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[BERKSHIRE HILLS BANCORP, INC. LETTERHEAD]
BERKSHIRE HILLS REPORTS RECORD EARNINGS FOR 2007
NET INCOME INCREASES 20% FOR THE YEAR
DIVIDEND DECLARED
PITTSFIELD, MA - January 24, 2008 - Berkshire Hills Bancorp (BHLB), parent of
Berkshire Bank, reported record net income of $13.5 million ($1.44 per share)
for the year 2007, an increase of 20% over $11.3 million ($1.29 per share) for
the prior year, and an increase of 12% on a per share basis. Results for 2007
included a $2.5 million fourth quarter loan loss provision ($0.16 per share
after tax) related to one commercial loan involving borrower fraud. Core
earnings per share in 2007 before that charge were $2.06, which was 3% higher
than the 2006 core earnings of $2.00. Including that loan charge, 2007 core
earnings per share were $1.90. Berkshire produced these results while also
absorbing higher expenses related to its strategic initiatives for de novo
branch growth and for rebranding as AMERICA'S MOST EXCITING BANK(SM). Earnings
results in both years also included non-core charges related primarily to
restructurings and acquisitions.
Berkshire's fourth quarter core earnings per share before the above loan charge
were $0.50 in 2007, compared to $0.48 in 2006. 2007 results benefited from
organic growth, expense control, and the contribution of the new Southern
Vermont region. Fourth quarter 2007 core earnings per share were $0.36 including
the loan charge ($0.14 per share after tax in the quarter). Fourth quarter
results included net non-core charges of $0.07 per share in 2007 and $0.01 per
share in 2006. Non-core charges in 2007 included merger integration charges
following the acquisition of Factory Point Bancorp in September 2007, and other
restructuring charges. After these charges, Berkshire's fourth quarter GAAP net
income was $3.1 million ($0.29 per share) in 2007 compared to $4.1 million
($0.47 per share) in 2006.
FOURTH QUARTER HIGHLIGHTS
o 18% increase in total net revenue, including the benefit of the
Factory Point acquisition
o Net interest margin increased to 3.38% from 3.20% for the linked
quarter
o Accruing delinquent loans decreased to 0.43% of total loans from
0.71% due to payoffs
o Nonperforming assets were 0.45% of total assets at year-end
o 5% annualized organic increase in commercial mortgage loans
o 14% annualized organic increase in core non-maturity deposit balances
o 8% annualized organic increase in transaction deposit accounts
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ANNUAL FINANCIAL HIGHLIGHTS
o Acquisition of Factory Point Bancorp, contributing to a 17% increase
in total assets
o Four new branches were opened, increasing the New York Capital Region
to ten branches
o First full year of operations for the expanded Berkshire Insurance
Group - with an increase of $10 million in revenues in 2007
o 7% organic growth in commercial mortgages
o 6% organic growth in core non-maturity deposits
o 32% growth in bank fee income
o 12% organic growth in wealth management assets to $781 million.
Michael P. Daly, President and Chief Executive Officer, stated, "We took major
steps to improve Berkshire's fundamental position in 2007. Our merger with
Factory Point Bancorp gave us a solid entry into the attractive Southern Vermont
market, and helped boost our total year-end assets by 17%. Including the seven
new Vermont branches and the four new branches we added in the Albany area, we
now have 38 banking offices, which is a 41% increase over the prior year-end. We
also introduced our branding as AMERICA'S MOST EXCITING BANK(SM), achieving
higher recognition as we build a better banking experience for our customers."
Mr. Daly continued, "Our earnings included a previously disclosed $2.5 million
charge that we recorded for the fourth quarter writedown of one commercial loan.
In addition to the 20% increase in GAAP earnings, we produced a 3% increase in
core earnings before this loan writedown. This reflects the forward progress we
made as a result of our organic growth and acquisitions, and this is net of the
$0.16 per share strategic investment we made in additional de novo branch and
branding expenses. Our fourth quarter net interest margin increased to 3.38%,
the highest quarterly level in fourteen quarters and our annual net revenue
increased by 23% to $89 million. We ended the year with strong fundamentals, and
we are optimistic that the momentum for higher earnings will carry forward into
2008."
Mr. Daly concluded, "We have long maintained that our markets are geographically
conservative, and this has been demonstrated in the current economic situation.
While there has naturally been some increase in delinquencies and nonperforming
loans during the year, our loan portfolio is in solid shape and many of our
performance metrics improved in the most recent quarter. Our annual loan
charge-offs were 0.34% of average loans, but this metric was only 0.11% before
the above noted fraud related situation, which compares favorably to the 0.16%
average for the prior four years. I am pleased to report that we promoted our
Risk Officer, Shepard D. Rainie, to Executive Vice President this month. Mr.
Rainie joined us in August, 2006 and has guided the expansion of this critical
function. We are committed to maintaining strong asset quality and proactively
managing credit risk in what is expect to be a softer 2008 economic environment.
We have not operated subprime lending programs and we have not purchased
subprime investments. Our decision to adjust our underwriting and pricing
criteria in 2007 resulted in lower volume and earnings growth than we had
planned, and we will continue
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to emphasize strong asset quality while we also take advantage of current
opportunities to gain market share in our multi-state franchise."
DIVIDEND DECLARATION
- --------------------
The Board of Directors declared a quarterly cash dividend of $0.15 per share to
stockholders of record on February 7, 2008 and payable on February 21, 2008. Due
to the third quarter dividend increase of $0.01 per share, Berkshire's total
dividends paid per share increased by 4% to $0.58 in 2007 compared to $0.56 in
2006.
FINANCIAL CONDITION
- -------------------
Total assets were $2.51 billion at year-end 2007, increasing by $364 million
(17%). Most categories of assets and liabilities increased due to the impact of
the acquisition and organic growth. In conjunction with the acquisition,
Berkshire restructured its balance sheet in the third quarter and sold $82
million in assets, including $32 million in securities and $50 million in
residential mortgage loans.
Total loans increased by $245 million, including acquired Factory Point loans.
Organic loan growth in 2007 totaled $58 million (3%) primarily due to growth of
$40 million (7%) in commercial mortgages. Commercial mortgages continued to be
the primary loan growth component in the fourth quarter, increasing at a 5%
annualized rate. Fourth quarter home equity loan balances grew by 5% primarily
due to pricing promotions, with no change in underwriting requirements. This
growth offset a decrease in automobile loans due to a change in the pricing
approach for these loans.
Net loan charge-offs measured 0.34% of average loans in 2007, and they measured
0.11% of average loans before $4.0 million recorded in the second half of the
year related to the previously mentioned commercial loan. Accruing delinquent
loans decreased in the fourth quarter to approximately $8.4 million (0.43% of
total loans) from $13.8 million (0.71% of total loans) at the end of the third
quarter. This decrease resulted primarily from payoffs in the commercial
mortgage portfolio. Total nonperforming assets also decreased in the fourth
quarter to $11.4 million (0.45% of total assets) from $11.8 million (0.48% of
total assets) at the end of the third quarter. Net loan charge-offs of $3.1
million were mostly offset by $2.7 million in net new nonperforming assets
during the fourth quarter. The loan loss allowance totaled 1.14% of total loans
at year-end 2007, which was unchanged from the prior quarter-end and the prior
year-end. The year-end loan loss allowance included impaired loan reserves
totaling $1.2 million, compared to $0.6 million at the end of the third quarter.
Total deposits increased by $301 million in 2007, including acquired Factory
Point deposits. Organic deposit growth in 2007 totaled $25 million (2%) due to
growth of $49 million (6%) in core non-maturity deposit balances. Berkshire
allowed expensive time deposits to decrease as loan growth declined, and the
Company promoted non-time accounts to take advantage of more favorable cost and
cross sale characteristics. Total borrowings decreased by $11 million in 2007,
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with the increase relating to the Factory Point acquisition being more than
offset by the third quarter balance sheet deleveraging.
Stockholders' equity increased in 2007 primarily due to $63 million recorded in
conjunction with the Factory Point acquisition, including the issuance of 1.91
million common shares. Goodwill increased by $57 million, primarily due to the
Factory Point acquisition. Total book value per share increased to $31.15, while
tangible book value per share decreased to $13.82. The ratio of total equity to
assets increased to 13.0% reflecting the benefit of the new shares issued and
the balance sheet deleveraging. The ratio of tangible equity to assets decreased
to 6.2% due primarily to the additional goodwill recognized. Net income of $14
million in 2007 was primarily used for dividends of $5 million and treasury
stock buybacks of $8 million. In the fourth quarter, the Company repurchased
270,000 shares at an average price of $26.55 per share.
RESULTS OF OPERATIONS
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Most major categories of income and expense increased in 2007 compared to 2006,
due to the acquisition of five affiliated insurance agencies in the fourth
quarter of 2006 and Factory Point Bancorp near the end of the third quarter of
2007. Net income in both years was reduced by net non-core charges. Non-core
charges in 2007 included $3.8 million related to the balance sheet restructuring
in the third quarter, $1.7 million in expenses related to the Factory Point
acquisition, and $1.3 million in other restructuring expenses. All per share
2007 income measures included 1.9 million in additional shares issued for the
Factory Point acquisition in September.
Net interest income increased by $3.7 million (6%) for 2007 and by $2.6 million
(17%) for the fourth quarter, compared to the prior year periods. These
increases reflected both the Factory Point acquisition and organic growth. Also,
the net interest margin increased to 3.38% in the most recent quarter, the
highest result in fourteen quarters. This reflected the benefit of the third
quarter balance sheet restructuring, the Factory Point acquisition, and revised
pricing strategies. Berkshire's interest rate risk was modestly liability
sensitive at year-end.
Total fee income increased by $13.1 million (97%) in 2007 compared to 2006, and
year-to-year fourth quarter fee income increased by $2.0 million (45%),
reflecting the benefit of organic growth and the insurance and bank
acquisitions. Insurance fee income increased by $10 million to $13.7 million for
the year. Total core non-interest income increased to 31% of core revenues in
2007, compared to 20% in 2006, reflecting Berkshire's goal of diversifying its
revenue stream. The $3.8 million in total 2007 charges recorded to non-interest
income represented net costs for the third quarter balance sheet restructuring,
which boosted fourth quarter net interest income and also improved Berkshire's
capital, liquidity, and interest rate sensitivity position.
Berkshire had boosted its loan loss allowance from 0.92% of loans to 1.14% of
loans in 2006 in recognition that the benign credit environment of the previous
several years was ending. The Company recorded a $7.9 million loan loss
provision in 2006 to accomplish this increase. In 2007, Berkshire maintained its
allowance at 1.14% of loans and the resulting provision was $4.3 million. The
lower provision in 2007 also reflected the impact of residential mortgage sales,
commercial loan outplacements, and lower organic loan portfolio growth. The
provision in 2007
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included a $2.5 million fourth quarter charge related to the one commercial loan
previously mentioned. In addition to the contribution from the provision, the
loan loss allowance also increased by $4.5 million in 2007 due to the inclusion
of the Factory Point loan loss allowance.
Total non-interest expense increased by $16.6 million (34%) in 2007, and
year-to-year fourth quarter non-interest expense increased by $3.7 million
(26%). These increases primarily resulted from the bank and insurance
acquisitions. The cost of the New York de novo branch program increased by $1.8
million ($0.11 per share after tax) due to recent branch expansion. Expenses in
2007 also included approximately $775 thousand ($0.05 per share after tax) for
the costs of the Company's branding program. The effective income tax rate
decreased to 28% in 2007 from 30% in 2006 due to higher tax exempt revenue
sources and the availability of tax credits. The year-to-year fourth quarter
effective income tax rate declined to 20% from 32% due primarily to the impact
of the commercial loan writedown in 2007.
CONFERENCE CALL
- ---------------
Berkshire will conduct a conference call at 10:00 A.M. eastern time on Friday,
January 25, 2008. President and Chief Executive Officer Michael P. Daly and
Executive Vice President and Chief Financial Officer Kevin P. Riley will discuss
highlights of the Company's fourth quarter and year-end financial results, along
with guidance about expected financial results. Information about the conference
call follows:
Dial-in: 1-800-860-2442
Replay Dial-in: 1-877-344-7529
Replay Passcode: 414744
Replay Dates: January 25, 2008 at 12:00 P.M. (noon ET) through
February 2, 2008 at 9:00 A.M. (ET)
Webcast replay: www.berkshirebank.com
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All interested parties are welcome to access the conference call and are
requested to call in a few minutes prior to 10:00 A.M. (ET) to register for the
event. After the presentation by Messrs. Daly and Riley there will be an
opportunity for questions and answers. Live access to the call on a listen only
basis will also be available on the Internet at the Company's website at
www.berkshirebank.com by clicking on the Investor Relations link and then
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selecting the Webcast link on the Corporate Profile page. A replay of the call
will also be available at the website for an extended period of time.
BACKGROUND
- ----------
Berkshire Hills Bancorp is the holding company for Berkshire Bank - AMERICA'S
MOST EXCITING BANK(SM). 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, Northeastern New York and Southern Vermont. The Bank is
transitioning into a regional bank, delivering exceptional customer service and
a broad array of competitively priced deposit, loan, insurance, wealth
management and trust services and
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investment products. For more information on Berkshire Hills Bancorp 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.
Forward-looking statements can be identified by the fact that they do not relate
strictly to historical or current facts. They often include words like
"believe," "expect," "anticipate," "estimate," and "intend" or future or
conditional verbs such as "will," "would," "should," "could" or "may." These
statements are based on the beliefs and expectations of 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. In addition, the following factors, among others, could
cause actual results to differ materially from the anticipated results or other
expectations expressed in the forward-looking statements: adverse governmental
or regulatory policies may be enacted; the risks associated with continued
diversification of assets and adverse changes to credit quality; and
difficulties associated with achieving expected future financial results.
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. 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 during the current fiscal period, and compared to
the prior fiscal period. The core earnings measure is not intended to substitute
for GAAP net income, but is an additional measure that the Company uses and
believes is useful for understanding its operating results. During the third
quarter of 2006, the Company identified charges related to the balance sheet
repositioning and to the loan loss allowance adjustment as
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non-core in the computation of core earnings. The Company views these charges as
infrequent and not specifically related to the Company's operating activities
during the year. During the third quarter of 2007, the Company identified
charges in conjunction with the acquisition of Factory Point Bancorp as non-core
in the computation of core earnings. These charges included indirect merger
costs and balance sheet deleveraging costs. Additionally, expense restructuring
costs were deemed as non-core.
# # #
CONTACTS
- --------
Kevin P. Riley
Executive Vice President and Chief Financial Officer
413-236-3195
David H. Gonci
Corporate Finance Officer
413-281-1973
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BERKSHIRE HILLS BANCORP
CONSOLIDATED BALANCE SHEETS - UNAUDITED
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December 31, September 30, December 31,
- ----------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2007 2007 2006
- ----------------------------------------------------------------------------------------------------------------------
ASSETS
Total cash and cash equivalents $ 41,142 $ 33,882 $ 30,985
Securities available for sale, at fair value 219,041 194,374 194,206
Securities held to maturity, at amortized cost 39,456 41,978 39,968
Residential mortgages 657,045 658,594 599,273
Commercial mortgages 704,764 694,650 567,074
Commercial business loans 203,564 203,594 189,758
Consumer loans 378,643 381,688 342,882
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Total loans 1,944,016 1,938,526 1,698,987
Less: Allowance for loan losses (22,116) (22,108) (19,370)
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Net loans 1,921,900 1,916,418 1,679,617
Premises and equipment, net 38,806 38,578 29,130
Goodwill 161,632 161,296 104,531
Other intangible assets 20,820 21,876 16,810
Cash surrender value of life insurance policies 35,316 35,027 30,338
Other assets 35,319 28,633 24,057
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Total assets $ 2,513,432 $ 2,472,062 $ 2,149,642
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LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits $ 231,994 $ 228,731 $ 178,109
NOW deposits 213,150 207,326 153,087
Money market deposits 439,341 388,251 297,155
Savings deposits 210,186 212,065 202,213
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Total non-maturity deposits 1,094,671 1,036,373 830,564
Brokered time deposits 21,497 26,578 41,741
Other time deposits 706,395 733,193 649,633
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Total time deposits 727,892 759,771 691,374
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Total deposits 1,822,563 1,796,144 1,521,938
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Borrowings 334,474 316,095 345,005
Junior subordinated debentures 15,464 15,464 15,464
Other liabilities 14,094 13,713 9,074
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Total liabilities 2,186,595 2,141,416 1,891,481
Total stockholders' equity 326,837 330,646 258,161
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Total liabilities and stockholders' equity $ 2,513,432 $ 2,472,062 $ 2,149,642
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F-1
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BERKSHIRE HILLS BANCORP
CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED
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LOAN ANALYSIS
-------------
December 31, September 30, December 31,
2007 2007 2006
----------------------------------------- --------------------------------- -------------
(1) Q4
annualize (2) 2007 (3) Acq.
organic organic FAPB Total w/o
(DOLLARS IN MILLIONS) Balance growth rate growth rate Balance balance FAPB Balance
- -----------------------------------------------------------------------------------------------------------------------------------
Residential mortgages:
1 - 4 Family $ 610 (1) % 5 % $ 612 $ 64 $ 548 $ 567
Construction 47 - 31 47 5 42 32
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Total residential mortgages 657 (1) 7 659 69 590 599
Commercial mortgages:
Construction 125 (60) (8) 147 6 141 130
Single and multi-family 69 45 6 62 - 62 65
Other commercial mortgages 510 19 13 487 91 396 372
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Total commercial mortgages 704 5 7 696 97 599 567
Commercial business loans 204 - (13) 204 39 165 190
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Total commercial loans 908 4 2 900 136 764 757
Consumer loans:
Auto 197 (17) (1) 206 3 203 196
Home equity and other 182 18 4 174 29 145 147
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Total consumer loans 379 (1) 1 380 32 348 343
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Total loans $ 1,944 1 % 3 % $ 1,939 $ 237 $ 1,702 $ 1,699
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DEPOSIT ANALYSIS
----------------
December 31, September 30, December 31,
2007 2007 2006
----------------------------------------- --------------------------------- -------------
(1) Q4
annualize (2) 2007 (3) Acq.
organic organic FAPB Total w/o
(DOLLARS IN MILLIONS) Balance growth rate growth rate Balance balance FAPB Balance
- -----------------------------------------------------------------------------------------------------------------------------------
Demand $ 232 5 % 4 % $ 229 $ 46 $ 183 $ 178
NOW 213 12 (5) 207 67 140 153
Money market 439 29 19 388 64 324 297
Savings 211 (2) (3) 212 16 196 202
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Total non-maturity deposits 1,095 14 6 1,036 193 843 830
Time less than $100,000 409 (14) (4) 424 54 370 370
Time $100,000 or more 298 (14) (3) 309 27 282 280
Brokered time 21 - - 27 - 27 42
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Total time deposits 728 (14) (3) 760 81 679 692
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Total deposits $ 1,823 2 % 2 % $ 1,796 $ 274 $ 1,522 $ 1,522
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(1) Q4 annualized and 2007 organic growth rates for deposits exclude the $22.7 million in Factory Point Bancorp, Inc. ("FAPB")
repurchase liabilities that were converted to deposit accounts in the 4th quarter of 2007 and the brokered time deposit
run-off of $6 million for the 4th quarter and $21 million for the full year.
(2) 2007 organic growth rates exclude the FAPB acquired balances and $50 million in residential mortgage loans sold in September.
(3) FAPB loans and deposits were acquired on September 21, 2007.
F-2
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BERKSHIRE HILLS BANCORP
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
- -------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Years Ended
December 31, December 31,
- -------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA) 2007 2006 2007 2006
- ------------------------------------------------------------------------------------------- -------------------------------
INTEREST AND DIVIDEND INCOME
Loans $ 32,666 $ 28,076 $ 120,059 $ 100,837
Securities and other 3,183 3,305 11,885 17,214
- -------------------------------------------------------------------------------------------------------------------------------
Total interest and dividend income 35,849 31,381 131,944 118,051
INTEREST EXPENSE
Deposits 13,749 11,679 50,597 41,044
Borrowings and junior subordinated debentures 3,882 4,131 17,422 16,767
- -------------------------------------------------------------------------------------------------------------------------------
Total interest expense 17,631 15,810 68,019 57,811
- -------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 18,218 15,571 63,925 60,240
NON-INTEREST INCOME
Insurance commissions and fees 2,290 1,645 13,728 3,757
Deposit service fees 2,620 1,800 7,747 5,803
Wealth management fees 1,476 877 4,407 3,287
Loan service fees 91 132 772 692
- -------------------------------------------------------------------------------------------------------------------------------
Total fee income 6,477 4,454 26,654 13,539
Other 551 453 1,710 1,639
Gain (loss) on sale of securities, net - 924 (591) (3,130)
Loss on prepayment of borrowings, net - - (1,180) -
Gain (loss) on sale of loans, net 41 - (1,950) -
- -------------------------------------------------------------------------------------------------------------------------------
Total non-interest income 7,069 5,831 24,643 12,048
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL NET REVENUE 25,287 21,402 88,568 72,288
PROVISION FOR LOAN LOSSES 3,060 785 4,300 7,860
NON-INTEREST EXPENSE
Salaries and employee benefits 9,386 7,296 34,018 24,708
Occupancy and equipment 2,656 2,061 9,945 7,699
Marketing, data processing, and professional services 2,275 1,791 8,598 6,648
Non-recurring expense 1,198 1,125 2,956 1,510
Amortization of intangible assets 1,050 601 3,058 2,035
Other 1,828 1,778 6,919 6,268
- -------------------------------------------------------------------------------------------------------------------------------
Total non-interest expense 18,393 14,652 65,494 48,868
- -------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before income taxes 3,834 5,965 18,774 15,560
Income tax expense 761 1,880 5,239 4,668
- -------------------------------------------------------------------------------------------------------------------------------
NET INCOME FROM CONTINUING OPERATIONS 3,073 4,085 13,535 10,892
Income from discontinued operations before income taxes - 29 - 606
Income tax expense - 11 - 235
- -------------------------------------------------------------------------------------------------------------------------------
NET INCOME FROM DISCONTINUED OPERATIONS - 18 - 371
- -------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 3,073 $ 4,103 $ 13,535 $ 11,263
- -------------------------------------------------------------------------------------------------------------------------------
BASIC EARNINGS PER SHARE
Continuing operations $ 0.29 $ 0.48 $ 1.47 $ 1.28
Discontinued operations - - - 0.04
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 0.29 $ 0.48 $ 1.47 $ 1.32
- -------------------------------------------------------------------------------------------------------------------------------
DILUTED EARNINGS PER SHARE
Continuing operations $ 0.29 $ 0.47 $ 1.44 $ 1.25
Discontinued operations - - - 0.04
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 0.29 $ 0.47 $ 1.44 $ 1.29
- -------------------------------------------------------------------------------------------------------------------------------
Weighted average shares outstanding
Basic 10,524 8,599 9,223 8,538
Diluted 10,664 8,823 9,370 8,726
F-3
11
BERKSHIRE HILLS BANCORP
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
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Quarters Ended
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Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
(IN THOUSANDS, EXCEPT PER SHARE DATA) 2007 2007 2007 2007 2006
- ----------------------------------------------------------------------------------------------------------------------------------
INTEREST AND DIVIDEND INCOME
Loans $ 32,666 $ 29,719 $ 29,152 $ 28,522 $ 28,076
Securities and other 3,183 2,912 2,842 2,948 3,305
- ----------------------------------------------------------------------------------------------------------------------------------
Total interest and dividend income 35,849 32,631 31,994 31,470 31,381
INTEREST EXPENSE
Deposits 13,749 12,581 12,318 11,949 11,679
Borrowings and junior subordinated debentures 3,882 4,571 4,638 4,331 4,131
- ----------------------------------------------------------------------------------------------------------------------------------
Total interest expense 17,631 17,152 16,956 16,280 15,810
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NET INTEREST INCOME 18,218 15,479 15,038 15,190 15,571
NON-INTEREST INCOME
Insurance commissions and fees 2,290 2,661 3,786 4,991 1,645
Deposit service fees 2,620 1,825 1,788 1,514 1,800
Wealth management fees 1,476 1,044 968 919 877
Loan service fees 91 324 48 309 132
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Total fee income 6,477 5,854 6,590 7,733 4,454
Other 551 433 303 423 453
(Loss) gain on sale of securities, net - (672) - 81 924
Loss on prepayment of borrowings, net - (1,180) - - -
Gain (loss) on sale of loans, net 41 (1,991) - - -
- ----------------------------------------------------------------------------------------------------------------------------------
Total non-interest income 7,069 2,444 6,893 8,237 5,831
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TOTAL NET REVENUE 25,287 17,923 21,931 23,427 21,402
PROVISION FOR LOAN LOSSES 3,060 390 100 750 785
NON-INTEREST EXPENSE
Salaries and employee benefits 9,386 7,891 8,230 8,511 7,296
Occupancy and equipment 2,656 2,418 2,385 2,486 2,061
Marketing, data processing, and professional services 2,275 2,260 2,116 1,947 1,791
Non-recurring expense 1,198 1,606 - 153 1,125
Amortization of intangible assets 1,050 684 662 662 601
Other 1,828 1,730 1,710 1,650 1,778
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Total non-interest expense 18,393 16,589 15,103 15,409 14,652
- ----------------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before income taxes 3,834 944 6,728 7,268 5,965
Income tax expense 761 - 2,152 2,326 1,880
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NET INCOME FROM CONTINUING OPERATIONS 3,073 944 4,576 4,942 4,085
Income from discontinued operations before income taxes - - - - 29
Income tax expense - - - - 11
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME FROM DISCONTINUED OPERATIONS - - - - 18
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 3,073 $ 944 $ 4,576 $ 4,942 $ 4,103
- ----------------------------------------------------------------------------------------------------------------------------------
BASIC EARNINGS PER SHARE
Continuing operations $ 0.29 $ 0.11 $ 0.52 $ 0.57 $ 0.48
Discontinued operations - - - - -
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 0.29 $ 0.11 $ 0.52 $ 0.57 $ 0.48
- ----------------------------------------------------------------------------------------------------------------------------------
DILUTED EARNINGS PER SHARE
Continuing operations $ 0.29 $ 0.10 $ 0.52 $ 0.56 $ 0.47
Discontinued operations - - - - -
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 0.29 $ 0.10 $ 0.52 $ 0.56 $ 0.47
- ----------------------------------------------------------------------------------------------------------------------------------
Weighted average shares outstanding
Basic 10,524 8,922 8,732 8,662 8,599
Diluted 10,664 9,045 8,875 8,842 8,823
F-4
12
BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
ASSET QUALITY ANALYSIS
- ------------------------------------------------------------------------------------------------------------------------------------
At or for the Quarters Ended
- ------------------------------------------------------------------------------------------------------------------------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
(DOLLARS IN THOUSANDS) 2007 2007 2007 2007 2006
- ------------------------------------------------------------------------------------------------------------------------------------
NON-PERFORMING ASSETS
Nonaccruing loans:
Residential mortgages $ 726 $ 623 $ 533 $ 22 $ 15
Commercial mortgages 5,177 4,977 1,580 1,346 308
Commercial business loans 4,164 5,553 6,816 7,049 7,203
Consumer loans 441 274 210 124 66
- ------------------------------------------------------------------------------------------------------------------------------------
Total nonaccruing loans 10,508 11,427 9,139 8,541 7,592
Real estate owned 866 348 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total nonperforming assets $ 11,374 $ 11,775 $ 9,139 $ 8,541 $ 7,592
- ------------------------------------------------------------------------------------------------------------------------------------
Total nonperforming loans/total loans 0.54% 0.59% 0.53% 0.49% 0.45%
Total nonperforming assets/total assets 0.45% 0.48% 0.42% 0.39% 0.35%
PROVISION AND ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period $ 22,108 $ 19,151 $ 19,652 $ 19,370 $ 19,154
Charged-off loans (3,117) (1,954) (678) (627) (754)
Recoveries on charged-off loans 65 68 77 159 185
- ------------------------------------------------------------------------------------------------------------------------------------
Net loans charged-off (3,052) (1,886) (601) (468) (569)
Acquired allowance - 4,453 - - -
Provision for loan losses 3,060 390 100 750 785
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at end of period $ 22,116 $ 22,108 $ 19,151 $ 19,652 $ 19,370
- ------------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses/nonperforming loans 210% 193% 210% 230% 255%
Allowance for loan losses/total loans 1.14% 1.14% 1.11% 1.14% 1.14%
NET LOAN CHARGE-OFFS
Residential mortgages $ - $ - $ - $ - $ -
Commercial mortgages - - - - -
Commercial business loans (2,683) (1,497) (406) (251) (420)
Consumer loans (369) (389) (195) (217) (149)
- ------------------------------------------------------------------------------------------------------------------------------------
Total net $ (3,052) $ (1,886) $ (601) $ (468) $ (569)
- ------------------------------------------------------------------------------------------------------------------------------------
Net charge-offs (YTD annualized)/average loans 0.34% 0.23% 0.12% 0.11% 0.07%
AVERAGE FICO SCORES OF CONSUMER
AUTOMOBILE LOANS 730 729 730 728 726
DELINQUENT LOANS / TOTAL LOANS
30-90 Days delinquent 0.39% 0.60% 0.29% 0.28% 0.24%
90 + Days delinquent and still accruing 0.04% 0.11% 0.07% 0.10% 0.02%
- ------------------------------------------------------------------------------------------------------------------------------------
Total accruing delinquent loans 0.43% 0.71% 0.36% 0.38% 0.26%
Nonaccruing loans 0.54% 0.59% 0.53% 0.49% 0.45%
- ------------------------------------------------------------------------------------------------------------------------------------
Total delinquent loans 0.97% 1.30% 0.89% 0.87% 0.71%
- ------------------------------------------------------------------------------------------------------------------------------------
F-5
13
BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------------------------------------------------------
At or for the Quarters Ended
-------------------------------------------------------------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2007 2007 2007 2007 2006
-------------------------------------------------------------------------
PERFORMANCE RATIOS
Core return on tangible assets 0.78 % 0.93 % 0.97 % 1.07 % 0.91 %
Return on total assets 0.50 0.18 0.84 0.92 0.77
Core return on tangible equity 12.10 13.04 13.75 15.40 12.97
Return on total equity 3.74 1.44 6.86 7.57 6.38
Net interest margin, fully taxable equivalent 3.38 3.20 3.15 3.24 3.31
Core tangible non-interest income to assets 1.23 1.21 1.33 1.60 0.97
Non-interest income to assets 1.14 0.44 1.26 1.53 1.09
Core tangible non-interest expense to assets 2.80 2.74 2.80 2.87 2.54
Non-interest expense to assets 2.95 3.00 2.76 2.86 2.73
Efficiency ratio 62.51 64.13 64.27 61.07 61.42
ANNUALIZED YEAR-TO-DATE ORGANIC GROWTH
Total loans 3 % 4 % - % 7 % 20 %
Total deposits 2 - (2) 3 11
FINANCIAL DATA (IN MILLIONS)
Total assets $ 2,513 $ 2,472 $ 2,170 $ 2,175 $ 2,150
Total loans 1,944 1,939 1,730 1,730 1,699
Total intangible assets 182 183 121 121 121
Total deposits 1,823 1,796 1,529 1,535 1,522
Total stockholders' equity 327 331 266 263 258
Total core income 3.8 4.4 4.6 5.0 4.2
Total net income 3.1 0.9 4.6 4.9 4.1
ASSET QUALITY RATIOS
Net charge-offs (YTD annualized)/average loans 0.34 % 0.23 % 0.12 % 0.11 % 0.07 %
Non-performing assets/total assets 0.45 0.48 0.42 0.39 0.35
Loan loss allowance/total loans 1.14 1.14 1.11 1.14 1.14
Loan loss allowance/nonperforming loans 2.10 x 1.93 x 2.10 x 2.30 x 2.55 x
PER SHARE DATA
Core earnings, diluted $ 0.36 $ 0.49 $ 0.52 $ 0.56 $ 0.48
Net earnings, diluted 0.29 0.10 0.52 0.56 0.47
Tangible book value 13.82 13.79 16.40 16.13 15.70
Total book value 31.15 30.82 30.12 29.87 29.63
Market price at period end 26.00 30.23 31.51 33.65 33.46
Dividends 0.15 0.15 0.14 0.14 0.14
CAPITAL RATIOS
Stockholders' equity to total assets 13.00 % 13.38 % 12.28 % 12.10 % 12.01 %
Tangible stockholders' equity to tangible assets 6.22 6.47 7.08 6.92 6.75
----------------------------------------------------------------------------------------------------------------------------
(1) Reconciliations of Non-GAAP financial measures, including all references
to core and tangible amounts, appear on page 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) 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.
(4) The Dec. 31, 2007 and Sept. 30, 2007 total loan annualized year-to-date
organic growth calculations both exclude the acquired FAPB balances and
$50 million in residential mortgage loans sold during September.
(5) The Dec. 31, 2007 and Sept. 30, 2007 total deposit annualized
year-to-date organic growth calculations both exclude the acquired FAPB
balances, $22.7 million in repurchase liabilities converted to deposit
accounts, and $21 million in brokered time deposit run-off.
F-6
14
BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
AVERAGE BALANCES
- ------------------------------------------------------------------------------------------------------------------------------------
Quarters Ended
----------------------------------------------------------------------------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
(IN THOUSANDS) 2007 2007 2007 2007 2006
----------------------------------------------------------------------------------------
ASSETS
Loans
Residential mortgages $ 661,937 $ 634,374 $ 612,289 $ 603,858 $ 592,016
Commercial mortgages 694,339 608,891 593,134 577,645 547,096
Commercial business loans 203,539 171,334 191,967 188,194 187,997
Consumer loans 381,401 349,311 344,069 340,563 341,311
- ------------------------------------------------------------------------------------------------------------------------------------
Total loans 1,941,216 1,763,910 1,741,459 1,710,260 1,668,420
Securities 254,847 224,207 228,471 231,035 259,838
Short-term investments 4,526 4,511 5,232 1,915 16,343
- ------------------------------------------------------------------------------------------------------------------------------------
Total earning assets 2,200,589 1,992,628 1,975,162 1,943,210 1,944,601
Intangible assets 183,902 126,797 120,698 121,059 115,580
Other assets 105,525 93,165 91,320 91,298 88,125
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $ 2,490,016 $ 2,212,590 $ 2,187,180 $ 2,155,567 $ 2,148,306
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
NOW $ 207,671 $ 141,529 $ 140,089 $ 142,403 $ 138,293
Money market 422,514 329,943 309,675 294,015 299,927
Savings 212,760 198,372 195,551 199,517 204,104
Time 749,785 701,062 703,595 702,554 686,818
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 1,592,730 1,370,906 1,348,910 1,338,489 1,329,142
Borrowings and debentures 327,383 374,537 386,044 375,730 371,201
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 1,920,113 1,745,443 1,734,954 1,714,219 1,700,343
Non-interest-bearing demand deposits 225,507 186,654 178,356 170,819 178,756
Other liabilities 11,267 4,298 7,359 8,456 10,511
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 2,156,887 1,936,395 1,920,669 1,893,494 1,889,610
Stockholders' equity 333,129 276,195 266,511 262,073 258,696
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 2,490,016 $ 2,212,590 $ 2,187,180 $ 2,155,567 $ 2,148,306
- ------------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTARY DATA
Total non-maturity deposits $ 1,068,452 $ 856,498 $ 823,671 $ 806,754 $ 821,080
Total deposits 1,818,237 1,557,560 1,527,266 1,509,308 1,507,898
Fully taxable equivalent income adj. 541 533 540 553 566
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Average balances for securities available-for-sale are based on amortized
cost.
F-7
15
BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
AVERAGE YIELDS (Fully Taxable Equivalent - Annualized)
- -------------------------------------------------------------------------------------------------------------------
Quarters Ended
------------------------------------------------------------------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2007 2007 2007 2007 2006
------------------------------------------------------------------------------
Earning assets
Loans
Residential mortgages 5.54 % 5.35 % 5.36 % 5.29 % 5.29 %
Commercial mortgages 7.34 7.49 7.55 7.47 7.57
Commercial business loans 7.68 8.06 7.81 8.09 7.98
Consumer loans 6.91 7.03 6.98 6.97 7.01
Total loans 6.68 6.68 6.71 6.76 6.68
Securities 5.85 6.15 5.92 6.06 5.64
Total earning assets 6.56 6.70 6.63 6.63 6.52
Funding liabilities
Deposits
NOW 1.39 1.40 1.50 1.54 1.23
Money Market 3.41 3.67 3.73 3.63 3.61
Savings 1.10 1.17 1.08 1.06 1.03
Time 4.65 4.69 4.78 4.77 4.62
Total interest-bearing deposits 3.42 3.64 3.66 3.62 3.49
Borrowings and debentures 4.70 4.84 4.82 4.67 4.42
Total interest-bearing liabilities 3.64 3.90 3.92 3.85 3.69
Net interest spread 2.92 2.80 2.71 2.78 2.83
Net interest margin 3.38 3.20 3.15 3.24 3.31
Cost of funds 3.26 3.52 3.55 3.50 3.34
Cost of deposits 3.00 3.20 3.24 3.21 3.07
- ------------------------------------------------------------------------------------------------------------------
(1) Average balances and yields for securities available-for-sale are based on
amortized cost.
(2) Cost of funds includes all deposits and borrowings.
F-8
16
BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
- ------------------------------------------------------------------------------------------------------------------------------------
At or for the Quarters Ended
- ------------------------------------------------------------------------------------------------------------------------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
(DOLLARS IN THOUSANDS) 2007 2007 2007 2007 2006
- ------------------------------------------------------------------------------------------------------------------------------------
Net income $ 3,073 $ 944 $ 4,576 $ 4,942 $ 4,103
Adj: Loss (gain) on sale of securities, net - 672 - (81) (924)
Adj: Loss on prepayment of borrowings, net - 1,180 - - -
Adj: Loss on sale of loans, net - 1,991 - - -
Less: Income from discontinued operations - - - - (29)
Plus: Other non-recurring expense 1,198 1,606 - 153 1,125
Adj: Income taxes (468) (1,995) - (29) (57)
- ------------------------------------------------------------------------------------------------------------------------------------
Core income (A) 3,803 4,398 4,576 4,985 4,218
Plus: Amort. of intangible assets (net of taxes) 704 458 444 444 403
- ------------------------------------------------------------------------------------------------------------------------------------
Tangible core income (B) $ 4,507 $ 4,856 $ 5,020 $ 5,429 $ 4,621
- ------------------------------------------------------------------------------------------------------------------------------------
Total non-interest income $ 7,069 $ 2,444 $ 6,893 $ 8,237 $ 5,831
Adj: Loss (gain) on sale of securities, net - 672 - (81) (924)
Adj: Loss on prepayment of borrowings, net - 1,180 - - -
Adj: Loss on sale of loans, net - 1,991 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total core non-interest income (C) 7,069 6,287 6,893 8,156 4,907
Net interest income 18,218 15,479 15,038 15,190 15,571
- ------------------------------------------------------------------------------------------------------------------------------------
Total core revenue (D) $ 25,287 $ 21,766 $ 21,931 $ 23,346 $ 20,478
- ------------------------------------------------------------------------------------------------------------------------------------
Total non-interest expense $ 18,393 $ 16,589 $ 15,103 $ 15,409 $ 14,652
Less: Other non-recurring expense (1,198) (1,606) - (153) (1,125)
- ------------------------------------------------------------------------------------------------------------------------------------
Core non-interest expense (E) 17,195 14,983 15,103 15,256 13,527
Less: Amortization of intangible assets (1,050) (684) (662) (662) (601)
- ------------------------------------------------------------------------------------------------------------------------------------
Total core tangible non-interest expense (F) $ 16,145 $ 14,299 $ 14,441 $ 14,594 $ 12,926
- ------------------------------------------------------------------------------------------------------------------------------------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
Total average assets $ 2,490 $ 2,213 $ 2,187 $ 2,156 $ 2,148
Less: Average intangible assets (184) (127) (121) (121) (116)
- ------------------------------------------------------------------------------------------------------------------------------------
Total average tangible assets (G) $ 2,306 $ 2,086 $ 2,066 $ 2,035 $ 2,032
- ------------------------------------------------------------------------------------------------------------------------------------
Total average stockholders' equity $ 333 $ 276 $ 267 $ 262 $ 259
Less: Average intangible assets (184) (127) (121) (121) (116)
- ------------------------------------------------------------------------------------------------------------------------------------
Total average tangible stockholders' equity (H) $ 149 $ 149 $ 146 $ 141 $ 143
- ------------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity, period-end $ 327 $ 331 $ 266 $ 263 $ 258
Less: Intangible assets, period-end (182) (183) (121) (121) (121)
- ------------------------------------------------------------------------------------------------------------------------------------
Total tangible stockholders' equity, period-end (I) $ 145 $ 148 $ 145 $ 142 $ 137
- ------------------------------------------------------------------------------------------------------------------------------------
Total shares outstanding, period-end (thousands) (J) 10,493 10,729 8,842 8,807 8,713
Average diluted shares outstanding (THOUSANDS) (K) 10,664 9,045 8,875 8,842 8,823
Core earnings per share (A/K) $ 0.36 $ 0.49 $ 0.52 $ 0.56 $ 0.48
Tangible book value per share (I/J) $ 13.82 $ 13.79 $ 16.40 $ 16.13 $ 15.70
Core return on tangible assets (B/G) 0.78 % 0.93 % 0.97 % 1.07 % 0.91 %
Core return on tangible equity (B/H) 12.10 13.04 13.75 15.40 12.97
Core tangible non-interest income to assets (C/G) 1.23 1.21 1.33 1.60 0.97
Core tangible non-interest exp to assets (F/G) 2.80 2.74 2.80 2.87 2.54
Efficiency ratio 62.51 64.13 64.27 61.07 61.42
- ------------------------------------------------------------------------------------------------------------------------------------
(1) 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.
(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.
F-9
17
BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
- ------------------------------------------------------------------------------------------------------------
For Years Ended
- ------------------------------------------------------------------------------------------------------------
December 31,
(DOLLARS IN THOUSANDS) 2007 2006
- ------------------------------------------------------------------------------------------------------------
Net income $ 13,535 $ 11,263
Adj: Loss on sale of securities, net 591 3,130
Adj: Loss on prepayment of borrowings, net 1,180 -
Adj: Loss on sale of loans, net 1,991 -
Less: Income from discontinued operations - (606)
Plus: Loan loss allowance pool adjustment - 5,512
Plus: Other non-recurring expense 2,956 1,510
Adj: Income taxes (2,492) (3,252)
- ------------------------------------------------------------------------------------------------------------
Core income (A) 17,761 17,557
Plus: Amort. intangible assets (net of taxes) 2,050 1,363
- ------------------------------------------------------------------------------------------------------------
Tangible core income (B) $ 19,811 $ 18,920
- ------------------------------------------------------------------------------------------------------------
Total non-interest income $ 24,643 $ 12,048
Adj: Loss on sale of securities, net 591 3,130
Adj: Loss on prepayment of borrowings, net 1,180 -
Adj: Loss on sale of loans, net 1,991 -
- ------------------------------------------------------------------------------------------------------------
Total core non-interest income (C) 28,405 15,178
Net interest income 63,925 60,240
- ------------------------------------------------------------------------------------------------------------
Total core revenue (D) $ 92,330 $ 75,418
- ------------------------------------------------------------------------------------------------------------
Total non-interest expense $ 65,494 $ 48,868
Less: Other non-recurring expense (2,956) (1,510)
- ------------------------------------------------------------------------------------------------------------
Core non-interest expense (E) 62,538 47,358
Less: Amortization of intangible assets (3,058) (2,035)
- ------------------------------------------------------------------------------------------------------------
Total core tangible non-interest expense (F) $ 59,480 $ 45,323
- ------------------------------------------------------------------------------------------------------------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
Total average assets $ 2,262 $ 2,116
Less: Average intangible assets (138) (103)
- ------------------------------------------------------------------------------------------------------------
Total average tangible assets (G) $ 2,123 $ 2,013
- ------------------------------------------------------------------------------------------------------------
Total average stockholders' equity $ 285 $ 256
Less: Average intangible assets (138) (103)
- ------------------------------------------------------------------------------------------------------------
Total average tangible stockholders' equity (H) $ 146 $ 153
- ------------------------------------------------------------------------------------------------------------
Total stockholders' equity, period-end $ 327 $ 258
Less: Intangible assets, period-end (182) (121)
- ------------------------------------------------------------------------------------------------------------
Total tangible stockholders' equity, period-end (I) $ 145 $ 137
- ------------------------------------------------------------------------------------------------------------
Total shares outstanding, period-end (THOUSANDS) (J) 10,493 8,713
Average diluted shares outstanding (THOUSANDS) (K) 9,370 8,726
Core earnings per share (A/K) $ 1.90 $ 2.00
Tangible book value per share (I/J) $ 13.82 $ 15.70
Core return on tangible assets (B/G) 0.93 % 0.94 %
Core return on tangible equity (B/H) 13.55 12.40
Core tangible non-interest income to assets (C/G) 1.34 0.75
Core tangible non-interest exp to assets (F/G) 2.80 2.25
Efficiency ratio 62.94 58.46
- --------------------------------------------------------------------------------------------------------------
(1) 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.
(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.
F-10