8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) June 15, 2006

BERKSHIRE HILLS BANCORP, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-51584	04-3510455
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

24 North Street, Pittsfield, Massachusetts	01201
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (413) 443-5601

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD.

On June 15 and 16, 2006, Michael P. Daly, President and Chief Executive Officer of Berkshire Hills Bancorp, Inc. (the “Company”), the holding company for Berkshire Bank, gave investor presentations. A copy of the slides used in Company’s presentations is attached as Exhibit 99.1 and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Number	Description
99.1	Power Point Presentation

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BERKSHIRE HILLS BANCORP, INC.
Dated: June 15, 2006	By:	/s/ Wayne F. Patenaude
		Wayne F. Patenaude
		Senior Vice-President and Chief
		Financial Officer

EX-99.1

Keefe, Bruyette & Woods, Inc.

Michael P. Daly

President and Chief Executive Officer

Boston,  June 15, 2006

New York,  June 16, 2006

Exhibit 99.1

Cautionary Statement

Statements contained in this presentation contain forward-looking statements within the meaning of the

Private Securities Litigation Reform Act of 1995.  These statements are based on the beliefs and

expectations

of

management

as

well

as

the

assumptions

made

using

information

currently

available

to

management.  Since these statements reflect the views of management concerning future events, these

statements involve risks, uncertainties and assumptions.  These risks and uncertainties include among

others, changes in market interest rates and general and regional economic conditions, changes in

government

regulations,

changes

in

accounting

principles

and

the

quality

or

composition

of

the

loan

and

investment

portfolios

and

other

factors

that

may

be

described

in

Berkshire

Hills

Bancorp,

Inc.’s

quarterly

reports on Form 10-Q for the quarters ended March 31, June 30 and September 30 and in its 2005 annual

report

on

Form

10-K,

each

filed

with

the

Securities

and

Exchange

Commission,

which

are

available

at

the Securities and Exchange Commission’s internet website (www.sec.gov) and to which reference is

hereby made.  Therefore, actual future results may differ significantly from results discussed in the

forward-looking statements.

You are cautioned not to place undue reliance on any forward-looking statements, which speak

only as of June 15 and 16, 2006.  Except as required by applicable law

or regulation, Berkshire Hills Bancorp, Inc. undertakes no obligation to update

any forward-looking statements, to reflect events or circumstances that occur

after June 15 and 16, 2006.

3

“Transitioning to a Regional Bank”

Fundamentals

Culture and people

Balance sheet growth

Asset liability management

Non-interest income growth

Efficiencies

Asset quality

Capital allocation

4

“Transitioning to a Regional Bank”

Culture and People

Attract and retain the best people

Strengthen team, stay focused, stretch, pay for

performance

Continually strengthen board

Instill culture of enthusiasm, teamwork and energy

“Recognizing the people within our organization and giving our

employees the latitude to make decisions and become part of the

equation translates into better customer service.  When people

want to come to work, they are energetic and engaged. You can’t

fake that kind of commitment.”

CEO

Michael

P.

Daly

—

VBO

Magazine

5

“Transitioning to a Regional Bank”

State chartered savings bank with commercial bank balance sheet

Ownership profile

–

March 31, 2006

Institutional holders

37%

Insiders*

10%

Individuals

47%

Foundation

6%

Corporate profile

–

March 31, 2006

Market capitalization

$300 million

Assets

$2.1 billion

Loans

$1.44 billion

Deposits

$1.45 billion

Employees

414 FTE’s

Operations

24 full-service branches

10 free standing ATMs

*Not including options

Profile

Berkshire County, MA

Pioneer Valley, MA

Capital Region, NY

6

“Transitioning to a Regional Bank”

$1,451

$67

$511

$873

3/31/06

Deposits

(millions)

24

3

10

11

12/31/05

Branches

$41

6

New York State

$1,371

27

Total

12/31/05

Deposits

(millions)

6/15/06

Branches

Market

10

11

$473

$857

Pioneer Valley

Berkshire County

Primary Market Area

Our values will

drive our

success in

expanded

markets

7

“Transitioning to a Regional Bank”

Total Deposit Growth

7% CAGR

prior to

expanded

market

63%

61%

58%

56%

58%

24%

23%

21%

22%

22%

20%

19%

16%

17%

19%

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

2002

2003

2004

2005

3/31/2006

Core

Time <$100

Time >$100

$830

$782

$846

$1,371

$1,451

21% Total deposit compound annual growth rate

7% Total deposit compound annual growth rate excluding Woronoco

Note:  Core excludes all time accounts and gross core excludes time accounts over $100M.

81%

83%

84%

81%

80%

8

“Transitioning to a Regional Bank”

Total Deposits –

Actual vs. Plan

13%

15%

13%

Plan

CAGR

through

2008

$1,134

11%

$817

$796

Total core

$1,662

20%

$1,160

$1,104

Total gross core

$2,000

23%

$1,451

$1,371

Total deposits

Plan

12/31/2008

Annualized

growth

1Q2006

Actual

3/31/2006

Actual

12/31/2005

Millions

23% Total deposits annualized growth through 3/31/06

13% CAGR

2005 -

2008

9

“Transitioning to a Regional Bank”

Total Loan Growth

Relationship

building

41%

40%

50%

47%

45%

38%

39%

28%

34%

33%

22%

19%

22%

21%

21%

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2002

2003

2004

2005

3/31/2006

Commercial

Residential

Consumer

$1,416

$723

$792

$828

$1,449

24% Total loan compound annual growth rate

9%

Total

loan

compound

annual

growth

rate

excluding

Woronoco

and

mortgage

securitizations

12% Total commercial loan compound annual growth rate excluding Woronoco

10

“Transitioning to a Regional Bank”

Total Loans –

Actual vs. Plan

19% CAGR

2005-2008

9% Total loans annualized growth through 3/31/06

13%

$792

4%

$556

$549

Residential

25%

16%

19%

Plan

CAGR

through

2008

$1,110

14%

$589

$570

Commercial

$459

9%

$304

$297

Consumer

$2,361

9%

$1,449

$1,416

Total loans

Plan

12/31/2008

Annualized

growth

1Q2006

Actual

3/31/2006

Actual

12/31/2005

Millions

11

“Transitioning to a Regional Bank”

Stable margins against rising rates and flattening yield curve

Asset Liability Management

1.01

1.25

3.27

3.26

3.73

4.36

1.74

2.94

4.47

3.26

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Net Interest Margin

Effective Fed Funds

Sub-Prime Sale

Effective interest

rate risk

management

12

“Transitioning to a Regional Bank”

$4,998

$5,431

$14,376

$13,660

$6,362

10.91%

12.63%

18.50%

13.62%

19.75%

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

2002

2003

2004

4Q05

Annualized

1Q06

Annualized

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

NII ex. of security gains

NII ex security gains/Total income

Main drivers of non-interest income: wealth management, insurance, loan service

and customer service fees

Non-Interest Income –

Historic Growth

13

“Transitioning to a Regional Bank”

Non-Interest Income –

Actual vs. Plan

19% CAGR

2005-2008

21% Annualized growth through 3/31/06

$22,926

$18,735

$16,162

$13,660

$0

$2,500

$5,000

$7,500

$10,000

$12,500

$15,000

$17,500

$20,000

$22,500

$25,000

Actual $14,376

Note:  Quarterly income annualized, exclusive of security gains

14

“Transitioning to a Regional Bank”

Operating Efficiencies

Reorganization

Sale of sub-prime loans

Sale of EastPoint Technologies

(1)

Exclusive of merger and conversion expenses, other non-recurring items, and amortization of intangible assets

(2)

Exclusive of merger and conversion expenses and other non-recurring items

Achieved 37% cost saves -

WRO acq

Six Sigma

57.48%

57.03%

60.66%

62.73%

64.55%

2.20%

2.18%

2.25%

2.49%

2.89%

52.00%

54.00%

56.00%

58.00%

60.00%

62.00%

64.00%

66.00%

2002

2003

2004

2005

1Q2006

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

Efficiency ratio (1)

Non-Interest

expense/

Average

assets

(2)

15

“Transitioning to a Regional Bank”

Maintaining Operating Efficiencies

Established “Office of Process Improvement”

Six Sigma established as the primary tool

Hired 2 certified Black Belts

11 employees certified as Green Belts

9 additional Green Belt candidates in progress

Primary focus on improving customer satisfaction levels

Profitability

16

“Transitioning to a Regional Bank”

Asset Quality

Reduce credit risk

Portfolio well protected…

Positioned for growth

2.22%

2.22%

2.21%

2.02%

2.04%

C&I Allowance/Loans

0.90%

0.92%

1.13%

1.13%

1.43%

Total Allowance/Loans

0.07%

10.96X%

1.44%

0.08%

$1,186

2005

0.15%

8.10X%

1.47%

0.14%

$1,152

2004

0.35%

2.80X%

1.43%

0.40%

$3,199

2003

0.87%

2.76X%

1.17%

0.72%

$5,241

2002

0.06%

14.42X%

1.40%

0.06%

$908

1Q2006

NCOs/avg. loans (annualized)

Allowance/NPLs

CRE Allowance/loans

NPAs/loans + REO

NPAs (000s)

17

“Transitioning to a Regional Bank”

Expansion

Woronoco acquisition

De novo branches

Fee income

Divested sub-prime auto loans 2000 -

2003

Divested technology company  2004

Stock buybacks

Strategic Capital Allocation

Invested for future

growth and

returned capital to

shareholders

18

“Transitioning to a Regional Bank”

Strategic Capital Allocation

Effectively

employed

excess capital

10.63%

7.56%

9.35%

9.55%

$1.31

$1.57

$2.11

$1.92

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

11.00%

2002

2003

2004

2005

$1.00

$1.20

$1.40

$1.60

$1.80

$2.00

$2.20

Tangible equity/tangible assets

Core diluted earnings per share core

19

“Transitioning to a Regional Bank”

Where We Are Now

57.48

57.00

60.66

62.73

64.55

Efficiency ratio %

3/31/06*

12/31/05*

2004

2003

2002

3.36

7.89

13.49

0.96

1.02

0.98

0.87

0.81

0.76

Core Tangible ROA %

7.64

9.06

7.28

1.54

ROE

0.94

0.89

0.80

0.20

ROA

3.61

7.97

Key Measures

**

*Annualized

**Please see appendix for reconciliation of non-GAAP financial measures

3.27

3.37

4.18

Net interest margin (FTE)%

12.63

9.36

6.28

Core Tangible ROE %

Successful

turnaround

20

“Transitioning to a Regional Bank”

Competition

Regional bank

niche opportunity

Capital Region

Under $1.5 Billion

48 banks & CUs

$30 Billion +

6 -

B of A, Citizens

HSBC, Key,

M&T, & Banknorth

$1.5 -

$30 Billion

4 –

First Niagara,

NBT, Trustco &

Berkshire

Bank

Berkshire County

Under $1.5 Billion

19 banks & CUs

$30 Billion +

2-

Citizens & Banknorth

$1.5 -

$30 Billion

1

–

Berkshire

Bank

Pioneer Valley

Under $1.5 Billion

39 banks & CUs

$30 Billion +

4 –

B of A, Citizens,

Sovereign & Banknorth

$1.5 -

$30 Billion

2 –

Chittenden &

Berkshire Bank

21

“Transitioning to a Regional Bank”

$4,000

$3,500

$800

Mortgage originations

(2004) (millions)

2,801

3,185

2,418

Population/ branch

$13,900

$9,100

$2,700

Deposits 6/05 (millions)

3.46%

2.23%

-1.65%

5 Year projected growth

$49,634

618

Pioneer

Valley

Capital

Region

Berkshire

County

$46,954

133

$51,351

818

Median HH income

Population (000s)

Regional growth opportunity

Retail Banking

Opportunities in

contiguous markets

22

“Transitioning to a Regional Bank”

Regional Growth

Extend our

success beyond

Berkshire County

Market area includes multi-state region

Building market share in attractive,

under-served markets

0

11

>$30 billion

2

11

$1.5 -

$30 billion

157

74

<$1.5 billion

C/Us

Banks

#

of

Regional

Banks

with

headquarters in

this market:

1

Berkshire Bank

23

“Transitioning to a Regional Bank”

Retail Banking –

Deposit Gathering

Double number of

branches by 2008

De novo branching

Only regional

bank

headquartered in expanded market area

v

27

11

10

6

6/15/06

30

11

10

9

12/31/06

Plan

50

24

Total

11

11

Berkshire County

10

3

12/31/05

18

Pioneer Valley

21

New York

12/31/08

Plan

Projected Yr End

24

“Transitioning to a Regional Bank”

Retail Banking –

Deposit Gathering

Strategy and goals

Maintain

Berkshire County

dominance

Branding

Centers of influence

Improve calling effort

Municipal banking

Deposit insurance fund

Double Pioneer

Valley market

share

Gain 3% market

share in Capital

Region

25

“Transitioning to a Regional Bank”

Retail Banking -

Deposit Gathering

13%

$2,000

$1,451

$1,371

Total

102%

$338

$  67

$  41

New York State

$748

$914

Plan

Deposits

2008

(millions)

$511

$873

Deposits

3/31/06

(millions)

Plan CAGR

through

2008

Deposits

12/31/05

(millions)

Market

$473

$857

17%

2%

Pioneer Valley

Berkshire County

Regional growth

13% CAGR

83%

80%

81%

Gross core dep/Total dep

15%

$1,662

$1,160

$1,104

Gross core deposits

(Excludes CDs >100M)

26

“Transitioning to a Regional Bank”

Retail Banking -

Mortgages

12%

$781

$556

$549

Total

92%

10%

4%

$141

$361

$291

$21

$263

$20

$272

$271

Plan

Mortgages

2005-2008

(millions)

3/31/06

(millions)

Plan CAGR

through 2008

Mortgages

12/31/05

(millions)

Market

$258

Capital Region

Pioneer Valley

Berkshire County

Regional growth

12% CAGR

27

“Transitioning to a Regional Bank”

Retail Banking -

Mortgages

Strategy and goals

Engage branch personnel

Triple outside origination staff

Capitalize on second home market and

metropolitan relocation

28

“Transitioning to a Regional Bank”

Retail Banking –

Consumer Lending

10%

$169

$129

$128

Total

126%

4%

6%

$23

$71

$75

$4

$60

$2

$65

$63

Plan Equity

Lines 2005-2008

(millions)

3/31/06

(millions)

Plan CAGR

through

2008

Equity Lines

12/31/05

(millions)

Market

$63

Capital Region

Pioneer Valley

Berkshire County

Equity Lines

Regional growth

10% CAGR

29

“Transitioning to a Regional Bank”

Retail Banking –

Real Estate Loan Quality

0.02%

0.23%

Delinquency 3/31/06

0.14%

0.22%

Average delinquency 2005

55%

61%

Average LTV

728

None

None

Mortgages

HELOCs

756

Average FICO 2004 –

2005

None

Losses 2000 –

2005

None

Uninsured LTV > 80%

Strong loan quality

Maintain credit

standards

30

“Transitioning to a Regional Bank”

19%

Albany

20%

Pittsfield

20%

Springfield

44%

Long Island

43%

Cape Cod

% Overvalued

Market

Overvalued Real Estate

*

Source

National

City

Bank

1

st

Qtr

2006

Credit risk partially protected from bubble

Retail Banking -

Mortgages

Berkshire Bank

average down payment

37%

31

“Transitioning to a Regional Bank”

Indirect Auto

Regional growth opportunity

Retail Banking -

Consumer Lending

20

60

35

34

Active

BHLB

Dealers

2008

23%

36%

8%

78%

Penetration

3/31/06

27%

17

73

Southern Vermont

45%

48

132

Capital Region

29%

94%

Penetration

2008

10

28

Active

BHLB

Dealers

3/31/06

# of

Dealers

Market

122

36

Pioneer Valley

Berkshire County

Opportunity in

contiguous markets

32

“Transitioning to a Regional Bank”

Retail Banking -

Consumer Lending

Strategy and goals

Use brand

Benefit from Six Sigma principles

Response in 30 minutes

Payments to dealers same day

Call program on high quality dealers

Utilization of branch network

Continue personal contact…people dealing with people

Absolutely no

subprime loans

33

“Transitioning to a Regional Bank”

Retail Banking -

Consumer Lending

Maintain credit

standards

Indirect Lending

Maintain credit quality

Sub-prime loans since 2001:  None

Average FICO of portfolio:  716

Average FICO 2005 originations:  732

Losses 2005:  0.43%

Average delinquency 2005:  0.45%

Delinquency 3/31/06:  0.35%

34

“Transitioning to a Regional Bank”

Commercial Banking

Why we have been successful

Only regional bank headquartered

in primary market area

Not a priority for large banks

Smaller banks have been acquired

Mid-cap borrowers prefer local relationship

Community involvement leads to business

Corporate commitment to commercial banking

Growth plan

Maintain dominance in Berkshire County

Opportunity from Woronoco acquisition

Robust growth in Capital Region –

Tech Valley growth initiative

Regional presence in adjacent markets with quality leadership

Established consistent

growth in underserved

markets

35

“Transitioning to a Regional Bank”

1%

3%

35%

BHLB estimated market share

$85

$128

$357

BHLB commercial loans (millions)

12/31/05

$47,926

$32,216

$7,781

Total business revenues (millions)

$4,250

23,736

Pioneer

Valley

Capital

Region

Berkshire

County

$1,025

6,984

$6,300

31,434

Estimated commercial loans (millions)

Total businesses

Commercial Banking

Regional growth opportunity

Opportunity in

contiguous markets

36

“Transitioning to a Regional Bank”

Deposits

(billion)

Sales

(billion)

Businesses

Median HH

Income

Projected

Growth

Population

(000s)

Market

$76.9

$7.7

$19.1

$2.7

50,207

6,984

2.74%

-1.65%

1,039

133

$60,534

$46,954

Northern Connecticut

Berkshire County

Potential growth in northern Connecticut

Commercial Banking

37

“Transitioning to a Regional Bank”

Deposits 

(billion)

Sales      

(billion)

Businesses

Median HH

Income

Projected

Growth

Population

(000s)

Market

$5.3

$7.7

$1.5

$2.7

5,241

6,984

1.07%

-1.65%

81

133

$43,769

$46,954

Southern Vermont

Berkshire County

Commercial Banking

Potential growth in southern Vermont

38

“Transitioning to a Regional Bank”

Commercial Banking

25%

$1,109

$589

$570

Totals

60%

29%

$345

$275

$100

$133

$489

Plan

Commercial

Loans 2008

(millions)

$356

3/31/06

(millions)

11%

Plan CAGR

through 2008

Commercial

Loans

12/31/05

(millions)

Market

$85

$128

$357

Capital Region

Pioneer Valley

Berkshire County

13% Annualized growth through 3/31/06

25% CAGR

39

“Transitioning to a Regional Bank”

Wealth Management Asset Growth

Consistent

growth and 

investment

results

$246

$288

$378

$39

$355

$319

$63

$63

$15

$7

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

2002

2003

2004

2005

1Q06

Asset Management/Trust

Investment services

Assets under management compounded growth rate = 19%

$418

$253

$303

$358

Total

$441

40

“Transitioning to a Regional Bank”

Wealth Management

Client centered/consultative wealth management

relationship

Financial planning platform with 5 CFPs

Investment management capabilities are not

outsourced

Credible investment results –

10 year history

Emphasis on personal investment management

“Trust”

department credibility

Strategy and goals

Key to our strategy

going forward

41

“Transitioning to a Regional Bank”

Wealth Management

24%

$795

$441

$418

Total

$186

$84

$525

Plan

AUM 2008

(millions)

$13

$32

$396

3/31/06

(millions)

Plan Growth

through 2008

AUM

12/31/05

(millions)

Market

$2

$23

$393

110%

38%

11%

Capital Region

Pioneer Valley

Berkshire County

22% Annualized growth AUM through 3/31/06

24% CAGR

42

“Transitioning to a Regional Bank”

Insurance –

An Emerging Business

Referral source of over 400 people

Captive audience with existing customers

Qualified leads through lending activities

Additional lines of business

Life

Disability

Health

Expect 15 -

20% pretax profit margin within 3 years

Overview

43

“Transitioning to a Regional Bank”

Remain well capitalized

Execute de novo branching and commercial banking strategy without

raising capital

Capital alternatives

Trust preferred

Subordinated debt

Capital Management

10.7%

7.8%

7.6%

3/31/2006

10.1%

11.1%

Total risk based capital (bank)

7.4%

7.8%

Tier 1 leverage capital (bank)

7.0%

7.6%

Tangible equity/assets

ProForma

12/31/08

12/31/2005

44

“Transitioning to a Regional Bank”

Wrap up

Financial Highlights

0.96%

0.94%

0.96%

Return on assets

9.41%

7.64%

7.89%

Return on equity

3.27%

57.48%

0.98%

12.63%

3/31/06

1.03%

1.02%

Core return on tangible assets

3.36%

57.00%

13.49%

Actual    

12/31/05

Annualized

Plan

12/31/08

3.49%

Net interest margin

57.62%

Efficiency ratio

14.10%

Core return on tangible equity

Note:  See Appendix for reconciliation of non-GAAP financial measures.

45

“Transitioning to a Regional Bank”

Wrap up

Core EPS Growth

Historic compound annual core diluted

EPS growth 2002 –

2005

17%

Proforma annual core diluted EPS growth

accelerating to 18% in 2008

Note:  Proforma growth does not include any significant acquisitions, which would be

expected to be accretive to EPS growth.

46

“Transitioning to a Regional Bank”

Wrap up

Strategic Highlights

Summary

Significant

organic growth

Double branch

network size

Double

commercial loans

Double size of

wealth management

Emerging

insurance

business

68% increase in

non-interest income

46% increase in

deposits

55% increase in

consumer loans

44% increase in

mortgages

Keefe, Bruyette & Woods, Inc.

June 15 -

16, 2006

For questions, please contact:

Wayne F. Patenaude

CFO

(413) 236-3195

wpatenaude@berkshirebank.com

Company website:

www.berkshirebank.com

48

“Transitioning to a Regional Bank”

Appendix

Years ended December 31 ($ in thousands)

Q4 2005

2004

2003

2002

Net income

4,838

$        

11,509

$     

8,965

$       

2,097

$       

Less:  Gain on sale of securities, net

(882)

(1,402)

(3,077)

(15,143)

Plus:  Termination of ESOP

168

-

-

10,702

Plus:  Merger and conversion expense

352

-

-

-

Plus:  Sale of sub-prime auto loans

-

-

1,854

-

Plus:  Other, net

-

653

754

9,155

Adj:  Income taxes

119

262

360

962

Core income (A)

4,595

11,022

8,856

7,773

Plus: Amort. Intang. Assets (net of taxes)

313

64

132

132

Tangible core income (B)

4,908

$        

11,085

$     

8,988

$       

7,905

$       

Total non-interest income

4,297

$        

7,764

$       

6,448

$       

6,427

$       

Less:  Gain on sale of securities, net

(882)

(1,402)

$     

(3,077)

$     

(15,143)

$   

Plus:  Other

-

-

2,060

13,704

Total core non-interest income (C)

3,415

$        

6,362

$       

5,431

$       

4,988

$       

Total non-interest expense

11,800

$      

28,977

$     

28,243

$     

37,279

$     

Less:  Termination of ESOP

(168)

-

-

-

Less:  Merger and conversion expense

(352)

-

-

-

Less:  Other

-

-

(408)

(6,900)

Core non-interest expense (D1)

11,280

28,977

27,835

$   

30,379

$   

Less: Amortization of intangible assets

(481)

(98)

(203)

(203)

Total core tangible non-interest expense (D2)

10,799

$      

28,879

$     

27,632

$     

30,176

$     

Total average assets (E)

2,032,098

$ 

1,289,500

$

1,115,800

$

1,051,800

$

Less:  Average intangible assets

(99,862)

(8,700)

(10,300)

(10,300)

Total average tangible assets (F)

1,932,236

$ 

1,280,800

$

1,105,500

$

1,041,500

$

Total average stockholders' equity (G)

246,307

$    

127,100

$   

123,100

$   

136,200

$   

Less:  Average intangible assets

(99,862)

(8,700)

(10,300)

(10,300)

Total average tangible stockholders' equity (H)

146,445

$    

118,400

$   

112,800

$   

125,900

$   

Core return on tangible assets -

annualized (B/F)

1.02

%

0.87

%

0.81

%

0.76

%

Core return on tangible equity -

annualized (B/H)

13.49

9.36

7.97

6.28

Efficiency ratio

57.14

60.66

62.73

64.55

Efficiency Ratio: is computed by dividing total tangible core non-interest expense by the sum of total

net interest income on a fully taxable equivalent basis and total core non-interest income.  The Company

uses this non-GAAP measure, which is used widely in the banking industry, to provide important

information regarding its operational efficiency.

BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Mar. 31,

Dec. 31,

Sept. 30,

June 30,

Mar. 31,

2006

2005

2005

2005

2005

(Dollars in thousands, except per share data)

Net income

4,818

$      

4,838

$      

4,746

$         

(4,608)

$      

3,252

$       

Less:  Gain on sale of securities, net

(497)

(882)

(832)

(1,388)

(429)

Plus:  Termination of ESOP

-

168

-

8,667

-

Plus:  Merger and conversion expense

-

352

828

963

-

Adj:  Income taxes

164

119

1

(139)

150

Core income                                                     

(A)

4,485

4,595

4,743

3,495

2,973

Plus: Amort. Intang. Assets (net of taxes)

320

322

322

105

20

Tangible core income                                          

(B)

4,805

$      

4,917

$      

5,065

$         

3,600

$       

2,993

$       

Total non-interest income

4,091

$      

4,297

$      

3,955

$         

3,916

$       

2,744

$       

Less:  Gain on sale of securities, net

(497)

(882)

(832)

(1,388)

(429)

Total core non-interest income                      

(C)

3,594

$      

3,415

$      

3,123

$         

2,528

$       

2,315

$       

Total non-interest expense

11,225

$    

11,800

$    

11,600

$       

18,061

$     

7,536

$       

Less:  Termination of ESOP

-

(168)

-

(8,667)

-

Less:  Merger and conversion expense

-

(352)

(828)

(963)

-

Core non-interest expense                                   

11,225

11,280

10,772

8,431

7,536

Less: Amortization of intangible assets

(478)

(481)

(481)

(156)

(30)

Total core tangible non-interest expense            

(D)

10,747

$    

10,799

$    

10,291

$       

8,275

$       

7,506

$       

Total average assets                                            

2,043,749

$

2,032,098

$

2,065,251

$  

1,563,945

$

1,311,023

$

Less:  Average intangible assets

(99,318)

(99,862)

(100,955)

(38,879)

(7,254)

Total average tangible assets                             

(E)

1,944,431

$

1,932,236

$

1,964,296

$  

1,525,066

$

1,303,769

$

Total average stockholders' equity                        

250,305

$   

246,307

$   

241,540

$     

164,717

$   

132,053

$   

Less:  Average intangible assets

(99,318)

(99,862)

(100,955)

(38,879)

(7,254)

Total average tangible stockholders' equity         

(F)

150,987

$   

146,445

$   

140,585

$     

125,838

$   

124,799

$   

Total stockholders' equity, period-end

247,637

$   

246,066

$   

245,531

$     

244,497

128,426

Less:  Intangible assets, period-end

(99,163)

(99,616)

(99,742)

(102,167)

(7,235)

Total tangible stockholders' equity, period-end  

(G)

148,474

$   

146,450

$   

145,789

$     

142,330

$   

121,191

$   

Total shares outstanding  (thousands)              

(H)

8,601

8,540

8,564

8,594

5,835

Average diluted shares outstanding (thousands)

(I)

8,755

8,813

8,856

6,257

5,691

Core earnings per share                                      

(A/I)

0.51

$        

0.52

$        

0.54

$           

0.53

$         

0.52

$         

Tangible book value per share                      

(G/H)

17.26

$      

17.15

$      

17.04

$         

16.56

$       

20.77

$       

Core return on tangible assets                            

(B/E)

0.98

%

1.02

%

1.04

%

0.94

%

0.91

%

Core return on tangible equity                       

(B/F)

12.63

13.49

14.47

11.42

9.52

Core tangible non-interest income to assets    

(C/E)

0.74

0.71

0.64

0.66

0.71

Core tangible non-interest exp to assets      

(D/E)

2.21

2.24

2.10

2.17

2.30

Efficiency ratio

57.48

57.00

55.17

57.65

59.56

Efficiency ratio is computed by dividing total tangible core non-interest expense by the sum of total

net interest income on a fully taxable equivalent basis and total core non-interest income.  The Company

uses this non-GAAP measure, which is used widely in the banking industry, to provide important

information regarding its operational efficiency.

Note:  Ratios are annualized and based on average balance sheet amounts, where applicable.

BERKSHIRE HILLS BANCORP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

At or for the Quarters Ended