Berkshire Hills Reports 50% First Quarter Core EPS Growth

Dividend Declared

 

Pittsfield, MA – April 24, 2012 – Berkshire Hills Bancorp, Inc. (NASDAQ: BHLB) reported $0.45 in first quarter core earnings per share, a 50% increase over first quarter 2011 core earnings of $0.30 per share. This increase resulted from ongoing business expansion together with the benefit of the acquisitions of Rome Bancorp and Legacy Bancorp. GAAP net income included nonrecurring and merger related expenses, together with income from discontinued operations. These non-core items together equated to a first quarter after-tax charge of $0.17 per share in 2012 compared to $0.10 per share in 2011. Including these non-core items, first quarter GAAP net income was $0.28 per share, compared to $0.20 per share in the first quarter of 2011.

 

FIRST QUARTER FINANCIAL HIGHLIGHTS

 

·

50% increase in core earnings per share, compared to first quarter of 2011

·

10% annualized revenue growth, compared to linked quarter

·

11% annualized loan growth

·

11% annualized deposit growth

·

3.62% net interest margin

·

0.58% non-performing assets/total assets

·

0.24% annualized net loan charge-offs/average loans

·

0.94% core ROA (0.59% GAAP ROA)

·

59% efficiency ratio

 

Berkshire President and CEO, Michael P. Daly, stated, “We maintained strong momentum as we started the year, including a 9% annualized increase in core EPS compared to the prior quarter. We continue to have strong growth in our balance sheet, while maintaining a solid net interest margin. Our fee revenue also grew strongly during the quarter, while our focused expense discipline resulted in operating costs a little better than our expectations. Our core profitability improved and we are generating positive core operating leverage, with revenue growth exceeding expense growth. Our loan performance metrics remain favorable and improving. We are maintaining the momentum we need to achieve our earnings growth targets and to generate revenue growth through further market share gains.”

 

 

Mr. Daly continued, “We are pleased with the progress of our strategic acquisitions of the operations of Greenpark Mortgage Corporation and CBT – The Connecticut Bank and Trust Company. We look forward to having the well regarded Greenpark team join us in the current quarter, and our partnership with them contributed to our first quarter results. The Connecticut Bank and Trust Company acquisition was completed on schedule on April 20. We are now operating 8 branches in the Greater Hartford area, bringing our total branch count to 68, and introducing our brand and products into this attractive market. We look forward to additional revenue and earnings growth from both of these strategic initiatives, along with the benefits to all of our business lines from this further expansion of our footprint.”

 

DIVIDEND DECLARED

 

The Board of Directors voted to declare a cash dividend of $0.17 per share to shareholders of record at the close of business on May 10, 2012, payable on May 24, 2012. This dividend equated to a 3.0% yield based on the $22.67 average closing price of Berkshire’s common stock in the first quarter of 2012.

 

FINANCIAL CONDITION

 

Total assets increased at a 4% annualized rate during the first quarter of 2012 including 11% annualized loan growth. The $82 million increase in loans primarily resulted from increased bookings of Massachusetts residential mortgages relating to the partnership with Greenpark Mortgage during the transition period prior to the planned acquisition in the second quarter. Commercial business loans increased at an 18% annualized rate, and the pipeline of pending commercial loans grew including the benefit of Berkshire’s recent expansion in Central/Eastern Massachusetts with the opening of its Westborough commercial lending office. The Bank plans to continue to maintain an asset sensitive interest rate profile based on commercial loan growth and the integration of the CBT balance sheet. All major categories of deposit account balances increased, with growth continuing to come primarily from Berkshire’s expanding New York region, including a new office in Colonie, New York. In January, the Company completed the divestiture of the deposits of four former Legacy New York offices which were reported as discontinued operations at the end of 2011.

 

Asset performance remained favorable and improving in the most recent quarter, with non-performing assets decreasing to 0.58% of total assets, and the annualized ratio of net loan charge-offs/average loans decreasing to 0.24%. The allowance for loan losses increased slightly to $32.7 million, measuring 1.07% of loans and 143% of non-performing loans at the end of the quarter.

 

Capital ratios were little changed during the most recent quarter, with tangible equity/assets measuring 8.8% and total equity/assets measuring 13.8% at quarter-end. Tangible book value per share increased to $15.81 from $15.60 during the quarter, while total book value per share increased to $26.28 from $26.17.

 

 

RESULTS OF OPERATIONS

 

First quarter results in 2012 included the operations of Rome Bancorp (acquired on April 1, 2011) and Legacy Bancorp (acquired on July 21, 2011), along with the per share impact of shares issued as merger consideration for those acquisitions. Most first quarter categories of income and expense increased from year-to-year due to these acquisitions. This discussion therefore primarily compares the most recent quarter to the fourth quarter of 2011, which also included these acquired operations. The core return on assets increased to 0.94% in the most recent quarter from 0.93% in the prior quarter. The GAAP ROA was 0.59% compared to 0.85% for these periods, respectively, including noncore expense charges.

 

Total net revenue increased by $1.0 million (10% annualized) in the most recent quarter, compared to the linked quarter. This growth was due to an increase in fee income, including the benefit of increases in mortgage secondary market income, insurance income, and wealth management income. These increases included increased business volume in these areas, along with some seasonal and pricing related factors. Net interest income was stable compared to the prior quarter, and the net interest margin increased slightly to 3.62%. Loan growth was weighted towards the latter part of the quarter and is expected to produce a higher proportionate revenue benefit in the second quarter. The provision for loan losses decreased to $2.0 million in the most recent quarter from $2.3 million in the prior quarter. Net loan charge-offs totaled $1.8 million during the quarter.

 

Core non-interest expense increased by $0.4 million (7% annualized) in the most recent quarter, compared to the linked quarter. Expense growth included the impact of office expansion in retail and commercial banking. The efficiency ratio remained unchanged at 59%. Net non-recurring and merger related expense totaled $2.9 million after-tax in the most recent quarter. This included merger related expenses for the Legacy and CBT acquisitions, disposition costs of excess premises in Pittsfield following the Legacy integration, and systems conversion costs related to the core systems conversion planned for later in 2012. Additionally, the Company recorded a $0.6 million after-tax non-core charge related to the divestiture of four New York branches in January. This charge included $0.4 million in income tax expense due to the non-deductibility of the goodwill associated with these branches. The effective income tax rate on core income from continuing operations was 27% in the most recent quarter, compared to a 24% effective tax rate for the year 2011, reflecting the expectation of higher core income in 2012.

 

UNAUDITED SELECTED FINANCIAL HIGHLIGHTS OF CBT – THE CONNECTICUT BANK AND TRUST COMPANY

 

Included in the financial exhibits to this news release are unaudited selected first quarter financial highlights of CBT. This information does not include all items which may affect the final financial statements of CBT as of March 31, 2012 and it does not include non-core charges related to the merger of CBT into Berkshire. Additional financial information about CBT will be provided in the notes to the financial statements of Berkshire as of June 30, 2012, which will reflect the acquisition of CBT as of April 20, 2012.

 

 

CONFERENCE CALL

 

Berkshire will conduct a conference call/webcast at 10:00 A.M. eastern time on Wednesday, April 25, 2012 to discuss the results for the quarter and guidance about expected future results. Participants should dial-in to the call a few minutes before it begins. Information about the conference call follows:

 

Dial-in: 866-843-0890

Elite Entry Number: 3494596

Webcast:

www.berkshirebank.com (investor relations link)

 

A telephone replay of the call will be available through May 2, 2012 by calling 877-344- 7529 and entering access code: 10011976. The webcast and a podcast will be available at Berkshire’s website above for an extended period of time.

 

BACKGROUND

 

Berkshire Hills Bancorp is the parent of Berkshire Bank - America's Most Exciting Bank(SM). Including the recently acquired operations of CBT, Berkshire has $4.3 billion in assets and 68 full service branch offices in Massachusetts, New York, Connecticut, and Vermont providing personal and business banking, insurance, and wealth management services. Berkshire Bank provides 100% deposit insurance protection for all deposit accounts, regardless of amount, based on a combination of FDIC insurance and the Depositors Insurance Fund (DIF). For more information, visit www.berkshirebank.com or call 800-773-5601.

 

FORWARD LOOKING STATEMENTS

 

This document may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. There are several factors that could cause actual results to differ significantly from expectations described in the forward-looking statements. For a discussion of such factors, please see Berkshire’s most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission and available on the SEC's website at www.sec.gov.  Berkshire does not undertake any obligation to update forward-looking statements made in this document.

 

 

NON-GAAP FINANCIAL MEASURES

 

This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). These non-GAAP measures provide supplemental perspectives on operating results, performance trends, and financial condition. They are not 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 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, including components for core revenue and expense. These measures exclude amounts which the Company views as unrelated to its normalized operations, including merger costs, restructuring costs, and systems conversion costs. Similarly, the efficiency ratio is also adjusted for these non-core items and for tax preference items. The Company also adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community. Non-GAAP expense adjustments are primarily related to charges related to merger and acquisition activity. These charges consist primarily of severance/benefit related expenses, contract termination costs, and professional fees. There are additionally non-GAAP adjustments related to non-recurring securities gains, discontinued operations, the disposition of excess properties, and core systems conversion costs. Tax adjustments are based on an analysis of tax accruals for core income and for GAAP income, with the net difference included with non-core items and reflecting the timing impacts of tax expense estimates.

 

# # #

 

CONTACTS

 

Investor Relations Contact

David Gonci

Investor Relations Officer

413-281-1973

 

Media Contact

Lori Gazzillo

AVP, Community Relations

413-822-1695

  

 

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED BALANCE SHEETS - UNAUDITED - F-1
		March 31,				December 31,
(In thousands)		2012				2011
Assets
Cash and due from banks		$	34,117			$	46,713
Short-term investments			11,186				28,646
Trading security			16,847				17,395
Securities available for sale, at fair value			423,580				419,756
Securities held to maturity, at amortized cost			59,533				58,912
Federal Home Loan Bank stock and other restricted securities			35,282				37,118
Total securities			535,242				533,181
Loans held for sale			-				1,455
Residential mortgages			1,100,663				1,020,435
Commercial mortgages			1,147,455				1,156,241
Commercial business loans			429,627				410,292
Consumer loans			361,255				369,602
Total loans			3,039,000				2,956,570
Less: Allowance for loan losses			(32,657	)			(32,444	)
Net loans			3,006,343				2,924,126
Premises and equipment, net			61,661				60,139
Other real estate owned			439				1,900
Goodwill			202,397				202,391
Other intangible assets			19,662				20,973
Cash surrender value of bank-owned life insurance			75,652				75,009
Other assets			82,628				91,309
Assets from discontinued operations			-				5,362
Total assets		$	4,029,327			$	3,991,204
Liabilities and stockholders' equity
Demand deposits		$	450,497			$	447,414
NOW deposits			294,411				272,204
Money market deposits			1,089,742				1,055,306
Savings deposits			365,289				350,517
Total non-maturity deposits			2,199,939				2,125,441
Time deposits			984,228				975,734
Total deposits			3,184,167				3,101,175
Borrowings			236,240				221,938
Junior subordinated debentures			15,464				15,464
Total borrowings			251,704				237,402
Other liabilities			36,622				43,758
Liabilities from discontinued operations			-				55,504
Total liabilities			3,472,493				3,437,839
Total stockholders' equity			556,834				553,365
Total liabilities and stockholders' equity		$	4,029,327			$	3,991,204

 

(1)

At year end 2011, four branches were held for sale as discontinued operations and sold in the first quarter of 2012

  

 

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - F-2
LOAN ANALYSIS
										Organic annualized growth %
(Dollars in millions)		March 31,  2012 Balance				December 31, 2011 Balance				First Quarter 2012
Total residential mortgages		$	1,101			$	1,020				32	%
Total commercial mortgages			1,147				1,156				(3	)
Total commercial business loans			430				411				18
Total commercial loans			1,577				1,567				3
Total consumer loans			361				370				(9	)
Total loans		$	3,039			$	2,957				11	%

 

DEPOSIT ANALYSIS
										Organic annualized growth %
(Dollars in millions)		March 31,  2012 Balance				December 31, 2011 Balance				First Quarter 2012
Demand		$	451			$	447				4	%
NOW			294				272				32
Money market			1,090				1,055				13
Savings			365				351				16
Total non-maturity deposits			2,200				2,125				14
Time less than $100,000			479				487				(7	)
Time $100,000 or more			505				489				13
Total time deposits			984				976				3
Total deposits		$	3,184			$	3,101				11	%

 

(1)

Organic annualized growth rates are calculated on organic growth only, which excludes the impact of mergers and divestitures.

(2)

Quarterly data may not sum to annualized data due to rounding

 

 

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - F-3
		Three Months Ended
		March 31,
(In thousands, except per share data)		2012				2011
Interest and dividend income
Loans		$	35,051			$	24,606
Securities and other			3,621				3,307
Total interest and dividend income			38,672				27,913
Interest expense
Deposits			5,502				5,715
Borrowings and junior subordinated debentures			2,025				2,052
Total interest expense			7,527				7,767
Net interest income			31,145				20,146
Non-interest income
Loan related fees			1,373				591
Deposit related fees			3,500				2,541
Insurance commissions and fees			2,746				3,730
Wealth management fees			1,900				1,192
Total fee income			9,519				8,054
Other			241				80
Non-recurring gain			42				-
Total non-interest income			9,802				8,134
Total net revenue			40,947				28,280
Provision for loan losses			2,000				1,600
Non-interest expense
Compensation and benefits			13,589				11,151
Occupancy and equipment			4,395				3,435
Technology and communications			1,958				1,466
Marketing and professional services			1,716				1,213
Supplies, postage and delivery			562				454
FDIC premiums and assessments			681				1,027
Other real estate owned			179				609
Amortization of intangible assets			1,311				716
Nonrecurring and merger related expenses			4,223				1,708
Other			1,580				1,410
Total non-interest expense			30,194				23,189
Income from continuing operations before income taxes			8,753				3,491
Income tax expense			2,272				656
Net income from continuing operations			6,481				2,835
Loss from discontinued operations before income taxes (including gain on disposal of $63)			(261	)			-
Income tax expense			376				-
Net loss from discontinued operations			(637	)			-
Net income		$	5,844			$	2,835
Basic and diluted earnings per share:
Continuing operations		$	0.31			$	0.20
Discontinued operations			(0.03	)			-
Total basic and diluted earnings per share		$	0.28			$	0.20
Weighted average shares outstanding:
Basic			20,955				13,943
Diluted			21,062				13,981

 

(1)

Discontinued operations are described in Note 3 on Page F-1. Loss from discontinued operations includes operating losses in the first quarter of 2012 (including divestiture costs), and the gain on the sale of four branches in the same quarter, net of taxes

 

 

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - F-4
		Quarters Ended
		Mar. 31,				Dec. 31,				Sept. 30,				June 30,				Mar. 31,
(In thousands, except per share data)		2012				2011				2011				2011				2011
Interest and dividend income
Loans		$	35,051			$	35,466			$	35,719			$	28,607			$	24,606
Securities and other			3,621				3,562				3,547				3,446				3,307
Total interest and dividend income			38,672				39,028				39,266				32,053				27,913
Interest expense
Deposits			5,502				5,792				6,097				5,768				5,715
Borrowings and junior subordinated debentures			2,025				2,101				2,131				2,084				2,052
Total interest expense			7,527				7,893				8,228				7,852				7,767
Net interest income			31,145				31,135				31,038				24,201				20,146
Non-interest income
Loan related fees			1,373				856				934				780				591
Deposit related fees			3,500				3,848				3,885				3,366				2,541
Insurance commissions and fees			2,746				2,145				2,431				2,782				3,730
Wealth management fees			1,900				1,650				1,607				1,389				1,192
Total fee income			9,519				8,499				8,857				8,317				8,054
Other			241				318				(158	)			(277	)			80
Gain on sale of securities, net			-				8				-				6				-
Non-recurring gain			42				-				1,975				124				-
Total non-interest income			9,802				8,825				10,674				8,170				8,134
Total net revenue			40,947				39,960				41,712				32,371				28,280
Provision for loan losses			2,000				2,263				2,200				1,500				1,600
Non-interest expense
Compensation and benefits			13,589				13,172				13,195				12,027				11,151
Occupancy and equipment			4,395				4,063				3,883				3,546				3,435
Technology and communications			1,958				2,464				1,996				1,531				1,466
Marketing and professional services			1,716				1,565				1,873				1,557				1,213
Supplies, postage and delivery			562				555				545				507				454
FDIC premiums and assessments			681				542				923				741				1,027
Other real estate owned			179				153				541				700				609
Amortization of intangible assets			1,311				1,314				1,271				935				716
Nonrecurring and merger related expenses			4,223				3,678				9,091				5,451				1,708
Other			1,580				2,024				1,392				1,627				1,410
Total non-interest expense			30,194				29,530				34,710				28,623				23,189
Income from continuing operations before income taxes			8,753				8,167				4,802				2,248				3,491
Income tax expense			2,272				609				405				371				656
Net income fro\m continuing operations			6,481				7,558				4,397				1,877				2,835
(Loss) gain from discontinued operations before income taxes (including gain on disposals)			(261	)			4,692				(8	)			-				-
Income tax expense (benefit)			376				3,773				(3	)			-				-
Net (loss) gain from discontinued operations			(637	)			919				(5	)			-				-
Net income		$	5,844			$	8,477			$	4,392			$	1,877			$	2,835
Basic and diluted earnings per share:
Continuing operations		$	0.31			$	0.36			$	0.22			$	0.11			$	0.20
Discontinued operations			(0.03	)			0.04				-				-				-
Total basic and diluted earnings per share		$	0.28			$	0.44			$	0.22			$	0.11			$	0.20
Weighted average shares outstanding:
Basic			20,955				20,930				20,009				16,580				13,943
Diluted			21,062				21,043				20,105				16,601				13,981

 

(1)

The Company acquired Rome Bancorp on April 1, 2011. The income statement includes operations from that date.

(2)

The Company acquired Legacy Bancorp on July 21, 2011. The income statement includes operations from that date.

 

 

BERKSHIRE HILLS BANCORP, INC.
ASSET QUALITY ANALYSIS - F-5
		At or for the Quarters Ended
		Mar. 31,				Dec. 31,				Sept. 30,				June 30,				Mar. 31,
(Dollars in thousands)		2012				2011				2011				2011				2011
NON-PERFORMING ASSETS
Non-accruing loans:
Residential mortgages		$	8,281			$	7,010			$	4,750			$	2,811			$	1,529
Commercial mortgages			12,151				14,280				13,721				9,600				9,510
Commercial business loans			1,029				990				1,399				1,764				1,507
Consumer loans			1,411				1,954				1,834				862				763
Total non-accruing loans			22,872				24,234				21,704				15,037				13,309
Other real estate owned			439				1,900				2,200				1,700				2,400
Total non-performing assets		$	23,311			$	26,134			$	23,904			$	16,737			$	15,709
Total non-accruing loans/total loans			0.75	%			0.82	%			0.72	%			0.61	%			0.62	%
Total non-performing assets/total assets			0.58	%			0.65	%			0.58	%			0.52	%			0.54	%
PROVISION AND ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period		$	32,444			$	32,181			$	31,919			$	31,898			$	31,898
Charged-off loans			(1,923	)			(2,313	)			(2,061	)			(1,564	)			(1,758	)
Recoveries on charged-off loans			136				313				123				85				158
Net loans charged-off			(1,787	)			(2,000	)			(1,938	)			(1,479	)			(1,600	)
Provision for loan losses			2,000				2,263				2,200				1,500				1,600
Balance at end of period		$	32,657			$	32,444			$	32,181			$	31,919			$	31,898
Allowance for loan losses/total loans			1.07	%			1.10	%			1.07	%			1.30	%			1.49	%
Allowance for loan losses/non-accruing loans			143	%			134	%			148	%			212	%			240	%
NET LOAN CHARGE-OFFS
Residential mortgages		$	(381	)		$	(449	)		$	(292	)		$	(225	)		$	(124	)
Commercial mortgages			(1,116	)			(1,198	)			(1,099	)			(597	)			(963	)
Commercial business loans			(3	)			(244	)			(463	)			(435	)			(222	)
Home equity			(247	)			(90	)			7				(68	)			(79	)
Other consumer			(40	)			(19	)			(91	)			(154	)			(212	)
Total, net		$	(1,787	)		$	(2,000	)		$	(1,938	)		$	(1,479	)		$	(1,600	)
Net charge-offs (QTD annualized)/average loans			0.24	%			0.27	%			0.27	%			0.24	%			0.30	%
Net charge-offs (YTD annualized)/average loans			0.24	%			0.27	%			0.27	%			0.27	%			0.30	%
DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS
30-89 Days delinquent			0.55	%			0.55	%			0.79	%			0.50	%			0.59	%
90+ Days delinquent and still accruing			0.40	%			0.34	%			0.22	%			0.12	%			0.11	%
Total accruing delinquent loans			0.95	%			0.89	%			1.01	%			0.62	%			0.70	%
Non-accruing loans			0.75	%			0.82	%			0.72	%			0.61	%			0.62	%
Total delinquent and non-accruing loans			1.70	%			1.71	%			1.73	%			1.23	%			1.32	%

 

(1)

The above schedule includes balances associated with discontinued operations

 

 

		At or for the Quarters Ended
		Mar. 31,				Dec. 31,				Sept. 30,				June 30,				Mar. 31,
		2012				2011				2011				2011				2011
PERFORMANCE RATIOS
Core return on assets			0.94	%			0.93	%			0.89	%			0.72	%			0.59	%
Return on assets			0.59				0.85				0.45				0.23				0.39
Core return on equity			6.80				6.74				6.50				5.15				4.31
Return on equity			4.23				6.16				3.31				1.67				2.89
Net interest margin, fully taxable equivalent			3.62				3.61				3.74				3.52				3.30
Fee income/Net interest and fee income			23.44				21.44				22.20				25.58				28.56
Efficiency ratio			59.27				59.44				59.62				66.22				71.03
GROWTH
Total commercial loans, year-to-date (annualized)			3	%			29	%			38	%			20	%			-	%
Total loans, year-to-date (annualized)			11				38				54				29				-
Total deposits, year-to-date (annualized)			11				41				63				26				7
Total net revenues, year-to-date, compared to prior year			43				33				28				15				6
Earnings per share, year-to-date, compared to prior year			40				(2	)			(26	)			(37	)			(17	)
Core earnings per share, year-to-date, compared to prior year			50				53				50				33				25
FINANCIAL DATA (In millions)
Total assets		$	4,029			$	3,991			$	4,087			$	3,226			$	2,886
Total loans			3,039				2,957				3,003				2,452				2,145
Allowance for loan losses			33				32				32				32				32
Total intangible assets			222				223				233				193				172
Total deposits			3,184				3,101				3,249				2,486				2,241
Total stockholders' equity			557				553				547				445				391
Total core income			9.4				9.3				8.6				5.8				4.2
Total net income			5.8				8.5				4.4				1.9				2.8
ASSET QUALITY RATIOS
Net charge-offs (current quarter annualized)/average loans			0.24	%			0.27	%			0.27	%			0.24	%			0.30	%
Non-performing assets/total assets			0.58				0.65				0.58				0.52				0.54
Allowance for loan losses/total loans			1.07				1.10				1.07				1.30				1.49
Allowance for loan losses/non-accruing loans			143				134				148				212				240
PER SHARE DATA
Core earnings, diluted		$	0.45			$	0.44			$	0.43			$	0.35			$	0.30
Net earnings, diluted			0.28				0.40				0.22				0.11				0.20
Tangible book value			15.81				15.60				14.86				15.07				15.52
Total book value			26.28				26.17				25.87				26.61				27.69
Market price at period end			22.92				22.19				18.47				22.39				20.83
Dividends			0.17				0.17				0.16				0.16				0.16
CAPITAL RATIOS
Stockholders' equity to total assets			13.82	%			13.86	%			13.38	%			13.80	%			13.54	%
Tangible stockholders' equity to tangible assets			8.80				8.76				8.15				8.31				8.07

 

(1)

Reconciliation of Non-GAAP financial measures, including all references to core and tangible amounts, appear on pages 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)

The above schedule does not reclassify balances associated with discontinued operations, which are reclassified  from period end balances on the balance sheet

 

 

BERKSHIRE HILLS BANCORP, INC.
AVERAGE BALANCES - F-7
		Quarters Ended
		Mar. 31,				Dec. 31,				Sept. 30,				June 30,				Mar. 31,
(In thousands)		2012				2011				2011				2011				2011
Assets
Loans:
Residential mortgages		$	1,057,903			$	1,039,025			$	1,004,950			$	802,460			$	651,059
Commercial mortgages			1,153,690				1,166,989				1,140,691				973,557				929,564
Commercial business loans			412,237				392,542				383,059				333,700				283,747
Consumer loans			366,035				376,385				376,754				311,057				281,069
Total loans			2,989,865				2,974,941				2,905,454				2,420,774				2,145,439
Securities			525,109				515,128				474,435				405,670				403,549
Short-term investments			15,107				20,748				34,293				4,688				12,035
Total earning assets			3,530,081				3,510,817				3,414,182				2,831,132				2,561,023
Goodwill and other intangible assets			223,930				230,864				229,594				196,292				172,653
Other assets			235,909				247,376				226,757				186,785				142,789
Total assets		$	3,989,920			$	3,989,057			$	3,870,533			$	3,214,209			$	2,876,465
Liabilities and stockholders' equity
Deposits:
NOW		$	272,239			$	274,041			$	256,662			$	229,980			$	215,191
Money market			1,084,948				953,162				853,128				778,055				746,366
Savings			359,859				446,672				476,230				317,232				234,838
Time			983,696				1,028,817				1,029,555				809,768				737,551
Total interest-bearing deposits			2,700,742				2,702,692				2,615,575				2,135,035				1,933,946
Borrowings and debentures			257,389				248,611				253,018				269,665				229,878
Total interest-bearing liabilities			2,958,131				2,951,303				2,868,593				2,404,700				2,163,824
Non-interest-bearing demand deposits			439,015				448,952				432,381				334,171				293,895
Other liabilities			40,039				38,110				38,431				25,268				26,862
Total liabilities			3,437,185				3,438,365				3,339,405				2,764,139				2,484,581
Total stockholders' equity			552,735				550,692				531,128				450,070				391,884
Total liabilities and stockholders' equity		$	3,989,920			$	3,989,057			$	3,870,533			$	3,214,209			$	2,876,465
Supplementary data
Total non-maturity deposits		$	2,156,061			$	2,122,827			$	2,018,401			$	1,659,438			$	1,490,290
Total deposits			3,139,757				3,151,644				3,047,956				2,469,206				2,227,841
Fully taxable equivalent income adj.			669				674				673				675				679

 

(1)

The above schedule does not reclassify balances associated with discontinued operations, which are reclassified from period end balances on the balance sheet

 

 

BERKSHIRE HILLS BANCORP, INC.
AVERAGE YIELDS  (Fully Taxable Equivalent - Annualized) - F-8
		Quarters Ended
		Mar. 31,				Dec. 31,				Sept. 30,				June 30,				Mar. 31,
		2012				2011				2011				2011				2011
Earning assets
Loans:
Residential mortgages			4.63	%			4.68	%			4.82	%			4.97	%			5.04	%
Commercial mortgages			5.01				5.17				5.44				4.74				4.68
Commercial business loans			4.76				4.44				4.78				4.89				4.69
Consumer loans			3.98				4.03				4.17				3.97				3.63
Total loans			4.72				4.74				4.97				4.74				4.65
Securities			3.29				3.26				3.53				4.07				4.01
Short-term investments			0.07				0.14				0.03				0.19				0.13
Total earning assets			4.48				4.49				4.72				4.64				4.53
Funding liabilities
Deposits:
NOW			0.26				0.39				0.49				0.31				0.33
Money Market			0.55				0.62				0.66				0.69				0.75
Savings			0.20				0.19				0.18				0.26				0.31
Time			1.51				1.52				1.67				2.00				2.19
Total interest-bearing deposits			0.82				0.87				0.95				1.08				1.20
Borrowings and debentures			3.16				3.35				3.34				3.10				3.62
Total interest-bearing liabilities			1.02				1.06				1.16				1.31				1.46
Net interest spread			3.46				3.43				3.56				3.33				3.07
Net interest margin			3.62				3.61				3.74				3.52				3.30
Cost of funds			0.89				0.92				1.01				1.15				1.28
Cost of deposits			0.71				0.73				0.82				0.94				1.04

 

(1)

Cost of funds includes all deposits and borrowings

(2)

The above schedule includes yields associated with discontinued operations, although the related income is excluded from income from continuing operations on the income statement.  This schedule also includes balances associated with discontinued operations

 

 

BERKSHIRE HILLS BANCORP, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - F-9
				At or for the Quarters Ended
				Mar. 31,				Dec. 31,				Sept. 30,				June 30,				Mar. 31,
(Dollars in thousands)				2012				2011				2011				2011				2011
Net income				$	5,844			$	8,477			$	4,392			$	1,877			$	2,835
Adj: Gain on sale of securities, net					-				(8	)			-				(6	)			-
Adj:  Other non-recurring gain					(42	)			-				(1,975	)			(124	)			-
Plus: Nonrecurring and merger related expense					4,223				3,678				9,091				5,451				1,708
Adj:  Income taxes					(1,255	)			(1,947	)			(2,884	)			(1,400	)			(316	)
Adj: pre-tax loss (income) from discontinued operations					261				(4,692	)			8				-				-
Adj: income taxes from discontinued operations					376				3,773				(3	)			-				-
Total core income		(A)		$	9,407			$	9,281			$	8,629			$	5,798			$	4,227
Total non-interest income				$	9,878			$	8,825			$	10,766			$	8,170			$	8,009
Adj: Gain on sale of securities, net					-				(8	)			-				(6	)			-
Adj:  Other non-recurring gain					(42	)			-				(1,975	)			(124	)			-
Total core non-interest income					9,836				8,817				8,791				8,040				8,009
Net interest income					31,138				31,135				31,551				24,201				20,146
Total core revenue				$	40,974			$	39,952			$	40,342			$	32,241			$	28,155
Total non-interest expense				$	30,524			$	29,533			$	35,320			$	28,623			$	23,189
Less: Merger related expense					(4,223	)			(3,678	)			(9,091	)			(5,451	)			(1,708	)
Core non-interest expense					26,301				25,855				26,229				23,172				21,481
Less: Amortization of intangible assets					(1,318	)			(1,314	)			(1,382	)			(935	)			(716	)
Total core tangible non-interest expense				$	24,983			$	24,541			$	24,847			$	22,237			$	20,765
(Dollars in millions, except per share data)
Total average assets		(B)		$	3,990			$	3,989			$	3,871			$	3,214			$	2,876
Total average stockholders' equity		(C)			553				551				531				450				392
Total stockholders' equity, period-end					557				553				547				445				391
Less: Intangible assets, period-end					(222	)			(223	)			(233	)			(193	)			(172	)
Total tangible stockholders' equity, period-end		(D)			335				330				314				252				219
Total shares outstanding, period-end (thousands)		(E)			21,191				21,147				21,134				16,721				14,115
Average diluted shares outstanding (thousands)		(F)			21,062				21,043				20,105				16,601				13,981
Core earnings per share, diluted		(A/F)		$	0.45			$	0.44			$	0.43			$	0.35			$	0.30
Tangible book value per share, period-end		(D/E)		$	15.81			$	15.60			$	14.86			$	15.07			$	15.52
Core return (annualized) on assets		(A/B)			0.94	%			0.93	%			0.89	%			0.72	%			0.59	%
Core return (annualized) on equity		(A/C)			6.80				6.74				6.50				5.15				4.31
Efficiency ratio (1)					59.27				59.44				59.62				66.22				71.03
Supplementary data
Tax credit benefit of tax shelter investments				$	505			$	664			$	664			$	664			$	405

 

(1)

Efficiency ratio is computed by dividing total core tangible non-interest expense by the sum of total net interest income on a fully taxable equivalent basis and total core non-interest income adjusted to include tax credit benefit of tax shelter investments. 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

 

 

THE CONNECTICUT BANK AND TRUST COMPANY
UNAUDITED SELECTED FINANCIAL HIGHLIGHTS - F-10
		March 31,				December 31,
(In thousands)		2012				2011
Selected Financial Condition Data:
Loans:
Commercial mortgages		$	130,242			$	133,215
Other commercial loans			58,732				68,022
Consumer and other loans			25,413				25,796
Total loans			214,387				227,033
Deposits:
Demand deposits			51,200				52,014
NOW deposits			26,835				24,002
Savings and money market deposits			66,572				67,252
Time deposits			72,575				76,737
Total deposits			217,182				220,005

 

		Three Months Ended
		March 31,
		2012				2011
Selected Operating Data:
Core net interest income		$	2,380			$	2,494
Core non-interest income			227				208
Core non-interest expense			2,590				2,527

 

(1)

Core income and expense information excludes non-core merger related items