Berkshire Hills Bancorp, Inc. reported$0.45in first quarter core earnings per share, a 50 percent increase over first quarter 2011 core earnings of$0.30per 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$0.17per share in 2012 compared to$0.10per share in 2011. Including these non-core items, first quarter GAAP net income was$0.28per share, compared to$0.20per share in the first quarter of 2011.
First Quarter Financial Highlights
50 percent increase in core earnings per share, compared to first quarter of 2011
10 percent annualized revenue growth, compared to linked quarter
11 percent annualized loan growth
11 percent annualized deposit growth
3.62 percent net interest margin
0.58 percent non-performing assets/total assets
0.24 percent annualized net loan charge-offs/average loans
0.94 percent core ROA (0.59% GAAP ROA)
59 percent efficiency ratio
Berkshire President and CEO,Michael P. Daly, stated, "We maintained strong momentum as we started the year, including a 9 percent 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 ofGreenpark Mortgage Corporationand 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 theGreater Hartfordarea, 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$0.17per share to shareholders of record at the close of business onMay 10, 2012, payable onMay 24, 2012. This dividend equated to a 3.0% yield based on the$22.67average closing price ofBerkshire's common stock in the first quarter of 2012.
Financial Condition
Total assets increased at a 4 percent annualized rate during the first quarter of 2012 including 11 percent annualized loan growth.The$82 millionincrease in loans primarily resulted from increased bookings ofMassachusettsresidential 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 percent annualized rate, and the pipeline of pending commercial loans grew including the benefit ofBerkshire's recent expansion in Central/Eastern Massachusetts with the opening of itsWestborough 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 fromBerkshire's expandingNew Yorkregion, including anew 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 percent of total assets, and the annualized ratio of net loan charge-offs/average loans decreasing to 0.24 percent. The allowance for loan losses increased slightly to$32.7 million, measuring 1.07 percent of loans and 143 percent 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 percent and total equity/assets measuring 13.8 percent at quarter-end. Tangible book value per share increased to$15.81from$15.60during the quarter, while total book value per share increased to$26.28from$26.17.
RESULTS OF OPERATIONS
First quarter results in 2012 included the operations of Rome Bancorp (acquired onApril 1, 2011) and Legacy Bancorp (acquired onJuly 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 percent in the most recent quarter from 0.93 percent in the prior quarter. The GAAP ROA was 0.59 percent compared to 0.85 percent for these periods, respectively, including noncore expense charges.
Total net revenue increased by$1.0 million(10 percent 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 percent. 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 millionin the most recent quarter from$2.3 millionin the prior quarter.Net loan charge-offs totaled$1.8 millionduring the quarter.
Core non-interest expense increased by$0.4 million(7 percent 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 percent.Net non-recurring and merger related expense totaled$2.9 millionafter-tax in the most recent quarter.This included merger related expenses for the Legacy and CBT acquisitions, disposition costs of excess premises inPittsfieldfollowing 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 millionafter-tax non-core charge related to the divestiture of four New York branches in January.This charge included$0.4 millionin 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 percent in the most recent quarter, compared to a 24 percent effective tax rate for the year 2011, reflecting the expectation of higher core income in 2012.
Unaudited Selected Financial Highlights of CBT ‘TheConnecticutBank 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 ofMarch 31, 2012and 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 Berkshireas ofJune 30, 2012, which will reflect the acquisition of CBT as ofApril 20, 2012.
Conference Call
Berkshirewill conduct a conference call/webcast at10:00 am eastern timeonWednesday, April 25, 2012to 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 throughMay 2, 2012by calling 877-344-7529 and entering access code: 10011976. The webcast and a podcast will be available atBerkshire'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,Berkshirehas$4.3 billionin assets and 68 full service branch offices inMassachusetts,New York,Connecticut, andVermontproviding personal and business banking, insurance, and wealth management services. Berkshire Bank provides 100 percent deposit insurance protection for all deposit accounts, regardless of amount, based on a combination of FDIC insurance and theDepositors Insurance Fund(DIF). For more information, visitwww.berkshirebank.comor 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 seeBerkshire'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 atwww.sec.gov.Berkshiredoes 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.
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
oftaxes.
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 from 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 reclassifiedfrom periodend 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 reclassifiedfrom periodend 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 includesbalances
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 fullytaxable equivalent basis and total core non-interest income adjusted to include tax credit benefit of tax shelter investments.TheCompany 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.
Berkshire Hills Bank Inc. 4.24.2012.