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OPERATING SEGMENTS
6 Months Ended
Jun. 30, 2014
OPERATING SEGMENTS  
OPERATING SEGMENTS

NOTE 12. OPERATING SEGMENTS

 

The Company has two reportable operating segments, Banking and Insurance, which are delineated by the consolidated subsidiaries of Berkshire Hills Bancorp, Inc.  Banking includes the activities of the Bank and its subsidiaries, which provide retail and commercial banking, along with wealth management and investment services.  Insurance includes the activities of Berkshire Insurance Group, Inc. (“BIG”), which provides retail and commercial insurance services.  The only other consolidated financial activity of the Company is the Parent, which consists of the transactions of Berkshire Hills Bancorp, Inc. Management fees for corporate services provided by the Bank to BIG and the Parent are eliminated.

 

The accounting policies of each reportable segment are the same as those of the Company.  The Insurance segment and the Parent reimburse the Bank for administrative services provided to them.  Income tax expense for the individual segments is calculated based on the activity of the segments, and the Parent records the tax expense or benefit necessary to reconcile to the consolidated total.  The Parent does not allocate capital costs.  Average assets include securities available-for-sale based on amortized cost.

 

A summary of the Company’s operating segments was as follows:

 

(In thousands) 

 

Banking

 

Insurance

 

Parent

 

Eliminations

 

Total Consolidated

 

Three months ended June 30, 2014

 

 

 

 

 

 

 

 

 

 

 

Net interest income (expense)

 

$

45,244

 

$

 

$

(915

)

$

 

$

44,329

 

Provision for loan losses

 

3,989

 

 

 

 

3,989

 

Non-interest income

 

12,046

 

2,460

 

12,272

 

(12,272

)

14,506

 

Non-interest expense

 

36,970

 

1,887

 

406

 

 

39,263

 

Income before income taxes

 

16,331

 

573

 

10,951

 

(12,272

)

15,583

 

Income tax expense (benefit)

 

4,409

 

223

 

(513

)

 

4,119

 

Net income

 

$

11,922

 

$

350

 

$

11,464

 

$

(12,272

)

$

11,464

 

 

 

 

 

 

 

 

 

 

 

 

 

Average assets (in millions)

 

$

6,111

 

$

27

 

$

744

 

$

(736

)

$

6,146

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

42,086

 

$

 

$

7,018

 

$

(8,000

)

$

41,104

 

Provision for loan losses

 

2,700

 

 

 

 

2,700

 

Non-interest income

 

13,204

 

2,402

 

5,026

 

(5,026

)

15,606

 

Non-interest expense

 

35,267

 

2,038

 

630

 

 

37,935

 

Income before income taxes

 

17,323

 

364

 

11,414

 

(13,026

)

16,075

 

Income tax expense (benefit)

 

4,503

 

158

 

(623

)

 

4,038

 

Net income

 

$

12,820

 

$

206

 

$

12,037

 

$

(13,026

)

$

12,037

 

 

 

 

 

 

 

 

 

 

 

 

 

Average assets (in millions)

 

$

5,175

 

$

27

 

$

746

 

$

(749

)

$

5,199

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 2014

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

88,954

 

$

 

$

(1,859

)

$

 

$

87,095

 

Provision for loan losses

 

7,385

 

 

 

 

7,385

 

Non-interest income

 

13,420

 

5,509

 

12,020

 

(12,020

)

18,929

 

Non-interest expense

 

79,543

 

4,209

 

871

 

 

84,623

 

Income before income taxes

 

15,446

 

1,300

 

9,290

 

(12,020

)

14,016

 

Income tax expense (benefit)

 

4,217

 

509

 

(1,068

)

 

3,658

 

Net income

 

$

11,229

 

$

791

 

$

10,358

 

$

(12,020

)

$

10,358

 

 

 

 

 

 

 

 

 

 

 

 

 

Average assets (in millions)

 

$

5,971

 

$

26

 

$

733

 

$

(732

)

$

5,998

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

Net interest income (expense)

 

$

84,989

 

$

 

$

13,052

 

$

(15,000

)

$

83,041

 

Provision for loan losses

 

5,100

 

 

 

 

5,100

 

Non-interest income

 

25,022

 

5,382

 

9,490

 

(9,490

)

30,404

 

Non-interest expense

 

71,956

 

4,171

 

1,291

 

 

77,418

 

Income before income taxes

 

32,955

 

1,211

 

21,251

 

(24,490

)

30,927

 

Income tax expense (benefit)

 

9,208

 

468

 

(1,251

)

 

8,425

 

Net income

 

$

23,747

 

$

743

 

$

22,502

 

$

(24,490

)

$

22,502

 

 

 

 

 

 

 

 

 

 

 

 

 

Average assets (in millions)

 

$

5,189

 

$

27

 

$

751

 

$

(758

)

$

5,208