-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IjEOEJvMJ+5EfMIkGxHu32Un9N4cTKzrTDgxQk8Uoh7U041OazSuedRTmubmioIJ m1iOJCqT5cyMIRFjYPGOig== 0000943374-09-000027.txt : 20090113 0000943374-09-000027.hdr.sgml : 20090113 20090113161141 ACCESSION NUMBER: 0000943374-09-000027 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20071231 FILED AS OF DATE: 20090113 DATE AS OF CHANGE: 20090113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERKSHIRE HILLS BANCORP INC CENTRAL INDEX KEY: 0001108134 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 043510455 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-51584 FILM NUMBER: 09524080 BUSINESS ADDRESS: STREET 1: 24 NORTH ST. CITY: PITTSFIELD STATE: MA ZIP: 01201 BUSINESS PHONE: 4134435601 MAIL ADDRESS: STREET 1: 24 NORTH ST CITY: PITTSFIELD STATE: MA ZIP: 01201 11-K 1 form11k_10809.txt FORM 11-K 6 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996]. For the fiscal year ended December 31, 2007 --------------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]. For the transition period from _______________ to ______________________ Commission File Number 001-51584_______ A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Berkshire Bank 401(k) Plan B: Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Berkshire Hills Bancorp, Inc. 24 North St. Pittsfield, MA 01201 BERKSHIRE BANK 401(k) PLAN Financial Statements and Supplemental Schedule Years Ended December 31, 2007 and 2006 CONTENTS BERKSHIRE BANK 401(k) PLAN Financial Statements and Supplemental Schedule Years Ended December 31, 2007 and 2006 The following financial information is submitted herewith: Page Report of Independent Registered Public Accounting Firm 1 Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-10 Schedule H, Line 4i - Schedule of Assets (Held at End of Year) 11 WOLF Certified Public Accountants & COMPANY, P.C. and Business Consultants - -------------------------------------------------------------------------------- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee Berkshire Hills Bancorp, Inc. Pittsfield, Massachusetts We have audited the accompanying statement of net assets available for benefits of Berkshire Bank 401(k) Plan (the "Plan") as of December 31, 2007, and the related statement of changes in net assets available for benefits for the year ended December 31, 2007. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the Plan as of and for the year ended December 31, 2006, were audited by other auditors by whose report, dated on October 10, 2007, expressed an unqualified opinion. We conducted our audit in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2007, and the changes in net assets available for benefits for the year ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America. Our audit of the financial statements was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at year end) for 2007 is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the United States Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Wolf & Company, P.C. Boston, Massachusetts December 8, 2008 BERKSHIRE BANK 401(k) PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEIFTS Years Ended December 31, 2007 and 2006 2007 2006 --------- -------- ASSETS Cash held for investment $ 3,385,352 $ 1,952,230 Investments, at fair value 38,345,382 25,229,870 Participant loans 746,559 518,495 ----------- ----------- 42,477,293 27,700,595 ----------- ----------- Receivables: Employer contributions 52,410 - Participant contributions 56,624 - ----------- ----------- 109,034 - ----------- ----------- Net assets available for benefits $42,586,327 $27,700,595 =========== =========== See accompanying notes to financial statements. 2 BERKSHIRE BANK 401(k) PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS Years Ended December 31, 2007 and 2006
2007 2006 --------- -------- Investment income: Net (depreciation) appreciation in fair value of investments $ (603,821) $ 2,429,118 Interest and dividends 1,408,238 869,664 ----------- ----------- 804,417 3,298,782 ----------- ----------- Contributions: Employer 1,314,067 910,977 Particpants 1,535,647 1,094,329 Rollover 1,477,049 522,545 ----------- ----------- 4,326,763 2,527,851 ----------- ----------- Assets transferred in from merged/terminated plans 13,670,154 77,381 ----------- ----------- Total additions 18,801,334 5,904,014 ----------- ----------- Deductions from net assets attributed to: Withdrawals and benefits paid to participants 3,905,463 5,140,149 Administrative fees 10,139 7,971 Total deductions 3,915,602 5,148,120 ----------- ----------- Net increase in net assets available for benefits 14,885,732 755,894 Net assets available for benefits: Beginning of year 27,700,595 26,944,701 ----------- ----------- Net assets available for benefits: End of year $42,586,327 $27,700,595 =========== ===========
See accompanying notes to financial statements. 3 BERKSHIRE BANK 401(k) PLAN NOTES TO FINANCIAL STATEMENTS Years Ended December 31, 2007 and 2006 1. DESCRIPTION OF THE PLAN The Berkshire Bank 401(k) Plan (the "Plan") was established on April 11, 1993. The following brief description of the Plan is provided for general information purposes only. Participants should refer to the Plan Agreement for a more complete description of the Plan's provisions. General The Plan is a defined contribution plan covering all eligible employees of Berkshire Bank (the "Bank" or the "Plan Sponsor"). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Vanguard Fiduciary Trust Company serves as the Trustee of the Plan. The Vanguard Group ("Vanguard" or the "Custodian") is the custodian of the Plan. In 2005, Berkshire Bank, the Plan Sponsor, terminated its Employee Stock Ownership Plan ("ESOP"). During 2007, active employees of Berkshire Bank were given the option to transfer their shares of stock from the ESOP into the Plan. The value transferred into the Plan is the value of the shares as posted on the Nasdaq Stock Market as of the date of transfer. On November 1, 2006, Berkshire Bank acquired five local insurance agencies. These insurance agencies all participated in one plan, the Alliance Berkshire Insurance 401(k) Plan ("Alliance"). During 2007, Alliance was merged into the Plan. Effective on the merger date, all employees of Alliance followed the eligibility requirements of the Plan but were given credit for hours of service with their previous employer. On September 21, 2007, Berkshire Bank acquired Factory Point National Bank of Manchester Center ("Factory Point"). Effective November 5, 2007, the Factory Point National Bank 401(k) Profit Sharing Plan was merged into the Plan. Effective on the merger date, all employees of Factory Point followed the eligibility requirements of the Plan but were given credit for hours of service with their previous employer. 4 BERKSHIRE BANK 401(k) PLAN NOTES TO FINANCIAL STATEMENTS (Continued) DESCRIPTION OF THE PLAN (continued) Contributions Each year, participants may contribute a percent of pretax annual compensation, excluding certain types of restricted compensation, subject to certain limitations as defined by the Plan and the Internal Revenue Code ("IRC"). The maximum participant deferral was $15,500 and $15,000 for the Plan years ended December 31, 2007 and 2006. In addition, all employees who are eligible to make salary reductions under the Plan and who have attained age 50 before the close of the Plan year are eligible to make catch-up contributions, as defined by the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"). Participants may also contribute rollover amounts representing distributions from other qualified retirement plans and IRAs. Participants direct the investment of their contributions into various investment options offered by the Plan. Participants may change their rate of contribution each pay period. The Bank matches a portion of eligible employee contributions. During 2007 and 2006, the Bank matched 100% of eligible employee contributions up to 4% of the participant's annual compensation. In addition, the Bank makes a Safe Harbor non-elective contribution to the account of each eligible employee in an amount equal to 3% of the participant's annual compensation, excluding certain types of restricted compensation. Plan Eligibility Employees of the Bank are eligible to participate in the Plan after attaining twenty-one years of age and completing one year of service with 1,000 hours during their initial year of employment. 500 hours of service must be exceeded each subsequent year to avoid a break in eligibility service. Service credit is given to employees of certain predecessor employers as described in the Plan document for participation and vesting purposes. Employees may join the Plan on the first of the month following the month in which eligibility requirements are satisfied. Participant Accounts Each participant's account is credited with the participant's contribution and allocations of (a) the Company's matching and additional contributions for non-highly compensated employees, if any, and (b) the Plan's investment earnings. Allocations are based on participant earnings or account balances, as defined by the Plan. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. 5 BERKSHIRE BANK 401(k) PLAN NOTES TO FINANCIAL STATEMENTS (Continued) DESCRIPTION OF THE PLAN (continued) Investments Participants direct the investment of their contributions into investment options offered by the Plan which include selected pooled separate accounts of Vanguard and common shares of Berkshire Hills Bancorp, Inc., the parent company of the Bank. Employer contributions are invested in each participant's account according to the participant's selected allocation. Participants may change or transfer their investment options at any time via an automated telephone system or the Custodian's website. Vesting Participants are 100% vested in all contributions plus actual earnings thereon. Participant Loans Participants may borrow from their fund accounts an amount equal to $50,000 or 50% of their vested account balance, whichever is less. In addition, the $50,000 limit is reduced by the highest outstanding loan balance (of any previous loans made) in the previous twelve months. The loans are secured by the balance in the participant's accounts and bear interest at The Wall Street Journal prime rate plus one percentage point as of the loan application review date. Interest rates ranged from 5.00% to 9.25% for the years ended December 31, 2007 and 2006. In general, principal and interest are paid ratably over a period not to exceed five years through regular payroll deductions. Loans used to finance the participant's principal residence are repaid over a period of time, up to 20 years. Payment of Benefits On termination of service due to death, disability, normal retirement, or attaining age 59 1/2 a participant may elect to receive either a lump sum amount equal to the value of the participant's vested interest in their account, annual installments, or defer distribution until a later date. If the vested portion of a participant's account balance is $5,000 or less, this amount is paid as a lump sum distribution as soon as possible following termination, retirement, disability, or to the beneficiary following death. If the participant's account balance is between $1,000 and $5,000 and they fail to direct a distribution or rollover, their mandatory distribution are rolled over to an IRA established on their behalf. Participants may request a benefit payment in the case of financial hardship, subject to certain limitations as defined by the Plan. 6 BERKSHIRE BANK 401(k) PLAN NOTES TO FINANCIAL STATEMENTS (Continued) DESCRIPTION OF THE PLAN (concluded) Administrative Expenses The Plan's administrative expenses are paid by either the Plan or the Plan Sponsor as provided by the Plan document. Administrative expenses paid by the Bank were $15,050 and $20,500 for the years ended December 31, 2007 and 2006, respectively. Plan Termination Although it has not expressed any intent to do so, the Bank has the right under the Plan to discontinue its contributions at any time and to terminate the Plan, subject to the provisions of ERISA. In the event of Plan termination, the net assets of the Plan would be allocated as prescribed by ERISA and its related regulations. 2. SUMMARY OF ACCOUNTING POLICIES A summary of significant accounting policies consistently applied in the preparation of the accompanying financial statements follows. Basis of Accounting The accompanying financial statements have been prepared using the accrual method of accounting. Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Investment Valuation and Income Recognition The Plan's investments are stated at fair value. Shares of registered investment companies are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. Investments in Berkshire Hills Bancorp, Inc. common stock and other equities are valued at the closing market price as of the last trade date of the year. Fixed income securities are valued using the last quoted bid price. Participant's notes are valued at cost, which approximates fair value. 7 BERKSHIRE BANK 401(k) PLAN NOTES TO FINANCIAL STATEMENTS (Continued) SUMMARY OF ACCOUNTING POLICIES (concluded) Investment Valuation and Income Recognition (concluded) Purchases and sales of investments are recorded on a trade-date basis. Investment income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Capital gain distributions are included in dividend income. Risks and Uncertainties The Plan is comprised of various investment securities, including investments in mutual funds, registered investment companies, common collective trusts, and in employer stock. Investment securities are exposed to various risks, such as interest rate, market, and credit. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the statement of net assets available for benefits. 3. CASH HELD FOR INVESTMENT The following schedule presents the fair market values of the Plan's cash held for investment: December 31, -------------------------- 2007 2006 --------- -------- Cash held for investment: *VGI Brokerage option $ - $ 45 *Vanguard Prime Money Market 3,385,352(a) 1,952,230(b) ----------- ----------- $ 3,385,352 $ 1,952,230 =========== =========== (a) Investment represents 5% or more of Plan net assets at December 31, 2007. (b) Investment represents 5% or more of Plan net assets at December 31, 2006. * Represents a party-in-interest under ERISA. 8 BERKSHIRE BANK 401(k) PLAN NOTES TO FINANCIAL STATEMENTS (Continued) 4. INVESTMENTS, AT FAIR VALUE The following schedule presents the fair market value of the Plan's investments: December 31, -------------------------- 2007 2006 --------- -------- Mutual Funds: *Royce Low Priced Stock $ 503,808 $ 550,550 *Vanguard 500 Index Inv. 7,158,236(a) 4,599,812(b) *Vanguard IT Treasury Inv. 2,746,411(a) 1,927,614(b) *Vanguard International Growth Fund 3,506,924(a) 2,059,998(b) *Vanguard Mid-Cap Index Fund 1,713,087 560,760 *Vanguard Morgan Growth Inv. 488,827 159,822 *Vanguard Selected Value 616,392 557,846 *Vanguard Small-Cap Growth Index 2,081,181 1,536,840(b) *Vanguard TGT Retirement 2015 4,174,760(a) 2,833,437(b) *Vanguard TGT Retirement 2025 1,274,355 208,767 *Vanguard TGT Retirement 2035 483,020 344,158 *Vanguard TGT Retirement 2045 602,980 230,452 *Vanguard Target Retirement Inc. 1,009,957 1,143,321 *Vanguard Total Stock Market Inv. 5,647,432(a) 5,595,337(b) *Vanguard Windsor II Fund Inv. 1,095,670 791,400 Common stock: *VGI Brokerage Option Company Stock 44,904 41,717 *Berkshire Hills Bancorp, Inc. Common Stock 5,197,438(a) 2,088,039(b) ----------- ----------- $38,345,382 $25,229,870 =========== =========== (a) Investment represents 5% or more of Plan net assets at December 31, 2007. (b) Investment represents 5% or more of Plan net assets at December 31, 2006. * Represents a party-in-interest under ERISA. During 2007 and 2006, the Plan's investments (including investments bought, sold, and held during the year) appreciated (depreciated) in value by $(603,821) and $2,429,118, respectively, as follows: December 31, -------------------------- 2007 2006 --------- -------- Unrealized gain (loss), net $(1,006,293) $2,197,762 Realized gain, net 402,472 231,356 ----------- ----------- $ (603,821) $2,429,118 =========== =========== 9 BERKSHIRE BANK 401(k) PLAN NOTES TO FINANCIAL STATEMENTS (Concluded) 5. TAX STATUS The Bank adopted a Prototype Plan whose most recent determination letter from the Internal Revenue Service, dated August 22, 2001, stated that the Plan and related Trust were designed in accordance with applicable sections of the IRC. The Plan has been amended since receiving this letter; however, the Plan Administrator believes the Plan is currently operated in compliance with the applicable requirements of the IRC. 6. ADMINISTRATION OF PLAN ASSETS The Plan assets are held by Vanguard Fiduciary Trust Company, the Trustee of the Plan. Bank contributions, participant elective deferrals, and participant accounts are held and administrated by Vanguard, who invests cash received in accordance with participants instructions and makes distributions to participants. Certain administrative functions are performed by officers or employees of the Bank. No such officers or employees receive compensation for such functions from the Plan. 7. RELATED PARTY TRANSACTIONS The Bank contributed $1,314,067 and $910,977 to the Plan for the years ended December 31, 2007 and 2006, of which $52,410 and $0 was owed the Plan at December 31, 2007 and 2006, respectively. In addition, the Bank paid expenses in connection with the administrations of the Plan, totaling $15,050 and $20,500 for the years ended December 31, 2007 and 2006, respectively. The Plan has investments in common stock of Berkshire Hills Bancorp, Inc., the parent company of the Bank. In addition, certain of the investment options are managed by Vanguard. Transactions in such investments qualify as party-in-interest transactions. 8. ASSETS TRANSFERRED IN FROM MERGED/TERMINATED PLANS The assets transferred in from merged plans are as follows: v December 31, -------------------------- 2007 2006 --------- -------- ESOP $ 1,943,781 $ 75,874 Alliance 2,650,583 - Factory Point 7,064,422 - Adjustment to Berkshire Hills, Inc. common stock transferred in from cost value to maket value 2,011,368 1,507 ----------- ----------- $13,670,154 $ 77,381 =========== =========== 10 BERKSHIRE BANK 401(k) PLAN SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR) December 31, 2007 a b c d - ----- --------------------------------- ---------------- -------------- Identity of Issuer, Borrower Description of Lessor or Similar Party and Investment-number Current Description of Investment of units/shares Value (1) --------------------------------- ---------------- ------------- Cash held for investement: * Vanguard Prime Money Market 3,383,352.000 $ 3,385,352 Mutual Funds: * Royce Low Priced Stock 34,087.163 503,808 * Vanguard 500 Index Inv. 52,965.123 7,158,236 * Vanguard IT Treasury Inv. 242,830.335 2,746,411 * Vanguard International Growth Fund 141,294.289 3,506,924 * Vanguard Mid-Cap Index Fund 82,757.843 1,713,087 * Vanguard Morgan Growth Inv. 25,016.724 488,827 * Vanguard Selected Value 32,288.744 616,392 * Vanguard Small-Cap Growth Index 104,007.020 2,081,181 * Vanguard TGT Retirement 2015 319,659.999 4,174,760 * Vanguard TGT Retirement 2025 92,883.015 1,274,355 * Vanguard TGT Retirement 2035 33,038.264 483,020 * Vanguard TGT Retirement 2045 39,958,940 602,980 * Vanguard Target Retirement Inc. 90,741.841 1,009,957 * Vanguard Total Stock Market Inv. 159,712.442 5,647,432 * Vanguard Windsor II Fund Inv. 35,020.222 1,095,670 Common stock: * Vanguard Brokerage Option Company Stock 44,904.040 44,904 * Berkshire Hills Bancorp, Inc. Common Stock 199,901.475 5,197,438 Loan Fund: Participant loans 5.00%-9.25% 746,559 ----------- ----------- $42,477,293 =========== (1) As allowed by ERISA, cost information may be omitted with respect to participant or beneficiary directed investments under an individual account plan. * Represents a party-in-interest as defined by ERISA. See report of independent registered public accounting firm. 11 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. BERKSHIRE BANK 401(k) PLAN Date January 12, 2009 By: /s/ Linda A. Johnston ------------------------- Name: Linda A. Johnston Title: SVP, Human Resources Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the Registration Statement of Berkshire Hills Bancorp, Inc. on Form S-8 (SEC File No. 333-146604) of our report dated December 8, 2008 with respect to the financial statements of the Berkshire Bank 401(k) Plan for the year ended December 31, 2007 on Form 11-K. /s/ Wolf & Company, P.C. Boston, Massachusetts January 12, 2009 -----END PRIVACY-ENHANCED MESSAGE-----