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                                                           FOR IMMEDIATE RELEASE


                     BERKSHIRE HILLS BANCORP, INC. ANNOUNCES
                        SETTLEMENT OF REIT TAX ASSESSMENT


PITTSFIELD,  MA, June 24, 2003,  Berkshire Hills Bancorp,  Inc. (the "Company"),
(AMEX:  BHL), the holding  company for Berkshire Bank (the "Bank")  announced it
has reached a settlement agreement with the Massachusetts  Department of Revenue
("DOR") with respect to the tax assessment resulting from the DOR's disallowance
of the Company's  deduction of certain  dividend  distributions  received by the
Bank from its real estate investment trust ("REIT").

The Company  previously  disclosed  that the DOR had  assessed it  approximately
$780,000 in state taxes plus interest for the disallowed deduction. As a result,
the  Company  accrued a first  quarter  2003 charge of  approximately  $513,000,
representing the net tax-effected assessment.  The first quarter charge resulted
from  retroactive   legislation  passed  in  early  2003  which  eliminated  the
deductions on dividends received from certain REITs, effective for the tax years
beginning in 1999.

The Company has agreed to pay  approximately  $398,000 to the DOR,  representing
half of the assessment plus interest.  The DOR will release the Company from any
liability  for the  remaining  amount  assessed.  As a result,  the Company will
reverse one-half of the first quarter charge,  or approximately  $259,000 during
the second quarter of 2003.

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

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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 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:  Michael P. Daly
              (413) 236-3194