Berkshire Hills Bancorp, Inc. Announces Third Quarter 2003 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)--Oct. 22, 2003 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 $2.4 million, or $0.43 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, 2003 as compared to $2.1 million, or $0.38, for the quarter ended June June: see month. 30, 2003 and $2.3 million, or $0.40 for the quarter ended September 30, 2002. Net income totaled $6.4 million for the first nine months of 2003, as compared to $6.3 million for the first nine months of 2002. Earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the first nine months of 2003 were $1.12 compared to $1.07 for the first nine months of 2002. Exclusive of gains on the sale of securities, earnings for the current quarter were $2.2 million, or $0.39 per diluted share. This compares to $0.38 per diluted share for the quarter ended June 30, 2003, where gains on the sale of securities and a tax credit from the Real Estate Investment Trust ("REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ") settlement were offset by a non-recurring retirement benefit charge. "I am pleased with the Company's third quarter financial performance. We have been vigilant in our efforts to balance short and long term investments in anticipation The performance of an act or obligation before it is legally due. In patent law, the publication of the existence of an invention that has already been patented or has a patent pending, of rising interest rates and at the same time drive current earnings. This objective has been facilitated by a combination of expense reduction and strong performance of our loan portfolio. In light of the earnings for the first nine months and our current business outlook we are comfortable with analyst's consensus estimates of at least $1.46 per share for the full year. While our attention to current period results go unabated un·a·bat·ed adj. Sustaining an original intensity or maintaining full force with no decrease: an unabated windstorm; a battle fought with unabated violence. we are also focused on planning the Bank's future," stated 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. As compared to the third quarter of 2002, earnings for the current quarter benefited from a lower loan loss provision, which was consistent with an improved credit risk profile and a reduction in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , offset by a decline in net interest income and a higher effective income tax rate. As compared to the second quarter of 2003, lower net interest income, which was primarily attributed to heavy 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 on loans, was offset by a lower loan loss provision. 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 Company reported that the Board of Directors declared a quarterly cash dividend of $0.12 per common share. The dividend is payable on November November: see month. 21, 2003 to shareholders of record at the close of business on November 6, 2003. Third Quarter Highlights -- The Bank sold $38.0 million in one-to four-family fixed rate residential mortgages, as the Bank continued to reduce its exposure to long duration assets. -- Commercial loans increased $10.2 million, or 3.0%, and consumer loans increased $5.6 million, or 3.5%, from June 30, 2003. -- Core deposits increased $16.2 million, or 3.3%, from June 30, 2003. -- Operating expenses, exclusive of EastPoint, decreased 3.5%, as compared to the same quarter last year. Financial Condition Loans increased $77.3 million from December December: see month. 31, 2002, attributed primarily to growth in residential real estate loans, up $43.6 million, or 18.0%, and commercial real estate loans, up $27.0 million, or 17.2%. Loans declined $22.6 million from June 30, 2003 primarily due to the sale of residential loans, partially offset by an increase in commercial real estate loans and an increase in consumer loans. Securities available for sale increased $70.3 million from December 31, 2002, with $64.4 million of this growth occurring since June 30, 2003, as the Company took advantage of a rise in interest rates during the current quarter and a steep yield curve. Investments were made primarily in mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. with durations averaging 3.5 years. Earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin were funded by growth in deposits and increases in borrowings. Deposits increased $45.4 million, or 5.8%, from December 31, 2002 to $827.8 million at September 30, 2003, and were up $11.0 million, or 1.4%, from June 30, 2003. Deposit growth resulted from gains in core deposits, represented by demand, NOW, savings and money market accounts, as time deposits were essentially flat. Borrowings from the Federal Home Loan Bank increased $34.2 million from June 30, 2003, and increased $58.3 million from December 31, 2002. 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 $3.7 million at September 30, 2003, an increase of $63,000 from June 30, 2003, and a decline of $90,000 from December 31, 2002. The Bank held no foreclosed real estate at September 30, 2003 and June 30, 2003 compared to $1.5 million at December 31, 2002. Sub-prime 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 totaled $13.0 million at September 30, 2003, a decrease of $2.1 million, or 14.0%, from June 30, 2003 and a decrease of $6.6 million, or 33.6%, from December 31, 2002. These loans are expected to continue to decline at a pace of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.1 million per quarter, which is consistent with the 2003 quarterly trend. The ratio of loans 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. 30 days or more to total loans was 0.98% at September 30, 2003, consistent with 1.06% at June 30, 2003, and 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 improvement in the Bank's credit risk profile as compared to a ratio of 1.40% at December 31, 2002. The allowance for loan losses totaled $10.1 million, representing 1.26% of total loans at September 30, 2003 compared to $10.3 million, or 1.25% of total loans at June 30, 2003, and $10.3 million, or 1.43% of total loans at December 31, 2002. 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, 2003, June 30, 2003, and December 31, 2002 was $18.71, $18.38 and $18.00, respectively. Results of Operations Net interest income was $9.3 million for the third quarter of 2003, decreasing $124,000 and $1.3 million, compared to the quarters ended June 30, 2003 and September 30, 2002, respectively. The Company's net interest margin was 3.51% for the third quarter of 2003 compared to 3.73% for the second quarter of 2003, and 4.21% for the third quarter last year. The decline in the net interest margin from the preceding quarter was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to heavy prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. on one-to four-family residential loans and, to a lesser extent, from the actions taken by management to shorten (audio, compression) Shorten - A form of lossless audio compression. the duration of earning assets, better positioning the Company's balance sheet given the current historically low interest rate environment. Prepayments are expected to slow significantly in the remaining months of 2003. The provision for loan losses totaled $575,000 for the quarter ended September 30, 2003, a reduction of $210,000 from $785,000 for the quarter ended June 30, 2003 and $475,000 from $1.1 million for the same period in 2002. Net loan charge-offs totaled $760,000 for the quarter ended September 30, 2003, a decrease of $92,000, or 10.8%, compared to $852,000 for the quarter ended June 30, 2003 and a decrease of $576,000, or 43.1%, from $1.3 million for the quarter ended September 30, 2002. Excluding license maintenance and sales fees from EastPoint and gains on the sale of securities, noninterest income was $1.6 million for the quarter ended September 30, 2003, essentially flat compared to the quarter ended June 30, 2003 and an increase of $440,000, or 39.3%, from $1.1 million for the quarter ended September 30, 2002. This increase compared to the same period last year was primarily the result of increases in trust department and loan fees and gains on the sale of loans. License maintenance and processing fees and license sales and other fees, which represent revenue from EastPoint totaled $1.7 million in the current quarter, decreasing $405,000 from June 30, 2003 and $452,000 as compared to the same quarter last year. Associated expenses, which are recorded in various expense categories, totaled $1.8 million, net of minority interests, for the current quarter, a decrease of $412,000 from June 30, 2003 and $481,000 as compared to the same quarter last year. Exclusive of EastPoint expenses and an $800,000 non-recurring retirement benefit charge taken in the second quarter of 2003, operating expenses totaled $6.8 million for the third quarter of 2003, a decrease of $244,000, or 3.5%, compared to the same quarter last year and up $39,000, or less than 1%, compared to the quarter ended June 30, 2003. The decrease was primarily due to decreases in salaries and benefits expense and in foreclosed real estate and other loan expenses. The decline in foreclosed real estate and other loan expenses resulted from a decline in expenses associated with the Bank's automobile repossession The taking back of an item that has been sold on credit and delivered to the purchaser because the payments have not been made on it. 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. The Company's effective tax rate was 36.0% in the quarter ended September 30, 2003, an increase compared to 32.6% for the same quarter last year. The increase was primarily due to the State's disallowance dis·al·low tr.v. dis·al·lowed, dis·al·low·ing, dis·al·lows 1. To refuse to allow: "[The government] of a dividend received deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. paid to the Bank by the Bank's REIT. The effective tax rate is expected to remain at approximately 36.0% for the remaining quarter of 2003. 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. 23, 2003. 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 do so by dialing 1-800-289-0529, and use access code 233673. 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 23, 2003. Replays of the conference call will be available beginning October 23, 2003 at 5:00 P.M. (ET) through October 31, 2003 at 11:00 P.M. (ET) by dialing 1-888-203-1112, using access code 233673. 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. 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 its customers. This press release may contain certain 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. with regard to the Company's prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions for forward-looking statements contained in 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, and is including this statement for purposes of said safe harbor provisions. Forward-looking statements, which are based on certain assumptions, and describe future plans, strategies, and expectations of the Company, are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," or other similar expressions. The Company's ability to predict results, or the actual effects of its plans and strategies, are inherently uncertain. Accordingly, actual results may differ materially from anticipated results. Factors that could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to: the price of loans or other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. sold by the Bank in the future; changes in market interest rates, general economic conditions, legislation, and regulation; changes in the monetary and fiscal policies of the U.S. Government; changes in the quality or composition of the loan and investment portfolios; changes in deposit flows, competition, and demand for financial services 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 loan, deposit, and investment products in the Company's local markets; changes in local real estate values; changes in accounting principles and guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. ; war or terrorist activities; and other economic, competitive, governmental, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. , geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. and technological factors affecting the Company's operations, pricing, and services. Specific factors that could cause future results to vary from current management expectations are detailed from time to time in the Company's SEC filings. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Except as required by applicable law or regulation, the Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or that occur after the date on which such statements were made.
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Unaudited
At
September 30, June 30, Dec. 31,
2003 2003 2002
(In thousands)
ASSETS:
Cash and due from banks $17,803 $11,303 $17,258
Short term investments 9,262 8,024 43,397
Total cash and cash equivalents 27,065 19,327 60,655
Securities available for sale,
at fair value 243,451 179,011 173,169
Securities held to maturity, at
amortized cost 41,380 46,476 44,267
Federal Home Loan Bank stock,
at cost 11,416 7,858 7,440
Savings Bank Life Insurance
stock, at cost 2,043 2,043 2,043
Loans 800,280 822,873 723,022
Allowance for loan losses (10,097) (10,282) (10,308)
Net loans 790,183 812,591 712,714
Premises and equipment, net 12,816 13,132 13,267
Foreclosed real estate - - 1,500
Accrued interest receivable 5,096 5,256 5,125
Goodwill and other intangibles (1) 10,284 10,334 10,435
Net deferred tax assets 2,843 2,601 2,185
Bank owned life insurance 7,626 7,529 -
Other assets 13,703 12,211 13,315
TOTAL ASSETS $1,167,906 $1,118,369 $1,046,115
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits $827,782 $816,772 $782,360
Federal Home Loan Bank advances 191,318 157,156 133,002
Securities sold under
agreements to repurchase - - 700
Loans sold with recourse 598 765 1,201
Due to broker 20,019 16,411 -
Accrued expenses and other
liabilities (1) 5,632 6,714 5,846
Total liabilities 1,045,349 997,818 923,109
Minority interests 2,300 2,301 2,438
Stockholders' Equity:
Preferred stock ($.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, 2003 and December
31, 2002; shares outstanding:
5,878,920 at September 30, 2003
and 6,117,134 at December
31, 2002) 77 77 77
Additional paid-in capital 75,605 75,430 74,632
Unearned compensation (8,892) (9,273) (9,535)
Retained earnings (1) 84,362 82,603 80,010
Accumulated other comprehensive
income 5,427 5,870 5,542
Treasury stock at cost (1,794,841
shares at September 30, 2003
and 1,556,627 shares at
December 31, 2002) (36,322) (36,457) (30,158)
Total stockholders' equity 120,257 118,250 120,568
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY $1,167,906 $1,118,369 $1,046,115
(1) For the period ended December 2002, the information reflects the
adoption of SFAS 147. The impact resulted in increases to goodwill
of $497,000, deferred taxes of $169,000, and $328,000 to retained
earnings.
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Unaudited
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2003 2002 2003 2002
(In thousands, except per share data)
Interest and dividend income:
Bond interest $1,676 $1,368 $4,799 $3,940
Stock dividends 269 411 747 1,031
Short-term investment
interest 5 121 103 326
Loan interest 11,908 14,551 36,249 44,282
Total interest and
dividend income 13,858 16,451 41,898 49,579
Interest expense:
Interest on deposits 3,343 4,425 10,714 13,556
Interest on FHLB advances
and other borrowings 1,206 1,467 3,362 4,325
Total interest
expense 4,549 5,892 14,076 17,881
Net interest income 9,309 10,559 27,822 31,698
Provision for loan losses 575 1,050 1,685 3,875
Net interest income after
provision for loan losses 8,734 9,509 26,137 27,823
Non-interest income:
Customer service fees 568 557 1,743 1,666
Trust Department fees 573 411 1,563 1,365
Loan fees 142 79 337 394
Gain/ (Loss) on sale of
securities, net 356 (29) 1,513 (37)
Gain on sale of loans 102 - 240 -
License maintenance and
processing fees 1,060 1,098 3,337 3,268
License sales and other fees 661 1,075 2,131 1,984
Other income 171 69 352 450
Total non-interest
income 3,633 3,260 11,216 9,090
Operating expense:
Salaries and benefits 5,132 5,411 16,380 16,261
Occupancy and equipment 1,191 1,236 3,794 3,932
Marketing and advertising 137 177 379 389
Data processing 283 148 743 494
Professional services 292 337 834 942
Office supplies 164 154 525 531
Foreclosed real estate and
other loans, net 333 581 740 1,821
Amortization of other
intangibles (1) 51 51 153 153
Minority interests (1) (43) (137) (300)
Other expenses 1,013 1,268 3,602 3,342
Total operating expense 8,595 9,320 27,013 27,565
Income before taxes 3,772 3,449 10,340 9,348
Provision for income
taxes (1) 1,358 1,123 3,966 3,043
Net income $2,414 $2,326 $6,374 $6,305
Earnings per share:
Basic $0.46 $0.43 $1.20 $1.16
Diluted $0.43 $0.40 $1.12 $1.07
Weighted average shares
outstanding:
Basic 5,196 5,378 5,301 5,457
Diluted 5,655 5,850 5,711 5,907
(1) For the quarter and nine months ended September 30, 2002, the
information reflects the adoption of SFAS 147. The impact for the
quarter, and every quarter in 2002 , resulted in a decrease of
$124,000 in amortization expense, and an increase of $42,000 in
the provision for income taxes.
BERKSHIRE HILLS BANCORP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Unaudited
Quarters Ended
Sept. 30 June 30 Mar. 31 Dec. 31 Sept. 30
2003 2003 2003 2002 2002
(In thousands, except per share data)
Interest and dividend income:
Residential mortgage $4,099 $4,564 $4,030 $3,896 $3,969
Commercial real estate 2,760 2,627 2,607 2,521 2,411
Commercial 2,401 2,474 2,544 2,559 2,820
Indirect auto loans 1,945 1,836 1,920 2,686 4,365
Other consumer 703 859 880 967 986
Total interest on
loans 11,908 12,360 11,981 12,629 14,551
Securities 1,886 1,706 1,770 1,721 1,711
Federal Home Loan Bank 59 59 66 70 68
Short-term investments 5 14 84 129 121
Total interest and
dividend income 13,858 14,139 13,901 14,549 16,451
Interest expense:
Deposits 3,343 3,613 3,758 4,221 4,425
Borrowings 1,206 1,093 1,063 1,326 1,467
Total interest
expense 4,549 4,706 4,821 5,547 5,892
Net interest income 9,309 9,433 9,080 9,002 10,559
Provision for loan losses 575 785 325 2,305 1,050
Net interest income after
provision for loan losses 8,734 8,648 8,755 6,697 9,509
Non-interest income:
Customer service fees 568 619 556 567 557
Trust Department fees 573 554 436 431 411
Loan fees 142 147 48 46 79
Net security gains(losses) 356 317 840 14,507 (29)
License maintenance and
sales fees 1,721 2,126 1,621 1,739 2,173
Net loan sales
gains(losses) 102 138 - (10,702) -
Loss on impairment of
other assets - - - (1,262) -
Penalty on prepayment of
borrowings - - - (1,067) -
Other non-interest income 171 121 60 69 69
Total non-interest
income 3,633 4,022 3,561 4,328 3,260
Non-interest expense:
Salaries and benefits 5,132 5,962 5,286 12,227 5,411
Occupancy and equipment 1,191 1,222 1,381 1,356 1,236
Professional and outside
service fees 292 294 248 442 337
Marketing and advertising 137 139 103 259 177
Data processing 283 239 221 264 148
REO and other loan expenses 333 286 121 1,429 581
Amortization of other
intangibles 51 51 51 51 51
Interest from disallowance
of REIT - (15) 44 - -
Other non-interest expense 1,176 1,589 1,196 1,717 1,379
Total non-interest
expense 8,595 9,767 8,651 17,745 9,320
Income before income
tax expense 3,772 2,903 3,665 (6,720) 3,449
Income tax effect resulting
from REIT disallowance - (244) 487 - -
Provision for income taxes 1,358 1,009 1,356 (2,513) 1,123
Net income $2,414 $2,138 $1,822 $(4,207) $2,326
Basic earnings per share $0.46 $0.40 $0.34 $(0.78) $0.43
Diluted earnings per share $0.43 $0.38 $0.32 $(0.78) $0.40
Average shares:
Basic 5,196 5,291 5,357 5,370 5,378
Diluted 5,655 5,687 5,731 5,370 5,850
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
Unaudited
NON-PERFORMING ASSETS At
Sept. 30 June 30 Mar. 31 Dec. 31 Sept. 30
2003 2003 2003 2002 2002
(In thousands)
Non-accrual loans:
Residential mortgage $221 $213 $220 $230 $166
Commercial real estate 154 165 167 - -
Commercial 2,578 2,490 2,641 2,850 1,490
Indirect automobile
loans 696 710 706 593 759
Other consumer 2 10 148 68 99
Total non-accrual
loans $3,651 $3,588 $3,882 $3,741 $2,514
Real estate owned ("REO"),
net of allowance for
losses - - - 1,500 2,000
Total non-
performing assets $3,651 $3,588 $3,882 $5,241 $4,514
Non-performing loans as a
percentage of total loans 0.46% 0.44% 0.49% 0.52% 0.32%
Non-performing assets as a
percentage of total loans
and REO 0.46% 0.44% 0.49% 0.72% 0.57%
Allowance for loan losses
as a percentage of
non-performing loans 276.55% 286.57% 266.59% 275.54% 424.66%
Allowance for loan losses
as a percentage of total
loans 1.26% 1.25% 1.31% 1.43% 1.36%
Net charge-offs as a
percentage of total loans 0.09% 0.10% 0.04% 0.37% 0.17%
PROVISION AND ALLOWANCE
FOR LOAN LOSSES
Balance at beginning of
period $10,282 $10,349 $10,308 $10,676 $10,962
Charge-offs (1,015) (1,164) (1,111) (3,174) (1,840)
Recoveries 255 312 827 501 504
Net loan charge-offs (760) (852) (284) (2,673) (1,336)
Provision for loan losses 575 785 325 2,305 1,050
Balance at end of period $10,097 $10,282 $10,349 $10,308 $10,676
NET LOAN (CHARGE-OFFS) RECOVERIES
Residential mortgage $- $- $- $- $-
Commercial real estate - - - - (150)
Commercial loans 21 (26) 399 (196) 18
Consumer loans (1) (781) (826) (683) (2,477) (1,204)
Total $(760) $(852) $(284) $(2,673) $(1,336)
SUBPRIME LOANS
Balance at end of period $13,006 $15,128 $17,238 $19,573 $88,200
Allowance for subprime
loans/Total subprime
loans 15.75% 15.79% 16.01% 15.83% 4.08%
AVERAGE FICO SCORES
CONSUMER LOANS (1) 674 670 666 665 623
(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, March 31, Dec 31, Sept 30,
2003 2003 2003 2002 2002
(In thousands, except per share data)
Performance Ratios (1):
Return (loss) on
average assets 0.86% 0.80% 0.70% (1.47%) 0.88%
Return (loss) on
average stockholders'
equity 8.10% 7.16% 6.06% (12.09%) 6.76%
Return (loss)on
average tangible
stockholders' equity 8.87% 7.85% 6.33% (13.14%) 7.31%
Net interest margin 3.51% 3.73% 3.67% 3.89%(2) 4.21%
Noninterest income to
average assets 1.16% 1.38% 1.04% 1.06%(3) 1.24%
Noninterest expense
to average assets 3.05% 3.35%(4) 3.31% 3.85%(4) 3.52%
Average earning assets
to average assets 94.14% 95.09% 94.67% 94.88% 94.90%
Efficiency ratio 68.29% 68.25%(4) 73.31% 87.27%(3,4) 68.20%
Asset Quality Ratios(5):
Non-performing loans $3,651 $3,588 $3,882 $3,741 $2,514
Foreclosed real estate $- $- $- $1,500 $2,000
Non-performing assets $3,651 $3,588 $3,882 $5,241 $4,514
Net charged-off loans
to total loans 0.09% 0.10% 0.04% 0.37% 0.17%
Nonperforming loans to
total loans 0.46% 0.44% 0.49% 0.52% 0.32%
Nonperforming assets to
total loans and REO 0.46% 0.44% 0.49% 0.72% 0.57%
Nonperforming assets to
total assets 0.31% 0.32% 0.37% 0.50% 0.42%
Allowance for loan
losses to non-
performing loans 276.55% 286.57% 266.59% 275.54% 424.66%
Allowance for loan
losses to total loans 1.26% 1.25% 1.31% 1.43% 1.36%
Capital ratios (5)
Stockholders' equity
to total assets 10.30% 10.57% 11.20% 11.53% 12.48%
Tier I capital to
average adjusted
assets 9.36% 9.66% 10.00% 10.30% 10.82%
Tier I capital to
risk weighted assets 12.51% 12.06% 13.02% 13.45% 12.97%
Total capital to risk
weighted assets 14.19% 13.75% 14.67% 15.19% 15.32%
Other data (5)
Book value per share $20.46 $20.14 $19.80 $19.71 $21.78
Tangible book value
per share $18.71 $18.38 $18.07 $18.00 $20.08
Stock price:
High $33.90 $28.40 $24.00 $25.25 $27.25
Low $28.10 $23.10 $21.86 $22.94 $20.99
Close $33.69 $28.40 $23.00 $23.55 $23.50
(1) Ratios are annualized for each of the quarters
(2) Adjusted for impact of the forfeiture of $758,000 in interest
income upon the sale of subprime automobile loans in December 2002
(3) Excludes net securities gains/losses, and, excludes charges
related to the sale of subprime auto loans and other restructuring
charges in fourth quarter of 2002
(4) Excludes retirement benefit charges in second quarter of 2003 and
severance costs and other management restructuring charges in
fourth quarter of 2002
(5) End of period prices and values
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS (1)
Unaudited
Quarters ended
September 30, 2003
Average Yield/
Balance Interest Rate
(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%
Repurchase Agreements - - -
Total borrowings 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.
BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE, INTEREST AND YIELD/RATE ANALYSIS (1)
Unaudited
Quarters ended
June 30, 2003
Average Yield/
Balance Interest Rate
(In thousands)
Earning assets:
Short-term investments $2,834 $14 1.98%
Securities (2) 186,975 1,705 3.65%
Federal Home Loan Bank 7,496 60 3.20%
Loans:
Residential mortgage 324,366 4,564 5.63%
Commercial real estate 164,997 2,627 6.37%
Commercial 171,007 2,474 5.79%
Indirect auto loans 93,772 1,836 7.83%
Other consumer 60,316 859 5.70%
Total loans 814,458 12,360 6.07%
Total earning assets 1,011,763 $14,139 5.59%
Other assets 60,165
Total assets $1,071,928
Funding liabilities:
Deposits:
Non-interest-bearing deposits $86,299
Savings, NOW and money market 385,992 964 1.00%
Total core deposits 472,291 964 0.82%
Certificates of deposits 332,879 2,649 3.18%
Total deposits 805,170 3,613 1.79%
Borrowings:
Federal Home Loan Bank
advances 136,685 1,093 3.20%
Repurchase Agreements - - na
Total borrowings 136,685 1,093 3.20%
Total funding liabilities 941,855 $4,706 2.00%
Other liabilities 8,376
Total liabilities 950,231
Minority Interest 2,339
Stockholders' Equity 119,358
Total liabilities and
equity $1,071,928
Net interest income/spread $9,433 3.59%
Net interest margin 3.73%
(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 (1)
Unaudited
Quarters ended
September 30, 2002
Average Yield/
Balance Interest Rate
(In thousands)
Earning assets:
Short-term investments $30,073 $121 1.61%
Securities (2) 161,875 1,711 4.23%
Federal Home Loan Bank 7,378 68 3.69%
Loans:
Residential mortgage 240,840 3,976 6.60%
Commercial real estate 140,366 2,410 6.87%
Commercial 173,177 2,821 6.52%
Indirect auto loans 191,029 4,359 9.13%
Other consumer 59,618 985 6.61%
Total loans 805,030 14,551 7.23%
Total earning assets 1,004,356 $16,451 6.55%
Other assets 52,521
Total assets $1,056,877
Funding liabilities:
Deposits:
Non-interest-bearing deposits $82,900
Savings, NOW and money market 357,677 1,365 1.53%
Total core deposits 440,577 1,365 1.24%
Certificates of deposits 323,336 3,060 3.79%
Total deposits 763,913 4,425 2.32%
Borrowings:
Federal Home Loan Bank
advances 146,581 1,463 3.99%
Repurchase Agreements 1,075 4 1.49%
Total borrowings 147,656 1,467 3.97%
Total funding liabilities 911,569 $5,892 2.59%
Other liabilities 7,571
Total liabilities 919,140
Minority Interest 2,818
Stockholders' Equity 134,919
Total liabilities and
equity $1,056,877
Net interest income/spread $10,559 3.97%
Net interest margin 4.21%
(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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