Berkshire Hills Reports Strong Earnings Growth

Second Quarter 2025 GAAP EPS $0.66; Operating EPS $0.69 15% increase in operating EPS linked quarter; 25% increase year-over-year 3% increase in operating revenue linked quarter, 2% decrease in operating non-interest expense 3.27% net interest margin, 3 bps increase linked quarter and 7 bps year-over-year 56.7% efficiency ratio; improved from 59.5% linked quarter 0.48% delinquent and non-performing loans to total loans , /PRNewswire/ -- Berkshire Hills Bancorp, Inc. (NYSE: BHLB) today reported results for the second quarter of 2025. These results along with comparison periods are summarized below: ($ in millions, except per share data) Three Months Ended June 30, 2025 Mar. 31,2025 June 30, 2024 Net income $ 30.4 $ 25.7 $ 24.0 Per share 0.66 0.56 0.57 Operating earnings1 31.6 27.6 23.2 Per share 0.69 0.60 0.55 Net interest income, non FTE $ 91.9 $ 89.8 $ 88.5 Net interest income, FTE 93.8 91.7 90.5 Net interest margin, FTE 3.27 % 3.24 % 3.20 % Non-interest income $ 21.8 $ 20.7 $ 20.1 Operating non-interest income1 21.8 20.7 20.1 Non-interest expense 68.1 70.4 70.9 Operating non-interest expense1 66.7 67.9 71.3 Efficiency ratio1 56.7 % 59.5 % 63.4 % Average balances Loans $ 9,484 $ 9,389 $ 9,157 Deposits 9,817 9,847 9,296 Period-end balances Loans 9,499 9,429 9,229 Deposits 9,979 9,880 9,621 1. See non-GAAP financial measures and reconciliation to GAAP measures beginning on page 12. Berkshire CEO Nitin Mhatre stated, "Second quarter operating earnings grew 36% year-over-year due to revenue growth and lower expenses. Loans, deposits and the net interest margin increased over the linked quarter, boosting net interest income, and were accompanied by solid non-interest income growth. Quarterly operating revenue has increased sequentially over the last six quarters, growing 8% over this period, including 3% growth linked quarter. Quarterly operating income, operating EPS, and efficiency were the strongest since 2019. Second quarter 2025 operating return on tangible common equity advanced to 10.8%. TIME and Newsweek have once again honored Berkshire with national awards, the former for being one of the top-performing U.S. companies of our size and the latter for being one of the best workplaces in the financial services sector. Following months of preparation among our teams, we look forward to completing our transformative merger of equals with Brookline Bancorp and creating a powerful financial institution serving the Northeast." "As I reflect on our progress since we began our transformation program in early 2021, I want to express my deepest gratitude to every member of the Berkshire team, our clients and our board of directors. Our bankers' dedication, resilience, and commitment to our clients have been the driving force behind our improved operating and financial performance. Together, we've navigated challenges, embraced change, and delivered results for our clients, shareholders and communities. I'm incredibly proud of what we've accomplished and excited to see what the combined company will achieve next," added Mhatre. Berkshire CFO Brett Brbovic stated, "Second quarter net interest income increased 2% linked quarter and the net interest margin increased 3 basis points to 3.27%, benefiting from loan growth and lower deposit cost. Operating non-interest income increased $1.1 million linked quarter. Operating non-interest expense decreased $1.3 million linked quarter and $4.7 million year-over-year. The provision for credit losses decreased $1.5 million linked quarter and the allowance for credit losses on loans was unchanged at 1.24%. Quarterly results were very solid across the board." As of and For the Three Months Ended June 30, 2025 Mar. 31, 2025 June 30, 2024 Asset Quality Net loan charge-offs to average loans 0.14 % 0.15 % 0.07 % Non-performing loans to total loans 0.27 % 0.25 % 0.23 % Returns10 Return on average assets 1.03 % 0.88 % 0.82 % Operating return on average assets 1.07 % 0.94 % 0.79 % Return on tangible common equity 10.35 % 9.02 % 9.99 % Operating return on tangible common equity 10.76 % 9.66 % 9.65 % Capital1 Tangible common equity/tangible assets 10.1 % 9.9 % 8.2 % Book value per share $26.40 $25.81 $23.58 Tangible book value per share $26.12 $25.50 $23.18 1. See non-GAAP measures and reconciliation to GAAP beginning on page 12. All performance ratios are annualized and are based on average balance sheet amounts, where applicable. Berkshire Hills Bancorp, Inc. (NYSE: BHLB) is the parent company of Berkshire Bank, a relationship-driven, community-focused bank with $12.0 billion in assets and 83 financial centers in New England and New York. Berkshire is headquartered in Boston and offers commercial, retail, wealth, and private banking solutions. Berkshire has a pending agreement to merge with Brookline Bancorp, Inc., a multi-bank holding company with $11.6 billion in assets and branches in Massachusetts, Rhode Island, and New York. 2Q 2025 Financial Highlights (comparisons are to the linked quarter unless otherwise noted). Income Statement. Second quarter GAAP income was $30 million, or $0.66 per share. Operating earnings totaled $32 million, or $0.69 per share. GAAP results included $1.5 million in primarily merger-related non-operating expenses. Operating earnings increased $4.0 million, or 14%, linked quarter and 36% year-over-year, with ongoing positive operating leverage from operating revenue growth and expense reduction. Reflecting the merger-related share issuance in December 2024, quarterly operating EPS was up 25% year-over-year. The efficiency ratio was 56.7% in the second quarter, improving to the best quarterly result since 2019. Quarterly net interest income increased linked quarter by $2.2 million to $92 million in 2Q25. The net interest margin increased 3 basis points to 3.27%. The earning asset yield increased 3 basis points to 5.38%. The loan yield increased 2 basis points to 5.82%. The cost of funds decreased 1 basis point to 2.29% The cost of deposits decreased 3 basis points to 2.15%. Provision for credit losses totaled $4.0 million, decreasing 1.5 million linked quarter. Net loan charge-offs totaled $3.3 million, compared to $3.5 million linked quarter. The annualized loan net charge-off ratio was 0.14% for the quarter and 0.15% year-to-date. GAAP and operating non-interest income was $22 million, increasing $1.1 million linked quarter primarily due to higher loan related fee income. Non-interest expense totaled $68 million on a GAAP basis and $67 million on an operating basis. The operating measure decreased $1.3 million linked quarter and $4.7 million year-over-year. Compensation and occupancy expense decreased $1.8 million from seasonally higher levels in the linked quarter. The effective tax rate was 27% in 2Q25 compared to 26% in the linked quarter. Loans. Compared to the linked quarter, total loans increased $70 million, or 1%, to $9.5 billion. Growth was primarily in commercial and industrial loans which increased $56 million, or 4%. The quarter-end allowance for credit losses on loans was unchanged at 1.24% of total loans. The period-end allowance was 462% of non-performing loans. Non-performing loans were 0.27% of total loans at period-end. Delinquent and non-performing loans were 0.48% of total loans at period-end. Deposits. Compared to the linked quarter, total end of period deposits increased $99 million, or 1%, to $10.0 billion. Total end of period deposits excluding payroll and brokered deposits increased $66 million, or 1%, linked quarter, and increased $541 million, or 7%, year-over year. Equity. Total shareholders' equity increased $26 million, or 2%, linked quarter to $1.2 billion. The ratio of tangible common equity to tangible assets measured 10.1%, increasing from 9.9% linked quarter. Tangible book value per share grew 13% year-over-year to $26.12 at period-end. Proposed Transaction with Brookline Bancorp, Inc. On December 16, 2024, Berkshire Hills Bancorp, Inc., Commerce Acquisition Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Berkshire formed solely to facilitate the merger ("Merger Sub") and Brookline Bancorp, Inc., a Delaware corporation ("Brookline"), entered into an Agreement and Plan of Merger (the "Merger Agreement"). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Brookline, with Brookline as the surviving entity, and immediately thereafter, Brookline will merge with and into Berkshire, with Berkshire as the surviving entity (collectively, the "Merger"). As a result of the Merger, the separate corporate existence of Brookline will cease, and Berkshire will continue as the surviving corporation. Under the terms of the Merger Agreement, which was unanimously approved by the Boards of Directors of both companies, each outstanding share of Brookline common stock will be exchanged for the right to receive 0.42 shares of Berkshire common stock. Holders of Brookline common stock will receive cash in lieu of fractional shares of Berkshire common stock. As a result of the proposed transaction and a $100 million common stock offering completed by Berkshire to support the proposed transaction, Berkshire stockholders will own approximately 55% and Brookline stockholders will own approximately 45% of the outstanding shares of the combined company. The proposed transaction is expected to close in 2025, subject to satisfaction of customary closing conditions, including receipt of required regulatory approvals. Shareholders of both companies approved merger-related proposals in May 2025. Conference Call and Investor Presentation. Berkshire will conduct a conference call/webcast at 9:00 a.m. Eastern time on Thursday, July 24, 2025 to discuss results for the quarter and the Company's outlook. Instructions for listening to the call may be found at the Company's website at ir.berkshirebank.com. Additional materials relating to the call may also be accessed at this website. The call will be archived at the website and will be available for an extended period of time. Forward Looking Statements: This document contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these statements from the use of the words "may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," "remain," "target" and similar expressions. There are many factors that could cause actual results to differ significantly from expectations described in the forward-looking statements. For a discussion of such factors, please see the sections titled "Forward-Looking Statements" and "Risk Factors" in Berkshire's most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission and available on the SEC's website at www.sec.gov. These factors include, but are not limited to, the occurrence of any event, change or other circumstances that could give rise to the right of Berkshire or Brookline to terminate the merger agreement; the outcome of any legal proceedings that may be instituted against Berkshire or Brookline; delays in completing the proposed transaction with Brookline; the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction), or to satisfy any of the other conditions to the proposed transaction on a timely basis or at all, including the ability of Berkshire and Brookline to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the impact of certain restrictions during the pendency of the proposed transaction on the parties' ability to pursue certain business opportunities and strategic transactions; diversion of management's attention from ongoing business operations and opportunities; and potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction. You should not place undue reliance on forward-looking statements, which reflect our expectations only as of the date of this document. Berkshire does not undertake any obligation to update forward-looking statements. INVESTOR CONTACTKevin ConnInvestor Relations617.641.9206[email protected] MEDIA CONTACTGary LevanteCorporate Communications413.447.1737[email protected] Berkshire Hills Bancorp SELECTED FINANCIAL HIGHLIGHTS (1) At or for the Quarters Ended June 30, March 31, Dec. 31, Sept. 30, June 30, 2025 2025 2024 2024 2024 NOMINAL AND PER SHARE DATA Net earnings/(loss) per common share, diluted $ 0.66 $ 0.56 $ 0.46 $ 0.88 $ 0.57 Operating earnings per common share, diluted (2)(3) 0.69 0.60 0.60 0.58 0.55 Net income/(loss), (thousands) 30,366 25,719 19,657 37,509 24,025 Operating net income, (thousands) (2)(3) 31,587 27,621 25,982 24,789 23,168 Net interest income, (thousands) non FTE 91,921 89,771 86,855 88,059 88,532 Net interest income, FTE (5) 93,761 91,655 88,798 90,082 90,545 Total common shares outstanding, end of period (thousands) 46,303 46,377 46,424 42,982 42,959 Average diluted shares, (thousands) 46,007 46,061 43,064 42,454 42,508 Total book value per common share, end of period 26.40 25.81 25.15 24.90 23.58 Tangible book value per common share, end of period (2)(3) 26.12 25.50 24.82 24.53 23.18 Dividends declared per common share 0.18 0.18 0.18 0.18 0.18 Dividend payout ratio (6) 27.54 % 32.52 % 39.40 % 20.63 % 32.74 % PERFORMANCE RATIOS (4) Return on equity 9.97 % 8.63 % 7.18 % 14.29 % 9.49 % Operating return on equity (2)(3) 10.37 9.28 9.49 9.44 9.15 Return on tangible common equity (2)(3) 10.35 9.02 7.59 14.83 9.99 Operating return on tangible common equity (2)(3) 10.76 9.66 9.93 9.91 9.65 Return on assets 1.03 0.88 0.68 1.28 0.82 Operating return on assets (2)(3) 1.07 0.94 0.90 0.85 0.79 Net interest margin, FTE (5) 3.27 3.24 3.14 3.16 3.20 Efficiency ratio (3) 56.73 59.45 62.43 63.74 63.40 FINANCIAL DATA (in millions, end of period) Total assets $ 12,035 $ 12,013 $ 12,273 $ 11,605 $ 12,219 Total earning assets 11,346 11,334 11,523 10,922 11,510 Total loans 9,499 9,429 9,385 9,212 9,229 Total funding liabilities 10,565 10,564 10,813 10,285 10,907 Total deposits 9,979 9,880 10,375 9,577 9,621 Loans/deposits (%) 95 % 95 % 90 % 96 % 96 % Total accumulated other comprehensive (loss) net of tax, end of period $ (91) $ (95) $ (106) $ (89) $ (115) Total shareholders' equity 1,222 1,197 1,167 1,070 1,013 ASSET QUALITY Allowance for credit losses, (millions) $ 117 $ 117 $ 115 $ 112 $ 112 Net charge-offs, (millions) (3) (4) (3) (6) (2) Net charge-offs (QTD annualized)/average loans 0.14 % 0.15 % 0.14 % 0.24 % 0.07 % Provision (benefit)/expense, (millions) $ 4 $ 6 $ 6 $ 6 $ 6 Non-performing assets, (millions) 28 26 27 27 24 Non-performing loans/total loans 0.27 % 0.25 % 0.26 % 0.26 % 0.23 % Allowance for credit losses/non-performing loans 462 501 469 467 525 Allowance for credit losses/total loans 1.24 1.24 1.22 1.22 1.22 CAPITAL RATIO Tangible common shareholders' equity/tangible assets (3) 10.1 9.9 9.4 9.1 8.2 (1) All financial tables presented are unaudited. (2) Reconciliation of non-GAAP financial measures, including all references to operating and tangible amounts, appear on page 13 and 14. (3) Non-GAAP financial measure. Operating measurements are non-GAAP financial measures that are adjusted to exclude net non-operating charges primarily related to acquisitions and restructuring activities. See page 13 and 14 for reconciliations of non-GAAP financial measures. (4) All performance ratios are annualized and are based on average balance sheet amounts, where applicable. (5) Fully taxable equivalent considers the impact of tax advantaged investment securities and loans. (6) Dividend payout ratio is based on dividends declared. Berkshire Hills Bancorp CONSOLIDATED BALANCE SHEETS June 30, March 31, December 31, June 30, (in thousands) 2025 2025 2024 2024 Assets Cash and due from banks $ 131,970 $ 121,137 $ 182,776 $ 112,085 Short-term investments 670,761 705,199 945,633 988,207 Total cash and cash equivalents 802,731 826,336 1,128,409 1,100,292 Trading securities, at fair value 4,835 5,010 5,258 5,699 Equity securities, at fair value 647 647 655 12,736 Securities available for sale, at fair value 664,713 669,182 655,723 611,711 Securities held to maturity, at amortized cost 476,756 494,242 507,658 520,239 Federal Home Loan Bank stock 25,579 29,688 19,565 35,010 Total securities 1,172,530 1,198,769 1,188,859 1,185,395 Less: Allowance for credit losses on investment securities (63) (63) (64) (65) Net securities 1,172,467 1,198,706 1,188,795 1,185,330 Loans held for sale 4,014 1,322 3,076 52,072 Commercial real estate loans 4,898,078 4,882,927 4,848,824 4,706,810 Commercial and industrial loans 1,511,362 1,455,847 1,461,341 1,421,921 Residential mortgages 2,720,363 2,721,885 2,701,227 2,674,611 Consumer loans 369,046 368,226 373,602 425,184 Total loans 9,498,849 9,428,885 9,384,994 9,228,526 Less: Allowance for credit losses on loans (117,344) (116,678) (114,700) (112,167) Net loans 9,381,505 9,312,207 9,270,294 9,116,359 Premises and equipment, net 58,439 57,680 56,609 55,893 Other real estate owned 124 - - - Other intangible assets 12,809 13,936 15,064 17,319 Other assets 596,140 596,082 604,231 615,882 Assets held for sale 6,519 6,930 6,930 76,307 Total assets $ 12,034,748 $ 12,013,199 $ 12,273,408 $ 12,219,454 Liabilities and shareholders' equity Non-interest bearing deposits $ 2,296,268 $ 2,295,040 $ 2,324,879 $ 2,222,012 NOW and other deposits 814,600 789,418 841,406 766,641 Money market deposits 3,153,241 3,197,331 3,610,521 3,278,753 Savings deposits 1,105,009 1,065,530 1,021,716 1,004,320 Time deposits 2,609,913 2,532,558 2,576,682 2,349,733 Total deposits 9,979,031 9,879,877 10,375,204 9,621,459 Federal Home Loan Bank advances 463,861 562,921 316,482 689,606 Subordinated borrowings 121,736 121,674 121,612 121,487 Total borrowings 585,597 684,595 438,094 811,093 Other liabilities 247,809 251,967 292,686 287,312 Liabilities held for sale - - - 486,648 Total liabilities 10,812,437 10,816,439 11,105,984 11,206,512 Common shareholders' equity 1,222,311 1,196,760 1,167,424 1,012,942 Total shareholders' equity 1,222,311 1,196,760 1,167,424 1,012,942 Total liabilities and shareholders' equity $ 12,034,748 $ 12,013,199 $ 12,273,408 $ 12,219,454 Berkshire Hills Bancorp CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended Six Months Ended June 30, June 30, (in thousands, except per share data) 2025 2024 2025 2024 Interest income $ 151,469 $ 154,109 $ 299,799 $ 306,115 Interest expense 59,548 65,577 118,107 129,443 Net interest income, non FTE 91,921 88,532 181,692 176,672 Non-interest income Deposit related fees 8,193 8,561 16,142 16,866 Loan related fees 5,100 2,364 8,887 5,027 Gain on SBA loans 2,288 3,294 5,564 4,993 Wealth management fees 2,657 2,613 5,612 5,497 Fair value adjustments on securities 46 (42) (6) (157) Other 3,468 3,343 6,225 5,217 Total non-interest income excluding gains and losses 21,752 20,133 42,424 37,443 (Loss) on sale of securities - - - (49,909) Total non-interest income 21,752 20,133 42,424 (12,466) Total net revenue 113,673 108,665 224,116 164,206 Provision expense for credit losses 4,000 6,499 9,500 12,499 Non-interest expense Compensation and benefits 39,303 40,126 79,938 80,861 Occupancy and equipment 7,203 8,064 14,869 16,762 Technology 9,756 10,236 19,821 20,140 Professional services 961 2,757 2,675 5,433 Regulatory expenses 1,648 1,848 3,275 3,693 Amortization of intangible assets 1,128 1,140 2,256 2,345 Marketing 1,541 532 2,808 1,648 Merger, restructuring and other non-operating expenses 1,491 (384) 3,945 3,233 Other expenses 5,113 6,612 8,923 12,836 Total non-interest expense 68,144 70,931 138,510 146,951 Total non-interest expense excluding non-operating expenses 66,653 71,315 134,565 143,718 Income before income taxes 41,529 31,235 76,106 4,756 Income tax expense 11,163 7,210 20,021 919 Net income 30,366 24,025 56,085 3,837 Basic earnings per common share $ 0.66 $ 0.57 $ 1.23 $ 0.09 Diluted earnings per common share $ 0.66 $ 0.57 $ 1.22 $ 0.09 Weighted average shares outstanding: Basic 45,764 42,437 45,731 42,602 Diluted 46,007 42,508 46,042 42,763 Berkshire Hills Bancorp CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend) June 30, March 31, Dec. 31, Sept. 30, June 30, (in thousands, except per share data) 2025 2025 2024 2024 2024 Interest income $ 151,469 $ 148,330 $ 150,555 $ 157,268 $ 154,109 Interest expense 59,548 58,559 63,700 69,209 65,577 Net interest income, non FTE 91,921 89,771 86,855 88,059 88,532 Non-interest income Deposit related fees 8,193 7,949 8,237 8,656 8,561 Loan related fees 5,100 3,787 3,039 3,214 2,364 Gain on SBA loans 2,288 3,276 4,635 3,020 3,294 Wealth management fees 2,657 2,955 2,658 2,685 2,613 Fair value adjustments on securities 46 (52) (352) 516 (42) Other 3,468 2,757 4,943 3,416 3,343 Total non-interest income excluding gains and losses 21,752 20,672 23,160 21,507 20,133 Gain on sale of business operations and assets, net - - 193 16,048 - Loss on sale of securities - - (28) - - Total non-interest income 21,752 20,672 23,325 37,555 20,133 Total net revenue 113,673 110,443 110,180 125,614 108,665 Provision expense for credit losses 4,000 5,500 6,000 5,500 6,499 Non-interest expense Compensation and benefits 39,303 40,635 38,929 40,663 40,126 Occupancy and equipment 7,203 7,666 7,334 7,373 8,064 Technology 9,756 10,065 10,241 10,014 10,236 Professional services 961 1,714 2,765 2,109 2,757 Regulatory expenses 1,648 1,627 1,851 1,851 1,848 Amortization of intangible assets 1,128 1,128 1,128 1,128 1,140 Marketing 1,541 1,267 2,013 861 532 Merger, restructuring and other non-operating expenses 1,491 2,454 6,557 (297) (384) Other expenses 5,113 3,810 6,757 8,258 6,612 Total non-interest expense 68,144 70,366 77,575 71,960 70,931 Total non-interest expense excluding non-operating expenses 66,653 67,912 71,018 72,257 71,315 Income/(loss) before income taxes $ 41,529 $ 34,577 $ 26,605 $ 48,154 $ 31,235 Income tax expense/(benefit) 11,163 8,858 6,948 10,645 7,210 Net income/(loss) $ 30,366 $ 25,719 $ 19,657 $ 37,509 $ 24,025 Diluted earnings/(loss) per common share $ 0.66 $ 0.56 $ 0.46 $ 0.88 $ 0.57 Weighted average shares outstanding: Basic 45,764 45,684 42,661 42,170 42,437 Diluted 46,007 46,061 43,064 42,454 42,508 Berkshire Hills Bancorp AVERAGE BALANCES AND AVERAGE YIELDS AND COSTS Quarters Ended June 30, 2025 March 31, 2025 June 30, 2024 (in millions) Average Balance Interest (1) AverageYield/Rate Average Balance Interest (1) AverageYield/Rate Average Balance Interest (1) AverageYield/Rate Assets Commercial real estate $ 4,903 76 6.19 % $ 4,865 $ 75 6.19 % 4,649 77 6.52 % Commercial and industrial loans 1,501 27 6.99 1,446 25 7.00 1,384 27 7.62 Residential mortgages 2,711 30 4.39 2,708 30 4.35 2,694 28 4.21 Consumer loans 369 5 6.58 370 6 6.57 430 8 7.47 Total loans 9,484 138 5.82 9,389 136 5.80 9,157 140 6.05 Securities (2) 1,299 8 2.59 1,312 9 2.62 1,332 8 2.44 Short-term investments and loans held for sale 540 5 4.31 534 6 4.19 597 8 5.07 New York branch loans held for sale (3) - - - - - - 57 1 5.86 Total earning assets 11,323 151 5.38 11,235 151 5.35 11,143 157 5.57 Goodwill and other intangible assets 13 14 18 Other assets 513 505 531 Total assets 11,849 $ 11,754 11,692 Non-interest-bearing demand deposits 2,281 $ - - % $ 2,262 $ - - % 2,244 $ - - % NOW and other 800 3 1.48 758 2 1.32 763 3 1.44 Money market 3,095 23 2.92 3,247 23 2.87 2,909 24 3.32 Savings 1,081 3 1.24 1,038 3 1.13 1,004 3 1.06 Time 2,560 24 3.73 2,542 25 3.91 2,376 25 4.22 Total deposits 9,817 53 2.15 9,847 53 2.18 9,296 55 2.35 Borrowings (4) 590 7 4.65 463 6 4.90 610 9 5.55 New York branch non-interest-bearing deposits held for sale (3) - - - - - - 97 - - New York branch interest-bearing deposits held for sale (3) - - - - - - 386 3 2.80 Total funding liabilities 10,407 60 2.29 10,310 59 2.30 10,389 67 2.53 Other liabilities 224 253 290 Total liabilities 10,631 10,563 10,679 Common shareholders' equity (5) 1,218 1,191 1,013 Total shareholders' equity 1,218 1,191 1,013 Total liabilities and shareholders' equity 11,849 $ 11,754 11,692 Net interest margin, FTE 3.27 3.24 3.20 Supplementary data Net Interest Income, non FTE 91,921 89,771 88,532 FTE income adjustment 1,840 1,884 2,013 Net Interest Income, FTE 93,761 91,655 90,545 (1) Interest income and expense presented on a fully taxable equivalent basis. (2) Average balances for securities available-for-sale are based on amortized cost. (3) New York branch loans and deposits moved to held for sale on March 4, 2024. (4) Average balances for borrowings includes the financing lease obligation which is presented under other liabilities on the consolidated balance sheet. (5) Unrealized gains and losses, net of tax, are included in average equity. Berkshire Hills Bancorp ASSET QUALITY ANALYSIS At or for the Quarters Ended June 30, March 31, December 31, September 30, June 30, (in thousands) 2025 2025 2024 2024 2024 NON-PERFORMING ASSETS Commercial real estate $ 9,869 $ 9,742 $ 10,393 $ 10,270 $ 5,976 Commercial and industrial loans 11,512 8,998 9,156 8,227 8,489 Residential mortgages 3,289 3,684 3,830 4,348 5,491 Consumer loans 734 856 1,068 1,124 1,392 Total non-performing loans 25,404 23,280 24,447 23,969 21,348 Repossessed assets 2,384 2,288 2,280 2,563 2,549 Total non-performing assets $ 27,788 $ 25,568 $ 26,727 $ 26,532 $ 23,897 Total non-performing loans/total loans 0.27 % 0.25 % 0.26 % 0.26 % 0.23 % Total non-performing assets/total assets 0.23 % 0.21 % 0.22 % 0.23 % 0.20 % PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS Balance at beginning of period $ 116,678 $ 114,700 $ 112,047 $ 112,167 $ 107,331 Charged-off loans (4,348) (6,256) (4,553) (7,091) (3,246) Recoveries on charged-off loans 1,014 2,734 1,206 1,471 1,583 Net loans charged-off (3,334) (3,522) (3,347) (5,620) (1,663) Provision expense for loan credit losses 4,000 5,500 6,000 5,500 6,499 Balance at end of period $ 117,344 $ 116,678 $ 114,700 $ 112,047 $ 112,167 Allowance for credit losses/total loans 1.24 % 1.24 % 1.22 % 1.22 % 1.22 % Allowance for credit losses/non-performing loans 462 % 501 % 469 % 467 % 525 % NET LOAN CHARGE-OFFS Commercial real estate $ (338) $ (991) $ (121) $ (999) $ 22 Commercial and industrial loans (3,232) (1,518) (2,309) (1,009) (711) Residential mortgages 48 161 552 273 316 Home equity (13) 102 1 3 8 Other consumer loans 205 (1,276) (1,470) (3,888) (1,298) Total, net $ (3,330) $ (3,522) $ (3,347) $ (5,620) $ (1,663) Net charge-offs (QTD annualized)/average loans 0.14 % 0.15 % 0.14 % 0.24 % 0.07 % Net charge-offs (YTD annualized)/average loans 0.15 % 0.15 % 0.16 % 0.16 % 0.13 % DELINQUENT AND NON-PERFORMING LOANS Balance Percent of TotalLoans Balance Percent of Total Loans Balance Percent of Total Loans Balance Percentof Total Loans Balance Percent of TotalLoans 30-89 Days delinquent $ 15,263 0.16 % $ 9,783 0.10 % $ 17,591 0.19 % $ 18,526 0.20 % $ 18,494 0.20 % 90+ Days delinquent and still accruing 4,675 0.05 % 6,858 0.07 % 6,417 0.07 % 6,280 0.07 % 11,672 0.13 % Total accruing delinquent loans 19,938 0.21 % 16,641 0.17 % 24,008 0.26 % 24,806 0.27 % 30,166 0.33 % Non-performing loans 25,404 0.27 % 23,280 0.25 % 24,447 0.26 % 23,969 0.26 % 21,348 0.23 % Total delinquent and non-performing loans $ 45,342 0.48 % $ 39,921 0.42 % $ 48,455 0.52 % $ 48,775 0.53 % $ 51,514 0.56 % NON-GAAP FINANCIAL MEASURES This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles ("GAAP"). These non-GAAP measures are intended to provide the reader with additional supplemental perspectives on operating results, performance trends, and financial condition. Non-GAAP financial measures 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 provided below. In all cases, it should be understood that non-GAAP measures do not depict amounts that accrue directly to the benefit of shareholders. An item which management excludes when computing non-GAAP operating earnings can be of substantial importance to the Company's results for any particular quarter or year. The Company's non-GAAP operating earnings information set forth is not necessarily comparable to non-GAAP information which may be presented by other companies. Each non-GAAP measure used by the Company in this report as supplemental financial data should be considered in conjunction with the Company's GAAP financial information. The Company utilizes the non-GAAP measure of operating earnings in evaluating operating trends, including components for operating revenue and expense. These measures exclude amounts which the Company views as unrelated to its normalized operations. These items primarily include restructuring costs. Restructuring costs generally consist of costs and losses associated with the disposition of assets and liabilities and lease terminations, including costs related to branch consolidations. The Company also calculates operating earnings per share based on its measure of operating earnings and diluted common shares. The Company views these amounts as important to understanding its operating trends, particularly due to the impact of accounting standards related to merger and acquisition activity. Analysts also rely on these measures in estimating and evaluating the Company's performance. Adjustments in 2025 were primarily related to the pending merger. Adjustments in 2024 were primarily related to the pending merger, branch sales and consolidations, and loss on sale of securities. Management believes that the computation of non-GAAP operating earnings and operating earnings per share may facilitate the comparison of the Company to other companies in the financial services industry. The Company also adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community. Berkshire Hills Bancorp RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA At or for the Quarters Ended June 30, March 31, Dec. 31, Sept. 30, June 30, (in thousands) 2025 2025 2024 2024 2024 Total non-interest income $ 21,752 $ 20,672 $ 23,325 $ 37,555 $ 20,133 Adj: Net (gains) on sale of business operations and assets - - (193) (16,048) - Adj: Loss on sale of securities - - 28 - - Total operating non-interest income (1) $ 21,752 $ 20,672 $ 23,160 $ 21,507 $ 20,133 Total revenue (A) $ 113,673 $ 110,443 $ 110,180 $ 125,614 $ 108,665 Adj: Net (gains) on sale of business operations and assets - - (193) (16,048) - Adj: Loss on sale of securities - - 28 - - Total operating revenue (1) (B) $ 113,673 $ 110,443 $ 110,015 $ 109,566 $ 108,665 Total non-interest expense (C) $ 68,144 $ 70,366 $ 77,575 $ 71,960 $ 70,931 Adj: Merger, restructuring and other non-operating expenses (1,491) (2,454) (6,557) 297 384 Operating non-interest expense (1) (D) $ 66,653 $ 67,912 $ 71,018 $ 72,257 $ 71,315 Pre-tax, pre-provision net revenue (PPNR) (A-C) $ 45,529 $ 40,077 $ 32,605 $ 53,654 $ 37,734 Operating pre-tax, pre-provision net revenue (PPNR) (1) (B-D) 47,020 42,531 38,997 37,309 37,350 Net income/(loss) $ 30,366 $ 25,719 $ 19,657 $ 37,509 $ 24,025 Adj: Net (gains) on sale of business operations and assets - - (193) (16,048) - Adj: Loss on sale of securities - - 28 - - Adj: Merger, restructuring expense and other non-operating expenses 1,491 2,454 6,557 (297) (384) Adj: Income taxes (expense)/benefit (270) (552) (67) 3,625 (473) Total operating income (1) (E) $ 31,587 $ 27,621 $ 25,982 $ 24,789 $ 23,168 (in millions, except per share data) Total average assets (F) $ 11,849 $ 11,754 $ 11,596 $ 11,695 $ 11,692 Total average shareholders' equity (G) 1,218 1,191 1,095 1,050 1,013 Total average tangible shareholders' equity (1) (I) 1,205 1,177 1,080 1,034 995 Total accumulated other comprehensive (loss) net of tax, end of period (91) (95) (106) (89) (115) Total tangible shareholders' equity, end of period (1) (K) 1,210 1,183 1,152 1,054 996 Total tangible assets, end of period (1) (L) 12,022 11,999 12,258 11,588 12,202 Total common shares outstanding, end of period (thousands) (M) 46,303 46,377 46,424 42,982 42,959 Average diluted shares outstanding (thousands) (N) 46,007 46,061 43,064 42,454 42,508 Earnings/(loss) per common share, diluted (1) $ 0.66 $ 0.56 $ 0.46 $ 0.88 $ 0.57 Operating earnings per common share, diluted (1) (E/N) 0.69 0.60 0.60 0.58 0.55 Tangible book value per common share, end of period (1) (K/M) 26.12 25.50 24.82 24.53 23.18 Total tangible shareholders' equity/total tangible assets (1) (K/L) 10.06 9.86 9.40 9.10 8.16 Performance ratios (2) Return on equity 9.97 % 8.63 % 7.18 % 14.29 % 9.49 % Operating return on equity (1) (E/G) 10.37 9.28 9.49 9.44 9.15 Return on tangible common equity (1)(3) 10.35 9.02 7.59 14.83 9.99 Operating return on tangible common equity (1)(3) (E+Q)/(I) 10.76 9.66 9.93 9.91 9.65 Return on assets 1.03 0.88 0.68 1.28 0.82 Operating return on assets (1) (E/F) 1.07 0.94 0.90 0.85 0.79 Efficiency ratio (1) (D-Q)/(B+R) 56.73 59.45 62.43 63.74 63.40 Supplementary data (in thousands) Effective tax rate 26.9 % 25.6 % 26.1 % 22.1 % 23.1 % Intangible amortization (Q) $ 1,128 $ 1,128 $ 1,128 $ 1,128 $ 1,140 Fully taxable equivalent income adjustment (R) 1,840 1,884 1,943 2,023 2,013 (1) Non-GAAP financial measure. (2) Ratios are annualized and based on average balance sheet amounts, where applicable. Quarterly data may not sum to year-to-date data due to rounding. (3) Amortization of intangible assets is adjusted assuming a 27% marginal tax rate. Berkshire Hills Bancorp RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA - UNAUDITED At or for the Six Months Ended June 30, June 30, (in thousands) 2025 2024 Total non-interest income $ 42,424 $ (12,466) Adj: Loss on sale of securities - 49,909 Total operating non-interest income (1) $ 42,424 $ 37,443 Total revenue (A) $ 224,116 $ 164,206 Adj: Net (gains) on sale of business operations and assets - - Adj: Loss on sale of securities - 49,909 Total operating revenue (1) (B) $ 224,116 $ 214,115 Total non-interest expense (C) $ 138,510 $ 146,951 Less: Merger, restructuring and other non-operating expenses (3,945) (3,233) Operating non-interest expense (1) (D) $ 134,565 $ 143,718 Pre-tax, pre-provision net revenue (PPNR) (A-C) $ 85,606 $ 17,255 Operating pre-tax, pre-provision net revenue (PPNR) (1) (B-D) 89,551 70,397 Net income $ 56,085 $ 3,837 Adj: Loss on sale of securities - 49,909 Adj: Merger, restructuring expense and other non-operating expenses 3,945 3,233 Adj: Income taxes (expense)/benefit (822) (12,877) Total operating income (1) (E) $ 59,208 $ 44,102 (in millions, except per share data) Total average assets (F) $ 11,802 $ 11,723 Total average shareholders' equity (G) 1,205 1,015 Total average tangible shareholders' equity (1) (I) 1,191 997 Total accumulated other comprehensive (loss) net of tax, end of period (91) (115) Total tangible shareholders' equity, end of period (1) (K) 1,210 996 Total tangible assets, end of period (1) (L) 12,022 12,202 Total common shares outstanding, end of period (thousands) (M) 46,303 42,959 Average diluted shares outstanding (thousands) (N) 46,042 42,763 Earnings/(loss) per common share, diluted (1) $ 1.22 $ 0.09 Operating earnings per common share, diluted (1) (E/N) 1.29 1.03 Tangible book value per common share, end of period (1) (K/M) 26.12 23.18 Total tangible shareholders' equity/total tangible assets (1) (K/L) 10.06 8.16 Performance ratios (2) Return on equity 9.31 % 0.76 % Operating return on equity (1) (E/G) 9.83 8.69 Return on tangible common equity (1)(3) 9.69 1.11 Operating return on tangible common equity (1)(3) (E+Q)/(I) 10.22 9.19 Return on assets 0.95 0.07 Operating return on assets (1) (E/F) 1.00 0.75 Efficiency ratio (1) (D-Q)/(B+R) 58.07 64.81 Net interest margin, FTE 3.26 3.18 Supplementary data (in thousands) Intangible amortization (Q) $ 2,256 $ 2,345 Fully taxable equivalent income adjustment (R) 3,724 4,019 (1) Non-GAAP financial measure. (2) Ratios are annualized and based on average balance sheet amounts, where applicable. Quarterly data may not sum to year-to-date data due to rounding. (3) Amortization of intangible assets is adjusted assuming a 27% marginal tax rate. SOURCE Berkshire Hills Bancorp, Inc. WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

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