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[BERKSHIRE HILLS BANCORP, INC. LETTERHEAD]
NEWS RELEASE
BERKSHIRE HILLS EXPECTS RECORD EPS IN 2008
PITTSFIELD, MA - January 31, 2008 - Berkshire Hills Bancorp (BHLB), parent of
Berkshire Bank, conducted a conference call on January 25, 2008 to discuss
highlights of the Company's fourth quarter and year-end financial results, along
with guidance about expected 2008 financial results. President and Chief
Executive Officer Michael P. Daly and Executive Vice President and Chief
Financial Officer Kevin P. Riley participated in the call.
Berkshire announced that it expects record earnings per share of $2.16 in 2008,
which represents a 50% increase over 2007 results of $1.44 per share. Earnings
are expected to benefit from revenue growth exceeding 20%, reflecting the
contributions of organic growth and recent acquisitions; 2007 revenues were also
net of balance sheet restructuring charges. Earnings growth in 2008 is also
expected to result from improved efficiencies, with the efficiency ratio
declining to 61% or below, from around 63% in 2007.
The Company also discussed the decrease in delinquent loans and nonperforming
assets in the most recent quarter. Management stated that current indications
are that ongoing charge-offs will remain comparatively low in 2008. Management
reported that the loan portfolio is sound, and reiterated that Berkshire has no
subprime lending programs.
Additional information about 2007 results and guidance for 2008 is available
from the replay of the conference call, which may be accessed from the Investor
Relations link at the Company's Web site, www.berkshirebank.com. Some of the
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information discussed above is also available in the Company's earnings release
dated January 24, 2007, and which is also available at the Company's Web site.
BACKGROUND
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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 investment products. For more information on
Berkshire Hills Bancorp or Berkshire Bank, visit www.berkshirebank.com or call
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800-773-5601.
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FORWARD-LOOKING STATEMENTS
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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: possible enactment of
adverse governmental or regulatory policies; risks associated with continued
diversification of assets; and adverse changes to credit quality. 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
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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
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This press release references materials that contain 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 in the Company's earnings 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 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.
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These charges included indirect merger costs and balance sheet deleveraging
costs. Additionally, expense restructuring costs were deemed as non-core.
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CONTACTS
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David H. Gonci
Corporate Finance Officer
413-281-1973
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