<Page>1
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma consolidated condensed combined balance
sheet as of June 30, 2007 and the unaudited pro forma consolidated condensed
combined statements of income for the six months ended June 30, 2007 and the
year ended December 31, 2006 give effect to the pending merger.
The unaudited pro forma consolidated condensed combined financial
information is based on the historical consolidated financial statements of
Berkshire Hills Bancorp and Factory Point Bancorp under the assumptions and
adjustments set forth in the accompanying notes. The unaudited pro forma
consolidated condensed combined balance sheet gives effect to the merger as if
the merger had been consummated at June 30, 2007. The unaudited pro forma
consolidated condensed combined statements of income give effect to the merger
as if the merger had been completed at the beginning of the periods presented.
You should read the unaudited pro forma consolidated condensed combined
financial statements in conjunction with the historical consolidated financial
statements of Berkshire Hills Bancorp that are incorporated by reference into
this document and of Factory Point Bancorp that appear elsewhere in this
document. The pro forma information is not necessarily indicative of the
combined financial position or the results of operations in the future or of the
combined financial position or the results of operations that would have been
realized had the merger been consummated during the periods or as of the dates
for which the pro forma information is presented.
Pro forma per share amounts for the combined company are based on the
exchange ratio of 0.5844 set forth in the Agreement and Plan of Merger.
<Page>2
BERKSHIRE HILLS BANCORP, INC. AND FACTORY POINT BANCORP, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED COMBINED BALANCE SHEET
AS OF JUNE 30, 2007
<Table>
<Caption>
Historical
-------------------------------
Berkshire Hills Factory Point Pro Forma Pro Forma
(in thousands) Bancorp Bancorp Adjustment Combined
- ---------------------------------- --------------- -------------- ---------- -----------
ASSETS
Cash and securities $ 249,677 $ 87,889 $ -- $ 337,566
Net loans 1,711,09 231,800 (5,300) 1,937,59
Goodwill 105,051 2,299 56,200 (3) 163,550
Other intangibles 15,474 -- 8,400 (4) 23,874
Other assets 88,339 14,091 (1,300)(5) 101,130
----------- -------- -------- ----------
Total assets $ 2,169,632 $336,079 $ 58,000 $2,563,711
=========== ======== ======== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Deposits $ 1,528,514 $260,595 $ -- $1,789,109
Borrowings 353,083 43,319 -- 396,402
Subordinated debentures 15,464 -- 23,000 (6) 38,464
Other liabilities 6,219 2,639 -- 8,858
----------- -------- -------- ----------
Total liabilities 1,903,28 306,553 23,000 2,232,833
Common stock 106 4,106 (4,083)(7) 129
Additional paid-in capital 202,441 18,793 45,710 (7) 266,944
Unearned compensation (2,805) -- -- (7) (2,805)
Retained earnings 112,621 7,221 (7,221)(7) 112,621
Net accumulated other
comprehensive income/(loss) (1,274) (581) 581 (7) (1,274)
Treasury stock at cost (44,737) (13) 13 (7) (44,737)
----------- -------- -------- ----------
Total stockholders' equity 266,352 29,526 35,000 330,878
----------- -------- -------- ----------
Total liabilities and
stockholders' equity $ 2,169,632 $336,079 $ 58,000 $2,563,711
=========== ======== ======== ==========
</Table>
See Notes to the Unaudited Pro Forma Consolidated Condensed Combined
Financial Statements
<Page>3
BERKSHIRE HILLS BANCORP, INC. AND FACTORY POINT BANCORP, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED COMBINED STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 2007
<Table>
<Caption>
Historical
------------------------------
Berkshire Hills Factory Point Pro Forma Pro Forma
(In thousands, except per share data) Bancorp Bancorp Adjustment Combined
- -------------------------------------- ---------------- ------------- ---------- ----------
INTEREST AND DIVIDEND INCOME
Loans $ 57,674 $ 8,596 $ 300 (2) $66,570
Investments and other 5,790 1,915 -- 7,705
----------- -------- -------- --------
Total interest and dividend income 63,464 10,511 300 74,275
INTEREST EXPENSE
Deposits 24,267 3,134 -- 27,401
Borrowings 8,969 944 850 (6) 10,763
----------- -------- -------- --------
Total interest expense 33,236 4,078 850 38,164
----------- -------- -------- --------
NET INTEREST INCOME 30,228 6,433 (550) 36,111
NON-INTEREST INCOME
Fee income 14,323 1,326 -- 15,649
Gain on securities 81 -- -- 81
Other non-interest income 726 448 -- 1,174
----------- -------- -------- --------
Total non-interest income 15,130 1,774 -- 16,904
----------- -------- -------- --------
TOTAL NET REVENUE 45,358 8,207 (550) 53,015
PROVISION FOR LOAN LOSSES 850 -- -- 850
NON-INTEREST EXPENSE
Salaries and employee benefits 16,741 2,769 (800) 18,710
Occupancy and equipment 4,871 925 -- 5,796
Non-recurring expense 153 -- -- 153
Other non-interest expense 8,747 1,540 100 (8) 10,387
----------- -------- -------- --------
Total non-interest expense 30,512 5,234 (700) 35,046
----------- -------- -------- --------
Income before income taxes 13,996 2,973 150 (8) 17,119
Income tax expense 4,478 755 50 5,283
----------- -------- -------- --------
NET INCOME $ 9,518 $ 2,218 $ 100 $ 11,836
=========== ======== ======== ========
BASIC EARNINGS PER SHARE $ 1.09 $ 0.54 $ 1.12
DILUTED EARNINGS PER SHARE $ 1.07 $ 0.53 $ 1.09
Weighted average common shares
Basic 8,697 4,089 1,914 10,611
Diluted 8,855 4,152 1,978 10,833
</Table>
See Notes to the Unaudited Pro Forma Consolidated Condensed Combined
Financial Statements
<Page>3
BERKSHIRE HILLS BANCORP, INC. AND FACTORY POINT BANCORP, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED COMBINED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 2006
<Table>
<Caption>
Historical
------------------------------
Berkshire Hills Factory Point Pro Forma Pro Forma
(In thousands, except per share data) Bancorp Bancorp Adjustment Combined
- -------------------------------------- ---------------- ------------- ---------- ----------
Loans $ 100,836 $ 16,312 $ 600 (2) $117,748
Investments and other 17,215 3,889 -- 21,104
---------------- ------------- ---------- ----------
Total interest and dividend income 118,051 20,201 600 138,852
INTEREST EXPENSE
Deposits 41,044 5,064 -- 46,108
Borrowings 16,767 1,943 1,700 (6) 20,410
---------------- ------------- ---------- ----------
Total interest expense 57,811 7,007 1,700 66,518
---------------- ------------- ---------- ----------
NET INTEREST INCOME 60,240 13,194 (1,100) 72,334
NON-INTEREST INCOME
Fee income 13,539 2,846 -- 16,385
Loss on securities (3,130) -- -- (3,130)
Other non-interest income 1,639 258 -- 1,897
---------------- ------------- ---------- ----------
Total non-interest income 12,048 3,104 -- 15,152
---------------- ------------- ---------- ----------
TOTAL NET REVENUE 72,288 16,298 (1,100) 87,486
PROVISION FOR LOAN LOSSES 7,860 390 -- 8,250
NON-INTEREST EXPENSE
Salaries and employee benefits 24,708 5,148 (1,600) (8) 28,256
Occupancy and equipment 7,699 1,733 -- 9,432
Non-recurring expense 1,510 -- -- 1,510
Other non-interest expense 14,951 3,009 200 (8) 18,160
---------------- ------------- ---------- ----------
Total non-interest expense 48,868 9,890 (1,400) 57,358
---------------- ------------- ---------- ----------
Income from continuing operations
before income taxes 15,560 6,018 300 (8) 21,878
Income tax expense 4,668 1,553 100 6,321
---------------- ------------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS 10,892 4,465 200 15,557
Income from discontinued
operations before income taxes 606 -- -- 606
Income tax expense 235 -- -- 235
---------------- ------------- ---------- ----------
NET INCOME FROM DISCONTINUED
OPERATIONS 371 -- -- 371
---------------- ------------- ---------- ----------
NET INCOME $ 11,263 $ 4,465 $ 200 $ 15,928
================ ============= ========== ===========
BASIC EARNINGS PER SHARE
Continuing operations $ 1.28 $ 1.10 $ 1.49
Discontinued operations 0.04 -- 0.03
---------------- ------------- ---------- ----------
TOTAL $ 1.32 $ 1.10 $ 1.52
================ ============= ========== ===========
DILUTED EARNINGS PER SHARE
Continuing operations $ 1.25 $ 1.08 $ 1.46
Discontinued operations 0.04 -- 0.03
---------------- ------------- ---------- ----------
TOTAL $ 1.29 $ 1.08 $ 1.49
================ ============= ========== ===========
Weighted average common shares
Basic 8,538 4,073 1,914 10,452
Diluted 8,730 4,150 1,978 10,708
</Table>
See Notes to the Unaudited Pro Forma Consolidated Condensed Combined
Financial Statements
<Page>4
BERKSHIRE HILLS BANCORP, INC. AND FACTORY POINT BANCORP, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED COMBINED FINANCIAL STATEMENTS
NOTE 1
The unaudited pro forma consolidated condensed combined ("pro forma
combined") balance sheet of Berkshire Hills Bancorp and Factory Point Bancorp at
June 30, 2007 has been prepared as if the merger had been consummated on that
date. The pro forma combined statements of income for the six months ended June
30, 2007 and year ended December 31, 2006 have been prepared as if the merger
had been consummated at the beginning of the periods presented. The pro forma
combined financial statements are based on the historical financial statements
of Berkshire Hills Bancorp and Factory Point Bancorp and give effect to the
merger under the purchase method of accounting and the assumptions and
adjustments in the notes that follow.
Certain reclassifications have been made to Factory Point Bancorp's
financial information to conform to Berkshire Hills Bancorp's financial
information.
NOTE 2
The only material estimated purchase accounting adjustment to record the
existing assets and liabilities of Factory Point Bancorp at fair value is a $5.3
million estimated discount for net loans based on the Factory Point Bancorp
financial statements at December 31, 2006. This estimated fair value and
resulting net discount, for purposes of these pro forma combined financial
statements, is being accreted to interest income on a straight line basis over
approximately nine years. The actual discount will be accreted to interest
income to produce a constant yield to maturity.
NOTE 3
The components of the purchase price of Factory Point Bancorp are as
follows:
(in thousands, except per share data)
<Table>
<Caption>
<s> <c>
Purchase Price of Factory Point Bancorp
Factory Point Bancorp common stock outstanding 4,105 (a)
Exchange ratio (80% stock consideration converted at 0.5844 exchange ratio) 0.4675
Total Berkshire Hills Bancorp common stock to be issued 1,919
Purchase price per Berkshire Hills Bancorp common shares $61,989 (b)
Estimated value of converted Factory Point stock options 2,740
Cash payment to Factory Point Bancorp shareholders (20% cash consideration
at $19.50 per share) 16,009 (c)
Estimated transaction costs, net of 33% tax 6,816 (c)
-------
Total purchase price $87,554
=======
</Table>
(a) Based on shares of Factory Point Bancorp common stock outstanding as of
March 31, 2007.
(b) Based on the $32.30 average per share closing price of Berkshire Hills
Bancorp common stock from May 11, 2007 through May 17, 2007.
(c) Estimated transaction costs include severance, contract terminations and
professional fees.
<Page>5
Goodwill is calculated as the difference between the total purchase price
and the net fair value of assets and liabilities acquired, including the fair
value of identified intangible assets and related tax adjustments.
The pro forma combined financial statements do not include indirect merger
costs which are estimated in the range of $1.0 to $2.0 million, after tax
effects, for systems conversion and integration expenses. It is anticipated that
these expenses will be recorded around the time of the merger date.
NOTE 4
Other intangibles include an estimated core deposit intangible of $8.0
million, and the value of non-compete agreements and other intangible assets of
$0.4 million. The core deposit intangible is estimated to have an estimated
useful life of eight years and is amortized over this estimated useful life on a
straight-line basis. The other intangible assets are amortized on a
straight-line basis over a three year period.
NOTE 5
The adjustment to other assets is the estimated change in the net deferred
tax asset based on the other pro forma adjustments.
NOTE 6
The increase in subordinated debentures is based on a projected issuance
of $23.0 million in junior subordinated debentures to finance the $16.0 million
cash consideration to shareholders and the $7.0 million in estimated direct
costs of the merger, net of taxes. Interest expense includes the estimated
interest cost of this financing. The actual form of this financing may be
different from this assumption, based on capital market conditions.
NOTE 7
Under the purchase method of accounting, the equity accounts of Factory
Point are eliminated. Common stock is adjusted to include the $19 thousand par
value of the 1.9 million common shares to be issued as part of the purchase
consideration. Additional paid-in capital is adjusted for the value of the
common stock issued, in excess of the par value, along with the $2.7 million
estimated value of Berkshire Hills Bancorp stock options issued in exchange for
Factory Point Bancorp options.
NOTE 8
It is anticipated that there will be operating cost savings approximating
$2.5 million, which will be partially offset by $1.1 million in increased
amortization related to increased intangible assets. The allocation of operating
cost savings is an estimate subject to further change. The net tax rate related
to merger related changes in net income is estimated at approximately 33%.