Berkshire Hills Bancorp, Inc., Reports 2001 Fourth Quarter and Year End Earnings.Business Editors PITTSFIELD Pittsfield, city (1990 pop. 48,622), seat of Berkshire co., W Mass., between mountain ranges, on branches of the Housatonic River; inc. as a town 1761, as a city 1889. The city is the metropolis of the Berkshire resort area. , Mass.--(BUSINESS WIRE)--Jan. 23, 2002 Berkshire Hills Berkshire Hills (bûrk`shər, –shĭr), mountainous region of wooded hills with many small lakes and streams, W Mass. The Berkshires are a southern extension of the Green Mts. Bancorp, Inc. (the "Company"), (AMEX AMEX See: American Stock Exchange : BHL BHL Bleeding-Heart Liberal BHL Battle Handover Line BHL Breath Hydrogen Level BHL Biohazard Level BHL Bottom of Heated Length BHL Bachelor of Hebrew Letters/Literature BHL Bilateral Hilar Lymphadenomegaly BHL Back-Hoe Loader ), the holding company for Berkshire Berkshire (bärk`shĭr, –shər, bûrk`–) or Berks (bärks, bûrks), former county, S central England. Bank (the "Bank"), reported net income of $1.7 million for the quarter ended December December: see month. 31, 2001 as compared to $2.5 million for the quarter ended December 31, 2000. For the year ended December 31, 2001, net income was $8.9 million as compared to $4.6 million for the year ended December 31, 2000. The results for 2001 include a $2.2 million gain from the dissolution Act or process of dissolving; termination; winding up. In this sense it is frequently used in the phrase dissolution of a partnership. The dissolution of a contract is its Rescission by the parties themselves or by a court that nullifies its binding force and reinstates each of the Bank's defined benefit pension plan, while the results for 2000 include a non-recurring, one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. expense of $5.7 million related to the funding of Berkshire Hills Foundation, a charitable foundation, with Company stock in connection with the Company's mutual to stock conversion in June June: see month. 2000. Berkshire Hills Bancorp's annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on average assets and annualized return on average equity for the fourth quarter of 2001 were 0.67% and 4.87%, respectively, compared with 0.98% and 6.19%, respectively, for the corresponding quarter of 2000. For the year ended December 31, 2001, Berkshire Hills Bancorp's return on average assets and return on average equity were 0.86% and 5.74% respectively, compared with 0.49% and 3.72% for the year ended December 31, 2000. Basic and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the quarter ended December 31, 2001 were $0.30 and $0.28, respectively. For the quarter ended December 31, 2000, basic earnings per share was $0.35. There was no potential issuance of common stock equivalents in 2000 which would cause dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. of earnings. Basic and diluted earnings per share for the year ended December 31, 2001 were $1.42 and $1.35, respectively. There is no comparable figure for 2000, as the Company became a public company in June 2000. The Company's book value per share at December 31, 2001, September September: see month. 30, 2001, and December 31, 2000 was $21.68, $21.21, and $21.02, respectively. Dividend Declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. Berkshire Hills Bancorp also reported that the Board of Directors declared a quarterly cash dividend of $0.12 per common share, an increase of $0.01 per share from the previous quarter, payable on February February: see month. 22, 2002 to stockholders of record as of February 7, 2002. Annual Meeting Berkshire Hills Bancorp, Inc., announced today that it has established May 2, 2002 as the date of its 2002 Annual Meeting of Stockholders. The meeting will be held at the Crowne Plaza This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. Hotel, One West Street, Pittsfield, MA at 10:00 a.m. The voting record date has been set as March 14, 2002. The Company intends to distribute proxy See proxy server. (networking) proxy - A process that accepts requests for some service and passes them on to the real server. A proxy may run on dedicated hardware or may be purely software. solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual materials on or about March 28, 2002. Stock Repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. During 2001, the Company successfully completed three 5% stock repurchase programs totaling 1,094,469 shares at a cost of $20.2 million. The Company is currently engaged in its fourth 5% repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. program having purchased 154,152 shares out of an authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: 328,964 shares as of December 31, 2001 at a cost of $3.1 million. Due primarily to the stock repurchase programs, stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. declined to $139.3 million on December 31, 2001 from $161.3 million on December 31, 2000. Financial Condition Total assets at December 31, 2001 were $1.03 billion as compared to $1.01 billion at December 31, 2000, an increase of $20.5 million, or 2.0%. Loans increased $9.3 million to $803.0 million from $793.6 million last year. Commercial real estate loans and commercial construction loans increased $31.5 million, and more than offset a $14.6 million decline in automobile automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of loans, and $11.3 million decline in residential loans. Commercial real estate loan growth and commercial construction loan growth was centered in loans to retirement/assisted living facilities throughout Berkshire County as well as in loans to various hotels, motels Motels may refer to any of the following:
The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real efforts on higher quality automobile loans. This change in strategy also resulted in a change in its risk management practices for these loans. A highly competitive local marketplace, along with the sale of all newly originated fixed rate mortgage loans, contributed to the decline in residential loans. Asset growth was supported by a $13.1 million, or 1.8%, increase in deposits to $742.7 million at December 31, 2001 from $729.6 million at December 31, 2000 along with a $32.6 million increase in borrowings from the Federal Home Loan Bank of Boston Boston, town, England Boston, town (1991 pop. 26,495), E central England, on the Witham River. Boston's fame as a port dates from the 13th cent., when it was a Hanseatic port trading wool and wine. Having recovered from a decline in the 18th and 19th cent. . As interest rates declined precipitously pre·cip·i·tous adj. 1. Resembling a precipice; extremely steep. See Synonyms at steep1. 2. Having several precipices: a precipitous bluff. 3. throughout 2001 making borrowing more affordable, the Company also noted a shifting of customer deposit preferences from certificates of deposit and money market accounts into savings accounts Savings Account A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates. Notes: and demand deposit accounts. Net interest income, before the provision for loan losses, totaled $11.1 million for the quarter ended December 31, 2001 up $799,000, or 7.8%, from $10.3 million for the same quarter last year. Rapidly declining interest rates had a bigger impact on interest expense than interest and dividend income when comparing this past quarter to 2000's fourth quarter. For the twelve months ended December 31, 2001, net interest income totaled $42.2 million, an increase of $4.7 million, or 12.5%, from the $37.6 million earned in 2000. The Bank's assets were repricing Repricing To change the price of an asset. In derivatives, it sometimes refers to the exchange of options of with different strike prices. repricing more rapidly than its liabilities early in the year. However, the situation reversed late in the year as the Bank altered its deposit pricing strategies There are many ways in which the price of a product can be determined. The following are the foremost strategies that businesses are likely to use. Competition-based pricing Setting the price based upon prices of the similar competitor products. . This change enabled margins to remain wide throughout 2001. For the three months and twelve months ended December 31, 2001, the Bank's net interest margin was 4.57% and 4.35%, respectively, as compared to 4.38% and 4.25%, respectively, for the same time periods last year. Net interest income, after provision for loan losses, totaled $6.5 million for the three months ended December 31, 2001, a decrease of $3.0 million, or 31.6%, from the same quarter in 2000. As a measure to further enhance its risk management practices, the Bank initiated a more aggressive charge-off Eliminate or write off. The term charge-off is used to describe the process of removing from the records of a company something that was once regarded as an asset but has subsequently become worthless. policy for automobile loans whereby all automobile loans that are 120 days or more past due, except for those customers who are in bankruptcy proceedings bankruptcy proceedings n. the bankruptcy procedure is: a) filing a petition (voluntary or involuntary) to declare a debtor person or business bankrupt, or, under Chapter 11 or 13, to allow reorganization or refinancing under a plan to meet the debts of the party , were charged-off. The change in policy resulted in an additional $2.6 million in automobile charge-offs in the fourth quarter. In conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with this change, the Bank established a new classification for automobile loans that were 90 days or more past due but still accruing interest. Automobile loans in the amount of $1.3 million were 90 days or more past due and still accruing interest at the end of 2001 as compared to zero at the end of the previous year. The change in policy, coupled with an $840,000 provision for commercial loan losses and an additional provision of $1.1 million, resulted in a total provision of $4.6 million for 2001's fourth quarter as compared to $740,000 for 2000's fourth quarter. For the year ended December 31, 2001, net interest income, after provision for loan losses, totaled $35.1 million, an increase of $681,000, or 2.0%, from 2000's $34.4 million. The total provisions for loan losses in 2001 and 2000 were $7.2 million and $3.2 million, respectively. The allowance for loan losses was $11.0 million at December 31, 2001 as compared to $10.2 million at December 31, 2000 and represented 1.37% and 1.29% of total loans, respectively. The increase in 2001 was reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of the increased risk associated with maintaining commercial loan and consumer automobile loan portfolios in a weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. economic
environment. Non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. as a percentage of total loans were
0.34% at December 31, 2001 as compared to 0.36% at December 31, 2000.EastPoint Technologies, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control Six months ago, the Company announced its investment in EastPoint Technologies, LLC. The Company was one of a consortium of six banks who agreed to buy EastPoint. With all banks having received the necessary approvals, the Company's equity interest in EastPoint equals 60.3%. EastPoint contributed $185,000 in pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income over the final six months of 2001. Eastpoint's revenues and expenses are included in various non-interest income and operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. categories on the Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Income. Established in 1846, Berkshire Bank is one of Massachusetts' oldest and largest independent banks and is the largest banking institution based in Western Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. . The Bank is headquartered in
Pittsfield, Massachusetts "Pittsfield" redirects here. For other places named Pittsfield, see Pittsfield (disambiguation).Pittsfield is the largest city and county seat of Berkshire County, Massachusetts, United States. with 11 branch offices serving communities throughout Berkshire County. The Bank is committed to continuing to operate as an independent bank, delivering exceptional customer service and a broad array of competitively priced retail and commercial products to customers. Statements contained in this news release, which are not historical facts, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as that term is defined in the Private Securities Legislation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time.
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Unaudited
December 31, December 31,
2001 2000
In thousands
ASSETS
Cash and due from banks $ 22,652 $ 26,891
Short term investments 19,471 16,721
Total cash and cash equivalents 42,123 43,612
Securities available for sale, at fair
value 104,446 99,309
Securities held to maturity, at
amortized cost 33,263 32,238
Federal Home Loan Bank stock, at cost 7,027 5,651
Savings Bank Life Insurance stock, at
cost 2,043 2,043
Loans 800,414 793,621
Loans held for sale 2,540 --
Allowance for loan losses (11,034) (10,216)
Net loans 791,920 783,405
Premises and equipment, net 14,187 12,370
Foreclosed real estate -- 50
Accrued interest receivable 5,873 6,310
Goodwill and other intangibles 10,618 6,260
Other assets 20,304 20,092
TOTAL ASSETS $ 1,031,804 $ 1,011,340
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 742,729 $ 729,594
Federal Home Loan Bank advances 133,964 101,385
Securities sold under agreements to
repurchase 1,890 2,030
Net deferred tax liability 4,761 4,482
Loans sold with recourse -- 7,740
Accrued expenses and other liabilities 6,014 4,787
Total Liabilities 889,358 850,018
Minority Interests 3,123 --
Stockholders' Equity:
Preferred stock ($.01 par value;
1,000,000 shares authorized; none
issued or outstanding) -- --
Common stock ( $.01 par value:
26,000,000 shares authorized;
shares issued: 7,673,761 at
December 31, 2001 and December
31, 2000; shares outstanding:
6,425,140 at December 31, 2001
and 7,673,761 at December 31,
2000) 77 77
Additional paid-in capital 74,146 74,054
Unearned compensation (11,101) (7,187)
Retained earnings 80,657 74,554
Accumulated other comprehensive
income 18,836 19,824
Treasury stock, at cost (1,248,621
shares at December 31, 2001) (23,292) --
Total stockholders' equity 139,323 161,322
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY $ 1,031,804 $ 1,011,340
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Unaudited Unaudited
Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
(In thousands, except per share amounts)
INTEREST AND DIVIDEND INCOME
Bond interest $ 1,358 $ 1,419 $ 5,608 $ 5,330
Stock dividends 341 183 1,484 1,362
Short term investment interest 141 362 413 662
Loan interest 16,460 17,539 68,291 63,664
TOTAL INTEREST AND DIVIDEND
INCOME 18,300 19,503 75,796 71,018
INTEREST EXPENSE
Interest on deposits 5,686 7,492 26,685 27,603
Interest on FHLB advances 1,536 1,704 6,613 5,766
Interest on securities sold
under agreements to
repurchase and other
borrowings 11 39 262 99
TOTAL INTEREST EXPENSE 7,233 9,235 33,560 33,468
NET INTEREST INCOME 11,067 10,268 42,236 37,550
PROVISION FOR LOAN LOSSES 4,550 740 7,175 3,170
NET INTEREST INCOME, AFTER
PROVISION FOR LOAN LOSSES 6,517 9,528 35,061 34,380
NON-INTEREST INCOME
Customer service fees 453 396 1,810 1,590
Trust department fees 479 473 1,782 1,707
Loan servicing fees 109 (123) 595 446
Gain on securities, net 2 130 268 423
License maintenance and
processing fees 1,094 -- 2,100 --
License sales and other fees 754 -- 2,144 --
Gain on curtailment of defined
benefit pension plan 2,173 -- 2,173 --
Other income 135 366 490 580
TOTAL NON-INTEREST INCOME 5,199 1,242 11,362 4,746
OPERATING EXPENSES
Salaries and benefits 4,925 3,250 17,590 13,631
Occupancy and equipment 1,357 928 4,689 4,178
Marketing and advertising 220 247 629 578
Data processing 201 636 1,065 1,765
Professional services 455 523 1,314 850
Office supplies 217 147 899 706
Foreclosed real estate and
other loans, net 398 436 2,238 1,165
Amortization of goodwill and
other intangibles 382 137 827 549
Contributions -- -- -- 5,684
Minority Interests (148) -- (119) --
Other expenses 1,152 753 4,031 3,078
TOTAL OPERATING EXPENSES 9,159 7,057 33,163 32,184
INCOME BEFORE TAXES 2,557 3,713 13,260 6,942
Provision for income taxes 838 1,256 4,349 2,360
NET INCOME $ 1,719 $ 2,457 $ 8,911 $ 4,582
Earnings per share:
Basic $ 0.30 $ 0.35 $ 1.42 NA
Diluted $ 0.28 $ 0.35 $ 1.35 NA
Weighted average shares
outstanding:
Basic 5,763 7,086 6,264 NA
Diluted 6,157 7,086 6,604 NA
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
Unaudited
December 31, 2001 December 31, 2000
Percent Percent
Loan Analysis Balance of Total Balance of Total
Dollars in Thousands
Mortgage loans on real estate
Residential 1-4 family $233,017 29.02% $244,290 30.78%
Commercial 1 -4 family 11,517 1.43% 11,063 1.39%
Commercial Real Estate 84,538 10.53% 63,871 8.05%
Commercial Construction 19,351 2.41% 8,480 1.07%
Multi-family 13,183 1.64% 15,699 1.98%
Total real estate 361,606 45.03% 343,403 43.27%
Commercial loans 170,305 21.21% 167,085 21.05%
Consumer loan
Automobile 216,026 26.90% 230,648 29.06%
Home Equity Loans 34,439 4.30% 34,471 4.34%
Other 20,578 2.56% 18,014 2.27%
Total consumer loans 271,043 33.76% 283,133 35.68%
Total loans 802,954 793,621
Less: Allowance for loan
losses (11,034) 1.37% (10,216) 1.29%
Loans, net $791,920 $783,405
Deposit Analysis Percent Percent
Balance of Total Balance of Total
Dollars in Thousands
Demand Deposits $ 82,757 11.14% $ 76,750 10.52%
NOW Accounts 80,970 10.90% 79,978 10.96%
Savings Accounts 151,566 20.41% 137,293 18.82%
Money Market Accounts 110,199 14.84% 115,800 15.87%
Term Certificates 317,237 42.71% 319,773 43.83%
Total Deposits $742,729 $729,594
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL RATIOS
Unaudited Unaudited
At or for the At or for the
Three Months Ended Twelve Months Ended
December 31 December 31
2001 2000 2001 2000
Dollars in thousands Dollars in thousands
Performance Ratios (1):
Return on average assets 0.67% 0.98% 0.86% 0.49%
Return on average equity 4.87% 6.19% 5.74% 3.72%
Net interest margin as
of average earning assets 4.57% 4.38% 4.35% 4.25%
Non-interest income to
average earning assets 2.15% 0.53% 1.17% 0.54%
Non-interest expense to
average earning assets 3.78% 3.01% 3.41% 3.64%
Asset Quality Ratios (2):
Average earning assets to
average assets 93.78% 93.72% 93.80% 94.35%
Net charged-off loans to
total loans 0.54% 0.10% 0.79% 0.19%
Non-performing loans to total
loans 0.34% 0.36% 0.34% 0.36%
Non-performing assets to
total assets 0.26% 0.29% 0.26% 0.29%
Allowance for loan losses to
non-performing loans 408.36% 356.08% 408.36% 356.08%
Allowance for loan losses to
total loans 1.37% 1.29% 1.37% 1.29%
Capital ratios (2):
Stockholders' equity to total
assets 13.50% 15.95% 13.50% 15.95%
Tier I capital to average
assets 11.00% 14.54% 11.00% 14.54%
Tier I capital to risk
weighted assets 12.97% 17.12% 12.97% 17.12%
Total capital to risk
weighted assets 15.73% 20.15% 15.73% 20.15%
Other data (2):
Non-performing loans $ 2,702 $ 2,869 $ 2,702 $ 2,869
Foreclosed real estate $ -- $ 50 $ -- $ 50
Non-performing assets $ 2,702 $ 2,919 $ 2,702 $ 2,919
Efficiency ratio (3) 56.31% 62.01% 62.18% 76.86%
Book value per share $ 21.68 $ 21.02 $ 21.68 $ 21.02
(1) Ratios are annualized for the three and twelve months ended
December 31, 2001 and 2000
(2) End of period ratios and balances
(3) Efficiency ratio equals operating expense divided by net interest
income plus non-interest income less gain (loss) on securities.
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