Press Release

Berkshire Hills Reports Third Quarter Results

Company Release -
10/20/2022 7:30 AM ET

BOSTON, Oct. 20, 2022 /PRNewswire/ -- Berkshire Hills Bancorp, Inc. (NYSE: BHLB) today reported third quarter 2022 earnings per share ("EPS") totaling $0.42.  The non-GAAP measure of adjusted EPS totaled $0.62 for this period.

GAAP EPS decreased from $0.50 in the prior quarter due to $11 million in third quarter charges primarily consisting of branch restructuring costs following the completion of the previously announced branch consolidation program.  

Excluding these charges, adjusted EPS increased by 21% from $0.51 in the prior quarter.  Results benefited from a 13% increase in net interest income driven by a 37 basis point increase in the net interest margin due to loan growth and higher market interest rates.

Third quarter GAAP EPS decreased from $1.31 in 2021 due to $52 million in gains recorded on the sale of branch and insurance operations in 2021.  Excluding these gains, adjusted EPS increased year-over-year by 18%.  Berkshire's 2022 results demonstrate positive operating leverage from its BEST strategic transformation initiatives.

THIRD QUARTER FINANCIAL HIGHLIGHTS (Changes are quarter-over-quarter unless otherwise stated.  Non-GAAP measures are reconciled on pages F-9 and F-10).

  • 6.8% return on tangible common equity and 9.9% adjusted return on tangible common equity
  • 11% increase quarter-over-quarter in total net revenue; 10% increase in adjusted net revenue
  • 3.48% net interest margin, increased from 3.11% in 2Q22 and 2.56% in 3Q21
  • 62% efficiency ratio, improved from 67% in 2Q22 and 69% in 3Q21
  • 2% end-of-period loan growth quarter-over-quarter; 16% growth year-over-year
  • 0.74% delinquent and non-accrual loans/loans
  • 7% reduction in period-end shares outstanding year-over-year reflecting stock buybacks
  • Prepayment of $75 million in subordinated debt in September 2022

CEO Nitin Mhatre stated "Berkshire posted strong revenue growth in the third quarter and achieved the highest adjusted per share earnings since 2019.  We're ahead of our BEST strategic transformation plan targets for performance improvement and accelerating our progress towards our vision of becoming a high-performing, leading socially responsible community bank."

"Berkshire posted another quarter of loan growth and asset quality remains strong.  Our balance sheet remains positioned to benefit from further increases in market interest rates.  The Company's expense discipline continues to support positive operating leverage and improved efficiency, allowing us to reinvest in targeted business lines.  Our focused capital management has improved our capital returns to shareholders while also maintaining a strong capital base to support further franchise growth."

Mr. Mhatre concluded, "We continue to evolve our organization to meet shifting consumer, business, community, and employee expectations while enhancing our DigitouchSM model of customer engagement.  We've increased our base pay rates, announced a number of promotions, and continue targeted recruiting of frontline bankers.  Our teams are finding opportunities to add new relationships in the changing local banking landscape.  We're making steady progress in our multi-billion BEST Community Comeback program along with our ESG activities and are encouraged by the ongoing momentum within our organization and communities."

RESULTS OF OPERATIONS

Earnings:  Third quarter EPS of $0.42 decreased from $0.50 quarter-over-quarter, while adjusted EPS increased by 21% to $0.62 from $0.51. Third quarter EPS decreased from $1.31 in 2021 due to gains recorded on the sale of business operations in 2021. Third quarter adjusted EPS increased from $0.53 in 2021.

The improvement in adjusted earnings reflects positive operating leverage, with 11% revenue growth and 3% growth in adjusted operating expense compared to the prior quarter.  The efficiency ratio improved to 62% in the most recent quarter, compared to 67% in the linked quarter and to 69% in the third quarter of 2021. 

The third quarter 2022 return on tangible common equity measured 6.8% and the non-GAAP measure of adjusted return on tangible common equity measured 9.9%, The return on assets measured 0.66% and the non-GAAP measure of adjusted return on assets measured 0.99%.

The Company also utilizes the financial measure of Pre-tax Pre-Provision Net Revenue ("PPNR") to evaluate the results of operations before the impact of the provision and tax expense. Compared to the prior quarter, PPNR decreased by $2 million to $27 million due to the restructuring expenses.  The non-GAAP measure of adjusted PPNR increased by 28% to $39 million. Adjusted PPNR increased by 53% on a year-over-year basis.

Earnings per share benefited from share repurchases in most quarters during 2021 and 2022.  At period-end, the Company had approximately $35 million remaining in its 2022 share repurchase authorization. 

Revenue and expense comparisons to the third quarter of 2021 include the impact of the sale of branch and insurance operations at the end of that period.  Revenue and expense related to those operations were components of operating income in that period and in prior periods.

Revenue:  Total net revenue increased by 11% quarter-over-quarter and decreased by 25% year-over-year, due to the gains recorded on the sale of operations in the third quarter of 2021.   The Company's non-GAAP measure of adjusted revenue increased by 10% and 17% for the above periods. 

Net interest income has been the primary driver of revenue growth in recent periods.  Third quarter net interest income increased by $11 million, or 13%, compared to the linked quarter and by $21 million, or 29%, compared to the third quarter of 2021.  After several quarters of relative stability, including a 2.56% margin in the third quarter of 2021, the margin expanded strongly to 3.11% in the second quarter of 2022, and then rose further to 3.48% in the third quarter of 2022. 

This improvement primarily reflected the impact of rapidly rising market interest rates which the Company was positioned to benefit from due to the positive asset sensitivity of its balance sheet.  The margin also reflected the benefit of the reduction in higher cost wholesale funds as well as the reinvestment of excess cash into loan growth.  The interest margin has also benefited from a lag in the responsiveness of deposit costs to the initial upward move in market interest rates.

The yield on average earning assets improved quarter-over-quarter to 3.91% from 3.34%.  The cost of funds increased to 0.46% from 0.24%, while the cost of deposits increased to 0.33% from 0.17%.  The Company's interest rate sensitivity remained positive at period-end and was positioned to benefit from further interest rate increases anticipated by the market. 

Deposit fees increased 5% quarter-over-quarter and 9% year-over-year, reflecting increased customer activity.  Most lending related fees were down due to lower commercial activity in the most recent quarter.

Provision for Credit Losses on Loans:  Berkshire recorded a $3 million provision for credit losses in the third quarter of 2022, compared to a zero provision in the second quarter of 2022 and a credit of $4 million in the third quarter of 2021. The Company continues to maintain strong credit quality, and the allowance for credit losses on loans decreased by $3 million to $96 million during the quarter. 

Non-Interest Expense:  Berkshire has maintained quarterly operating non-interest expenses generally stable within a targeted range of $68-70 million for more than a year, with a goal of reinvesting expense savings into frontline bankers and technology.  Total expense increased to $82 million in the most recent quarter, primarily due to the $11 million charge for restructuring and other expense.  The non-GAAP measure of adjusted non-interest expense totaled $70 million during this quarter.  Total compensation expense increased by $2 million quarter-over-quarter including wage increases and increased performance based compensation. Full time equivalent staff totaled 1,300 positions at period-end, compared to 1,319 positions at the start of the year.  The effective tax rate was 21% in the most recent quarter, which was an increase from 20% for the year 2021. 

BALANCE SHEET (references are to period-end balances unless otherwise stated)

Summary:  Total loans grew by 2% quarter over quarter and by 16% year-over-year, including increases near double digits or greater across all major categories.  Total deposits decreased by 1% quarter-over-quarter and 4% year-over-year, due primarily due to reductions of brokered deposits and overnight payroll deposits.  Period-end liquidity and capital remained strong, with the ratio of loans/deposits measuring 80% and tangible common equity/tangible assets measuring 8.1%. The Company remained positively sensitive to interest rate increases based on its asset/liability profile at period-end.

Loans:  Quarter-over-quarter loan growth was concentrated in a 12% increase in residential mortgages.  Year-over-year loan growth was concentrated in a 41% increase in residential mortgages and a 10% increase in commercial loans.  Berkshire has expanded its mortgage origination team and its in-footprint relationship bank channel.  The Company expanded its commercial teams over the last year, and business volumes and credit usage have benefited from improved market demand.  Loan growth has also benefited from a decline in prepayments in the prevailing rising rate environment.  

Asset Quality:   Asset quality metrics remained within historically favorable ranges through the third quarter. Period-end non-performing assets measured 0.35% of total assets, and total delinquent and non-accruing loans were 0.74% of total loans.  Annualized net loan charge-offs measured 0.16% of average loans for the first nine months of the year. The ratio of the allowance for loan credit losses on loans to total loans decreased to 1.21% from 1.27% at midyear and from 1.55% at the start of the year.

Deposits and Borrowings:  Total deposits decreased by 1% quarter-over-quarter and 4% year-over-year.  Excluding changes in overnight payroll deposits and changes in brokered deposits, total deposits increased by 1% and decreased by 1% for these respective periods.  During the third quarter, Berkshire prepaid its ten-year-old 6.875% $75 million subordinated note.  The Company completed the issuance of an investment grade rated $100 million sustainable subordinated bond offering in June 2022.

Equity:  The $71 million, or 7%, quarter-over-quarter decrease in shareholders' equity included a $61 million net decrease due to after-tax unrealized bond losses caused by rising interest rates. Stock buybacks in the most recent quarter totaled approximately $20 million consisting of approximately 705,000 shares.  At period-end, book value per share totaled $20.93 and tangible book value per share totaled $20.36.

ESG & CORPORATE RESPONSIBILITY UPDATE 

Berkshire Bank is committed to purpose-driven, community-centered banking that enhances value for all stakeholders as it pursues its vision of being a high-performing, leading socially responsible community bank in New England and beyond. Learn more about the steps Berkshire is taking at berkshirebank.com/csr and in its most recent Corporate Responsibility Report.

Key developments in the quarter include:

  • BEST Community Comeback: As a result of the collective efforts of its employees, Berkshire is making steady progress towards the achievement of its "BEST Community Comeback" goals. The multi-year plan focuses on four key areas: fueling small businesses, community financing and philanthropy, financial access and empowerment, and funding environmental sustainability. Additional information can be found at berkshirebank.com/comeback.
  • Current ESG Performance: The Company remained within its BEST ESG goal with a top 23% composite performance in leading ESG indexes in the U.S. for its Environmental, Social and Governance (ESG) ratings. As of September 30, 2022 the Company has ratings of: MSCI ESG- BBB; ISS ESG Quality Score - Environment: 2, Social: 1, Governance: 2; and Bloomberg ESG Disclosure- 62.81. The Company also receives a rating by Sustainalytics. Berkshire continues to rank among the top 1% of all U.S. Banks for ESG in Bloomberg this year.
  • Recognition & Continued Community Impact: The Boston Business Journal named Berkshire one of Massachusetts' Top Charitable Contributors for the tenth consecutive year. The honor further demonstrates Berkshire's deep commitment to lifting-up its communities which includes recent announcements of $100,000 in scholarships to forty (40) students continuing in their pursuit of an undergraduate degree from an accredited non-profit college or technical school and more than $600,000 in third quarter philanthropic contributions through Berkshire's Foundation to support projects enhancing the quality of life and economic vibrancy in communities where the bank operates.

INVESTOR CONFERENCE CALL AND INVESTOR PRESENTATION

Berkshire will conduct a conference call/webcast at 10:00 a.m. Eastern time on Thursday, October 20, 2022 to discuss results for the quarter and provide guidance about expected future results. Participants are encouraged to pre-register for the conference call using the following link:

https://www.netroadshow.com/events/login?show=4f8bbd69&confId=42577

Callers who pre-register will be given dial-in instructions and a unique PIN to gain immediate access to the call. Participants may pre-register at any time prior to the call and will immediately receive simple instructions via email. Additionally, participants may reach the registration link and access the webcast by logging in through the investor relations section of Berkshire's website at ir.berkshirebank.com. Those parties who do not have Internet access or are otherwise unable to pre-register for this event, may still participate at the above time by dialing 844-200-6205 and using participant access code: 197166.  Participants are requested to dial-in a few minutes before the scheduled start of the call. A telephone replay of the call will be available for one week by dialing 866-813-9403 and using access code: 027908. The webcast will be available on Berkshire's website for an extended period of time.

ABOUT BERKSHIRE HILLS BANCORP

Berkshire Hills Bancorp is the parent of Berkshire Bank. The Bank's goal is to be a high-performing, leading socially responsible community bank in New England, Upstate New York, and beyond. Berkshire Bank provides business and consumer banking, mortgage, wealth management, and investment services. Headquartered in Boston, Berkshire has approximately $11.3 billion in assets and operates 100 financial centers in New England and New York, and is a member of the Bloomberg Gender-Equality Index. To learn more, call 800-773-5601 or follow us on Facebook, Twitter, Instagram, and LinkedIn.

FORWARD-LOOKING STATEMENTS

This document contains "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. You can identify these statements from the use of the words "may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," "remain," "target" and similar expressions. There are many factors that could cause actual results to differ significantly from expectations described in the forward-looking statements. For a discussion of such factors, please see Berkshire's most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission and available on the SEC's website at www.sec.gov. You should not place undue reliance on forward-looking statements, which reflect our expectations only as of the date of this document. Berkshire does not undertake any obligation to update forward-looking statements.

NON-GAAP FINANCIAL MEASURES

This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles ("GAAP"). These non-GAAP measures provide supplemental perspectives on operating results, performance trends, and financial condition.  They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company's GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is included on pages F-9 and F-10 in the accompanying financial tables.  In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders. 

The Company utilizes the non-GAAP measure of adjusted earnings in evaluating operating trends, including components for adjusted revenue and expense. These measures exclude items which the Company does not view as related to its normalized operations. These items primarily include securities gains/losses, other gains/losses, merger costs, restructuring costs, goodwill impairment, and discontinued operations. In 2021, the Company recorded a third quarter net gain of $52 million on the sale of the Company's insurance subsidiary and the Mid-Atlantic branch operations. Expense adjustments in the first quarter 2021 were primarily related to branch consolidations. Third quarter 2021 adjustments included Federal Home Loan Bank borrowings prepayment costs. They also included other restructuring charges for efficiency initiatives in operations areas including write-downs on real estate moved to held for sale and severance related to staff reductions. The fourth quarter 2021 revenue adjustment was primarily related to trailing revenue on a previously reported sale, and the expense adjustment was due primarily to branch restructuring costs. The revenue adjustments in 2022 were related to fair market value changes in equity and trading investments. The restructuring expense adjustment in third quarter of 2022 primarily related to the termination of leasehold interests and the write-down of related right of use assets and leasehold improvements in conjunction with branch consolidations and real estate reductions.

The Company utilizes Adjusted Pre-Provision Net Revenue ("Adjusted PPNR") which measures adjusted income before credit loss provision and tax expense. PPNR is used by the investment community due to the volatility and variability across banks related to credit loss provision expense under the Current Expected Credit Loss accounting standard. The Company also calculates Adjusted PPNR/assets in order to utilize the PPNR measure in assessing its comparative operating profitability.

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

CONTACTS

Investor Relations Contacts

Kevin Conn, SVP, Investor Relations & Corporate Development
Email: KAConn@berkshirebank.com 
Tel: (617) 641-9206

David Gonci, Capital Markets Director
Email: dgonci@berkshirebank.com 
Tel: (413) 281-1973

Media Contact:

Gary Levante, SVP, Corporate Responsibility & Communications
Email: glevante@berkshirebank.com 
Tel: (413) 447-1737

 

 

BERKSHIRE HILLS BANCORP, INC.

SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1)










Sept. 30,


Dec. 31,


March 31,


June 30,


Sept. 30,






2021


2021


2022


2022


2022

















NOMINAL AND PER SHARE DATA













Net earnings per common share, diluted

$     1.31


$     0.42


$       0.42


$     0.50


$      0.42




Adjusted earnings per common share, diluted (2)

0.53


0.42


0.43


0.51


0.62




Net income, (thousands)

63,749


20,248


20,196


23,115


18,717




Adjusted net income, (thousands) (2)

25,695


20,172


20,789


23,562


27,928




Total common shares outstanding, end of period (thousands)  

48,657


48,667


47,792


45,788


45,040




Average diluted shares, (thousands)

48,744


48,340


48,067


46,102


45,034




Total book value per common share, (end of period)

24.21


24.30


22.89


22.15


20.93




Tangible book value per common share, (end of period) (2)

23.58


23.69


22.30


21.56


20.36




Dividends per common share

0.12


0.12


0.12


0.12


0.12




Full-time equivalent staff

1,333


1,319


1,333


1,322


1,300

















PERFORMANCE RATIOS (3)













Return on equity

22.18

%

6.86

%

6.79

%

7.82

%

6.30

%



Adjusted return on equity (2)

8.94


6.83


6.99


7.97


9.40




Return on tangible common equity (2)

23.14


7.37


7.29


8.33


6.76




Adjusted return on tangible common equity (2)

9.53


7.34


7.49


8.48


9.92




Return on assets

2.14


0.71


0.70


0.82


0.66




Adjusted return on assets (2)

0.86


0.71


0.72


0.84


0.99




Net interest margin, fully taxable equivalent (FTE) (4)(5)

2.56


2.60


2.61


3.11


3.48




Efficiency ratio (2)

68.76


71.98


72.61


66.60


62.01

















FINANCIAL DATA (in millions, end of period)













Total assets


$ 11,846


$ 11,555


$   12,097


$ 11,579


$ 11,317




Total earning assets

11,145


10,899


11,401


10,849


10,604




Total loans


6,836


6,826


7,267


7,803


7,943




Total deposits


10,365


10,069


10,699


10,115


9,988




Loans/deposits (%)

66

%

68

%

68

%

77

%

80

%



Total shareholders' equity

$   1,178


$   1,182


$     1,094


$   1,014


$       943

















ASSET QUALITY













Allowance for credit losses, (millions)

$      113


$      106


$          99


$        99


$         96




Net charge-offs, (millions)

(2)


(4)


(3)


(0)


(6)




Net charge-offs (QTD annualized)/average loans

0.12

%

0.23

%

0.15

%

0.02

%

0.30

%



Provision (benefit)/expense, (millions)

$        (4)


$        (3)


$          (4)


$           -


$           3




Non-performing assets, (millions)

39


37


32


29


40




Non-performing loans/total loans

0.54

%

0.52

%

0.41

%

0.34

%

0.48

%



Allowance for credit losses/non-performing loans

304


300


335


368


254




Allowance for credit losses/total loans

1.65


1.55


1.37


1.27


1.21

















CAPITAL RATIOS













Common equity tier 1 capital to risk weighted assets (6)

15.3

%

15.0

%

13.9

%

12.9

%

12.7

%



Tier 1 capital leverage ratio (6)

9.9


10.5


10.3


10.2


10.1




Tangible common shareholders' equity/tangible assets (2)

9.7


10.0


8.8


8.5


8.1




(1)

Reconciliations of non-GAAP financial measures, including all references to adjusted and tangible amounts, appear on pages F-9 and F-10.

(2)

Non-GAAP financial measure. adjusted measurements are non-GAAP financial measures that are adjusted to exclude net non-adjusted
charges primarily
 related to acquisitions and restructuring activities. See pages F-9 and F-10 for reconciliations of non-GAAP financial measures.

(3)

All performance ratios are annualized and are based on average balance sheet amounts, where applicable.

(4)

Fully taxable equivalent considers the impact of tax advantaged investment securities and loans.

(5)

The effect of purchase accounting accretion for loans, time deposits, and borrowings on the quarterly net interest margin was an increase in all
quarters,
which is shown sequentially as follows beginning with the earliest quarter and ending with the most recent quarter: 0.06%, 0.06%,
0.03%, 0.03%, 0.01%

(6)

Presented as projected for September 30, 2022 and actual for the remaining periods.

 

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2)


September 30,

December 31,

June 30,

September 30,

(in thousands)

2021

2021

2022

2022

Assets





Cash and due from banks

$        153,185

$       109,350

$      156,470

$        128,509

Short-term investments

1,971,345

1,518,457

714,547

566,404

Total cash and cash equivalents

2,124,530

1,627,807

871,017

694,913






Trading security

8,574

8,354

7,040

6,812

Marketable equity securities, at fair value

15,601

15,453

14,154

12,790

Securities available for sale, at fair value

1,643,965

1,877,585

1,697,019

1,470,949

Securities held to maturity, at amortized cost

651,863

636,503

602,611

592,503

Federal Home Loan Bank stock and other restricted securities

12,041

10,800

9,365

7,264

Total securities

2,332,044

2,548,695

2,330,189

2,090,318

Less: Allowance for credit losses on investment securities

(125)

(105)

(94)

(95)

Net securities

2,331,919

2,548,590

2,330,095

2,090,223






Loans held for sale

5,176

6,110

1,062

4,124






Total loans

6,836,235

6,825,847

7,803,451

7,943,481

Less: Allowance for credit losses on loans

(112,916)

(106,094)

(99,021)

(96,013)

Net loans

6,723,319

6,719,753

7,704,430

7,847,468






Premises and equipment, net

99,233

94,383

89,657

86,809

Goodwill and other intangible assets

30,907

29,619

27,046

25,761

Other assets

527,049

524,074

550,275

563,946

Assets held for sale

3,743

4,577

5,386

3,830

Total assets

$   11,845,876

$  11,554,913

$ 11,578,968

$   11,317,074






Liabilities and shareholders' equity





Demand deposits

$     3,022,821

$    3,008,461

$   2,921,347

$     2,896,659

NOW and other deposits

1,982,089

976,401

2,247,544

1,045,970

Money market deposits

2,438,832

3,293,526

2,327,004

3,388,932

Savings deposits

1,095,959

1,111,625

1,143,352

1,111,304

Time deposits

1,825,714

1,678,940

1,475,417

1,545,256

Total deposits

10,365,415

10,068,953

10,114,664

9,988,121






Senior borrowings

13,369

13,331

58,542

4,494

Subordinated borrowings

97,454

97,513

195,659

121,001

Total borrowings

110,823

110,844

254,201

125,495






Other liabilities

191,563

192,681

196,053

260,896

Total liabilities

10,667,801

10,372,478

10,564,918

10,374,512






Common shareholders' equity

1,178,075

1,182,435

1,014,050

942,562

Total shareholders' equity

1,178,075

1,182,435

1,014,050

942,562

Total liabilities and shareholders' equity

$   11,845,876

$  11,554,913

$ 11,578,968

$   11,317,074

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-3)

LOAN ANALYSIS

































Growth %

(in millions)


December 31, 2021
Balance


June 30, 2022
Balance


September 30, 2022
Balance


Quarter ended
September 30, 2022


Year to Date 














Total commercial real estate


$                    3,598


$           3,920


$                     3,902


(0)

%

8

%

Commercial and industrial loans


1,330


1,471


1,435


(2)


8


Total commercial loans


4,928


5,391


5,337


(1)


8














Total residential mortgages


1,392


1,819


2,033


12


46














Home equity


253


241


234


(3)


(7)


Auto and other


253


352


339


(4)


34


Total consumer loans


506


593


573


(3)


13


Total loans


$                    6,826


$           7,803


$                     7,943


2

%

16

%









































































DEPOSIT ANALYSIS





















Growth %

(in millions)


December 31, 2021
Balance


June 30, 2022
Balance


September 30, 2022
Balance


Quarter ended
September 30, 2022


Year to Date


Non-interest bearing


$                    3,008


$           2,921


$                     2,897


(1)

%

(4)

%

NOW and other


976


2,248


1,046


(53)


7


Money market


3,294


2,327


3,389


46


3


Savings


1,112


1,143


1,111


(3)


(0)


Time deposits


1,679


1,476


1,545


5


(8)


Total deposits (1)


$                  10,069


$         10,115


$                     9,988


(1)

%

(1)

%

(1) Included in total deposits are brokered deposits of $163.6 million, $112.9 million, and $228.1 million at September 30, 2022, June 30, 2022, and
December 31, 2021, respectively.

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - (F-4)


Three Months Ended


Nine Months Ended


September 30,


September 30,

(in thousands, except per share data)

2022


2021


2022


2021

Interest income   

$ 103,671


$   79,688


$ 265,873


$ 253,205

Interest expense   

11,587


8,320


23,368


31,351

Net interest income, not FTE

92,084


71,368


242,505


221,854

Non-interest income








Deposit related fees

8,377


7,657


23,733


22,291

Loan fees and revenue

3,785


8,285


16,673


25,962

Insurance commissions and fees   

-


1,581


-


7,003

Wealth management fees   

2,353


2,653


7,753


7,944

Mortgage banking fees

58


461


186


1,797

Other

2,154


1,279


7,132


5,638

Total non-interest income excluding (losses)  

16,727


21,916


55,477


70,635

Securities (losses), net    

(476)


(166)


(2,194)


(681)

Gain on sale of business operations and assets, net

-


51,885


-


51,885

Total non-interest income     

16,251


73,635


53,283


121,839

Total net revenue

108,335


145,003


295,788


343,693

Total net revenue excluding (losses)

108,811


93,284


297,982


292,489









Provision expense/(benefit) for credit losses  

3,000


(4,000)


(1,000)


2,500

Non-interest expense








Compensation and benefits

39,422


37,068


114,773


112,773

Occupancy and equipment    

8,702


10,421


28,207


32,044

Technology and communications

8,719


8,397


25,857


25,204

Professional services

3,285


3,180


8,890


13,495

Other expenses

10,076


8,969


29,449


28,053

Merger, restructuring and other non-operating expenses

11,473


1,425


11,526


4,917

Total non-interest expense    

81,677


69,460


218,702


216,486

Total non-interest expense excluding merger, restructuring and other

70,204


68,035


207,176


211,569









Income before income taxes      

$   23,658


$   79,543


$   78,086


$ 124,707

Income tax expense

4,941


15,794


16,058


26,291

Net income

$   18,717


$   63,749


$   62,028


$   98,416









Basic earnings per common share

$       0.42


$       1.32


$       1.35


$       1.98

Diluted earnings per common share

$       0.42


$       1.31


$       1.34


$       1.97









Weighted average shares outstanding:     








Basic

44,700


48,395


46,056


49,672

Diluted

45,034


48,744


46,396


49,963









 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME (5 Quarter Trend) - UNAUDITED - (F-5)














Sept. 30,


Dec. 31,


March 31,


June 30,


Sept. 30,


(in thousands, except per share data)


2021


2021


2022


2022


2022


Interest income   


$   79,688


$   75,860


$   74,823


$   87,379


$ 103,671


Interest expense   


8,320


6,548


5,760


6,021


11,587


Net interest income, not FTE


71,368


69,312


69,063


81,358


92,084


Non-interest income












Deposit related fees


7,657


7,522


7,351


8,005


8,377


Loan fees and revenue


8,285


9,098


8,265


4,623


3,785


Insurance commissions and fees   


1,581


-


-


-


-


Wealth management fees   


2,653


2,586


2,625


2,775


2,353


Mortgage banking fees


461


259


19


109


58


Other


1,279


993


3,166


1,812


2,154


Total non-interest income excluding (losses)/gains


21,916


20,458


21,426


17,324


16,727


Securities (losses), net    


(166)


(106)


(745)


(973)


(476)


Gain on sale of business operations and assets, net


51,885


1,057


-


-


-


Total non-interest income     


73,635


21,409


20,681


16,351


16,251


Total net revenue


145,003


90,721


89,744


97,709


108,335


Total net revenue excluding (losses)/gains


93,284


89,770


90,489


98,682


108,811














Provision (benefit)/expense for credit losses  


(4,000)


(3,000)


(4,000)


-


3,000


Non-interest expense












Compensation and benefits


37,068


37,816


37,521


37,830


39,422


Occupancy and equipment    


10,421


9,738


10,067


9,438


8,702


Technology and communications


8,397


8,599


8,527


8,611


8,719


Professional services


3,180


2,365


2,692


2,913


3,285


Other expenses


8,969


10,025


9,725


9,648


10,076


Merger, restructuring and other non-operating expenses


1,425


864


18


35


11,473


Total non-interest expense    


69,460


69,407


68,550


68,475


81,677


Total non-interest expense excluding merger, restructuring and other


68,035


68,543


68,532


68,440


70,204


























Income before income taxes


$   79,543


$   24,314


$   25,194


$   29,234


$   23,658


Income tax expense


15,794


4,066


4,998


6,119


4,941


Net income


$   63,749


$   20,248


$   20,196


$   23,115


$   18,717














Diluted earnings per common share


$       1.31


$       0.42


$       0.42


$       0.50


$       0.42














Weighted average shares outstanding:












Basic


48,395


47,958


47,668


45,818


44,700


Diluted


48,744


48,340


48,067


46,102


45,034


























 

BERKSHIRE HILLS BANCORP, INC.

AVERAGE BALANCES AND AVERAGE YIELDS AND COSTS - UNAUDITED - (F-6)




Sept. 30, 2021


Dec. 31, 2021


March 31, 2022


June 30, 2022


Sept. 30, 2022








(in millions)

Average
Balance

Average
Yield/Rate



Average
Balance

Average
Yield/Rate



Average
Balance

Average
Yield/Rate



Average
Balance

Average
Yield/Rate



Average
Balance

Average
Yield/Rate


Assets





















Commercial real estate

3,577

3.40

%

3,569

3.49

%

3,651

3.35

%

3,831

3.79

%

3,926

4.53

%

Commercial and industrial loans

1,370

4.78



1,278

4.37



1,373

4.14



1,447

4.46



1,449

5.21



Residential mortgages

1,499

3.65



1,403

3.82



1,436

3.56



1,652

3.57



1,926

3.53



Consumer loans

545

3.95



516

3.96



514

4.24



562

5.41



587

6.24



Total loans (1)

6,991

3.77



6,766

3.76



6,974

3.61



7,492

3.99



7,888

4.54



Securities (2)

2,312

2.09



2,367

2.04



2,649

1.95



2,621

1.97



2,400

2.13



Short-term investments and loans held for sale

1,762

0.17



1,609

0.17



1,202

0.17



476

0.57



342

1.96



Mid-Atlantic region loans held for sale

155

3.82



-

-



-

-



-

-



-

-



Total earning assets

11,220

2.86



10,742

2.84



10,825

2.82



10,589

3.34



10,630

3.91



Goodwill and other intangible assets

31




30




29




27




26




Other assets

674




655




639




644




659




Total assets

11,925




11,427




11,493




11,260




11,315

























Liabilities and shareholders' equity





















NOW and other

1,316

0.05

%

1,331

0.05

%

1,456

0.04

%

1,454

0.12

%

1,362

0.48

%

Money market

2,716

0.16



2,731

0.16



2,871

0.16



2,811

0.19



2,737

0.46



Savings

1,112

0.04



1,100

0.04



1,117

0.03



1,127

0.03



1,129

0.03



Time

1,893

0.86



1,750

0.80



1,624

0.71



1,460

0.64



1,528

0.85



Total interest-bearing deposits

7,037

0.31



6,912

0.28



7,068

0.24



6,852

0.24



6,756

0.48



Borrowings (3)

263

3.89



121

5.68



122

5.21



160

4.61



251

5.46



Mid-Atlantic region interest-bearing deposits

306

0.51



-

-



-

-



-

-



-

-



Total interest-bearing liabilities

7,606

0.43



7,033

0.37



7,190

0.32



7,012

0.34



7,007

0.66



Non-interest-bearing demand deposits

2,901




3,038




2,968




2,903




2,913




Other liabilities (4)

269




175




146




163




206




Total liabilities

10,776




10,246




10,304




10,078




10,126

























Common shareholders' equity

1,149




1,181




1,189




1,182




1,189




Total shareholders' equity

1,149




1,181




1,189




1,182




1,189




Total liabilities and shareholders' equity

11,925




11,427




11,493




11,260




11,315

























Net interest spread


2.43

%


2.47

%


2.50

%


2.99

%


3.25

%

Net interest margin, FTE (5)


2.56




2.60




2.61




3.11




3.48



Cost of funds


0.31




0.26




0.23




0.24




0.46



Cost of deposits


0.22




0.19




0.17




0.17




0.33
























Supplementary data





















Net Interest Income, not FTE

71.368




69.312




69.063




81.358




92.084




Fully taxable equivalent income adjustment

1.586




1.604




1.524




1.560




1.715




Net Interest Income, FTE

72.954




70.916




70.587




82.918




93.799

























Average PPP loans (6)

90




37




27




NM




NM




Average loans excluding PPP loans (6)

6,901




6,729




6,947




7,492




7,888




Total PPP loans, end of period (6)

46




30




16




NM




NM




Total loans excluding PPP loans, end of period (6)

6,790




6,796




7,251




7,803




7,943




PPP interest income

2.063




0.302




0.200




NM




NM

























Total average non-maturity deposits

8,045




8,200




8,412




8,295




8,141




Total average deposits

9,938




9,950




10,037




9,755




9,669

























Purchase accounting accretion

1.695




1.548




0.717




0.773




0.280




Total average tangible equity (7)

1,118




1,151




1,160




1,155




1,163


























(1) Total loans include non-accruing loans.

(2) Average balances for securities available-for-sale are based on amortized cost.

(3) Average balances for borrowings includes the financing lease obligation which is presented under other liabilities on the consolidated balance sheet.

(4) The average balance for September 30, 2021 includes the Mid-Atlantic region non-interesting bearing deposits.

(5) The effect of PPP loans on the quarterly net interest margin is shown sequentially as follows beginning with the earliest quarter and ending with the most recent quarter: 
(0.05%, 0.00%, 0.00%, 0.00%, 0.00%)
This calculation excludes gross interest income on PPP loans and average PPP loan balances.

(6) As of June 30, 2022, the PPP loan balances and interest are not considered material and will no longer be considered in adjusted metrics. 

(7) See page F-9 for details on the calculation of total average tangible equity.

 

BERKSHIRE HILLS BANCORP, INC.

ASSET QUALITY ANALYSIS - UNAUDITED - (F-7)




Sept. 30,


Dec. 31,


March 31,


June 30,


Sept. 30,


(in thousands)

2021


2021


2022


2022


2022


NON-PERFORMING ASSETS











Non-accruing loans:











Commercial real estate

$   14,845


$   13,954


$     8,984


$   8,277


$   2,976


Commercial and industrial loans

7,140


6,747


5,618


4,891


21,008


Residential mortgages

9,763


9,825


11,079


10,331


10,407


Consumer loans

5,399


4,800


4,000


3,385


3,463


Total non-accruing loans

37,147


35,326


29,681


26,884


37,854


Other real estate owned

-


-


-


-


-


Repossessed assets

1,664


1,736


2,004


2,004


2,175


Total non-performing assets

$   38,811


$   37,062


$   31,685


$ 28,888


$ 40,029













Total non-accruing loans/total loans

0.54 %


0.52 %


0.41 %


0.34 %


0.48 %


Total non-accruing loans/total loans excluding PPP loans

0.55 %


0.52 %


0.42 %


0.38 %


0.54 %


Total non-performing assets/total assets

0.33 %


0.32 %


0.26 %


0.25 %


0.35 %













PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS








Balance at beginning of period

$ 119,044


$ 112,916


$ 106,094


$ 99,475


$ 99,021


Charged-off loans

(4,334)


(7,976)


(6,048)


(1,593)


(7,424)


Recoveries on charged-off loans

2,206


4,154


3,429


1,139


1,416


Net loans charged-off

(2,128)


(3,822)


(2,619)


(454)


(6,008)


Provision (benefit)/expense for loan credit losses

(4,000)


(3,000)


(4,000)


-


3,000


Balance at end of period

$ 112,916


$ 106,094


$   99,475


$ 99,021


$ 96,013













Allowance for credit losses/total loans

1.65 %


1.55 %


1.37 %


1.27 %


1.21 %


Allowance for credit losses/total loans excluding PPP loans

1.66 %


1.56 %


1.37 %


1.27 %


1.21 %


Allowance for credit losses/non-accruing loans

304 %


300 %


335 %


368 %


254 %













NET LOAN CHARGE-OFFS











Commercial real estate

$   (1,391)


$   (2,208)


$   (3,280)


$      (76)


$    (854)


Commercial and industrial loans

110


(1,649)


653


(237)


(4,931)


Residential mortgages

(677)


(2)


(50)


(30)


122


Home equity

106


106


135


33


1


Auto and other consumer

(276)


(69)


(77)


(144)


(346)


Total, net

$   (2,128)


$   (3,822)


$   (2,619)


$    (454)


$ (6,008)













Net charge-offs (QTD annualized)/average loans

0.12 %


0.23 %


0.15 %


0.02 %


0.30 %


Net charge-offs (YTD annualized)/average loans

0.30 %


0.29 %


0.15 %


0.08 %


0.16 %













 

BERKSHIRE HILLS BANCORP, INC.

ASSET QUALITY ANALYSIS - UNAUDITED (F-8)




September 30, 2021

December 31, 2021


March 31, 2022


June 30, 2022


September 30, 2022


(in thousands)

Balance

Percent of
Total Loans


Balance


Percent of
Total Loans


Balance


Percent of
Total Loans


Balance


Percent of
Total Loans


Balance


Percent of
Total Loans


30-89 Days delinquent

$ 18,365

0.27 %


$ 39,863


0.58 %


$ 13,517


0.19 %


$ 36,184


0.46 %


$ 14,662


0.18 %


90+ Days delinquent and still accruing

3,803

0.06 %


3,270


0.05 %


6,613


0.09 %


6,760


0.09 %


6,285


0.08 %


Total accruing delinquent loans

22,168

0.33 %


43,133


0.63 %


20,130


0.28 %


42,944


0.55 %


20,947


0.26 %


Non-accruing loans

37,147

0.54 %


35,326


0.52 %


29,681


0.41 %


26,884


0.34 %


37,854


0.48 %


Total delinquent and non-accruing loans

$ 59,315

0.87 %


$ 78,459


1.15 %


$ 49,811


0.69 %


$ 69,828


0.89 %


$ 58,801


0.74 %


 

 

BERKSHIRE HILLS BANCORP, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED - (F-9)






Sept. 30,


Dec. 31,


March 31,


June 30,


Sept. 30,


(in thousands)


2021


2021


2022


2022


2022


Total revenue

(A)

$    145,003


$   90,721


$   89,744


$   97,709


$    108,335


Adj: Net securities losses (1)


166


106


745


973


476


Adj: Net (gains) on sale of business operations and assets


(51,885)


(1,057)


-


-


-


Total adjusted revenue (2)

(B)

$      93,284


$   89,770


$   90,489


$   98,682


$    108,811














Total non-interest expense

(C)

$      69,460


$   69,407


$   68,550


$   68,475


$      81,677


Less: Merger, restructuring and other expense


(1,425)


(864)


(18)


(35)


(11,473)


Adjusted non-interest expense (2)                                    

(D)

$      68,035


$   68,543


$   68,532


$   68,440


$      70,204














Pre-tax, pre-provision net revenue (PPNR)

(A-C)

$      75,543


$   21,314


$   21,194


$   29,234


$      26,658


Adjusted pre-tax, pre-provision net revenue (PPNR)

(B-D)

25,249


21,227


21,957


30,242


38,607














Net income


$      63,749


$   20,248


$   20,196


$   23,115


$      18,717


Adj: Net securities losses (1)


166


106


745


973


476


Adj: Net (gains) on sale of business operations and assets


(51,885)


(1,057)


-


-


-


Adj: Restructuring expense and other expense


1,425


864


18


35


11,473


Adj: Income taxes (expense)/benefit


12,240


11


(170)


(561)


(2,738)


Total adjusted income (2)

(E)

$      25,695


$   20,172


$   20,789


$   23,562


$      27,928














(in millions, except per share data)












Total average assets                                               

(F)

$      11,925


$   11,427


$   11,493


$   11,260


$      11,315


Total average shareholders' equity                        

(G)

1,149


1,181


1,189


1,182


1,189


Total average tangible shareholders' equity (2)(3)     

(H)

1,118


1,151


1,160


1,155


1,164


Total average tangible common shareholders' equity (2)(3)  

(I)

1,118


1,151


1,160


1,155


1,164


Total tangible shareholders' equity, period-end (2)(3)

(J)

1,147


1,153


1,066


987


917


Total tangible common shareholders' equity, period-end (2)(3)

(K)

1,147


1,153


1,066


987


917


Total tangible assets, period-end (2)(3)

(L)

11,815


11,525


12,069


11,552


11,291














Total common shares outstanding, period-end (thousands)

(M)

48,657


48,667


47,792


45,788


45,040


Average diluted shares outstanding (thousands)

(N)

48,744


48,340


48,067


46,102


45,034














GAAP earnings per common share, diluted (2)


$          1.31


$       0.42


$       0.42


$       0.50


$          0.42


Adjusted earnings per common share, diluted (2)

(E/N)

0.53


0.42


0.43


0.51


0.62


Tangible book value per common share, period-end (2)

(K/M)

23.58


23.69


22.30


21.56


20.36


Total tangible shareholders' equity/total tangible assets (2)

(J/L)

9.71


10.00


8.83


8.54


8.12














Performance ratios (4)












GAAP return on equity


22.18

%

6.86

%

6.79


7.82

%

6.30

%

Adjusted return on equity (2)

(E/G)

8.94


6.83


6.99


7.97


9.40


Return on tangible common equity (2)(5)


23.14


7.37


7.29


8.33


6.76


Adjusted return on tangible common equity (2)(5)

(E+Q)/(I)

9.53


7.34


7.49


8.48


9.92


GAAP return on assets


2.14


0.71


0.70


0.82


0.66


Adjusted return on assets (2)


0.86


0.71


0.72


0.84


0.99


PPNR from continuing operations/assets (2)


2.53


0.75


0.74


1.04


0.94


Adjusted PPNR/assets (2)


0.85


0.74


0.76


1.07


1.36


Efficiency ratio (2)(6) 

(D-Q)/(B+O+R)

68.76


71.98


72.61


66.60


62.01


Net interest margin, FTE


2.56


2.60


2.61


3.11


3.48


























Supplementary data (in thousands)












Tax benefit on tax-credit investments (7)

(O)

$        2,195


$     2,057


$        596


$        595


$           620


Non-interest income charge on tax-credit investments (8)

(P)

(1,789)


(1,448)


(357)


(351)


(445)


Net income on tax-credit investments

(O+P)

406


609


239


244


175














Intangible amortization

(Q)

$        1,296


$     1,288


$     1,286


$     1,286


$        1,285


Fully taxable equivalent income adjustment

(R)

1,586


1,604


1,524


1,560


1,715














 

(1) Net securities losses/(gains) include the change in fair value of the Company's equity securities in compliance with the Company's adoption of ASU 2016-01.

(2) Non-GAAP financial measure.

(3) Total tangible shareholders' equity is computed by taking total shareholders' equity less the intangible assets at period-end. Total tangible assets is computed by taking intangible
assets at period-end. 

(4) Ratios are annualized and based on average balance sheet amounts, where applicable. Quarterly data may not sum to year-to-date data due to rounding.

(5) Adjusted return on tangible equity is computed by dividing the total adjusted income adjusted for the tax-effected amortization of intangible assets, assuming a 27% marginal rate,
by tangible equity.

(6) Efficiency ratio is computed by dividing total adjusted tangible non-interest expense by the sum of total net interest income on a fully taxable equivalent basis and total adjusted
non-interest income adjusted to include tax credit benefit of tax shelter investments. The Company uses this non-GAAP measure to provide important information regarding its
operational efficiency.

(7) The tax benefit is the direct reduction to the income tax provision due to tax credits and deductions generated from investments in historic rehabilitation and low-income housing.

(8) The non-interest income charge is the reduction to the tax-advantaged investments, which are incurred as the tax credits are generated.

 

BERKSHIRE HILLS BANCORP, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED - (F-10)



At or for the Nine Months Ended




Sept. 30,


Sept. 30,


(in thousands)



2021


2022


Total revenue

(A)


$    343,693


$    295,788


Adj: Net securities losses (1)



681


2,194


Adj: Net (gains) on sale of business operations and assets



(51,885)


-


Total adjusted revenue (2)

(B)


$    292,489


$    297,982









Total non-interest expense

(C)


$    216,486


$    218,702


Less: Merger, restructuring and other expense



(4,917)


(11,526)


Adjusted non-interest expense (2)                                    

(D)


$    211,569


$    207,176









Pre-tax, pre-provision net revenue (PPNR)

(A-C)


$    127,207


$      77,086


Adjusted pre-tax, pre-provision net revenue (PPNR)

(B-D)


80,920


90,806









Net income



$      98,416


$      62,028


Adj: Net securities losses (1)



681


2,194


Adj: Net (gains) on sale of business operations and assets



(51,885)


-


Adj: Restructuring expense and other expense



4,917


11,526


Adj: Income taxes benefit/(expense)



11,685


(3,469)


Total adjusted income/(loss) (2)

(E)


$      63,814


$      72,279









(in millions, except per share data)







Total average assets                                               

(F)


$      12,268


$      11,355


Total average shareholders' equity                        

(G)


1,161


1,187


Total average tangible shareholders' equity (2)(3)                        

(H)


1,128


1,159


Total average tangible common shareholders' equity (2)(3)  

(I)


1,128


1,159


Total tangible shareholders' equity, period-end (2)(3)

(J)


1,147


917


Total tangible common shareholders' equity, period-end (2)(3)

(K)


1,147


917


Total tangible assets, period-end (2)(3)

(L)


11,815


11,291









Total common shares outstanding, period-end (thousands)              

(M)


48,657


45,040


Average diluted shares outstanding (thousands)

(N)


49,963


46,396









GAAP earnings/(loss) per common share, diluted (2)



$          1.97


$          1.34


Adjusted earnings per common share, diluted (2)

(E/N)


1.28


1.56


Tangible book value per common share, period-end (2)

(K/M)


23.58


20.36


Total tangible shareholders' equity/total tangible assets (2)

(J/L)


9.71


8.12









Performance ratios (4)







GAAP return on equity



11.30

%

6.97

%

Adjusted return on equity (2)

(E/G)


7.33


8.12


Return on tangible common equity (2)(5)



11.97


7.46


Adjusted return on tangible common equity (2)(5)

(E+Q)/(I)


7.88


8.64


GAAP return on assets



1.07


0.73


Adjusted return on assets (2)



0.69


0.85


PPNR from continuing operations/assets (2)



1.38


0.91


Adjusted PPNR/assets (2)



0.88


1.07


Efficiency ratio (2)(6)               

(D-Q)/(B+O+R)


69.32


66.75


Net interest margin, FTE



2.60


3.05
















Supplementary data (in thousands)







Tax benefit on tax-credit investments (7)

(O)


$        2,315


$        1,811


Non-interest income charge on tax-credit investments (8)

(P)


(1,996)


(1,153)


Net income on tax-credit investments

(O+P)


319


658









Intangible amortization

(Q)


$        3,912


$        3,857


Fully taxable equivalent income adjustment

(R)


4,739


4,799









 

(1) Net securities losses include the change in fair value of the Company's equity securities in compliance with the Company's adoption of ASU 2016-01.

(2) Non-GAAP financial measure.

(3) Total tangible shareholders' equity is computed by taking total shareholders' equity less the intangible assets at period-end. Total tangible assets is computed
 by taking intangible assets at period-end. 

(4) Ratios are annualized and based on average balance sheet amounts, where applicable. Quarterly data may not sum to year-to-date data due to rounding.

(5) Adjusted return on tangible equity is computed by dividing the total adjusted income adjusted for the tax-effected amortization of intangible assets, assuming
a 27% marginal rate, by tangible equity.

(6) Efficiency ratio is computed by dividing total adjusted tangible non-interest expense by the sum of total net interest income on a fully taxable equivalent basis
and total adjusted non-interest income adjusted to include tax credit benefit of tax shelter investments. The Company uses this non-GAAP measure to provide
important information regarding its operational efficiency.

(7) The tax benefit is the direct reduction to the income tax provision due to tax credits and deductions generated from investments in historic rehabilitation
 and low-income housing.

(8) The non-interest income charge is the reduction to the tax-advantaged investments, which are incurred as the tax credits are generated.

 

 

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SOURCE Berkshire Hills Bancorp, Inc.

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