Berkshire Hills Bancorp, Inc., Reports First Quarter 2002 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)--April 24, 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 first quarter of 2002 as compared to $2.1 million for the same quarter of 2001, a decrease of 19.3%. The decrease in net income was primarily due to an increase of $670,000 in the Bank's provision for loan losses during the quarter as charge-offs in the consumer loan portfolio, and in particular, the 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 portfolio, were higher than last year. In the fourth quarter of 2001, the Bank instituted a more conservative 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 loans that are more than 120 days delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. are charged off immediately except for those to customers 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 . Consumer loan charge-offs, net of recoveries, totaled $1.4 million in the quarter as compared to $514,000 in the same quarter last year. In an effort to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. future losses in the
consumer loan portfolio, the Bank has decided to exit the sub-prime
automobile loan business by allowing its existing sub-prime automobile
loans to run off and by discontinuing the origination OriginationThe 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 of such sub-prime loans. 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 March 31, 2002 were $0.30 and $0.28, respectively, compared to $0.31 and $0.30, respectively, for the first quarter of 2001. The Company's book value per share at March 31, 2002, December December: see month. 31, 2001, and March 31, 2001 was $21.92, $21.68, and $20.57, 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 also reported that, today, the Board of Directors declared a quarterly cash dividend of $0.12 per share. The dividend is payable on May 24, 2002 to stockholders of record at the close of business on May 9, 2002. Financial Condition Total assets at March 31, 2002 were $1.035 billion compared to $1.031 billion at December 31, 2001, an increase of $3.9 million. Total loans decreased $17.1 million, or 2.1%, to $785.9 million at March 31, 2002 from $803.0 million at December 31, 2001. 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 management's determination to exit the sub-prime automobile loan market, the automobile loan portfolio accounted for the majority of the decrease falling $8.9 million. Residential one- to four-family real estate loans fell $7.3 million, as the first quarter has historically been a slow quarter for real estate activity. As a result of the decreased loan balances, funds have been temporarily channeled into short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments which totaled $37.9 million at March 31, 2002, an $18.4 million increase from $19.5 million at December 31, 2001. Deposits declined $1.3 million to $741.4 million at March 31, 2002, from $742.7 at December 31, 2001. In a somewhat atypical atypical /atyp·i·cal/ (-i-k'l) irregular; not conformable to the type; in microbiology, applied specifically to strains of unusual type. a·typ·i·cal adj. first quarter, deposit losses were smaller than in previous years as growth in savings and money market accounts, fueled by municipal deposits, nearly offset the decline in demand deposits and certificates of deposit. 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. increased $8.1 million to $142.0 million at March 31, 2002 as the Bank looked to extend maturities and take advantage of low cost funds. Foreclosed real estate totaled $2.0 million at March 31, 2002 versus zero at December 31, 2001, as the Bank took possession of one commercial property. The allowance for loan losses totaled $10.8 million at March 31, 2002, relatively unchanged from the $11.0 million at December 31, 2001. During the first quarter of 2002, the Company continued its fourth 5% stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program purchasing 151,400 shares at a cost of $3.3 million. A total of 305,552 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, has been purchased under the fourth 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 at a cost of $6.4 million. Due primarily to the stock repurchase program, 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 $137.5 million at March 31, 2002 from $139.3 at December 31, 2001. Net interest income, after the provision for loan losses, totaled $9.0 million for the first quarter of 2002 compared to $9.2 million for the same quarter last year. The provision for loan losses was $1.5 million in the current quarter as compared to $840,000 last year, more than offsetting an increase of $451,000 in net interest income. Net interest margin equaled 4.36% for the first three months of 2002 compared to 4.21% over the same period in 2001 as a deposit pricing change instituted late in 2001 has eliminated floors on certain deposit accounts and allowed their rates to more closely parallel short-term market rates. In the quarter, noninterest income increased $1.6 million to $2.7 million from $1.1 million last year. Various license revenues of $1.4 million, associated with EastPoint Technologies' operations, accounted for the majority of the increase. In a similar vein, expenses of EastPoint's operations, after allocations for minority interests, totaled $1.7 million and accounted for the bulk of the $2.0 million increase in Company expenses. EastPoint Technologies is a software and data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a provider for financial institutions that is majority-owned by Berkshire Hills Technology, Inc., a wholly-owned subsidiary of the Company. 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
March 31, December 31,
2002 2001
In thousands
ASSETS
Cash and due from banks $ 22,561 $ 22,652
Short-term investments 37,910 19,471
Total cash and cash equivalents 60,471 42,123
Securities available for sale,
at fair value 106,326 104,446
Securities held to maturity,
at amortized cost 32,549 33,263
Federal Home Loan Bank
stock, at cost 7,102 7,027
Savings Bank Life Insurance
stock, at cost 2,043 2,043
Loans 785,720 800,414
Loans held for sale, at fair value 170 2,540
Allowance for loan losses (10,759) (11,034)
Net loans 775,131 791,920
Premises and equipment, net 14,000 14,213
Foreclosed real estate 2,000 --
Accrued interest receivable 5,632 5,873
Goodwill and other intangibles 10,417 10,592
Other assets 18,968 19,201
TOTAL ASSETS $ 1,034,639 $ 1,030,701
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 741,442 $ 742,729
Federal Home Loan Bank advances 142,030 133,964
Securities sold under
agreements to repurchase 1,590 1,890
Net deferred tax liability 4,488 4,573
Accrued expenses and
other liabilities 4,621 5,099
Total Liabilities 894,171 888,255
Minority Interests 2,956 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
March 31, 2002 and December 31, 2001;
shares outstanding: 6,273,740 at
March 31, 2002 and 6,425,140 at
December 31, 2001) 77 77
Additional paid-in capital 74,305 74,146
Unearned compensation (10,709) (11,101)
Retained earnings 81,628 80,657
Accumulated other comprehensive income 18,756 18,836
Treasury stock at cost (1,400,021
shares at March 31, 2002
and 1,248,621 shares at
December 31, 2001) (26,545) (23,292)
Total stockholders' equity 137,512 139,323
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,034,639 $ 1,030,701
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Unaudited
THREE MONTHS ENDING
MARCH 31,
2002 2001
(In thousands, except
per share amounts)
INTEREST AND DIVIDEND INCOME
Bond interest $ 1,256 $ 1,513
Stock dividends 290 394
Short term investment interest 57 75
Loan interest 14,957 17,154
TOTAL INTEREST AND DIVIDEND INCOME 16,560 19,136
INTEREST EXPENSE
Interest on deposits 4,664 7,261
Interest on FHLB advances 1,414 1,673
Interest on securities sold
under agreements to repurchase
and other borrowings 8 179
TOTAL INTEREST EXPENSE 6,086 9,113
NET INTEREST INCOME 10,474 10,023
PROVISION FOR LOAN LOSSES 1,510 840
NET INTEREST INCOME, AFTER
PROVISION FOR LOAN LOSSES 8,964 9,183
NONINTEREST INCOME
Customer service fees 447 407
Trust department fees 487 430
Loan servicing fees 200 119
Loss on sale of securities, net (20) (1)
License maintenance and processing fees 1,077 --
License sales and other fees 364 --
Other income 189 155
TOTAL NONINTEREST INCOME 2,744 1,110
OPERATING EXPENSES
Salaries and benefits 5,528 3,622
Occupancy and equipment 1,418 1,089
Marketing and advertising 88 146
Data processing 190 171
Professional services 299 253
Office supplies 183 285
Foreclosed real estate and other loans, net 483 536
Amortization of other intangibles 175 124
Minority interests (167) --
Other expenses 1,029 975
TOTAL OPERATING EXPENSES 9,226 7,201
INCOME BEFORE TAXES 2,482 3,092
Provision for income taxes 806 1,014
NET INCOME $ 1,676 $ 2,078
Earnings per share:
Basic $ 0.30 $ 0.31
Diluted $ 0.28 $ 0.30
Weighted average shares outstanding:
Basic 5,540 6,678
Diluted 5,963 6,916
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
Unaudited
March 31, 2002 December 31, 2001
Percent Percent
Loan Analysis Balance of Total Balance of Total
Dollars in thousands
Mortgage loans on real estate
Residential one-to four-family $ 222,166 28.27% $ 229,432 28.57%
Residential construction 4,197 0.53% 3,585 0.45%
Commercial one-to four-family 11,177 1.42% 11,517 1.43%
Commercial real estate 84,583 10.76% 84,538 10.53%
Commercial construction 15,464 1.97% 19,351 2.41%
Multi-family 13,106 1.67% 13,183 1.64%
Total real estate 350,693 44.62% 361,606 45.03%
Commercial loans 174,964 22.26% 170,305 21.21%
Consumer loans
Automobile 207,165 26.36% 216,026 26.90%
Home equity loans 34,676 4.41% 34,439 4.30%
Other 18,392 2.34% 20,578 2.56%
Total consumer loans 260,233 33.11% 271,043 33.76%
Total loans 785,890 802,954
Less: Allowance for loan losses (10,759) 1.37% (11,034) 1.37%
Loans, net $ 775,131 $ 791,920
Deposit Analysis Percent Percent
Balance of Total Balance of Total
Dollars in thousands
Demand Deposits $ 78,795 10.63% $ 82,758 11.14%
NOW Accounts 80,750 10.89% 80,970 10.90%
Savings Accounts 155,246 20.94% 151,565 20.41%
Money Market Accounts 115,530 15.58% 110,199 14.84%
Term Certificates 311,121 41.96% 317,237 42.71%
Total Deposits $ 741,442 $ 742,729
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL RATIOS
Unaudited
Three Months Ended
March 31
2002 2001
Dollars in thousands,
except per share amounts
Performance Ratios(1):
Return on average assets 0.65% 0.82%
Return on average equity 4.85% 5.34%
Net interest margin as % of average earning assets 4.36% 4.21%
Noninterest income to average earning assets 1.14% 0.47%
Noninterest expense to average earning assets 3.84% 3.02%
Asset Quality Ratios(2):
Average earning assets to average assets 93.62% 94.31%
Net charged-off loans to total loans 0.23% 0.06%
Nonperforming loans to total loans 0.42% 0.43%
Nonperforming assets to total assets 0.51% 0.34%
Allowance for loan losses to non-performing loans 329.12% 308.69%
Allowance for loan losses to total loans 1.37% 1.31%
Capital ratios(2):
Stockholders' equity to total assets 13.29% 15.07%
Tier I capital to average adjusted assets 10.66% 12.80%
Tier I capital to risk weighted assets 12.94% 15.76%
Total capital to risk weighted assets 15.74% 18.66%
Other data(2):
Non-performing loans $ 3,269 $ 3,416
Foreclosed real estate $ 2,000 $ --
Non-performing assets $ 5,269 $ 3,416
Efficiency ratio 69.69% 64.68%
Book value per share $ 21.92 $ 20.57
(1) Ratios are annualized for the three months ended March 31, 2002
and 2001
(2) End of period ratios and balances
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