Announces $40
Million Share Repurchase Authorization
- Fourth quarter loss of $1
million, ($0.03) per share;
operating income of $20 million,
$0.47 per share
- $267 million securities sale
resulting in $25.1 million pre-tax
non-operating loss
- Net loan charge-offs and non-performing assets decreased 18%
linked quarter
- TCE ratio of 8.0% and CET1 ratio of 12.0%
- Tangible book value per share of $22.82, up $1.57,
or 7%, in the quarter
BOSTON, Jan. 25,
2024 /PRNewswire/ -- Berkshire Hills Bancorp, Inc.
(NYSE: BHLB) today reported results for the fourth quarter of 2023.
These results along with comparison periods are summarized
below:
($ in millions, except
per share data)
|
|
Three Months Ended
|
Twelve Months
Ended
|
|
|
Dec. 31,
2023
|
|
Sep. 30,
2023
|
|
Dec. 31,
2022
|
|
Dec. 31,
2023
|
|
Dec. 31,
2022
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(1.4)
|
$
|
19.5
|
$
|
30.5
|
$
|
69.6
|
$
|
92.5
|
Per
share
|
|
(0.03)
|
|
0.45
|
|
0.69
|
|
1.60
|
|
2.02
|
Operating
earnings1
|
|
20.2
|
|
21.5
|
|
28.3
|
|
93.2
|
|
100.5
|
Per share
|
|
0.47
|
|
0.50
|
|
0.64
|
|
2.14
|
|
2.19
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income,
non FTE
|
$
|
88.4
|
$
|
90.3
|
$
|
102.1
|
$
|
369.0
|
$
|
344.6
|
Net interest income,
FTE
|
|
90.4
|
|
92.3
|
|
103.9
|
|
376.9
|
|
351.3
|
Net interest margin, FTE
|
|
3.11 %
|
|
3.18 %
|
|
3.84 %
|
|
3.27 %
|
|
3.26 %
|
Non-interest
income
|
|
(8.4)
|
|
17.5
|
|
15.7
|
|
42.8
|
|
68.9
|
Operating non-interest
income1
|
|
16.7
|
|
17.5
|
|
15.5
|
|
67.8
|
|
71.0
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
expense
|
$
|
79.0
|
$
|
76.5
|
$
|
70.0
|
$
|
301.5
|
$
|
288.7
|
Operating non-interest
expense1
|
|
75.3
|
|
73.9
|
|
72.6
|
|
295.2
|
|
279.8
|
Efficiency
ratio1
|
|
67.8 %
|
|
65.1 %
|
|
58.3 %
|
|
63.9 %
|
|
64.3 %
|
|
|
|
|
|
|
|
|
|
|
|
Average
balances
|
|
|
|
|
|
|
|
|
|
|
Loans
|
$
|
8,990
|
$
|
8,952
|
$
|
8,082
|
$
|
8,814
|
$
|
7,612
|
Deposits
|
|
9,936
|
|
9,630
|
|
9,731
|
|
9,704
|
|
9,797
|
|
|
|
|
|
|
|
|
|
|
|
Period-end
balances
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
9,040
|
|
8,984
|
|
8,335
|
|
9,040
|
|
8,335
|
Deposits
|
|
10,633
|
|
9,981
|
|
10,327
|
|
10,633
|
|
10,327
|
|
|
|
|
|
1. See non-GAAP
financial measures and reconciliation to GAAP measures beginning on
page 12.
|
Berkshire CEO Nitin Mhatre
stated, "Through the final quarter of the year, we continued to
strengthen our balance sheet while maintaining strong credit
performance, cost discipline and capital. Despite industry
turbulence earlier in the year, full year operating EPS was
relatively unchanged from 2022. Our year-end securities sale
reduced wholesale borrowings, improving our funding profile as we
move into 2024. We continue to benefit from disruption in the
competitive landscape and have recruited experienced bankers to
further support deposit gathering activities. Our Board has
authorized additional share repurchases in 2024 to balance return
of capital while supporting franchise growth. I'm confident
that Berkshire is well positioned
to deliver the benefits of our strategic initiatives to our
shareholders and communities."
CFO David Rosato added, "Fourth
quarter operating earnings were $20.2
million, decreasing $1.3
million linked quarter. Net interest margin of 3.11 percent
decreased 7 basis points as funding cost increases outpaced loan
yield expansion. However, our full year margin was steady at 3.27%.
Operating non-interest income decreased by 5 percent linked quarter
and increased 8 percent year-over-year. Non-interest expense
increased 3 percent linked quarter on a GAAP basis and 2 percent on
an operating basis. We continue to improve oversight of our
operating costs and are pursuing further efficiency improvements in
2024 while reinvesting in front-line revenue generating teams.
Non-operating expenses of $3.7
million were primarily severance charges related to a
workforce reduction. We sold lower-yielding securities with a
market value of $267 million near
period-end and proceeds were used to reduce borrowings by a similar
amount. The securities sale resulted in a $25.1 million ($19.0
million after-tax) non-operating loss. Total shareholders'
equity was not impacted by the securities sale and our common
equity Tier 1 ratio remained a healthy 12.0% percent at
year-end."
The Board of Directors has authorized the repurchase of
$40 million of common stock through
December 31, 2024. This would result
in the repurchase of approximately 4% of outstanding shares based
on the current share price.
|
_ __ ___As of and For the Three
Months Ended_________
|
|
Dec. 31,
2023
|
|
Sep. 30,
2023
|
|
Dec. 31,
2022
|
Asset
Quality
|
|
|
|
|
|
Net loan charge-offs to
average loans
|
0.20 %
|
|
0.24 %
|
|
0.58 %
|
Non-performing loans to
total loans
|
0.24 %
|
|
0.30 %
|
|
0.37 %
|
|
|
|
|
|
|
Returns
|
|
|
|
|
|
Return on average
assets
|
(0.05) %
|
|
0.66 %
|
|
1.10 %
|
Return on tangible
common equity,
including
unrealized losses on AFS securities 1
|
(0.24) %
|
|
8.45 %
|
|
13.36 %
|
Return on tangible
common equity,
excluding
unrealized losses on AFS securities 1
|
(0.18) %
|
|
6.76 %
|
|
10.59 %
|
|
|
|
|
|
|
Capital
Ratios2
|
|
|
|
|
|
Tangible common
equity/tangible assets1
|
8.0 %
|
|
7.7 %
|
|
8.0 %
|
Tier 1
leverage
|
9.6 %
|
|
9.8 %
|
|
10.2 %
|
Common equity Tier
1
|
12.0 %
|
|
12.1 %
|
|
12.4 %
|
Tier 1
risk-based
|
12.3 %
|
|
12.3 %
|
|
12.6 %
|
Total
risk-based
|
14.4 %
|
|
14.4 %
|
|
14.6 %
|
|
|
|
1. See non-GAAP
measures and reconciliation to GAAP beginning on beginning on page
12. All performance ratios are annualized and are based on average
balance sheet amounts, where applicable. 2. Presented as estimated
for December 31, 2023 and actual for the remaining
periods.
|
|
|
|
|
|
|
|
|
Berkshire Hills Bancorp, Inc. (NYSE: BHLB) is the parent company
of Berkshire Bank, a relationship-driven, community-focused bank
with $12.4 billion in assets and 96
financial centers in New England and New
York. Berkshire is
headquartered in Boston and offers
commercial, retail, wealth, and private banking solutions.
4Q 2023 Financial Highlights
Income Statement
- GAAP loss of $1.4 million, or
$(0.03) per share.
-
- Operating earnings totaled $20.2
million, or $0.47 per
share.
- Net interest income totaled $88.4
million in 4Q23 compared to $90.3 million in
3Q23.
- Net interest margin decreased 7 basis points from 3Q23 to 3.11%
reflecting:
- Includes higher deposit costs (increase of 30 basis
points).
-
- Higher cost of funds (increase of 17 basis points).
- Higher yields on the loan portfolio (increase of 9 basis
points).
- Provision for credit losses on loans totaled $7.0
million.
-
- Allowance for credit losses on loans increased $2.6 million.
- Net loan charge-offs totaled $4.4
million.
- Net annualized loan charge-off ratio of 0.20%.
- Non-interest income excluding the $25.1
million loss on sale of AFS securities totaled $16.7
million in 4Q23 compared to $17.5 million in
3Q23.
-
- Deposit related fee revenue decreased $311 thousand.
- Loan related fees decreased $821
thousand primarily due to lower swap revenue.
- Gain on SBA loan sales decreased $166
thousand.
- Wealth management revenue decreased $87
thousand. At December 31, 2023, wealth assets under
management were $1.4 billion.
- Other non-interest income decreased $641
thousand due to higher tax credit amortization.
- Non-interest expense in 4Q23 totaled $79.0 million on
a GAAP basis and $75.3 million on an
operating basis. These measures were $76.5
million and $73.9 million in
3Q23.
-
- Non-operating expense totaled $3.7
million in 4Q23, and was primarily severance charges related
to a workforce reduction.
- Compensation and benefits expense decreased $60 thousand.
- Occupancy and equipment expense decreased $263 thousand.
- Technology and communications expense increased $710 thousand.
- Professional services expense increased $994 thousand.
- The efficiency ratio was 67.8% for 4Q23 compared to 65.1% for
3Q23.
- Income tax expense was a benefit of $4.5
million in 4Q23, including a $7.1
million credit related to net non-operating items. The
effective tax rate was 11.1% for the year 2023 compared to 18.7%
for the year 2022.
Loans
- Commercial real estate loans totaled $4.5 billion at December
31, 2023, a $73 million
increase from September 30,
2023.
- Average commercial real estate loans totaled $4.5 billion in 4Q23, an $84 million increase from 3Q23.
- Commercial and industrial loans totaled $1.4 billion at December
31, 2023, a $31 million
decrease from September 30,
2023.
- Average commercial and industrial loans totaled
$1.4 billion in 4Q23, a $69 million decrease from 3Q23.
- Residential mortgage loans totaled $2.7 billion at December
31, 2023, a $32 million
increase from September 30,
2023.
- Average residential mortgage loans totaled $2.7 billion in 4Q23, a $38 million increase from 3Q23.
- Consumer loans totaled $487
million at December 31, 2023,
a $19 million decrease from
September 30, 2023.
- Average consumer loans totaled $498 million in 4Q23, a $15 million decrease from 3Q23.
- Non-performing loans to total loans was 0.24% at
December 31, 2023 compared to 0.30%
at September 30,
2023.
- The allowance for credit losses to total loans was 1.17%
at December 31, 2023, compared to
1.14% at September 30,
2023.
Deposits
- Non-interest bearing deposits totaled $2.5 billion at December
31, 2023, a $61 million
decrease from September 30,
2023.
-
- Average non-interest bearing deposits totaled $2.5 billion in 4Q23, a $65 million decrease from 3Q23.
- Time deposits totaled $2.7
billion at December 31, 2023,
a $241 million increase from
September 30, 2023.
-
- Average time deposits totaled $2.6
billion in 4Q23, a $118
million increase from 3Q23.
4Q 2023 Corporate Responsibility Highlights
- Berkshire was named one of
America's Best Regional Banks by Newsweek and listed in the Human
Rights Campaign's Corporate Equality Index.
- Berkshire maintained its top
quartile ESG rating performance and announced an innovative
new partnership between Berkshire Bank's Center for Women, Wellness
& Wealth and the Massachusetts General Hospital's Dementia Care
Collaborative.
- Berkshire implemented a
climate risk management program to strengthen governance of climate
matters and achieved 100% renewable electricity use at its premises
as of year-end.
Conference Call and Investor Presentation.
Berkshire will conduct a conference
call/webcast at 9:00 a.m. eastern time on
Thursday, January 25, 2024 to discuss
results for the quarter and provide guidance about expected future
results. Instructions for listening to the call may be found
at the Company's website at ir.berkshirebank.com. Additional
materials relating to the call may also be accessed at this
website. The call will be archived at the website and will be
available for an extended period of time.
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," "remain," "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. 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.
INVESTOR CONTACT
Kevin
Conn
Investor Relations
617.641.9206
kaconn@berkshirebank.com
MEDIA CONTACT
Gary
Levante
Corporate Communications
413.447.1737
glevante@berkshirebank.com
BERKSHIRE HILLS
BANCORP, INC.
|
SELECTED FINANCIAL
HIGHLIGHTS (1)
|
|
|
|
|
At or for the Quarters
Ended
|
|
|
|
|
Dec.
31,
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
|
|
|
|
2023
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOMINAL AND PER
SHARE DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)/earnings per
common share, diluted
|
$
(0.03)
|
|
$ 0.45
|
|
$ 0.55
|
|
$ 0.63
|
|
$ 0.69
|
|
|
|
Operating earnings per
common share, diluted (2)(3)
|
0.47
|
|
0.50
|
|
0.55
|
|
0.63
|
|
0.64
|
|
|
|
Net (loss)/income,
(thousands)
|
(1,445)
|
|
19,545
|
|
23,861
|
|
27,637
|
|
30,505
|
|
|
|
Operating net income,
(thousands) (2)(3)
|
20,190
|
|
21,516
|
|
23,878
|
|
27,608
|
|
28,254
|
|
|
|
Net interest income,
(thousands) non FTE
|
88,421
|
|
90,334
|
|
92,759
|
|
97,533
|
|
102,092
|
|
|
|
Net interest income,
FTE (5)
|
90,442
|
|
92,314
|
|
94,721
|
|
99,441
|
|
103,937
|
|
|
|
Total common shares
outstanding, end of period (thousands)
|
43,501
|
|
43,822
|
|
44,033
|
|
44,411
|
|
44,361
|
|
|
|
Average diluted shares,
(thousands)
|
43,101
|
|
43,347
|
|
43,532
|
|
44,036
|
|
44,484
|
|
|
|
Total book value per
common share, end of period
|
23.27
|
|
21.70
|
|
22.11
|
|
22.42
|
|
21.51
|
|
|
|
Tangible book value per
common share, end of period (2)(3)
|
22.82
|
|
21.23
|
|
21.60
|
|
21.89
|
|
20.95
|
|
|
|
Dividends per common
share
|
0.18
|
|
0.18
|
|
0.18
|
|
0.18
|
|
0.18
|
|
|
|
Dividend payout
ratio
|
|
(543.94)
|
%
|
40.56
|
%
|
33.47
|
%
|
28.98
|
%
|
26.59
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE
RATIOS (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity,
including unrealized losses on AFS securities
|
(0.60)
|
%
|
7.91
|
%
|
9.51
|
%
|
11.31
|
%
|
12.63
|
%
|
|
|
Return on equity,
excluding unrealized losses on AFS securities
|
(0.47)
|
|
6.35
|
|
7.82
|
|
9.11
|
|
10.06
|
|
|
|
Operating return on
equity, including unrealized losses on AFS securities
(2)(3)
|
8.36
|
|
8.71
|
|
9.51
|
|
11.30
|
|
11.70
|
|
|
|
Operating return on
equity, excluding unrealized losses on AFS securities
(2)(3)
|
6.51
|
|
6.99
|
|
7.82
|
|
9.10
|
|
9.32
|
|
|
|
Return on tangible
common equity, including unrealized losses on AFS securities
(2)(3)
|
(0.24)
|
|
8.45
|
|
10.09
|
|
11.96
|
|
13.36
|
|
|
|
Return on tangible
common equity, excluding unrealized losses on AFS securities
(2)(3)
|
(0.18)
|
|
6.76
|
|
8.26
|
|
9.59
|
|
10.59
|
|
|
|
Operating return on
tangible common equity, including unrealized losses on AFS
securities (2)(3)
|
8.90
|
|
9.27
|
|
10.09
|
|
11.96
|
|
12.40
|
|
|
|
Operating return on
tangible common equity, excluding unrealized losses on AFS
securities (2)(3)
|
6.91
|
|
7.41
|
|
8.27
|
|
9.59
|
|
9.83
|
|
|
|
Return on
assets
|
|
(0.05)
|
|
0.66
|
|
0.79
|
|
0.96
|
|
1.10
|
|
|
|
Operating return on
assets (2)(3)
|
0.68
|
|
0.73
|
|
0.79
|
|
0.95
|
|
1.02
|
|
|
|
Net interest margin,
FTE (5)
|
3.11
|
|
3.18
|
|
3.24
|
|
3.58
|
|
3.84
|
|
|
|
Efficiency ratio
(3)
|
|
67.77
|
|
65.05
|
|
63.57
|
|
59.51
|
|
58.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA
(in millions, end of period)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
12,431
|
|
$ 12,140
|
|
$ 12,090
|
|
$
12,320
|
|
$ 11,663
|
|
|
|
Total earning
assets
|
|
11,705
|
|
11,400
|
|
11,370
|
|
11,615
|
|
10,913
|
|
|
|
Total loans
|
|
9,040
|
|
8,984
|
|
8,882
|
|
8,682
|
|
8,335
|
|
|
|
Total
deposits
|
|
10,633
|
|
9,981
|
|
10,068
|
|
10,068
|
|
10,327
|
|
|
|
Loans/deposits
(%)
|
|
85
|
%
|
90
|
%
|
88
|
%
|
86
|
%
|
81
|
%
|
|
|
Total accumulated other
comprehensive (loss) net of tax, end of period
|
$
(143)
|
|
$
(218)
|
|
$
(186)
|
|
$ (159)
|
|
$
(181)
|
|
|
|
Total shareholders'
equity
|
1,012
|
|
951
|
|
973
|
|
995
|
|
954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET
QUALITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses, (millions)
|
$ 105
|
|
$ 103
|
|
$ 100
|
|
$
98
|
|
$
96
|
|
|
|
Net charge-offs,
(millions)
|
(4)
|
|
(5)
|
|
(6)
|
|
(7)
|
|
(12)
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
0.20
|
%
|
0.24
|
%
|
0.26
|
%
|
0.32
|
%
|
0.58
|
%
|
|
|
Provision
(benefit)/expense, (millions)
|
$
7
|
|
$
8
|
|
$
8
|
|
$
9
|
|
$
12
|
|
|
|
Non-performing assets,
(millions)
|
24
|
|
29
|
|
31
|
|
29
|
|
33
|
|
|
|
Non-performing
loans/total loans
|
0.24
|
%
|
0.30
|
%
|
0.32
|
%
|
0.31
|
%
|
0.37
|
%
|
|
|
Allowance for credit
losses/non-performing loans
|
492
|
|
386
|
|
353
|
|
363
|
|
309
|
|
|
|
Allowance for credit
losses/total loans
|
1.17
|
|
1.14
|
|
1.13
|
|
1.13
|
|
1.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk weighted assets,
(millions)(6)
|
$
9,549
|
|
$
9,594
|
|
$
9,523
|
|
$
9,454
|
|
$
9,151
|
|
|
|
Common equity Tier 1
capital to risk weighted assets (6)
|
12.0
|
%
|
12.1
|
%
|
12.1
|
%
|
12.1
|
%
|
12.4
|
%
|
|
|
Tier 1 capital leverage
ratio (6)
|
9.6
|
|
9.8
|
|
9.6
|
|
9.9
|
|
10.2
|
|
|
|
Tangible common
shareholders' equity/tangible assets (3)
|
8.0
|
|
7.7
|
|
7.9
|
|
7.9
|
|
8.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
All financial tables
presented are unaudited.
|
|
(2)
|
Reconciliations of
non-GAAP financial measures, including all references to operating
and tangible amounts, appear on pages 13 and 14.
|
|
(3)
|
Non-GAAP financial
measure. Operating measurements are non-GAAP financial measures
that are adjusted to exclude net non-operating charges
primarily related to acquisitions and
restructuring activities. See pages 13 and 14 for reconciliations
of non-GAAP financial measures.
|
|
(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.
|
|
(6)
|
Presented as projected
for December 31, 2023 and actual for the remaining
periods.
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED BALANCE
SHEETS
|
|
December
31,
|
September
30,
|
December 31,
|
(in
thousands)
|
2023
|
2023
|
2022
|
Assets
|
|
|
|
Cash and due from
banks
|
$
148,148
|
$
120,634
|
$
145,342
|
Short-term
investments
|
1,055,096
|
542,836
|
540,013
|
Total cash and cash
equivalents
|
1,203,244
|
663,470
|
685,355
|
|
|
|
|
Trading securities, at
fair value
|
6,142
|
6,171
|
6,708
|
Equity securities, at
fair value
|
13,029
|
12,325
|
12,856
|
Securities available
for sale, at fair value
|
1,022,285
|
1,260,391
|
1,423,200
|
Securities held to
maturity, at amortized cost
|
543,351
|
552,981
|
583,453
|
Federal Home Loan Bank
stock
|
22,689
|
38,912
|
7,219
|
Total
securities
|
1,607,496
|
1,870,780
|
2,033,436
|
Less: Allowance for
credit losses on investment securities
|
(68)
|
(69)
|
(91)
|
Net
securities
|
1,607,428
|
1,870,711
|
2,033,345
|
|
|
|
|
Loans held for
sale
|
2,237
|
2,342
|
4,311
|
|
|
|
|
Commercial real estate
loans
|
4,527,012
|
4,453,573
|
4,095,079
|
Commercial and
industrial loans
|
1,352,834
|
1,384,038
|
1,473,316
|
Residential
mortgages
|
2,672,677
|
2,640,210
|
2,216,410
|
Consumer
loans
|
487,163
|
506,556
|
550,504
|
Total loans
|
9,039,686
|
8,984,377
|
8,335,309
|
Less: Allowance for
credit losses on loans
|
(105,357)
|
(102,792)
|
(96,270)
|
Net loans
|
8,934,329
|
8,881,585
|
8,239,039
|
|
|
|
|
Premises and equipment,
net
|
68,915
|
70,042
|
85,217
|
Other intangible
assets
|
19,664
|
20,869
|
24,483
|
Other assets
|
584,066
|
619,777
|
587,854
|
Assets held for
sale
|
10,938
|
11,157
|
3,260
|
Total assets
|
$
12,430,821
|
$
12,139,953
|
$ 11,662,864
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
Non-interest bearing
deposits
|
$
2,469,164
|
$
2,530,441
|
$
2,852,127
|
NOW and other
deposits
|
858,644
|
843,032
|
1,054,596
|
Money market
deposits
|
3,565,516
|
3,075,307
|
3,723,570
|
Savings
deposits
|
1,053,810
|
1,086,329
|
1,063,269
|
Time
deposits
|
2,686,250
|
2,445,435
|
1,633,707
|
Total
deposits
|
10,633,384
|
9,980,544
|
10,327,269
|
|
|
|
|
Federal Home Loan Bank
advances
|
385,223
|
804,295
|
4,445
|
Subordinated
borrowings
|
121,363
|
121,300
|
121,064
|
Total
borrowings
|
506,586
|
925,595
|
125,509
|
|
|
|
|
Other
liabilities
|
278,630
|
282,805
|
256,024
|
Total
liabilities
|
11,418,600
|
11,188,944
|
10,708,802
|
|
|
|
|
Common shareholders'
equity
|
1,012,221
|
951,009
|
954,062
|
Total shareholders'
equity
|
1,012,221
|
951,009
|
954,062
|
Total liabilities and
shareholders' equity
|
$
12,430,821
|
$
12,139,953
|
$ 11,662,864
|
BERKSHIRE HILLS BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
Three Months
Ended
|
|
Years Ended
|
|
December 31,
|
|
December 31,
|
(in thousands,
except per share data)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Interest
income
|
$
150,537
|
|
$
121,384
|
|
$
576,299
|
|
$
387,257
|
Interest
expense
|
62,116
|
|
19,292
|
|
207,252
|
|
42,660
|
Net interest income,
non FTE
|
88,421
|
|
102,092
|
|
369,047
|
|
344,597
|
Non-interest
income
|
|
|
|
|
|
|
|
Deposit related
fees
|
8,481
|
|
8,293
|
|
34,155
|
|
32,026
|
Loan related
fees
|
2,058
|
|
2,123
|
|
10,595
|
|
9,467
|
Gain on SBA loan
sales
|
2,382
|
|
2,979
|
|
10,334
|
|
12,494
|
Wealth management
fees
|
2,394
|
|
2,255
|
|
10,197
|
|
10,008
|
Other
|
591
|
|
(159)
|
|
2,045
|
|
6,973
|
Total non-interest
income excluding (losses)/gains
|
15,906
|
|
15,491
|
|
67,326
|
|
70,968
|
Fair value adjustments
on securities
|
768
|
|
163
|
|
513
|
|
(2,037)
|
(Loss)/gain on sale of
AFS securities
|
(25,057)
|
|
-
|
|
(25,057)
|
|
6
|
Total non-interest
income
|
(8,383)
|
|
15,654
|
|
42,782
|
|
68,937
|
Total net
revenue
|
80,038
|
|
117,746
|
|
411,829
|
|
413,534
|
|
|
|
|
|
|
|
|
Provision expense for
credit losses
|
7,000
|
|
12,000
|
|
31,999
|
|
11,000
|
Non-interest
expense
|
|
|
|
|
|
|
|
Compensation and
benefits
|
40,095
|
|
37,968
|
|
159,281
|
|
152,741
|
Occupancy and
equipment
|
8,553
|
|
9,431
|
|
35,718
|
|
37,638
|
Technology and
communications
|
11,326
|
|
9,729
|
|
41,878
|
|
35,586
|
Professional
services
|
3,417
|
|
3,153
|
|
11,643
|
|
12,043
|
Other
expenses
|
11,932
|
|
12,350
|
|
46,727
|
|
41,799
|
Merger, restructuring
and other non-operating expenses
|
3,669
|
|
(2,617)
|
|
6,261
|
|
8,909
|
Total non-interest
expense
|
78,992
|
|
70,014
|
|
301,508
|
|
288,716
|
Total non-interest
expense excluding merger, restructuring and other
|
75,323
|
|
72,631
|
|
295,247
|
|
279,807
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
(5,954)
|
|
$
35,732
|
|
$
78,322
|
|
$
113,818
|
Income tax
(benefit)/expense
|
(4,509)
|
|
5,227
|
|
8,724
|
|
21,285
|
Net
(loss)/income
|
$
(1,445)
|
|
$
30,505
|
|
$
69,598
|
|
$
92,533
|
|
|
|
|
|
|
|
|
Basic
(loss)/earnings per common share
|
$
(0.03)
|
|
$
0.69
|
|
$
1.61
|
|
$
2.03
|
Diluted
(loss)/earnings per common share
|
$
(0.03)
|
|
$
0.69
|
|
$
1.60
|
|
$
2.02
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
42,852
|
|
44,105
|
|
43,288
|
|
45,564
|
Diluted
|
43,101
|
|
44,484
|
|
43,504
|
|
45,914
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (5 Quarter Trend)
|
|
|
Dec.
31,
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
(in thousands,
except per share data)
|
|
2023
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
Interest
income
|
|
$ 150,537
|
|
$ 148,021
|
|
$ 145,425
|
|
$ 132,316
|
|
$ 121,384
|
|
Interest
expense
|
|
62,116
|
|
57,687
|
|
52,666
|
|
34,783
|
|
19,292
|
|
Net interest income,
non FTE
|
|
88,421
|
|
90,334
|
|
92,759
|
|
97,533
|
|
102,092
|
|
Non-interest
income
|
|
|
|
|
|
|
|
|
|
|
|
Deposit related
fees
|
|
8,481
|
|
8,792
|
|
8,571
|
|
8,311
|
|
8,293
|
|
Loan related
fees
|
|
2,058
|
|
2,879
|
|
3,189
|
|
2,469
|
|
2,123
|
|
Gain on SBA loan
sales
|
|
2,382
|
|
2,548
|
|
2,910
|
|
2,494
|
|
2,979
|
|
Wealth management
fees
|
|
2,394
|
|
2,481
|
|
2,583
|
|
2,739
|
|
2,255
|
|
Other
|
|
591
|
|
1,232
|
|
(137)
|
|
359
|
|
(159)
|
|
Total non-interest
income excluding (losses)/gains
|
|
15,906
|
|
17,932
|
|
17,116
|
|
16,372
|
|
15,491
|
|
Fair value adjustments
on securities
|
|
768
|
|
(467)
|
|
(22)
|
|
234
|
|
163
|
|
Loss on sale of AFS
securities
|
|
(25,057)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total non-interest
income
|
|
(8,383)
|
|
17,465
|
|
17,094
|
|
16,606
|
|
15,654
|
|
Total net
revenue
|
|
80,038
|
|
107,799
|
|
109,853
|
|
114,139
|
|
117,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision expense for
credit losses
|
|
7,000
|
|
8,000
|
|
8,000
|
|
8,999
|
|
12,000
|
|
Non-interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
40,095
|
|
40,155
|
|
39,960
|
|
39,071
|
|
37,968
|
|
Occupancy and
equipment
|
|
8,553
|
|
8,816
|
|
8,970
|
|
9,379
|
|
9,431
|
|
Technology and
communications
|
|
11,326
|
|
10,616
|
|
10,465
|
|
9,471
|
|
9,729
|
|
Professional
services
|
|
3,417
|
|
2,423
|
|
2,526
|
|
3,277
|
|
3,153
|
|
Other
expenses
|
|
11,932
|
|
11,896
|
|
12,106
|
|
10,793
|
|
12,350
|
|
Merger, restructuring
and other non-operating expenses
|
|
3,669
|
|
2,607
|
|
21
|
|
(36)
|
|
(2,617)
|
|
Total non-interest
expense
|
|
78,992
|
|
76,513
|
|
74,048
|
|
71,955
|
|
70,014
|
|
Total non-interest
expense excluding merger, restructuring and other
|
|
75,323
|
|
73,906
|
|
74,027
|
|
71,991
|
|
72,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
$
(5,954)
|
|
$
23,286
|
|
$
27,805
|
|
$
33,185
|
|
$
35,732
|
|
Income tax
(benefit)/expense
|
|
(4,509)
|
|
3,741
|
|
3,944
|
|
5,548
|
|
5,227
|
|
Net
(loss)/income
|
|
$
(1,445)
|
|
$
19,545
|
|
$
23,861
|
|
$
27,637
|
|
$
30,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)/earnings
per common share
|
|
$
(0.03)
|
|
$
0.45
|
|
$
0.55
|
|
$
0.63
|
|
$
0.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
42,852
|
|
43,164
|
|
43,443
|
|
43,693
|
|
44,105
|
|
Diluted
|
|
43,101
|
|
43,347
|
|
43,532
|
|
44,036
|
|
44,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERKSHIRE HILLS
BANCORP, INC.
|
AVERAGE BALANCES AND
AVERAGE YIELDS AND COSTS
|
|
Quarters
Ended
|
|
|
December 31,
2023
|
|
September 30,
2023
|
|
|
December 31,
2022
|
|
|
|
|
|
(in
millions)
|
|
Average
Balance
|
Interest
(1)
|
Average
Yield/Rate
|
|
|
Average
Balance
|
Interest (1)
|
Average
Yield/Rate
|
|
|
Average
Balance
|
Interest (1)
|
Average
Yield/Rate
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
$
4,469
|
$
74
|
6.45
|
%
|
|
$
4,385
|
$
71
|
6.32
|
%
|
|
$
3,934
|
$
55
|
5.46
|
%
|
Commercial and
industrial loans
|
|
1,367
|
26
|
7.60
|
|
|
1,436
|
27
|
7.48
|
|
|
1,471
|
25
|
6.62
|
|
Residential
mortgages
|
|
2,656
|
27
|
4.06
|
|
|
2,618
|
26
|
3.97
|
|
|
2,114
|
19
|
3.56
|
|
Consumer
loans
|
|
498
|
9
|
7.31
|
|
|
513
|
9
|
7.33
|
|
|
563
|
10
|
7.00
|
|
Total
loans
|
|
8,990
|
136
|
5.97
|
|
|
8,952
|
133
|
5.88
|
|
|
8,082
|
109
|
5.28
|
|
Securities
(2)
|
|
2,080
|
12
|
2.40
|
|
|
2,171
|
13
|
2.40
|
|
|
2,294
|
13
|
2.20
|
|
Short-term investments
and loans HFS
|
|
350
|
4
|
4.22
|
|
|
267
|
3
|
4.76
|
|
|
267
|
2
|
3.05
|
|
Total earning
assets
|
|
11,420
|
152
|
5.26
|
|
|
11,390
|
149
|
5.19
|
|
|
10,643
|
123
|
4.56
|
|
Goodwill and other
intangible assets
|
|
20
|
|
|
|
|
21
|
|
|
|
|
25
|
|
|
|
Other assets
|
|
422
|
|
|
|
|
449
|
|
|
|
|
406
|
|
|
|
Total
assets
|
|
$
11,862
|
|
|
|
|
$
11,860
|
|
|
|
|
11,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
demand deposits
|
|
$
2,488
|
$
0
|
-
|
%
|
|
$
2,553
|
$
0
|
-
|
%
|
|
$
2,876
|
$
0
|
-
|
%
|
NOW and
other
|
|
833
|
3
|
1.38
|
|
|
858
|
2
|
1.15
|
|
|
1,395
|
4
|
1.11
|
|
Money market
|
|
2,995
|
23
|
3.08
|
|
|
2,697
|
18
|
2.69
|
|
|
2,819
|
8
|
1.16
|
|
Savings
|
|
1,062
|
2
|
0.90
|
|
|
1,082
|
2
|
0.77
|
|
|
1,086
|
-
|
0.03
|
|
Time
|
|
2,558
|
25
|
3.77
|
|
|
2,440
|
22
|
3.43
|
|
|
1,555
|
5
|
1.21
|
|
Total
deposits
|
|
9,936
|
53
|
2.11
|
|
|
9,630
|
44
|
1.81
|
|
|
9,731
|
17
|
0.69
|
|
Borrowings
(3)
|
|
668
|
9
|
5.45
|
|
|
1,010
|
14
|
5.32
|
|
|
169
|
2
|
5.56
|
|
Total funding
liabilities
|
|
10,604
|
62
|
2.32
|
|
|
10,640
|
58
|
2.15
|
|
|
9,900
|
19
|
0.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
liabilities
|
|
292
|
|
|
|
|
232
|
|
|
|
|
208
|
|
|
|
Total
liabilities
|
|
10,896
|
|
|
|
|
10,872
|
|
|
|
|
10,108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shareholders'
equity (4)
|
|
966
|
|
|
|
|
988
|
|
|
|
|
966
|
|
|
|
Total shareholders'
equity
|
|
966
|
|
|
|
|
988
|
|
|
|
|
966
|
|
|
|
Total liabilities
and shareholders' equity
|
|
$
11,862
|
|
|
|
|
$
11,860
|
|
|
|
|
11,074
|
|
|
|
Net interest margin,
FTE
|
|
|
|
3.11
|
|
|
|
|
3.18
|
|
|
|
|
3.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income,
non FTE
|
|
88.421
|
|
|
|
|
90.334
|
|
|
|
|
102.092
|
|
|
|
FTE income
adjustment
|
|
2.021
|
|
|
|
|
1.980
|
|
|
|
|
1.845
|
|
|
|
Net Interest Income,
FTE
|
|
90.442
|
|
|
|
|
92.314
|
|
|
|
|
103.937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Interest
income and expense presented on a fully taxable equivalent
basis.
|
(2) Average balances
for securities available-for-sale are based on amortized
cost.
|
(3) Average balances
for borrowings includes the financing lease obligation which is
presented under other liabilities on the consolidated balance
sheet.
|
(4) Unrealized gains
and losses, net of tax, are included in average equity. Prior
period balances and financial metrics have been updated to reflect
the current presentation.
|
BERKSHIRE HILLS
BANCORP, INC.
|
ASSET QUALITY
ANALYSIS
|
|
At or for the Quarters
Ended
|
|
Dec.
31,
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
(in
thousands)
|
2023
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
NON-PERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
$
4,453
|
|
$
5,288
|
|
$
1,509
|
|
$
2,546
|
|
$
2,434
|
|
Commercial and
industrial loans
|
8,712
|
|
11,028
|
|
15,597
|
|
12,155
|
|
17,023
|
|
Residential
mortgages
|
6,404
|
|
8,060
|
|
8,722
|
|
9,442
|
|
8,612
|
|
Consumer
loans
|
1,838
|
|
2,260
|
|
2,560
|
|
2,848
|
|
3,045
|
|
Total non-performing
loans
|
21,407
|
|
26,636
|
|
28,388
|
|
26,991
|
|
31,114
|
|
Repossessed
assets
|
2,601
|
|
2,548
|
|
2,549
|
|
2,462
|
|
2,209
|
|
Total non-performing
assets
|
$
24,008
|
|
$
29,184
|
|
$
30,937
|
|
$
29,453
|
|
$
33,323
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-performing
loans/total loans
|
0.24 %
|
|
0.30 %
|
|
0.32 %
|
|
0.31 %
|
|
0.37 %
|
|
Total non-performing
assets/total assets
|
0.19 %
|
|
0.24 %
|
|
0.26 %
|
|
0.24 %
|
|
0.29 %
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION AND
ALLOWANCE FOR CREDIT LOSSES ON LOANS
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of
period
|
$
102,792
|
|
$
100,219
|
|
$
97,991
|
|
$
96,270
|
|
$
96,013
|
|
Adoption of ASU No.
2022-02
|
-
|
|
-
|
|
-
|
|
(401)
|
|
-
|
|
Balance after adoption
of ASU No. 2022-02
|
102,792
|
|
100,219
|
|
97,991
|
|
95,869
|
|
96,013
|
|
Charged-off
loans
|
(6,891)
|
|
(6,744)
|
|
(7,686)
|
|
(7,936)
|
|
(12,995)
|
|
Recoveries on
charged-off loans
|
2,456
|
|
1,317
|
|
1,914
|
|
1,059
|
|
1,252
|
|
Net loans
charged-off
|
(4,435)
|
|
(5,427)
|
|
(5,772)
|
|
(6,877)
|
|
(11,743)
|
|
Provision
(benefit)/expense for loan credit losses
|
7,000
|
|
8,000
|
|
8,000
|
|
8,999
|
|
12,000
|
|
Balance at end of
period
|
$
105,357
|
|
$
102,792
|
|
$
100,219
|
|
$
97,991
|
|
$
96,270
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit
losses/total loans
|
1.17 %
|
|
1.14 %
|
|
1.13 %
|
|
1.13 %
|
|
1.15 %
|
|
Allowance for credit
losses/non-performing loans
|
492 %
|
|
386 %
|
|
353 %
|
|
363 %
|
|
309 %
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOAN
CHARGE-OFFS
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
$
316
|
|
$
97
|
|
$
664
|
|
$
122
|
|
$
187
|
|
Commercial and
industrial loans
|
(2,309)
|
|
(3,345)
|
|
(4,146)
|
|
(5,695)
|
|
(10,914)
|
|
Residential
mortgages
|
55
|
|
23
|
|
(143)
|
|
305
|
|
192
|
|
Home
equity
|
83
|
|
208
|
|
126
|
|
16
|
|
(128)
|
|
Auto and other
consumer
|
(2,580)
|
|
(2,410)
|
|
(2,273)
|
|
(1,625)
|
|
(1,080)
|
|
Total, net
|
$
(4,435)
|
|
$
(5,427)
|
|
$
(5,772)
|
|
$
(6,877)
|
|
$
(11,743)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (QTD
annualized)/average loans
|
0.20 %
|
|
0.24 %
|
|
0.26 %
|
|
0.32 %
|
|
0.58 %
|
|
Net charge-offs (YTD
annualized)/average loans
|
0.26 %
|
|
0.28 %
|
|
0.29 %
|
|
0.32 %
|
|
0.27 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELINQUENT AND
NON-PERFORMING LOANS
|
Balance
|
Percent of Total
Loans
|
Balance
|
Percent of Total
Loans
|
Balance
|
Percent of Total
Loans
|
Balance
|
Percent of Total
Loans
|
Balance
|
Percent of Total
Loans
|
30-89 Days
delinquent
|
$
22,140
|
0.24 %
|
$
18,700
|
0.21 %
|
$
15,147
|
0.17 %
|
$
14,210
|
0.16 %
|
$
12,162
|
0.15 %
|
90+ Days delinquent and
still accruing
|
5,537
|
0.06 %
|
5,744
|
0.06 %
|
7,812
|
0.09 %
|
6,937
|
0.08 %
|
7,038
|
0.08 %
|
Total accruing
delinquent loans
|
27,677
|
0.30 %
|
24,444
|
0.27 %
|
22,959
|
0.26 %
|
21,147
|
0.24 %
|
19,200
|
0.23 %
|
Non-performing
loans
|
21,407
|
0.24 %
|
26,636
|
0.30 %
|
28,399
|
0.32 %
|
26,991
|
0.31 %
|
31,114
|
0.37 %
|
Total delinquent and
non-performing loans
|
$
49,084
|
0.54 %
|
$
51,080
|
0.57 %
|
$
51,358
|
0.58 %
|
$
48,138
|
0.55 %
|
$
50,314
|
0.60 %
|
|
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 are intended to
provide the reader with additional supplemental perspectives on
operating results, performance trends, and financial condition.
Non-GAAP financial measures 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 provided below. In all cases, it
should be understood that non-GAAP measures do not depict amounts
that accrue directly to the benefit of shareholders. An item which
management excludes when computing non-GAAP operating earnings can
be of substantial importance to the Company's results for any
particular quarter or year. The Company's non-GAAP operating
earnings information set forth is not necessarily comparable to
non- GAAP information which may be presented by other companies.
Each non-GAAP measure used by the Company in this report as
supplemental financial data should be considered in conjunction
with the Company's GAAP financial information.
The Company utilizes the non-GAAP measure of operating earnings in
evaluating operating trends, including components for operating
revenue and expense. These measures exclude amounts which the
Company views as unrelated to its normalized operations. These
items primarily include restructuring costs. Restructuring costs
generally consist of costs and losses associated with the
disposition of assets and liabilities and lease terminations,
including costs related to branch consolidations.
The Company also calculates operating earnings per share based on
its measure of operating earnings and diluted common shares. The
Company views these amounts as important to understanding its
operating trends, particularly due to the impact of accounting
standards related to merger and acquisition activity. Analysts also
rely on these measures in estimating and evaluating the Company's
performance. Adjustments in 2023 were primarily related to branch
consolidations, severance charges related to a workforce reduction,
and loss on sale of AFS securities. Expense adjustments in 2022
were primarily related to branch consolidations. For 2022, fair
value adjustments on securities were primarily due to unrealized
equity securities losses due to changes in market conditions.
Starting March 31, 2023 fair value adjustments on securities are
included in operating income.
Management believes that the computation of non-GAAP operating
earnings and operating earnings per share may facilitate the
comparison of the Company to other companies in the financial
services industry. The Company also adjusts certain equity related
measures to exclude intangible assets due to the importance of
these measures to the investment community.
|
BERKSHIRE HILLS BANCORP,
INC. |
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA
|
|
|
At or for the Quarters
Ended
|
|
|
|
Dec.
31,
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
(in
thousands)
|
|
|
2023
|
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
Total non-interest
income
|
|
|
$
(8,383)
|
|
$ 17,465
|
|
$ 17,094
|
|
$ 16,606
|
|
$ 15,654
|
|
Adj: Fair value
adjustments on securities (1)
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(163)
|
|
Adj: Loss on sale of
AFS securities
|
|
|
25,057
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total operating
non-interest income (2)
|
|
|
$
16,674
|
|
$ 17,465
|
|
$ 17,094
|
|
$ 16,606
|
|
$ 15,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
(A)
|
|
$
80,038
|
|
$
107,799
|
|
$
109,853
|
|
$
114,139
|
|
$
117,746
|
|
Adj: Fair value
adjustments on securities (1)
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(163)
|
|
Adj: Loss on sale of
AFS securities
|
|
|
25,057
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total operating revenue
(2)
|
(B)
|
|
$
105,095
|
|
$
107,799
|
|
$
109,853
|
|
$
114,139
|
|
$
117,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
(C)
|
|
$
78,992
|
|
$ 76,513
|
|
$ 74,048
|
|
$ 71,955
|
|
$ 70,014
|
|
Adj: Merger,
restructuring and other non-operating expenses
|
|
|
(3,669)
|
|
(2,607)
|
|
(21)
|
|
36
|
|
2,617
|
|
Operating non-interest
expense (2)
|
(D)
|
|
$
75,323
|
|
$ 73,906
|
|
$ 74,027
|
|
$ 71,991
|
|
$ 72,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax, pre-provision
net revenue (PPNR)
|
(A-C)
|
|
$
1,046
|
|
$ 31,286
|
|
$ 35,805
|
|
$ 42,184
|
|
$ 47,732
|
|
Operating pre-tax,
pre-provision net revenue (PPNR) (2)
|
(B-D)
|
|
29,772
|
|
33,893
|
|
35,826
|
|
42,148
|
|
44,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss)/income
|
|
|
$
(1,445)
|
|
$ 19,545
|
|
$ 23,861
|
|
$ 27,637
|
|
$ 30,505
|
|
Adj: Fair value
adjustments on securities (1)
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(163)
|
|
Adj: Loss on sale of
AFS securities
|
|
|
25,057
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Adj: Restructuring
expense and other non-operating expenses
|
|
|
3,669
|
|
2,607
|
|
21
|
|
(36)
|
|
(2,617)
|
|
Adj: Income taxes
(expense)/benefit
|
|
|
(7,091)
|
|
(636)
|
|
(4)
|
|
7
|
|
529
|
|
Total operating income
(2)
|
(E)
|
|
$
20,190
|
|
$ 21,516
|
|
$ 23,878
|
|
$ 27,608
|
|
$ 28,254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average
assets
|
(F)
|
|
$
11,862
|
|
$ 11,860
|
|
$ 12,057
|
|
$ 11,569
|
|
$ 11,074
|
|
Total average
shareholders' equity, including unrealized losses on AFS
securities
|
(G)
|
|
966
|
|
988
|
|
1,004
|
|
978
|
|
966
|
|
Total average
shareholders' equity, excluding unrealized losses on AFS
securities
|
(H)
|
|
1,240
|
|
1,231
|
|
1,221
|
|
1,214
|
|
1,213
|
|
Total average tangible
shareholders' equity, including unrealized losses on AFS securities
(2)
|
(I)
|
|
946
|
|
967
|
|
981
|
|
954
|
|
941
|
|
Total average tangible
shareholders' equity, excluding unrealized losses on AFS securities
(2)
|
(J)
|
|
1,220
|
|
1,210
|
|
1,198
|
|
1,190
|
|
1,188
|
|
Total accumulated other
comprehensive (loss) net of tax, end of period
|
|
|
(143)
|
|
(218)
|
|
(186)
|
|
(159)
|
|
(181)
|
|
Total tangible
shareholders' equity, end of period (2)
|
(K)
|
|
993
|
|
930
|
|
951
|
|
972
|
|
930
|
|
Total tangible assets,
end of period (2)
|
(L)
|
|
12,411
|
|
12,119
|
|
12,068
|
|
12,297
|
|
11,638
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, end of period
(thousands)
|
(M)
|
|
43,501
|
|
43,822
|
|
44,033
|
|
44,411
|
|
44,361
|
|
Average diluted shares
outstanding (thousands)
|
(N)
|
|
43,101
|
|
43,347
|
|
43,532
|
|
44,036
|
|
44,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share, diluted (2)
|
|
|
$
(0.03)
|
|
$
0.45
|
|
$
0.55
|
|
$
0.63
|
|
$
0.69
|
|
Operating earnings per
common share, diluted (2)
|
(E/N)
|
|
0.47
|
|
0.50
|
|
0.55
|
|
0.63
|
|
0.64
|
|
Tangible book value per
common share, end of period (2)
|
(K/M)
|
|
22.82
|
|
21.23
|
|
21.60
|
|
21.89
|
|
20.95
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(K/L)
|
|
8.00
|
|
7.68
|
|
7.88
|
|
7.91
|
|
7.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance
ratios (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity,
including unrealized losses on AFS securities
|
|
|
(0.60)
|
%
|
7.91
|
%
|
9.51
|
%
|
11.31
|
%
|
12.63
|
%
|
Return on equity,
excluding unrealized losses on AFS
securities
|
|
|
(0.47)
|
|
6.35
|
|
7.82
|
|
9.11
|
|
10.06
|
|
Operating return on
equity, including unrealized losses on AFS securities
(2)
|
(E/G)
|
|
8.36
|
|
8.71
|
|
9.51
|
|
11.30
|
|
11.70
|
|
Operating return on
equity, excluding unrealized losses on AFS
securities
|
(E/H)
|
|
6.51
|
|
6.99
|
|
7.82
|
|
9.10
|
|
9.32
|
|
Return on tangible
common equity, including unrealized losses on AFS securities
(2)(4)
|
|
|
(0.24)
|
|
8.45
|
|
10.09
|
|
11.96
|
|
13.36
|
|
Return on tangible
common equity, excluding unrealized losses on AFS securities
(2)(4)
|
|
|
(0.18)
|
|
6.76
|
|
8.26
|
|
9.59
|
|
10.59
|
|
Operating return on
tangible common equity, including unrealized losses on AFS
securities (2)(4)
|
(E+Q)/(I)
|
|
8.90
|
|
9.27
|
|
10.09
|
|
11.96
|
|
12.40
|
|
Operating return on
tangible common equity, excluding unrealized losses on AFS
securities (2)(4)
|
(E+Q)/(J)
|
|
6.91
|
|
7.41
|
|
8.27
|
|
9.59
|
|
9.83
|
|
Return on
assets
|
|
|
(0.05)
|
|
0.66
|
|
0.79
|
|
0.96
|
|
1.10
|
|
Operating return on
assets (2)
|
(E/F)
|
|
0.68
|
|
0.73
|
|
0.79
|
|
0.95
|
|
1.02
|
|
Efficiency ratio
(2)
|
(D-Q)/(B+O+R)
|
|
67.77
|
|
65.05
|
|
63.57
|
|
59.51
|
|
58.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (5)
|
(O)
|
|
$
2,252
|
|
$
1,979
|
|
$
2,735
|
|
$
2,897
|
|
$
3,068
|
|
Non-interest income
tax-credit investments amortization (6)
|
(P)
|
|
(2,060)
|
|
(1,463)
|
|
(2,210)
|
|
(2,285)
|
|
(2,355)
|
|
Net income on
tax-credit investments
|
(O+P)
|
|
193
|
|
516
|
|
525
|
|
612
|
|
713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(Q)
|
|
$
1,205
|
|
$
1,205
|
|
$
1,205
|
|
$
1,205
|
|
$
1,277
|
|
Fully taxable
equivalent income adjustment
|
(R)
|
|
2,021
|
|
1,980
|
|
1,962
|
|
1,908
|
|
1,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Starting March 31,
2023, fair value adjustments on securities are included in
operating income.
|
(2) Non-GAAP financial
measure.
|
(3) 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.
|
(4) Amortization of
intangible assets is adjusted assuming a 27% marginal tax
rate.
|
(5) The tax benefit is
the direct reduction to the income tax provision due to tax credit
investments.
|
(6) The non-interest
income amortization is the reduction to the tax-advantaged
investments and are incurred as the tax credits are
generated.
|
BERKSHIRE HILLS BANCORP,
INC.
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA-
UNAUDITED
|
|
|
At or for the Years
Ended
|
|
|
|
Dec.
31,
|
|
Dec. 31,
|
|
(in
thousands)
|
|
|
2023
|
|
2022
|
|
Total non-interest
income
|
|
|
$
42,782
|
|
$
68,937
|
|
Adj: Fair value
adjustments on securities (1)
|
|
|
-
|
|
2,037
|
|
Adj: Loss on sale of
AFS securities
|
|
|
25,057
|
|
(6)
|
|
Total operating
non-interest income (2)
|
|
|
$
67,839
|
|
$
70,968
|
|
|
|
|
|
|
|
|
Total
revenue
|
(A)
|
|
$
411,829
|
|
$
413,534
|
|
Adj: Fair value
adjustments on securities (1)
|
|
|
-
|
|
2,037
|
|
Adj: Loss/(gain) on
sale of AFS securities
|
|
|
25,057
|
|
(6)
|
|
Total operating revenue
(2)
|
(B)
|
|
$
436,886
|
|
$
415,565
|
|
|
|
|
|
|
|
|
Total non-interest
expense
|
(C)
|
|
$
301,508
|
|
$
288,716
|
|
Less: Merger,
restructuring and other non-operating expenses
|
|
|
(6,261)
|
|
(8,909)
|
|
Operating non-interest
expense (2)
|
(D)
|
|
$
295,247
|
|
$
279,807
|
|
|
|
|
|
|
|
|
Pre-tax, pre-provision
net revenue (PPNR)
|
(A-C)
|
|
$
110,321
|
|
$
124,818
|
|
Operating pre-tax,
pre-provision net revenue (PPNR) (2)
|
(B-D)
|
|
141,639
|
|
135,758
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
69,598
|
|
$
92,533
|
|
Adj: Fair value
adjustments on securities (1)
|
|
|
-
|
|
2,037
|
|
Adj: Loss/(gain) on
sale of AFS securities
|
|
|
25,057
|
|
(6)
|
|
Adj: Restructuring
expense and other non-operating expenses
|
|
|
6,261
|
|
8,909
|
|
Adj: Income taxes
(expense)/benefit
|
|
|
(7,723)
|
|
(2,940)
|
|
Total operating income
(2)
|
(E)
|
|
$
93,193
|
|
$
100,533
|
|
|
|
|
|
|
|
|
(in millions, except
per share data)
|
|
|
|
|
|
|
Total average
assets
|
(F)
|
|
$
11,838
|
|
$
11,216
|
|
Total average
shareholders' equity, including unrealized losses on AFS
securities
|
(G)
|
|
984
|
|
1,063
|
|
Total average
shareholders' equity, excluding unrealized losses on AFS
securities
|
(H)
|
|
1,226
|
|
1,193
|
|
Total average tangible
shareholders' equity, including unrealized losses on AFS securities
(2)
|
(I)
|
|
962
|
|
1,036
|
|
Total average tangible
shareholders' equity, excluding unrealized losses on AFS securities
(2)
|
(J)
|
|
1,204
|
|
1,166
|
|
Total accumulated other
comprehensive (loss) net of tax, end of period
|
|
|
(143)
|
|
(181)
|
|
Total tangible
shareholders' equity, end of period (2)
|
(K)
|
|
993
|
|
930
|
|
Total tangible assets,
end of period (2)
|
(L)
|
|
12,411
|
|
11,638
|
|
|
|
|
|
|
|
|
Total common shares
outstanding, end of period
(thousands)
|
(M)
|
|
43,501
|
|
44,361
|
|
Average diluted shares
outstanding (thousands)
|
(N)
|
|
43,504
|
|
45,914
|
|
|
|
|
|
|
|
|
Earnings/(loss) per
common share, diluted (2)
|
|
|
$
1.60
|
|
$
2.02
|
|
Operating earnings per
common share, diluted (2)
|
(E/N)
|
|
2.14
|
|
2.19
|
|
Tangible book value per
common share, end of period (2)
|
(K/M)
|
|
22.82
|
|
20.95
|
|
Total tangible
shareholders' equity/total tangible assets (2)
|
(K/L)
|
|
8.00
|
|
7.99
|
|
|
|
|
|
|
|
|
Performance
ratios (3)
|
|
|
|
|
|
|
Return on equity,
including unrealized losses on AFS securities
|
|
|
7.07
|
%
|
8.70
|
%
|
Return on equity,
excluding unrealized losses on AFS
securities
|
|
|
5.68
|
|
7.76
|
|
Operating return on
equity, including unrealized losses on AFS securities
(2)
|
(E/G)
|
|
9.47
|
|
9.46
|
|
Operating return on
equity, excluding unrealized losses on AFS securities
(2)
|
(E/H)
|
|
7.60
|
|
8.43
|
|
Return on tangible
common equity, including unrealized losses on AFS securities
(2)(4)
|
|
|
7.60
|
|
9.29
|
|
Return on tangible
common equity, excluding unrealized losses on AFS securities
(2)(4)
|
|
|
6.07
|
|
8.26
|
|
Operating return on
tangible common equity, including unrealized losses on AFS
securities (2)(4)
|
(E+Q)/(I)
|
|
10.05
|
|
10.07
|
|
Operating return on
tangible common equity, excluding unrealized losses on AFS
securities (2)(4)
|
(E+Q)/(J)
|
|
8.03
|
|
8.94
|
|
Return on
assets
|
|
|
0.59
|
|
0.82
|
|
Operating return on
assets (2)
|
(E/F)
|
|
0.79
|
|
0.90
|
|
Efficiency ratio
(2)
|
(D-Q)/(B+O+R)
|
|
63.88
|
|
64.31
|
|
Net interest margin,
FTE
|
|
|
3.27
|
|
3.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary
data (in thousands)
|
|
|
|
|
|
|
Tax benefit on
tax-credit investments (5)
|
(O)
|
|
$
9,863
|
|
$
4,880
|
|
Non-interest income
charge on tax-credit investments (6)
|
(P)
|
|
(8,018)
|
|
(3,508)
|
|
Net income on
tax-credit investments
|
(O+P)
|
|
1,845
|
|
1,372
|
|
|
|
|
|
|
|
|
Intangible
amortization
|
(Q)
|
|
$
4,820
|
|
$
5,134
|
|
Fully taxable
equivalent income adjustment
|
(R)
|
|
7,870
|
|
6,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Starting March 31,
2023, fair value adjustments on securities are included in
operating income.
|
(2) Non-GAAP financial
measure.
|
(3) 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.
|
(4) Amortization of
intangible assets is adjusted assuming a 27% marginal tax
rate.
|
(5) The tax benefit is
the direct reduction to the income tax provision due to tax credit
investments.
|
(6) The non-interest
income amortization is the reduction to the tax-advantaged
investments and are incurred as the tax credits are
generated.
|
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SOURCE Berkshire Hills Bancorp, Inc.