Berkshire Hills Reports 63% Increase in First Quarter Earnings; Dividend Declared

Berkshire Hills Reports 63% Increase in First Quarter Earnings; Dividend Declared

PR Newswire

BOSTON, April 23, 2018 /PRNewswire/ -- Berkshire Hills Bancorp, Inc. BHLB reported first quarter 2018 net income of $25 million, which was a 63% increase over 2017 first quarter results of $15 million.  This reflected the ongoing benefit of the Company's growth and expansion, together with the benefit of a lower federal tax rate resulting from federal tax reform near the end of 2017.     

 (PRNewsfoto/Berkshire Hills Bancorp, Inc.)

FIRST QUARTER FINANCIAL HIGHLIGHTS (income statement comparisons are year over year and balance sheet growth is compared to prior quarter-end):

  • $0.55 GAAP EPS
  • $0.65 Core EPS
  • 13% increase in net revenue
  • 30% increase in loan and deposit related fee income
  • 4% annualized loan growth; 3% annualized C&I loan growth
  • 3% increase in average deposits
  • 3.36% net interest margin
  • 59.5% efficiency ratio
  • 0.27% non-performing assets/assets
  • 0.17% net loan charge-offs/average loans

CEO Michael Daly stated, "We had a solid start to the year, delivering ongoing growth while integrating our new Commerce operations.   With the benefit of greater efficiency, GAAP return on assets improved to 0.88% and core return on assets improved to 1.04%. We expect continued momentum in the second quarter where GAAP return on assets will improve to over 1.00% and core return on assets will improve to over 1.10%.  We formally opened our new Boston corporate headquarters, which also serves as a regional hub for Greater Boston relationship teams.  We added additional bankers both in Boston and in the Princeton, NJ area.  We also opened a new branch in Simsbury, CT, which uses a combination of virtual teller technology and MyBanker relationship professionals to provide enhanced customer support and product availability."

DIVIDEND DECLARED

The Board of Directors declared a quarterly cash dividend of $0.22 per common share to shareholders of record at the close of business on May 10, 2018, payable on May 24, 2018.  The dividend equates to a 2.3% annualized yield based on the $37.88 average closing price of Berkshire Hills Bancorp common stock during the first quarter.  The Board also declared a quarterly cash dividend of $0.44 per share for the preferred stock issued in conjunction with the Commerce acquisition, with the same record and payment dates as above.  The quarterly common and preferred dividends were increased in the prior quarter by 5%. 

FINANCIAL CONDITION

Total assets ended the first quarter of 2018 at $11.5 billion.  Both commercial loans and residential mortgages contributed to the 4% annualized increase in total loans.  Period-end deposit balances are impacted by daily fluctuations related to payroll processing.  Average deposits increased by 3% compared to the prior quarter.  Asset quality metrics remained strong.  Delinquency metrics increased due to one commercial credit which is expected to remain accruing and is in the process of collection. Metrics related to capital, liquidity, and book value per share were generally stable compared to the start of the year.     

RESULTS OF OPERATIONS

First quarter revenue and expense included the full quarter impact of the Commerce operations acquired on October 13, 2017.   2018 first quarter net income totaled $25 million, which was a 63% increase over 2017 first quarter results of $15 million.  Earnings per share increased by 25% to $0.55, including the impact of additional shares issued in 2017.  First quarter core earnings per share improved by 18% to $0.65 per share in 2018 compared $0.55 in 2017.  The measure of core earnings per share excludes amounts viewed as not related to normalized operations.  In the most recent quarter these were primarily related to the integration of the Commerce operations.

Quarterly net revenue totaled $115 million in the most recent quarter, and included the impact of lower mortgage banking fees, which was partially offset by seasonal gains in wealth and insurance fee income compared to the prior quarter.  The net interest margin decreased to 3.36% from 3.50% in the prior quarter.  The contribution from purchased loan accretion decreased by 0.08%.   Additionally, the contribution of taxable equivalent securities yields decreased by 0.05% as a result of lower federal income taxes.  The cost of funds increased due to change in deposit mix and higher deposit and borrowings funding costs as a result of increases in short term market interest rates. The first quarter loan loss provision was $5.6 million and exceeded the net loan charge-offs recorded during the period.

Total first quarter non-interest expense decreased by 15% compared to the prior quarter, primarily due to lower non-core Commerce merger charges.  Total core expense increased by 1% including a full quarter of the new Commerce operations.  The efficiency ratio measured 59.5%, including the benefit of expense reductions in mortgage banking.  Total full-time equivalent staff measured 1,941 positions at quarter-end, compared to 1,992 positions at the start of the year.  The first quarter effective income tax rate was 22% in 2018 compared to 30% in 2017, reflecting the benefit of federal income tax reform which became effective in 2018. 

INVESTOR CONFERENCE CALL

Berkshire will conduct a conference call/webcast at 10:00 a.m. eastern time on Tuesday, April 24, 2018 to discuss the results for the quarter and provide guidance about expected future results.   Participants are encouraged to pre-register for the conference call using the following link:  http://dpregister.com/10118850.  Callers who pre-register will be given dial-in instructions and a unique PIN to gain immediate access to the call.  Participants may pre-register at any time prior to the call, and will immediately receive simple instructions via email.  Additionally, participants may reach the registration link and access the webcast by logging in through the investor section of Berkshire's website at http://ir.berkshirebank.com.  Those parties who do not have internet access or are otherwise unable to pre-register for this event, may participate at the above time by dialing 1-844-792-3726 and asking the Operator to join the Berkshire Hills Bancorp (BHLB) earnings call.  A telephone replay of the call will be available through Tuesday, May 1, 2018 by dialing 877-344-7529 and entering access number 10118850.  The webcast will be available on Berkshire's website for an extended period of time.

BACKGROUND

Berkshire Hills Bancorp is the parent of Berkshire Bank - America's Most Exciting Bank®. The Company has approximately $11.5 billion in assets and 114 full service branches in Massachusetts, New York, Connecticut, Vermont, New Jersey, and Pennsylvania providing personal and business banking, insurance, and wealth management services. The Company also offers mortgages and specialized commercial lending services in targeted national markets.

FORWARD LOOKING STATEMENTS

This document contains 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.

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 on page F-9 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 items which the Company does not view as related to its normalized operations.  These items primarily include securities gains/losses, merger costs, and restructuring costs.  Securities gains/losses include unrealized gains/losses on equity securities beginning in the first quarter of 2018. Charges related to merger and acquisition activity consist primarily of severance/benefit related expenses, contract termination costs, systems conversion costs, variable compensation expenses, and professional fees.  These charges in 2017 and 2018 are primarily related to business combinations with First Choice Bank and Commerce Bancshares Corp.  Restructuring costs generally consist of costs and losses associated with the disposition of assets and liabilities and lease terminations, including costs related to branch sales.  Additionally, the Company recorded charges for hedge terminations in the first quarter of 2017 and legal settlement costs during the year. 

Non-core adjustments are presented net of an adjustment for income tax expense.  This adjustment is determined as the difference between the GAAP tax rate and the effective tax rate applicable to core income.  The efficiency ratio is adjusted for non-core revenue and expense items and for tax preference items.  The Company also calculates measures related to tangible equity, which adjust equity (and assets where applicable) to exclude intangible assets due to the importance of these measures to the investment community. 

CONTACTS

Investor Relations Contact

Allison O'Rourke; Executive Vice President, Investor Relations Officer; 413-236-3149

Media Contact

Elizabeth Mach; Senior Vice President, Marketing Officer; 413-445-8390

TABLE

INDEX

CONSOLIDATED UNAUDITED FINANCIAL SCHEDULES

F-1

Selected Financial Highlights

F-2

Balance Sheets

F-3

Loan and Deposit Analysis

F-4

Statements of Income

F-5

Statements of Operations (Five Quarter Trend)

F-6

Average Yields and Costs

F-7

Average Balances

F-8

Asset Quality Analysis

F-9

Reconciliation of Non-GAAP Financial Measures (Five Quarter Trend)

and Supplementary Data

 

 

BERKSHIRE HILLS BANCORP, INC.

SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1)



At or for the Quarters Ended (2)



March 31,



Dec. 31,



Sept. 30,



June 30,



March 31,





2018



2017 (3)



2017



2017



2017

























PER SHARE DATA























Net earnings/(loss), diluted

$          0.55



$        (0.06)



$          0.57



$         0.53



$          0.44





Core earnings, diluted (1)

0.65



0.58



0.59



0.58



0.55





Total book value per common share

32.12



32.14



31.78



31.37



30.77





Tangible book value per common share (1)

19.86



19.83



21.38



20.96



18.97





Market price at period end

37.95



36.60



38.75



35.15



36.05





Dividends per common share

0.22



0.21



0.21



0.21



0.21





Dividends per preferred share

0.44



0.42



-



-



-

























PERFORMANCE RATIOS (4)























Return on assets

0.88%



(0.10)%



0.95%



0.84%



0.68%





Core return on assets (1)

1.04



0.94



0.98



0.92



0.85





Return on equity

6.69



(0.77)



7.26



6.80



5.71





Core return on equity (1)

7.92



7.16



7.47



7.45



7.17





Core return on tangible common equity (1)

13.43



11.90



11.42



11.96



12.05





Net interest margin, fully taxable equivalent (FTE) (5)

3.36



3.50



3.36



3.36



3.33





Fee income/Net interest and fee income

25.51



25.91



29.96



32.23



30.04





Efficiency ratio (1)

59.54



57.43



59.28



61.72



61.94

























GROWTH (Year-to-date)























Total commercial loans (annualized)

1%



38%



9%



13%



15%





Total loans (annualized)

4



27



8



10



6





Total deposits (annualized)

(3)



32



3



3



2





Total net revenues (compared to prior year)

13



41



37



40



39





Earnings per share (compared to prior year) 

25



(25)



(2)



(8)



(15)





Core earnings per share (compared to prior year)(1)

18



4



4



5



2

























FINANCIAL DATA (in millions)























Total assets

$      11,519



$      11,571



$        9,767



$       9,627



$        9,298





Total earning assets

10,442



10,509



8,944



8,807



8,486





Total securities

1,932



1,899



1,824



1,773



1,714





Total loans

8,376



8,299



6,947



6,864



6,656





Allowance for loan losses

54



52



49



47



46





Total intangible assets

556



558



420



421



422





Total deposits

8,683



8,750



6,790



6,715



6,656





Total shareholders' equity

1,498



1,496



1,285



1,268



1,100





Net income/(loss)

25.2



(2.8)



22.9



19.7



15.5





Core income (1)

29.9



26.3



23.6



21.6



19.4





























ASSET QUALITY AND CONDITION RATIOS 























Net charge-offs (current quarter annualized)/average loans

0.17%



0.17%



0.19%



0.20%



0.20%





Total non-performing assets/total assets

0.27



0.21



0.23



0.25



0.27





Allowance for loan losses/total loans

0.64



0.62



0.71



0.69



0.69





Loans/deposits

96



95



102



102



100





Shareholders' equity to total assets

13.00



12.93



13.15



13.17



11.83





Tangible shareholders' equity to tangible assets (1)

8.59



8.52



9.25



9.20



7.64





(1)

Non-GAAP financial measure. Core measurements are non-GAAP financial measures that are adjusted to exclude net non-core charges primarily

related to acquisitions and restructuring activities. See page F-9 for reconciliations of non-GAAP financial measures.

(2)

Reconciliations of non-GAAP financial measures, including all references to core and tangible amounts, appear on page F-9.

(3)

The Company acquired Commerce Bancshares Corp., the parent of Commerce Bank & Trust Company, on October 13, 2017.

(4)

All performance ratios are annualized and are based on average balance sheet amounts, where applicable.

(5)

Fully taxable equivalent considers the impact of tax advantaged investment securities and loans.

 

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2)



March 31,



December 31,

(in thousands)

2018



2017

Assets







Cash and due from banks

$              88,193



$          91,122

Short-term investments

35,694



157,641

Total cash and short-term investments

123,887



248,763









Trading security

11,795



12,277

Securities available for sale, at fair value

1,460,660



1,426,099

Securities held to maturity, at amortized cost

395,337



397,103

Federal Home Loan Bank stock and other restricted securities

64,038



63,085

Total securities

1,931,830



1,898,564









Loans held for sale, at fair value

98,440



153,620









Commercial real estate

3,266,737



3,264,742

Commercial and industrial loans

1,818,974



1,803,939

Residential mortgages

2,181,807



2,102,807

Consumer loans

1,108,899



1,127,850

Total loans

8,376,417



8,299,338

Less: Allowance for loan losses

(53,859)



(51,834)

Net loans

8,322,558



8,247,504









Premises and equipment, net

111,237



109,352

Other real estate owned

-



-

Goodwill 

519,128



519,287

Other intangible assets

37,085



38,296

Cash surrender value of bank-owned life insurance

192,379



191,221

Deferred tax asset, net

51,679



47,061

Other assets

131,024



117,083

Total assets 

$       11,519,247



$   11,570,751









Liabilities and shareholders' equity







Demand deposits

$         1,575,243



$     1,606,656

NOW and other deposits

715,581



734,558

Money market deposits

2,749,763



2,776,157

Savings deposits

756,711



741,954

Time deposits

2,885,969



2,890,205

Total deposits

8,683,267



8,749,530









Senior borrowings

1,125,860



1,047,736

Subordinated borrowings

89,384



89,339

Total borrowings

1,215,244



1,137,075









Other liabilities 

123,079



187,882

Total liabilities

10,021,590



10,074,487









Total preferred shareholders' equity

40,633



40,633

Total common shareholders' equity

1,457,024



1,455,631

Total shareholders' equity

1,497,657



1,496,264

Total liabilities and shareholders' equity

$       11,519,247



$   11,570,751









Net common shares outstanding 

45,360



45,290

 

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-3)

LOAN ANALYSIS

















Annualized Growth % 

(in millions)



March 31, 2018

Balance



December 31, 2017

Balance



Quarter ended

March 31, 2018





























Commercial real estate - construction



$                         347



$                          354



(8)%

Commercial real estate - other



2,920



2,910



1

Total commercial real estate



3,267



3,264



0

Commercial and industrial loans 



1,819



1,804



3

Total commercial loans 



5,086



5,068



1















Total residential mortgages



2,181



2,103



15















Home equity 



400



410



(10)

Auto and other



709



718



(5)

Total consumer loans



1,109



1,128



(7)

Total loans



$                      8,376



$                       8,299



4%





















































































DEPOSIT ANALYSIS















Annualized Growth % 

(in millions)



March 31, 2018

Balance



December 31, 2017

Balance



Quarter ended

March 31, 2018

Demand



$                      1,575



$                       1,606



(8)%

NOW and other



715



735



(11)

Money market



2,750



2,776



(4)

Savings



757



742



8

Time deposits



2,886



2,890



(1)

Total deposits 



$                      8,683



$                       8,749



(3)%

 

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - (F-4)



Three Months Ended



March 31,

(in thousands, except per share data)

2018



2017

Interest and dividend income    







Loans

$           92,835



$           68,943

Securities and other    

14,405



11,766

Total interest and dividend income    

107,240



80,709

Interest expense







Deposits

15,325



9,098

Borrowings

6,445



4,725

Total interest expense    

21,770



13,823

Net interest income

85,470



66,886

Non-interest income







Mortgage banking originations

10,147



12,678

Loan related income

5,438



4,179

Deposit related fees

8,066



6,204

Insurance commissions and fees    

3,025



3,136

Wealth management fees    

2,597



2,526

Total fee income    

29,273



28,723

Other

1,268



93

Securities (losses)/gains, net     

(1,502)



12,570

Gain on sale of business operations and assets, net

481



-

Loss on termination of hedges

-



(6,629)

Total non-interest income      

29,520



34,757

Total net revenue

114,990



101,643

Provision for loan losses   

5,575



5,095

Non-interest expense







Compensation and benefits

42,184



36,119

Occupancy and equipment     

10,082



9,026

Technology and communications

6,830



6,087

Marketing and promotion     

2,612



1,999

Professional services

2,053



2,451

FDIC premiums and assessments

1,195



1,298

Other real estate owned and foreclosures

67



28

Amortization of intangible assets     

1,268



801

Merger, restructuring and other expense 

5,093



11,682

Other

5,485



4,835

Total non-interest expense     

76,869



74,326









Income before income taxes       

32,546



22,222

Income tax expense

7,298



6,762

Net income 

$           25,248



$           15,460

Preferred stock dividend

230



-

Income available to common shareholders

$           25,018



$           15,460









Earnings per common share:







Basic

$               0.55



$               0.44

Diluted

$               0.55



$               0.44









Weighted average shares outstanding:      







Basic

45,966



35,280

Diluted

46,200



35,452



 

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend) - UNAUDITED - (F-5)







March 31,



Dec. 31,



Sept. 30,



June 30,



March 31,

(in thousands, except per share data)

2018



2017



2017



2017



2017

Interest and dividend income    



















Loans

$        92,835



$        91,149



$        76,024



$        71,983



$        68,943

Securities and other    

14,405



14,674



13,036



12,683



11,766

Total interest and dividend income    

107,240



105,823



89,060



84,666



80,709

Interest expense



















Deposits

15,325



13,802



10,984



9,971



9,098

Borrowings

6,445



5,655



6,078



5,150



4,725

Total interest expense    

21,770



19,457



17,062



15,121



13,823

Net interest income

85,470



86,366



71,998



69,545



66,886

Non-interest income



















Mortgage banking originations

10,147



11,918



13,374



16,281



12,678

Loan related income

5,438



5,866



6,081



5,275



4,179

Deposit related fees

8,066



7,871



6,445



6,645



6,204

Insurance commissions and fees    

3,025



2,284



2,581



2,588



3,136

Wealth management fees    

2,597



2,268



2,315



2,286



2,526

Total fee income    

29,273



30,207



30,796



33,075



28,723

Other

1,268



(939)



(2,255)



(276)



93

Securities (losses)/gains, net     

(1,502)



30



(1)



(1)



12,570

Gain on sale of business operations and assets, net

481



-



296



-



-

Loss on termination of hedges

-



-



-



-



(6,629)

Total non-interest income      

29,520



29,298



28,836



32,798



34,757

Total net revenue

114,990



115,664



100,834



102,343



101,643

Provision for loan losses   

5,575



6,141



4,900



4,889



5,095

Non-interest expense



















Compensation and benefits

42,184



42,220



37,643



36,997



36,119

Occupancy and equipment     

10,082



9,451



8,267



8,678



9,026

Technology and communications

6,830



6,286



6,644



6,883



6,087

Marketing and promotion  

2,612



4,573



2,128



3,177



1,999

Professional services

2,053



2,277



2,247



2,190



2,451

FDIC premiums and assessments

1,195



1,920



1,651



1,588



1,298

Other real estate owned and foreclosures

67



9



(23)



30



28

Amortization of intangible assets     

1,268



1,183



739



770



801

Merger, restructuring and other expense 

5,093



15,553



1,420



2,903



11,682

Other

5,485



6,569



5,104



6,307



4,835

Total non-interest expense     

76,869



90,041



65,820



69,523



74,326





















Income before income taxes

32,546



19,482



30,114



27,931



22,222

Income tax expense 

7,298



22,292



7,211



8,237



6,762

Net income/(loss)

$        25,248



$         (2,810)



$        22,903



$        19,694



$        15,460

Preferred stock dividend

230



219



-



-



-

Income/(loss) available to common shareholders

$        25,018



$         (3,029)



$        22,903



$        19,694



$        15,460









































Earnings/(loss) per common share:



















Basic 

$            0.55



$           (0.06)



$            0.57



$            0.53



$            0.44

Diluted 

$            0.55



$           (0.06)



$            0.57



$            0.53



$            0.44





















Weighted average shares outstanding:      



















Basic

45,966



45,122



39,984



37,324



35,280

Diluted

46,200



45,122



40,145



37,474



35,452



 

 

BERKSHIRE HILLS BANCORP, INC.

AVERAGE YIELDS AND COSTS (Fully Taxable Equivalent - Annualized) - UNAUDITED - (F-6)





Quarters Ended





March 31,



Dec. 31,



Sept. 30,



June 30,



March 31,





2018



2017



2017



2017



2017























Earning assets 





















Loans:





















Commercial real estate



4.76%



4.73%



4.64%



4.41%



4.58%

Commercial and industrial loans



5.19



5.25



5.09



5.30



4.86

Residential mortgages



3.56



3.76



3.68



3.62



3.56

Consumer loans



4.01



3.94



3.88



3.81



3.62

Total loans



4.45



4.47



4.33



4.25



4.19

Securities



3.26



3.55



3.43



3.45



3.38

Short-term investments and loans held for sale



3.43



2.90



3.40



3.07



2.40

Total earning assets



4.21



4.27



4.13



4.07



4.00























Funding liabilities





















Deposits:





















NOW and other



0.28



0.25



0.26



0.23



0.22

Money market



0.73



0.66



0.57



0.54



0.52

Savings



0.14



0.14



0.14



0.14



0.13

Time



1.40



1.25



1.20



1.13



1.08

Total interest-bearing deposits



0.90



0.82



0.78



0.73



0.69

Borrowings



2.02



1.81



1.65



1.46



1.38

Total interest-bearing liabilities



1.08



0.97



0.96



0.88



0.83























Net interest spread



3.13



3.30



3.17



3.19



3.17

Net interest margin (1)



3.36



3.50



3.36



3.36



3.33























Cost of funds (2)



0.90



0.81



0.82



0.75



0.70

Cost of deposits 



0.73



0.66



0.64



0.60



0.56



(1)

The effect of purchased loan accretion on the quarterly net interest margin was an increase in all quarters, which is

shown sequentially as follows beginning with the most recent quarter and ending with the earliest quarter:  0.13%,

0.21%, 0.14%, 0.12%, 0.18%. See page F-7 for purchased loan accretion.

(2)

Cost of funds includes all deposits and borrowings.

 

 

BERKSHIRE HILLS BANCORP, INC.

AVERAGE BALANCES - UNAUDITED - (F-7)



Quarters Ended



March 31, 



Dec. 31, 



Sept. 30, 



June 30, 



March 31, 

(in thousands)

2018



2017



2017



2017



2017

Assets



















Loans



















Commercial real estate

$            3,250,861



$            3,161,902



$            2,669,558



$            2,691,804



$            2,631,281

Commercial and industrial loans

1,811,433



1,645,719



1,183,980



1,130,384



1,072,716

Residential mortgages

2,138,544



2,081,548



1,977,538



1,871,329



1,906,457

Consumer loans

1,114,586



1,123,683



1,030,032



996,488



978,683

Total loans (1) 

8,315,424



8,012,852



6,861,108



6,690,005



6,589,137

Securities (2)

1,933,002



1,921,724



1,779,379



1,701,443



1,625,769

Short-term investments and loans held for sale

139,161



146,101



167,724



148,276



118,537

Total earning assets

10,387,587



10,080,677



8,808,211



8,539,724



8,333,443

Goodwill and other intangible assets

557,321



533,157



420,853



421,601



422,331

Other assets

521,745



516,802



402,188



369,317



388,211

Total assets

$          11,466,653



$          11,130,636



$            9,631,252



$            9,330,642



$            9,143,985





















Liabilities and shareholders' equity



















Deposits 



















NOW and other

$               712,181



$               702,353



$               570,864



$               572,688



$               574,799

Money market

2,518,920



2,371,203



1,768,108



1,794,693



1,804,738

Savings

743,944



733,157



669,690



667,863



648,839

Time

2,913,512



2,906,423



2,587,702



2,472,990



2,351,183

Total interest-bearing deposits

6,888,557



6,713,136



5,596,364



5,508,234



5,379,559

Borrowings

1,275,173



1,229,781



1,445,700



1,398,653



1,374,620

Total interest-bearing liabilities

8,163,730



7,942,917



7,042,064



6,906,887



6,754,179

Non-interest-bearing demand deposits

1,656,260



1,591,431



1,196,451



1,155,533



1,178,790

Other liabilities 

137,976



127,562



131,003



110,367



128,573

Total liabilities

9,957,966



9,661,910



8,369,518



8,172,787



8,061,542





















Total preferred shareholders' equity

40,633



34,892



-



-



-

Total common shareholders' equity

1,468,054



1,433,834



1,261,734



1,157,855



1,082,443

Total shareholders' equity

1,508,687



1,468,726



1,261,734



1,157,855



1,082,443

Total liabilities and shareholders' equity

$          11,466,653



$          11,130,636



$            9,631,252



$            9,330,642



$            9,143,985









































Supplementary data



















Total average non-maturity deposits

$            5,631,305



$            5,398,144



$            4,205,113



$            4,190,777



$            4,207,166

Total average deposits 

8,544,817



8,304,567



6,792,815



6,663,767



6,558,349

Fully taxable equivalent income adjustment

1,820



3,122



2,950



2,644



2,511

Purchased loan accretion

3,433



5,507



3,066



2,550



3,687

Total average tangible equity (3)

951,366



935,569



840,881



736,254



660,112



(1)

Total loans include non-accruing loans.

(2)

Average balances for securities available-for-sale are based on amortized cost.

(3)

See page F-9 for details on the calculation of total average tangible equity.

 

 

BERKSHIRE HILLS BANCORP, INC.

ASSET QUALITY ANALYSIS - UNAUDITED - (F-8)





At or for the Quarters Ended





March 31,



Dec. 31,



Sept. 30,



June 30,



March 31,

(in thousands)



2018



2017



2017



2017



2017

NON-PERFORMING ASSETS





















Non-accruing loans:





















Commercial real estate



$          10,084



$            7,266



$            5,228



$            7,587



$            7,718

Commercial and industrial loans



7,430



7,311



9,681



8,387



8,327

Residential mortgages



5,777



2,883



3,092



3,245



3,971

Consumer loans



5,996



5,438



4,350



4,977



5,109

Total non-accruing loans



29,287



22,898



22,351



24,196



25,125

Other real estate owned



-



-



288



279



71

Repossessed assets



1,241



1,147



-



-



-

Total non-performing assets



$          30,528



$          24,045



$          22,639



$          24,475



$          25,196























Total non-accruing loans/total loans



0.35%



0.28%



0.32%



0.35%



0.38%

Total non-performing assets/total assets



0.27%



0.21%



0.23%



0.25%



0.27%























PROVISION AND ALLOWANCE FOR LOAN LOSSES



















Balance at beginning of period



$          51,834



$          49,004



$          47,359



$          45,804



$          43,998

Charged-off loans



(3,791)



(3,734)



(3,796)



(3,431)



(3,623)

Recoveries on charged-off loans



241



423



541



97



334

Net loans charged-off



(3,550)



(3,311)



(3,255)



(3,334)



(3,289)

Provision for loan losses



5,575



6,141



4,900



4,889



5,095

Balance at end of period



$          53,859



$          51,834



$          49,004



$          47,359



$          45,804























Allowance for loan losses/total loans



0.64%



0.62%



0.71%



0.69%



0.69%

Allowance for loan losses/non-accruing loans



184%



226%



219%



196%



182%























NET LOAN CHARGE-OFFS





















Commercial real estate



$             (817)



$             (881)



$          (1,425)



$          (1,474)



$             (633)

Commercial and industrial loans



(972)



(960)



(573)



(625)



(1,634)

Residential mortgages



(406)



(759)



130



(337)



(324)

Home equity 



(588)



(123)



(634)



(268)



(95)

Auto and other consumer



(767)



(588)



(753)



(630)



(603)

Total, net



$          (3,550)



$          (3,311)



$          (3,255)



$          (3,334)



$          (3,289)























Net charge-offs (QTD annualized)/average loans 

0.17%



0.17%



0.19%



0.20%



0.20%

Net charge-offs (YTD annualized)/average loans 

0.17%



0.19%



0.20%



0.20%



0.20%























DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS

















30-89 Days delinquent



0.39%



0.35%



0.25%



0.23%



0.24%

90+ Days delinquent and still accruing



0.23%



0.20%



0.17%



0.12%



0.16%

Total accruing delinquent loans



0.62%



0.55%



0.42%



0.35%



0.40%

Non-accruing loans



0.35%



0.28%



0.32%



0.35%



0.38%

Total delinquent and non-accruing loans



0.97%



0.83%



0.74%



0.70%



0.78%

 

 

BERKSHIRE HILLS BANCORP, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED - (F-9)





At or for the Quarters Ended





March 31,



Dec. 31,



Sept. 30,



June 30,



March 31,

(in thousands)



2018



2017



2017



2017



2017

Net income/(loss)



$       25,248



$       (2,810)



$       22,903



$    19,694



$    15,460

Adj: Net securities losses/(gains) (1)



1,502



(30)



1



1



(12,570)

Adj: Loss on termination of hedges



-



-



-



-



6,629

Adj: Net (gains) on sale of business operations and assets



(481)



-



(296)



-



-

Adj: Merger and acquisition expense



5,093



15,553



1,110



2,266



5,947

Adj: Restructuring expense and other expense



-



-



310



637



5,735

Adj: Employee and community investment



-



3,400



-



-



-

Adj: Deferred tax asset impairment



-



18,145



-



-



-

Adj: Income taxes



(1,481)



(7,963)



(474)



(1,039)



(1,801)

Total core income (2)

(A)

$       29,881



$       26,295



$       23,554



$    21,559



$    19,400























Total revenue 



$     114,990



$     115,664



$     100,834



$  102,343



$  101,643

Adj: Net securities losses/(gains) (1)



1,502



(30)



1



1



(12,570)

Adj: Net (gains) on sale of business operations



(481)



-



(296)



-



-

Adj: Loss on termination of hedges



-



-



-



-



6,629

Total core revenue (2)

(B)

$     116,011



$     115,634



$     100,539



$  102,344



$    95,702























Total non-interest expense



$       76,869



$       90,041



$       65,820



$    69,523



$    74,326

Less: Merger, restructuring and other expense (see above)



(5,093)



(15,553)



(1,420)



(2,903)



(11,682)

Less: Employee and community investment



-



(3,400)



-



-



-

Core non-interest expense (2)                                    

(C)

$       71,776



$       71,088



$       64,400



$    66,620



$    62,644























(in millions, except per share data)





















Total average assets                                                

(D)

$       11,467



$       11,131



$         9,631



$      9,331



$      9,144

Total average shareholders' equity                         

(E)

1,509



1,469



1,262



1,158



1,082

Total average tangible shareholders' equity (2)                        

(F)

951



936



841



736



660

Total average tangible common shareholders' equity (2)                        

(G)

911



901



841



736



660

Total tangible shareholders' equity, period-end (2)(3)

(H)

941



939



864



847



678

Total tangible common shareholders' equity, period-end (2)(3)

(I)

901



898



864



847



678

Total tangible assets, period-end (2)(3)

(J)

10,963



11,013



9,346



9,206



8,876























Total common shares outstanding, period-end (thousands)               

(K)

45,360



45,290



40,424



40,428



35,729

Average diluted shares outstanding (thousands)

(L)

46,200



45,383



40,145



37,474



35,452























Core earnings per share, diluted(2)

(A/L)

$           0.65



$           0.58



$           0.59



$        0.58



$        0.55

Tangible book value per common share, period-end (2)

(I/K)

19.86



19.83



21.38



20.96



18.97

Total tangible shareholders' equity/total tangible assets (2)

(H)/(J)

8.59



8.53



9.25



9.20



7.64























Performance ratios (4)





















GAAP return on assets



0.88%



(0.10)%



0.95%



0.84%



0.68%

Core return on assets (2)

(A/D)

1.04



0.94



0.98



0.92



0.85

GAAP return on equity 



6.69



(0.77)



7.26



6.80



5.71

Core return on equity (2)

(A/E)

7.92



7.16



7.47



7.45



7.17

Core return on tangible common equity (2)(5)

(A+O)/(G)

13.43



11.90



11.42



11.96



12.05

Efficiency ratio (2)(6)                                                                                

(C-O)/(B+M+P)

59.54



57.43



59.28



61.72



61.94

Net interest margin



3.36



3.50



3.36



3.36



3.33























Supplementary data (in thousands)





















Tax benefit on tax-credit investments (7)

(M)

$            596



$         2,957



$         3,905



$      1,696



$      1,624

Non-interest income charge on tax-credit investments (8)

(N)

(506)



(2,564)



(3,347)



(1,453)



(1,329)

Net income on tax-credit investments

(M+N)

90



393



558



243



295























Intangible amortization

(O)

$         1,268



$         1,183



$            739



$         770



$         801

Fully taxable equivalent income adjustment 

(P)

1,820



3,122



2,950



2,644



2,511



(1)

Net securities losses/(gains) for the period ending March 31, 2018 includes the change in fair value of the Company's equity securities in compliance with the Company's adoption of ASU 2016-01. There were no non-equity securities sold during the period ending March 31, 2018.

(2)

Non-GAAP financial measure.

(3)

Total tangible shareholders' equity is computed by taking total shareholders' equity less the intangible assets at period-end. Total tangible assets is computed by taking total assets less the intangible assets at period-end. 

(4)

Ratios are annualized and based on average balance sheet amounts, where applicable. Quarterly data may not sum to year-to-date data due to rounding.

(5)

Core return on tangible equity is computed by dividing the total core income adjusted for the tax-effected amortization of intangible assets, assuming a 27.32% marginal rate, by tangible equity.

(6)

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 to provide important information regarding its operational efficiency.

(7)

The tax benefit is the direct reduction to the income tax provision due to tax credits and deductions generated from investments in historic rehabilitation and low-income housing.

(8)

The non-interest income charge is the reduction to the tax-advantaged investments, which are incurred as the tax credits are generated.

 

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/berkshire-hills-reports-63-increase-in-first-quarter-earnings-dividend-declared-300634713.html

SOURCE Berkshire Hills Bancorp, Inc.

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