Berkshire Hills Reports Second Quarter Results; Dividend Declared

Published

BOSTON, July 23, 2019 /PRNewswire/ -- Berkshire Hills Bancorp, Inc. (NYSE: BHLB) reported GAAP net income of $25 million, or $0.52 per share, in the second quarter of 2019.  The non-GAAP measure of core earnings totaled $32 million, or $0.65 per share.  Net non-core charges were primarily related to the acquisition of Willimantic, CT based SI Financial Group, Inc. on May 17, 2019 and are net of discontinued operations.  GAAP EPS increased by 2% compared to the prior quarter, while core EPS increased by 8% due to the benefits of the Company's initiatives. 

SECOND QUARTER FINANCIAL HIGHLIGHTS (income statement metrics are compared to the prior quarter):

  • 2% increase in GAAP EPS; 8% increase in core EPS
  • 2% increase in net revenue from continuing operations
  • 3.19% net interest margin
  • 56.4% efficiency ratio, improved from 59.5%
  • 0.14% net loan charge-offs/average loans
  • 0.27% non-performing assets/assets

CEO Richard Marotta stated, "Our teams had a good quarter and contributed to improving the profitability of our operations based on revenue driven positive operating leverage.  Several critical initiatives were accomplished in the most recent quarter.  We completed the acquisition of SI Financial Group, which added the Savings Institute operations consisting of 23 branches and $1.7 billion in total assets in eastern Connecticut and Rhode Island.  This was completed on time and on plan, including the issuance of 5.7 million Berkshire shares as merger consideration.  The systems conversion remains targeted for early in the fourth quarter."

Mr. Marotta continued, "We completed our strategic review and moved forward on several fronts.  Our commercial aircraft portfolio is in the process of being sold, and our FCLS national mortgage banking operations are being marketed for sale.  We're seeing the benefits of our efficiency initiatives, and we're also investing in targeted areas, including our growing SBA lending team.   Repurchases of common stock have begun under our recent 2.4 million share repurchase authorization."

Mr. Marotta concluded with comments about recent governance and culture initiatives.  "We were pleased to add three new Board members in June:  Baye Adofo-Wilson, Rheo Brouillard, and William Hughes.  They represent our newer markets, enhance our diversity, and add new expertise in technology and community development finance.  Longtime community organizer and activist, Malia Lazu, was appointed as EVP/Chief Experience and Culture Officer, and SVP Jacqueline Courtwright was promoted to Chief Human Resources Officer.  In May, the Bank announced its Be FIRST values program, including initiatives for new community storefronts based around our MyBanker program, a new community deposit and loan product, and enhanced diversity and inclusion programs for employee recruitment and development.   In June, over 90% of our employees joined together in our fourth annual Xtraordinary Day of Service, donating more than 6,000 hours of service at 37 projects throughout our footprint.  Berkshire Bank was recently named as the winner of the 2019 North American Employee Engagement Award for Social Responsibility."

DIVIDEND DECLARED

The Board of Directors approved a quarterly cash dividend of $0.23 per common share to shareholders of record at the close of business on August 8, 2019, payable on August 22, 2019.  The dividend equates to a 3.1% annualized yield based on the $29.85 average closing price of Berkshire Hills Bancorp during the second quarter of 2019.  Effective on the same dates, the Board also approved a quarterly cash dividend on preferred stock totaling $0.46 per share.  The Board had approved a 5% increase in the common and preferred dividend following the start of the year.

ACQUISITION OF SI FINANCIAL GROUP

Berkshire completed the acquisition of SI Financial Group ("SIFI") on May 17, 2019.  At the acquisition date, SIFI had assets with a gross fair value totaling $1.7 billion and a net fair value of $140 million net of liabilities.  Berkshire recorded $176 million in total merger consideration, consisting primarily of the issuance of 5.69 million Berkshire common shares.   Goodwill was recorded in the amount of $35 million, and the core deposit intangible was recorded at $18 million.  For the first quarter of 2019, SIFI reported $57 million in annualized revenue and $39 million in annualized operating expense.  For that period, it recorded a 3.00% net interest margin, with a 4.35% loan yield and a 1.29% interest-bearing deposit cost.  Most Berkshire consolidated balance sheet and income statement categories increased as a result of the merger.

Berkshire targets to achieve cost savings related efficiencies totaling approximately $12 million, or 30% of SIFI annualized non-interest expense.  The Company continues to expect that it will remain within its target of approximately $23 million in total after-tax transaction costs.  Including all purchase accounting and targeted transaction costs the Company estimates that the transaction will be approximately $0.45 dilutive to tangible book value per share.  Projected dilution per share is less than originally anticipated due to changes in market conditions affecting purchase accounting. 

FINANCIAL CONDITION

Total assets were $13.7 billion at midyear 2019, increasing by $1.5 billion, or 12%, during the quarter and including the SIFI merger.  Investment securities increased by $24 million, or 1%.  The SIFI merger added $143 million and there were $119 million in net reductions as a result of the Company's strategic review, along with the integration of the SIFI securities.  Total loans increased in the second quarter by $1.0 billion, or 11%, to $9.9 billion including $1.3 billion in SIFI loans.  The $178 million portfolio of commercial aircraft loans was designated as held-for-sale.  The Company expects to complete the sale of these loans in the third quarter.  Total loans decreased organically in the quarter and year-to-date.  This reflects the Company's strategic review and emphasis on adjusting the level and mix of assets to improve capital returns and to integrate the acquired SIFI portfolio.  Total deposits increased by $1.4 billion, or 15%, in the second quarter to $10.6 billion including $1.3 billion in SIFI deposits.  Payroll related balances decreased by $82 million to $480 million in the second quarter.  Deposits increased organically before changes related to SIFI and payroll accounts.  Ratio metrics of capital, liquidity, and asset quality improved modestly during the most recent quarter.  The SIFI loans were recorded at a $42 million (or 3.1%) discount to gross carrying value, including a $31 million credit discount and an $11 million interest rate discount.  Near quarter-end, the Company initiated purchases of common stock under its recently approved 2.4 million share repurchase program.  The Company repurchased 110 thousand shares in the second quarter and repurchases are expected to continue.   Book value per common share increased by 1% to $34.05 from $33.75 in the most recent quarter, and the non-GAAP measure of tangible book value per common share increased by 3% to $22.25 from $21.66, more than offsetting the dilution from the acquisition.     

RESULTS OF OPERATIONS

GAAP earnings were $0.52 per share in the most recent quarter, compared to $0.51 in the prior quarter.  Results in the second quarter were reduced by non-core charges related to the SIFI acquisition, restructuring charges, and discontinued operations.  

The non-GAAP measure of core earnings totaled $0.65 per share in the most recent quarter, increasing by 8% from $0.60 in the prior quarter.  Revenue driven positive operating leverage contributed to improving core profitability.  This reflected initial benefits from the SIFI acquisition and the Company's strategic initiatives.  The return on equity measured 6.1% in the most recent quarter, and the non-GAAP metric of core return on tangible common equity measured 12.2%.

Compared to the prior quarter, total net revenue from continuing operations increased by $2 million, or 2%, and the non-GAAP measure of core revenue increased by $4 million, or 4%.  The net interest margin was 3.19% in the most recent quarter, increasing by 0.02% from the prior quarter, including the benefit of higher accretion related to the SIFI acquisition.   Fee income was down 3% from the prior quarter due to lower loan related revenue.  Non-interest income decreased due to higher tax credit amortization charges which were more than offset by the benefit to income tax expense from tax credits received on projects completed during the quarter.    

Non-interest expense increased quarter-over-quarter including the acquired SIFI operations and higher merger related charges.  Compared to the prior quarter, non- interest expense increased by $5 million, or 6%, while the non-GAAP measure of core expense increased by $400 thousand, or 1%.  The efficiency ratio improved to 56% from 60%.  Excluding SIFI and the FCLS operations, full time equivalent staff decreased to 1,391 at midyear, compared to 1,485 at the start of the year.  FCLS staff totaled 416 at midyear, compared to 432 at the start of the year.  Staff in the acquired SIFI operations totaled 230 at midyear.  The effective income tax rate decreased to 18% in the most recent quarter from 22% in the prior quarter due to higher tax credit benefits resulting from tax credit investment projects that came into service during the quarter.  Net of the related amortization charges to non-interest income previously mentioned, these projects contributed $0.01 to earnings per share during the quarter.

The FCLS national mortgage banking operations contributed $0.03 in non-core EPS during the most recent quarter, as industry business volumes improved following the decrease in long term interest rates that developed during the quarter.  These operations generated $15 million in fee revenue, which was an increase of 56% quarter-over-quarter and 47% year-over-year due to improved market conditions.  The Company generated $719 million in held-for-sale residential mortgages in the most recent quarter, compared to $398 million in the prior quarter and to $626 million in the second quarter of 2018.  Due to the decision to sell the FCLS operations, they are accounted for as discontinued in the financial statements, and most references to revenue and expense refer to continuing operations and exclude FCLS revenue and expense.

INVESTOR CONFERENCE CALL AND INVESTOR PRESENTATION

Berkshire will conduct a conference call/webcast at 10:00 a.m. eastern time on Wednesday, July 24, 2019 to discuss the results for the quarter and provide guidance about expected future results.  Prior to the call, the Company will post a presentation at its website with updates on its strategic initiatives.   Participants are encouraged to pre-register for the conference call using the following link:  http://dpregister.com/10133134.  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.  A telephone replay of the call will be available through Wednesday, July 31, 2019 by dialing 877-344-7529 and entering access number 10133134.  The webcast will be available on Berkshire's website for an extended period of time.

BACKGROUND

Berkshire Hills Bancorp is the parent of Berkshire Bank, a premier regional bank distinguished by its local responsiveness and engagement. With corporate headquarters in Boston, the Company operates in seven Northeastern states, with approximately $13.7 billion in assets and 132 banking offices.  Berkshire Bank is recognized for its entrepreneurial approach, relationship customer experience, and distinctive culture embracing and celebrating the diversity of all customers, employees and, suppliers.

FORWARD LOOKING STATEMENTS

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

NON-GAAP FINANCIAL MEASURES

This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles ("GAAP").  These non-GAAP measures provide supplemental perspectives on operating results, performance trends, and financial condition.  They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company's GAAP financial information.  A reconciliation of non-GAAP financial measures to GAAP measures is included on 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, and discontinued operations.  Merger costs consist primarily of severance/benefit related expenses, contract termination costs, systems conversion costs, variable compensation expenses, and professional fees.  Merger costs in 2018 and 2019 are primarily related to the acquisitions of Commerce Bancshares Corp. and 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.   Discontinued operations are the Company's national mortgage banking operations for which the Company is pursuing sale opportunities.  In 2018, the Company recorded $8 million in charges related to the restructuring of banking systems vendor relationships.  The Company recorded a $3 million cost for the settlement of an existing legal proceeding with a plaintiff claiming to be representing a class of depositors.  Non-core charges in 2018 also included a $1.5 million net charge related to the CEO transition. 

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

 

CONTACTS

Investor Relations Contact

Erin E. Duggan; Investor Relations Manager; 413-236-3773

Media Contact

Cassandra Giovanni; Corporate Communications Manager; 860-428-9561

 

TABLE INDEX   CONSOLIDATED UNAUDITED FINANCIAL SCHEDULES
F-1 Selected Financial Highlights
F-2 Balance Sheets
F-3 Loan and Deposit Analysis
F-4 Statements of Income
F-5 Statements of Operations (Five Quarter Trend)
F-6 Average Yields and Costs
F-7 Average Balances
F-8 Asset Quality Analysis
F-9 Reconciliation of Non-GAAP Financial Measures
and Supplementary Data (Five Quarter Trend)
F-10 Reconciliation of Non-GAAP Financial Measures
and Supplementary Data (Year-to-Date)

 

TABLE INDEX   CONSOLIDATED UNAUDITED FINANCIAL SCHEDULES BERKSHIRE HILLS BANCORP, INC.
F-1 Selected Financial Highlights SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1)
F-2 Balance Sheets At or for the Quarters Ended (1)
F-3 Loan and Deposit Analysis June 30, March 31, Dec. 31, Sept. 30, June 30,
F-4 Statements of Income 2019 (2) 2019 2018 2018 2018
F-5 Statements of Operations (Five Quarter Trend)
F-6 Average Yields and Costs PER SHARE DATA
F-7 Average Balances Net earnings per common share, diluted $          0.52 $          0.51 $          0.31 $          0.70 $          0.74
F-8 Asset Quality Analysis Core earnings per common share, diluted (3) 0.65 0.60 0.69 0.72 0.73
F-9 Reconciliation of Non-GAAP Financial Measures Total book value per common share 34.05 33.75 33.30 32.84 32.49
and Supplementary Data (Five Quarter Trend) Tangible book value per common share (3) 22.25 21.66 21.15 20.68 20.28
F-10 Reconciliation of Non-GAAP Financial Measures Market price at period end 31.39 27.24 26.97 40.70 40.60
and Supplementary Data (Year-to-Date) Dividends per common share 0.23 0.23 0.22 0.22 0.22
Dividends per preferred share 0.46 0.46 0.44 0.44 0.44
PERFORMANCE RATIOS (4)
Return on assets 0.79 % 0.78 % 0.47 % 1.08 % 1.17 %
Core return on assets (3) 1.01 0.92 1.07 1.12 1.18
Return on equity 6.07 5.97 3.61 8.27 8.88
Core return on equity (3) 7.67 7.00 8.09 8.49 8.81
Core return on tangible common equity (3) 12.21 11.44 13.21 14.02 14.68
Net interest margin, fully taxable equivalent (FTE) (5)(6) 3.19 3.17 3.41 3.32 3.50
Fee income/Net interest and fee income from continuing operations 16.20 17.56 15.59 18.06 17.21
Efficiency ratio (3) 56.41 59.54 54.88 52.20 52.42
GROWTH (Year-to-date)
Total commercial loans (organic, annualized) (10) % (3) % 6 % 5 % 5 %
Total loans (organic, annualized) (9) (4) 9 10 10
Total deposits (organic, annualized) 6 8 3 0 2
Total net revenues from continuing operations (compared to prior year) 1 3 17 22 21
Earnings per common share (compared to prior year)  (20) (7) 65 28 33
Core earnings per common share (compared to prior year)(3) (9) (8) 32 37 36
FINANCIAL DATA (in millions)
Total assets $      13,653 $      12,173 $      12,212 $      12,030 $      11,902
Total earning assets 12,343 11,039 11,140 10,957 10,827
Total securities 1,905 1,881 1,919 1,918 1,920
Total loans 9,942 8,947 9,043 8,905 8,710
Allowance for loan losses 62 62 61 58 56
Total intangible assets 603 551 552 553 555
Total deposits 10,566 9,166 8,982 8,766 8,839
Total shareholders' equity 1,779 1,577 1,553 1,532 1,516
Net income 25.4 23.6 14.3 32.2 34.0
Core income (3) 32.1 27.7 32.0 33.1 33.8
Purchase accounting accretion 3.2 1.3 8.2 4.6 7.3
ASSET QUALITY AND CONDITION RATIOS 
Net charge-offs (current quarter annualized)/average loans 0.14 % 0.15 % 0.17 % 0.19 % 0.21 %
Total non-performing assets/total assets 0.27 0.26 0.28 0.30 0.20
Allowance for loan losses/total loans 0.63 0.69 0.68 0.66 0.64
Loans/deposits 94 98 101 102 99
Shareholders' equity to total assets 13.03 12.95 12.72 12.74 12.74
Tangible shareholders' equity to tangible assets (3) 9.01 8.83 8.59 8.53 8.47
(1) Reconciliations of non-GAAP financial measures, including all references to core and tangible amounts, appear on pages F-9 and F-10.
(2) The Company acquired SI Financial Group, Inc. on May 17, 2019.
(3) 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.
(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) 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: 0.11%, 0.05%, 0.30%, 0.17%, 0.27%.

 

 

TABLE INDEX   CONSOLIDATED UNAUDITED FINANCIAL SCHEDULES BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC.
F-1 Selected Financial Highlights SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1) CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2)
F-2 Balance Sheets At or for the Quarters Ended (1) June 30, March 31, December 31,
F-3 Loan and Deposit Analysis June 30, March 31, Dec. 31, Sept. 30, June 30, (in thousands) 2019 2019 2018
F-4 Statements of Income 2019 (2) 2019 2018 2018 2018 Assets
F-5 Statements of Operations (Five Quarter Trend) Cash and due from banks $            100,588 $              98,689 $                100,972
F-6 Average Yields and Costs PER SHARE DATA Short-term investments 128,718 68,930 82,217
F-7 Average Balances Net earnings per common share, diluted $          0.52 $          0.51 $          0.31 $          0.70 $          0.74 Total cash and short-term investments 229,306 167,619 183,189
F-8 Asset Quality Analysis Core earnings per common share, diluted (3) 0.65 0.60 0.69 0.72 0.73
F-9 Reconciliation of Non-GAAP Financial Measures Total book value per common share 34.05 33.75 33.30 32.84 32.49 Trading security 11,210 11,164 11,212
and Supplementary Data (Five Quarter Trend) Tangible book value per common share (3) 22.25 21.66 21.15 20.68 20.28 Marketable equity securities, at fair value 59,121 59,121 56,638
F-10 Reconciliation of Non-GAAP Financial Measures Market price at period end 31.39 27.24 26.97 40.70 40.60 Securities available for sale, at fair value 1,410,535 1,386,768 1,399,647
and Supplementary Data (Year-to-Date) Dividends per common share 0.23 0.23 0.22 0.22 0.22 Securities held to maturity, at amortized cost 364,463 369,331 373,763
Dividends per preferred share 0.46 0.46 0.44 0.44 0.44 Federal Home Loan Bank stock and other restricted securities 59,356 54,624 77,344
Total securities 1,904,685 1,881,008 1,918,604
PERFORMANCE RATIOS (4)
Return on assets 0.79 % 0.78 % 0.47 % 1.08 % 1.17 % Loans held for sale 184,810 4,773 2,183
Core return on assets (3) 1.01 0.92 1.07 1.12 1.18
Return on equity 6.07 5.97 3.61 8.27 8.88 Commercial real estate loans 4,005,347 3,388,139 3,400,221
Core return on equity (3) 7.67 7.00 8.09 8.49 8.81 Commercial and industrial loans 1,987,297 1,957,339 1,980,046
Core return on tangible common equity (3) 12.21 11.44 13.21 14.02 14.68 Residential mortgages 2,882,380 2,544,824 2,566,424
Net interest margin, fully taxable equivalent (FTE) (5)(6) 3.19 3.17 3.41 3.32 3.50 Consumer loans 1,066,804 1,057,193 1,096,562
Fee income/Net interest and fee income from continuing operations 16.20 17.56 15.59 18.06 17.21 Total loans 9,941,828 8,947,495 9,043,253
Efficiency ratio (3) 56.41 59.54 54.88 52.20 52.42 Less: Allowance for loan losses (62,156) (62,038) (61,469)
Net loans 9,879,672 8,885,457 8,981,784
GROWTH (Year-to-date)
Total commercial loans (organic, annualized) (10) % (3) % 6 % 5 % 5 % Premises and equipment, net 121,619 105,651 106,500
Total loans (organic, annualized) (9) (4) 9 10 10 Other real estate owned 154 - -
Total deposits (organic, annualized) 6 8 3 0 2 Goodwill  553,796 518,325 518,325
Total net revenues from continuing operations (compared to prior year) 1 3 17 22 21 Other intangible assets 48,724 32,219 33,418
Earnings per common share (compared to prior year)  (20) (7) 65 28 33 Cash surrender value of bank-owned life insurance 227,458 191,768 190,609
Core earnings per common share (compared to prior year)(3) (9) (8) 32 37 36 Deferred tax asset, net 51,118 38,783 42,434
Other assets 238,951 182,720 120,926
FINANCIAL DATA (in millions) Assets from discontinued operations 212,745 165,078 114,259
Total assets $      13,653 $      12,173 $      12,212 $      12,030 $      11,902 Total assets  $       13,653,038 $       12,173,401 $           12,212,231
Total earning assets 12,343 11,039 11,140 10,957 10,827
Total securities 1,905 1,881 1,919 1,918 1,920 Liabilities and shareholders' equity
Total loans 9,942 8,947 9,043 8,905 8,710 Demand deposits $         1,827,016 $         1,526,584 $             1,603,019
Allowance for loan losses 62 62 61 58 56 NOW and other deposits 997,685 820,177 1,122,321
Total intangible assets 603 551 552 553 555 Money market deposits 2,811,158 2,743,448 2,245,195
Total deposits 10,566 9,166 8,982 8,766 8,839 Savings deposits 848,699 731,711 724,129
Total shareholders' equity 1,779 1,577 1,553 1,532 1,516 Time deposits 4,081,398 3,344,495 3,287,717
Net income 25.4 23.6 14.3 32.2 34.0 Total deposits 10,565,956 9,166,415 8,982,381
Core income (3) 32.1 27.7 32.0 33.1 33.8
Purchase accounting accretion 3.2 1.3 8.2 4.6 7.3 Senior borrowings 904,814 1,120,189 1,428,298
Subordinated borrowings 96,927 89,562 89,518
ASSET QUALITY AND CONDITION RATIOS  Total borrowings 1,001,741 1,209,751 1,517,816
Net charge-offs (current quarter annualized)/average loans 0.14 % 0.15 % 0.17 % 0.19 % 0.21 %
Total non-performing assets/total assets 0.27 0.26 0.28 0.30 0.20 Other liabilities  280,155 204,725 149,519
Allowance for loan losses/total loans 0.63 0.69 0.68 0.66 0.64 Liabilities from discontinued operations 26,256 15,505 9,597
Loans/deposits 94 98 101 102 99 Total liabilities 11,874,108 10,596,396 10,659,313
Shareholders' equity to total assets 13.03 12.95 12.72 12.74 12.74
Tangible shareholders' equity to tangible assets (3) 9.01 8.83 8.59 8.53 8.47 Preferred shareholders' equity 40,633 40,633 40,633
Common shareholders' equity 1,738,297 1,536,372 1,512,285
Total shareholders' equity 1,778,930 1,577,005 1,552,918
(1) Reconciliations of non-GAAP financial measures, including all references to core and tangible amounts, appear on pages F-9 and F-10. Total liabilities and shareholders' equity $       13,653,038 $       12,173,401 $           12,212,231
(2) The Company acquired SI Financial Group, Inc. on May 17, 2019.
(3) Non-GAAP financial measure. Core measurements are non-GAAP financial measures that are adjusted to exclude net non-core charges primarily   Net common shares outstanding  51,045 45,522 45,417
 related to acquisitions and restructuring activities. See pages F-9 and F-10 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) 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: 0.11%, 0.05%, 0.30%, 0.17%, 0.27%.

 

 

TABLE INDEX   CONSOLIDATED UNAUDITED FINANCIAL SCHEDULES BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC.
F-1 Selected Financial Highlights SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1) CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2) CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-3)
F-2 Balance Sheets At or for the Quarters Ended (1) June 30, March 31, December 31, LOAN ANALYSIS
F-3 Loan and Deposit Analysis June 30, March 31, Dec. 31, Sept. 30, June 30, (in thousands) 2019 2019 2018
F-4 Statements of Income 2019 (2) 2019 2018 2018 2018 Assets
F-5 Statements of Operations (Five Quarter Trend) Cash and due from banks $            100,588 $              98,689 $                100,972 Organic Annualized Growth %(1)
F-6 Average Yields and Costs PER SHARE DATA Short-term investments 128,718 68,930 82,217 (in millions) June 30, 2019Balance Acquired Savings Institute Balances (2) March 31, 2019Balance December 31, 2018Balance Quarter ended June 30, 2019 Year to Date  
F-7 Average Balances Net earnings per common share, diluted $          0.52 $          0.51 $          0.31 $          0.70 $          0.74 Total cash and short-term investments 229,306 167,619 183,189
F-8 Asset Quality Analysis Core earnings per common share, diluted (3) 0.65 0.60 0.69 0.72 0.73 Total commercial real estate $                      4,006 $                         624 $                      3,388 $                       3,400 (1) % (1) %
F-9 Reconciliation of Non-GAAP Financial Measures Total book value per common share 34.05 33.75 33.30 32.84 32.49 Trading security 11,210 11,164 11,212 Commercial and industrial loans  1,987 244 1,957 1,980 (44) (24)
and Supplementary Data (Five Quarter Trend) Tangible book value per common share (3) 22.25 21.66 21.15 20.68 20.28 Marketable equity securities, at fair value 59,121 59,121 56,638 Total commercial loans  5,993 868 5,345 5,380 (17) (10)
F-10 Reconciliation of Non-GAAP Financial Measures Market price at period end 31.39 27.24 26.97 40.70 40.60 Securities available for sale, at fair value 1,410,535 1,386,768 1,399,647
and Supplementary Data (Year-to-Date) Dividends per common share 0.23 0.23 0.22 0.22 0.22 Securities held to maturity, at amortized cost 364,463 369,331 373,763 Total residential mortgages 2,882 375 2,545 2,566 (6) (5)
Dividends per preferred share 0.46 0.46 0.44 0.44 0.44 Federal Home Loan Bank stock and other restricted securities 59,356 54,624 77,344
Total securities 1,904,685 1,881,008 1,918,604 Home equity  404 58 365 377 (21) (16)
PERFORMANCE RATIOS (4) Auto and other 663 2 692 720 (18) (16)
Return on assets 0.79 % 0.78 % 0.47 % 1.08 % 1.17 % Loans held for sale 184,810 4,773 2,183 Total consumer loans 1,067 60 1,057 1,097 (19) (16)
Core return on assets (3) 1.01 0.92 1.07 1.12 1.18 Total loans $                      9,942 $                      1,303 $                      8,947 $                       9,043 (14) % (9) %
Return on equity 6.07 5.97 3.61 8.27 8.88 Commercial real estate loans 4,005,347 3,388,139 3,400,221 (1) Non-GAAP financial measure.
Core return on equity (3) 7.67 7.00 8.09 8.49 8.81 Commercial and industrial loans 1,987,297 1,957,339 1,980,046 (2) The acquired balances for Savings Institute are as of May 17, 2019.
Core return on tangible common equity (3) 12.21 11.44 13.21 14.02 14.68 Residential mortgages 2,882,380 2,544,824 2,566,424
Net interest margin, fully taxable equivalent (FTE) (5)(6) 3.19 3.17 3.41 3.32 3.50 Consumer loans 1,066,804 1,057,193 1,096,562
Fee income/Net interest and fee income from continuing operations 16.20 17.56 15.59 18.06 17.21 Total loans 9,941,828 8,947,495 9,043,253
Efficiency ratio (3) 56.41 59.54 54.88 52.20 52.42 Less: Allowance for loan losses (62,156) (62,038) (61,469)
Net loans 9,879,672 8,885,457 8,981,784 DEPOSIT ANALYSIS
GROWTH (Year-to-date)
Total commercial loans (organic, annualized) (10) % (3) % 6 % 5 % 5 % Premises and equipment, net 121,619 105,651 106,500 Organic Annualized Growth % (1)
Total loans (organic, annualized) (9) (4) 9 10 10 Other real estate owned 154 - - (in millions) June 30, 2019Balance Acquired Savings Institute Balances (2) March 31, 2019Balance December 31, 2018Balance Quarter ended June 30, 2019 Year to Date
Total deposits (organic, annualized) 6 8 3 0 2 Goodwill  553,796 518,325 518,325 Demand $                      1,827 $                         258 $                      1,527 $                       1,603 11 % (4) %
Total net revenues from continuing operations (compared to prior year) 1 3 17 22 21 Other intangible assets 48,724 32,219 33,418 NOW and other 998 138 820 1,122 20 (47)
Earnings per common share (compared to prior year)  (20) (7) 65 28 33 Cash surrender value of bank-owned life insurance 227,458 191,768 190,609 Money market 2,811 190 2,743 2,245 (18) 34
Core earnings per common share (compared to prior year)(3) (9) (8) 32 37 36 Deferred tax asset, net 51,118 38,783 42,434 Savings 849 164 732 724 (26) (11)
Other assets 238,951 182,720 120,926 Time deposits 4,081 585 3,344 3,288 18 13
FINANCIAL DATA (in millions) Assets from discontinued operations 212,745 165,078 114,259 Total deposits  $                    10,566 $                      1,335 $                      9,166 $                       8,982 3 % 6 %
Total assets $      13,653 $      12,173 $      12,212 $      12,030 $      11,902 Total assets  $       13,653,038 $       12,173,401 $           12,212,231 (1) Non-GAAP financial measure.
Total earning assets 12,343 11,039 11,140 10,957 10,827 (2) The acquired balances for Savings Institute are as of May 17, 2019.
Total securities 1,905 1,881 1,919 1,918 1,920 Liabilities and shareholders' equity
Total loans 9,942 8,947 9,043 8,905 8,710 Demand deposits $         1,827,016 $         1,526,584 $             1,603,019
Allowance for loan losses 62 62 61 58 56 NOW and other deposits 997,685 820,177 1,122,321
Total intangible assets 603 551 552 553 555 Money market deposits 2,811,158 2,743,448 2,245,195
Total deposits 10,566 9,166 8,982 8,766 8,839 Savings deposits 848,699 731,711 724,129
Total shareholders' equity 1,779 1,577 1,553 1,532 1,516 Time deposits 4,081,398 3,344,495 3,287,717
Net income 25.4 23.6 14.3 32.2 34.0 Total deposits 10,565,956 9,166,415 8,982,381
Core income (3) 32.1 27.7 32.0 33.1 33.8
Purchase accounting accretion 3.2 1.3 8.2 4.6 7.3 Senior borrowings 904,814 1,120,189 1,428,298
Subordinated borrowings 96,927 89,562 89,518
ASSET QUALITY AND CONDITION RATIOS  Total borrowings 1,001,741 1,209,751 1,517,816
Net charge-offs (current quarter annualized)/average loans 0.14 % 0.15 % 0.17 % 0.19 % 0.21 %
Total non-performing assets/total assets 0.27 0.26 0.28 0.30 0.20 Other liabilities  280,155 204,725 149,519
Allowance for loan losses/total loans 0.63 0.69 0.68 0.66 0.64 Liabilities from discontinued operations 26,256 15,505 9,597
Loans/deposits 94 98 101 102 99 Total liabilities 11,874,108 10,596,396 10,659,313
Shareholders' equity to total assets 13.03 12.95 12.72 12.74 12.74
Tangible shareholders' equity to tangible assets (3) 9.01 8.83 8.59 8.53 8.47 Preferred shareholders' equity 40,633 40,633 40,633
Common shareholders' equity 1,738,297 1,536,372 1,512,285
Total shareholders' equity 1,778,930 1,577,005 1,552,918
(1) Reconciliations of non-GAAP financial measures, including all references to core and tangible amounts, appear on pages F-9 and F-10. Total liabilities and shareholders' equity $       13,653,038 $       12,173,401 $           12,212,231
(2) The Company acquired SI Financial Group, Inc. on May 17, 2019.
(3) Non-GAAP financial measure. Core measurements are non-GAAP financial measures that are adjusted to exclude net non-core charges primarily   Net common shares outstanding  51,045 45,522 45,417
 related to acquisitions and restructuring activities. See pages F-9 and F-10 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) 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: 0.11%, 0.05%, 0.30%, 0.17%, 0.27%.

 

 

TABLE INDEX   CONSOLIDATED UNAUDITED FINANCIAL SCHEDULES BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC.
F-1 Selected Financial Highlights SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1) CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2) CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-3) CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - (F-4)
F-2 Balance Sheets At or for the Quarters Ended (1) June 30, March 31, December 31, LOAN ANALYSIS Three Months Ended Six Months Ended
F-3 Loan and Deposit Analysis June 30, March 31, Dec. 31, Sept. 30, June 30, (in thousands) 2019 2019 2018 June 30, June 30,
F-4 Statements of Income 2019 (2) 2019 2018 2018 2018 Assets (in thousands, except per share data) 2019 2018 2019 2018
F-5 Statements of Operations (Five Quarter Trend) Cash and due from banks $            100,588 $              98,689 $                100,972 Organic Annualized Growth %(1) Interest and dividend income from continuing operations    
F-6 Average Yields and Costs PER SHARE DATA Short-term investments 128,718 68,930 82,217 (in millions) June 30, 2019Balance Acquired Savings Institute Balances (2) March 31, 2019Balance December 31, 2018Balance Quarter ended June 30, 2019 Year to Date   Loans $         113,990 $         100,254 $           219,641 $            191,995
F-7 Average Balances Net earnings per common share, diluted $          0.52 $          0.51 $          0.31 $          0.70 $          0.74 Total cash and short-term investments 229,306 167,619 183,189 Securities and other     15,248 15,230 30,706 29,635
F-8 Asset Quality Analysis Core earnings per common share, diluted (3) 0.65 0.60 0.69 0.72 0.73 Total commercial real estate $                      4,006 $                         624 $                      3,388 $                       3,400 (1) % (1) % Total interest and dividend income     129,238 115,484 250,347 221,630
F-9 Reconciliation of Non-GAAP Financial Measures Total book value per common share 34.05 33.75 33.30 32.84 32.49 Trading security 11,210 11,164 11,212 Commercial and industrial loans  1,987 244 1,957 1,980 (44) (24) Interest expense from continuing operations 
and Supplementary Data (Five Quarter Trend) Tangible book value per common share (3) 22.25 21.66 21.15 20.68 20.28 Marketable equity securities, at fair value 59,121 59,121 56,638 Total commercial loans  5,993 868 5,345 5,380 (17) (10) Deposits 28,273 17,768 54,895 33,093
F-10 Reconciliation of Non-GAAP Financial Measures Market price at period end 31.39 27.24 26.97 40.70 40.60 Securities available for sale, at fair value 1,410,535 1,386,768 1,399,647 Borrowings 9,370 7,424 18,398 13,488
and Supplementary Data (Year-to-Date) Dividends per common share 0.23 0.23 0.22 0.22 0.22 Securities held to maturity, at amortized cost 364,463 369,331 373,763 Total residential mortgages 2,882 375 2,545 2,566 (6) (5) Total interest expense     37,643 25,192 73,293 46,581
Dividends per preferred share 0.46 0.46 0.44 0.44 0.44 Federal Home Loan Bank stock and other restricted securities 59,356 54,624 77,344 Net interest income from continuing operations 91,595 90,292 177,054 175,049
Total securities 1,904,685 1,881,008 1,918,604 Home equity  404 58 365 377 (21) (16) Non-interest income from continuing operations 
PERFORMANCE RATIOS (4) Auto and other 663 2 692 720 (18) (16) Mortgage banking originations 278 334 324 472
Return on assets 0.79 % 0.78 % 0.47 % 1.08 % 1.17 % Loans held for sale 184,810 4,773 2,183 Total consumer loans 1,067 60 1,057 1,097 (19) (16) Loan related income 4,822 6,003 10,825 10,822
Core return on assets (3) 1.01 0.92 1.07 1.12 1.18 Total loans $                      9,942 $                      1,303 $                      8,947 $                       9,043 (14) % (9) % Deposit related fees 7,525 7,605 14,383 15,671
Return on equity 6.07 5.97 3.61 8.27 8.88 Commercial real estate loans 4,005,347 3,388,139 3,400,221 (1) Non-GAAP financial measure. Insurance commissions and fees     2,738 2,549 5,591 5,574
Core return on equity (3) 7.67 7.00 8.09 8.49 8.81 Commercial and industrial loans 1,987,297 1,957,339 1,980,046 (2) The acquired balances for Savings Institute are as of May 17, 2019. Wealth management fees     2,348 2,280 4,789 4,877
Core return on tangible common equity (3) 12.21 11.44 13.21 14.02 14.68 Residential mortgages 2,882,380 2,544,824 2,566,424 Total fee income     17,711 18,771 35,912 37,416
Net interest margin, fully taxable equivalent (FTE) (5)(6) 3.19 3.17 3.41 3.32 3.50 Consumer loans 1,066,804 1,057,193 1,096,562 Other (216) 155 754 1,423
Fee income/Net interest and fee income from continuing operations 16.20 17.56 15.59 18.06 17.21 Total loans 9,941,828 8,947,495 9,043,253 Securities gains/(losses), net      17 718 2,568 (784)
Efficiency ratio (3) 56.41 59.54 54.88 52.20 52.42 Less: Allowance for loan losses (62,156) (62,038) (61,469) (Loss)/gain on sale of business operations and assets, net - (21) - 460
Net loans 9,879,672 8,885,457 8,981,784 DEPOSIT ANALYSIS Total non-interest income       17,512 19,623 39,234 38,515
GROWTH (Year-to-date) Total net revenue from continuing operations 109,107 109,915 216,288 213,564
Total commercial loans (organic, annualized) (10) % (3) % 6 % 5 % 5 % Premises and equipment, net 121,619 105,651 106,500 Organic Annualized Growth % (1) Provision for loan losses    3,467 6,532 7,468 12,107
Total loans (organic, annualized) (9) (4) 9 10 10 Other real estate owned 154 - - (in millions) June 30, 2019Balance Acquired Savings Institute Balances (2) March 31, 2019Balance December 31, 2018Balance Quarter ended June 30, 2019 Year to Date Non-interest expense from continuing operations
Total deposits (organic, annualized) 6 8 3 0 2 Goodwill  553,796 518,325 518,325 Demand $                      1,827 $                         258 $                      1,527 $                       1,603 11 % (4) % Compensation and benefits 34,779 33,499 68,279 67,346
Total net revenues from continuing operations (compared to prior year) 1 3 17 22 21 Other intangible assets 48,724 32,219 33,418 NOW and other 998 138 820 1,122 20 (47) Occupancy and equipment      9,449 9,224 18,895 18,416
Earnings per common share (compared to prior year)  (20) (7) 65 28 33 Cash surrender value of bank-owned life insurance 227,458 191,768 190,609 Money market 2,811 190 2,743 2,245 (18) 34 Technology and communications 6,715 7,053 12,972 13,537
Core earnings per common share (compared to prior year)(3) (9) (8) 32 37 36 Deferred tax asset, net 51,118 38,783 42,434 Savings 849 164 732 724 (26) (11) Marketing and promotion      1,155 1,084 2,422 2,306
Other assets 238,951 182,720 120,926 Time deposits 4,081 585 3,344 3,288 18 13 Professional services 3,953 864 6,228 2,560
FINANCIAL DATA (in millions) Assets from discontinued operations 212,745 165,078 114,259 Total deposits  $                    10,566 $                      1,335 $                      9,166 $                       8,982 3 % 6 % FDIC premiums and assessments 1,751 1,411 3,390 2,606
Total assets $      13,653 $      12,173 $      12,212 $      12,030 $      11,902 Total assets  $       13,653,038 $       12,173,401 $           12,212,231 (1) Non-GAAP financial measure. Other real estate owned and foreclosures (2) 1 - 68
Total earning assets 12,343 11,039 11,140 10,957 10,827 (2) The acquired balances for Savings Institute are as of May 17, 2019. Amortization of intangible assets      1,475 1,246 2,675 2,514
Total securities 1,905 1,881 1,919 1,918 1,920 Liabilities and shareholders' equity Merger, restructuring and other expense  11,155 847 18,170 5,940
Total loans 9,942 8,947 9,043 8,905 8,710 Demand deposits $         1,827,016 $         1,526,584 $             1,603,019 Other 6,138 6,298 15,528 11,600
Allowance for loan losses 62 62 61 58 56 NOW and other deposits 997,685 820,177 1,122,321 Total non-interest expense      76,568 61,527 148,559 126,893
Total intangible assets 603 551 552 553 555 Money market deposits 2,811,158 2,743,448 2,245,195
Total deposits 10,566 9,166 8,982 8,766 8,839 Savings deposits 848,699 731,711 724,129 Income from continuing operations before income taxes        $           29,072 $           41,856 $             60,261 $              74,564
Total shareholders' equity 1,779 1,577 1,553 1,532 1,516 Time deposits 4,081,398 3,344,495 3,287,717 Income tax expense 5,118 8,145 12,035 15,482
Net income 25.4 23.6 14.3 32.2 34.0 Total deposits 10,565,956 9,166,415 8,982,381 Net income from continuing operations $           23,954 $           33,711 $             48,226 $              59,082
Core income (3) 32.1 27.7 32.0 33.1 33.8
Purchase accounting accretion 3.2 1.3 8.2 4.6 7.3 Senior borrowings 904,814 1,120,189 1,428,298 Income from discontinued operations before income taxes $             2,082 $                426 $               1,228 $                   264
Subordinated borrowings 96,927 89,562 89,518 Income tax expense 588 106 371 67
ASSET QUALITY AND CONDITION RATIOS  Total borrowings 1,001,741 1,209,751 1,517,816 Net income from discontinued operations $             1,494 $                320 $                  857 $                   197
Net charge-offs (current quarter annualized)/average loans 0.14 % 0.15 % 0.17 % 0.19 % 0.21 %
Total non-performing assets/total assets 0.27 0.26 0.28 0.30 0.20 Other liabilities  280,155 204,725 149,519 Net income $           25,448 $           34,031 $             49,083 $              59,279
Allowance for loan losses/total loans 0.63 0.69 0.68 0.66 0.64 Liabilities from discontinued operations 26,256 15,505 9,597 Preferred stock dividend 240 229 480 459
Loans/deposits 94 98 101 102 99 Total liabilities 11,874,108 10,596,396 10,659,313 Income available to common shareholders $           25,208 $           33,802 $             48,603 $              58,820
Shareholders' equity to total assets 13.03 12.95 12.72 12.74 12.74
Tangible shareholders' equity to tangible assets (3) 9.01 8.83 8.59 8.53 8.47 Preferred shareholders' equity 40,633 40,633 40,633 Basic earnings per common share:
Common shareholders' equity 1,738,297 1,536,372 1,512,285 Continuing Operations $               0.49 $               0.73 $                 1.01 $                  1.29
Total shareholders' equity 1,778,930 1,577,005 1,552,918 Discontinued Operations 0.03 0.01 0.02 -
(1) Reconciliations of non-GAAP financial measures, including all references to core and tangible amounts, appear on pages F-9 and F-10. Total liabilities and shareholders' equity $       13,653,038 $       12,173,401 $           12,212,231 Total $               0.52 $               0.74 $                 1.03 $                  1.29
(2) The Company acquired SI Financial Group, Inc. on May 17, 2019.
(3) Non-GAAP financial measure. Core measurements are non-GAAP financial measures that are adjusted to exclude net non-core charges primarily   Net common shares outstanding  51,045 45,522 45,417 Diluted earnings per common share:
 related to acquisitions and restructuring activities. See pages F-9 and F-10 for reconciliations of non-GAAP financial measures. Continuing Operations $               0.49 $               0.73 $                 1.01 $                  1.28
(4) All performance ratios are annualized and are based on average balance sheet amounts, where applicable. Discontinued Operations 0.03 0.01 0.02 -
(5) Fully taxable equivalent considers the impact of tax advantaged investment securities and loans. Total $               0.52 $               0.74 $                 1.03 $                  1.28
(6) 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: 0.11%, 0.05%, 0.30%, 0.17%, 0.27%. Weighted average shares outstanding:      
Basic 48,961 46,032 47,550 45,999
Diluted 49,114 46,215 47,700 46,206

 

 

TABLE INDEX   CONSOLIDATED UNAUDITED FINANCIAL SCHEDULES BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC.
F-1 Selected Financial Highlights SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1) CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2) CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-3) CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - (F-4) CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend) - UNAUDITED - (F-5)
F-2 Balance Sheets At or for the Quarters Ended (1) June 30, March 31, December 31, LOAN ANALYSIS Three Months Ended Six Months Ended
F-3 Loan and Deposit Analysis June 30, March 31, Dec. 31, Sept. 30, June 30, (in thousands) 2019 2019 2018 June 30, June 30, June 30, March 31, Dec. 31, Sept. 30, June 30,
F-4 Statements of Income 2019 (2) 2019 2018 2018 2018 Assets (in thousands, except per share data) 2019 2018 2019 2018 (in thousands, except per share data) 2019 2019 2018 2018 2018
F-5 Statements of Operations (Five Quarter Trend) Cash and due from banks $            100,588 $              98,689 $                100,972 Organic Annualized Growth %(1) Interest and dividend income from continuing operations     Interest and dividend income from continuing operations    
F-6 Average Yields and Costs PER SHARE DATA Short-term investments 128,718 68,930 82,217 (in millions) June 30, 2019Balance Acquired Savings Institute Balances (2) March 31, 2019Balance December 31, 2018Balance Quarter ended June 30, 2019 Year to Date   Loans $         113,990 $         100,254 $           219,641 $            191,995 Loans $      113,990 $      105,651 $      111,576 $      102,651 $      100,254
F-7 Average Balances Net earnings per common share, diluted $          0.52 $          0.51 $          0.31 $          0.70 $          0.74 Total cash and short-term investments 229,306 167,619 183,189 Securities and other     15,248 15,230 30,706 29,635 Securities and other     15,248 15,458 15,119 14,918 15,230
F-8 Asset Quality Analysis Core earnings per common share, diluted (3) 0.65 0.60 0.69 0.72 0.73 Total commercial real estate $                      4,006 $                         624 $                      3,388 $                       3,400 (1) % (1) % Total interest and dividend income     129,238 115,484 250,347 221,630 Total interest and dividend income     129,238 121,109 126,695 117,569 115,484
F-9 Reconciliation of Non-GAAP Financial Measures Total book value per common share 34.05 33.75 33.30 32.84 32.49 Trading security 11,210 11,164 11,212 Commercial and industrial loans  1,987 244 1,957 1,980 (44) (24) Interest expense from continuing operations  Interest expense from continuing operations
and Supplementary Data (Five Quarter Trend) Tangible book value per common share (3) 22.25 21.66 21.15 20.68 20.28 Marketable equity securities, at fair value 59,121 59,121 56,638 Total commercial loans  5,993 868 5,345 5,380 (17) (10) Deposits 28,273 17,768 54,895 33,093 Deposits 28,273 26,622 23,811 21,460 17,768
F-10 Reconciliation of Non-GAAP Financial Measures Market price at period end 31.39 27.24 26.97 40.70 40.60 Securities available for sale, at fair value 1,410,535 1,386,768 1,399,647 Borrowings 9,370 7,424 18,398 13,488 Borrowings 9,370 9,028 10,118 7,724 7,424
and Supplementary Data (Year-to-Date) Dividends per common share 0.23 0.23 0.22 0.22 0.22 Securities held to maturity, at amortized cost 364,463 369,331 373,763 Total residential mortgages 2,882 375 2,545 2,566 (6) (5) Total interest expense     37,643 25,192 73,293 46,581 Total interest expense     37,643 35,650 33,929 29,184 25,192
Dividends per preferred share 0.46 0.46 0.44 0.44 0.44 Federal Home Loan Bank stock and other restricted securities 59,356 54,624 77,344 Net interest income from continuing operations 91,595 90,292 177,054 175,049 Net interest income from continuing operations 91,595 85,459 92,766 88,385 90,292
Total securities 1,904,685 1,881,008 1,918,604 Home equity  404 58 365 377 (21) (16) Non-interest income from continuing operations  Non-interest income from continuing operations
PERFORMANCE RATIOS (4) Auto and other 663 2 692 720 (18) (16) Mortgage banking originations 278 334 324 472 Mortgage banking originations 278 46 148 15 334
Return on assets 0.79 % 0.78 % 0.47 % 1.08 % 1.17 % Loans held for sale 184,810 4,773 2,183 Total consumer loans 1,067 60 1,057 1,097 (19) (16) Loan related income 4,822 6,003 10,825 10,822 Loan related income 4,822 6,003 5,087 7,246 6,003
Core return on assets (3) 1.01 0.92 1.07 1.12 1.18 Total loans $                      9,942 $                      1,303 $                      8,947 $                       9,043 (14) % (9) % Deposit related fees 7,525 7,605 14,383 15,671 Deposit related fees 7,525 6,858 7,131 7,004 7,605
Return on equity 6.07 5.97 3.61 8.27 8.88 Commercial real estate loans 4,005,347 3,388,139 3,400,221 (1) Non-GAAP financial measure. Insurance commissions and fees     2,738 2,549 5,591 5,574 Insurance commissions and fees     2,738 2,853 2,479 2,930 2,549
Core return on equity (3) 7.67 7.00 8.09 8.49 8.81 Commercial and industrial loans 1,987,297 1,957,339 1,980,046 (2) The acquired balances for Savings Institute are as of May 17, 2019. Wealth management fees     2,348 2,280 4,789 4,877 Wealth management fees     2,348 2,441 2,287 2,283 2,280
Core return on tangible common equity (3) 12.21 11.44 13.21 14.02 14.68 Residential mortgages 2,882,380 2,544,824 2,566,424 Total fee income     17,711 18,771 35,912 37,416 Total fee income     17,711 18,201 17,132 19,478 18,771
Net interest margin, fully taxable equivalent (FTE) (5)(6) 3.19 3.17 3.41 3.32 3.50 Consumer loans 1,066,804 1,057,193 1,096,562 Other (216) 155 754 1,423 Other (216) 970 1,666 468 155
Fee income/Net interest and fee income from continuing operations 16.20 17.56 15.59 18.06 17.21 Total loans 9,941,828 8,947,495 9,043,253 Securities gains/(losses), net      17 718 2,568 (784) Securities gains/(losses), net      17 2,551 (3,023) 88 718
Efficiency ratio (3) 56.41 59.54 54.88 52.20 52.42 Less: Allowance for loan losses (62,156) (62,038) (61,469) (Loss)/gain on sale of business operations and assets, net - (21) - 460 (Loss) on sale of business operations and assets, net - - - - (21)
Net loans 9,879,672 8,885,457 8,981,784 DEPOSIT ANALYSIS Total non-interest income       17,512 19,623 39,234 38,515 Total non-interest income       17,512 21,722 15,775 20,034 19,623
GROWTH (Year-to-date) Total net revenue from continuing operations 109,107 109,915 216,288 213,564 Total net revenue from continuing operations 109,107 107,181 108,541 108,419 109,915
Total commercial loans (organic, annualized) (10) % (3) % 6 % 5 % 5 % Premises and equipment, net 121,619 105,651 106,500 Organic Annualized Growth % (1) Provision for loan losses    3,467 6,532 7,468 12,107 Provision for loan losses    3,467 4,001 6,716 6,628 6,532
Total loans (organic, annualized) (9) (4) 9 10 10 Other real estate owned 154 - - (in millions) June 30, 2019Balance Acquired Savings Institute Balances (2) March 31, 2019Balance December 31, 2018Balance Quarter ended June 30, 2019 Year to Date Non-interest expense from continuing operations Non-interest expense from continuing operations
Total deposits (organic, annualized) 6 8 3 0 2 Goodwill  553,796 518,325 518,325 Demand $                      1,827 $                         258 $                      1,527 $                       1,603 11 % (4) % Compensation and benefits 34,779 33,499 68,279 67,346 Compensation and benefits 34,779 33,500 34,927 31,746 33,499
Total net revenues from continuing operations (compared to prior year) 1 3 17 22 21 Other intangible assets 48,724 32,219 33,418 NOW and other 998 138 820 1,122 20 (47) Occupancy and equipment      9,449 9,224 18,895 18,416 Occupancy and equipment      9,449 9,446 9,366 9,145 9,224
Earnings per common share (compared to prior year)  (20) (7) 65 28 33 Cash surrender value of bank-owned life insurance 227,458 191,768 190,609 Money market 2,811 190 2,743 2,245 (18) 34 Technology and communications 6,715 7,053 12,972 13,537 Technology and communications 6,715 6,257 6,103 7,507 7,053
Core earnings per common share (compared to prior year)(3) (9) (8) 32 37 36 Deferred tax asset, net 51,118 38,783 42,434 Savings 849 164 732 724 (26) (11) Marketing and promotion      1,155 1,084 2,422 2,306 Marketing and promotion   1,155 1,267 1,224 1,167 1,084
Other assets 238,951 182,720 120,926 Time deposits 4,081 585 3,344 3,288 18 13 Professional services 3,953 864 6,228 2,560 Professional services 3,953 2,275 3,302 1,481 864
FINANCIAL DATA (in millions) Assets from discontinued operations 212,745 165,078 114,259 Total deposits  $                    10,566 $                      1,335 $                      9,166 $                       8,982 3 % 6 % FDIC premiums and assessments 1,751 1,411 3,390 2,606 FDIC premiums and assessments 1,751 1,639 1,488 1,640 1,411
Total assets $      13,653 $      12,173 $      12,212 $      12,030 $      11,902 Total assets  $       13,653,038 $       12,173,401 $           12,212,231 (1) Non-GAAP financial measure. Other real estate owned and foreclosures (2) 1 - 68 Other real estate owned and foreclosures (2) 2 1 (1) 1
Total earning assets 12,343 11,039 11,140 10,957 10,827 (2) The acquired balances for Savings Institute are as of May 17, 2019. Amortization of intangible assets      1,475 1,246 2,675 2,514 Amortization of intangible assets      1,475 1,200 1,202 1,218 1,246
Total securities 1,905 1,881 1,919 1,918 1,920 Liabilities and shareholders' equity Merger, restructuring and other expense  11,155 847 18,170 5,940 Merger, restructuring and other expense  11,155 7,015 16,006 198 847
Total loans 9,942 8,947 9,043 8,905 8,710 Demand deposits $         1,827,016 $         1,526,584 $             1,603,019 Other 6,138 6,298 15,528 11,600 Other 6,138 9,390 6,754 5,526 6,298
Allowance for loan losses 62 62 61 58 56 NOW and other deposits 997,685 820,177 1,122,321 Total non-interest expense      76,568 61,527 148,559 126,893 Total non-interest expense      76,568 71,991 80,373 59,627 61,527
Total intangible assets 603 551 552 553 555 Money market deposits 2,811,158 2,743,448 2,245,195
Total deposits 10,566 9,166 8,982 8,766 8,839 Savings deposits 848,699 731,711 724,129 Income from continuing operations before income taxes        $           29,072 $           41,856 $             60,261 $              74,564 Income from continuing operations before income taxes $        29,072 $        31,189 $        21,452 $        42,164 $        41,856
Total shareholders' equity 1,779 1,577 1,553 1,532 1,516 Time deposits 4,081,398 3,344,495 3,287,717 Income tax expense 5,118 8,145 12,035 15,482 Income tax expense  5,118 6,917 4,384 9,095 8,145
Net income 25.4 23.6 14.3 32.2 34.0 Total deposits 10,565,956 9,166,415 8,982,381 Net income from continuing operations $           23,954 $           33,711 $             48,226 $              59,082 Net income from continuing operations $        23,954 $        24,272 $        17,068 $        33,069 $        33,711
Core income (3) 32.1 27.7 32.0 33.1 33.8
Purchase accounting accretion 3.2 1.3 8.2 4.6 7.3 Senior borrowings 904,814 1,120,189 1,428,298 Income from discontinued operations before income taxes $             2,082 $                426 $               1,228 $                   264 Income/(loss) from discontinued operations before income taxes $          2,082 $            (854) $         (3,884) $         (1,147) $             426
Subordinated borrowings 96,927 89,562 89,518 Income tax expense 588 106 371 67 Income tax expense/(benefit) 588 (217) (1,075) (305) 106
ASSET QUALITY AND CONDITION RATIOS  Total borrowings 1,001,741 1,209,751 1,517,816 Net income from discontinued operations $             1,494 $                320 $                  857 $                   197 Net income/(loss) from discontinued operations $          1,494 $            (637) $         (2,809) $            (842) $             320
Net charge-offs (current quarter annualized)/average loans 0.14 % 0.15 % 0.17 % 0.19 % 0.21 %
Total non-performing assets/total assets 0.27 0.26 0.28 0.30 0.20 Other liabilities  280,155 204,725 149,519 Net income $           25,448 $           34,031 $             49,083 $              59,279 Net income $        25,448 $        23,635 $        14,259 $        32,227 $        34,031
Allowance for loan losses/total loans 0.63 0.69 0.68 0.66 0.64 Liabilities from discontinued operations 26,256 15,505 9,597 Preferred stock dividend 240 229 480 459 Preferred stock dividend 240 240 229 230 229
Loans/deposits 94 98 101 102 99 Total liabilities 11,874,108 10,596,396 10,659,313 Income available to common shareholders $           25,208 $           33,802 $             48,603 $              58,820 Income available to common shareholders $        25,208 $        23,395 $        14,030 $        31,997 $        33,802
Shareholders' equity to total assets 13.03 12.95 12.72 12.74 12.74
Tangible shareholders' equity to tangible assets (3) 9.01 8.83 8.59 8.53 8.47 Preferred shareholders' equity 40,633 40,633 40,633 Basic earnings per common share:
Common shareholders' equity 1,738,297 1,536,372 1,512,285 Continuing Operations $               0.49 $               0.73 $                 1.01 $                  1.29 Basic earnings per common share:
Total shareholders' equity 1,778,930 1,577,005 1,552,918 Discontinued Operations 0.03 0.01 0.02 - Continuing Operations $            0.49 $            0.52 $            0.37 $            0.72 $            0.73
(1) Reconciliations of non-GAAP financial measures, including all references to core and tangible amounts, appear on pages F-9 and F-10. Total liabilities and shareholders' equity $       13,653,038 $       12,173,401 $           12,212,231 Total $               0.52 $               0.74 $                 1.03 $                  1.29 Discontinued Operations 0.03 (0.01) (0.06) (0.02) 0.01
(2) The Company acquired SI Financial Group, Inc. on May 17, 2019. Total $            0.52 $            0.51 $            0.31 $            0.70 $            0.74
(3) Non-GAAP financial measure. Core measurements are non-GAAP financial measures that are adjusted to exclude net non-core charges primarily   Net common shares outstanding  51,045 45,522 45,417 Diluted earnings per common share:
 related to acquisitions and restructuring activities. See pages F-9 and F-10 for reconciliations of non-GAAP financial measures. Continuing Operations $               0.49 $               0.73 $                 1.01 $                  1.28 Diluted earnings per common share:
(4) All performance ratios are annualized and are based on average balance sheet amounts, where applicable. Discontinued Operations 0.03 0.01 0.02 - Continuing Operations $            0.49 $            0.52 $            0.37 $            0.72 $            0.73
(5) Fully taxable equivalent considers the impact of tax advantaged investment securities and loans. Total $               0.52 $               0.74 $                 1.03 $                  1.28 Discontinued Operations 0.03 (0.01) (0.06) (0.02) 0.01
(6) The effect of purchase accounting accretion for loans, time deposits, and borrowings on the quarterly net interest margin was an increase in all quarters,  Total $            0.52 $            0.51 $            0.31 $            0.70 $            0.74
which is shown sequentially as follows beginning with the most recent quarter and ending with the earliest quarter: 0.11%, 0.05%, 0.30%, 0.17%, 0.27%. Weighted average shares outstanding:      
Basic 48,961 46,032 47,550 45,999 Weighted average shares outstanding:      
Diluted 49,114 46,215 47,700 46,206 Basic 48,961 46,113 46,061 46,030 46,032
Diluted 49,114 46,261 46,240 46,263 46,215

 

 

TABLE INDEX   CONSOLIDATED UNAUDITED FINANCIAL SCHEDULES BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC.
F-1 Selected Financial Highlights SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1) CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2) CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-3) CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - (F-4) CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend) - UNAUDITED - (F-5) AVERAGE YIELDS AND COSTS (Fully Taxable Equivalent - Annualized) - UNAUDITED - (F-6)
F-2 Balance Sheets At or for the Quarters Ended (1) June 30, March 31, December 31, LOAN ANALYSIS Three Months Ended Six Months Ended Quarters Ended
F-3 Loan and Deposit Analysis June 30, March 31, Dec. 31, Sept. 30, June 30, (in thousands) 2019 2019 2018 June 30, June 30, June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, March 31, Dec. 31, Sept. 30, June 30,
F-4 Statements of Income 2019 (2) 2019 2018 2018 2018 Assets (in thousands, except per share data) 2019 2018 2019 2018 (in thousands, except per share data) 2019 2019 2018 2018 2018 2019 2019 2018 2018 2018
F-5 Statements of Operations (Five Quarter Trend) Cash and due from banks $            100,588 $              98,689 $                100,972 Organic Annualized Growth %(1) Interest and dividend income from continuing operations     Interest and dividend income from continuing operations    
F-6 Average Yields and Costs PER SHARE DATA Short-term investments 128,718 68,930 82,217 (in millions) June 30, 2019Balance Acquired Savings Institute Balances (2) March 31, 2019Balance December 31, 2018Balance Quarter ended June 30, 2019 Year to Date   Loans $         113,990 $         100,254 $           219,641 $            191,995 Loans $      113,990 $      105,651 $      111,576 $      102,651 $      100,254 Earning assets 
F-7 Average Balances Net earnings per common share, diluted $          0.52 $          0.51 $          0.31 $          0.70 $          0.74 Total cash and short-term investments 229,306 167,619 183,189 Securities and other     15,248 15,230 30,706 29,635 Securities and other     15,248 15,458 15,119 14,918 15,230 Loans:
F-8 Asset Quality Analysis Core earnings per common share, diluted (3) 0.65 0.60 0.69 0.72 0.73 Total commercial real estate $                      4,006 $                         624 $                      3,388 $                       3,400 (1) % (1) % Total interest and dividend income     129,238 115,484 250,347 221,630 Total interest and dividend income     129,238 121,109 126,695 117,569 115,484 Commercial real estate 5.01 % 4.91 % 5.40 % 4.67 % 5.08 %
F-9 Reconciliation of Non-GAAP Financial Measures Total book value per common share 34.05 33.75 33.30 32.84 32.49 Trading security 11,210 11,164 11,212 Commercial and industrial loans  1,987 244 1,957 1,980 (44) (24) Interest expense from continuing operations  Interest expense from continuing operations Commercial and industrial loans 5.79 5.83 5.97 6.22 5.73
and Supplementary Data (Five Quarter Trend) Tangible book value per common share (3) 22.25 21.66 21.15 20.68 20.28 Marketable equity securities, at fair value 59,121 59,121 56,638 Total commercial loans  5,993 868 5,345 5,380 (17) (10) Deposits 28,273 17,768 54,895 33,093 Deposits 28,273 26,622 23,811 21,460 17,768 Residential mortgages 3.74 3.74 3.72 3.66 3.72
F-10 Reconciliation of Non-GAAP Financial Measures Market price at period end 31.39 27.24 26.97 40.70 40.60 Securities available for sale, at fair value 1,410,535 1,386,768 1,399,647 Borrowings 9,370 7,424 18,398 13,488 Borrowings 9,370 9,028 10,118 7,724 7,424 Consumer loans 4.52 4.45 4.52 4.27 4.13
and Supplementary Data (Year-to-Date) Dividends per common share 0.23 0.23 0.22 0.22 0.22 Securities held to maturity, at amortized cost 364,463 369,331 373,763 Total residential mortgages 2,882 375 2,545 2,566 (6) (5) Total interest expense     37,643 25,192 73,293 46,581 Total interest expense     37,643 35,650 33,929 29,184 25,192 Total loans 4.76 4.73 4.94 4.66 4.73
Dividends per preferred share 0.46 0.46 0.44 0.44 0.44 Federal Home Loan Bank stock and other restricted securities 59,356 54,624 77,344 Net interest income from continuing operations 91,595 90,292 177,054 175,049 Net interest income from continuing operations 91,595 85,459 92,766 88,385 90,292 Securities 3.38 3.46 3.34 3.32 3.45
Total securities 1,904,685 1,881,008 1,918,604 Home equity  404 58 365 377 (21) (16) Non-interest income from continuing operations  Non-interest income from continuing operations Short-term investments and loans held for sale 3.37 3.59 3.74 3.82 3.86
PERFORMANCE RATIOS (4) Auto and other 663 2 692 720 (18) (16) Mortgage banking originations 278 334 324 472 Mortgage banking originations 278 46 148 15 334 Total earning assets 4.51 4.49 4.64 4.41 4.48
Return on assets 0.79 % 0.78 % 0.47 % 1.08 % 1.17 % Loans held for sale 184,810 4,773 2,183 Total consumer loans 1,067 60 1,057 1,097 (19) (16) Loan related income 4,822 6,003 10,825 10,822 Loan related income 4,822 6,003 5,087 7,246 6,003
Core return on assets (3) 1.01 0.92 1.07 1.12 1.18 Total loans $                      9,942 $                      1,303 $                      8,947 $                       9,043 (14) % (9) % Deposit related fees 7,525 7,605 14,383 15,671 Deposit related fees 7,525 6,858 7,131 7,004 7,605 Funding liabilities
Return on equity 6.07 5.97 3.61 8.27 8.88 Commercial real estate loans 4,005,347 3,388,139 3,400,221 (1) Non-GAAP financial measure. Insurance commissions and fees     2,738 2,549 5,591 5,574 Insurance commissions and fees     2,738 2,853 2,479 2,930 2,549 Deposits:
Core return on equity (3) 7.67 7.00 8.09 8.49 8.81 Commercial and industrial loans 1,987,297 1,957,339 1,980,046 (2) The acquired balances for Savings Institute are as of May 17, 2019. Wealth management fees     2,348 2,280 4,789 4,877 Wealth management fees     2,348 2,441 2,287 2,283 2,280 NOW and other 0.66 0.65 0.59 0.58 0.44
Core return on tangible common equity (3) 12.21 11.44 13.21 14.02 14.68 Residential mortgages 2,882,380 2,544,824 2,566,424 Total fee income     17,711 18,771 35,912 37,416 Total fee income     17,711 18,201 17,132 19,478 18,771 Money market 1.27 1.23 1.10 0.92 0.88
Net interest margin, fully taxable equivalent (FTE) (5)(6) 3.19 3.17 3.41 3.32 3.50 Consumer loans 1,066,804 1,057,193 1,096,562 Other (216) 155 754 1,423 Other (216) 970 1,666 468 155 Savings 0.15 0.18 0.16 0.15 0.14
Fee income/Net interest and fee income from continuing operations 16.20 17.56 15.59 18.06 17.21 Total loans 9,941,828 8,947,495 9,043,253 Securities gains/(losses), net      17 718 2,568 (784) Securities gains/(losses), net      17 2,551 (3,023) 88 718 Time 2.06 2.07 1.93 1.76 1.54
Efficiency ratio (3) 56.41 59.54 54.88 52.20 52.42 Less: Allowance for loan losses (62,156) (62,038) (61,469) (Loss)/gain on sale of business operations and assets, net - (21) - 460 (Loss) on sale of business operations and assets, net - - - - (21) Total interest-bearing deposits 1.44 1.44 1.31 1.18 1.02
Net loans 9,879,672 8,885,457 8,981,784 DEPOSIT ANALYSIS Total non-interest income       17,512 19,623 39,234 38,515 Total non-interest income       17,512 21,722 15,775 20,034 19,623 Borrowings 2.92 2.85 2.67 2.42 2.29
GROWTH (Year-to-date) Total net revenue from continuing operations 109,107 109,915 216,288 213,564 Total net revenue from continuing operations 109,107 107,181 108,541 108,419 109,915 Total interest-bearing liabilities 1.66 1.65 1.55 1.38 1.23
Total commercial loans (organic, annualized) (10) % (3) % 6 % 5 % 5 % Premises and equipment, net 121,619 105,651 106,500 Organic Annualized Growth % (1) Provision for loan losses    3,467 6,532 7,468 12,107 Provision for loan losses    3,467 4,001 6,716 6,628 6,532
Total loans (organic, annualized) (9) (4) 9 10 10 Other real estate owned 154 - - (in millions) June 30, 2019Balance Acquired Savings Institute Balances (2) March 31, 2019Balance December 31, 2018Balance Quarter ended June 30, 2019 Year to Date Non-interest expense from continuing operations Non-interest expense from continuing operations Net interest spread 2.85 2.84 3.09 3.03 3.25
Total deposits (organic, annualized) 6 8 3 0 2 Goodwill  553,796 518,325 518,325 Demand $                      1,827 $                         258 $                      1,527 $                       1,603 11 % (4) % Compensation and benefits 34,779 33,499 68,279 67,346 Compensation and benefits 34,779 33,500 34,927 31,746 33,499 Net interest margin 3.19 3.17 3.41 3.32 3.50
Total net revenues from continuing operations (compared to prior year) 1 3 17 22 21 Other intangible assets 48,724 32,219 33,418 NOW and other 998 138 820 1,122 20 (47) Occupancy and equipment      9,449 9,224 18,895 18,416 Occupancy and equipment      9,449 9,446 9,366 9,145 9,224
Earnings per common share (compared to prior year)  (20) (7) 65 28 33 Cash surrender value of bank-owned life insurance 227,458 191,768 190,609 Money market 2,811 190 2,743 2,245 (18) 34 Technology and communications 6,715 7,053 12,972 13,537 Technology and communications 6,715 6,257 6,103 7,507 7,053 Cost of funds (1) 1.41 1.41 1.31 1.16 1.03
Core earnings per common share (compared to prior year)(3) (9) (8) 32 37 36 Deferred tax asset, net 51,118 38,783 42,434 Savings 849 164 732 724 (26) (11) Marketing and promotion      1,155 1,084 2,422 2,306 Marketing and promotion   1,155 1,267 1,224 1,167 1,084 Cost of deposits  1.18 1.19 1.07 0.96 0.83
Other assets 238,951 182,720 120,926 Time deposits 4,081 585 3,344 3,288 18 13 Professional services 3,953 864 6,228 2,560 Professional services 3,953 2,275 3,302 1,481 864
FINANCIAL DATA (in millions) Assets from discontinued operations 212,745 165,078 114,259 Total deposits  $                    10,566 $                      1,335 $                      9,166 $                       8,982 3 % 6 % FDIC premiums and assessments 1,751 1,411 3,390 2,606 FDIC premiums and assessments 1,751 1,639 1,488 1,640 1,411 (1) Cost of funds includes all deposits and borrowings.
Total assets $      13,653 $      12,173 $      12,212 $      12,030 $      11,902 Total assets  $       13,653,038 $       12,173,401 $           12,212,231 (1) Non-GAAP financial measure. Other real estate owned and foreclosures (2) 1 - 68 Other real estate owned and foreclosures (2) 2 1 (1) 1
Total earning assets 12,343 11,039 11,140 10,957 10,827 (2) The acquired balances for Savings Institute are as of May 17, 2019. Amortization of intangible assets      1,475 1,246 2,675 2,514 Amortization of intangible assets      1,475 1,200 1,202 1,218 1,246
Total securities 1,905 1,881 1,919 1,918 1,920 Liabilities and shareholders' equity Merger, restructuring and other expense  11,155 847 18,170 5,940 Merger, restructuring and other expense  11,155 7,015 16,006 198 847
Total loans 9,942 8,947 9,043 8,905 8,710 Demand deposits $         1,827,016 $         1,526,584 $             1,603,019 Other 6,138 6,298 15,528 11,600 Other 6,138 9,390 6,754 5,526 6,298
Allowance for loan losses 62 62 61 58 56 NOW and other deposits 997,685 820,177 1,122,321 Total non-interest expense      76,568 61,527 148,559 126,893 Total non-interest expense      76,568 71,991 80,373 59,627 61,527
Total intangible assets 603 551 552 553 555 Money market deposits 2,811,158 2,743,448 2,245,195
Total deposits 10,566 9,166 8,982 8,766 8,839 Savings deposits 848,699 731,711 724,129 Income from continuing operations before income taxes        $           29,072 $           41,856 $             60,261 $              74,564 Income from continuing operations before income taxes $        29,072 $        31,189 $        21,452 $        42,164 $        41,856
Total shareholders' equity 1,779 1,577 1,553 1,532 1,516 Time deposits 4,081,398 3,344,495 3,287,717 Income tax expense 5,118 8,145 12,035 15,482 Income tax expense  5,118 6,917 4,384 9,095 8,145
Net income 25.4 23.6 14.3 32.2 34.0 Total deposits 10,565,956 9,166,415 8,982,381 Net income from continuing operations $           23,954 $           33,711 $             48,226 $              59,082 Net income from continuing operations $        23,954 $        24,272 $        17,068 $        33,069 $        33,711
Core income (3) 32.1 27.7 32.0 33.1 33.8
Purchase accounting accretion 3.2 1.3 8.2 4.6 7.3 Senior borrowings 904,814 1,120,189 1,428,298 Income from discontinued operations before income taxes $             2,082 $                426 $               1,228 $                   264 Income/(loss) from discontinued operations before income taxes $          2,082 $            (854) $         (3,884) $         (1,147) $             426
Subordinated borrowings 96,927 89,562 89,518 Income tax expense 588 106 371 67 Income tax expense/(benefit) 588 (217) (1,075) (305) 106
ASSET QUALITY AND CONDITION RATIOS  Total borrowings 1,001,741 1,209,751 1,517,816 Net income from discontinued operations $             1,494 $                320 $                  857 $                   197 Net income/(loss) from discontinued operations $          1,494 $            (637) $         (2,809) $            (842) $             320
Net charge-offs (current quarter annualized)/average loans 0.14 % 0.15 % 0.17 % 0.19 % 0.21 %
Total non-performing assets/total assets 0.27 0.26 0.28 0.30 0.20 Other liabilities  280,155 204,725 149,519 Net income $           25,448 $           34,031 $             49,083 $              59,279 Net income $        25,448 $        23,635 $        14,259 $        32,227 $        34,031
Allowance for loan losses/total loans 0.63 0.69 0.68 0.66 0.64 Liabilities from discontinued operations 26,256 15,505 9,597 Preferred stock dividend 240 229 480 459 Preferred stock dividend 240 240 229 230 229
Loans/deposits 94 98 101 102 99 Total liabilities 11,874,108 10,596,396 10,659,313 Income available to common shareholders $           25,208 $           33,802 $             48,603 $              58,820 Income available to common shareholders $        25,208 $        23,395 $        14,030 $        31,997 $        33,802
Shareholders' equity to total assets 13.03 12.95 12.72 12.74 12.74
Tangible shareholders' equity to tangible assets (3) 9.01 8.83 8.59 8.53 8.47 Preferred shareholders' equity 40,633 40,633 40,633 Basic earnings per common share:
Common shareholders' equity 1,738,297 1,536,372 1,512,285 Continuing Operations $               0.49 $               0.73 $                 1.01 $                  1.29 Basic earnings per common share:
Total shareholders' equity 1,778,930 1,577,005 1,552,918 Discontinued Operations 0.03 0.01 0.02 - Continuing Operations $            0.49 $            0.52 $            0.37 $            0.72 $            0.73
(1) Reconciliations of non-GAAP financial measures, including all references to core and tangible amounts, appear on pages F-9 and F-10. Total liabilities and shareholders' equity $       13,653,038 $       12,173,401 $           12,212,231 Total $               0.52 $               0.74 $                 1.03 $                  1.29 Discontinued Operations 0.03 (0.01) (0.06) (0.02) 0.01
(2) The Company acquired SI Financial Group, Inc. on May 17, 2019. Total $            0.52 $            0.51 $            0.31 $            0.70 $            0.74
(3) Non-GAAP financial measure. Core measurements are non-GAAP financial measures that are adjusted to exclude net non-core charges primarily   Net common shares outstanding  51,045 45,522 45,417 Diluted earnings per common share:
 related to acquisitions and restructuring activities. See pages F-9 and F-10 for reconciliations of non-GAAP financial measures. Continuing Operations $               0.49 $               0.73 $                 1.01 $                  1.28 Diluted earnings per common share:
(4) All performance ratios are annualized and are based on average balance sheet amounts, where applicable. Discontinued Operations 0.03 0.01 0.02 - Continuing Operations $            0.49 $            0.52 $            0.37 $            0.72 $            0.73
(5) Fully taxable equivalent considers the impact of tax advantaged investment securities and loans. Total $               0.52 $               0.74 $                 1.03 $                  1.28 Discontinued Operations 0.03 (0.01) (0.06) (0.02) 0.01
(6) The effect of purchase accounting accretion for loans, time deposits, and borrowings on the quarterly net interest margin was an increase in all quarters,  Total $            0.52 $            0.51 $            0.31 $            0.70 $            0.74
which is shown sequentially as follows beginning with the most recent quarter and ending with the earliest quarter: 0.11%, 0.05%, 0.30%, 0.17%, 0.27%. Weighted average shares outstanding:      
Basic 48,961 46,032 47,550 45,999 Weighted average shares outstanding:      
Diluted 49,114 46,215 47,700 46,206 Basic 48,961 46,113 46,061 46,030 46,032
Diluted 49,114 46,261 46,240 46,263 46,215

 

 

TABLE INDEX   CONSOLIDATED UNAUDITED FINANCIAL SCHEDULES BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC.
F-1 Selected Financial Highlights SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1) CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2) CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-3) CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - (F-4) CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend) - UNAUDITED - (F-5) AVERAGE YIELDS AND COSTS (Fully Taxable Equivalent - Annualized) - UNAUDITED - (F-6) AVERAGE BALANCES - UNAUDITED - (F-7)
F-2 Balance Sheets At or for the Quarters Ended (1) June 30, March 31, December 31, LOAN ANALYSIS Three Months Ended Six Months Ended Quarters Ended Quarters Ended
F-3 Loan and Deposit Analysis June 30, March 31, Dec. 31, Sept. 30, June 30, (in thousands) 2019 2019 2018 June 30, June 30, June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, March 31, Dec. 31, Sept. 30, June 30, June 30,  March 31,  Dec. 31,  Sept. 30,  June 30, 
F-4 Statements of Income 2019 (2) 2019 2018 2018 2018 Assets (in thousands, except per share data) 2019 2018 2019 2018 (in thousands, except per share data) 2019 2019 2018 2018 2018 2019 2019 2018 2018 2018 (in thousands) 2019 2019 2018 2018 2018
F-5 Statements of Operations (Five Quarter Trend) Cash and due from banks $            100,588 $              98,689 $                100,972 Organic Annualized Growth %(1) Interest and dividend income from continuing operations     Interest and dividend income from continuing operations     Assets
F-6 Average Yields and Costs PER SHARE DATA Short-term investments 128,718 68,930 82,217 (in millions) June 30, 2019Balance Acquired Savings Institute Balances (2) March 31, 2019Balance December 31, 2018Balance Quarter ended June 30, 2019 Year to Date   Loans $         113,990 $         100,254 $           219,641 $            191,995 Loans $      113,990 $      105,651 $      111,576 $      102,651 $      100,254 Earning assets  Loans
F-7 Average Balances Net earnings per common share, diluted $          0.52 $          0.51 $          0.31 $          0.70 $          0.74 Total cash and short-term investments 229,306 167,619 183,189 Securities and other     15,248 15,230 30,706 29,635 Securities and other     15,248 15,458 15,119 14,918 15,230 Loans: Commercial real estate $            3,716,130 $            3,377,902 $            3,373,936 $            3,331,097 $            3,316,482
F-8 Asset Quality Analysis Core earnings per common share, diluted (3) 0.65 0.60 0.69 0.72 0.73 Total commercial real estate $                      4,006 $                         624 $                      3,388 $                       3,400 (1) % (1) % Total interest and dividend income     129,238 115,484 250,347 221,630 Total interest and dividend income     129,238 121,109 126,695 117,569 115,484 Commercial real estate 5.01 % 4.91 % 5.40 % 4.67 % 5.08 % Commercial and industrial loans 2,056,384 1,986,792 1,921,361 1,824,369 1,773,722
F-9 Reconciliation of Non-GAAP Financial Measures Total book value per common share 34.05 33.75 33.30 32.84 32.49 Trading security 11,210 11,164 11,212 Commercial and industrial loans  1,987 244 1,957 1,980 (44) (24) Interest expense from continuing operations  Interest expense from continuing operations Commercial and industrial loans 5.79 5.83 5.97 6.22 5.73 Residential mortgages 2,711,348 2,556,299 2,539,592 2,459,943 2,268,886
and Supplementary Data (Five Quarter Trend) Tangible book value per common share (3) 22.25 21.66 21.15 20.68 20.28 Marketable equity securities, at fair value 59,121 59,121 56,638 Total commercial loans  5,993 868 5,345 5,380 (17) (10) Deposits 28,273 17,768 54,895 33,093 Deposits 28,273 26,622 23,811 21,460 17,768 Residential mortgages 3.74 3.74 3.72 3.66 3.72 Consumer loans 1,064,579 1,079,583 1,112,433 1,120,942 1,113,089
F-10 Reconciliation of Non-GAAP Financial Measures Market price at period end 31.39 27.24 26.97 40.70 40.60 Securities available for sale, at fair value 1,410,535 1,386,768 1,399,647 Borrowings 9,370 7,424 18,398 13,488 Borrowings 9,370 9,028 10,118 7,724 7,424 Consumer loans 4.52 4.45 4.52 4.27 4.13 Total loans (1)  9,548,441 9,000,576 8,947,322 8,736,351 8,472,179
and Supplementary Data (Year-to-Date) Dividends per common share 0.23 0.23 0.22 0.22 0.22 Securities held to maturity, at amortized cost 364,463 369,331 373,763 Total residential mortgages 2,882 375 2,545 2,566 (6) (5) Total interest expense     37,643 25,192 73,293 46,581 Total interest expense     37,643 35,650 33,929 29,184 25,192 Total loans 4.76 4.73 4.94 4.66 4.73 Securities (2) 1,893,298 1,895,768 1,933,891 1,928,851 1,931,104
Dividends per preferred share 0.46 0.46 0.44 0.44 0.44 Federal Home Loan Bank stock and other restricted securities 59,356 54,624 77,344 Net interest income from continuing operations 91,595 90,292 177,054 175,049 Net interest income from continuing operations 91,595 85,459 92,766 88,385 90,292 Securities 3.38 3.46 3.34 3.32 3.45 Short-term investments and loans held for sale 117,029 67,367 51,827 47,752 36,136
Total securities 1,904,685 1,881,008 1,918,604 Home equity  404 58 365 377 (21) (16) Non-interest income from continuing operations  Non-interest income from continuing operations Short-term investments and loans held for sale 3.37 3.59 3.74 3.82 3.86 Total earning assets (3) 11,558,768 10,963,711 10,933,040 10,712,954 10,439,419
PERFORMANCE RATIOS (4) Auto and other 663 2 692 720 (18) (16) Mortgage banking originations 278 334 324 472 Mortgage banking originations 278 46 148 15 334 Total earning assets 4.51 4.49 4.64 4.41 4.48 Goodwill and other intangible assets 555,606 550,966 552,206 554,359 554,591
Return on assets 0.79 % 0.78 % 0.47 % 1.08 % 1.17 % Loans held for sale 184,810 4,773 2,183 Total consumer loans 1,067 60 1,057 1,097 (19) (16) Loan related income 4,822 6,003 10,825 10,822 Loan related income 4,822 6,003 5,087 7,246 6,003 Other assets 593,917 557,442 494,377 501,739 486,616
Core return on assets (3) 1.01 0.92 1.07 1.12 1.18 Total loans $                      9,942 $                      1,303 $                      8,947 $                       9,043 (14) % (9) % Deposit related fees 7,525 7,605 14,383 15,671 Deposit related fees 7,525 6,858 7,131 7,004 7,605 Funding liabilities Assets from discontinued operations 192,466 115,721 101,464 141,443 130,392
Return on equity 6.07 5.97 3.61 8.27 8.88 Commercial real estate loans 4,005,347 3,388,139 3,400,221 (1) Non-GAAP financial measure. Insurance commissions and fees     2,738 2,549 5,591 5,574 Insurance commissions and fees     2,738 2,853 2,479 2,930 2,549 Deposits: Total assets $          12,900,757 $          12,187,840 $          12,081,087 $          11,910,495 $          11,611,018
Core return on equity (3) 7.67 7.00 8.09 8.49 8.81 Commercial and industrial loans 1,987,297 1,957,339 1,980,046 (2) The acquired balances for Savings Institute are as of May 17, 2019. Wealth management fees     2,348 2,280 4,789 4,877 Wealth management fees     2,348 2,441 2,287 2,283 2,280 NOW and other 0.66 0.65 0.59 0.58 0.44
Core return on tangible common equity (3) 12.21 11.44 13.21 14.02 14.68 Residential mortgages 2,882,380 2,544,824 2,566,424 Total fee income     17,711 18,771 35,912 37,416 Total fee income     17,711 18,201 17,132 19,478 18,771 Money market 1.27 1.23 1.10 0.92 0.88 Liabilities and shareholders' equity
Net interest margin, fully taxable equivalent (FTE) (5)(6) 3.19 3.17 3.41 3.32 3.50 Consumer loans 1,066,804 1,057,193 1,096,562 Other (216) 155 754 1,423 Other (216) 970 1,666 468 155 Savings 0.15 0.18 0.16 0.15 0.14 Deposits 
Fee income/Net interest and fee income from continuing operations 16.20 17.56 15.59 18.06 17.21 Total loans 9,941,828 8,947,495 9,043,253 Securities gains/(losses), net      17 718 2,568 (784) Securities gains/(losses), net      17 2,551 (3,023) 88 718 Time 2.06 2.07 1.93 1.76 1.54 NOW and other $            1,053,335 $               963,043 $               920,225 $               844,888 $               819,166
Efficiency ratio (3) 56.41 59.54 54.88 52.20 52.42 Less: Allowance for loan losses (62,156) (62,038) (61,469) (Loss)/gain on sale of business operations and assets, net - (21) - 460 (Loss) on sale of business operations and assets, net - - - - (21) Total interest-bearing deposits 1.44 1.44 1.31 1.18 1.02 Money market 2,474,071 2,378,496 2,339,699 2,348,516 2,524,713
Net loans 9,879,672 8,885,457 8,981,784 DEPOSIT ANALYSIS Total non-interest income       17,512 19,623 39,234 38,515 Total non-interest income       17,512 21,722 15,775 20,034 19,623 Borrowings 2.92 2.85 2.67 2.42 2.29 Savings 780,797 736,707 728,853 740,765 749,995
GROWTH (Year-to-date) Total net revenue from continuing operations 109,107 109,915 216,288 213,564 Total net revenue from continuing operations 109,107 107,181 108,541 108,419 109,915 Total interest-bearing liabilities 1.66 1.65 1.55 1.38 1.23 Time 3,593,022 3,429,375 3,229,521 3,274,518 2,878,846
Total commercial loans (organic, annualized) (10) % (3) % 6 % 5 % 5 % Premises and equipment, net 121,619 105,651 106,500 Organic Annualized Growth % (1) Provision for loan losses    3,467 6,532 7,468 12,107 Provision for loan losses    3,467 4,001 6,716 6,628 6,532 Total interest-bearing deposits 7,901,225 7,507,621 7,218,298 7,208,687 6,972,720
Total loans (organic, annualized) (9) (4) 9 10 10 Other real estate owned 154 - - (in millions) June 30, 2019Balance Acquired Savings Institute Balances (2) March 31, 2019Balance December 31, 2018Balance Quarter ended June 30, 2019 Year to Date Non-interest expense from continuing operations Non-interest expense from continuing operations Net interest spread 2.85 2.84 3.09 3.03 3.25 Borrowings 1,415,614 1,351,834 1,566,478 1,363,914 1,382,794
Total deposits (organic, annualized) 6 8 3 0 2 Goodwill  553,796 518,325 518,325 Demand $                      1,827 $                         258 $                      1,527 $                       1,603 11 % (4) % Compensation and benefits 34,779 33,499 68,279 67,346 Compensation and benefits 34,779 33,500 34,927 31,746 33,499 Net interest margin 3.19 3.17 3.41 3.32 3.50 Total interest-bearing liabilities 9,316,839 8,859,455 8,784,776 8,572,601 8,355,514
Total net revenues from continuing operations (compared to prior year) 1 3 17 22 21 Other intangible assets 48,724 32,219 33,418 NOW and other 998 138 820 1,122 20 (47) Occupancy and equipment      9,449 9,224 18,895 18,416 Occupancy and equipment      9,449 9,446 9,366 9,145 9,224 Non-interest-bearing demand deposits 1,673,560 1,538,767 1,579,013 1,635,564 1,619,470
Earnings per common share (compared to prior year)  (20) (7) 65 28 33 Cash surrender value of bank-owned life insurance 227,458 191,768 190,609 Money market 2,811 190 2,743 2,245 (18) 34 Technology and communications 6,715 7,053 12,972 13,537 Technology and communications 6,715 6,257 6,103 7,507 7,053 Cost of funds (1) 1.41 1.41 1.31 1.16 1.03 Other liabilities  215,704 192,119 127,370 132,521 89,933
Core earnings per common share (compared to prior year)(3) (9) (8) 32 37 36 Deferred tax asset, net 51,118 38,783 42,434 Savings 849 164 732 724 (26) (11) Marketing and promotion      1,155 1,084 2,422 2,306 Marketing and promotion   1,155 1,267 1,224 1,167 1,084 Cost of deposits  1.18 1.19 1.07 0.96 0.83 Liabilities from discontinued operations 18,434 13,962 8,854 11,880 12,650
Other assets 238,951 182,720 120,926 Time deposits 4,081 585 3,344 3,288 18 13 Professional services 3,953 864 6,228 2,560 Professional services 3,953 2,275 3,302 1,481 864 Total liabilities 11,224,537 10,604,303 10,500,013 10,352,566 10,077,567
FINANCIAL DATA (in millions) Assets from discontinued operations 212,745 165,078 114,259 Total deposits  $                    10,566 $                      1,335 $                      9,166 $                       8,982 3 % 6 % FDIC premiums and assessments 1,751 1,411 3,390 2,606 FDIC premiums and assessments 1,751 1,639 1,488 1,640 1,411 (1) Cost of funds includes all deposits and borrowings.
Total assets $      13,653 $      12,173 $      12,212 $      12,030 $      11,902 Total assets  $       13,653,038 $       12,173,401 $           12,212,231 (1) Non-GAAP financial measure. Other real estate owned and foreclosures (2) 1 - 68 Other real estate owned and foreclosures (2) 2 1 (1) 1 Preferred shareholders' equity 40,633 40,633 40,633 40,633 40,633
Total earning assets 12,343 11,039 11,140 10,957 10,827 (2) The acquired balances for Savings Institute are as of May 17, 2019. Amortization of intangible assets      1,475 1,246 2,675 2,514 Amortization of intangible assets      1,475 1,200 1,202 1,218 1,246 Common shareholders' equity 1,635,587 1,542,904 1,540,441 1,517,296 1,492,818
Total securities 1,905 1,881 1,919 1,918 1,920 Liabilities and shareholders' equity Merger, restructuring and other expense  11,155 847 18,170 5,940 Merger, restructuring and other expense  11,155 7,015 16,006 198 847 Total shareholders' equity 1,676,220 1,583,537 1,581,074 1,557,929 1,533,451
Total loans 9,942 8,947 9,043 8,905 8,710 Demand deposits $         1,827,016 $         1,526,584 $             1,603,019 Other 6,138 6,298 15,528 11,600 Other 6,138 9,390 6,754 5,526 6,298 Total liabilities and shareholders' equity $          12,900,757 $          12,187,840 $          12,081,087 $          11,910,495 $          11,611,018
Allowance for loan losses 62 62 61 58 56 NOW and other deposits 997,685 820,177 1,122,321 Total non-interest expense      76,568 61,527 148,559 126,893 Total non-interest expense      76,568 71,991 80,373 59,627 61,527
Total intangible assets 603 551 552 553 555 Money market deposits 2,811,158 2,743,448 2,245,195
Total deposits 10,566 9,166 8,982 8,766 8,839 Savings deposits 848,699 731,711 724,129 Income from continuing operations before income taxes        $           29,072 $           41,856 $             60,261 $              74,564 Income from continuing operations before income taxes $        29,072 $        31,189 $        21,452 $        42,164 $        41,856 Supplementary data
Total shareholders' equity 1,779 1,577 1,553 1,532 1,516 Time deposits 4,081,398 3,344,495 3,287,717 Income tax expense 5,118 8,145 12,035 15,482 Income tax expense  5,118 6,917 4,384 9,095 8,145 Total average non-maturity deposits $            5,981,763 $            5,617,013 $            5,567,790 $            5,569,733 $            5,713,344
Net income 25.4 23.6 14.3 32.2 34.0 Total deposits 10,565,956 9,166,415 8,982,381 Net income from continuing operations $           23,954 $           33,711 $             48,226 $              59,082 Net income from continuing operations $        23,954 $        24,272 $        17,068 $        33,069 $        33,711 Total average deposits  9,574,785 9,046,388 8,797,311 8,844,251 8,592,190
Core income (3) 32.1 27.7 32.0 33.1 33.8 Fully taxable equivalent income adjustment 1,882 1,809 1,763 1,807 2,033
Purchase accounting accretion 3.2 1.3 8.2 4.6 7.3 Senior borrowings 904,814 1,120,189 1,428,298 Income from discontinued operations before income taxes $             2,082 $                426 $               1,228 $                   264 Income/(loss) from discontinued operations before income taxes $          2,082 $            (854) $         (3,884) $         (1,147) $             426 Total average tangible equity (4) 1,120,614 1,032,571 1,028,868 1,003,570 978,860
Subordinated borrowings 96,927 89,562 89,518 Income tax expense 588 106 371 67 Income tax expense/(benefit) 588 (217) (1,075) (305) 106
ASSET QUALITY AND CONDITION RATIOS  Total borrowings 1,001,741 1,209,751 1,517,816 Net income from discontinued operations $             1,494 $                320 $                  857 $                   197 Net income/(loss) from discontinued operations $          1,494 $            (637) $         (2,809) $            (842) $             320 (1) Total loans include non-accruing loans.
Net charge-offs (current quarter annualized)/average loans 0.14 % 0.15 % 0.17 % 0.19 % 0.21 % (2) Average balances for securities available-for-sale are based on amortized cost.
Total non-performing assets/total assets 0.27 0.26 0.28 0.30 0.20 Other liabilities  280,155 204,725 149,519 Net income $           25,448 $           34,031 $             49,083 $              59,279 Net income $        25,448 $        23,635 $        14,259 $        32,227 $        34,031 (3) Excludes discontinued operations for presentation purposes. Performance ratios are calculated including the impact of discontinued operations. 
Allowance for loan losses/total loans 0.63 0.69 0.68 0.66 0.64 Liabilities from discontinued operations 26,256 15,505 9,597 Preferred stock dividend 240 229 480 459 Preferred stock dividend 240 240 229 230 229 (4) See page F-9 for details on the calculation of total average tangible equity.
Loans/deposits 94 98 101 102 99 Total liabilities 11,874,108 10,596,396 10,659,313 Income available to common shareholders $           25,208 $           33,802 $             48,603 $              58,820 Income available to common shareholders $        25,208 $        23,395 $        14,030 $        31,997 $        33,802
Shareholders' equity to total assets 13.03 12.95 12.72 12.74 12.74
Tangible shareholders' equity to tangible assets (3) 9.01 8.83 8.59 8.53 8.47 Preferred shareholders' equity 40,633 40,633 40,633 Basic earnings per common share:
Common shareholders' equity 1,738,297 1,536,372 1,512,285 Continuing Operations $               0.49 $               0.73 $                 1.01 $                  1.29 Basic earnings per common share:
Total shareholders' equity 1,778,930 1,577,005 1,552,918 Discontinued Operations 0.03 0.01 0.02 - Continuing Operations $            0.49 $            0.52 $            0.37 $            0.72 $            0.73
(1) Reconciliations of non-GAAP financial measures, including all references to core and tangible amounts, appear on pages F-9 and F-10. Total liabilities and shareholders' equity $       13,653,038 $       12,173,401 $           12,212,231 Total $               0.52 $               0.74 $                 1.03 $                  1.29 Discontinued Operations 0.03 (0.01) (0.06) (0.02) 0.01
(2) The Company acquired SI Financial Group, Inc. on May 17, 2019. Total $            0.52 $            0.51 $            0.31 $            0.70 $            0.74
(3) Non-GAAP financial measure. Core measurements are non-GAAP financial measures that are adjusted to exclude net non-core charges primarily   Net common shares outstanding  51,045 45,522 45,417 Diluted earnings per common share:
 related to acquisitions and restructuring activities. See pages F-9 and F-10 for reconciliations of non-GAAP financial measures. Continuing Operations $               0.49 $               0.73 $                 1.01 $                  1.28 Diluted earnings per common share:
(4) All performance ratios are annualized and are based on average balance sheet amounts, where applicable. Discontinued Operations 0.03 0.01 0.02 - Continuing Operations $            0.49 $            0.52 $            0.37 $            0.72 $            0.73
(5) Fully taxable equivalent considers the impact of tax advantaged investment securities and loans. Total $               0.52 $               0.74 $                 1.03 $                  1.28 Discontinued Operations 0.03 (0.01) (0.06) (0.02) 0.01
(6) The effect of purchase accounting accretion for loans, time deposits, and borrowings on the quarterly net interest margin was an increase in all quarters,  Total $            0.52 $            0.51 $            0.31 $            0.70 $            0.74
which is shown sequentially as follows beginning with the most recent quarter and ending with the earliest quarter: 0.11%, 0.05%, 0.30%, 0.17%, 0.27%. Weighted average shares outstanding:      
Basic 48,961 46,032 47,550 45,999 Weighted average shares outstanding:      
Diluted 49,114 46,215 47,700 46,206 Basic 48,961 46,113 46,061 46,030 46,032
Diluted 49,114 46,261 46,240 46,263 46,215

 

 

TABLE INDEX   CONSOLIDATED UNAUDITED FINANCIAL SCHEDULES BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC. BERKSHIRE HILLS BANCORP, INC.
F-1 Selected Financial Highlights SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1) CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2) CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-3) CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - (F-4) CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend) - UNAUDITED - (F-5) AVERAGE YIELDS AND COSTS (Fully Taxable Equivalent - Annualized) - UNAUDITED - (F-6) AVERAGE BALANCES - UNAUDITED - (F-7) ASSET QUALITY ANALYSIS - UNAUDITED - (F-8)
F-2 Balance Sheets At or for the Quarters Ended (1) June 30, March 31, December 31, LOAN ANALYSIS Three Months Ended Six Months Ended Quarters Ended Quarters Ended At or for the Quarters Ended
F-3 Loan and Deposit Analysis June 30, March 31, Dec. 31, Sept. 30, June 30, (in thousands) 2019 2019 2018 June 30, June 30, June 30, March 31, Dec. 31,