Berkshire Hills Announces Fourth Quarter Results; Annual Meeting Date Announced

Rhea-AI Summary

Berkshire Hills Bancorp (BHLB) reported a fourth-quarter 2020 net income of $15 million, or $0.30 per share, down from $21 million, or $0.42 per share, in the previous quarter. This decline is attributed to pandemic-related impacts, including a $9 million rise in noncash expected credit loss provisions. Financial highlights include a 2.61% net interest margin and a 71% efficiency ratio. Total assets grew by 2% to $12.8 billion, while total loans fell by $901 million. The bank is consolidating branches and focusing on digital banking to adapt to changing customer preferences.

Positive

• Total assets increased by 2%, reaching $12.8 billion.
• Net interest margin remained stable at 2.61%.
• Decreased total criticized loans by $36 million, or 9%, to $359 million.
• Reduction in staffing and operational costs noted.

Negative

• Net income fell 29% from the previous quarter.
• Core earnings per share declined by 47%.
• Total loans decreased by $901 million, or 7%.
• Nonaccrual loans increased by $18 million, raising concerns.

BOSTON, Jan. 25, 2021 /PRNewswire/ -- Berkshire Hills Bancorp, Inc. (NYSE: BHLB) today announced fourth quarter 2020 net income of $15 million, or $0.30 per share, compared to $21 million, or $0.42 per share, in the prior quarter.  The fourth quarter non-GAAP measure of core earnings totaled $14 million, or $0.28 per share, compared to $26 million, or $0.53 per share, in the prior quarter.  The change in earnings is primarily due to pandemic related impacts, including a $9 million increase in the noncash provision for expected credit losses.  

FOURTH QUARTER FINANCIAL HIGHLIGHTS (non-GAAP measures are reconciled on pages F-9 and F-10)

• 2.61% net interest margin
• 71% efficiency ratio
• 9.3% equity/assets
• 79% loans/deposits
• $23.37 book value per share; $22.68 tangible book value per share (non-GAAP measure)
• 0.80% annualized net charge-offs/loans
• 0.52% non-performing assets/assets

Acting CEO and President Sean Gray stated, "Fourth quarter results declined primarily due to higher noncash provisioning for expected credit losses reflecting the persistence of pandemic impacts on economic activity.  These impacts also contributed to lower operating revenue and higher operating expenses.  In this environment, the Bank adhered to its financial and operating disciplines.   Higher net charge-offs were primarily due to four hospitality relationships, including credits which were exited during the quarter.  Total criticized loans decreased, along with loans with payment deferrals.  The net interest margin was supported by a reduction in funding costs.   We managed down our staffing, as well as occupancy, and technology costs.  We continue to adjust operations to protect employees, customers and communities, including moving branch lobbies back to appointment-only access based on local conditions.  Management's actions are targeted to position the Bank for improved results as public health and economic conditions improve."

Mr. Gray continued, "We recently announced important strategic initiatives, starting with our best of breed digital account opening platform.  We've made the right technology investments to support customer preferences for electronic banking.  Consistent with these shifts, we announced the planned consolidation of 16 branches in the first half of 2021.   With the concierge banking offered by our growing team of MyBankers, we expect to smoothly transition customers to nearby branches.  Separately, we entered into an agreement to sell our eight mid-Atlantic branches and we are opening a new Providence commercial banking office.  When these initiatives are completed, we plan to have 106 branch offices located primarily in southern New England and eastern/central New York.  These actions are targeted to focus and deepen meaningful engagement with our communities as a 21^st century purpose-driven community bank that helps everyone access the services they need to live healthier financial lives." 

ANNUAL MEETING

The Board of Directors determined that the Annual Meeting of Shareholders will be held on Thursday, May 20, 2021 and may be convened as a virtual meeting.   The date of Thursday,March 25, 2021 was established as the record date for the determination of the shareholders entitled to notice of, and to vote at, the Annual Meeting.  Further information about the annual meeting will be available in early April at the Company's website at ir.berkshirebank.com.

FINANCIAL CONDITION

Total assets increased quarter-over-quarter by $224 million, or 2%, to $12.8 billion due to a $514 million increase in short-term payroll deposits at year-end, which resulted in higher short-term investments.  Excluding this increase, total assets decreased by $291 million, or 2%, due to ongoing loan runoff. Investment securities increased by $236 million as excess liquidity was reinvested into residential and commercial agency mortgage backed securities.

Total loans decreased by $901 million during the fourth quarter.  Due to the pending agreement for the sale of the Mid-Atlantic branches, Berkshire has reclassified $301 million in loans as assets held for sale.   Excluding this reclassification, total loans decreased by $600 million, or 7%, due to ongoing runoff in all major categories.  Paycheck Protection Program ("PPP") loans decreased by $75 million to $633 million as the SBA loan forgiveness program was initiated.

Total criticized loans decreased by $36 million, or 9%, to $359 million during the fourth quarter, including the sale of $22 million in criticized hospitality loans. Total loans with active and in-process deferrals decreased by $97 million, or 22%, to $350 million as conditions improved for commercial borrowers.    

Total delinquent and nonaccrual loans measured 1.14% of total loans at year-end, compared to 0.98% at the start of the quarter.   Accruing delinquent loans decreased to 0.34% of total loans from 0.45% during the quarter.  Total nonaccrual loans increased by $18 million to $65 million due primarily to two COVID sensitive commercial relationships which were rated as substandard prior to the pandemic, including one 2019 purchased credit deteriorated loan.  Net charge-offs totaled $17 million, or 0.80% annualized compared to average loans.  This included $12 million related to hospitality loans, of which $7 million was related to the above mentioned loan sale.  The allowance for credit losses on loans decreased quarter-over-quarter due to the decrease in total loans, including the impact of charge-offs.   The year-end ratio of the allowance to loans measured 1.58%.  Excluding PPP loans, this ratio measured 1.71% at year-end, and was not materially changed in the second half of the year.  

Total deposits decreased by $251 million during the fourth quarter.  Due to the branch sale, the Company has reclassified $617 million in deposits as liabilities held for sale.  Adjusting for this reclassification, total deposits increased by $367 million during the quarter, including the previously noted $514 million increase in short-term payroll deposits to $1.046 billion.  This was offset by a $209 million decrease in brokered time deposits to $605 million.  All other deposits increased by a total of $61 million, or 1%.  Total borrowings decreased by $131 million to $572 million.  The loans/deposits ratio measured 79% at year-end, decreasing from 86% at the start of the fourth quarter.

Year-end book value per share totaled $23.37 and the non-GAAP measure of tangible book value per share measured $22.68.  Year-end equity/assets measured 9.3% and the non-GAAP measure of tangible equity/tangible assets was 9.0%.  During the fourth quarter, the remaining balance of preferred stock was converted to common shares in accordance with contractual terms. 

RESULTS OF OPERATIONS – FOURTH QUARTER

Berkshire's earnings declined in the fourth quarter compared to the prior quarter, reflecting ongoing impacts of the pandemic on the Company's results of operations.  Most of the impact was due to the $9 million increase in the noncash provision for expected credit losses on loans.  Further, interest income was negatively impacted by non-accrual loans and expense was affected by higher loan workout expense.   GAAP earnings per share decreased by $0.12, or 29%, and the non-GAAP measure of core earnings per share decreased by $0.25 or 47%.  The GAAP measure of pre-tax, pre-provision net revenue ("PPNR") increased quarter-over-quarter by $3 million to $27 million, while the non-GAAP measure of core PPNR decreased by $6 million to $24 million.  The Company focuses on this measure of operations as a key measure of operating performance before accounting for estimations of future pandemic related credit losses. This decrease was due to a $2.6 million decrease in core revenue and a $3.7 million increase in core expense. 

The revenue decrease included a $1 million decrease in net interest income as a result of lower earning assets and higher nonaccrual loans.   The net interest margin was stable at 2.61% and benefited from a 0.14% decrease in the cost of deposits, along with higher interest revenue related to PPP loan forgiveness.  Time deposit costs decreased including the impact of lower brokered deposits and maturities of higher rate CD's.   The unamortized balance of deferred PPP fees totaled $13 million at year-end.   Total fee income decreased by $1 million due to a seasonal decrease in mortgage banking revenue. 

The provision for expected credit losses increased quarter-over-quarter by $9 million to $10 million, primarily due to a qualitative assessment of credit migration in the loan portfolio.   The level of the year-end allowance is intended to absorb pandemic related expected credit losses over the next seven quarters based on information and third party forecasts at year-end. 

Non-interest expense decreased quarter-over-quarter by $1 million, due to higher noncore costs recorded in the third quarter related to the CEO separation.   The non-GAAP measure of core non-interest expense increased by $4 million due primarily to a lending operations project which was completed during the quarter.   Full time equivalent staff in continuing operations at year-end totaled 1,505, compared to 1,507 positions at the start of the fourth quarter and to 1,550 positions at the start of the year.  Occupancy and technology expense decreased quarter-over-quarter.   The fourth quarter effective tax rate on continuing operations was a benefit of 10%.

Net non-core adjustments to core income totaled $1 million in the fourth quarter.  A final loss was recorded on discontinued national mortgage banking operations as the Company completed the wind-down of these operations, with no further cost recognition expected.  This was partially offset by net securities gains and other non-core items.  The Company has announced strategic initiatives for the sale and consolidation of branches in the first half of 2021.   The Company expects to recognize a noncore net gain on the sale of these operations and non-core charges in conjunction through these consolidations.

BE FIRST CORPORATE RESPONSIBILITY UPDATE

Berkshire is committed to delivering purpose-driven performance. Learn more about the steps Berkshire is taking to be a values-based brand for all its stakeholders at www.berkshirebank.com/csr and in its most recent Corporate Responsibility Report.

Key developments in the quarter and year include:

• Continued Investment in Community Recovery & Resiliency: As people and small businesses in neighborhoods across the Company's footprint struggle through the impacts of the COVID-19 pandemic, Berkshire's Foundation is answering the call providing a record $3.8 million in grant funding to 502 organizations in 2020. These critical investments included recent contributions to local food banks to meet increasing demand for services across the Company's footprint. 
• Enhancing Thirty Party ESG Ratings: The Company continued to improve its Environmental, Social and Governance (ESG) ratings with third party agencies and as of December 31, 2020 the Company received ratings of: MSCI ESG- BBB, ISS ESG Quality Score - Environment: 2, Social: 1, Governance: 3 and Bloomberg ESG Disclosure- 41.67. The company is also rated by Sustainalytics.   Additionally, the Company is included in the Bloomberg Gender Equality Index. 
• Awards & Recognition: Berkshire was named a recipient of the 2020 Communitas Award for Leadership in Corporate Social Responsibility recognizing its' continued performance through the Be FIRST Commitment, as well as the company's comprehensive corporate responsibility, social impact and sustainability strategy. In addition, the Bank was recognized by the American Bankers Association Community Commitment Awards for its Be FIRST Commitment in the Economic Inclusion category.

INVESTOR CONFERENCE CALL AND INVESTOR PRESENTATION

Berkshire will post an investor presentation at its website at ir.berkshirebank.com with additional financial information and other information about the quarter.

Berkshire will also conduct a conference call/webcast at 10:00 a.m. Eastern time on Tuesday, January 26, 2021 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:  https://dpregister.com/sreg/10151338/e0b6214914.  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 still participate at the above time by dialing 1-844-792-3726 and asking the Operator to join the Berkshire Hills Bancorp (BHLB) earnings call.  Participants are requested to dial-in a few minutes before the scheduled start of the call.    A telephone replay of the call will be available through Tuesday, February 2, 2021 by dialing 877-344-7529 and entering access number 10151338.  The webcast will be available on Berkshire's website for an extended period of time.

ABOUT BERKSHIRE HILLS BANCORP

Berkshire Hills Bancorp is the parent of Berkshire Bank, a 21^st century community bank pursuing purpose driven performance based on its Be FIRST corporate responsibility culture.  Headquartered in Boston, Berkshire operates 130 banking offices in seven Northeastern states, with approximately $12.8 billion in assets.

FORWARD LOOKING STATEMENTS

This document contains "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. You can identify these statements from the use of the words "may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," "target" and similar expressions. There are many 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.

Further, given its ongoing and dynamic nature, it is difficult to predict what continued effects the COVID-19 pandemic will have on our business and results of operations. The pandemic and the related local and national economic disruption may result in a continued decline in demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; an increase in our allowance for credit losses on loans; a decline in the value of loan collateral, including real estate; a greater decline in the yield on our interest-earning assets than the decline in the cost of our interest-bearing liabilities; and increased cybersecurity risks, as employees increasingly work remotely.

Accordingly, you should not place undue reliance on forward-looking statements, which reflect our expectations only as of the date of this document. 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 pages F-9 and F-10 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, restructuring costs, goodwill impairment, and discontinued operations.  Discontinued operations are the Company's national mortgage banking operations which the Company exited.  Merger costs consist primarily of severance/benefit related expenses, contract termination costs, systems conversion costs, variable compensation expenses, and professional fees.  Merger costs in 2019 were primarily related to the acquisition of SI Financial Group.  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.  Restructuring costs also include severance and consulting expenses related to the Company's strategic review.  They also include costs related to the consolidation of branches, including eight branches for the full year of 2019.  The Company recorded a full impairment of its goodwill in the second quarter of 2020, which was classified as noncore.  Noncore charges in the third and fourth quarters of 2020 included costs related to separation with the former CEO in the third quarter, and consulting for the CEO succession process in both quarters.   A non-core gain was recognized on the sale of a specialty commercial insurance business line in the fourth quarter.

The Company has introduced the measure of Core Pre-Provision Net Revenue ("Core PPNR") which measures core income before credit loss provision and tax expense.  Due to the non-cash projections introduced into the calculation of income by the new CECL accounting standard, the investment community is placing more emphasis on PPNR in order to measure the results of operations and to compare them across banks which may have widely varying estimates of future economic conditions that affect their provision expense and reported earnings.  The Company also calculates core PPNR/assets in order to utilize the PPNR measure in assessing its comparative operating profitability.

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. References to organic growth and organic change exclude balances acquired in bank mergers. 

CONTACTS
Investor Relations Contact
David Gonci; Capital Markets Director; 413-281-1973

Media Contacts:
John Lovallo
Email: jlovallo@levick.com
Tel: (917) 612-8419

Cate Cronin
Email: ccronin@levick.com
Tel: (202) 738-7302

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 Operations
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
	and Supplementary Data (Five Quarter Trend)
F-10	Reconciliation of Non-GAAP Financial Measures
	and Supplementary Data (Year-to-Date)

 

BERKSHIRE HILLS BANCORP, INC.
SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1)
		At or for the Quarters Ended (1)
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,
		2020		2020		2020		2020		2019
PER SHARE DATA
	Net earnings/(loss) per common share, diluted	$     0.30		$     0.42		$ (10.93)		$     (0.40)		$     0.51
	Core earnings/(loss) per common share, diluted (2)	0.28		0.53		(0.13)		(0.07)		0.70
	Total book value per common share	23.37		23.03		22.79		33.90		34.65
	Tangible book value per common share (2)	22.68		22.22		21.94		22.00		22.56
	Market price at period end	17.12		10.11		11.02		14.86		32.88
	Dividends per common share	0.12		0.12		0.24		0.24		0.23
	Dividends per preferred share	NA		0.24		0.48		0.48		0.46
PERFORMANCE RATIOS (3)
	Return on assets	0.48	%	0.67	%	(16.38)	%	(0.62)	%	0.78	%
	Core return on assets (2)	0.45		0.84		(0.19)		(0.11)		1.08
	Return on equity	5.22		7.50		(131.17)		(4.58)		5.90
	Core return on equity (2)	4.89		9.33		(1.54)		(0.84)		8.09
	Core return on tangible common equity (2)	5.50		10.27		(2.05)		(0.94)		13.12
	Net interest margin, fully taxable equivalent (FTE) (4)(5)	2.61		2.61		2.62		3.04		3.11
	Fee income/Net interest and fee income from continuing operations	18.84		19.82		18.45		15.46		18.11
	Efficiency ratio (2)	71.03		65.39		71.01		66.92		53.66
CHANGE (Year-to-date)
	Total commercial loans (organic, annualized)	(1)	%	5	%	12	%	(5)	%	(7)	%
	Total loans (organic, annualized)	(12)		(7)		(3)		(8)		(9)
	Total deposits (organic, annualized)	5		2		9		(10)		0
	Total net revenues from continuing operations (compared to prior year)	(15)		(15)		(14)		(14)		4
	(Loss)/earnings per common share (compared to prior year)	(638)		(847)		(1,200)		(178)		(14)
	Core earnings/(loss) per common share (compared to prior year)(2)	(75)		(81)		(116)		(112)		(14)
FINANCIAL DATA (in millions)
	Total assets	$ 12,838		$ 12,614		$ 13,063		$   13,122		$ 13,216
	Total earning assets	12,090		11,832		12,267		11,785		11,916
	Total securities	2,223		1,988		1,882		1,837		1,770
	Total loans	8,082		8,982		9,370		9,303		9,502
	Allowance for credit losses	127		134		139		114		64
	Total intangible assets	35		41		42		598		599
	Total deposits	10,216		10,467		10,776		10,072		10,336
	Total shareholders' equity	1,188		1,179		1,164		1,722		1,759
	Net income/(loss)	15.0		21.2		(549.4)		(19.9)		25.8
	Core income/(loss) (2)	14.1		26.4		(6.5)		(3.6)		35.3
	Purchase accounting accretion	2.2		2.5		2.1		3.1		5.1
	Goodwill impairment	-		-		553.8		-		-
ASSET QUALITY AND CONDITION RATIOS
	Net charge-offs (current quarter annualized)/average loans	0.80	%	0.27	%	0.17	%	0.45	%	0.17	%
	Total non-performing assets/total assets	0.52		0.39		0.36		0.40		0.31
	Allowance for credit losses/total loans	1.58		1.50		1.49		1.22		0.67
	Loans/deposits	79		86		87		92		92
	Shareholders' equity to total assets	9.25		9.35		8.91		13.13		13.31
	Tangible shareholders' equity to tangible assets (2)	9.01		9.05		8.61		8.98		9.19
(1)	Reconciliations of non-GAAP financial measures, including all references to core and tangible amounts, appear on pages F-9 and F-10.
(2)	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 pages F-9 and F-10 for reconciliations of non-GAAP financial measures.
(3)	All performance ratios are annualized and are based on average balance sheet amounts, where applicable.
(4)	Fully taxable equivalent considers the impact of tax advantaged investment securities and loans.
(5)	The effect of purchase accounting accretion for loans, time deposits, and borrowings 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: 0.07%, 0.08%, 0.07%, 0.11%, 0.17%.

 

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2)
	December 31,		September 30,		December 31,
(in thousands)	2020		2020		2019
Assets
Cash and due from banks	$          91,219		$           90,537		$        105,447
Short-term investments	1,466,656		844,755		474,382
Total cash and short-term investments	1,557,875		935,292		579,829
Trading security	9,708		9,525		10,769
Marketable equity securities, at fair value	18,513		31,993		41,556
Securities available for sale, at fair value	1,695,232		1,575,289		1,311,555
Securities held to maturity, at amortized cost	465,091		330,197		357,979
Federal Home Loan Bank stock and other restricted securities	34,873		40,520		48,019
Total securities	2,223,417		1,987,524		1,769,878
Less: Allowance for credit losses on investment securities	(104)		(96)		-
Net securities	2,223,313		1,987,428		1,769,878
Loans held for sale	17,748		15,854		36,664
Total loans	8,081,519		8,982,336		9,502,428
Less: Allowance for credit losses on loans	(127,302)		(134,414)		(63,575)
Net loans	7,954,217		8,847,922		9,438,853
Premises and equipment, net	112,663		117,116		120,398
Other real estate owned	149		40		-
Goodwill	-		-		553,762
Other intangible assets	34,819		40,947		45,615
Cash surrender value of bank-owned life insurance	232,695		231,217		227,894
Other assets	387,230		425,675		288,945
Assets held for sale	317,304		-		-
Assets from discontinued operations	-		12,966		154,132
Total assets	$   12,838,013		$    12,614,457		$   13,215,970
Liabilities and shareholders' equity
Demand deposits	$     2,484,249		$      2,585,173		$     1,884,100
NOW and other deposits	1,003,005		1,522,289		1,492,569
Money market deposits	3,371,353		2,516,168		2,528,656
Savings deposits	972,116		952,836		841,283
Time deposits	2,385,085		2,890,093		3,589,369
Total deposits	10,215,808		10,466,559		10,335,977
Senior borrowings	474,357		605,483		730,501
Subordinated borrowings	97,280		97,223		97,049
Total borrowings	571,637		702,706		827,550
Other liabilities	232,730		251,220		267,398
Liabilities held for sale	630,065		-		-
Liabilities from discontinued operations	-		14,947		26,481
Total liabilities	11,650,240		11,435,432		11,457,406
Preferred shareholders' equity	-		20,325		40,633
Common shareholders' equity	1,187,773		1,158,700		1,717,931
Total shareholders' equity	1,187,773		1,179,025		1,758,564
Total liabilities and shareholders' equity	$   12,838,013		$    12,614,457		$   13,215,970
Net common shares outstanding	50,833		50,306		49,585

 

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-3)
LOAN ANALYSIS
									Organic Annualized Growth %
(in millions)	December 31, 2020 Balance		December 31, 2020 HFS Balance		September 30, 2020 Balance		December 31, 2019 Balance		Quarter ended December 31, 2020		Year to Date
Total commercial real estate	$                      3,647		$                         188		$                       3,943		$                      4,034		(11)	%	(5)	%
Commercial and industrial loans	1,959		14		2,147		1,841		(32)		7
Total commercial loans	5,606		202		6,090		5,875		(19)		(1)
Total residential mortgages	1,813		63		2,122		2,685		(46)		(30)
Home equity	295		31		350		381		(27)		(14)
Auto and other	368		5		420		561		(45)		(34)
Total consumer loans	663		36		770		942		(37)		(26)
Total loans	$                      8,082		$                         301		$                       8,982		$                      9,502		(27)	%	(12)	%
DEPOSIT ANALYSIS
								Organic Annualized Growth %
(in millions)	December 31, 2020 Balance		December 31, 2020 HFS Balance		September 30, 2020 Balance		December 31, 2019 Balance		Quarter ended December 31, 2020		Year to Date
Demand	$                      2,484		$                         107		$                       2,585		$                      1,884		1	%	38	%
NOW and other	1,003		112		1,523		1,493		(107)		(25)
Money market	3,372		220		2,516		2,529		171		42
Savings	972		17		953		841		15		18
Time deposits	2,385		161		2,890		3,589		(48)		(29)
Total deposits	$                    10,216		$                         617		$                     10,467		$                    10,336		14	%	5	%

 

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - (F-4)
	Three Months Ended				Years Ended
	December 31,				December 31,
(in thousands, except per share data)	2020		2019		2020		2019
Interest and dividend income from continuing operations
Loans	$     79,756		$      110,915		$        358,015		$      448,927
Securities and other	12,375		14,526		51,767		60,586
Total interest and dividend income	92,131		125,441		409,782		509,513
Interest expense from continuing operations
Deposits	12,255		28,797		72,715		115,193
Borrowings	4,167		5,311		20,285		29,062
Total interest expense	16,422		34,108		93,000		144,255
Net interest income from continuing operations	75,709		91,333		316,782		365,258
Non-interest income from continuing operations
Mortgage banking originations	543		172		5,190		788
Loan related income	4,833		7,056		16,840		24,374
Deposit related fees	7,523		8,264		27,905		31,352
Insurance commissions and fees	2,319		2,471		10,770		10,957
Wealth management fees	2,359		2,239		9,285		9,353
Total fee income	17,577		20,202		69,990		76,824
Other	2,105		75		2,597		1,438
Securities gains/(losses), net	2,405		1,734		(7,520)		4,389
Gain on sale of business operations and assets, net	1,240		1,351		1,240		1,351
Total non-interest income	23,327		23,362		66,307		84,002
Total net revenue from continuing operations	99,036		114,695		383,089		449,260
Provision for credit losses	10,000		5,351		75,878		35,419
Non-interest expense from continuing operations
Compensation and benefits	36,719		35,355		147,840		140,906
Occupancy and equipment	10,948		10,798		43,359		39,586
Technology and communications	7,988		6,702		32,364		26,523
Marketing and promotion	634		1,046		3,703		4,474
Professional services	4,055		2,288		11,907		10,798
FDIC premiums and assessments	1,218		471		5,876		3,861
Other real estate owned and foreclosures	44		4		125		154
Amortization of intangible assets	1,513		1,582		6,181		5,783
Goodwill impairment	-		-		553,762		-
Merger, restructuring and other expense	523		5,713		5,839		28,046
Other	8,154		6,328		29,283		29,726
Total non-interest expense	71,796		70,287		840,239		289,857
Income/(loss) from continuing operations before income taxes	$     17,240		$        39,057		$      (533,028)		$      123,984
Income tax (benefit)/expense	(1,659)		6,421		(19,853)		22,463
Net income/(loss) from continuing operations	$     18,899		$        32,636		$      (513,175)		$      101,521
(Loss) from discontinued operations before income taxes	$      (5,114)		$        (9,514)		$        (26,855)		$        (5,539)
Income tax (benefit)	(1,224)		(2,629)		(7,013)		(1,468)
Net (loss) from discontinued operations	$      (3,890)		$        (6,885)		$        (19,842)		$        (4,071)
Net income/(loss)	$     15,009		$        25,751		$      (533,017)		$        97,450
Preferred stock dividend	-		240		313		960
Income/(loss) available to common shareholders	$     15,009		$        25,511		$      (533,330)		$        96,490
Basic earnings/(loss) per common share:
Continuing Operations	$         0.38		$            0.65		$          (10.21)		$            2.06
Discontinued Operations	(0.08)		(0.14)		(0.39)		(0.08)
Total	$         0.30		$            0.51		$          (10.60)		$            1.98
Diluted earnings/(loss) per common share:
Continuing Operations	$         0.38		$            0.65		$          (10.21)		$            2.05
Discontinued Operations	(0.08)		(0.14)		(0.39)		(0.08)
Total	$         0.30		$            0.51		$          (10.60)		$            1.97
Weighted average shares outstanding:
Basic	50,308		50,494		50,270		49,263
Diluted	50,355		50,702		50,270		49,421

 

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend) - UNAUDITED - (F-5)
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,
(in thousands, except per share data)	2020		2020		2020		2020		2019
Interest and dividend income from continuing operations
Loans	$   79,756		$   85,688		$       90,876		$   101,695		$   110,915
Securities and other	12,375		12,080		12,812		14,500		14,526
Total interest and dividend income	92,131		97,768		103,688		116,195		125,441
Interest expense from continuing operations
Deposits	12,255		16,070		20,552		23,838		28,797
Borrowings	4,167		4,643		5,546		5,929		5,311
Total interest expense	16,422		20,713		26,098		29,767		34,108
Net interest income from continuing operations	75,709		77,055		77,590		86,428		91,333
Non-interest income from continuing operations
Mortgage banking originations	543		2,044		1,644		959		172
Loan related income	4,833		4,988		5,717		1,302		7,056
Deposit related fees	7,523		7,062		5,373		7,947		8,264
Insurance commissions and fees	2,319		2,660		2,767		3,024		2,471
Wealth management fees	2,359		2,299		2,057		2,570		2,239
Total fee income	17,577		19,053		17,558		15,802		20,202
Other	2,105		1,927		(999)		(436)		75
Securities gains/(losses), net	2,405		(1,017)		822		(9,730)		1,734
Gain on sale of business operations and assets, net	1,240		-		-		-		1,351
Total non-interest income	23,327		19,963		17,381		5,636		23,362
Total net revenue from continuing operations	99,036		97,018		94,971		92,064		114,695
Provision for credit losses	10,000		1,200		29,871		34,807		5,351
Non-interest expense from continuing operations
Compensation and benefits	36,719		34,809		39,403		36,909		35,355
Occupancy and equipment	10,948		11,084		10,195		11,132		10,798
Technology and communications	7,988		8,540		7,755		8,081		6,702
Marketing and promotion	634		1,002		902		1,165		1,046
Professional services	4,055		2,567		2,565		2,720		2,288
FDIC premiums and assessments	1,218		1,518		1,658		1,482		471
Other real estate owned and foreclosures	44		40		14		27		4
Amortization of intangible assets	1,513		1,530		1,558		1,580		1,582
Goodwill impairment	-		-		553,762		-		-
Merger, restructuring and other expense	523		5,316		-		-		5,713
Other	8,154		6,437		6,463		8,229		6,328
Total non-interest expense	71,796		72,843		624,275		71,325		70,287
Income/(loss) from continuing operations before income taxes	$   17,240		$   22,975		$   (559,175)		$    (14,068)		$     39,057
Income tax (benefit)/expense	(1,659)		(68)		(16,130)		(1,996)		6,421
Net income/(loss) from continuing operations	$   18,899		$   23,043		$   (543,045)		$    (12,072)		$     32,636
(Loss) from discontinued operations before income taxes	$   (5,114)		$   (2,477)		$       (8,635)		$    (10,629)		$      (9,514)
Income tax (benefit)	(1,224)		(659)		(2,299)		(2,831)		(2,629)
Net (loss) from discontinued operations	$   (3,890)		$   (1,818)		$       (6,336)		$      (7,798)		$      (6,885)
Net income/(loss)	$   15,009		$   21,225		$   (549,381)		$    (19,870)		$     25,751
Preferred stock dividend	-		58		130		125		240
Income/(loss) available to common shareholders	$   15,009		$   21,167		$   (549,511)		$    (19,995)		$     25,511
Basic earnings/(loss) per common share:
Continuing Operations	$       0.38		$       0.46		$       (10.80)		$        (0.24)		$         0.65
Discontinued Operations	(0.08)		(0.04)		(0.13)		(0.16)		(0.14)
Total	$       0.30		$       0.42		$       (10.93)		$        (0.40)		$         0.51
Diluted earnings/(loss) per common share:
Continuing Operations	$       0.38		$       0.46		$       (10.80)		$        (0.24)		$         0.65
Discontinued Operations	(0.08)		(0.04)		(0.13)		(0.16)		(0.14)
Total	$       0.30		$       0.42		$       (10.93)		$        (0.40)		$         0.51
Weighted average shares outstanding:
Basic	50,308		50,329		50,246		50,204		50,494
Diluted	50,355		50,329		50,246		50,204		50,702

 

BERKSHIRE HILLS BANCORP, INC.
AVERAGE YIELDS AND COSTS (Fully Taxable Equivalent - Annualized) - UNAUDITED - (F-6)
	Quarters Ended
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,
	2020		2020		2020		2020		2019
Earning assets
Loans:
Commercial real estate	3.34	%	3.52	%	3.78	%	4.41	%	4.80	%
Commercial and industrial loans	4.05		3.88		4.02		5.03		5.35
Residential mortgages	3.78		3.78		3.78		3.77		3.61
Consumer loans	3.41		3.59		3.72		4.28		4.38
Total loans	3.62		3.68		3.83		4.33		4.52
Securities	2.69		2.78		3.07		3.32		3.31
Short-term investments and loans held for sale	0.57		0.21		0.50		1.78		3.15
Total earning assets	3.17		3.31		3.50		4.08		4.27
Funding liabilities
Deposits:
NOW and other	0.17		0.24		0.30		0.46		0.54
Money market	0.32		0.38		0.58		0.98		1.18
Savings	0.08		0.10		0.10		0.13		0.14
Time	1.35		1.63		1.84		1.87		1.97
Total interest-bearing deposits	0.62		0.81		1.01		1.18		1.35
Borrowings	2.50		2.36		2.38		2.60		2.77
Total interest-bearing liabilities	0.79		0.95		1.16		1.33		1.48
Net interest spread	2.38		2.36		2.34		2.75		2.79
Net interest margin	2.61		2.61		2.62		3.04		3.11
Cost of funds (1)	0.60		0.73		0.92		1.11		1.23
Cost of deposits	0.47		0.61		0.79		0.96		1.11
(1) Cost of funds includes all deposits and borrowings.

 

BERKSHIRE HILLS BANCORP, INC.
AVERAGE BALANCES - UNAUDITED - (F-7)
	Quarters Ended
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,
(in thousands)	2020		2020		2020		2020		2019
Assets
Loans
Commercial real estate	$       3,843,263		$      3,986,424		$      4,005,018		$      4,000,461		$       4,056,244
Commercial and industrial loans	2,055,978		2,191,749		2,152,820		1,795,813		1,768,039
Residential mortgages	1,971,366		2,224,132		2,452,622		2,654,224		2,758,676
Consumer loans	725,810		800,824		865,318		921,810		974,889
Total loans (1)	8,596,417		9,203,129		9,475,778		9,372,308		9,557,848
Securities (2)	1,967,527		1,873,533		1,793,381		1,744,635		1,752,968
Short-term investments and loans held for sale	977,375		766,447		697,138		374,894		444,622
Total earning assets (3)	11,541,319		11,843,109		11,966,297		11,491,837		11,755,438
Goodwill and other intangible assets	39,887		41,460		590,672		598,347		601,192
Other assets	852,810		759,534		751,702		663,056		737,396
Assets from discontinued operations	11,704		16,041		109,923		98,528		176,251
Total assets	$     12,445,720		$    12,660,144		$    13,418,594		$    12,851,768		$     13,270,277
Liabilities and shareholders' equity
Deposits
NOW and other	$       1,278,764		$      1,243,487		$      1,183,839		$      1,159,388		$       1,085,485
Money market	2,756,348		2,673,567		2,672,066		2,752,465		2,688,766
Savings	966,929		940,488		901,218		846,942		835,209
Time	2,628,608		3,056,419		3,399,222		3,333,070		3,827,175
Total interest-bearing deposits	7,630,649		7,913,961		8,156,345		8,091,865		8,436,635
Borrowings	657,622		777,369		942,033		949,316		853,911
Total interest-bearing liabilities	8,288,271		8,691,330		9,098,378		9,041,181		9,290,546
Non-interest-bearing demand deposits	2,541,916		2,558,981		2,343,173		1,849,295		1,898,045
Other liabilities	459,845		254,273		272,690		203,797		304,504
Liabilities from discontinued operations	5,666		22,805		28,988		23,799		30,446
Total liabilities	11,295,698		11,527,389		11,743,229		11,118,072		11,523,541
Preferred shareholders' equity	7,290		20,325		20,325		20,548		40,633
Common shareholders' equity	1,142,732		1,112,430		1,655,040		1,713,148		1,706,103
Total shareholders' equity	1,150,022		1,132,755		1,675,365		1,733,696		1,746,736
Total liabilities and shareholders' equity	$     12,445,720		$    12,660,144		$    13,418,594		$    12,851,768		$     13,270,277
Supplementary data
Total average non-maturity deposits	$       7,543,957		$      7,416,523		$      7,100,296		$      6,608,090		$       6,507,505
Total average deposits	10,172,565		10,472,942		10,499,518		9,941,160		10,334,680
Fully taxable equivalent income adjustment	1,485		1,512		1,580		1,824		1,934
Total average tangible equity (4)	1,110,135		1,091,295		1,084,693		1,135,349		1,145,544
(1) Total loans include non-accruing loans.
(2) Average balances for securities available-for-sale are based on amortized cost.
(3) Excludes discontinued operations for presentation purposes. Performance ratios are calculated including the impact of discontinued operations.
(4) 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
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,
(in thousands)	2020		2020		2020		2020		2019
NON-PERFORMING ASSETS
Non-accruing loans:
Commercial real estate (1)	$          35,581		$          14,777		$          12,486		$          16,938		$          20,119
Commercial and industrial loans	12,921		15,035		15,045		18,370		11,373
Residential mortgages	8,347		7,928		9,840		9,636		3,343
Consumer loans	8,099		9,650		7,513		6,172		4,805
Total non-accruing loans	64,948		47,390		44,884		51,116		39,640
Other real estate owned	149		401		517		224		-
Repossessed assets	1,932		1,646		1,581		1,316		858
Total non-performing assets	$          67,029		$          49,437		$          46,982		$          52,656		$          40,498
Total non-accruing loans/total loans	0.80%		0.53%		0.48%		0.55%		0.42%
Total non-performing assets/total assets	0.52%		0.39%		0.36%		0.40%		0.31%
PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS
Balance at beginning of period	$        134,414		$        139,394		$        113,510		$          63,575		$          62,230
Adoption of ASU No. 2016-13 (2)	-		-		-		25,434		-
Balance after adoption of ASU No. 2016-13	134,414		139,394		113,510		89,009		62,230
Charged-off loans	(18,314)		(7,776)		(7,274)		(12,432)		(4,485)
Recoveries on charged-off loans	1,209		1,580		3,259		1,958		479
Net loans charged-off	(17,105)		(6,196)		(4,015)		(10,474)		(4,006)
Provision for loan credit losses	9,993		1,216		29,899		34,975		5,351
Balance at end of period	$        127,302		$        134,414		$        139,394		$        113,510		$          63,575
Allowance for credit losses/total loans	1.58%		1.50%		1.49%		1.22%		0.67%
Allowance for credit losses/non-accruing loans	196%		284%		311%		222%		160%
NET LOAN CHARGE-OFFS
Commercial real estate	$        (11,862)		$             (635)		$          (1,679)		$          (5,990)		$          (1,419)
Commercial and industrial loans	(5,089)		(5,551)		(1,059)		(3,728)		(1,495)
Residential mortgages	250		517		(966)		(19)		(351)
Home equity	141		(57)		(10)		(107)		(67)
Auto and other consumer	(545)		(470)		(301)		(630)		(674)
Total, net	$        (17,105)		$          (6,196)		$          (4,015)		$        (10,474)		$          (4,006)
Net charge-offs (QTD annualized)/average loans	0.80%		0.27%		0.17%		0.45%		0.17%
Net charge-offs (YTD annualized)/average loans	0.41%		0.29%		0.31%		0.45%		0.35%
DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS
30-89 Days delinquent	0.20%		0.31%		0.37%		0.43%		0.25%
90+ Days delinquent and still accruing	0.14%		0.14%		0.14%		0.05%		0.29%
Total accruing delinquent loans	0.34%		0.45%		0.51%		0.48%		0.54%
Non-accruing loans	0.80%		0.53%		0.48%		0.55%		0.42%
Total delinquent and non-accruing loans	1.14%		0.98%		0.99%		1.03%		0.96%
(1) This balance includes $17 million of PCD loans.
(2) This balance includes $12 million of PCD confirmed losses as of January 1, 2020.

 

BERKSHIRE HILLS BANCORP, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED - (F-9)
		At or for the Quarters Ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,
(in thousands)		2020		2020		2020		2020		2019
Net income/(loss)		$    15,009		$       21,225		$    (549,381)		$     (19,870)		$      25,751
Adj: Net securities (gains)/losses (1)		(2,405)		1,017		(822)		9,730		(1,734)
Adj: Goodwill impairment		-		-		553,762		-		-
Adj: Net (gains) on sale of business operations and assets		(1,240)		-		-		-		-
Adj: Merger and acquisition expense		-		-		-		-		3,611
Adj: Restructuring expense and other expense		523		5,316		-		-		2,102
Adj: Loss from discontinued operations before income taxes		5,114		2,477		8,635		10,629		9,514
Adj: Income taxes		(2,939)		(3,611)		(18,658)		(4,134)		(3,910)
Total core income/(loss) (2)	(A)	$    14,062		$       26,424		$        (6,464)		$       (3,645)		$      35,334
Total revenue from continuing operations		$    99,036		$       97,018		$        94,971		$      92,064		$    114,695
Adj: Net securities (gains)/losses (1)		(2,405)		1,017		(822)		9,730		(1,734)
Adj: Net (gains) on sale of business operations and assets		(1,240)		-		-		-		-
Total core revenue (2)	(B)	$    95,391		$       98,035		$        94,149		$    101,794		$    112,961
Total non-interest expense from continuing operations		$    71,796		$       72,843		$      624,275		$      71,325		$      70,287
Less: Merger, restructuring and other expense (see above)		(523)		(5,316)		-		-		(5,713)
Less: Goodwill impairment		-		-		(553,762)		-		-
Core non-interest expense (2)	(C)	$    71,273		$       67,527		$        70,513		$      71,325		$      64,574
Total revenue		$    98,479		$       96,752		$        90,383		$      93,869		$    116,860
Total non-interest expense		76,353		75,054		628,322		83,759		81,966
Pre-tax, pre-provision net revenue (PPNR)		$    22,126		$       21,698		$    (537,939)		$      10,110		$      34,894
Total revenue from continuing operations		$    99,036		$       97,018		$        94,971		$      92,064		$    114,695
Total non-interest expense from continuing operations		71,796		72,843		624,275		71,325		70,287
Pre-tax, pre-provision net revenue (PPNR) from continuing operations		$    27,240		$       24,175		$    (529,304)		$      20,739		$      44,408
Total core revenue (2)		$    95,391		$       98,035		$        94,149		$    101,794		$    112,961
Core non-interest expense (2)		71,273		67,527		70,513		71,325		64,574
Core pre-tax, pre-provision net revenue (PPNR)		$    24,118		$       30,508		$        23,636		$      30,469		$      48,387
(in millions, except per share data)
Total average assets	(D)	$    12,446		$       12,660		$        13,419		$      12,852		$      13,270
Total average shareholders' equity	(E)	1,150		1,133		1,675		1,734		1,747
Total average tangible shareholders' equity (2)	(F)	1,110		1,091		1,085		1,135		1,146
Total average tangible common shareholders' equity (2)	(G)	1,103		1,071		1,064		1,115		1,105
Total tangible shareholders' equity, period-end (2)(3)	(H)	1,153		1,138		1,122		1,124		1,159
Total tangible common shareholders' equity, period-end (2)(3)	(I)	1,153		1,118		1,101		1,104		1,119
Total tangible assets, period-end (2)(3)	(J)	12,803		12,574		13,021		12,524		12,617
Total common shares outstanding, period-end (thousands)	(K)	50,833		50,306		50,192		50,199		49,585
Average diluted shares outstanding (thousands)	(L)	50,355		50,329		50,246		50,204		50,702
Core earnings/(loss) per common share, diluted(2)	(A/L)	$        0.28		$           0.53		$          (0.13)		$         (0.07)		$          0.70
Tangible book value per common share, period-end (2)	(I/K)	22.68		22.22		21.94		22.00		22.56
Total tangible shareholders' equity/total tangible assets (2)	(H)/(J)	9.01		9.05		8.61		8.98		9.19
Performance ratios (4)
GAAP return on assets		0.48	%	0.67	%	(16.38)	%	(0.62)	%	0.78	%
Core return on assets (2)		0.45		0.84		(0.19)		(0.11)		1.08
GAAP return on equity		5.22		7.50		(131.17)		(4.58)		5.90
Core return on equity (2)	(A/E)	4.89		9.33		(1.54)		(0.84)		8.09
Core return on tangible common equity (2)(5)	(A+O)/(G)	5.50		10.27		(2.05)		(0.94)		13.12
PPNR/assets (2)		0.71		0.69		(16.04)		0.31		1.05
Core PPNR/assets (2)		0.78		0.97		0.71		0.96		1.48
Efficiency ratio (2)(6)	(C-O)/(B+M+P)	71.03		65.39		71.01		66.92		53.66
Net interest margin		2.61		2.61		2.62		3.04		3.11
Supplementary data (in thousands)
Tax benefit on tax-credit investments (7)	(M)	$      1,334		$         1,377		$          1,379		$           608		$        2,503
Non-interest income charge on tax-credit investments (8)	(N)	(971)		(1,090)		(1,097)		(486)		(1,996)
Net income on tax-credit investments	(M+N)	363		287		282		122		507
Intangible amortization	(O)	$      1,513		$         1,530		$          1,558		$        1,580		$        1,582
Fully taxable equivalent income adjustment	(P)	1,485		1,512		1,580		1,824		1,934
(1) Net securities (gains)/losses include the change in fair value of the Company's equity securities in compliance with the Company's adoption of ASU 2016-01.
(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/(loss) adjusted for the tax-effected amortization of intangible assets,
assuming a 27% 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.

 

	BERKSHIRE HILLS BANCORP, INC.
	RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA - UNAUDITED - (F-10)
			Years Ended
			Dec. 31,		Dec. 31,
	(Dollars in thousands)		2020		2019
	Net (loss)/income		$  (533,017)		$    97,450
	Adj: Net securities losses/(gains) (1)		7,520		(4,389)
	Adj: Goodwill impairment		553,762		-
	Adj: Net (gains) on sale of business operations and assets		(1,240)		-
	Adj: Merger and acquisition expenses		-		18,733
	Adj: Restructuring expense and other		5,839		9,313
	Adj: Loss from discontinued operations before income taxes		26,855		5,539
	Adj: Income taxes		(29,342)		(7,799)
	Total core income (2)	(A)	$      30,377		$  118,847
	Total revenue from continuing operations		$    383,089		$  449,260
	Adj: Net securities losses/(gains) (1)		7,520		(4,389)
	Adj: Net (gains) on sale of business operations and assets		(1,240)		-
	Total core revenue(2)	(B)	$    389,369		$  444,871
	Total non-interest expense from continuing operations		$    840,239		$  289,857
	Less: Merger, restructuring and other expense (see above)		(5,839)		(28,046)
	Less: Goodwill impairment		(553,762)		-
	Core non-interest expense (2)	(C)	$    280,638		$  261,811
	Total revenue		$    379,483		$  490,490
	Total non-interest expense		863,488		336,626
	Pre-tax, pre-provision net revenue (PPNR)		$  (484,005)		$  153,864
	Total revenue from continuing operations		$    383,089		$  449,260
	Total non-interest expense from continuing operations		840,239		289,857
	Pre-tax, pre-provision net revenue (PPNR) from continuing operations		$  (457,150)		$  159,403
	Total core revenue (2)		$    389,369		$  444,871
	Core non-interest expense (2)		280,638		261,811
	Core pre-tax, pre-provision net revenue (PPNR)		$    108,731		$  183,060
	(in millions, except per share data)
	Total average assets	(D)	$      12,861		$    12,961
	Total average shareholders' equity	(E)	1,421		1,694
	Total average tangible shareholders' equity (2)	(F)	1,105		1,116
	Total average tangible common shareholders' equity (2)	(G)	1,088		1,076
	Total tangible shareholders' equity, period-end (2)(3)	(H)	1,153		1,159
	Total tangible common shareholders' equity, period-end (2)(3)	(I)	1,153		1,119
	Total tangible assets, period-end (2)(3)	(J)	12,803		12,613
	Total common shares outstanding, period-end (thousands)	(K)	50,833		49,585
	Average diluted shares outstanding (thousands)	(L)	50,308		49,421
	Core earnings per common share, diluted(2)	(A/L)	$          0.60		$        2.40
	Tangible book value per common share, period-end (2)	(I/K)	22.68		22.56
	Total tangible shareholders' equity/total tangible assets (2)	(H)/(J)	9.01		9.19
	Performance ratios (4)
	GAAP return on assets		(4.15)	%	0.75	%
	Core return on assets (2)	(A/D)	0.24		0.93
	GAAP return on equity		(37.46)		5.75
	Core return on equity (2)	(A/E)	2.14		7.01
	Core return on tangible common equity (2)(5)	(A+O)/(G)	3.18		11.35
	PPNR/assets (2)		(3.76)		1.19
	Core PPNR/assets (2)		0.85		1.41
	Efficiency ratio (2)(6)	(C-O)/(B+M+P)	68.53		55.63
	Net interest margin		2.72		3.17
	Supplementary data
	Tax benefit on tax-credit investments (7)	(M)	$        4,699		$      7,950
	Non-interest income charge on tax-credit investments (8)	(N)	(3,645)		(6,455)
	Net income on tax-credit investments	(M+N)	1,054		1,495
	Intangible amortization	(O)	6,181		5,783
	Fully taxable equivalent income adjustment	(P)	6,402		7,451
(1)	Net securities losses/(gains) include the change in fair value of the Company's equity securities in compliance with the Company's adoption
	of ASU 2016-01.
(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% 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.

 

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SOURCE Berkshire Hills Bancorp, Inc.

FAQ

What were Berkshire Hills Bancorp's fourth quarter 2020 earnings?

Berkshire Hills Bancorp reported a fourth-quarter net income of $15 million, or $0.30 per share.

How did the pandemic impact Berkshire Hills Bancorp's earnings?

The pandemic contributed to a $9 million increase in expected credit loss provisions, affecting overall earnings.

What was the total asset growth for Berkshire Hills Bancorp in the fourth quarter?

Total assets grew by 2% to $12.8 billion in the fourth quarter.

How many branches will Berkshire Hills Bancorp consolidate in 2021?

The bank plans to consolidate 16 branches in the first half of 2021.

What was the loan-to-deposit ratio for Berkshire Hills Bancorp?

The loan-to-deposit ratio stood at 79% at year-end.