Berkshire Hills Reports 20% Increase in First Quarter Core EPS; Dividend Announced
PITTSFIELD, Mass., April 29, 2013 /PRNewswire/ -- Berkshire Hills Bancorp, Inc. (NYSE: BHLB) reported first quarter core earnings per share totaling $0.54 in 2013, which was a 20% increase over 2012 first quarter core EPS of $0.45. First quarter core earnings reached a record $13.5 million, which was a 43% increase over prior year first quarter results. Berkshire has entered its fourth year of consecutive quarterly core earnings growth due to ongoing business expansion and improved profitability. Per share results include the impact of shares issued for bank acquisitions in 2012.
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First quarter GAAP earnings in both years included the impact of net non-core charges related primarily to merger and integration expenses which were generally within the range of the Company's expectations. These net charges totaled $0.12 and $0.17 per share after-tax in first quarter 2013 and 2012, respectively. Including these non-core items, first quarter GAAP net income was $0.42 and $0.28 per share in 2013 and 2012, respectively.
FIRST QUARTER FINANCIAL HIGHLIGHTS
- 20% increase in core earnings per share, compared to first quarter of 2012
- 39% increase in net revenue, compared to first quarter of 2012
- 12% annualized increase in commercial business loans during quarter
- 10% annualized increase in average deposit balances over prior quarter
- 3.73% net interest margin, increased from 3.67% in the prior quarter
- 57% efficiency ratio, improved from 60% in the prior quarter
- 0.56% non-performing assets/total assets
- 0.23% annualized net loan charge-offs/average loans
Berkshire Chairman and CEO Michael Daly stated, "We achieved our bottom line objective in the first quarter, with a 20% increase in core earnings per share compared to the same period in 2012. This follows the 29% full year increase we achieved in 2012 for core EPS. We are generating business in our new markets by leveraging our brand and culture with increasingly sophisticated products and technologies. During the first quarter, we also completed the integration of our Beacon Syracuse operations. We are improving our efficiency, and achieved a 7% annualized increase in core earnings compared to the most recent quarter."
Mr. Daly continued, "We remain focused on commercial lending, driven by 12% annualized growth in commercial business loans in the most recent quarter. During this quarter, we also announced the recruitment of an experienced Eastern Massachusetts commercial banking team, as well as the recruitment of an experienced Syracuse commercial leader. Our mortgage and consumer lending revenue is benefiting from our 2012 expansion in Eastern Massachusetts and now in Central New York. We continue to pursue our growth targets for the year based on our multiple initiatives."
DIVIDEND DECLARED
The Board of Directors voted to declare a cash dividend of $0.18 per share to shareholders of record at the close of business on May 16, 2013, payable on May 30, 2013. This dividend equates to a 2.9% annualized yield based on the $24.59 average closing price of Berkshire's common stock in the first quarter of 2013.
FINANCIAL CONDITION
Berkshire managed its balance sheet in the first quarter to build targeted business volumes while repositioning assets acquired through bank acquisitions in 2012 and benefiting the loan yield. Targeted fixed rate mortgages were replaced with shorter duration securities that support the asset sensitive balance sheet profile in the event of future higher interest rates. Measures of asset quality, liquidity, and capital remained favorable.
Total commercial loans benefited from 12% annualized growth in commercial business loans during the first quarter. Berkshire is building business loan volume in its markets while it targets relationships with middle market customers who require a full range of products and services provided by a responsive local banking partner. Total originations of commercial loan commitments were up 23% from the prior quarter and 48% from the prior year first quarter. Collections of acquired impaired and other targeted commercial credit balances were approximately $19 million, or 4% of total commercial loans on an annualized basis, as the Company continues to make progress with integrating and optimizing acquired bank portfolios to contribute to its balanced portfolio growth objectives. In the most recent quarter, Berkshire expanded its commercial lending program, including an experienced new team in Eastern Massachusetts, a new commercial leader in its recently acquired Syracuse market, and team additions in the Hartford/Springfield region. These teams are expected to contribute to increased commercial originations in these regional markets where Berkshire increased its presence in 2012.
Asset quality metrics remained favorable in the most recent quarter. Quarter-end non-performing assets were 0.56% of total assets. Net loan charge-offs measured 0.23% of average loans, which was the lowest level in the last five quarters. Accruing delinquent loans declined slightly to 1.08% of total loans during the quarter. The loan loss allowance increased slightly to 0.86% of total loans during this period. For loans from business activities (excluding acquired loans), net charge-offs averaged 0.26% and the related allowance measured 1.22% of these loans.
Ongoing deposit acquisition resulted in 10% annualized growth in total average deposits, including 10% annualized growth in average transaction balances. Outstanding balances were affected by seasonal factors at the start and end of the period. Berkshire promotes lower cost transaction accounts as a focus of relationship based business development for retail and business accounts.
Stockholders' equity increased based on retained earnings. Tangible book value per share increased at a 6% annualized rate to $15.87, while the ratio of tangible equity/assets improved to 8.1% from 7.8% during the quarter. Total book value per share increased to $26.68 and total equity/assets improved to 12.8%. Near the end of the quarter, Berkshire announced that it had completed the repurchase of approximately 100 thousand outstanding common shares and authorized a new 500 thousand share repurchase program which will be available indefinitely for future stock buybacks.
RESULTS OF OPERATIONS
Berkshire posted strong growth in first quarter revenue, earnings, and earnings per share in 2013 compared to 2012. Core profitability improved as a result of the positive operating leverage attributable to revenue growth and disciplined expense management. Berkshire is achieving these results while bearing the costs of maintaining its asset sensitive interest rate risk profile, absorbing charges related to its branch and team expansion, and investing in technology and other infrastructure. Results in 2013 included the operations of The Connecticut Bank and Trust Company and Beacon Federal Bancorp, along with mortgage operations in Eastern Massachusetts - all of which were acquired after the first quarter of 2012.
The first quarter core return on equity was 8.1% in 2013, compared to 6.8% in 2012. Including the amortization of intangible assets, Berkshire generated $0.59 in tangible equity per share, which equated to a 15.1% annualized return on starting tangible equity in the most recent quarter. First quarter GAAP return on equity included net non-core charges and measured 6.3% and 4.2% in 2013 and 2012, respectively. The reconciliation of net income and core income, together with related profitability measures, is shown on table F-9 of the financial tables.
Berkshire's total first quarter net revenue increased by 39% to $57 million in 2013 compared to 2012. Compared to the linked quarter, first quarter net interest income benefited from a 2% annualized increase in average loan balances and a 6 basis point increase in the net interest margin. Net interest income declined slightly compared to the prior quarter due to fewer days in the first quarter of the year.
The net interest margin improved to 3.73% from 3.67% in the prior quarter and from 3.62% in the first quarter of 2012. The improvement compared to the linked quarter included the benefit of lower amortization of mortgage premiums due to a decline in residential mortgage prepayment speeds. Net interest income includes the net benefit from loan purchase accounting accretion which totaled $3.8 million and $3.2 million in the two most recent respective quarters, including approximately $2.3 million in each quarter from the collection of acquired impaired loans.
Compared to the prior quarter, changes in fee income included seasonal factors for deposit and insurance fees. Loan related fees decreased primarily due to lower volumes and margins in mortgage banking operations, including seasonal factors and processing related costs. Wealth management fees increased by 21% to a quarterly record of $2.3 million compared to the prior quarter including the benefit of higher volume and stronger margins related to improved securities market conditions.
The first quarter provision for loan losses increased to $2.4 million in 2013 from $2.0 million in 2012. Net loan charge-offs totaled $2.3 million and $1.8 million in these periods, respectively. There were no significant changes in the Company's favorable charge-off metrics. Following the loan loss provision, the loan loss allowance increased to $33.3 million from $33.2 million during the quarter.
First quarter 2013 non-interest expense totaled $39.5 million. This included $5.1 million in non-recurring and merger related expense primarily related to the completion of the Beacon Federal acquisition and the related systems conversion. Berkshire has substantially completed its projected cost savings and efficiencies totaling approximately $5.5 million annualized based on a 30% gross cost saving expectation for these acquired operations. Net of the above charges, core first quarter non-interest expense totaled $34.4 million. Most major categories of expense were flat or down from the prior quarter; the Company consolidated two New York branches during this period. The efficiency ratio improved to 57% due to expense reductions from the prior quarter. The core effective income tax rate was 32% in the most recent quarter. This rate increased from 30% for the prior fiscal year due to higher expected pretax income in 2013 based on Berkshire's growth and the lower proportionate benefit of tax preference items.
CONFERENCE CALL
Berkshire will conduct a conference call/webcast at 10:00 a.m. Eastern Time on Tuesday, April 30, 2013 to discuss the results for the quarter and provide guidance about expected future results. Participants should dial-in to the call a few minutes before it begins. Information about the conference call follows:
| Dial-in: |
888-317-6003 |
| Elite Entry Number: |
3920732 |
| Webcast: |
berkshirebank.com (investor relations link) |
A telephone replay of the call will be available through Tuesday, May 7, 2013 by calling 877-344-7529 and entering conference number: 10027117. The webcast and a podcast will be available at Berkshire's website above for an extended period of time.
BACKGROUND
Berkshire Hills Bancorp is the parent of Berkshire Bank – America's Most Exciting Bank®. The Company has approximately $5.2 billion in assets and 73 full service branch offices in Massachusetts, New York, Connecticut, and Vermont providing personal and business banking, insurance, and wealth management services.
FORWARD LOOKING STATEMENTS
This document may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. There are several 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. Berkshire does not undertake any obligation to update forward-looking statements made in this document.
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 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 core earnings in evaluating operating trends, including components for core revenue and expense. These measures exclude amounts which the Company views as unrelated to its normalized operations, including merger costs, restructuring costs, and systems conversion costs. Similarly, the efficiency ratio is also adjusted for these non-core items and for tax preference items. The Company also adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community. Non-GAAP expense adjustments are primarily related to charges related to merger and acquisition activity. These charges consist primarily of severance/benefit related expenses, contract termination costs, and professional fees. There are additionally non-GAAP adjustments related to non-recurring securities gains, discontinued operations, the disposition of excess properties, and core systems conversion costs. Tax adjustments are based on an analysis of tax accruals for core income and for GAAP income, with the net difference included with non-core items and reflecting the timing impacts of tax expense estimates.
CONTACTS
Investor Relations Contact
Allison O'Rourke; Vice President - Investor Relations; 413-236-3149
Media Contact
Ray Smith, Assistant Vice President – Marketing; 413-236-3756
| BERKSHIRE HILLS BANCORP, INC. |
||||
| CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-1) |
||||
| March 31, |
December 31, |
|||
| (In thousands) |
2013 |
2012 |
||
| Assets |
||||
| Cash and due from banks |
$ 53,683 |
$ 63,382 |
||
| Short-term investments |
20,648 |
34,862 |
||
| Total cash and short-term investments |
74,331 |
98,244 |
||
| Trading security |
16,485 |
16,893 |
||
| Securities available for sale, at fair value |
558,875 |
466,169 |
||
| Securities held to maturity, at amortized cost |
50,472 |
51,024 |
||
| Federal Home Loan Bank stock and other restricted securities |
37,870 |
39,785 |
||
| Total securities |
663,702 |
573,871 |
||
| Loans held for sale |
72,348 |
85,368 |
||
| Residential mortgages |
1,234,616 |
1,324,251 |
||
| Commercial mortgages |
1,397,142 |
1,413,544 |
||
| Commercial business loans |
618,342 |
600,126 |
||
| Consumer loans |
638,972 |
650,733 |
||
| Total loans |
3,889,072 |
3,988,654 |
||
| Less: Allowance for loan losses |
(33,263) |
(33,208) |
||
| Net loans |
3,855,809 |
3,955,446 |
||
| Premises and equipment, net |
88,181 |
86,461 |
||
| Other real estate owned |
2,513 |
1,929 |
||
| Goodwill |
255,529 |
255,199 |
||
| Other intangible assets |
17,682 |
19,059 |
||
| Cash surrender value of bank-owned life insurance |
88,893 |
88,198 |
||
| Deferred tax asset |
56,581 |
57,729 |
||
| Other assets |
69,765 |
75,305 |
||
| Total assets |
$ 5,245,334 |
$ 5,296,809 |
||
| Liabilities and stockholders' equity |
||||
| Demand deposits |
$ 656,706 |
$ 673,921 |
||
| NOW deposits |
374,721 |
379,880 |
||
| Money market deposits |
1,504,092 |
1,439,632 |
||
| Savings deposits |
451,959 |
436,387 |
||
| Total non-maturity deposits |
2,987,478 |
2,929,820 |
||
| Time deposits |
1,113,113 |
1,170,589 |
||
| Total deposits |
4,100,591 |
4,100,409 |
||
| Senior borrowings |
309,598 |
358,471 |
||
| Subordinated notes |
89,632 |
89,617 |
||
| Total borrowings |
399,230 |
448,088 |
||
| Other liabilities |
71,631 |
81,047 |
||
| Total liabilities |
4,571,452 |
4,629,544 |
||
| Total stockholders' equity |
673,882 |
667,265 |
||
| Total liabilities and stockholders' equity |
$ 5,245,334 |
$ 5,296,809 |
||
| (1) Certain reclassifications have been made to prior year balances to conform to the current year presentation. |
||||
| BERKSHIRE HILLS BANCORP, INC. |
||||||||
| CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-2) |
||||||||
| LOAN ANALYSIS |
||||||||
| Annualized growth % |
||||||||
| (Dollars in millions) |
March 31, 2013 |
Dec. 31, 2012 |
Quarter end |
|||||
| Total residential mortgages |
$ 1,235 |
$ 1,324 |
(27) |
% |
||||
| Commercial mortgages: |
||||||||
| Construction |
169 |
168 |
3 |
|||||
| Single and multi-family |
143 |
124 |
63 |
|||||
| Commercial real estate |
1,085 |
1,122 |
(13) |
|||||
| Total commercial mortgages |
1,397 |
1,414 |
(5) |
|||||
| Total commercial business loans |
618 |
600 |
12 |
|||||
| Total commercial loans |
2,015 |
2,014 |
0 |
|||||
| Consumer loans: |
||||||||
| Home equity |
317 |
325 |
(10) |
|||||
| Other |
322 |
326 |
(6) |
|||||
| Total consumer loans |
639 |
651 |
(7) |
|||||
| Total loans |
$ 3,889 |
$ 3,989 |
(10) |
% |
||||
| DEPOSIT ANALYSIS |
||||||||
| Annualized growth % |
||||||||
| (Dollars in millions) |
March 31, 2013 |
Dec. 31, 2012 |
Quarter end |
|||||
| Demand |
$ 656 |
$ 674 |
(11) |
% |
||||
| NOW |
375 |
380 |
(5) |
|||||
| Money market |
1,504 |
1,440 |
18 |
|||||
| Savings |
452 |
436 |
15 |
|||||
| Total non-maturity deposits |
2,987 |
2,930 |
8 |
|||||
| Total time deposits |
1,113 |
1,170 |
(19) |
|||||
| Total deposits |
$ 4,100 |
$ 4,100 |
0 |
% |
||||
| (1) Quarterly data may not sum to annualized data due to rounding. |
||||||||
| BERKSHIRE HILLS BANCORP, INC. |
||||
| CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - (F-3) |
||||
| Three Months Ended |
||||
| March 31, |
||||
| (In thousands, except per share data) |
2013 |
2012 |
||
| Interest and dividend income |
||||
| Loans |
$ 47,081 |
$ 35,051 |
||
| Securities and other |
3,800 |
3,621 |
||
| Total interest and dividend income |
50,881 |
38,672 |
||
| Interest expense |
||||
| Deposits |
5,363 |
5,502 |
||
| Borrowings and subordinated debentures |
3,581 |
2,025 |
||
| Total interest expense |
8,944 |
7,527 |
||
| Net interest income |
41,937 |
31,145 |
||
| Non-interest income |
||||
| Loan related fees |
4,934 |
1,373 |
||
| Deposit related fees |
4,259 |
3,500 |
||
| Insurance commissions and fees |
2,997 |
2,746 |
||
| Wealth management fees |
2,264 |
1,900 |
||
| Total fee income |
14,454 |
9,519 |
||
| Other |
344 |
241 |
||
| Non-recurring gain |
- |
42 |
||
| Total non-interest income |
14,798 |
9,802 |
||
| Total net revenue |
56,735 |
40,947 |
||
| Provision for loan losses |
2,400 |
2,000 |
||
| Non-interest expense |
||||
| Compensation and benefits |
17,741 |
13,589 |
||
| Occupancy and equipment |
5,768 |
4,395 |
||
| Technology and communications |
2,991 |
1,958 |
||
| Marketing and promotion |
638 |
351 |
||
| Professional services |
1,490 |
1,365 |
||
| FDIC premiums and assessments |
828 |
681 |
||
| Other real estate owned and foreclosures |
23 |
179 |
||
| Amortization of intangible assets |
1,377 |
1,311 |
||
| Non-recurring and merger related expenses |
5,064 |
4,223 |
||
| Other |
3,563 |
2,142 |
||
| Total non-interest expense |
39,483 |
30,194 |
||
| Income from continuing operations before income taxes |
14,852 |
8,753 |
||
| Income tax expense |
4,387 |
2,272 |
||
| Net income from continuing operations |
10,465 |
6,481 |
||
| Loss from discontinued operations before income taxes |
||||
| (including gain on disposals of $63) |
- |
(261) |
||
| Income tax expense |
- |
376 |
||
| Net loss from discontinued operations |
- |
(637) |
||
| Net income |
$ 10,465 |
$ 5,844 |
||
| Basic and diluted earnings per share: |
||||
| Continuing operations |
$ 0.42 |
$ 0.31 |
||
| Discontinued operations |
- |
(0.03) |
||
| Total basic and diluted earnings per share |
$ 0.42 |
$ 0.28 |
||
| Weighted average shares outstanding: |
||||
| Basic |
24,927 |
20,955 |
||
| Diluted |
25,136 |
21,062 |
||
| BERKSHIRE HILLS BANCORP, INC. |
||||||||||
| CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - (F-4) |
||||||||||
| Quarters Ended |
||||||||||
| Mar. 31, |
Dec. 31, |
Sept. 30, |
June 30, |
Mar. 31, |
||||||
| (In thousands, except per share data) |
2013 |
2012 |
2012 |
2012 |
2012 |
|||||
| Interest and dividend income |
||||||||||
| Loans |
$ 47,081 |
$ 47,601 |
$ 39,497 |
$ 38,787 |
$ 35,051 |
|||||
| Securities and other |
3,800 |
3,887 |
3,626 |
3,869 |
3,621 |
|||||
| Total interest and dividend income |
50,881 |
51,488 |
43,123 |
42,656 |
38,672 |
|||||
| Interest expense |
||||||||||
| Deposits |
5,363 |
5,870 |
5,628 |
5,482 |
5,502 |
|||||
| Borrowings and subordinated debentures |
3,581 |
3,653 |
2,270 |
2,121 |
2,025 |
|||||
| Total interest expense |
8,944 |
9,523 |
7,898 |
7,603 |
7,527 |
|||||
| Net interest income |
41,937 |
41,965 |
35,225 |
35,053 |
31,145 |
|||||
| Non-interest income |
||||||||||
| Loan related fees |
4,934 |
7,012 |
5,646 |
3,524 |
1,373 |
|||||
| Deposit related fees |
4,259 |
4,355 |
3,775 |
3,963 |
3,500 |
|||||
| Insurance commissions and fees |
2,997 |
2,565 |
2,742 |
2,768 |
2,746 |
|||||
| Wealth management fees |
2,264 |
1,865 |
1,774 |
1,757 |
1,900 |
|||||
| Total fee income |
14,454 |
15,797 |
13,937 |
12,012 |
9,519 |
|||||
| Other |
344 |
421 |
375 |
269 |
241 |
|||||
| Gain on sale of securities, net |
- |
1,435 |
- |
7 |
- |
|||||
| Non-recurring gain |
- |
- |
1 |
- |
42 |
|||||
| Total non-interest income |
14,798 |
17,653 |
14,313 |
12,288 |
9,802 |
|||||
| Total net revenue |
56,735 |
59,618 |
49,538 |
47,341 |
40,947 |
|||||
| Provision for loan losses |
2,400 |
2,840 |
2,500 |
2,250 |
2,000 |
|||||
| Non-interest expense |
||||||||||
| Compensation and benefits |
17,741 |
18,862 |
15,992 |
15,638 |
13,589 |
|||||
| Occupancy and equipment |
5,768 |
5,985 |
4,599 |
4,490 |
4,395 |
|||||
| Technology and communications |
2,991 |
2,949 |
2,302 |
2,258 |
1,958 |
|||||
| Marketing and promotion |
638 |
483 |
419 |
778 |
351 |
|||||
| Professional services |
1,490 |
1,600 |
1,327 |
1,493 |
1,365 |
|||||
| FDIC premiums and assessments |
828 |
919 |
907 |
870 |
681 |
|||||
| Other real estate owned and foreclosures |
23 |
66 |
42 |
(6) |
179 |
|||||
| Amortization of intangible assets |
1,377 |
1,357 |
1,314 |
1,357 |
1,311 |
|||||
| Non-recurring and merger related expenses |
5,064 |
7,497 |
2,214 |
4,085 |
4,223 |
|||||
| Other |
3,563 |
4,548 |
3,046 |
3,221 |
2,142 |
|||||
| Total non-interest expense |
39,483 |
44,266 |
32,162 |
34,184 |
30,194 |
|||||
| Income from continuing operations before income taxes |
14,852 |
12,512 |
14,876 |
10,907 |
8,753 |
|||||
| Income tax expense |
4,387 |
3,183 |
4,847 |
2,921 |
2,272 |
|||||
| Net income from continuing operations |
10,465 |
9,329 |
10,029 |
7,986 |
6,481 |
|||||
| Loss from discontinued operations before income taxes |
||||||||||
| (including gain on disposals of $63) |
- |
- |
- |
- |
(261) |
|||||
| Income tax expense |
- |
- |
- |
- |
376 |
|||||
| Net loss from discontinued operations |
- |
- |
- |
- |
(637) |
|||||
| Net income |
$ 10,465 |
$ 9,329 |
$ 10,029 |
$ 7,986 |
$ 5,844 |
|||||
| Basic earnings per share: |
||||||||||
| Continuing operations |
$ 0.42 |
$ 0.39 |
$ 0.46 |
$ 0.37 |
$ 0.31 |
|||||
| Discontinued operations |
- |
- |
- |
- |
(0.03) |
|||||
| Total basic earnings per share |
$ 0.42 |
$ 0.39 |
$ 0.46 |
$ 0.37 |
$ 0.28 |
|||||
| Diluted earnings per share: |
||||||||||
| Continuing operations |
$ 0.42 |
$ 0.38 |
$ 0.46 |
$ 0.37 |
$ 0.31 |
|||||
| Discontinued operations |
- |
- |
- |
- |
(0.03) |
|||||
| Total diluted earnings per share |
$ 0.42 |
$ 0.38 |
$ 0.46 |
$ 0.37 |
$ 0.28 |
|||||
| Weighted average shares outstanding: |
||||||||||
| Basic |
24,927 |
24,165 |
21,921 |
21,742 |
20,955 |
|||||
| Diluted |
25,136 |
24,396 |
22,031 |
21,806 |
21,062 |
|||||
| (1) The Company acquired The Connecticut Bank and Trust Company on April 20, 2012, purchased certain assets and assumed certain |
||||||||||
| BERKSHIRE HILLS BANCORP, INC. |
||||||||||||
| ASSET QUALITY ANALYSIS - (F-5) |
||||||||||||
| At or for the Quarters Ended |
||||||||||||
| Mar. 31, |
Dec. 31, |
Sept. 30, |
June 30, |
Mar. 31, |
||||||||
| (Dollars in thousands) |
2013 |
2012 |
2012 |
2012 |
2012 |
|||||||
| NON-PERFORMING ASSETS |
||||||||||||
| Non-accruing loans: |
||||||||||||
| Residential mortgages |
$ 8,818 |
$ 7,466 |
$ 8,440 |
$ 8,525 |
$ 8,281 |
|||||||
| Commercial mortgages |
12,396 |
12,617 |
13,552 |
15,336 |
12,151 |
|||||||
| Commercial business loans |
3,519 |
3,681 |
2,024 |
1,047 |
1,029 |
|||||||
| Consumer loans |
2,325 |
1,748 |
1,823 |
1,209 |
1,411 |
|||||||
| Total non-accruing loans |
27,058 |
25,512 |
25,839 |
26,117 |
22,872 |
|||||||
| Other real estate owned |
2,513 |
1,929 |
1,399 |
827 |
439 |
|||||||
| Total non-performing assets |
$ 29,571 |
$ 27,441 |
$ 27,238 |
$ 26,944 |
$ 23,311 |
|||||||
| Total non-accruing loans/total loans |
0.70% |
0.64% |
0.76% |
0.78% |
0.75% |
|||||||
| Total non-performing assets/total assets |
0.56% |
0.52% |
0.59% |
0.60% |
0.58% |
|||||||
| PROVISION AND ALLOWANCE FOR LOAN LOSSES |
||||||||||||
| Balance at beginning of period |
$ 33,208 |
$ 33,090 |
$ 32,868 |
$ 32,657 |
$ 32,444 |
|||||||
| Charged-off loans |
(2,501) |
(3,073) |
(2,353) |
(2,102) |
(1,923) |
|||||||
| Recoveries on charged-off loans |
156 |
351 |
75 |
63 |
136 |
|||||||
| Net loans charged-off |
(2,345) |
(2,722) |
(2,278) |
(2,039) |
(1,787) |
|||||||
| Provision for loan losses |
2,400 |
2,840 |
2,500 |
2,250 |
2,000 |
|||||||
| Balance at end of period |
$ 33,263 |
$ 33,208 |
$ 33,090 |
$ 32,868 |
$ 32,657 |
|||||||
| Allowance for loan losses/total loans |
0.86% |
0.83% |
0.97% |
0.98% |
1.07% |
|||||||
| Allowance for loan losses/non-accruing loans |
123% |
130% |
128% |
126% |
143% |
|||||||
| NET LOAN CHARGE-OFFS |
||||||||||||
| Residential mortgages |
$ (260) |
$ (1,034) |
$ (243) |
$ (886) |
$ (381) |
|||||||
| Commercial mortgages |
(952) |
(893) |
(1,790) |
(378) |
(1,116) |
|||||||
| Commercial business loans |
(631) |
(496) |
(99) |
(2) |
(3) |
|||||||
| Home equity |
(199) |
(22) |
(90) |
(707) |
(247) |
|||||||
| Other consumer |
(303) |
(277) |
(56) |
(66) |
(40) |
|||||||
| Total, net |
$ (2,345) |
$ (2,722) |
$ (2,278) |
$ (2,039) |
$ (1,787) |
|||||||
| Net charge-offs (QTD annualized)/average loans |
0.23% |
0.28% |
0.27% |
0.25% |
0.24% |
|||||||
| Net charge-offs (YTD annualized)/average loans |
0.23% |
0.26% |
0.25% |
0.24% |
0.24% |
|||||||
| DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS |
||||||||||||
| 30-89 Days delinquent |
0.61% |
0.63% |
0.62% |
0.41% |
0.55% |
|||||||
| 90+ Days delinquent and still accruing |
0.47% |
0.48% |
0.38% |
0.49% |
0.40% |
|||||||
| Total accruing delinquent loans |
1.08% |
1.11% |
1.00% |
0.90% |
0.95% |
|||||||
| Non-accruing loans |
0.70% |
0.64% |
0.76% |
0.78% |
0.75% |
|||||||
| Total delinquent and non-accruing loans |
1.78% |
1.75% |
1.76% |
1.68% |
1.70% |
|||||||
| (1) Amounts related to loans and deposits of discontinued operations have not been reclassified on the above schedule, |
||||||||||||
| although they are reclassified out of loans and deposits on the balance sheet and income statement. |
||||||||||||
| BERKSHIRE HILLS BANCORP, INC. |
|||||||||||||
| SELECTED FINANCIAL HIGHLIGHTS - (F-6) |
|||||||||||||
| At or for the Quarters Ended |
|||||||||||||
| Mar. 31, |
Dec. 31, |
Sept. 30, |
June 30, |
Mar. 31, |
|||||||||
| 2013 |
2012 |
2012 |
2012 |
2012 |
|||||||||
| PER SHARE DATA |
|||||||||||||
| Core earnings, diluted |
$ 0.54 |
$ 0.54 |
$ 0.52 |
$ 0.47 |
$ 0.45 |
||||||||
| Net earnings, diluted |
0.42 |
0.38 |
0.46 |
0.37 |
0.28 |
||||||||
| Tangible book value |
15.87 |
15.63 |
15.86 |
15.49 |
15.81 |
||||||||
| Total book value |
26.68 |
26.53 |
26.60 |
26.31 |
26.28 |
||||||||
| Market price at period end |
25.54 |
23.86 |
22.88 |
22.00 |
22.92 |
||||||||
| Dividends |
0.18 |
0.18 |
0.17 |
0.17 |
0.17 |
||||||||
| PERFORMANCE RATIOS |
|||||||||||||
| Core return on assets |
1.03 |
% |
1.02 |
% |
1.00 |
% |
0.94 |
% |
0.94 |
% |
|||
| Return on assets |
0.80 |
0.72 |
0.88 |
0.73 |
0.59 |
||||||||
| Core return on equity |
8.10 |
8.32 |
7.81 |
7.13 |
6.80 |
||||||||
| Return on equity |
6.28 |
5.86 |
6.89 |
5.58 |
4.23 |
||||||||
| Net interest margin, fully taxable equivalent |
3.73 |
3.67 |
3.50 |
3.70 |
3.62 |
||||||||
| Fee income/Net interest and fee income |
25.63 |
27.35 |
28.35 |
25.52 |
23.44 |
||||||||
| Efficiency ratio |
57.14 |
59.68 |
56.54 |
59.29 |
59.27 |
||||||||
| GROWTH |
|||||||||||||
| Total commercial loans, year-to-date (annualized) |
0 |
% |
29 |
% |
22 |
% |
30 |
% |
3 |
% |
|||
| Total loans, year-to-date (annualized) |
(10) |
35 |
21 |
27 |
11 |
||||||||
| Total deposits, year-to-date (annualized) |
0 |
30 |
12 |
16 |
11 |
||||||||
| Total net revenues, year-to-date, compared to prior year |
39 |
39 |
34 |
45 |
43 |
||||||||
| Earnings per share, year-to-date, compared to prior year |
50 |
62 |
106 |
110 |
40 |
||||||||
| Core earnings per share, year-to-date, compared to prior year |
20 |
29 |
30 |
39 |
50 |
||||||||
| FINANCIAL DATA (In millions) |
|||||||||||||
| Total assets |
$ 5,245 |
$ 5,297 |
$ 4,634 |
$ 4,508 |
$ 4,029 |
||||||||
| Total earning assets |
4,646 |
4,683 |
4,140 |
4,014 |
3,585 |
||||||||
| Total loans |
3,889 |
3,989 |
3,418 |
3,366 |
3,039 |
||||||||
| Allowance for loan losses |
33 |
33 |
33 |
33 |
33 |
||||||||
| Total intangible assets |
273 |
274 |
239 |
240 |
222 |
||||||||
| Total deposits |
4,101 |
4,100 |
3,450 |
3,410 |
3,184 |
||||||||
| Total stockholders' equity |
674 |
667 |
591 |
583 |
557 |
||||||||
| Total core income |
13.5 |
13.2 |
11.4 |
10.2 |
9.4 |
||||||||
| Total net income |
10.5 |
9.3 |
10.0 |
8.0 |
5.8 |
||||||||
| ASSET QUALITY RATIOS |
|||||||||||||
| Net charge-offs (current quarter annualized)/average loans |
0.23 |
% |
0.28 |
% |
0.27 |
% |
0.25 |
% |
0.24 |
% |
|||
| Allowance for loan losses/total loans |
0.86 |
0.83 |
0.97 |
0.98 |
1.07 |
||||||||
| CAPITAL RATIOS |
|||||||||||||
| Stockholders' equity to total assets |
12.85 |
% |
12.60 |
% |
12.75 |
% |
12.94 |
% |
13.82 |
% |
|||
| Tangible stockholders' equity to tangible assets |
8.06 |
7.82 |
8.01 |
8.04 |
8.80 |
||||||||
| (1) |
Reconciliation of Non-GAAP financial measures, including all references to core and tangible amounts, appear on page F-9. |
||||||||||||
| Tangible assets are total assets less total intangible assets. |
|||||||||||||
| (2) |
All performance ratios are annualized and are based on average balance sheet amounts, where applicable. |
||||||||||||
| (3) |
Amounts related to loans and deposits of discontinued operations have not been reclassified on the above schedule, |
||||||||||||
| although they are reclassified out of loans and deposits on the balance sheet and income statement. |
|||||||||||||
| BERKSHIRE HILLS BANCORP, INC. |
|||||||||
| AVERAGE BALANCES - (F-7) |
|||||||||
| Quarters Ended |
|||||||||
| Mar. 31, |
Dec. 31, |
Sept. 30, |
June 30, |
Mar. 31, |
|||||
| (In thousands) |
2013 |
2012 |
2012 |
2012 |
2012 |
||||
| Assets |
|||||||||
| Loans: |
|||||||||
| Residential mortgages |
$ 1,290,989 |
$ 1,340,375 |
$ 1,207,635 |
$ 1,167,007 |
$ 1,057,903 |
||||
| Commercial mortgages |
1,406,628 |
1,404,515 |
1,276,909 |
1,250,741 |
1,153,690 |
||||
| Commercial business loans |
601,695 |
580,436 |
545,988 |
490,983 |
412,237 |
||||
| Consumer loans |
644,674 |
598,802 |
368,795 |
375,090 |
366,035 |
||||
| Total loans |
3,943,986 |
3,924,128 |
3,399,327 |
3,283,821 |
2,989,865 |
||||
| Securities |
591,304 |
572,268 |
559,116 |
549,479 |
525,109 |
||||
| Short-term investments and loans held for sale |
98,160 |
126,378 |
115,835 |
47,302 |
15,107 |
||||
| Total earning assets |
4,633,450 |
4,622,774 |
4,074,278 |
3,880,602 |
3,530,081 |
||||
| Goodwill and other intangible assets |
273,428 |
267,588 |
239,186 |
235,961 |
223,930 |
||||
| Other assets |
333,485 |
312,665 |
258,246 |
235,712 |
235,909 |
||||
| Total assets |
$ 5,240,363 |
$ 5,203,027 |
$ 4,571,710 |
$ 4,352,275 |
$ 3,989,920 |
||||
| Liabilities and stockholders' equity |
|||||||||
| Deposits: |
|||||||||
| NOW |
$ 368,392 |
$ 355,366 |
$ 291,158 |
$ 297,431 |
$ 272,239 |
||||
| Money market |
1,477,497 |
1,404,113 |
1,170,840 |
1,136,161 |
1,084,948 |
||||
| Savings |
441,547 |
422,447 |
376,064 |
370,182 |
359,859 |
||||
| Time |
1,148,345 |
1,161,175 |
1,039,301 |
1,038,662 |
983,696 |
||||
| Total interest-bearing deposits |
3,435,781 |
3,343,101 |
2,877,363 |
2,842,436 |
2,700,742 |
||||
| Borrowings and debentures |
423,739 |
519,831 |
531,076 |
398,650 |
257,389 |
||||
| Total interest-bearing liabilities |
3,859,520 |
3,862,932 |
3,408,439 |
3,241,086 |
2,958,131 |
||||
| Non-interest-bearing demand deposits |
645,923 |
635,044 |
537,466 |
498,972 |
439,015 |
||||
| Other liabilities |
68,509 |
68,475 |
43,047 |
39,665 |
40,039 |
||||
| Total liabilities |
4,573,952 |
4,566,451 |
3,988,952 |
3,779,723 |
3,437,185 |
||||
| Total stockholders' equity |
666,411 |
636,576 |
582,758 |
572,552 |
552,735 |
||||
| Total liabilities and stockholders' equity |
$ 5,240,363 |
$ 5,203,027 |
$ 4,571,710 |
$ 4,352,275 |
$ 3,989,920 |
||||
| Supplementary data |
|||||||||
| Total non-maturity deposits |
$ 2,933,359 |
$ 2,816,970 |
$ 2,375,528 |
$ 2,302,746 |
$ 2,156,061 |
||||
| Total deposits |
4,081,704 |
3,978,145 |
3,414,829 |
3,341,408 |
3,139,757 |
||||
| Fully taxable equivalent income adjustment |
629 |
667 |
623 |
638 |
669 |
||||
| (1) Average balances for securities available-for-sale are based on amortized cost. Total loans include non-accruing loans. |
|||||||||
| (2) Amounts related to loans and deposits of discontinued operations have not been reclassified on the above schedule, |
|||||||||
| although they are reclassified out of loans and deposits on the balance sheet and income statement. |
|||||||||
| BERKSHIRE HILLS BANCORP, INC. |
||||||||||
| AVERAGE YIELDS (Fully Taxable Equivalent - Annualized) - (F-8) |
||||||||||
| Quarters Ended |
||||||||||
| Mar. 31, |
Dec. 31, |
Sept. 30, |
June 30, |
Mar. 31, |
||||||
| 2013 |
2012 |
2012 |
2012 |
2012 |
||||||
| Earning assets |
||||||||||
| Loans: |
||||||||||
| Residential mortgages |
4.04 |
% |
4.00 |
% |
4.28 |
% |
4.58 |
% |
4.63 |
% |
| Commercial loans |
5.24 |
5.29 |
4.85 |
5.00 |
4.89 |
|||||
| Consumer loans |
4.94 |
4.56 |
3.97 |
3.93 |
3.98 |
|||||
| Total loans |
4.75 |
4.73 |
4.62 |
4.75 |
4.72 |
|||||
| Securities |
3.04 |
3.17 |
3.02 |
3.30 |
3.29 |
|||||
| Short-term investments and loans held for sale |
1.83 |
2.86 |
2.15 |
0.63 |
0.07 |
|||||
| Total earning assets |
4.51 |
4.49 |
4.27 |
4.49 |
4.48 |
|||||
| Funding liabilities |
||||||||||
| Deposits: |
||||||||||
| NOW |
0.29 |
0.35 |
0.28 |
0.30 |
0.26 |
|||||
| Money market |
0.39 |
0.43 |
0.47 |
0.49 |
0.55 |
|||||
| Savings |
0.18 |
0.20 |
0.18 |
0.18 |
0.20 |
|||||
| Time |
1.23 |
1.31 |
1.48 |
1.44 |
1.51 |
|||||
| Total interest-bearing deposits |
0.63 |
0.70 |
0.78 |
0.78 |
0.82 |
|||||
| Borrowings and debentures |
3.43 |
2.80 |
1.70 |
2.14 |
3.16 |
|||||
| Total interest-bearing liabilities |
0.94 |
0.98 |
0.92 |
0.95 |
1.02 |
|||||
| Net interest spread |
3.57 |
3.51 |
3.35 |
3.54 |
3.46 |
|||||
| Net interest margin |
3.73 |
3.67 |
3.50 |
3.70 |
3.62 |
|||||
| Cost of funds |
0.81 |
0.84 |
0.80 |
0.82 |
0.89 |
|||||
| Cost of deposits |
0.53 |
0.59 |
0.66 |
0.66 |
0.71 |
|||||
| (1) Cost of funds includes all deposits and borrowings. |
||||||||||
| (2) Amounts related to loans and deposits of discontinued operations have not been reclassified on the above schedule, |
||||||||||
| although they are reclassified out of loans and deposits on the balance sheet and income statement. |
||||||||||
| BERKSHIRE HILLS BANCORP, INC. |
|||||||||||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - (F-9) |
|||||||||||
| At or for the Quarters Ended |
|||||||||||
| Mar. 31, |
Dec. 31, |
Sept. 30, |
|||||||||
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