PITTSFIELD, Mass., Jan. 26, 2015 /PRNewswire/ -- Berkshire Hills Bancorp, Inc. (NYSE: BHLB) reported a 20% increase in fourth quarter core earnings per share to $0.48 in 2014 compared to $0.40 in 2013. Earnings growth was driven by a 17% increase in core revenue as the Company expanded operations in its footprint. Fourth quarter GAAP EPS increased by 10% to $0.46 as earnings in both years were impacted by non-core charges related primarily to growth and restructuring.
http://photos.prnewswire.com/prnvar/20120131/NE44966LOGO
For the year, core earnings per share totaled $1.80 in 2014. Core earnings decreased by 4% from $1.87 per share in 2013 as volume growth was offset by lower margins in the first half of the year. GAAP EPS totaled $1.36 in 2014 and $1.65 in 2013.
FOURTH QUARTER FINANCIAL HIGHLIGHTS (comparisons are to prior quarter unless otherwise stated):
-- 4% increase in core earnings per share -- 8% annualized increase in net revenue -- 17% year over year increase in fee income, with growth in all major categories -- 11% annualized increase in total loans -- 8% annualized increase in deposits -- 12% annualized increase in demand deposits -- 0.37% non-performing assets/assets -- 0.29% net loan charge-offs/average loans
CEO Michael Daly stated, "We finished the year on pace, with growth of 2 cents per share in core earnings in each of the last four quarters. We delivered on the market share opportunities of our expanded footprint. Momentum continued in the fourth quarter, with strong growth in revenue, loans, and deposits compared to the linked quarter."
Mr. Daly continued, "We are well-positioned for further expansion in our footprint. During the fourth quarter, Hampden Bancorp entered a merger agreement with us, which will deepen our presence in the Springfield market and the Hartford/Springfield economic area. This merger is targeted for completion in the second quarter of 2015. Our Westborough branch opened in October, completing the build out of this regional office serving the Worcester area and our Central Massachusetts market. Our teams are building business volumes in Eastern Massachusetts and in New York, where earlier in the year we acquired 20 branches serving our Central and Eastern New York markets."
Mr. Daly concluded, "Our core return on assets improved during the year as we leveraged our franchise investment. In the fourth quarter, our active balance sheet management produced an increase in our net interest margin, while our close focus on expense control improved our efficiency ratio. We are targeting to extend these gains as we integrate our in-market merger with Hampden in 2015, and our teams across our franchise are delivering the right solutions for our markets and our investors. In recognition of our progress and prospects, I'm pleased to also be announcing a 6% increase in our quarterly dividend to shareholders."
DIVIDEND INCREASED
The Board of Directors voted to declare a cash dividend of $0.19 per share to shareholders of record at the close of business on February 12, 2015, payable on February 26, 2015. This is a penny increase from $0.18 and the new dividend equates to a 3.0% annualized yield based on the $25.05 average closing price of Berkshire's common stock during the fourth quarter.
ANNUAL MEETING DATE SET
The Board of Directors voted that the Annual Meeting of Shareholders shall be held on May 7, 2015 at the Crowne Plaza Hotel, One West Street, Pittsfield, Massachusetts at 10:00 a.m. The date of March 12, 2015 was established as the record date for the determination of the shareholders entitled to notice of, and to vote at, the Annual Meeting.
FINANCIAL CONDITION
Fourth quarter results demonstrated strong loan growth funded by solid deposit growth and supported by capital generation that also strengthened the capital foundation. Loan growth was 11% annualized in the fourth quarter and 12% for the year 2014. Organic deposit growth was 8% annualized in the fourth quarter. Including the deposits from acquired branches, total deposits increased by 21% for the year. As a result, the ratio of loans/deposits decreased during the year, measuring 101% at year-end. The ratio of tangible equity to assets measured 7.0% at year-end, with total equity/assets measuring 10.9%. Most capital ratios are targeted to increase with the acquisition of Hampden Bancorp. Tangible book value per share increased by 6% to $17.19 in 2014 while total book value per share increased by 4% to $28.17. Berkshire continues to manage its balance sheet with the objective of benefiting from expected future interest rate increases.
Berkshire's 11% annualized fourth quarter loan growth resulted primarily from 15% annualized commercial loan growth, which matched the full year growth rate. Commercial growth was concentrated in diversified commercial and industrial loans in the fourth quarter, while for the full year commercial balances increased primarily due to higher commercial real estate loans. Residential mortgage balances advanced at a 14% annualized rate in the fourth quarter, including the benefit of stronger demand in the second half of the year. Residential mortgage growth was 8% for the year. Consumer loans grew by 11% for the year and declined by 5% annualized in the fourth quarter due to a planned de-emphasis of the auto loan portfolio.
Asset quality metrics remained favorable. Annualized net loan charge-offs measured 0.29% of average loans for the quarter. Quarter-end non-performing assets decreased to 0.37% of total assets and accruing delinquent loans measured 0.52% of total loans. The loan loss allowance was 0.76% of total loans; approximately 16% of quarter-end loans were balances recorded at fair value in recent bank acquisitions.
Annualized fourth quarter deposit growth of 8% included increases in all major categories. Growth was primarily in relationship oriented transaction accounts, with a concentration in new commercial balances. Full year deposit growth of 21% included 11% related to balances totaling $440 million in acquired New York branches.
RESULTS OF OPERATIONS
The fourth quarter core return on tangible equity increased to 12.0% in 2014 compared to 10.5% in 2013. Net non-core charges in both periods were primarily related to acquisition and restructuring activity. GAAP return on equity improved to 6.5% from 6.2% in the above respective periods and the efficiency ratio improved to 62.5% from 63.2%.
The 20% year over year increase in fourth quarter core earnings per share reflected the benefit of 17% growth in core revenue, with an identical percentage increase in both net interest income and fee income. This resulted primarily from volume growth in Berkshire's footprint, particularly in newer markets in Eastern Massachusetts and Central New York. Fee income grew in all major categories, including a 30% increase in deposit related fees primarily from the New York branch acquisition.
Compared to the linked quarter, growth in core earnings per share was primarily driven by 4% growth in net interest income. This included the benefit of volume growth, together with an expansion of the net interest margin to 3.23% compared to 3.20% in the linked quarter; the margin was 3.26% in the fourth quarter of 2013. Net interest income includes purchased loan accretion which is largely comprised of recoveries on the resolution of impaired loans acquired in previous bank acquisitions. This accretion totaled $1.7 million in the most recent quarter, compared to $1.2 million in the linked quarter and $2.4 million in the fourth quarter of 2013. Fourth quarter non-interest income was down 3% from the linked quarter, with seasonally lower fee income mostly offset by distributions from equity investments.
The loan loss provision totaled $3.9 million in the fourth quarter. Net loan charge-offs were $3.2 million, and the loan loss allowance increased by $0.7 million to $35.7 million.
Fourth quarter core non-interest expense increased by 1% over the prior quarter to $39.9 million. Non-core expense increased due to the pending Hampden merger. Full time equivalent staff totaled 1,091 at year-end. The core tax rate was 29% and the GAAP tax rate of 25% was due to the full year impact of the first quarter branch acquisition charges.
CONFERENCE CALL
Berkshire will conduct a conference call/webcast at 10:00 a.m. eastern time on Tuesday, January 27, 2015 to discuss the results for the quarter and provide guidance about expected future results. Participants should dial-in to the call 10-15 minutes before it begins. Information about the conference call follows:
Dial-in: 888-317-6003
Elite Entry Number: 1730849
Webcast: berkshirebank.com (investor relations link)
A telephone replay of the call will be available through Wednesday, February 4, 2015 by calling 877-344-7529 and entering conference number: 10058299 The webcast will be available at Berkshire's website above for an extended period of time. A print-friendly version of this news release will be available at the web link shown above.
BACKGROUND
Berkshire Hills Bancorp is the parent of Berkshire Bank - America's Most Exciting Bank(®). The Company has $6.5 billion in assets and 91 full-service branch offices in Massachusetts, New York, Connecticut, and Vermont providing personal and business banking, insurance, and wealth management services. Berkshire has a pending agreement to acquire Hampden Bancorp, the parent of Hampden Bank, which has $706 million in assets and operates ten offices in the Springfield, Massachusetts area.
FORWARD LOOKING STATEMENTS
This document contains 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.
ADDITIONAL INFORMATION FOR STOCKHOLDERS
In connection with the proposed merger with Hampden Bancorp, Berkshire has filed with the Securities and Exchange Commission ("SEC") a Registration Statement on Form S-4 that includes a Proxy Statement of Hampden and a Prospectus of Berkshire, as well as other relevant documents concerning the proposed merger. Investors and stockholders are urged to read the Registration Statement and the Proxy Statement/Prospectus regarding the proposed merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. A free copy of the Registration Statement and Proxy Statement/Prospectus, as well as other filings containing information about Berkshire and Hampden, when they become available, may be obtained at the SEC's Internet site (www.sec.gov). Copies of the Registration Statement and Proxy Statement/Prospectus and the filings that will be incorporated by reference therein may also be obtained, free of charge, from Berkshire's website at ir.berkshirebank.com or by contacting Berkshire Investor Relations at 413-236-3149 or from Hampden's website at www.hampdenbank.com and selecting the "Investor Relations" link or by contacting Hampden Investor relations at 413-452-5150.
PARTICIPANTS IN SOLICITATION
Berkshire and Hampden and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Hampden in connection with the proposed merger. Information about the directors and executive officers of Berkshire is set forth in the proxy statement for Berkshire's 2014 annual meeting of stockholders, as filed with the SEC on a Schedule 14A on April 1 and in the Form 8-k filed with the SEC on June 30, 2014. Information about the directors and executive officers of Hampden is set forth in the proxy statement for Hampden's 2014 annual meeting of stockholders, as filed with the SEC on a Schedule 14A on September 26, 2014 and additional filings reporting results of the annual meeting on November 4, 2014. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction and a description of their direct and indirect interests, by security holdings or otherwise, may be obtained by reading the Proxy Statement/Prospectus and other relevant documents regarding the proposed merger filed with the SEC (when they become available). Free copies of these documents may be obtained as described in the preceding paragraph.
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 securities gains/losses, losses recorded for hedge terminations, merger costs, restructuring costs, systems conversion costs, and out-of-period adjustments. Non-core adjustments are presented net of an adjustment for income tax expense. This adjustment in 2013 was based on the marginal tax rate applied to the net non-core pre-tax adjustments. In 2014, due to the comparative magnitude of the non-core items, this adjustment was determined as the difference between the GAAP tax rate and the effective tax rate applicable to core income. Accordingly, GAAP net income exceeded core income in two quarters due to the higher effective full year tax rate on core income before the net non-core charges. The efficiency ratio is adjusted for non-core 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. Charges related to merger and acquisition activity consist primarily of severance/benefit related expenses, contract termination costs, and professional fees. Systems conversion costs relate primarily to the Company's core systems conversion and related systems conversions costs. Restructuring costs primarily consist of employee severance costs, as well as costs and losses associated with the disposition of assets which were undertaken as a project to right-size expenses following a decline in revenue in 2013. Out-of-period accounting adjustments for interest income on acquired loans were recorded following systems conversions and merger related accounting activity and were deemed non-core. Other non-core expenses include variable rate compensation related to non-core items as well as expenses related to the Bank's charter change.
CONTACTS
Investor Relations Contact
Allison O'Rourke, Senior 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) ---------------------------------------------- December 31, September 30, December 31, ------------ ------------- ------------ (In thousands) 2014 2014 2013 ------------- ---- ---- ---- Assets Cash and due from banks $54,179 $58,624 $56,841 Short-term investments 17,575 12,201 18,698 Total cash and short-term investments 71,754 70,825 75,539 Trading security 14,909 14,745 14,840 Securities available for sale, at fair value 1,091,818 1,058,965 760,048 Securities held to maturity, at amortized cost 43,347 42,596 44,921 Federal Home Loan Bank stock and other restricted securities 55,720 54,646 50,282 Total securities 1,205,794 1,170,952 870,091 Loans held for sale, at fair value 19,493 29,091 15,840 Residential mortgages 1,496,204 1,445,861 1,384,274 Commercial real estate 1,611,567 1,595,400 1,417,120 Commercial and industrial loans 804,366 732,960 687,293 Consumer loans 768,463 778,561 691,836 -------------- ------- ------- ------- Total loans (1) 4,680,600 4,552,782 4,180,523 Less: Allowance for loan losses (35,662) (34,966) (33,323) ------------------------------- ------- ------- ------- Net loans 4,644,938 4,517,816 4,147,200 Premises and equipment, net 87,279 87,166 84,459 Other real estate owned 2,049 4,854 2,758 Goodwill 264,742 264,770 256,871 Other intangible assets 11,528 12,524 13,791 Cash surrender value of bank-owned life insurance 104,588 103,749 101,530 Deferred tax asset, net 28,776 38,503 50,711 Other assets 61,090 51,908 54,009 ------------ Total assets $6,502,031 $6,352,158 $5,672,799 ------------ ---------- ---------- ---------- Liabilities and stockholders' equity Demand deposits $869,302 $844,480 $677,917 NOW deposits 426,108 420,290 353,612 Money market deposits 1,407,179 1,394,558 1,383,856 Savings deposits 496,344 474,774 431,496 Time deposits 1,455,746 1,429,231 1,001,648 Total deposits (1) 4,654,679 4,563,333 3,848,529 Senior borrowings 962,576 951,105 974,428 Subordinated borrowings 89,747 89,730 89,679 ----------------------- ------ ------ ------ Total borrowings 1,052,323 1,040,835 1,064,107 Other liabilities 85,742 51,053 82,101 ----------------- ------ ------ ------ Total liabilities 5,792,744 5,655,221 4,994,737 Total stockholders' equity 709,287 696,937 678,062 Total liabilities and stockholders' equity $6,502,031 $6,352,158 $5,672,799 ------------------------------------------ ---------- ---------- ---------- (1) The Company acquired 20 branches in Central New York on January 17, 2014, including $440 million in deposits and $4 million in loans.
BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-2) ------------------------------------------------------- LOAN ANALYSIS ------------- Annualized growth % ------------------ (Dollars in millions) Dec. 31, 2014 Sept. 30, 2014 Dec. 31, 2013 Quarter ended Year to date Balance Balance Balance December 31, 2014 --- ------- ------- ------- ----------------- Total residential mortgages $1,496 $1,446 $1,384 14% 8% Commercial real estate 1,612 1,595 1,417 4 14 Commercial and industrial loans 804 733 688 39 17 ------------------------------- --- --- --- --- --- Total commercial loans 2,416 2,328 2,105 15 15 Home equity 319 316 307 3 4 Auto and other 450 463 385 (12) 17 -------------- --- --- --- --- --- Total consumer loans 769 779 692 (5) 11 -------------------- --- --- --- --- --- Total loans $4,681 $4,553 $4,181 11% 12% ----------- ------ ------ ------ --- --- DEPOSIT ANALYSIS ---------------- Annualized growth % ------------------ (Dollars in millions) Dec. 31, 2014 Sept. 30, 2014 Acquired Dec. 31, 2013 Quarter ended Year to date Balance Balance Balance (1) Balance December 31, 2014 --- ------- ------- ---------- ------- ----------------- Demand $869 $844 $110 $678 12% 28% NOW 426 420 80 354 6 20 Money market 1,407 1,395 124 1,384 3 2 Savings 497 475 36 431 19 15 ------- --- --- --- --- --- --- Total non-maturity deposits 3,199 3,134 350 2,847 8 12 Total time deposits 1,456 1,429 90 1,002 8 45 ------------------- ----- ----- --- ----- Total deposits $4,655 $4,563 $440 $3,849 8% 21% -------------- ------ ------ ---- ------ --- --- (1) The Company acquired 20 branches in Central New York on January 17, 2014, including $440 million in deposits, as shown above, and $4 million in loans.
BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - (F-3) ---------------------------------------------------- Three Months Ended Years Ended December 31, December 31, ------------ ------------ (In thousands, except per share data) 2014 2013 2014 2013 ------------------------------------ ---- ---- ---- ---- Interest and dividend income Loans $45,706 $43,566 $174,467 $186,115 Securities and other 8,310 5,093 32,575 17,626 -------------------- ----- ----- ------ ------ Total interest and dividend income 54,016 48,659 207,042 203,741 Interest expense Deposits 5,109 5,166 19,185 20,859 Borrowings 2,260 3,651 9,166 14,130 ---------- ----- ----- ----- ------ Total interest expense 7,369 8,817 28,351 34,989 ---------------------- ----- ----- ------ ------ Net interest income 46,647 39,842 178,691 168,752 Non-interest income Loan related income 1,763 1,578 6,328 8,247 Mortgage banking income 504 445 2,561 5,235 Deposit related fees 6,137 4,717 24,635 18,340 Insurance commissions and fees 2,223 2,143 10,364 10,020 Wealth management fees 2,373 2,212 9,546 8,683 ---------------------- ----- ----- ----- ----- Total fee income 13,000 11,095 53,434 50,525 Other 1,200 1,227 2,646 2,949 Gain on sale of securities, net - 3,392 482 4,758 Loss on termination of hedges - - (8,792) - ----------------------------- Total non-interest income 14,200 15,714 47,770 58,232 ------------------------- ------ ------ ------ ------ Total net revenue 60,847 55,556 226,461 226,984 Provision for loan losses 3,898 3,100 14,968 11,378 Non-interest expense Compensation and benefits 20,965 16,736 81,768 71,134 Occupancy and equipment 6,655 5,421 26,905 22,540 Technology and communications 3,702 3,169 14,764 12,944 Marketing and promotion 771 765 2,572 2,596 Professional services 1,205 1,558 4,211 6,569 FDIC premiums and assessments 1,083 899 4,284 3,473 Other real estate owned and foreclosures 232 255 801 700 Amortization of intangible assets 996 1,239 4,812 5,268 Merger, restructuring and conversion expenses 1,762 2,493 8,491 14,848 Other 4,305 4,622 17,378 17,287 ----- ----- ----- ------ ------ Total non-interest expense 41,676 37,157 165,986 157,359 -------------------------- ------ ------ ------- ------- Income before income taxes 15,273 15,299 45,507 58,247 Income tax expense 3,875 4,762 11,763 17,104 ------------------ ----- ----- ------ ------ Net income $11,398 $10,537 $33,744 $41,143 ---------- ------- ------- ------- ------- Earnings per share: Basic $0.46 $0.43 $1.36 $1.66 Diluted $0.46 $0.42 $1.36 $1.65 Weighted average shares outstanding: Basic 24,758 24,701 24,730 24,802 Diluted 24,912 24,857 24,854 24,965 (1) The Company acquired 20 branches in Central New York on January 17, 2014. The income statement for the three months ended March 31, 2014 includes operations of the branch acquisition beginning on that date. (2) Merger, restructuring and conversion expenses include branch acquisition related expenses and bank charter change related expenses.
BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - (F-4) -------------------------------------------------------- Quarters Ended -------------- Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, (In thousands, except per share data) 2014 2014 2014 2014 2013 ------------------------------------ ---- ---- ---- ---- ---- Interest and dividend income Loans $45,706 $43,958 $42,309 $42,494 $43,566 Securities and other 8,310 8,098 8,866 7,301 5,093 -------------------- ----- ----- ----- ----- ----- Total interest and dividend income 54,016 52,056 51,175 49,795 48,659 Interest expense Deposits 5,109 4,877 4,478 4,721 5,166 Borrowings 2,260 2,230 2,368 2,308 3,651 ---------- ----- ----- ----- ----- ----- Total interest expense 7,369 7,107 6,846 7,029 8,817 ---------------------- ----- ----- ----- ----- ----- Net interest income 46,647 44,949 44,329 42,766 39,842 Non-interest income Loan related income 1,763 1,471 1,846 1,248 1,578 Mortgage banking income 504 994 691 372 445 Deposit related fees 6,137 6,449 6,610 5,439 4,717 Insurance commissions and fees 2,223 2,632 2,460 3,049 2,143 Wealth management fees 2,373 2,330 2,294 2,549 2,212 ---------------------- ----- ----- ----- ----- ----- Total fee income 13,000 13,876 13,901 12,657 11,095 Other 1,200 520 402 524 1,227 Gain on sale of securities, net - 245 203 34 3,392 Loss on termination of hedges - - - (8,792) - ----------------------------- Total non-interest income 14,200 14,641 14,506 4,423 15,714 ------------------------- ------ ------ ------ ----- ------ Total net revenue 60,847 59,590 58,835 47,189 55,556 Provision for loan losses 3,898 3,685 3,989 3,396 3,100 Non-interest expense Compensation and benefits 20,965 20,665 20,279 19,859 16,736 Occupancy and equipment 6,655 6,780 6,656 6,814 5,421 Technology and communications 3,702 3,484 3,800 3,778 3,169 Marketing and promotion 771 659 621 521 765 Professional services 1,205 830 1,024 1,152 1,558 FDIC premiums and assessments 1,083 1,163 1,029 1,009 899 Other real estate owned and foreclosures 232 13 33 523 255 Amortization of intangible assets 996 1,236 1,274 1,306 1,239 Merger, restructuring and conversion expenses 1,762 238 190 6,301 2,493 Other 4,305 4,619 4,357 4,097 4,622 ----- Total non-interest expense 41,676 39,687 39,263 45,360 37,157 -------------------------- ------ ------ ------ ------ ------ Income (loss) before income taxes 15,273 16,218 15,583 (1,567) 15,299 Income tax expense (benefit) 3,875 4,230 4,119 (461) 4,762 --------------------------- ----- ----- ----- ---- ----- Net income (loss) $11,398 $11,988 $11,464 $(1,106) $10,537 ---------------- ------- ------- ------- ------- ------- Earnings (loss) per share: Basic $0.46 $0.48 $0.46 $(0.04) $0.43 Diluted $0.46 $0.48 $0.46 $(0.04) $0.42 Weighted average shares outstanding: Basic 24,758 24,747 24,715 24,698 24,701 Diluted 24,912 24,861 24,809 24,698 24,857 (1) See notes on Page F-3
BERKSHIRE HILLS BANCORP, INC. ASSET QUALITY ANALYSIS - UNAUDITED - (F-5) ----------------------------------------- At or for the Quarters Ended ---------------------------- Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, (Dollars in thousands) 2014 2014 2014 2014 2013 --------------------- ---- ---- ---- ---- ---- NON-PERFORMING ASSETS Non-accruing loans: Residential mortgages $3,908 $4,810 $5,295 $6,071 $7,867 Commercial real estate 12,878 12,192 12,583 13,036 13,739 Commercial and industrial loans 1,705 2,225 4,821 2,411 2,356 Consumer loans 3,214 3,660 3,359 3,846 3,493 -------------- ----- ----- ----- ----- ----- Total non-accruing loans 21,705 22,887 26,058 25,364 27,455 Other real estate owned 2,049 4,854 2,445 2,418 2,758 ----------------------- ----- ----- ----- ----- ----- Total non-performing assets $23,754 $27,741 $28,503 $27,782 $30,213 --------------------------- ------- ------- ------- ------- ------- Total non-accruing loans/total loans 0.46% 0.50% 0.59% 0.60% 0.66% Total non-performing assets/total assets 0.37% 0.44% 0.45% 0.46% 0.53% PROVISION AND ALLOWANCE FOR LOAN LOSSES Balance at beginning of period $34,966 $34,353 $33,602 $33,323 $33,248 Charged-off loans (3,660) (3,360) (3,516) (3,317) (3,462) Recoveries on charged-off loans 458 288 278 200 437 ------------------------------- --- --- --- --- --- Net loans charged-off (3,202) (3,072) (3,238) (3,117) (3,025) Provision for loan losses 3,898 3,685 3,989 3,396 3,100 ------------------------- ----- ----- ----- ----- ----- Balance at end of period $35,662 $34,966 $34,353 $33,602 $33,323 ------------------------ ------- ------- ------- ------- ------- Allowance for loan losses/total loans 0.76% 0.77% 0.77% 0.79% 0.80% Allowance for loan losses/non-accruing loans 164% 153% 132% 132% 121% NET LOAN CHARGE-OFFS Residential mortgages $(181) $(394) $(602) $(1,055) $(564) Commercial real estate (1,810) (1,470) (1,028) (1,105) (763) Commercial and industrial loans (540) (687) (1,341) (215) (1,042) Home equity (240) (193) (51) (458) 45 Auto and other consumer (431) (328) (216) (284) (701) ----------------------- ---- ---- ---- ---- ---- Total, net $(3,202) $(3,072) $(3,238) $(3,117) $(3,025) ---------- ------- ------- ------- ------- ------- Net charge-offs (QTD annualized)/average loans 0.29% 0.28% 0.31% 0.30% 0.31% Net charge-offs (YTD annualized)/average loans 0.29% 0.29% 0.30% 0.30% 0.29% DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS 30-89 Days delinquent 0.42% 0.32% 0.34% 0.37% 0.51% 90+ Days delinquent and still accruing 0.10% 0.12% 0.21% 0.22% 0.22% -------------------------------------- ---- ---- ---- ---- ---- Total accruing delinquent loans 0.52% 0.44% 0.55% 0.59% 0.73% Non-accruing loans 0.46% 0.50% 0.59% 0.60% 0.66% Total delinquent and non-accruing loans 0.98% 0.94% 1.14% 1.19% 1.39% --------------------------------------- ---- ---- ---- ---- ----
BERKSHIRE HILLS BANCORP, INC. SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-6) ------------------------------------------------ At or for the Quarters Ended ---------------------------- Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, 2014 2014 2014 2014 2013 ---- ---- ---- ---- ---- PER SHARE DATA Core earnings, diluted $0.48 $0.46 $0.44 $0.42 $0.40 Net earnings, diluted 0.46 0.48 0.46 (0.04) 0.42 Tangible book value 17.19 16.67 16.40 15.84 16.27 Total book value 28.17 27.69 27.49 26.99 27.08 Market price at period end 26.66 23.49 23.22 25.88 27.27 Dividends 0.18 0.18 0.18 0.18 0.18 PERFORMANCE RATIOS Core return on assets 0.75% 0.73% 0.71% 0.71% 0.73% Return on assets 0.71 0.77 0.75 (0.08) 0.77 Core return on equity 6.89 6.59 6.32 6.02 5.87 Core return on tangible equity 11.96 11.76 11.34 10.84 10.47 Return on equity 6.52 6.95 6.64 (0.64) 6.18 Net interest margin, fully taxable equivalent 3.23 3.20 3.26 3.35 3.26 Fee income/Net interest and fee income 21.79 23.59 23.87 22.84 21.78 Efficiency ratio 62.46 62.89 62.96 64.42 63.21 GROWTH Total commercial loans, year-to- date (annualized) 15% 14% 19% 9% 5% Total loans, year- to-date (annualized) 12 12 13 6 5 Total net revenues, year-to-date, compared to prior year (0) (3) (7) (17) 15 Core earnings per share, year-to- date, compared to prior year (4) (10) (15) (22) (6) Earnings per share, year-to-date, compared to prior year (18) (27) (54) (110) 11 FINANCIAL DATA (In millions) Total assets $6,502 $6,352 $6,311 $6,010 $5,673 Total earning assets 5,923 5,765 5,700 5,408 5,085 Total loans 4,681 4,553 4,450 4,243 4,181 Allowance for loan losses 36 35 34 34 33 Total intangible assets 276 277 279 280 271 Total deposits 4,655 4,563 4,479 4,219 3,849 Total stockholders' equity 709 697 690 678 678 Total core income 12.0 11.4 10.9 10.4 10.0 Total net income 11.4 12.0 11.5 (1.1) 10.5 ASSET QUALITY RATIOS Net charge-offs (current quarter annualized)/average loans 0.29% 0.28% 0.31% 0.30% 0.31% Allowance for loan losses/total loans 0.76 0.77 0.77 0.79 0.80 CONDITION RATIOS Stockholders' equity to total assets 10.91% 10.97% 10.94% 11.27% 11.95% Tangible stockholders' equity to tangible assets 6.95 6.91 6.81 6.94 7.54 Investments to total assets 18.54 18.43 18.99 19.05 15.34 Loans/deposits 101 100 99 101 109 (1) Reconciliation of Non-GAAP financial measures, including all references to core and tangible amounts, appear on pages F-9 & F-10. 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) See note on tangible equity on pages F-9 & F-10.
BERKSHIRE HILLS BANCORP, INC. AVERAGE BALANCES - UNAUDITED - (F-7) ----------------------------------- Quarters Ended -------------- Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, (In thousands) 2014 2014 2014 2014 2013 ---- ---- ---- ---- ---- Assets Loans: Residential mortgages $1,468,271 $1,412,720 $1,379,625 $1,379,266 $1,330,674 Commercial real estate 1,611,343 1,579,258 1,488,462 1,420,382 1,381,628 Commercial and industrial loans 733,750 716,787 703,798 684,776 673,292 Consumer loans 782,584 763,296 729,654 699,598 687,540 -------------- ------- ------- ------- ------- ------- Total loans 4,595,948 4,472,061 4,301,539 4,184,022 4,073,134 Securities 1,190,182 1,169,765 1,225,646 1,047,658 813,417 Short-term investments and loans held for sale 54,843 39,496 28,426 28,631 35,438 -------------------------------- ------ ------ ------ ------ ------ Total earning assets 5,840,973 5,681,322 5,555,611 5,260,311 4,921,989 Goodwill and other intangible assets 276,645 277,775 279,024 278,386 271,147 Other assets 304,909 305,698 311,176 312,145 305,617 ------------ ------- ------- ------- ------- ------- Total assets $6,422,527 $6,264,795 $6,145,811 $5,850,842 $5,498,753 ------------ ---------- ---------- ---------- ---------- ---------- Liabilities and stockholders' equity Deposits: NOW $415,806 $417,802 $425,824 $409,631 $348,600 Money market 1,426,722 1,405,454 1,448,624 1,490,408 1,392,570 Savings 479,988 480,036 481,790 463,615 435,766 Time 1,425,865 1,406,914 1,152,651 1,069,987 1,044,850 ---- --------- --------- --------- --------- --------- Total interest-bearing deposits 3,748,381 3,710,206 3,508,889 3,433,641 3,221,786 Borrowings 1,053,884 980,135 1,113,431 899,458 857,848 ---------- --------- ------- --------- ------- ------- Total interest-bearing liabilities 4,802,265 4,690,341 4,622,320 4,333,099 4,079,634 Non-interest-bearing demand deposits 863,795 824,489 779,775 749,982 681,368 Other liabilities 56,805 60,088 52,712 76,258 56,261 ----------------- ------ ------ ------ ------ ------ Total liabilities 5,722,865 5,574,918 5,454,807 5,159,339 4,817,263 Total stockholders' equity 699,662 689,877 691,004 691,503 681,490 Total liabilities and stockholders' equity $6,422,527 $6,264,795 $6,145,811 $5,850,842 $5,498,753 ----------------------------------- ---------- ---------- ---------- ---------- ---------- Supplementary data Total non-maturity deposits $3,186,311 $3,127,781 $3,136,013 $3,113,636 $2,858,304 Total deposits 4,612,176 4,534,695 4,288,664 4,183,623 3,903,154 Fully taxable equivalent income adjustment 887 859 852 718 639 Total average tangible equity 423,017 412,102 411,980 413,117 410,343 (1) Average balances for securities available-for-sale are based on amortized cost. Total loans include non-accruing loans. (2) Total average tangible equity results from the subtraction of average goodwill and other intangible assets from total average stockholders' equity. (3) The average balances of deposits include the deposits held for sale presented under other liabilities on the consolidated balance sheet.
BERKSHIRE HILLS BANCORP, INC. AVERAGE YIELDS (Fully Taxable Equivalent - Annualized) - UNAUDITED - (F-8) -------------------------------------------------------------------------- Quarters Ended -------------- Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, 2014 2014 2014 2014 2013 ---- ---- ---- ---- ---- Earning assets Loans: Residential mortgages 3.88% 3.86% 3.99% 4.12% 3.98% Commercial real estate 4.18 4.26 4.20 4.49 4.73 Commercial and industrial loans 4.22 3.79 3.82 3.97 3.91 Consumer loans 3.35 3.34 3.49 3.56 4.01 Total loans 3.96 3.91 3.96 4.13 4.26 Securities 3.00 2.98 3.13 3.04 2.72 Short-term investments and loans held for sale 1.37 1.65 1.40 1.51 1.92 Total earning assets 3.73 3.70 3.76 3.89 3.97 Funding liabilities Deposits: NOW 0.15 0.17 0.15 0.15 0.18 Money market 0.42 0.37 0.36 0.37 0.44 Savings 0.14 0.14 0.16 0.16 0.16 Time 0.91 0.91 0.98 1.15 1.25 Total interest- bearing deposits 0.54 0.52 0.51 0.56 0.64 Borrowings 0.85 0.90 0.85 1.04 1.69 Total interest- bearing liabilities 0.61 0.60 0.59 0.66 0.86 Net interest spread 3.12 3.10 3.17 3.23 3.11 Net interest margin 3.23 3.20 3.26 3.35 3.26 Cost of funds 0.52 0.51 0.51 0.56 0.73 Cost of deposits 0.44 0.43 0.42 0.46 0.53 (1) Cost of funds includes all deposits and borrowings. (2) The average cost of deposits includes the deposits held for sale.
BERKSHIRE HILLS BANCORP, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - UNAUDITED - (F-9) ---------------------------------------------------------------- At or for the Quarters Ended ---------------------------- Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, (Dollars in thousands) 2014 2014 2014 2014 2013 --------------------- ---- ---- ---- ---- ---- Net income (loss) $11,398 $11,988 $11,464 $(1,106) $10,537 Adj: Gain on sale of securities, net - (245) (203) (34) (3,392) Adj: Loss on termination of hedges - - - 8,792 - Adj: Merger and acquisition expenses 1,708 - 52 3,637 932 Adj: Restructuring and conversion expenses (5) 54 238 138 2,665 1,561 Adj: Out-of-period adjustment (6) - - - 1,381 - Adj: Income taxes (1,114) (612) (536) (4,923) 364 Total core income (A) $12,046 $11,369 $10,915 $10,412 $10,002 ----------------- --- ------- ------- ------- ------- ------- Total revenue $60,847 $59,590 $58,835 $47,189 $55,556 Adj: Gain on sale of securities, net - (245) (203) (34) (3,392) Adj: Loss on termination of hedges - - - 8,792 - Adj: Out-of-period adjustment (6) - - - 1,381 - Total core revenue $60,847 $59,345 $58,632 $57,328 $52,164 ------------------ ------- ------- ------- ------- ------- Total non-interest expense $41,676 $39,687 $39,263 $45,360 $37,157 Less: Total non-core expense (see above) (1,762) (238) (190) (6,302) (2,493) Core non-interest expense $39,914 $39,449 $39,073 $39,058 $34,664 ------------------------- ------- ------- ------- ------- ------- (Dollars in millions, except per share data) Total average assets (B) $6,423 $6,265 $6,146 $5,851 $5,499 Total average stockholders' equity (C) 700 690 691 692 681 Total average tangible stockholders' equity (D) 423 412 412 413 410 Total tangible stockholders' equity, period-end (7) (E) 433 420 411 398 407 Total common shares outstanding, period-end (thousands) (F) 25,183 25,173 25,115 25,105 25,036 Average diluted shares outstanding (thousands) (8) (G) 24,912 24,861 24,809 24,833 24,857 Core earnings per share, diluted (A/G) $0.48 $0.46 $0.44 $0.42 $0.40 Tangible book value per share, period-end (E/F) $17.19 $16.67 $16.40 $15.84 $16.27 Core return on assets (A/B) 0.75% 0.73% 0.71% 0.71% 0.73% Core return on equity (A/C) 6.89 6.59 6.32 6.02 5.87 Core return on tangible equity (4) (A/D) 11.96 11.76 11.34 10.84 10.47 Efficiency ratio (1) 62.46 62.89 62.96 64.42 63.21 Supplementary data Tax credit benefit of tax shelter investments $570 $555 $555 $555 $80 Intangible amortization $996 $1,236 $1,274 $1,306 $1,239 (1) Efficiency ratio is computed by dividing total core tangible non-interest expense by the sum of total net interest income on a fully taxable equivalent basis and total core 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. (2) Ratios are annualized and based on average balance sheet amounts, where applicable. (3) Quarterly data may not sum to year-to-date data due to rounding. (4) Core return on tangible equity is computed by dividing the total core income adjusted for the tax-affected amortization of intangible assets, assuming a 40% marginal rate, by tangible equity. (5) Bank charter change related expenses and prior period variable compensation are shown above under restructuring and conversion expenses. (6) The out of period adjustments shown above relate to interest income earned on loans acquired in bank acquisitions. (7) Total tangible stockholders' equity is computed by taking total stockholders' equity less the intangible assets at period-end. (8) Average diluted shares computed for core earnings per share differ from GAAP average diluted shares, in the first quarter of 2014, due to the GAAP net loss compared to core net income for the period.
BERKSHIRE HILLS BANCORP, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - UNAUDITED - (F-10) ----------------------------------------------------------------- At or for the Years Ended ------------------------- Dec. 31, Dec. 31, (Dollars in thousands) 2014 2013 --------------------- ---- ---- Net income $33,744 $41,143 Adj: Gain on sale of securities, net (482) (4,758) Adj: Loss on termination of hedges 8,792 - Adj: Merger and acquisition expenses 5,397 7,998 Adj: Restructuring and conversion expenses (5) 3,095 7,350 Adj: Out-of-period adjustment (6) 1,381 (1,287) Adj: Income taxes (7,185) (3,750) Total core income (A) $44,742 $46,696 ----------------- --- ------- ------- Total revenue $226,461 $226,984 Adj: Gain on sale of securities and other non-recurring gain, net (482) (4,758) Adj: Loss on termination of hedges 8,792 - Adj: Out-of-period adjustment (6) 1,381 (1,287) Total core revenue $236,152 $220,939 ------------------ -------- -------- Total non-interest expense $165,986 $157,359 Less: Total non-core expense (see above) (8,492) (15,348) Core non-interest expense $157,494 $142,011 ------------------------- -------- -------- (Dollars in millions, except per share data) Total average assets (B) $6,171 $5,306 Total average stockholders' equity (C) 693 675 Total average tangible stockholders' equity (D) 415 403 Total tangible stockholders' equity, period-end (7) (E) 433 407 Total common shares outstanding, period-end (thousands) (F) 25,183 25,036 Average diluted common shares outstanding (thousands) (G) 24,854 24,965 Core earnings per common share, diluted (A/G) $1.80 $1.87 Tangible book value per common share, period-end (E/F) $17.19 $16.27 Core return on assets (A/B) 0.73% 0.88% Core return on equity (A/C) 6.46 6.92 Core return on tangible equity (4) (A/D) 11.48 12.37 Efficiency ratio (1) 63.17 60.79 Supplementary data GAAP return on assets 0.55% 0.78% GAAP return on equity 4.87 6.09 Net interest margin 3.26 3.63 Tax credit benefit of tax shelter investments $2,234 $1,455 Intangible amortization $4,812 $5,268 (1) Efficiency ratio is computed by dividing total core tangible non-interest expense by the sum of total net interest income on a fully taxable equivalent basis and total core 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. (2) Ratios are annualized and based on average balance sheet amounts, where applicable. (3) Quarterly data may not sum to year-to-date data due to rounding. (4) Core return on tangible equity is computed by dividing the total core income adjusted for the tax-affected amortization of intangible assets, assuming a 40% marginal rate, by tangible equity. (5) Bank charter change related expenses and prior period variable compensation are shown above under restructuring and conversion expenses. (6) The out of period adjustments shown above relate to interest income earned on loans acquired in bank acquisitions. (7) Total tangible stockholders' equity is computed by taking total stockholders' equity less the intangible assets at period-end.
Logo - http://photos.prnewswire.com/prnh/20120131/NE44966LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/berkshire-hills-reports-20-increase-in-fourth-quarter-core-eps-dividend-increased-annual-meeting-date-set-300025726.html
SOURCE Berkshire Hills Bancorp, Inc.