-----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, Ly/55Bge1xgHgue4hKcuUBAK0V9qEfpxQ22chjCsX0v/mKRUjoBXPutDeL2ArnYw AQdyAAZqL4VdyBaW83R/Iw== 0001362310-09-000692.txt : 20090127 0001362310-09-000692.hdr.sgml : 20090127 20090127084536 ACCESSION NUMBER: 0001362310-09-000692 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20090126 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090127 DATE AS OF CHANGE: 20090127 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-51584 FILM NUMBER: 09546728 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 8-K 1 c79868e8vk.htm FORM 8-K Filed by Bowne Pure Compliance
 
 

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): January 26, 2009

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:

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

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

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

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

 
 

 

1

 

Item 2.02. Results of Operations and Financial Condition.

On January 26, 2009, Berkshire Hills Bancorp, Inc. (the “Company”), the holding company for Berkshire Bank, announced: (1) its financial results for the quarter and year ended December 31, 2008; and (2) the declaration of a quarterly dividend of $.16 per share.  The Company has posted a document with supplemental information in the Investor Relations section of its website at www.berkshirebank.com. The press release containing these announcements is filed as Exhibit 99.1 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits

  (a)  
Financial Statements of Businesses Acquired. Not applicable.

  (b)  
Pro Forma Financial Information. Not applicable.

  (c)  
Shell Company Transactions. Not applicable.

(d) Exhibits.

     
Exhibit No.
  Description
 
    
99.1
  Press Release dated January 26, 2009.

 

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.

DATE: January 26, 2009

By: /s/ Kevin P. Riley               
Kevin P. Riley,
Executive Vice President and Chief
Financial Officer

 

3

 

EXHIBIT INDEX

     
Exhibit No.
  Description
 
    
99.1
  Press Release dated January 26, 2009.

 

4

EX-99.1 2 c79868exv99w1.htm EXHIBIT 99.1 Filed by Bowne Pure Compliance
Exhibit 99.1
(BERKSHIRE HILLS BANCORP LOGO)
BERKSHIRE HILLS REPORTS ANOTHER STRONG QUARTER WITH
FOURTH QUARTER EPS OF $0.44 AND $2.06 FOR THE YEAR
Dividend Declared; Annual Meeting Date Set
PITTSFIELD, MA – January 26, 2009 – Berkshire Hills Bancorp (BHLB) reported fourth quarter earnings totaled $5.2 million, or $0.44 per share. For the year 2008, earnings were $22.2 million, or $2.06 per share. Core earnings per share increased by 8% in 2008, reflecting the benefit of acquisitions and organic growth. GAAP earnings per share increased by 43% due to non-core charges in 2007.
Most categories of income and expense increased in the first nine months of 2008 including the benefit of the acquired Vermont operations. Results in 2007 included non-core charges primarily due to the completion of that merger and a related balance sheet restructuring. Net income in 2007 totaled $13.5 million, or $1.44 per share. Fourth quarter 2007 net income was $3.1 million, or $0.29 per share.
Fourth Quarter Financial Highlights
  •  
$0.44 core earnings per share vs. $0.36 in 2007; GAAP EPS of $0.44 vs. $0.29
 
  •  
0.48% nonperforming assets to total assets at year-end; accruing delinquent loans were 0.51% of total loans
 
  •  
0.27% annualized charge-offs on average loans
 
  •  
Public issuance of nearly $40 million in common stock and the issuance of $40 million of preferred stock under the U.S. Treasury Capital Purchase Program
Annual Financial Highlights
  •  
8% increase in core EPS; 43% increase in GAAP EPS
 
  •  
12% increase in year-end tangible book value per share to $15.47; 3% decrease in total book value per share to $30.07
 
  •  
21% increase in total net revenue
 
  •  
3.44% net interest margin
 
  •  
8% increase in total commercial loans; 7% increase in total residential mortgage and home equity loans
 
  •  
61.4% efficiency ratio, improved from 62.9% in 2007
         
BHLB — Berkshire Hills Bancorp   Page 1   www.berkshirebank.com

 

 

 

Michael P. Daly, President and Chief Executive Officer, stated, “We had another solid quarter, and finished out a strong year with higher earnings and earnings per share. We generated positive operating leverage due to organic growth and the benefit of our Vermont operations acquired last year. Despite growing headwinds towards the end of the year, we generated higher earnings and core earnings per share in every quarter of the year.”
Mr. Daly continued, “We produced these solid results despite the impact of our October common stock offering, which reduced EPS by $0.06 in the fourth quarter and by $0.07 for the year. This successful public offering totaled nearly $40 million and bolstered our equity capital, which totaled 15% of total assets at year-end –our highest equity capital ratio since we went public. We combined the common equity with $40 million in preferred stock issued under the Treasury Capital Purchase Program to better position the Company to expand the flow of credit and support economic vitality in the communities that we serve.”
Mr. Daly concluded, “Our loan performance continued to hold up through year-end, and our charge-offs remained modest in 2008. We also had no writedowns on any of our investment securities during the year and our investment portfolio remained high quality at year-end. We recognize that the coming year will be challenging for our industry and we will again be disciplined in our budgeting process. The interest rate reductions by the Federal Reserve Bank have negatively impacted our pricing, thereby reducing our net interest margin. Should economic conditions continue to deteriorate in 2009, it is likely that we will increase our provision despite our strong loan performance through year-end 2008. We will also be incurring some earnings dilution from the common stock offering and the Treasury preferred stock. We aggressively supplemented our capital to prepare for the current environment, and we plan to be proactive in developing programs to meet the needs of our markets and in working promptly to address loan problems if they develop.”
DIVIDEND DECLARED
The Board of Directors declared a quarterly cash dividend of $0.16 per share to stockholders of record at the close of business on February 12, 2009 and payable on February 26, 2009. Common stock dividends totaled $0.63 per share in 2008, an increase of 9% over 2007.
ANNUAL MEETING SET
The 2009 annual meeting of stockholders will be held on May 7, 2009 at the Crowne Plaza Hotel, One West Street, Pittsfield, Massachusetts at 10:00 A.M. (ET). The voting record date has been set as March 10, 2009.
FINANCIAL CONDITION
Total assets were $2.7 billion at year-end 2008, increasing by 6% over year-end 2007. Total loans increased by 8% in 2008 excluding auto loans, reflecting growth in total commercial loans, along with higher residential mortgage and home equity loans. Growth in commercial real estate loans mostly reflected loan opportunities previously serviced by national providers in the Company’s New England lending areas. Home equity loan growth was due to new lines opened as a result of relationship promotions. Residential and home equity underwriting is based on prime lending standards with 80% maximum loan-to-value. Commercial business loans decreased due to paydowns. The bank made a decision early in the year to discontinue originations of indirect auto loans and this portfolio is declining as existing balances runoff. Fourth quarter loan activity generally reflected these annual trends.
         
BHLB — Berkshire Hills Bancorp   Page 2   www.berkshirebank.com

 

 

 

In the fourth quarter, securities available for sale increased by $71 million and short term investments increased by $10 million, primarily reflecting the utilization of stock issuance proceeds pending further investment activities in 2009. Securities purchases consisted primarily of short duration collateralized mortgage obligations issued by federal agencies. The Company’s securities portfolio consists primarily of U.S. agency mortgage backed securities, and municipal and economic development bonds. All debt securities are rated investment grade except for $40 million in unrated local municipal and economic development bonds. The total unrealized loss on securities available for sale was $3 million at year-end 2008, all of which was deemed to be temporary.
The Company’s problem loan measures at year-end 2008 remained comparatively low and were not significantly changed from the prior year-end. Year-end 2008 nonperforming assets totaled 0.48% of total assets, and accruing delinquent loans were up moderately to 0.51% of total loans. The year-end loan loss allowance was 1.14% of total loans for 2008 and 2007. The portion of the allowance assigned to specific reserves on impaired loans was $1.0 million at year-end 2008 and $1.2 million at year-end 2007.
Total deposits increased by $7 million to $1.83 billion in 2008. Deposit activity included an estimated $45 million in targeted run-off of higher cost municipal, commercial, and brokered time deposit accounts primarily in the second quarter. Estimated deposit growth excluding this run-off was 3%. Most of the Company’s retail deposit and loan promotions are linked to companion checking accounts. The Company offers 100% insurance on all deposit balances due to its participation in the Massachusetts Depositors Insurance Fund. The Bank expects to benefit from the temporary increase in FDIC deposit insurance limits and it is also participating in the optional temporary unlimited transaction account insurance offered by the FDIC.
Stockholders’ equity increased by $82 million in 2008 primarily due to the benefit of the common and preferred stock offerings. The contribution from earnings was partially offset by dividends and an unrealized mark-to-market loss on interest rate swaps. Total equity to assets increased to 15.3% at year-end 2008, while tangible equity to assets measured 9.2%. The risk based capital ratio of Berkshire Bank was approximately 12% at year-end. Total return on equity was 6.5% in 2008, while the core return on tangible equity was 16.2%. The Company views this latter measure as an important measure of its capital generation and capital strength. Tangible common book value per share was $15.47 at year-end 2008, compared to $13.82 at the prior year-end. Total common book value per share was $30.07 and $31.15 at these two dates, respectively.
         
BHLB – Berkshire Hills Bancorp   Page 3   www.berkshirebank.com

 

 

 

RESULTS OF OPERATIONS
Most major categories of income and expense increased in 2008 primarily due to the contribution of Vermont operations resulting from the Factory Point Bancorp acquisition in September 2007. Total annual core revenue increased by 16%, while total core income increased by 25%. Several non-core charges related principally to the Factory Point acquisition reduced revenue and income in 2007. As a result, total GAAP revenue increased by 21% and total GAAP earnings increased by 64% in 2008 compared to 2007. Fourth quarter GAAP earnings increased by 69%, including results from Vermont operations in both periods. The increase was primarily due to non-core charges and a larger loan loss provision in 2007.
Net interest income increased by 18% in 2008 and increased sequentially in all quarters during the year. Average earning assets also increased sequentially in each quarter in 2008, with the fourth quarter average exceeding the 2007 fourth quarter average by 6%. This was primarily driven by continuous loan growth, despite the impact of runoff in the indirect auto loan portfolio. The net interest margin increased sequentially in the first three quarters to a five year peak of 3.48%, and then declined in the fourth quarter to 3.41% due to market floors on deposit rates following the drop in the federal funds rate to the lowest levels since 1954. The net interest margin improvement to 3.44% in 2008 reflected disciplined loan and deposit pricing throughout the year, together with the benefit of the Factory Point acquisition and the related balance sheet restructuring in 2007.
Fee income increased by 14% in 2008, resulting from higher deposit, loan, and interest rate swap fee income. Insurance fees decreased by 1% in 2008 primarily due to softer pricing conditions in the property casualty markets. Wealth management fees increased by 29% in 2008; however they were adversely affected by stock market conditions in the fourth quarter. The stock market decline caused a 21% reduction in fourth quarter wealth management revenues. Non-interest income in 2007 included non-core balance sheet restructuring charges related to the Factory Point acquisition.
The loan loss provision increased by 7% in 2008, which was in line with the growth in total loans during the year. The 2008 loan loss provision was $4.6 million, while net loan charge-offs totaled $3.8 million in 2008, compared to $6.0 million in 2007.
The 9% increase in non-interest expense in 2008 was primarily due to the Factory Point acquisition. Fourth quarter results included the acquired Vermont operations in both 2008 and 2007, and fourth quarter core expenses were flat from year to year. Non-core charges were recorded in 2007 primarily due to the Factory Point acquisition, and there were additional non-core expense restructuring charges recorded in both years. The Bank’s efficiency ratio improved to 59% in 2008, while the consolidated ratio improved to 61%. The effective income tax rate was 28% in both 2008 and 2007, and also in the most recent quarter. The tax rate in 2008 included a second quarter non-core credit resulting from the reduction in the valuation reserve for deferred state tax assets.
         
BHLB — Berkshire Hills Bancorp   Page 4   www.berkshirebank.com

 

 

 

CONFERENCE CALL
The Company will conduct a conference call/webcast at 9:00 A.M. eastern time on Tuesday, January 27, 2009 to discuss the results for the quarter and the year, and guidance about expected future results. Additionally, the Company intends to post a document with supplemental information in the Investor Relations section of its web site at www.berkshirebank.com shortly before the commencement of the call.
Information about the conference call follows:
     
Dial-in:
  800-860-2442
Webcast:
  www.berkshirebank.com (Investor Relations link)
A telephone replay of the call will be available until February 4, 2009 by calling 877-344-7529 and entering replay passcode: 426862. The webcast and a podcast will be available at the Company’s website above for an extended period of time.
BACKGROUND
Berkshire Hills Bancorp is headquartered in Pittsfield, Massachusetts. It has approximately $2.7 billion in assets and is the parent of Berkshire Bank — America’s Most Exciting BankSM. The Company provides business and consumer banking, insurance, wealth management, and investment services through 48 banking and insurance offices in Western Massachusetts, Northeastern New York, and Southern Vermont. For more information, visit www.berkshirebank.com or call 800-773-5601.
FORWARD LOOKING STATEMENTS
Statements in this news release regarding Berkshire Hills Bancorp that are not historical facts are “forward-looking statements”. These statements reflect management’s views of future events, and involve risks and uncertainties. For a discussion of factors that could cause actual results to differ materially from expectations, see “Forward Looking Statements” in the Company’s 2007 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available at the Securities and Exchange Commission’s Internet website (www.sec.gov) and to which reference is hereby made. Actual future results may differ significantly from results discussed in these forward-looking statements, and undue reliance should not be placed on such statements. Except as required by law, the Company assumes no obligation to update any forward-looking statements.
         
BHLB — Berkshire Hills Bancorp   Page 5   www.berkshirebank.com

 

 

 

NON-GAAP FINANCIAL MEASURES
This news release contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). These non-GAAP measures provide supplemental perspectives on operating results, performance trends, and financial condition. They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is included in the accompanying financial tables. In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders. The Company utilizes the non-GAAP measure of core earnings in evaluating operating trends, including components for core revenue and expense. These measures exclude amounts which the Company views as unrelated to its normalized operations, including merger costs and restructuring costs. Similarly, the efficiency ratio is also adjusted for these non-core items. Additionally, the Company adjusts core income to exclude amortization of intangibles to arrive at a measure of the underlying operating cash return for the benefit of stockholders. The Company also adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community.
# # #
CONTACTS
Investor Relations Contact
David H. Gonci
Corporate Finance Officer
413-281-1973
Media Contact
Fedelina Madrid
Vice President — Marketing
413-236-3733
         
BHLB — Berkshire Hills Bancorp   Page 6   www.berkshirebank.com

 

 

 

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED BALANCE SHEETS — UNAUDITED
                         
    December 31,       September 30,       December 31,  
(In thousands)   2008       2008       2007  
Assets
                        
Total cash and cash equivalents
   $ 26,582     $ 26,445     $ 33,259  
Fed funds sold & short-term investments
     18,216       8,124       7,883  
Trading securities
     18,144       15,267       —  
Securities available for sale, at fair value
     276,423       205,554       197,964  
Securities held to maturity, at amortized cost
     25,872       25,923       39,456  
Federal Home Loan Bank stock
     21,077       21,077       21,077  
Loans held for sale
     1,768       5,401       3,445  
 
                        
Residential mortgages
     677,254       672,004       657,045  
Commercial mortgages
     808,591       794,780       704,764  
Commercial business loans
     175,799       181,224       203,564  
Consumer loans
     345,508       344,359       378,643  
 
                  
Total loans
     2,007,152       1,992,367       1,944,016  
Less: Allowance for loan losses
     (22,908 )     (22,886 )     (22,116 )
 
                  
Net loans
     1,984,244       1,969,481       1,921,900  
 
                        
Premises and equipment, net
     37,448       37,902       38,806  
Goodwill
     161,178       161,178       161,632  
Other intangible assets
     17,652       18,490       20,820  
Cash surrender value of life insurance policies
     35,668       35,331       35,316  
Other assets
     42,457       35,526       31,874  
 
                  
Total assets
   $ 2,666,729     $ 2,565,699     $ 2,513,432  
 
                  
 
                        
Liabilities and stockholders’ equity
                        
Demand deposits
   $ 233,040     $ 227,271     $ 231,994  
NOW deposits
     190,828       196,217       213,150  
Money market deposits
     448,238       450,818       439,341  
Savings deposits
     211,156       220,800       210,186  
 
                  
Total non-maturity deposits
     1,083,262       1,095,106       1,094,671  
Brokered time deposits
     2,942       3,008       21,497  
Other time deposits
     743,376       739,090       706,395  
 
                  
Total time deposits
     746,318       742,098       727,892  
 
                  
Total deposits
     1,829,580       1,837,204       1,822,563  
 
                  
 
                        
Borrowings
     359,157       366,092       334,474  
Junior subordinated debentures
     15,464       15,464       15,464  
Derivative liabilities
     23,868       2,608       —  
Due to broker
     19,895       —       —  
Other liabilities
     10,340       11,649       14,094  
 
                  
Total liabilities
     2,258,304       2,233,017       2,186,595  
 
                        
Total stockholders’ equity
     408,425       332,682       326,837  
 
                  
Total liabilities and stockholders’ equity
   $ 2,666,729     $ 2,565,699     $ 2,513,432  
 
                  

 

F-1

 

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED LOAN & DEPOSIT ANALYSIS — UNAUDITED
LOAN ANALYSIS
                                         
    December 31, 2008              
            Quarterly                    
            annualized     Annual     September 30, 2008     December 31, 2007  
(Dollars in millions)   Balance     growth     growth     Balance     Balance  
 
                                        
Residential mortgages:
                                        
1 - 4 Family
   $ 642       4 %     5 %   $ 636     $ 610  
Construction
     35       (11 )     (26 )     36       47  
 
                              
Total residential mortgages
     677       3       3       672       657  
 
                                        
Commercial mortgages:
                                        
Construction
     130       (12 )     4       134       125  
Single and multi-family
     70       —       1       70       69  
Other commercial mortgages
     608       12       19       591       510  
 
                              
Total commercial mortgages
     808       7       15       795       704  
 
                                        
Commercial business loans
     176       (11 )     (14 )     181       204  
 
                              
Total commercial loans
     984       3       8       976       908  
 
                                        
Consumer loans:
                                        
Auto and other
     140       (43 )     (34 )     157       211  
Home equity
     206       41       23       187       168  
 
                              
Total consumer loans
     346       2       (9 )     344       379  
 
                              
Total loans
   $ 2,007       3 %     3 %   $ 1,992     $ 1,944  
 
                              
DEPOSIT ANALYSIS
                                         
    December 31, 2008              
            Quarterly                    
            annualized     Annual     September 30, 2008     December 31, 2007  
(Dollars in millions)   Balance     growth     growth     Balance     Balance  
 
Demand
   $ 233       11 %     — %   $ 227     $ 232  
NOW
     191       (10 )     (10 )     196       213  
Money market
     448       (3 )     2       451       439  
Savings
     211       (18 )     —       221       211  
 
                              
Total non-maturity deposits
     1,083       (4 )     (1 )     1,095       1,095  
 
Time less than $100,000
     392       (2 )     (4 )     394       409  
Time $100,000 or more
     351       7       18       345       298  
Brokered time
     3       —       (86 )     3       21  
 
                              
Total time deposits
     746       2       2       742       728  
 
                              
Total deposits
   $ 1,829       (2 )%     — %   $ 1,837     $ 1,823  
 
                              

 

F-2

 

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME — UNAUDITED
                                 
    Three Months Ended     Years Ended  
    December 31,     December 31,  
(In thousands, except per share data)   2008     2007     2008     2007  
Interest and dividend income
                                
Loans
   $ 29,343     $ 32,666     $ 120,567     $ 120,059  
Securities and other
     3,419       3,183       12,644       11,885  
 
                        
Total interest and dividend income
     32,762       35,849       133,211       131,944  
Interest expense
                                
Deposits
     9,248       13,749       41,733       50,597  
Borrowings and junior subordinated debentures
     4,044       3,882       15,738       17,422  
 
                        
Total interest expense
     13,292       17,631       57,471       68,019  
 
                        
Net interest income
     19,470       18,218       75,740       63,925  
Non-interest income
                                
Insurance commissions and fees
     2,139       2,290       13,619       13,728  
Deposit service fees
     2,623       2,620       9,782       7,747  
Wealth management fees
     1,171       1,476       5,704       4,407  
Loan service and interest rate swap fees
     203       91       1,229       772  
 
                        
Total fee income
     6,136       6,477       30,334       26,654  
Other
     241       551       1,283       1,710  
Loss on sale of securities, net
     —       —       (22 )     (591 )
Loss on prepayment of borrowings, net
     —       —       —       (1,180 )
Gain (loss) on sale of loans, net
     —       41       —       (1,950 )
 
                        
Total non-interest income
     6,377       7,069       31,595       24,643  
 
                        
Total net revenue
     25,847       25,287       107,335       88,568  
Provision for loan losses
     1,400       3,060       4,580       4,300  
Non-interest expense
                                
Salaries and employee benefits
     8,988       9,386       38,282       34,018  
Occupancy and equipment
     2,736       2,656       11,238       9,945  
Marketing, data processing, and professional services
     2,338       2,275       8,761       8,598  
Non-recurring expense
     —       1,198       683       2,956  
Amortization of intangible assets
     838       1,050       3,830       3,058  
Other
     2,356       1,828       8,905       6,919  
 
                        
Total non-interest expense
     17,256       18,393       71,699       65,494  
 
                        
 
                                
Income before income taxes
     7,191       3,834       31,056       18,774  
Income tax expense
     1,985       761       8,812       5,239  
 
                        
Net income
   $ 5,206     $ 3,073     $ 22,244     $ 13,535  
 
                        
 
                                
Basic earnings per common share
   $ 0.44     $ 0.29     $ 2.08     $ 1.47  
 
                        
 
                                
Diluted earnings per common share
   $ 0.44     $ 0.29     $ 2.06     $ 1.44  
 
                        
 
                                
Weighted average common shares outstanding
                                
Basic
     11,804       10,524       10,700       9,223  
Diluted
     11,892       10,664       10,791       9,370  

 

F-3

 

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
                                         
    Quarters Ended  
    Dec. 31,     Sept. 30,     June 30,     Mar. 31,     Dec. 31,  
(In thousands, except per share data)   2008     2008     2008     2008     2007  
Interest and dividend income
                                        
Loans
   $ 29,343     $ 30,078     $ 29,823     $ 31,323     $ 32,666  
Securities and other
     3,419       3,014       3,011       3,200       3,183  
 
                              
Total interest and dividend income
     32,762       33,092       32,834       34,523       35,849  
Interest expense
                                        
Deposits
     9,248       9,676       10,521       12,288       13,749  
Borrowings and junior subordinated debentures
     4,044       4,087       3,666       3,941       3,882  
 
                              
Total interest expense
     13,292       13,763       14,187       16,229       17,631  
 
                              
Net interest income
     19,470       19,329       18,647       18,294       18,218  
Non-interest income
                                        
Insurance commissions and fees
     2,139       2,640       3,694       5,146       2,290  
Deposit service fees
     2,623       2,518       2,486       2,155       2,620  
Wealth management fees
     1,171       1,338       1,567       1,628       1,476  
Loan service and interest rate swap fees
     203       561       228       237       91  
 
                              
Total fee income
     6,136       7,057       7,975       9,166       6,477  
Other
     241       174       562       306       551  
Gain (loss) on securities, net
     —       4       (26 )     —       —  
Gain on sale of loans, net
     —       —       —       —       41  
 
                              
Total non-interest income
     6,377       7,235       8,511       9,472       7,069  
 
                              
Total net revenue
     25,847       26,564       27,158       27,766       25,287  
Provision for loan losses
     1,400       1,250       1,105       825       3,060  
Non-interest expense
                                        
Salaries and employee benefits
     8,988       9,796       9,842       9,656       9,386  
Occupancy and equipment
     2,736       2,760       2,774       2,968       2,656  
Marketing, data processing, and professional services
     2,338       2,121       2,181       2,121       2,275  
Non-recurring expense
     —       —       683       —       1,198  
Amortization of intangible assets
     838       889       1,019       1,084       1,050  
Other
     2,356       2,171       2,133       2,245       1,828  
 
                              
Total non-interest expense
     17,256       17,737       18,632       18,074       18,393  
 
                              
Income before income taxes
     7,191       7,577       7,421       8,867       3,834  
Income tax expense
     1,985       2,301       1,708       2,818       761  
 
                              
Net income
   $ 5,206     $ 5,276     $ 5,713     $ 6,049     $ 3,073  
 
                              
 
                                        
Basic earnings per share
   $ 0.44     $ 0.51     $ 0.55     $ 0.58     $ 0.29  
 
                                        
Diluted earnings per share
   $ 0.44     $ 0.51     $ 0.55     $ 0.58     $ 0.29  
 
                                        
Weighted average shares outstanding
                                        
Basic
     11,804       10,303       10,302       10,386       10,524  
Diluted
     11,892       10,400       10,384       10,457       10,664  

 

F-4

 

BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
ASSET QUALITY ANALYSIS
                                         
    At or for the Quarters Ended  
    Dec. 31,     Sept. 30,     June 30,     Mar. 31,     Dec. 31,  
(Dollars in thousands)   2008     2008     2008     2008     2007  
NON-PERFORMING ASSETS
                                        
Nonaccruing loans:
                                        
Residential mortgages
   $ 1,646     $ 1,315     $ 763     $ 1,060     $ 726  
Commercial mortgages
     7,738       6,178       5,329       7,082       5,177  
Commercial business loans
     1,921       2,210       3,103       3,557       4,164  
Indirect auto and installment loans
     693       576       503       374       346  
Home equity
     173       74       74       67       95  
 
                              
Total nonaccruing loans
     12,171       10,353       9,772       12,140       10,508  
Other real estate owned
     498       941       1,050       755       866  
 
                              
Total nonperforming assets
   $ 12,669     $ 11,294     $ 10,822     $ 12,895     $ 11,374  
 
                              
 
                                        
Total nonperforming loans/total loans
     0.61 %     0.52 %     0.49 %     0.63 %     0.54 %
Total nonperforming assets/total assets
     0.48 %     0.44 %     0.42 %     0.51 %     0.46 %
 
                                        
PROVISION AND ALLOWANCE FOR LOAN LOSSES
                                        
Balance at beginning of period
   $ 22,886     $ 22,581     $ 22,130     $ 22,116     $ 22,108  
Charged-off loans
     (1,474 )     (1,331 )     (754 )     (883 )     (3,117 )
Recoveries on charged-off loans
     96       386       100       72       65  
 
                              
Net loans charged-off
     (1,378 )     (945 )     (654 )     (811 )     (3,052 )
Acquired allowance
     —       —       —       —       —  
Provision for loan losses
     1,400       1,250       1,105       825       3,060  
 
                              
Balance at end of period
   $ 22,908     $ 22,886     $ 22,581     $ 22,130     $ 22,116  
 
                              
 
                                        
Allowance for loan losses/nonperforming loans
     188 %     221 %     231 %     182 %     210 %
Allowance for loan losses/total loans
     1.14 %     1.15 %     1.14 %     1.14 %     1.14 %
 
                                        
NET LOAN CHARGE-OFFS
                                        
Residential mortgages
   $ —     $ (119 )   $ —     $ (24 )   $ —  
Commercial mortgages
     (900 )     (63 )     (131 )     (175 )     —  
Commercial business loans
     (10 )     (265 )     (121 )     (213 )     (2,683 )
Indirect auto and installment loans
     (468 )     (498 )     (402 )     (339 )     (319 )
Home equity
     —       —       —       (60 )     (50 )
 
                              
Total net
   $ (1,378 )   $ (945 )   $ (654 )   $ (811 )   $ (3,052 )
 
                              
 
                                        
Net charge-offs (YTD annualized)/average loans
     0.19 %     0.16 %     0.15 %     0.17 %     0.34 %
 
                                        
DELINQUENT LOANS / TOTAL LOANS
                                        
30-89 Days delinquent
     0.46 %     0.45 %     0.33 %     0.41 %     0.39 %
90 + Days delinquent and still accruing
     0.05 %     0.03 %     0.04 %     0.03 %     0.04 %
 
                              
Total accruing delinquent loans
     0.51 %     0.48 %     0.37 %     0.44 %     0.43 %
 
                                        
Nonaccruing loans
     0.61 %     0.52 %     0.49 %     0.63 %     0.54 %
 
                              
Total delinquent loans
     1.12 %     1.00 %     0.86 %     1.07 %     0.97 %
 
                              

 

F-5

 

BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
                                         
    At or for the Quarters Ended  
    Dec. 31,     Sept. 30,     June 30,     Mar. 31,     Dec. 31,  
    2008     2008     2008     2008     2007  
 
PERFORMANCE RATIOS
                                        
Core return on tangible assets
     0.98 %     1.03 %     1.16 %     1.24 %     0.83 %
Return on total assets
     0.79       0.82       0.91       0.97       0.50  
Core return on tangible common equity
     12.70       15.85       17.89       19.52       12.90  
Return on total common equity
     5.62       6.26       6.89       7.38       3.74  
Net interest margin, fully taxable equivalent
     3.41       3.48       3.45       3.41       3.38  
Core tangible non-interest income to tangible assets
     1.04       1.21       1.47       1.64       1.23  
Non-interest income to assets
     0.97       1.13       1.36       1.52       1.14  
Core tangible non-interest expense to tangible assets
     2.68       2.82       2.91       2.95       2.80  
Non-interest expense to assets
     2.62       2.76       2.97       2.89       2.95  
Efficiency ratio
     62.24       62.18       61.08       60.12       62.51  
 
                                        
YEAR-TO-DATE GROWTH
                                        
Total loans
     3 %     3 %     4 %     (2 )%     3 %
Total deposits
     —       1       (1 )     12       2  
Total revenues
     21       29       21       19       23  
 
                                        
FINANCIAL DATA (In millions)
                                        
Total assets
   $ 2,667     $ 2,566     $ 2,547     $ 2,546     $ 2,513  
Total loans
     2,007       1,992       1,978       1,935       1,944  
Total intangible assets
     179       180       181       182       182  
Total deposits
     1,830       1,837       1,811       1,880       1,823  
Total stockholders’ equity
     408       333       330       329       327  
Total stockholders’ common equity
     368       333       330       329       327  
Total core income
     5.2       5.3       5.7       6.0       3.8  
Total net income
     5.2       5.3       5.7       6.0       3.1  
 
                                        
ASSET QUALITY RATIOS
                                        
Net charge-offs (annualized)/average loans
     0.27 %     0.19 %     0.13 %     0.17 %     0.34 %
Non-performing assets/total assets
     0.48       0.44       0.42       0.51       0.45  
Loan loss allowance/total loans
     1.14       1.15       1.14       1.14       1.14  
Loan loss allowance/nonperforming loans
     1.88 x     2.21 x     2.31 x     1.82 x     2.10 x
 
                                        
PER SHARE DATA
                                        
Core earnings, diluted
   $ 0.44     $ 0.51     $ 0.55     $ 0.58     $ 0.36  
Net earnings, diluted
     0.44       0.51       0.55       0.58       0.29  
Tangible common book value
     15.47       14.58       14.36       13.97       13.82  
Total common book value
     30.07       31.71       31.78       31.38       31.15  
Market price at period end
     30.86       32.00       23.65       25.19       26.00  
Dividends
     0.16       0.16       0.16       0.15       0.15  
 
                                        
CAPITAL RATIOS
                                        
Common stockholders’ equity to total assets
     13.82 %     12.97 %     12.96 %     12.91 %     13.00 %
Tangible common stockholders’ equity to tangible assets
     7.62       6.41       6.30       6.19       6.22  
Stockholders’ equity to total assets
     15.32 %     12.97 %     12.96 %     12.91 %     13.00 %
Tangible stockholders’ equity to tangible assets
     9.23       6.41       6.30       6.19       6.22  
     
(1)  
Reconciliations of Non-GAAP financial measures, including all references to core and tangible amounts, appear on page F-9. Tangible assets are total assets less total intangible assets.
 
(2)  
All performance ratios are annualized and are based on average balance sheet amounts, where applicable.
 
(3)  
The Dec. 31, 2007 total loan annualized year-to-date growth calculations exclude the acquired FAPB balances and $50 million in residential mortgage loans sold during September 07.
 
(4)  
The Dec. 31, 2007 total deposit annualized year-to-date growth calculations both exclude the acquired FAPB balances, $22.7 million in repurchase liabilities converted to deposit accounts, and $21 million in brokered time deposit run-off.

 

F-6

 

BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
AVERAGE BALANCES
                                         
    Quarters Ended  
    Dec. 31,     Sept. 30,     June 30,     Mar. 31,     Dec. 31,  
(In thousands)   2008     2008     2008     2008     2007  
Assets
                                        
Loans
                                        
Residential mortgages
   $ 679,000     $ 672,363     $ 665,407     $ 659,406     $ 661,937  
Commercial mortgages
     808,308       787,543       745,727       712,317       694,339  
Commercial business loans
     185,434       192,065       196,962       201,433       203,539  
Consumer loans
     343,894       346,068       354,321       369,659       381,401  
 
                              
Total loans
     2,016,636       1,998,039       1,962,417       1,942,815       1,941,216  
Securities
     304,466       266,720       260,046       254,561       254,847  
Short-term investments
     15,345       4,384       12,633       16,498       4,526  
 
                              
Total earning assets
     2,336,447       2,269,143       2,235,096       2,213,874       2,200,589  
Goodwill & other intangible assets
     179,187       180,387       181,705       182,895       183,902  
Other assets
     105,097       105,937       105,109       104,027       105,525  
 
                              
Total assets
   $ 2,620,731     $ 2,555,467     $ 2,521,910     $ 2,500,796     $ 2,490,016  
 
                              
 
                                        
Liabilities and stockholders’ equity
                                        
Deposits
                                        
NOW
   $ 196,326     $ 193,192     $ 202,747     $ 208,275     $ 207,671  
Money market
     453,977       447,184       491,945       466,673       422,514  
Savings
     220,565       221,746       212,680       210,310       212,760  
Time
     746,913       734,195       705,305       715,026       749,785  
 
                              
Total interest-bearing deposits
     1,617,781       1,596,317       1,612,677       1,600,284       1,592,730  
Borrowings and debentures
     382,015       380,453       343,816       346,475       327,383  
 
                              
Total interest-bearing liabilities
     1,999,796       1,976,770       1,956,493       1,946,759       1,920,113  
Non-interest-bearing demand deposits
     229,175       232,762       221,471       217,355       225,507  
Other liabilities
     17,566       10,804       10,780       7,079       11,267  
 
                              
Total liabilities
     2,246,537       2,220,336       2,188,744       2,171,193       2,156,887  
 
                                        
Stockholders’ equity
     374,194       335,131       333,166       329,603       333,129  
 
                              
Total liabilities and stockholders’ equity
   $ 2,620,731     $ 2,555,467     $ 2,521,910     $ 2,500,796     $ 2,490,016  
 
                              
 
                                        
Supplementary data
                                        
Total non-maturity deposits
   $ 1,100,043     $ 1,094,884     $ 1,128,843     $ 1,102,613     $ 1,068,452  
Total deposits
     1,846,956       1,829,079       1,834,148       1,817,639       1,818,237  
Fully taxable equivalent income adj.
     532       532       532       492       541  
     
(1)  
Average balances for securities available-for-sale are based on amortized cost.

 

F-7

 

BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
AVERAGE YIELDS (Fully Taxable Equivalent — Annualized)
                                         
    Quarters Ended  
    Dec. 31,     Sept. 30,     June 30,     Mar. 31,     Dec. 31,  
    2008     2008     2008     2008     2007  
 
Earning assets
                                        
Loans
                                        
Residential mortgages
     5.64 %     5.65 %     5.66 %     5.70 %     5.54 %
Commercial mortgages
     6.01       6.24       6.44       6.86       7.34  
Commercial business loans
     5.99       6.41       6.57       7.55       7.68  
Consumer loans
     5.46       5.86       6.02       6.58       6.91  
Total loans
     5.79       5.99       6.11       6.48       6.68  
Securities
     5.14       5.27       5.39       5.69       5.85  
Federal funds sold and short-term investments
     0.54       1.45       1.78       2.24       5.25  
Total earning assets
     5.67       5.89       6.00       6.36       6.56  
 
                                        
Funding liabilities
                                        
Deposits
                                        
NOW
     0.52       0.64       0.73       1.09       1.39  
Money Market
     1.73       1.86       2.14       2.88       3.41  
Savings
     0.68       0.61       0.71       0.97       1.10  
Time
     3.54       3.76       4.08       4.43       4.65  
Total interest-bearing deposits
     2.27       2.41       2.62       3.09       3.42  
Borrowings and debentures
     4.21       4.27       4.29       4.57       4.70  
Total interest-bearing liabilities
     2.64       2.77       2.91       3.35       3.64  
 
                                        
Net interest spread
     3.03       3.12       3.09       3.01       2.92  
Net interest margin
     3.41       3.48       3.45       3.41       3.38  
 
                                        
Cost of funds
     2.37       2.48       2.62       3.02       3.26  
Cost of deposits
     1.99       2.10       2.31       2.72       3.00  
     
(1)  
Average balances and yields for securities available-for-sale are based on amortized cost.
 
(2)  
Cost of funds includes all deposits and borrowings.

 

F-8

 

BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                                                 
            At or for the Quarters Ended  
            Dec. 31,     Sept. 30,     June 30,     Mar. 31,     Dec. 31,  
(Dollars in thousands)           2008     2008     2008     2008     2007  
Net income
           $ 5,206     $ 5,276     $ 5,713     $ 6,049     $ 3,073  
Adj: Loss (gain) on sale of securities, net
             —       (4 )     26       —       —  
Plus: Other non-recurring expense
             —       —       683       —       1,198  
Adj: Income taxes
             —       2       (701 )     —       (468 )
 
                                      
Core income
     (A )     5,206       5,274       5,721       6,049       3,803  
Plus: Amort. of intangible assets
             838       889       1,019       1,084       1,050  
 
                                      
Tangible core income
     (B )   $ 6,044     $ 6,163     $ 6,740     $ 7,133     $ 4,853  
 
                                      
 
                                                
Total non-interest income
           $ 6,377     $ 7,235     $ 8,511     $ 9,472     $ 7,069  
Adj: Loss (gain) on sale of securities, net
             —       (4 )     26       —       —  
 
                                      
Total core non-interest income
     (C )     6,377       7,231       8,537       9,472       7,069  
Net interest income
             19,470       19,329       18,647       18,294       18,218  
 
                                      
Total core revenue
     (D )   $ 25,847     $ 26,560     $ 27,184     $ 27,766     $ 25,287  
 
                                      
 
                                                
Total non-interest expense
           $ 17,256     $ 17,737     $ 18,632     $ 18,074     $ 18,393  
Less: Other non-recurring expense
             —       —       (683 )     —       (1,198 )
 
                                      
Core non-interest expense
     (E )     17,256       17,737       17,949       18,074       17,195  
Less: Amortization of intangible assets
             (838 )     (889 )     (1,019 )     (1,084 )     (1,050 )
 
                                      
Total core tangible non-interest expense
     (F )   $ 16,418     $ 16,848     $ 16,930     $ 16,990     $ 16,145  
 
                                      
 
                                                
(Dollars in millions, except per share data)                                                
Total average assets
           $ 2,621     $ 2,555     $ 2,522     $ 2,501     $ 2,490  
Less: Average intangible assets
             (179 )     (180 )     (182 )     (183 )     (184 )
 
                                      
Total average tangible assets
     (G )   $ 2,442     $ 2,375     $ 2,340     $ 2,318     $ 2,306  
 
                                      
 
                                                
Total average stockholders’ equity
           $ 374     $ 335     $ 333     $ 330     $ 333  
Less: Average intangible assets
             (179 )     (180 )     (182 )     (183 )     (184 )
 
                                      
Total average tangible stockholders’ equity
             195       155       151       147       149  
Less: Preferred equity
             (6 )     —       —       —       —  
 
                                      
Total average tangible common stockholders’ equity
     (H )   $ 189     $ 155     $ 151     $ 147     $ 149  
 
                                      
 
                                                
Total stockholders’ equity, period-end
           $ 408     $ 335     $ 330     $ 329     $ 327  
Less: Intangible assets, period-end
             (179 )     (180 )     (181 )     (182 )     (182 )
 
                                      
Total tangible stockholders’ equity, period-end
             229       155       149       147       145  
Less: Preferred equity
             (40 )     —       —       —       —  
 
                                      
Total tangible common stockholders’ equity, period-end
     (I )   $ 189     $ 155     $ 149     $ 147     $ 145  
 
                                      
 
                                                
Total shares outstanding, period-end (thousands)
     (J )     12,253       10,493       10,385       10,475       10,493  
Average diluted shares outstanding (thousands)
     (K )     11,892       10,400       10,384       10,457       10,664  
 
                                                
Core earnings per share
     (A/K )   $ 0.44     $ 0.51     $ 0.55     $ 0.58     $ 0.36  
Tangible book value per share
     (I/J )   $ 15.47     $ 14.58     $ 14.36     $ 13.97     $ 13.82  
 
                                                
Core return on tangible assets
     (B/G )     0.98 %     1.03 %     1.16 %     1.24 %     0.84 %
Core return on tangible common equity
     (B/H )     12.70       15.84       17.89       19.52       13.03  
Core tangible non-interest income to tang. assets
     (C/G )     1.04       1.21       1.47       1.64       1.23  
Core tangible non-interest exp to tang. assets
     (F/G )     2.68       2.82       2.91       2.95       2.80  
Efficiency ratio
             62.24       62.18       61.08       60.12       62.63  
     
(1)  
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.
 
(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.

 

F-9

 

BERKSHIRE HILLS BANCORP AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                         
            For years ended  
            Dec. 31,  
(Dollars in thousands)           2008     2007  
Net income
           $ 22,244     $ 13,535  
Adj: Loss on sale of securities, net
             22       591  
Adj: Loss on prepayment of borrowings, net
             —       1,180  
Adj: Loss on sale of loans, net
             —       1,991  
Plus: Other non-recurring expense
             683       2,956  
Adj: Income taxes
             (699 )     (2,492 )
 
                    
Core income
     (A )     22,250       17,761  
Plus: Amort. of intangible assets
             3,830       3,058  
 
                    
Tangible core income
     (B )   $ 26,080     $ 20,819  
 
                    
 
                        
Total non-interest income
             31,595     $ 24,643  
Adj: Loss on sale of securities, net
             22       591  
Adj: Loss on prepayment of borrowings, net
             —       1,180  
Adj: Loss on sale of loans, net
             —       1,991  
 
                    
Total core non-interest income
     (C )     31,617       28,405  
Net interest income
             75,740       63,925  
 
                    
Total core revenue
     (D )     107,357     $ 92,330  
 
                    
 
                        
Total non-interest expense
             71,699     $ 65,494  
Less: Other non-recurring expense
             (683 )     (2,956 )
 
                    
Core non-interest expense
     (E )     71,016       62,538  
Less: Amortization of intangible assets
             (3,830 )     (3,058 )
 
                    
Total core tangible non-interest expense
     (F )     67,186     $ 59,480  
 
                    
 
                        
(Dollars in millions, except per share data)                        
Total average assets
           $ 2,551     $ 2,262  
Less: Average intangible assets
             (180 )     (138 )
 
                    
Total average tangible assets
     (G )   $ 2,371     $ 2,124  
 
                    
 
                        
Total average stockholders’ equity
           $ 343     $ 288  
Less: Average intangible assets
             (180 )     (138 )
 
                    
Total average tangible stockholders’ equity
             163       150  
Less: Preferred equity
             (1 )     —  
 
                    
Total average tangible common stockholders’ equity
     (H )   $ 162     $ 150  
 
                    
 
                        
Total stockholders’ equity, period-end
           $ 408     $ 327  
Less: Intangible assets, period-end
             (179 )     (182 )
 
                    
Total tangible stockholders’ equity, period-end
             229       145  
Less: Preferred equity
             (40 )     —  
 
                    
Total tangible common stockholders’ equity, period-end
     (I )   $ 189     $ 145  
 
                    
 
                        
Total shares outstanding, period-end (thousands)
     (J )     12,253       10,493  
Average diluted shares outstanding (thousands)
     (K )     10,791       9,370  
 
                        
Core earnings per share
     (A/K )   $ 2.06     $ 1.90  
Tangible book value per share
     (I/J )   $ 15.47     $ 13.82  
 
                        
Core return on tangible assets
     (B/G )     1.10 %     0.98 %
Core return on tangible common equity
     (B/H )     16.16       13.88  
Core tangible non-interest income to tang. assets
     (C/G )     1.33       1.34  
Core tangible non-interest exp to tang. assets
     (F/G )     2.83       2.80  
Efficiency ratio
             61.40       62.94  
     
(1)  
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.

 

F-10

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