Press Release
BERKSHIRE HILLS BANCORP REPORTS NET INCOME UP 48% IN FIRST QUARTER
STRONG FIRST QUARTER LOAN AND DEPOSIT GROWTH
OPENING OF THREE NEW YORK BRANCHES PLANNED IN 2ND QUARTER AND TWO IN 4TH
QUARTER; DIVIDEND DECLARED
PITTSFIELD, MA - April 25, 2006 - Berkshire Hills Bancorp, Inc. (the "Company")
(NASDAQ: BHLB), the holding company for Berkshire Bank (the "Bank"), today
reported a 48% increase in first quarter net income to $4.82 million in 2006,
compared to $3.25 million in 2005. First quarter core income increased by 51% to
$4.49 million from $2.97 million in the prior year. Earnings growth reflected
the benefit of the acquisition of Woronoco Bancorp in June 2005, together with
the benefit of organic growth. First quarter earnings per diluted share totaled
$0.55 in 2006, compared to $0.57 a year ago. Core earnings per share were $0.51
in the first quarter of 2006, compared to $0.52 in the first quarter of 2005.
Earnings per share did not reflect the growth in total net income, primarily due
to the issuance of shares for the Woronoco acquisition.
First quarter financial highlights include:
o 23% annualized growth in total deposits
o 11% annualized growth in core deposits
o 13% annualized growth in total commercial loans
o 9% annualized growth in total loans
o 5% linked quarter growth in fee income
Michael P. Daly, President and Chief Executive Officer, stated, "We made
significant progress in the execution of our expansion plan during the first
quarter. Despite challenging market conditions, we met our earnings expectations
due to the benefits of our organic growth. This growth mostly offset a tighter
net interest margin reflecting less favorable deposit market conditions. Our
asset quality measures remain strong."
Mr. Daly continued, "We are nearing completion of three new branches which are
expected to open in our New York Region in the second quarter. We established
our Pioneer Valley Regional Headquarters and continued to expand sources for our
indirect automobile loan program. We also named a new director from the Albany
area, and we announced a 300,000 share stock repurchase program. We are active
on all fronts that we have identified as key components of our plan for
strategic growth as we evolve into a regional bank."
DIVIDEND DECLARED
The Board of Directors declared a quarterly cash dividend of $0.14 per share,
payable on May 19, 2006, to stockholders of record at the close of business on
May 5, 2006.
NEW YORK REGION EXPANSION
During the second quarter, the Bank expects to open three full-service branches
to be located in the towns of Delmar, East Greenbush, and Guilderland.
Announcements will be forthcoming in the near future for the opening date of
each branch. The Bank has also filed applications for regulatory approvals to
open two branches in the towns of Halfmoon and Colonie. These five branches will
bring to eight the total number of full-service branches in the Bank's New York
Region, and will increase the size of the Bank's total branch network to 29
offices from the 24 offices the Bank had at the beginning of this year.
FINANCIAL CONDITION
Total assets were $2.06 billion at quarter-end, up slightly from $2.04 billion
at the beginning of the quarter. Total loans increased by $32 million, growing
at a 9% annualized rate, to $1.45 billion. While most categories of loans
increased, growth was strongest in the Bank's primary target category of
commercial real estate, which increased at a 25% annualized rate during the
quarter due to the contribution of new leadership teams in our New York and
Pioneer Valley regions.
During the first quarter, the 23% annualized increase in total deposits resulted
from growth in money market and time accounts, which had the highest demand in
the current rising interest rate environment. The annualized rate of deposit
growth was 35% in the Pioneer Valley region, 258% in the New York region, and 9%
in the Berkshire County region. In addition to funding loan growth, these
proceeds were used to replace borrowings, which are the highest cost funding
source. Deposits increased by $79 million to $1.45 billion, while borrowings
decreased by $61 million to $352 million.
Asset quality remained favorable during the most recent quarter, with annualized
net charge-offs measuring 0.06% of average loans and quarter-end nonperforming
assets measuring 0.04% of total assets.
RESULTS OF OPERATIONS
All major categories of income and expense increased in the first quarter of
2006, compared to the first quarter of 2005, primarily due to the acquisition of
Woronoco Bancorp in June 2005, together with the benefit of organic growth.
First quarter net income was $4.82 million in 2006 compared to $3.25 million in
2005.
Results in the most recent quarter reflect the impact of a tighter net interest
margin, which measured 3.27% in 2006, compared to 3.36% in the linked quarter.
The decrease was primarily due to a rise in the cost of interest-bearing
deposits, which increased to 2.86% from 2.47% in the prior quarter. This
reflected a shift in market demand towards higher-yielding money market and time
deposit accounts, along with the increasingly competitive deposit market pricing
conditions. The impact of this shift was partially offset by the reduction in
borrowings. The Bank's flexibility to offset this shift has been constrained by
the nearly flat yield curve, which compresses spreads available on the
investment of proceeds from deposit growth.
Fee income increased by $142 thousand (5%) compared to the linked quarter. This
was primarily due to a $244 thousand increase in insurance fee income which
mainly reflected the benefit of annual contingent fee income. This increase
offset a $166 thousand decrease in deposit service fees, reflecting the impact
of lower overdraft income, along with seasonality and the effects of higher
earnings credits related to higher interest rates. Total non-interest income
also reflected changes in non-core net gains on the sale of equity securities,
which totaled $497 thousand in 2006, compared to $882 thousand in the linked
quarter.
Non-interest expense decreased by $575 thousand compared to the prior quarter
due to $520 thousand in non-core charges recorded in the prior quarter related
to the Woronoco acquisition and the termination of the Employee Stock Ownership
Plan in 2005. Core non-interest expense was essentially flat from quarter to
quarter. Expenses include costs of newly opened New York branches which totaled
$230 thousand in the most recent quarter and $217 thousand in the prior quarter.
CONFERENCE CALL
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 3:00 p.m. (ET) on Tuesday, April 25, 2006. Persons wishing to
access the conference call may do so by dialing 1-877-407-8035. Replays of the
conference call will be available beginning April 25, 2006 at 5:00 p.m. (ET)
through May 5, 2006 at 11:59 p.m. (ET) by dialing 1-877-660-6853 and using
Account #286 and Conference ID #198348 (both numbers are needed to access the
replay).
BACKGROUND
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 the largest banking institution based in Western
Massachusetts. The Bank is headquartered in Pittsfield, Massachusetts with
branches serving communities throughout Western Massachusetts and Northeastern
New York. The Bank is transitioning into a regional bank and is positioning
itself as the financial institution of choice in its retail and commercial
markets, delivering exceptional customer service and a broad array of
competitively priced deposit, loan, insurance, wealth management and trust
services, and investment products. For more information on Berkshire Hills
Bancorp, Inc. or Berkshire Bank, visit www.berkshirebank.com or call
800-773-5601.
FORWARD-LOOKING STATEMENTS
Statements contained in this news release contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on the beliefs and expectations of management, as
well as the assumptions made using information currently available to
management. Since these statements reflect the views of management concerning
future events, these statements involve risks, uncertainties, and assumptions.
These risks and uncertainties include among others: changes in market interest
rates and general and regional economic conditions; changes in government
regulations; changes in accounting principles; the quality or composition of the
loan and investment portfolios; and the achievement of anticipated future
earnings benefits from recent acquisitions. Additionally, other risks and
uncertainties may be described in the Company's quarterly reports on Form 10-Q
for the quarters ended March 31, June 30 and September 30 and in its annual
report on Form 10-K, each filed with the Securities and Exchange Commission,
which are available at the Securities and Exchange Commission's internet website
(www.sec.gov) and to which reference is hereby made. Therefore, actual future
results may differ significantly from results discussed in these forward-looking
statements and undue reliance should not be placed on such statements. The
Company assumes no obligation to update any forward-looking statements.
NON-GAAP FINANCIAL MEASURES
This press release contains certain non-GAAP financial measures in addition to
results presented in accordance with Generally Accepted Accounting Principles
(GAAP). The Company's management uses certain non-GAAP measures for operational
and investment decisions and believes that these measures are among several
useful measures for understanding its operating results, performance trends, and
financial condition. These measures should not be construed as 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 and elsewhere in
this release.
BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED BALANCE SHEETS - UNAUDITED
- ------------------------------------------------------------------------------------------------
March 31, December 31,
2006 2005
-------------------------------------
(IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
Cash and due from banks $ 27,426 $ 30,977
Short-term investments 352 110
----------------- -----------------
Total cash and cash equivalents 27,778 31,087
Securities available for sale, at fair value 384,629 390,876
Securities held to maturity, at amortized cost 28,846 29,908
Loans held for sale 1,267 2,093
Total loans 1,448,505 1,416,449
Less: Allowance for loan losses (13,090) (13,001)
----------------- -----------------
Net loans 1,435,415 1,403,448
Premises and equipment, net 26,226 26,236
Accrued interest receivable 8,915 8,508
Goodwill 88,123 88,092
Other intangible assets 11,040 11,524
Bank owned life insurance 19,201 19,002
Cash surrender value - other life insurance 11,262 11,503
Other assets 13,631 13,276
----------------- -----------------
Total assets $ 2,056,333 $ 2,035,553
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 1,450,554 $ 1,371,218
Borrowings 351,729 412,917
Other liabilities 6,413 5,352
----------------- -----------------
Total liabilities 1,808,696 1,789,487
Stockholders' equity:
Preferred stock ($.01 par value; 1,000,000 shares
authorized; none issued) - -
Common stock ($.01 par value; 26,000,000 shares
authorized; 10,600,472 shares issued) 106 106
Additional paid-in capital 200,087 198,667
Unearned compensation (2,709) (1,435)
Retained earnings 103,004 99,429
Accumulated other comprehensive loss (4,356) (2,239)
Treasury stock at cost (1,999,954 shares in 2006
and 2,060,604 in 2005) (48,495) (48,462)
----------------- -----------------
Total stockholders' equity 247,637 246,066
----------------- -----------------
Total liabilities and stockholders' equity $ 2,056,333 $ 2,035,553
================= =================
BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED
- -------------------------------------------------------------------------------------------
LOAN ANALYSIS
March 31, 2006 December 31, 2005
----------------------- ----------------------
Percent Percent
Balance of Total Balance of Total
----------------------- ----------------------
(DOLLARS IN MILLIONS)
Residential mortgages
1 - 4 Family $ 520 36 % $ 514 37 %
Construction 36 2 35 2
----------- ---------- ---------- ----------
Total residential mortgages 556 38 549 39
Commercial mortgages
Construction 60 4 59 4
Single and multi-family 67 5 69 5
Other 310 21 283 20
----------- ---------- ---------- ----------
Total commercial mortgages 437 30 411 29
Commercial business loans 152 11 159 11
Consumer loans
Auto 153 11 148 10
Home equity and other 151 10 149 11
----------- ---------- ---------- ----------
Total consumer loans 304 21 297 21
Total loans $ 1,449 100 % $ 1,416 100 %
=========== ========== ========== ==========
DEPOSIT ANALYSIS
March 31, 2006 December 31, 2005
----------------------- ----------------------
Percent Percent
Balance of Total Balance of Total
----------------------- ----------------------
(DOLLARS IN MILLIONS)
Demand $ 169 12 % $ 180 13 %
NOW 148 10 149 11
Money market 284 20 245 18
Savings 216 15 222 16
----------- ---------- ---------- ----------
Total non-maturity (core) deposits 817 57 796 58
Brokered time 57 4 57 4
Other time 577 39 518 38
----------- ---------- ---------- ----------
Total time deposits 634 43 575 42
Total deposits $ 1,451 100 % $ 1,371 100 %
=========== ========== ========== ==========
BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
- ----------------------------------------------------------------------------------------------
Three Months Ended
-------------------------------------
March 31, March 31,
2006 2005
-------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INTEREST AND DIVIDEND INCOME
Loans $ 22,356 $ 11,916
Securities 4,697 4,110
Short-term investments 17 11
----------------- -----------------
Total interest and dividend income 27,070 16,037
----------------- -----------------
INTEREST EXPENSE
Deposits 8,756 3,373
Borrowings 3,706 2,637
----------------- -----------------
Total interest expense 12,462 6,010
----------------- -----------------
NET INTEREST INCOME 14,608 10,027
PROVISION FOR LOAN LOSSES 290 493
----------------- -----------------
Net interest income after provision for loan losses 14,318 9,534
----------------- -----------------
NON-INTEREST INCOME
Deposit service fees 1,286 616
Wealth management service fees 756 670
Insurance commission and fees 908 32
Loan service fees 226 174
Increase in cash surrender value of life insurance 293 203
Gain on sale of securities, net 497 429
Gain on sale of loans and securitized loans, net - 588
Other 125 32
----------------- -----------------
Total non-interest income 4,091 2,744
----------------- -----------------
NON-INTEREST EXPENSE
Salaries and benefits 5,653 4,335
Occupancy and equipment 1,931 1,140
Marketing and advertising 243 161
Data processing 583 347
Professional services 503 423
Foreclosed real estate and other loans, net 32 94
Amortization of intangible assets 478 30
Other 1,802 1,006
----------------- -----------------
Total non-interest expense 11,225 7,536
----------------- -----------------
Income before income taxes 7,184 4,742
Income tax expense 2,366 1,490
----------------- -----------------
NET INCOME $ 4,818 $ 3,252
================= =================
Earnings per share
Basic $ 0.57 $ 0.61
Diluted $ 0.55 $ 0.57
Average shares outstanding
Basic 8,476 5,300
Diluted 8,755 5,691
BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
- ---------------------------------------------------------------------------------------------------------------------------
Quarters Ended
-----------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2006 2005 2005 2005 2005
-----------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INTEREST AND DIVIDEND INCOME
Residential mortgages $ 7,055 $ 7,142 $ 7,101 $ 4,444 $ 3,059
Commercial mortgages 7,625 7,001 6,673 4,977 4,044
Commercial business loans 2,815 2,865 2,884 2,505 2,222
Auto loans 2,236 2,256 2,274 1,991 1,806
Other consumer loans 2,625 2,556 2,217 1,309 785
-------------- ------------- ------------- ------------ ------------
Total interest on loans 22,356 21,820 21,149 15,226 11,916
Securities 4,697 4,679 4,628 4,100 4,110
Short-term investments 17 13 62 22 11
-------------- ------------- ------------- ------------ ------------
Total interest and dividend income 27,070 26,512 25,839 19,348 16,037
-------------- ------------- ------------- ------------ ------------
INTEREST EXPENSE
Deposits 8,756 7,359 5,979 4,318 3,373
Borrowings 3,706 4,116 4,806 3,522 2,637
-------------- ------------- ------------- ------------ ------------
Total interest expense 12,462 11,475 10,785 7,840 6,010
-------------- ------------- ------------- ------------ ------------
NET INTEREST INCOME 14,608 15,037 15,054 11,508 10,027
PROVISION FOR LOAN LOSSES 290 315 204 300 493
-------------- ------------- ------------- ------------ ------------
Net interest income after provision for loan losses 14,318 14,722 14,850 11,208 9,534
-------------- ------------- ------------- ------------ ------------
NON-INTEREST INCOME
Deposit service fees 1,286 1,452 1,439 1,033 616
Wealth management service fees 756 729 680 663 670
Insurance commission and fees 908 664 472 175 32
Loan service fees 226 189 179 198 174
Increase in cash surrender value of life insurance 293 244 245 200 203
Gain on sale of securities, net 497 882 832 1,388 429
Gain on sale of loans and securitized loans, net - - 22 162 588
Other 125 137 86 97 32
-------------- ------------- ------------- ------------ ------------
Total non-interest income 4,091 4,297 3,955 3,916 2,744
-------------- ------------- ------------- ------------ ------------
NON-INTEREST EXPENSE
Salaries and benefits 5,653 5,758 5,699 4,485 4,335
Occupancy and equipment 1,931 1,799 1,655 1,212 1,140
Marketing and advertising 243 355 372 200 161
Data processing 583 571 518 454 347
Professional services 503 471 590 363 423
Foreclosed real estate and other loans, net 32 187 241 218 94
Amortization of intangible assets 478 481 481 156 30
Merger and conversion expense - 352 828 963 -
Termination of Employee Stock Ownership Plan - 168 - 8,667 -
Other 1,802 1,658 1,216 1,343 1,006
-------------- ------------- ------------- ------------ ------------
Total non-interest expense 11,225 11,800 11,600 18,061 7,536
-------------- ------------- ------------- ------------ ------------
Income (loss) before income taxes 7,184 7,219 7,205 (2,937) 4,742
Income tax expense 2,366 2,381 2,459 1,671 1,490
-------------- ------------- ------------- ------------ ------------
NET INCOME (LOSS) $ 4,818 $ 4,838 $ 4,746 $ (4,608) $ 3,252
============== ============= ============= ============ ============
Earnings (loss) per share
Basic $ 0.57 $ 0.57 $ 0.56 $ (0.74) $ 0.61
Diluted $ 0.55 $ 0.55 $ 0.54 $ (0.74) $ 0.57
Average shares outstanding
Basic 8,476 8,420 8,456 6,257 5,300
Diluted 8,755 8,813 8,856 6,257 5,691
Dividends per share $ 0.14 $ 0.14 $ 0.14 $ 0.12 $ 0.12
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
ASSET QUALITY ANALYSIS
- -----------------------------------------------------------------------------------------------------------------------------------
At or For the Quarters Ended
---------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2006 2005 2005 2005 2005
---------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
NON-PERFORMING ASSETS
Nonaccruing loans:
Residential mortgages $ 289 $ 360 $ 393 $ 663 $ 298
Commercial mortgages - 127 130 209 144
Commercial business loans 480 553 876 613 832
Indirect automobile loans 100 75 106 78 95
Consumer loans 39 71 55 29 1
----------- ----------- ------------- ------------- -------------
Total nonaccruing loans $ 908 $ 1,186 $ 1,560 $ 1,592 $ 1,370
Real estate owned - - - - -
----------- ----------- ------------- ------------- -------------
Total nonperforming assets $ 908 $ 1,186 $ 1,560 $ 1,592 $ 1,370
=========== =========== ============= ============= =============
Total nonperforming loans/total loans 0.06% 0.08% 0.11% 0.11% 0.16%
Total nonperforming assets/total assets 0.04% 0.06% 0.08% 0.08% 0.11%
PROVISION AND ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period $ 13,001 $ 13,123 $ 13,044 $ 9,645 $ 9,337
Charged-off loans (331) (538) (284) (391) (328)
Recoveries on charged-off loans 130 101 159 169 143
----------- ----------- ------------- ------------- -------------
Net loans charged-off (201) (437) (125) (222) (185)
Allowance attributed to loans acquired by merger - - - 3,321 -
Provision for loan losses 290 315 204 300 493
----------- ----------- ------------- ------------- -------------
Balance at end of period $ 13,090 $ 13,001 $ 13,123 $ 13,044 $ 9,645
=========== =========== ============= ============= =============
Allowance for loan losses/nonperforming loans 1442% 1096% 841% 819% 704%
Allowance for loan losses/total loans 0.90% 0.92% 0.93% 0.92% 1.13%
NET LOAN (CHARGE-OFFS) RECOVERIES
Residential mortgages $ - $ - $ - $ - $ -
Commercial mortgages - - - - -
Commercial business loans 3 (268) 4 (109) (4)
Consumer loans (204) (169) (129) (113) (181)
----------- ----------- ------------- ------------- -------------
Total net $ (201) $ (437) $ (125) $ (222) $ (185)
=========== =========== ============= ============= =============
Net charge-offs (annualized)/average loans 0.06% 0.12% 0.04% 0.08% 0.09%
AVERAGE FICO SCORES OF CONSUMER
AUTOMOBILE LOANS 719 716 715 711 708
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------------
At or For the Quarters Ended
----------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2006 2005 2005 2005 2005
----------------------------------------------------------------------
PER SHARE DATA
Core earnings, diluted $ 0.51 $ 0.52 $ 0.54 $ 0.53 $ 0.52
Net earnings (loss), diluted 0.55 0.55 0.54 (0.74) 0.57
Tangible book value 17.26 17.15 17.04 16.56 20.77
Total book value 28.79 28.81 28.68 28.45 22.01
Market price at period end 34.94 33.50 34.00 33.32 33.75
PERFORMANCE RATIOS
Core return on tangible assets 0.98 % 1.02 % 1.04 % 0.94 % 0.91 %
Return (loss) on total assets 0.94 0.96 0.92 (1.19) 1.00
Core return on tangible equity 12.63 13.49 14.47 11.42 9.52
Return (loss) on total equity 7.64 7.89 7.90 (11.26) 9.94
Net interest margin, fully taxable equivalent 3.27 3.36 3.31 3.26 3.34
Core tangible non-interest income to assets 0.74 0.71 0.64 0.66 0.71
Non-interest income to assets 0.80 0.85 0.77 1.00 0.84
Core tangible non-interest expense to assets 2.21 2.24 2.10 2.17 2.30
Non-interest expense to assets 2.20 2.32 2.25 4.62 2.30
Efficiency ratio 57.48 57.00 55.17 57.65 59.56
ASSET QUALITY RATIOS
Net charge-offs (annualized)/average loans 0.06 % 0.12 % 0.04 % 0.08 % 0.09 %
Non-performing assets/total assets 0.04 0.06 0.08 0.08 0.11
Loan loss allowance/total loans 0.90 0.92 0.93 0.92 1.13
Loan loss allowance/nonperforming loans 14.42 x 10.96 x 8.41 x 8.19 x 7.04 x
CAPITAL RATIOS
Stockholders' equity to total assets 12.04 % 12.09 % 12.08 % 11.80 % 9.92 %
Tangible stockholders' equity to tangible assets 7.59 7.56 7.55 7.25 9.42
ANNUALIZED YEAR-TO-DATE GROWTH
Total loans 9 71 94 142 13
Total deposits 23 62 79 109 1
FINANCIAL DATA (IN MILLIONS)
Total assets $ 2,056 $ 2,036 $ 2,033 $ 2,067 $ 1,294
Total loans 1,449 1,416 1,412 1,416 855
Total intangible assets 99 100 100 102 7
Total deposits 1,451 1,371 1,348 1,306 847
Total stockholders' equity 248 246 246 244 128
Total core income 4.5 4.6 4.7 3.5 3.0
Total net income (loss) 4.8 4.8 4.7 (4.6) 3.3
- -----------------------------------------------
(1) All performance ratios are annualized and are based on average balance
sheet amounts, where applicable.
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCES
- ---------------------------------------------------------------------------------------------------------------------------
Quarters Ended
-------------------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2006 2005 2005 2005 2005
-------------------------------------------------------------------------------
(IN THOUSANDS)
Assets
Loans
Residential mortgages $ 554,833 $ 554,328 $ 561,048 $ 352,776 $ 239,755
Commercial mortgages 427,891 398,867 396,212 314,778 276,417
Commercial business loans 152,970 159,741 165,414 154,405 140,139
Auto loans 147,522 147,695 146,138 134,237 125,038
Other consumer loans 150,498 151,222 154,209 91,303 58,669
------------ --------------- --------------- --------------- ---------------
Total loans 1,433,714 1,411,853 1,423,021 1,047,499 840,018
Securities 418,744 425,237 435,853 393,962 396,473
Short-term investments 1,561 538 7,028 1,873 1,672
------------ --------------- --------------- --------------- ---------------
Total earning assets 1,854,019 1,837,628 1,865,902 1,443,334 1,238,163
Intangible assets 99,318 99,862 100,955 38,879 7,254
Other assets 90,412 94,608 98,394 81,732 65,606
------------ --------------- --------------- --------------- ---------------
Total assets $ 2,043,749 $ 2,032,098 $ 2,065,251 $ 1,563,945 $ 1,311,023
============ =============== =============== =============== ===============
Liabilities and stockholders' equity
Deposits
NOW $ 141,364 $ 143,120 $ 135,638 $ 112,775 $ 94,809
Money market 269,685 251,462 241,088 183,273 158,862
Savings 217,475 226,267 240,396 192,250 163,553
Time 611,324 558,963 515,120 384,443 319,682
------------ --------------- --------------- --------------- ---------------
Total interest-bearing deposits 1,239,848 1,179,812 1,132,242 872,741 736,906
Borrowings 380,019 424,293 499,877 387,208 330,448
------------ --------------- --------------- --------------- ---------------
Total interest-bearing liabilities 1,619,867 1,604,105 1,632,119 1,259,949 1,067,354
Non-interest-bearing demand deposits 168,478 175,025 185,183 129,700 107,835
Other liabilities 5,099 6,661 6,409 9,579 3,781
------------ --------------- --------------- --------------- ---------------
Total liabilities 1,793,444 1,785,791 1,823,711 1,399,228 1,178,970
Stockholders' equity 250,305 246,307 241,540 164,717 132,053
------------ --------------- --------------- --------------- ---------------
Total liabilities and equity $ 2,043,749 $ 2,032,098 $ 2,065,251 $ 1,563,945 $ 1,311,023
============ =============== =============== =============== ===============
Supplementary data
Total core deposits $ 797,002 $ 795,874 $ 802,305 $ 617,998 $ 525,059
Total deposits 1,408,326 1,354,837 1,317,425 1,002,441 844,741
- ------------------------------------------------------------
(1) Average balances for securities available-for-sale are based on amortized
cost.
(2) Average balances reflect the acquisition of Woronoco Bancorp, Inc. on
June 1, 2005.
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
AVERAGE YIELDS (Fully Taxable Equivalent - Annualized)
- -----------------------------------------------------------------------------------------------------------------
Quarters Ended
----------------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2006 2005 2005 2005 2005
----------------------------------------------------------------------------
Earning assets
Loans
Residential mortgages 5.09 % 5.15 % 5.06 % 5.04 % 5.10 %
Commercial mortgages 7.23 6.96 6.68 6.34 5.93
Commercial business loans 7.46 7.12 6.92 6.51 6.43
Auto loans 6.15 6.06 6.17 5.95 5.86
Other consumer loans 7.07 6.71 5.70 5.75 5.43
Total loans 6.21 6.15 5.91 5.83 5.73
Securities 4.96 4.87 4.69 4.40 4.41
Short-term investments 4.45 3.96 3.50 2.91 2.67
Total earning assets 5.99 5.83 5.60 5.44 5.31
Funding liabilities
Deposits
NOW 1.01 0.65 0.42 0.18 0.18
Money Market 3.12 2.61 2.07 1.98 1.62
Savings 0.76 0.77 0.86 1.03 1.00
Time 3.92 3.57 3.12 2.99 2.91
Total interest-bearing deposits 2.86 2.47 2.10 1.98 1.86
Borrowings 3.96 3.85 3.81 3.65 3.24
Total interest-bearing liabilities 3.12 2.84 2.62 2.50 2.28
Net interest spread 2.87 2.99 2.98 2.94 3.03
Net interest margin 3.27 3.36 3.31 3.26 3.34
Cost of funds 2.83 2.56 2.35 2.24 2.03
- ----------------------------------------------------------
(1) Average balances and yields for securities available-for-sale are based on
amortized cost.
(2) Cost of funds includes all deposits and borrowings.
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
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At or for the Quarters Ended
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Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2006 2005 2005 2005 2005
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(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Net income $ 4,818 $ 4,838 $ 4,746 $ (4,608) $ 3,252
Less: Gain on sale of securities, net (497) (882) (832) (1,388) (429)
Plus: Termination of ESOP - 168 - 8,667 -
Plus: Merger and conversion expense - 352 828 963 -
Adj: Income taxes 164 119 1 (139) 150
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Core income (A) 4,485 4,595 4,743 3,495 2,973
Plus: Amort. Intang. Assets (net of taxes) 320 322 322 105 20
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Tangible core income (B) $ 4,805 $ 4,917 $ 5,065 $ 3,600 $ 2,993
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Total non-interest income $ 4,091 $ 4,297 $ 3,955 $ 3,916 $ 2,744
Less: Gain on sale of securities, net (497) (882) (832) (1,388) (429)
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Total core non-interest income (C) $ 3,594 $ 3,415 $ 3,123 $ 2,528 $ 2,315
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Total non-interest expense $ 11,225 $ 11,800 $ 11,600 $ 18,061 $ 7,536
Less: Termination of ESOP - (168) - (8,667) -
Less: Merger and conversion expense - (352) (828) (963) -
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Core non-interest expense 11,225 11,280 10,772 8,431 7,536
Less: Amortization of intangible assets (478) (481) (481) (156) (30)
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Total core tangible non-interest expense (D) $ 10,747 $ 10,799 $ 10,291 $ 8,275 $ 7,506
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Total average assets $ 2,043,749 $ 2,032,098 $ 2,065,251 $ 1,563,945 $ 1,311,023
Less: Average intangible assets (99,318) (99,862) (100,955) (38,879) (7,254)
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Total average tangible assets (E) $ 1,944,431 $ 1,932,236 $ 1,964,296 $ 1,525,066 $ 1,303,769
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Total average stockholders' equity $ 250,305 $ 246,307 $ 241,540 $ 164,717 $ 132,053
Less: Average intangible assets (99,318) (99,862) (100,955) (38,879) (7,254)
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Total average tangible stockholders' equity (F) $ 150,987 $ 146,445 $ 140,585 $ 125,838 $ 124,799
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Total stockholders' equity, period-end $ 247,637 $ 246,066 $ 245,531 $ 244,497 $ 128,426
Less: Intangible assets, period-end (99,163) (99,616) (99,742) (102,167) (7,235)
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Total tangible stockholders' equity, period-end (G) $ 148,474 $ 146,450 $ 145,789 $ 142,330 $ 121,191
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Total shares outstanding (thousands) (H) 8,601 8,540 8,564 8,594 5,835
Average diluted shares outstanding (thousands) (I) 8,755 8,813 8,856 6,257 5,691
Core earnings per share (A/I) $ 0.51 $ 0.52 $ 0.54 $ 0.53 $ 0.52
Tangible book value per share (G/H) $ 17.26 $ 17.15 $ 17.04 $ 16.56 $ 20.77
Core return on tangible assets (B/E) 0.98 % 1.02 % 1.04 % 0.94 % 0.91 %
Core return on tangible equity (B/F) 12.63 13.49 14.47 11.42 9.52
Core tangible non-interest income to assets (C/E) 0.74 0.71 0.64 0.66 0.71
Core tangible non-interest exp to assets (D/E) 2.21 2.24 2.10 2.17 2.30
Efficiency ratio 57.48 57.00 55.17 57.65 59.56
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Efficiency ratio is computed by dividing total tangible core non-interest
expense by the sum of total net interest income on a fully taxable equivalent
basis and total core non-interest income. The Company uses this non-GAAP
measure, which is used widely in the banking industry, to provide important
information regarding its operational efficiency.
Note: Ratios are annualized and based on average balance sheet amounts,
where applicable.
CONTACT:
Berkshire Hills Bancorp, Inc.
Wayne F. Patenaude, 413-236-3195
Senior Vice President, Treasurer
and Chief Financial Officer