1
EXHIBIT 99.1
IMMEDIATE RELEASE
BERKSHIRE HILLS BANCORP, INC. REPORTS FIRST QUARTER EARNINGS
PITTSFIELD, MA - April 23, 2003 - Berkshire Hills Bancorp, Inc. (the "Company"),
(AMEX: BHL), the holding company for Berkshire Bank (the "Bank"), today reported
diluted earnings per share of $0.32 for the quarter ended March 31, 2003,
compared to $0.29 for the same quarter last year, an increase of 10.3%.
Net income totaled $1.82 million for the first quarter of 2003, compared to
$1.76 million for the first quarter of 2002, an increase of 3.6%. This increase
was primarily attributed to lower operating expenses and a lower provision for
loan losses resulting from improvement in the Bank's credit risk profile. The
improvement in credit quality was primarily due to the December 2002 sale of
$69.7 million of sub-prime automobile loans and improving credit quality trends
overall.
Dividend Declared
The Company also reported that the Board of Directors declared a quarterly cash
dividend of $0.12 per common share. The dividend is payable on May 23, 2003 to
shareholders of record at the close of business on May 8, 2003.
First Quarter Highlights
o The Company's operating expenses declined 5.0% to $8.7 million from $9.1
million for the same period last year.
o The Bank purchased $59.4 million of one-to four-family residential mortgage
loans funded by the proceeds from the sale of the sub-prime automobile
loans.
o The Company continued its fifth 5% stock repurchase program, purchasing
146,200 shares at an average price of $22.86.
o The Bank's Asset Management/Trust Group added 28 new relationships with
assets totaling $18.9 million.
o The Bank sold $1.6 million in equity securities resulting in a gain of
$524,000, net of taxes, as the Bank continued to reduce its exposure to the
equity markets.
o In March, the Bank recorded a charge of $515,000, net of taxes, due to the
state eliminating the dividend received deduction for dividends received
from the Company's real estate investment trust ("REIT") subsidiary,
effective for the tax years beginning in 1999. Due to the loss of this
dividend received deduction, the Company anticipates its effective tax rate
to be approximately 37% in 2003.
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Management Comments
"I am pleased with the Company's first quarter performance. We believe the
decisive steps taken over the last 180 days are on track to create a more
valuable franchise. The strategy deployed at the beginning of the year has been
effective and we have every reason to believe that this momentum will continue
throughout the year," stated Michael P. Daly, President and Chief Executive
Officer.
Financial Condition
Assets totaled $1.06 billion at March 31, 2003 compared to $1.05 billion at
December 31, 2002, an increase of $14.9 million. This growth was primarily due
to an increase in loans, which increased $66.9 million to $790.0 million at
March 31, 2003, with most of this increase due to the purchase of one-to
four-family residential mortgage loans. These purchased loans consisted
primarily of adjustable rate mortgages with the coupon rate fixed for the first
three and seven years, respectively and, to a lesser extent, 15 year fixed rate
mortgages. These purchased loans have a weighted average yield of 4.0% and a
weighted average duration of 2.3 years, utilizing current market prepayment
assumptions.
Non-performing assets were $3.9 million at March 31, 2003, a decline of $1.4
million from December 31, 2002. The Bank held no foreclosed real estate at March
31, 2003 compared to $1.5 million at December 31, 2002, as the Bank sold one
commercial property in the first quarter.
Non-performing loans were $3.9 million, $3.7 million and $2.5 million at March
31, 2003, December 31, 2002, and September 30, 2002, respectively. The increase
from September 30, 2002 was largely attributable to the placement of one
commercial loan relationship totaling $1.7 million on non-accrual status, as
previously discussed in the Company's annual report form 10-K for 2002. At the
end of the first quarter of 2003, this relationship was current in accordance
with its terms.
The balance of sub-prime automobile loans totaled $17.2 million at March 31,
2003, down $1.0 million from $18.2 million at December 31, 2002. The allowance
for loan losses allocated for sub-prime automobile loans totaled $2.8 million at
March 31, 2003 compared to $3.1 million at December 31, 2002.
The ratio of loans delinquent 30 days or more to total loans was 0.94%, 1.40%
and 1.76% at March 31, 2003, December 31, 2002 and March 31, 2002, respectively.
The allowance for loan losses totaled $10.3 million, representing 1.31% of total
loans at March 31, 2003 compared to $10.3 million, or 1.43% of total loans at
December 31, 2002.
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The Company's tangible book value per share at March 31, 2003 and December 31,
2002 was $18.07 and $18.00, respectively.
Results of Operations
Net income totaled $1.82 million for the first quarter of 2003 compared to $1.76
million for the same quarter last year. Net interest income was $9.1 million for
the first three months of 2003, a decrease of $1.4 million compared to the same
period last year. The principal reasons for this decline were the December 2002
sale of $69.7 million of higher yielding sub-prime automobile loans, the
proceeds of which were temporarily placed in short-term investments and the
continued high prepayment rate on residential mortgage loans and mortgage-backed
securities. As a result, the Company's net interest margin was 3.67% for the
first quarter of 2003 compared to 4.49% for the same quarter last year.
The provision for loan losses totaled $325,000 for the three months ended March
31, 2003, a decrease of $1.2 million from $1.5 million for the same period in
2002. This decrease was primarily due to the improvement in the Bank's credit
risk profile, largely due to the sale of sub-prime automobile loans and
improvement in other credit quality trends. Net loan charge-offs totaled
$284,000 at March 31, 2003, a decrease of $1.5 million from $1.8 million at
March 31, 2002.
Noninterest income increased $817,000 to $3.6 million for the quarter ended
March 31, 2003 from the same period last year. This increase was primarily the
result of an $840,000 net gain on the sale of securities in the first quarter of
2003 compared to a net loss of $20,000 last year.
Operating expenses totaled $8.7 million for the first three months of 2003, a
decrease of $451,000, or 5.0%, from $9.1 million for the first three months of
2002. The decrease in operating expenses was primarily due to a reduction of
$242,000 in salaries and benefits expense related to the management
reorganization that occurred in the fourth quarter of 2002 and a $362,000
decrease in foreclosed real estate and other loan expenses, $325,000 of which
was associated with the repossession and sale of those automobiles. Expenses
associated with the Bank's automobile repossession and sales activities are
expected to continue to decline due to the substantial reduction in the amount
of sub-prime automobile loans. Partially offsetting these decreases were
increases of $44,000 relating to the interest expense associated with the REIT
charge and a $69,000 decrease in minority interests.
On March 5, 2003, legislation was enacted in Massachusetts, eliminating the
state tax deduction on dividends received from a REIT, retroactive to tax years
beginning in 1999. As a result, the Company has ceased recording tax benefits
associated with the dividends received deduction effective for the 2003 tax year
and accrued $515,000 during the first quarter of 2003, representing the amount
of tax benefits realized by the Company through the dividends received deduction
through December 31, 2002, partially offset by the estimated impact of the
expected deductibility for federal income tax purposes of any amounts assessed
by Massachusetts. The Company has appealed the state's assessment.
Michael P. Daly, President and Chief Executive Officer and Wayne F. Patenaude,
Senior Vice President, Treasurer and Chief Financial Officer, will host a
conference call at 10:00 A.M.
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on Thursday, April 24, 2003. This conference call will include forward-looking
information and may include other material information. Persons wishing to
access the conference call may do so by dialing 1-800-319-9003, and use access
code 631974. A series of tables and graphs related to the topics to be discussed
in the conference call will be available on the Bank's website,
www.berkshirebank.com beginning at approximately 9:30 A.M. on April 24, 2003.
Replays of the conference call will be available beginning April 24, 2003 at
1:00 P.M. (ET) through May 2, 2003 at 12:00 A.M. (ET) by dialing 1-888-203-1112,
using access code 631974. If you have difficulty accessing the material, please
contact Rose Borotto at 413-236-3144.
Berkshire Hills Bancorp, Inc. is the holding company for Berkshire Bank.
Established in 1846, Berkshire Bank is one of Massachusetts' oldest and largest
independent banks and is the largest banking institution based in western
Massachusetts. The Bank is headquartered in Pittsfield, Massachusetts with 11
branch offices serving communities throughout Berkshire County. The Bank is
committed to continuing to operate as an independent bank, delivering
exceptional customer service and a broad array of competitively priced retail
and commercial products to its customers.
This press release may contain certain forward-looking statements with regard to
the Company's prospective performance and strategies within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and is including this statement for purposes of said safe harbor
provisions.
Forward-looking statements, which are based on certain assumptions, and describe
future plans, strategies, and expectations of the Company, are generally
identified by use of the words "believe," "expect," "intend," "anticipate,"
"estimate," "project," or other similar expressions. The Company's ability to
predict results, or the actual effects of its plans and strategies, are
inherently uncertain. Accordingly, actual results may differ materially from
anticipated results. Factors that could have a material adverse effect on the
operations of the Company and its subsidiaries include, but are not limited to:
the price of loans or other assets sold by the Bank in the future; changes in
market interest rates, general economic conditions, legislation, and regulation;
changes in the monetary and fiscal policies of the U.S. Government; changes in
the quality or composition of the loan and investment portfolios; changes in
deposit flows, competition, and demand for financial services and loan, deposit,
and investment products in the Company's local markets; changes in local real
estate values; changes in accounting principles and guidelines; war or terrorist
activities; and other economic, competitive, governmental, regulatory,
geopolitical and technological factors affecting the Company's operations,
pricing, and services.
Specific factors that could cause future results to vary from current management
expectations are detailed from time to time in the Company's SEC filings.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this release. Except as required
by applicable law or regulation, the
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Company undertakes no obligation to update these forward-looking statements to
reflect events or circumstances that occur after the date on which such
statements were made.
News contact: Wayne F. Patenaude 413-236-3195
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BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
Unaudited
At
------------------------------
Mar. 31, Dec. 31,
------------------------------
2003 2002
- ------------------------------------------------------------------------- ------------
(In thousands)
ASSETS:
Cash and due from banks $ 15,073 $ 17,258
Short term investments 2,104 43,397
----------- -----------
Total cash and cash equivalents 17,177 60,655
Securities available for sale, at fair value 151,902 173,169
Securities held to maturity, at amortized cost 55,901 44,267
Federal Home Loan Bank stock, at cost 7,440 7,440
Savings Bank Life Insurance stock, at cost 2,043 2,043
Loans 789,897 723,022
Allowance for loan losses (10,349) (10,308)
----------- -----------
Net loans 779,548 712,714
Premises and equipment, net 13,107 13,267
Foreclosed real estate - 1,500
Accrued interest receivable 5,336 5,125
Goodwill and other intangibles (1) 10,385 10,435
Net deferred tax assets 3,111 2,185
Other assets 15,098 13,315
----------- -----------
TOTAL ASSETS $ 1,061,048 $ 1,046,115
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits $ 791,120 $ 782,360
Federal Home Loan Bank advances 136,783 133,002
Securities sold under agreements to repurchase - 700
Loans sold with recourse 965 1,201
Accrued expenses and other liabilities (1) 11,011 5,846
----------- -----------
Total liabilities 939,879 923,109
----------- -----------
Minority interests 2,340 2,438
Stockholders' Equity:
Preferred stock ($.01 par value; 1,000,000 shares - -
authorized; none issued or outstanding)
Common stock ($.01 par value; 26,000,000 shares
authorized; shares issued: 7,673,761 at March 31, 2003
and December 31, 2002; shares outstanding: 6,000,862
at March 31, 2003 and 6,117,134 at December 31, 2002) 77 77
Additional paid-in capital 75,302 74,632
Unearned compensation (9,662) (9,535)
Retained earnings (1) 81,129 80,010
Accumulated other comprehensive income 4,950 5,542
Treasury stock at cost (1,672,899 shares at March 31, 2003
and 1,556,627 shares at December 31, 2002) (32,967) (30,158)
----------- -----------
Total stockholders' equity 118,829 120,568
----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,061,048 $ 1,046,115
=========== ===========
(1) For the period ended December 2002, the information reflects the adoption of
SFAS 147. The impact resulted in increases to goodwill of $497,000, deferred
taxes of $169,000, and $328,000 to retained earnings.
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BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
- -------------------------------------------------------------------------------
Unaudited
Three Months Ended
----------------------------------
Mar. 31, Mar. 31,
2003 2002
------------- --------------
(In thousands, except per share data)
INTEREST AND DIVIDEND INCOME:
Bond interest $ 1,572 $ 1,256
Stock dividends 263 290
Short-term investment interest 84 57
Loan interest 11,982 14,957
------------- --------------
TOTAL INTEREST AND DIVIDEND INCOME 13,901 16,560
------------- --------------
INTEREST EXPENSE:
Interest on deposits 3,758 4,664
Interest on FHLB advances and other borrowings 1,063 1,422
------------- --------------
TOTAL INTEREST EXPENSE 4,821 6,086
------------- --------------
NET INTEREST INCOME 9,080 10,474
PROVISION FOR LOAN LOSSES 325 1,510
------------- --------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 8,755 8,964
NON-INTEREST INCOME:
Customer service fees 556 447
Trust Department fees 436 487
Loan fees 48 200
Gain/ (Loss) on sale of securities, net 840 (20)
License maintenance and processing fees 1,141 1,077
License sales and other fees 480 364
Other income 60 189
------------- --------------
TOTAL NON-INTEREST INCOME 3,561 2,744
------------- --------------
OPERATING EXPENSE:
Salaries and benefits 5,286 5,528
Occupancy and equipment 1,381 1,418
Marketing and advertising 103 88
Data processing 221 190
Professional services 248 299
Office supplies 206 183
Foreclosed real estate and other loans, net 121 483
Amortization of other intangibles (1) 51 51
Minority interests (98) (167)
Other expenses 1,132 1,029
------------- --------------
TOTAL OPERATING EXPENSE 8,651 9,102
------------- --------------
INCOME BEFORE TAXES 3,665 2,606
Provision for income taxes (1) 1,843 848
------------- --------------
NET INCOME $ 1,822 $ 1,758
============= ==============
Earnings per share:
Basic $ 0.34 $ 0.32
Diluted $ 0.32 $ 0.29
Weighted average shares outstanding:
Basic 5,357 5,540
Diluted 5,731 5,963
(1) For the quarter ended March 31, 2002, the information reflects the adoption
of SFAS 147. The impact for the quarter, and every quarter in 2002 thereafter,
resulted in a decrease of $124,000 in amortization expense, and an increase of
$42,000 in the provision for income taxes.
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BERKSHIRE HILLS BANCORP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
Unaudited
Quarters Ended
--------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)
INTEREST AND DIVIDEND INCOME:
Residential mortgage $ 4,030 3,896 3,969 3,975 3,951
Commercial real estate 2,607 2,521 2,411 2,296 2,348
Commercial 2,544 2,559 2,820 2,905 2,893
Indirect automobile loans 1,920 2,686 4,365 4,625 4,759
Other consumer 880 967 986 973 1,006
--------------------------------------------------------------------
Total interest on loans 11,981 12,629 14,551 14,774 14,957
Securities 1,770 1,721 1,711 1,583 1,465
Federal Home Loan Bank 66 70 68 63 81
Short-term investments 84 129 121 148 57
--------------------------------------------------------------------
Total interest and dividend income 13,901 14,549 16,451 16,568 16,560
INTEREST EXPENSE:
Deposits 3,758 4,221 4,425 4,467 4,664
Borrowings 1,063 1,326 1,467 1,436 1,422
--------------------------------------------------------------------
Total interest expense 4,821 5,547 5,892 5,903 6,086
--------------------------------------------------------------------
Net interest income 9,080 9,002 10,559 10,665 10,474
Provision for loan losses 325 2,305 1,050 1,315 1,510
--------------------------------------------------------------------
Net interest income after provision for loan losses 8,755 6,697 9,509 9,350 8,964
--------------------------------------------------------------------
NON-INTEREST INCOME:
Customer service fees 556 567 557 662 447
Trust Department fees 436 431 411 467 487
Net security gains(losses) 840 14,507 (29) 12 (20)
License maintenance and sales fees 1,621 1,739 2,173 1,638 1,441
Loss on sale of loans - (10,702) - - -
Loss on impairment of other assets - (1,262) - - -
Penalty on prepayment of borrowings - (1,067) - - -
Other non-interest income 108 115 148 307 389
--------------------------------------------------------------------
Total non-interest income 3,561 4,328 3,260 3,086 2,744
--------------------------------------------------------------------
NON-INTEREST EXPENSE:
Salaries and benefits 5,286 12,227 5,411 5,322 5,528
Occupancy and equipment 1,381 1,356 1,236 1,278 1,418
Professional and outside service fees 248 442 337 306 299
Marketing and advertising 103 259 177 124 88
Data processing 221 264 148 156 190
REO and other loan expenses 121 1,429 581 757 483
Amortization of other intangibles 51 51 51 51 51
Other non-interest expense 1,240 1,717 1,379 1,150 1,045
--------------------------------------------------------------------
Total non-interest expense 8,651 17,745 9,320 9,144 9,102
--------------------------------------------------------------------
Income before income tax expense 3,665 (6,720) 3,449 3,292 2,606
Income tax resulting from REIT disallowance 487 - - - -
Provision for income taxes 1,356 (2,513) 1,123 1,072 848
--------------------------------------------------------------------
NET INCOME $ 1,822 $ (4,207) $ 2,326 $ 2,220 $ 1,758
--------------------------------------------------------------------
Basic earnings per share $ 0.34 $ (0.78) $ 0.43 $ 0.41 $ 0.32
Diluted earnings per share $ 0.32 $ (0.78) $ 0.40 $ 0.38 $ 0.29
Average shares:
Basic 5,357 5,370 5,378 5,455 5,540
Diluted 5,731 5,370 5,850 5,906 5,963
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BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
NON-PERFORMING ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Unaudited
At
------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
(In thousands)
Non-accrual loans:
Residential mortgage 220 230 166 169 961
Commercial real estate 167 - - 60 60
Commercial 2,641 2,850 1,490 1,612 1,806
Indirect automobile loans 706 593 759 448 372
Other consumer 148 68 99 95 70
------------------------------------------------------------------
Total non-accrual loans 3,882 3,741 2,514 2,384 3,269
Real estate owned ("REO"), net of allowance for losses - 1,500 2,000 2,000 2,000
Total non-performing assets 3,882 5,241 4,514 4,384 5,269
Non-performing loans as a percentage of total loans 0.49% 0.52% 0.32% 0.30% 0.42%
Non-performing assets as a percentage of total loans
and REO 0.49% 0.72% 0.57% 0.55% 0.67%
Allowance for loan losses as a percentage of
non-performing loans 266.59% 275.54% 424.66% 460.01% 329.12%
Allowance for loan losses as a percentage of total loans 1.31% 1.43% 1.36% 1.37% 1.37%
Net charge-offs as a percentage of total loans 0.04% 0.37% 0.17% 0.14% 0.23%
- ------------------------------------------------------------------------------------------------------------------------------------
Quarters Ended
------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
PROVISION AND ALLOWANCE FOR LOAN LOSSES 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at beginning of period 10,308 10,676 10,962 10,759 11,034
Charge-offs (1,111) (3,174) (1,840) (1,925) (3,089)
Recoveries 827 501 504 813 1,304
------------------------------------------------------------------
Net loan charge-offs (284) (2,673) (1,336) (1,112) (1,785)
Provision for loan losses 325 2,305 1,050 1,315 1,510
------------------------------------------------------------------
Balance at end of period 10,349 10,308 10,676 10,962 10,759
- ------------------------------------------------------------------------------------------------------------------------------------
Quarters Ended
------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
NET LOAN (CHARGE-OFFS) RECOVERIES 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------------------
Residential mortgage - - - - -
Commercial real estate - - (150) - (360)
Commercial loans 399 (196) 18 (80) (8)
Consumer loans (1) (683) (2,477) (1,204) (1,032) (1,417)
------------------------------------------------------------------
Total (284) (2,673) (1,336) (1,112) (1,785)
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Consists primarily of automobile loans
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BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL RATIOS
- ------------------------------------------------------------------------------------------------------------------------------------
Unaudited
At or for the three months ended
- ------------------------------------------------------------------------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2003 2002 2002 2002 2002
---------------------------------------------------------------------
(In thousands, except per share data)
Performance Ratios (1):
Return (loss)on average assets 0.70% (1.47%) 0.88% 0.85% 0.68%
Return (loss)on average stockholders' equity 6.06% (12.09%) 6.76% 6.39% 5.09%
Return (loss)on average tangible stockholders' equity 6.33% (13.14%) 7.31% 6.92% 5.51%
Net interest margin to average earning assets (2) 3.67% 3.89% 4.21% 4.36% 4.49%
Noninterest income to average assets (3) 1.04% 1.06% 1.24% 1.18% 1.08%
Noninterest expense to average assets (4) 3.31% 3.85% 3.52% 3.50% 3.79%
Average earning assets to average assets 94.67% 94.88% 94.90% 93.63% 93.62%
Efficiency ratio (3) (4) 73.31% 87.27% 68.20% 67.46% 69.80%
Asset Quality Ratios (5):
Non-performing loans $ 3,882 $ 3,741 $ 2,514 $ 2,384 $ 3,269
Foreclosed real estate $ - $ 1,500 $ 2,000 $ 2,000 $ 2,000
Non-performing assets $ 3,882 $ 5,241 $ 4,514 $ 4,384 $ 5,269
Net charged-off loans to total loans 0.04% 0.37% 0.17% 0.14% 0.23%
Nonperforming loans to total loans 0.49% 0.52% 0.32% 0.30% 0.42%
Nonperforming assets to total loans and REO 0.49% 0.72% 0.57% 0.55% 0.67%
Nonperforming assets to total assets 0.37% 0.50% 0.42% 0.42% 0.51%
Allowance for loan losses to non-performing loans 266.59% 275.54% 424.66% 460.01% 329.12%
Allowance for loan losses to total loans 1.31% 1.43% 1.36% 1.37% 1.37%
Capital Ratios (5):
Stockholders' equity to total assets 11.20% 11.53% 12.48% 12.96% 13.30%
Tier I capital to average adjusted assets 10.00% 10.30% 10.82% 10.49% 10.68%
Tier I capital to risk weighted assets 13.02% 13.45% 12.97% 12.73% 12.95%
Total capital to risk weighted assets 14.67% 15.19% 15.32% 15.38% 15.75%
Other data (5):
Book value per share $ 19.80 $ 19.71 $ 21.78 $ 22.00 $ 21.93
Tangible book value per share $ 18.07 $ 18.00 $ 20.08 $ 20.29 $ 20.25
Stock price:
High $ 24.00 $ 25.25 $ 27.25 $ 26.20 $ 22.20
Low $ 21.86 $ 22.94 $ 20.99 $ 21.98 $ 19.65
Close $ 23.00 $ 23.55 $ 23.50 $ 26.20 $ 22.15
(1) Ratios are annualized for the three months ended March 31, 2003 and 2002
(2) Adjusted for impact of the forfeiture of $758,000 in interest income upon
the sale of subprime automobile loans in December 2002
(3) Excludes net securities gains/losses, and excludes charges related to the
sale of subprime automobile loans and other restructuring charges in the
fourth quarter of 2002
(4) Excludes severance costs and other restructuring charges in the fourth
quarter of 2002
(5) End of period prices and values
11
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS (1)
Unaudited
Quarters ended
Mar. 31, 2003 Dec. 31, 2002 Mar. 31, 2002
---------------------------------------------------------------------------------------------
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate Balance Interest Rate
- ------------------------------------------------------------------------------------------------------------------------------------
(In thousands)
Earning assets:
Short-term investments $ 22,799 84 1.47% 32,069 129 1.61% 19,381 57 1.18%
Securities (2) 209,232 1,769 3.38% 185,563 1,721 3.71% 110,293 1,465 5.31%
Federal Home Loan Bank 7,440 66 3.55% 7,440 70 3.76% 7,044 81 4.60%
Loans:
Residential mortgage 265,884 4,031 6.06% 238,419 3,896 6.54% 229,977 3,951 6.87%
Commercial real estate 160,907 2,607 6.48% 146,922 2,521 6.86% 127,776 2,348 7.35%
Commercial 168,246 2,544 6.05% 171,544 2,559 5.97% 172,714 2,893 6.70%
Indirect automobile loans 94,953 1,920 8.09% 160,256 2,686 6.70% 208,512 4,759 9.13%
Other consumer 59,769 880 5.89% 60,282 967 6.42% 57,241 1,006 7.03%
------------------ ------------------- --------------------
Total loans 749,759 11,982 6.39% 777,424 12,629 6.50% 796,220 14,957 7.51%
------------------ ------------------- --------------------
Total earning assets 989,230 13,901 5.62% 1,002,496 14,549 5.81% 932,938 16,560 7.10%
Other assets 55,681 72,247 94,465
---------- ---------- ----------
Total assets 1,044,911 1,059,984 1,027,403
========== ========= ==========
Funding liabilities:
Deposits:
Non-interest-bearing deposits 86,304 - 85,037 - - 78,117 -
Savings, NOW and money market 364,525 924 1.01% 374,129 1,209 1.29% 346,181 1,316 1.52%
------------------ ------------------- --------------------
Total core deposits 450,829 924 0.82% 459,166 1,209 1.05% 424,298 1,316 1.24%
Certificates of deposit 335,173 2,834 3.38% 329,284 3,012 3.66% 311,611 3,348 4.30%
------------------ ------------------- --------------------
Total deposits 786,002 3,758 1.91% 788,450 4,221 2.14% 735,909 4,664 2.54%
------------------ ------------------- --------------------
Federal Home Loan Bank advances 131,124 1,062 3.24% 137,059 1,321 3.86% 137,963 1,414 4.10%
Repurchase Agreements 356 1 1.12% 1,161 5 1.72% 1,810 8 1.77%
------------------ ------------------- --------------------
Total borrowings 131,480 1,063 3.23% 138,219 1,326 3.84% 139,773 1,422 4.07%
------------------ ------------------- --------------------
Total funding liabilities 917,482 4,821 2.10% 926,670 5,547 2.39% 875,682 6,086 2.78%
Other liabilities 4,773 2,933 9,431
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Total liabilities 922,255 929,602 885,113
Minority interests 2,418 2,624 3,070
Stockholders' Equity 120,238 127,758 139,220
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Total liabilities and equity 1,044,911 1,059,984 1,027,403
========== ========= =========
Net interest income/spread 9,080 3.52% 9,002 3.41% 10,474 4.32%
Net interest margin/Avg earning assets 3.67% 3.59% 4.49%
(1) Average yields earned and rates paid are annualized.
(2) Average balances and yields for securities available for sale are based on
amortized cost.