | 3.62 | | | | 3.61 | | | | 3.74 | | | | 3.52 | | | | 3.30 | |
| | | | | | | | | | | | | | | | | | | | | |
| Cost of funds | | | 0.89 | | | | 0.92 | | | | 1.01 | | | | 1.15 | | | | 1.28 | |
| Cost of deposits | | | 0.71 | | | | 0.73 | | | | 0.82 | | | | 0.94 | | | | 1.04 | |
| | | | | | | | | | | | | | | | | | | | | |
| (1) | Cost of funds includes all deposits and borrowings |
| (2) | The above schedule includes yields associated with discontinued operations, although the related income is excluded from income from continuing operations on the income statement. This schedule also includes balances associated with discontinued operations |
| BERKSHIRE HILLS BANCORP, INC. |
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - F-9 |
| | | | | | | | | |
| | | | | At or for the Quarters Ended | |
| | | | | Mar. 31, | | | Dec. 31, | | | Sept. 30, | | | June 30, | | | Mar. 31, | |
| (Dollars in thousands) | | | | 2012 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | |
| Net income | | | | $ | 5,844 | | | $ | 8,477 | | | $ | 4,392 | | | $ | 1,877 | | | $ | 2,835 | |
| Adj: Gain on sale of securities, net | | | | | - | | | | (8 | ) | | | - | | | | (6 | ) | | | - | |
| Adj: Other non-recurring gain | | | | | (42 | ) | | | - | | | | (1,975 | ) | | | (124 | ) | | | - | |
| Plus: Nonrecurring and merger related expense | | | | | 4,223 | | | | 3,678 | | | | 9,091 | | | | 5,451 | | | | 1,708 | |
| Adj: Income taxes | | | | | (1,255 | ) | | | (1,947 | ) | | | (2,884 | ) | | | (1,400 | ) | | | (316 | ) |
| Adj: pre-tax loss (income) from discontinued operations | | | | | 261 | | | | (4,692 | ) | | | 8 | | | | - | | | | - | |
| Adj: income taxes from discontinued operations | | | | | 376 | | | | 3,773 | | | | (3 | ) | | | - | | | | - | |
| Total core income | | (A) | | $ | 9,407 | | | $ | 9,281 | | | $ | 8,629 | | | $ | 5,798 | | | $ | 4,227 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total non-interest income | | | | $ | 9,878 | | | $ | 8,825 | | | $ | 10,766 | | | $ | 8,170 | | | $ | 8,009 | |
| Adj: Gain on sale of securities, net | | | | | - | | | | (8 | ) | | | - | | | | (6 | ) | | | - | |
| Adj: Other non-recurring gain | | | | | (42 | ) | | | - | | | | (1,975 | ) | | | (124 | ) | | | - | |
| Total core non-interest income | | | | | 9,836 | | | | 8,817 | | | | 8,791 | | | | 8,040 | | | | 8,009 | |
| Net interest income | | | | | 31,138 | | | | 31,135 | | | | 31,551 | | | | 24,201 | | | | 20,146 | |
| Total core revenue | | | | $ | 40,974 | | | $ | 39,952 | | | $ | 40,342 | | | $ | 32,241 | | | $ | 28,155 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total non-interest expense | | | | $ | 30,524 | | | $ | 29,533 | | | $ | 35,320 | | | $ | 28,623 | | | $ | 23,189 | |
| Less: Merger related expense | | | | | (4,223 | ) | | | (3,678 | ) | | | (9,091 | ) | | | (5,451 | ) | | | (1,708 | ) |
| Core non-interest expense | | | | | 26,301 | | | | 25,855 | | | | 26,229 | | | | 23,172 | | | | 21,481 | |
| Less: Amortization of intangible assets | | | | | (1,318 | ) | | | (1,314 | ) | | | (1,382 | ) | | | (935 | ) | | | (716 | ) |
| Total core tangible non-interest expense | | | | $ | 24,983 | | | $ | 24,541 | | | $ | 24,847 | | | $ | 22,237 | | | $ | 20,765 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| (Dollars in millions, except per share data) | | | | | | | | | | | | | | | | | | | | | | |
| Total average assets | | (B) | | $ | 3,990 | | | $ | 3,989 | | | $ | 3,871 | | | $ | 3,214 | | | $ | 2,876 | |
| Total average stockholders' equity | | (C) | | | 553 | | | | 551 | | | | 531 | | | | 450 | | | | 392 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total stockholders' equity, period-end | | | | | 557 | | | | 553 | | | | 547 | | | | 445 | | | | 391 | |
| Less: Intangible assets, period-end | | | | | (222 | ) | | | (223 | ) | | | (233 | ) | | | (193 | ) | | | (172 | ) |
| Total tangible stockholders' equity, period-end | | (D) | | | 335 | | | | 330 | | | | 314 | | | | 252 | | | | 219 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total shares outstanding, period-end (thousands) | | (E) | | | 21,191 | | | | 21,147 | | | | 21,134 | | | | 16,721 | | | | 14,115 | |
| Average diluted shares outstanding (thousands) | | (F) | | | 21,062 | | | | 21,043 | | | | 20,105 | | | | 16,601 | | | | 13,981 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Core earnings per share, diluted | | (A/F) | | $ | 0.45 | | | $ | 0.44 | | | $ | 0.43 | | | $ | 0.35 | | | $ | 0.30 | |
| Tangible book value per share, period-end | | (D/E) | | $ | 15.81 | | | $ | 15.60 | | | $ | 14.86 | | | $ | 15.07 | | | $ | 15.52 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Core return (annualized) on assets | | (A/B) | | | 0.94 | % | | | 0.93 | % | | | 0.89 | % | | | 0.72 | % | | | 0.59 | % |
| Core return (annualized) on equity | | (A/C) | | | 6.80 | | | | 6.74 | | | | 6.50 | | | | 5.15 | | | | 4.31 | |
| Efficiency ratio (1) | | | | | 59.27 | | | | 59.44 | | | | 59.62 | | | | 66.22 | | | | 71.03 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Supplementary data | | | | | | | | | | | | | | | | | | | | | | |
| Tax credit benefit of tax shelter investments | | | | $ | 505 | | | $ | 664 | | | $ | 664 | | | $ | 664 | | | $ | 405 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| (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 |
| THE CONNECTICUT BANK AND TRUST COMPANY |
| UNAUDITED SELECTED FINANCIAL HIGHLIGHTS - F-10 |
| | | | | | | |
| | | | |
| | | March 31, | | | December 31, | |
| (In thousands) | | 2012 | | | 2011 | |
| Selected Financial Condition Data: | | | | | | | | |
| Loans: | | | | | | | | |
| Commercial mortgages | | $ | 130,242 | | | $ | 133,215 | |
| Other commercial loans | | | 58,732 | | | | 68,022 | |
| Consumer and other loans | | | 25,413 | | | | 25,796 | |
| Total loans | | | 214,387 | | | | 227,033 | |
| | | | | | | | | |
| Deposits: | | | | | | | | |
| Demand deposits | | | 51,200 | | | | 52,014 | |
| NOW deposits | | | 26,835 | | | | 24,002 | |
| Savings and money market deposits | | | 66,572 | | | | 67,252 | |
| Time deposits | | | 72,575 | | | | 76,737 | |
| Total deposits | | | 217,182 | | | | 220,005 | |
| | | Three Months Ended | |
| | | March 31, | |
| | | 2012 | | | 2011 | |
| Selected Operating Data: | | | | | | | | |
| Core net interest income | | $ | 2,380 | | | $ | 2,494 | |
| Core non-interest income | | | 227 | | | | 208 | |
| Core non-interest expense | | | 2,590 | | | | 2,527 | |
| | | | | | | | | |
| (1) | Core income and expense information excludes non-core merger related items |
