Berkshire Hills Bancorp, Inc. Announces Record Third Quarter Earnings and Declares Quarterly Dividend; EPS Increases 23% Over Third Quarter 2003; Year to Date EPS Up 30%.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. -- 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"), today reported net income of $3.0 million, or $0.53 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 September September: see month. 30, 2004 as compared to $2.4 million, or $0.43 diluted earnings per share, for the quarter ended September 30, 2003. Diluted earnings per share for the three months ended September 30, 2004 increased 23.3% compared to the same period in 2003. Net income for the first nine months of 2004 was $8.3 million, or $1.45 diluted earnings per share, as compared to $6.4 million, or $1.12 diluted earnings per share, for the same period last year. Diluted earnings per share for the nine months ended September 30, 2004 increased 29.5% over the same period in 2003. Commenting on the Company's performance, Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. P. Daly, President and Chief Executive Officer stated, "I am pleased to report another record quarter for the Company. We continue to experience strong organic growth in loans and core deposits and benefit from our productivity initiatives and exceptional credit quality. We are also pleased that our net interest margin responded favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to the rise in short term interest rates." 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. The Board of Directors declared a quarterly cash dividend of $0.12 per share, payable on November November: see month. 22, 2004 to stockholders of record at the close of business on November 8, 2004. Third Quarter Highlights --Commercial loans increased $8.0 million, or 2.0%, from June June: see month. 30, 2004. --Residential loans increased $9.0 million, or 4.1%, from June 30, 2004. --Consumer loans increased $5.5 million, or 3.2%, from June 30, 2004. --Core deposits increased $6.2 million, or 1.2%, from June 30, 2004. --Net interest margin increased 10 basis points as compared to the quarter ended June 30, 2004. The following table represents a reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income to core net income and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. . In determining its core net income and earnings per share, the Company excludes net security gains and losses and those items it believes to be non-recurring.
3Q 2004 2Q 2004 3Q 2003
----------------------------------------------------------------------
(In thousands, except per
share data)
----------------------------------------------------------------------
Net income -GAAP $3,007 $2,702 $2,414
----------------------------------------------------------------------
Plus:
----------------------------------------------------------------------
Non-recurring loss from discontinued
operations (1) - 255 1
----------------------------------------------------------------------
Less:
----------------------------------------------------------------------
Gain on sale of securities, net (2) 211 256 228
----------------------------------------------------------------------
Net Income-core $2,796 $2,701 $2,187
----------------------------------------------------------------------
----------------------------------------------------------------------
Earnings per diluted share-core $0.49 $0.47 $0.39
----------------------------------------------------------------------
Average diluted shares outstanding 5,721 5,725 5,655
----------------------------------------------------------------------
(1) Represents the operating loss and loss on the sale of EastPoint
Technologies, LLC, tax effected using a tax rate of 34.0%.
(2) Tax effected using a tax rate of 32.0% for 2004, and 36.0% for
2003.
Financial Condition Loans increased $22.4 million and $25.6 million from June 30, 2004 and December December: see month. 31, 2003, respectively. The increase from June 30, 2004 was primarily due to growth of $9.0 million in residential loans, $8.0 million in commercial loans and $5.5 million in consumer loans. The increase in consumer loans was primarily in home equity loans. The growth from December 31, 2003 was primarily due to increases of $41.0 million in commercial loans and $21.3 million in consumer loans, partially offset by the securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. of $38.7 million of one- to four-family fixed rate mortgages during the first quarter of 2004. Securities decreased a total of $7.7 million from June 30, 2004 and increased $73.9 million from December 31, 2003. The decrease from June 30, 2004 was largely due to a decline in purchase activity in the current quarter as compared to the previous quarter, as the Bank directed cash flows from the securities portfolio and growth in deposits to fund loan growth. The increase from December 31, 2003 included the securitization of $38.7 million of one- to four-family fixed rate mortgages. Security purchases, which occurred primarily in the first quarter of 2004, were made to take advantage of a steep yield curve and were primarily in mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. with durations averaging 3.5 years with limited risk of durations extending, particularly in a rising rate environment. Borrowings from the Federal Home Loan Bank were $324.8 million at September 30, 2004, an increase of $3.1 million from June 30, 2004. Borrowings were up $73.4 million from December 31, 2003, as the Bank took advantage of the lower cost of borrowings relative to the cost of deposits to fund earning asset Earning asset An asset that generates income, e.g., income from rental property. growth. Deposits increased $5.7 million from June 30, 2004 and increased $22.9 million from December 31, 2003. Core deposits (represented by demand, NOW, savings and money market accounts) were $528.3 million at September 30, 2004, an increase of $6.2 million, or 1.2%, and $19.4 million, or 3.8%, from June 30, 2004 and December 31, 2003, respectively. The Company's tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. book value per share at September 30, 2004, June 30, 2004 and December 31, 2003 was $20.89, $19.81 and $19.82, respectively. Asset Quality 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. were $2.7 million, or 0.33% of total loans at September 30, 2004, as compared to $3.2 million, or 0.40%, at June 30, 2004 and December 31, 2003. 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. and non-accrual loans to total loans measured 0.73% at September 30, 2004, as compared to 0.55% and 0.67% at June 30, 2004 and December 31, 2003, respectively. The increase in delinquencies during the third quarter of 2004 was the result of two commercial real estate loan relationships totaling $722,000 at September 30, 2004 and a $600,000 commercial relationship that was paid-off subsequent to September 30, 2004. Net loan charge-offs totaled $221,000 for the quarter ended September 30, 2004, compared to $129,000 and $903,000 in the second quarter of 2004 and the fourth quarter of 2003, respectively. An increase of $62,000 in net consumer charge-offs and $30,000 in net commercial charge-offs accounted for the increase from June 30, 2004. The allowance for loan losses totaled $9.4 million, representing 1.15% of total loans at September 30, 2004, compared to $9.2 million, or 1.16%, of total loans and $9.0 million, or 1.13% of total loans at June 30, 2004 and December 31, 2003, respectively. Results of Operations Net interest income was $10.2 million for the third quarter of 2004, an increase of $490,000 and $933,000 compared to the quarters ended June 30, 2004 and September 30, 2003, respectively. Net interest margin was 3.29% for the third quarter of 2004 compared to 3.19% and 3.51% for the second quarter of 2004 and the third quarter of 2003, respectively. The increase in the margin compared to the second quarter of 2004 was primarily attributed to an increase in short term interest rates, primarily the prime rate, and slower prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. activity in the third quarter on loans and securities. The lower margin for the third quarter of 2004 as compared to a year ago, resulted from the impact of a lower interest rate environment during 2004 and the execution of strategies in 2003, such as the sale and securitization of longer duration fixed-rate residential mortgages, to better position the Bank for a potential rise in interest rates. The provision for loan losses was $365,000 for the quarter ended September 30, 2004, a decrease of $60,000, or 14.1%, as compared to the quarter ended June 30, 2004, and a decrease of $210,000, or 36.5%, as compared to the same quarter last year. The decrease compared to a year ago was primarily attributed to improved credit quality, primarily in the consumer area, while the decrease compared to the previous quarter was consistent with the decrease in nonperforming loans and a higher allowance for loan losses to nonperforming loans. Non-interest income was $1.7 million for the quarter ended September 30, 2004, a decrease of $239,000, or 12.2%, compared to the quarter ended June 30, 2004, and a decrease of $186,000, or 9.7%, compared to the quarter ended September 30, 2003. The decrease as compared to the second quarter of 2004 was due to a decrease in annual safe deposit box A safe deposit box (sometimes incorrectly called a safety deposit box) is a type of safe usually located in groups inside a bank vault or in the back of a bank or post office. fees of $102,000, as these fees are largely recorded annually in the second quarter, and a decrease in the net gains on sale of securities of $67,000. Other income declined $51,000 due to a higher level of cash surrender value The amount of money that an insurance company pays the insured upon cancellation of a life insurance policy before death and which is a specific figure assigned to the policy at that particular time, reduced by a charge for administrative expenses. earned on certain life insurance policies in the previous quarter than in the third quarter. The decrease as compared to the same quarter last year was primarily due to a decrease of $181,000 in loan fees and net loan sales gains due to lower residential loan originations The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and no loan sales in the third quarter of this year. Non-interest expense was $7.2 million for the quarter ended September 30, 2004, a $248,000, or 3.6%, increase compared to non-interest expense of $6.9 million for the quarter ended June 30, 2004, and a $308,000, or 4.5%, increase compared to non-interest expense of $6.9 million for the quarter ended September 30, 2003. The increase as compared to the second quarter of 2004 was primarily attributed to higher salaries and benefits expense and higher professional and outside service fees. The increase in salary and benefits was largely associated with certain retirement benefit charges and semi-annual director fees. Also, a decrease in commercial loan originations contributed to a lower level of deferred salary expense, recorded in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). No. 91. Higher professional and outside service fees were attributed to cost associated with the compliance with section 404 of Sarbanes Oxley Oxley refers to several things: People
For example, if an individual fails to render prompt payments on a new car, the car might be subject to repossession by the finance company, and sales activities, also contributed to the increase. The Company's effective tax rate was 32.0% for the quarters ended September 30, 2004 and June 30, 2004. The Company expects its effective tax rate will be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 32.0% for the remainder of 2004. Michael P. Daly, President and Chief Executive Officer and Wayne Wayne, city (1990 pop. 19,899), Wayne co., SE Mich., a suburb of Detroit, on the Lower Rouge River; inc. as a village 1869, and with surrounding areas as a city 1960. It has automobile and aircraft industries and other varied manufactures. F. Patenaude, Senior Vice President, Treasurer TREASURER. An officer entrusted with the treasures or money either of a private individual, a corporation, a company, or a state. 2. It is his duty to use ordinary diligence in the performance of his office, and to account with those whose money he has. and Chief Financial Officer, will host a conference call at 10:00 A.M. (ET) on Thursday Thursday: see week. , October October: see month. 28, 2004. This conference call will include forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information and may include other material information. Persons wishing to access the conference call may dial 1-877-407-8035. Materials related to the topics to be discussed in the conference call will be available on the Bank's website, www.berkshirebank.com, beginning at approximately 8:30 A.M. (ET) on October 28, 2004. Replays of the conference call will be available beginning October 28, 2004 at 1:00 P.M. (ET) through November 4, 2004 at 4:00 P.M. (ET) by dialing 1-877-660-6853 and using the access codes of Account #1628 and Conference ID# 118464. If you have difficulty accessing the material, please contact Rose Borotto at 413-236-3144. Berkshire Hills Bancorp, Inc. is the holding company for Berkshire Bank. 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, and a representative office and one branch in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . The Bank is committed to continuing operation as an independent bank, delivering exceptional customer service and a broad array of competitively priced retail and commercial products to its customers. Statements contained in this news release contain 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. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are based on the beliefs and expectations of management, as well as the assumptions made using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions. These risks and uncertainties include, among others: changes in market interest rates and general and regional economic conditions; changes in government regulations; changes in accounting principles; and the quality or composition of the loan and investment portfolios and other factors that may be described in the Company's quarterly reports on Form 10-Q Form 10-Q See 10-Q. for the quarters ended March 31, June 30 and September 30 and in its annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , each filed with the Securities and Exchange Commission, which are available at the Securities and Exchange Commission's internet website (www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. ) and to which reference is hereby made. Therefore, actual future results may differ significantly from results discussed in these forward-looking statements.
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
----------------------------------------------------------------------
Unaudited
At
-----------------------------------
September 30, June 30, December 31,
2004 2004 2003
----------------------------------------------------------------------
(In thousands)
ASSETS:
Cash and due from banks $15,908 $15,981 $15,583
Short term investments 6,689 5,167 1,859
----------- ----------- -----------
Total cash and cash
equivalents 22,597 21,148 17,442
Securities available for sale,
at fair value 387,950 394,469 307,425
Securities held to maturity, at
amortized cost 26,255 27,435 36,903
Federal Home Loan Bank stock,
at cost 16,898 16,898 12,923
Savings Bank Life Insurance
stock, at cost 2,043 2,043 2,043
Loans held for sale 571 - -
Loans 817,805 795,365 792,227
Allowance for loan losses (9,392) (9,248) (8,969)
----------- ----------- -----------
Net loans 808,413 786,117 783,258
Premises and equipment, net 13,389 13,137 12,626
Foreclosed real estate, net - 25 -
Accrued interest receivable 5,400 5,292 5,080
Goodwill and other intangibles 5,763 5,763 10,233
Net deferred tax assets 1,505 3,999 1,725
Bank owned life insurance 8,004 7,912 7,721
Due from broker 378 458 7,089
Other assets 11,343 11,391 14,080
----------- ----------- -----------
TOTAL ASSETS $1,310,509 $1,296,087 $1,218,548
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits $853,115 $847,403 $830,244
Federal Home Loan Bank advances 324,831 321,722 251,465
Loans sold with recourse - 191 473
Due to broker - - 5,646
Accrued expenses and other
liabilities 4,075 4,716 5,293
----------- ----------- -----------
Total liabilities 1,182,021 1,174,032 1,093,121
----------- ----------- -----------
Minority interests - - 2,252
----------- ----------- -----------
Stockholders' Equity:
Preferred stock ($.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 September 30,
2004, June 30, 2004 and
December 31, 2003;
shares outstanding: 5,873,563
at September 30, 2004, 5,871,261
at June 30, 2004 and 5,903,082
at December 31, 2003) 77 77 77
Additional paid-in capital 77,154 76,921 75,764
Unearned compensation (7,832) (8,251) (8,507)
Retained earnings 92,469 90,114 86,276
Accumulated other comprehensive
income 4,345 1,080 5,559
Treasury stock at cost (1,800,198
shares at September 30, 2004,
1,802,500 at June 30, 2004 and
1,770,679 at December 31, 2003) (37,725) (37,886) (35,994)
----------- ----------- -----------
Total stockholders' equity 128,488 122,055 123,175
----------- ----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY $1,310,509 $1,296,087 $1,218,548
=========== =========== ===========
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
Three Months Ended Nine Months Ended
------------------- -----------------
Sept. Sept. Sept. Sept.
30, 30, 30, 30,
2004 2003 2004 2003
----------------------------------------------------------------------
(In thousands, except per share data)
Interest and dividend income:
Bond interest $4,130 $1,676 $12,116 $4,799
Stock dividends 279 269 887 747
Short-term investment
interest 6 5 24 103
Loan interest 11,131 11,908 32,247 36,249
---------- -------- -------- --------
Total interest and
dividend income 15,546 13,858 45,274 41,898
---------- -------- -------- --------
Interest expense:
Interest on deposits 3,097 3,343 9,209 10,714
Interest on FHLB advances
and other borrowings 2,207 1,206 5,906 3,362
---------- -------- -------- --------
Total interest expense 5,304 4,549 15,115 14,076
---------- -------- -------- --------
Net interest income 10,242 9,309 30,159 27,822
Provision for loan losses 365 575 1,140 1,685
---------- -------- -------- --------
Net interest income after
provision for loan losses 9,877 8,734 29,019 26,137
---------- -------- -------- --------
Non-interest income:
Customer service fees 580 568 1,738 1,743
Trust Department fees 611 573 1,835 1,563
Loan fees 63 142 245 337
Gain on sale of
securities, net 310 356 1,013 1,513
Gain on sale of loans, net - 102 84 240
Other income 162 171 651 352
---------- -------- -------- --------
Total non-interest income 1,726 1,912 5,566 5,748
---------- -------- -------- --------
Non-interest expense:
Salaries and benefits 4,195 3,877 12,687 12,577
Occupancy and equipment 997 895 3,030 2,858
Marketing and advertising 207 137 634 379
Data processing 305 375 1,030 920
Professional services 442 260 1,226 742
Office supplies 126 146 387 473
Foreclosed real estate and
other loans, net 150 333 404 740
Other expenses 759 850 2,279 2,648
---------- -------- -------- --------
Total non-interest expense 7,181 6,873 21,677 21,337
---------- -------- -------- --------
Income from continuing
operations before income
taxes 4,422 3,773 12,908 10,548
Provision for income taxes 1,415 1,358 4,144 4,037
---------- -------- -------- --------
Income from continuing
operations 3,007 2,415 8,764 6,511
---------- -------- -------- --------
Loss from discontinued
operations - (1) (653) (208)
(including June 2004 loss
on sale of $75,000)
Income tax benefit - - (222) (71)
---------- -------- -------- --------
Net loss from
discontinued
operations - (1) (431) (137)
---------- -------- -------- --------
Net income $3,007 $2,414 $8,333 $6,374
========== ======== ======== ========
Earnings per share:
Basic 0.57 0.46 1.58 1.20
Diluted 0.53 0.43 1.45 1.12
Weighted average shares
outstanding:
Basic 5,270 5,196 5,284 5,301
Diluted 5,721 5,655 5,735 5,711
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
----------------------------------------------------------------------
Unaudited
Quarters Ended
-----------------------------------------
Sept. June Mar. Dec. Sept.
30, 30, 31, 31, 30,
2004 2004 2004 2003 2003
----------------------------------------------------------------------
(In thousands, except per share data)
Interest and dividend income:
Residential mortgage $2,869 $2,567 $2,986 $3,793 $4,099
Commercial real estate 3,630 3,389 3,225 2,969 2,760
Commercial 2,204 2,135 2,226 2,312 2,401
Indirect auto loans 1,695 1,589 1,610 1,665 1,945
Other consumer 733 697 692 695 703
--------- ------- ------- ------- -------
Total interest on
loans 11,131 10,377 10,739 11,434 11,908
Securities 4,289 4,296 4,060 2,905 1,886
Federal Home Loan Bank 120 63 175 65 59
Short-term investments 6 1 16 6 5
--------- ------- ------- ------- -------
Total interest and
dividend income 15,546 14,737 14,990 14,410 13,858
--------- ------- ------- ------- -------
Interest expense:
Interest on deposits 3,097 3,026 3,088 3,148 3,343
Interest on FHLB advances
and other borrowings 2,207 1,959 1,740 1,518 1,206
--------- ------- ------- ------- -------
Total interest expense 5,304 4,985 4,828 4,666 4,549
--------- ------- ------- ------- -------
Net interest income 10,242 9,752 10,162 9,744 9,309
Provision (credit) for loan
losses 365 425 350 (225) 575
--------- ------- ------- ------- -------
Net interest income after
provision (credit) for
loan losses 9,877 9,327 9,812 9,969 8,734
--------- ------- ------- ------- -------
Non-interest income:
Customer service fees 580 634 524 557 568
Trust Department fees 611 648 577 527 573
Loan fees 63 103 79 49 142
Gain on sale of
securities, net 310 377 325 1,564 356
Net loan sales gains
(losses), net - (6) 90 (2,094) 102
Loss on impairment of
other assets - - - (206) -
Other non-interest income 162 209 280 303 171
--------- ------- ------- ------- -------
Total non-interest
income 1,726 1,965 1,875 700 1,912
--------- ------- ------- ------- -------
Non-interest expense:
Salaries and benefits 4,195 3,890 4,603 3,589 3,877
Occupancy and equipment 997 975 1,059 942 895
Professional and outside
service fees 442 357 428 485 260
Marketing and advertising 207 270 157 299 137
Data processing 305 331 394 284 375
Foreclosed real estate
and other loans, net 150 171 83 307 333
Other non-interest
expense 885 939 839 1,000 996
--------- ------- ------- ------- -------
Total non-interest
expense 7,181 6,933 7,563 6,906 6,873
--------- ------- ------- ------- -------
Income from continuing
operations before
income taxes 4,422 4,359 4,124 3,763 3,773
Provision for income taxes 1,415 1,402 1,325 1,124 1,358
--------- ------- ------- ------- -------
Income from continuing
operations 3,007 2,957 2,799 2,639 2,415
--------- ------- ------- ------- -------
Loss from discontinued
operations - (386) (267) (73) (1)
Income tax benefit - (131) (91) (25) -
--------- ------- ------- ------- -------
Net loss from discontinued
operations - (255) (176) (48) (1)
--------- ------- ------- ------- -------
Net income $3,007 $2,702 $2,623 $2,591 $2,414
========= ======= ======= ======= =======
Basic earnings per share $0.57 $0.51 $0.50 $0.50 $0.46
Diluted earnings per share $0.53 $0.47 $0.46 $0.45 $0.43
Average shares:
Basic 5,270 5,292 5,285 5,222 5,196
Diluted 5,721 5,725 5,757 5,717 5,655
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
----------------------------------------------------------------------
Unaudited
At or For the Period Ended
----------------------------------------------------------------------
Sept. June Mar. Dec. Sept.
30, 30, 31, 31, 30,
NON-PERFORMING ASSETS 2004 2004 2004 2003 2003
----------------------------------------------------------------------
(In thousands)
Non-accrual loans:
Residential mortgage $332 $266 $341 $348 $221
Commercial real estate 614 934 484 496 154
Commercial 1,463 1,609 1,738 1,887 2,578
Indirect automobile
loans 297 350 395 451 696
Other consumer 8 11 14 17 2
---------- ------- ------- -------- --------
Total non-accrual
loans $2,714 $3,170 $2,972 $3,199 $3,651
Real estate owned ("REO"),
net of allowance for losses - 25 25 - -
Total non-
performing assets $2,714 $3,195 $2,997 $3,199 $3,651
Non-performing loans as a
percentage of total loans 0.33% 0.40% 0.39% 0.40% 0.46%
Non-performing assets as a
percentage of total loans
and REO 0.33% 0.40% 0.39% 0.40% 0.46%
Non-performing assets to
total assets 0.21% 0.25% 0.24% 0.26% 0.31%
----------------------------------------------------------------------
PROVISION (CREDIT) AND ALLOWANCE
FOR LOAN LOSSES
----------------------------------------------------------------------
Balance at beginning of
period $9,248 $8,952 $8,969 $10,097 $10,282
Charge-offs (447) (390) (628) (1,074) (1,015)
Recoveries 226 261 261 171 255
---------- ------- ------- -------- --------
Net loan charge-offs (221) (129) (367) (903) (760)
Provision (credit) for
loan losses 365 425 350 (225) 575
---------- ------- ------- -------- --------
Balance at end of period $9,392 $9,248 $8,952 $8,969 $10,097
========== ======= ======= ======== ========
Allowance for loan losses
as a percentage of
non-performing loans 346.06% 291.74% 301.21% 280.37% 276.55%
Allowance for loan losses
as a percentage of total
loans 1.15% 1.16% 1.18% 1.13% 1.26%
----------------------------------------------------------------------
NET LOAN (CHARGE-OFFS) RECOVERIES
----------------------------------------------------------------------
Residential mortgage $- $- $- $- $-
Commercial real estate - - - - -
Commercial loans (7) 23 96 (110) 21
Consumer loans (1) (214) (152) (463) (793) (781)
---------- ------- ------- -------- --------
Total $(221) $(129) $(367) $(903) $(760)
========== ======= ======= ======== ========
Net charge-offs as a
percentage of total loans 0.03% 0.02% 0.05% 0.11% 0.09%
----------------------------------------------------------------------
AVERAGE FICO SCORES OF
CONSUMER LOANS (1) 702 699 695 691 674
----------------------------------------------------------------------
(1) Consists primarily of automobile loans
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL RATIOS
----------------------------------------------------------------------
Unaudited
At or for the three months ended
----------------------------------------------------
Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
2004 2004 2004 2003 2003
--------- ------- ------- ------- -------
Performance Ratios (1):
Return on average
assets 0.92% 0.84% 0.84% 0.86% 0.86%
Return on average
stockholders'
equity 9.71% 8.40% 8.39% 8.49% 8.10%
Return on average
tangible
stockholders'
equity 10.18% 8.69% 9.14% 9.27% 8.87%
Net interest
margin 3.29% 3.19% 3.44% 3.42%(2) 3.51%
Non-interest
income to
average assets (3) 0.53%(4) 0.61%(4) 0.60%(4) 0.23%(5) 0.68%(4)
Non-interest
expense to
average assets (6) 2.20% 2.15% 2.42% 2.29%(7) 2.44%
Average earning
assets to
average assets 95.59% 94.64% 94.46% 94.28% 94.14%
Efficiency
ratio (8) 61.60% 61.14% 64.58% 62.86%(9) 63.25%
Capital ratios
Stockholders' equity
to total assets 9.81% 9.42% 10.12% 10.11% 10.30%
Tier I capital to
average adjusted
assets 9.09% 8.98% 8.89% 8.97% 9.36%
Tier I capital to
risk weighted
assets 12.90% 12.77% 12.71% 12.59% 12.51%
Total capital to
risk weighted
assets 14.29% 14.15% 14.15% 14.08% 14.16%
Other data
Book value per
share $21.87 $20.79 $21.54 $20.86 $20.46
Tangible book
value per share $20.89 $19.81 $19.82 $19.13 $18.71
Stock price:
High $39.14 $37.10 $38.61 $37.40 $33.90
Low $35.01 $32.69 $34.46 $33.55 $28.10
Close $36.95 $37.10 $34.90 $36.20 $33.69
(1) Ratios are annualized.
(2) Excluding the forfeiture of $245,000 in interest income upon the
sale of sub-prime automobile loans in December 2003, the net
interest margin would have been 3.50%.
(3) Excludes non-interest income from discontinued operations.
(4) Excluding the gain on the sale of securities of $310,355,
$377,000, $325,000 and $356,000 in the quarters ended September
2004, June 2004, March 2004 and September 2003, respectively, the
ratios would have been 0.44%, 0.49%, 0.50% and 0.55%,
respectively.
(5) Excluding the gain on sale of securities of $1.6 million, the $2.2
million loss on the sale of sub-prime automobile loans, and the
loss of $206,000 on the impairment of other assets - repossessed
vehicle inventory, the ratio would have been 0.51%.
(6) Excludes non-interest expense from discontinued operations.
(7) Excluding $363,000 representing the partial reversal of an
$800,000 retirement benefit charge that was recorded in the second
quarter of 2003, the ratio would have been 2.41%.
(8) Efficiency ratio is non-interest expenses, less non- recurring
items, divided by the total of net interest income, plus
non-interest income, less securities gains, less non- recurring
items. The ratio excludes discontinued operations.
(9) Excludes the partial reversal of retirement benefit charges of
$363,000 from non-interest expenses, $2.2 million of loss on the
sale of sub-prime automobile loans, $245,000 in forfeiture of
interest income associated with the sale of sub-prime automobile
loans and the loss on the impairment of other assets - repossessed
vehicle inventory of $206,000.
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS
Unaudited
Quarters Ended
September 30, 2004
-----------------------------------
Average Yield/
Balance Interest Rate (1)
----------------------------------------------------------------------
(In thousands)
Earning assets:
Short-term investments $2,192 $6 1.09%
Securities (2) 419,474 4,289 4.09%
Federal Home Loan Bank 16,898 120 2.84%
Loans:
Residential mortgage 225,198 2,869 5.10%
Commercial real estate 250,323 3,630 5.80%
Commercial 160,129 2,204 5.51%
Indirect auto loans 111,117 1,695 6.10%
Other consumer 60,627 733 4.84%
-------------- ----------
Total loans 807,394 11,131 5.51%
-------------- ----------
Total earning assets 1,245,958 $15,546 4.99%
==========
Other assets 57,551
--------------
Total assets $1,303,509
--------------
Funding liabilities:
Deposits:
Non-interest-bearing deposits $105,257
Savings, NOW and money market 425,562 838 0.79%
-------------- ----------
Total core deposits 530,819 838 0.63%
Certificates of deposits 326,411 2,259 2.77%
-------------- ----------
Total deposits 857,230 3,097 1.45%
-------------- ----------
Borrowings:
Federal Home Loan Bank advances 318,870 2,207 2.77%
-------------- -----------
Total funding liabilities 1,176,100 $5,304 1.80%
===========
Other liabilities 3,540
--------------
Total liabilities 1,179,640
Stockholders' Equity 123,869
--------------
Total liabilities and equity $1,303,509
--------------
Net interest income/spread $10,242 3.19%
-----------
Net interest margin 3.29%
(1) Average yields earned and rates paid are annualized.
(2) Average balances and yields for securities available for sale are
based on amortized cost.
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS
Unaudited
Quarters Ended
June 30, 2004
-------------------------------------
Average Yield/
Balance Interest Rate (1)
----------------------------------------------------------------------
(In thousands)
Earning assets:
Short-term investments $1,031 $1 0.39%
Securities (2) 425,658 4,296 4.04%
Federal Home Loan Bank 14,925 63 1.69%
Loans:
Residential mortgage 216,164 2,567 4.75%
Commercial real estate 237,727 3,389 5.70%
Commercial 159,241 2,135 5.36%
Indirect auto loans 106,883 1,589 5.95%
Other consumer 59,556 697 4.68%
------------ ----------
Total loans 779,571 10,377 5.32%
------------ ----------
Total earning assets 1,221,185 $14,737 4.83%
==========
Other assets 69,166
------------
Total assets $1,290,351
------------
Funding liabilities:
Deposits:
Non-interest-bearing deposits $102,881
Savings, NOW and money market 419,222 826 0.79%
------------ ----------
Total core deposits 522,103 826 0.63%
Certificates of deposits 322,048 2,200 2.73%
------------ ----------
Total deposits 844,151 3,026 1.43%
------------ ----------
Borrowings:
Federal Home Loan Bank advances 310,935 1,959 2.52%
------------ ----------
Total funding liabilities 1,155,086 $4,985 1.73%
==========
Other liabilities 4,619
------------
Total liabilities 1,159,705
Minority interests 1,977
Stockholders' Equity 128,669
------------
Total liabilities and equity $1,290,351
------------
Net interest income/spread $9,752 3.10%
----------
Net interest margin 3.19%
(1) Average yields earned and rates paid are annualized.
(2) Average balances and yields for securities available for sale are
based on amortized cost.
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS
Unaudited
Quarters Ended
December 31, 2003
------------------------------------
Average Yield/
Balance Interest Rate (1)
----------------------------------------------------------------------
(In thousands)
Earning assets:
Short-term investments $2,853 $6 0.84%
Securities (2) 314,070 2,905 3.70%
Federal Home Loan Bank 12,166 65 2.14%
Loans:
Residential mortgage 287,518 3,793 5.28%
Commercial real estate 193,728 2,969 6.13%
Commercial 167,427 2,312 5.52%
Indirect auto loans 103,821 1,665 6.41%
Other consumer 57,013 695 4.88%
-------------- -----------
Total loans 809,507 11,434 5.65%
-------------- -----------
Total earning assets 1,138,596 $14,410 5.06%
===========
Other assets 69,076
--------------
Total assets $1,207,672
--------------
Funding liabilities:
Deposits:
Non-interest-bearing deposits $98,392
Savings, NOW and money market 415,486 814 0.78%
-------------- -----------
Total core deposits 513,878 814 0.63%
Certificates of deposits 321,732 2,334 2.90%
-------------- -----------
Total deposits 835,610 3,148 1.51%
-------------- -----------
Borrowings:
Federal Home Loan Bank
advances 236,534 1,518 2.57%
-------------- -----------
Total funding liabilities 1,072,144 $4,666 1.74%
===========
Other liabilities 11,249
--------------
Total liabilities 1,083,393
Minority Interest 2,261
Stockholders' Equity 122,018
--------------
Total liabilities and
equity $1,207,672
--------------
Net interest income/spread $9,744 3.32%
----------
Net interest margin 3.42%
(1) Average yields earned and rates paid are annualized.
(2) Average balances and yields for securities available for sale are
based on amortized cost.
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS
Unaudited
Quarters Ended
September 30, 2003
------------------------------------
Average Yield/
Balance Interest Rate (1)
----------------------------------------------------------------------
(In thousands)
Earning assets:
Short-term investments $2,626 $5 0.76%
Securities (2) 220,514 1,886 3.42%
Federal Home Loan Bank 8,406 59 2.81%
Loans:
Residential mortgage 324,272 4,099 5.06%
Commercial real estate 177,306 2,760 6.23%
Commercial 169,653 2,401 5.66%
Indirect auto loans 104,252 1,945 7.46%
Other consumer 54,684 703 5.14%
------------ -----------
Total loans 830,167 11,908 5.74%
------------ -----------
Total earning assets 1,061,713 $13,858 5.22%
===========
Other assets 65,993
------------
Total assets $1,127,706
------------
Funding liabilities:
Deposits:
Non-interest-bearing deposits $99,351 -
Savings, NOW and money market 407,451 832 0.82%
------------ -----------
Total core deposits 506,802 832 0.66%
Certificates of deposits 330,821 2,511 3.04%
------------ -----------
Total deposits 837,623 3,343 1.60%
------------ -----------
Borrowings:
Federal Home Loan Bank advances 165,011 1,206 2.92%
------------ -----------
Total funding liabilities 1,002,634 $4,549 1.81%
===========
Other liabilities 3,650
------------
Total liabilities 1,006,284
Minority Interest 2,279
Stockholders' Equity 119,143
------------
Total liabilities and equity $1,127,706
------------
Net interest income/spread $9,309 3.41%
----------
Net interest margin 3.51%
(1) Average yields earned and rates paid are annualized.
(2) Average balances and yields for securities available for sale are
based on amortized cost.
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