Berkshire Hills Reports Strong Fourth Quarter Operating Results

$0.46 GAAP EPS; $0.60 Operating EPS Operating EPS growth of 3% quarter-over-quarter and 28% year-over-year; FY2024 Operating EPS of $2.22 up 4% year-over-year Average deposit growth of 3% and Average loan growth of 0.4% quarter-over-quarter; Loans to deposits ratio improved further during the quarter 0.52% delinquent and non-performing loans to total loans, lowest in nearly two decades 7.6% return on tangible common equity; 9.9% operating return on tangible common equity 13.0% common equity Tier 1 ratio , /PRNewswire/ -- Berkshire Hills Bancorp, Inc. (NYSE: BHLB) today reported results for the fourth quarter of 2024. These results along with comparison periods are summarized below: ($ in millions, except per share data) Three Months Ended Twelve Months Ended Dec. 31, 2024 Sep. 30, 2024 Dec. 31, 2023 Dec. 31, 2024 Dec. 31, 2023 Net income (loss) $ 19.7 $ 37.5 $ (1.4) $ 61.0 $ 69.6 Per share 0.46 0.88 (0.03) 1.43 1.60 Operating earnings1 26.0 24.8 20.2 94.9 93.2 Per share 0.60 0.58 0.47 2.22 2.14 Net interest income, non FTE $ 86.9 $ 88.1 $ 88.4 $ 351.6 $ 369.0 Net interest income, FTE 88.8 90.1 90.4 359.6 376.9 Net interest margin, FTE 3.14 % 3.16 % 3.11 % 3.16 % 3.27 % Non-interest income 23.3 37.6 (8.4) 48.4 42.8 Operating non-interest income1 23.2 21.5 16.7 82.1 67.8 Non-interest expense $ 77.6 $ 72.0 $ 79.0 $ 296.5 $ 301.5 Operating non-interest expense1 71.0 72.3 75.3 287.0 295.2 Efficiency ratio1 62.4 % 63.7 % 67.8 % 63.9 % 63.9 % Average balances Loans $ 9,271 $ 9,233 $ 8,990 $ 9,176 $ 8,814 Deposits 9,659 9,360 9,936 9,536 9,704 Period-end balances Loans 9,385 9,212 9,040 9,385 9,040 Deposits 10,375 9,577 10,633 10,375 10,633 1. See non-GAAP financial measures and reconciliation to GAAP measures beginning on page 12. 1 Berkshire CEO Nitin Mhatre stated, "Berkshire continued its positive momentum and finished the year strong, highlighted by a year-over-year 28% increase in fourth quarter operating EPS and a 4% increase for full year operating EPS. This reflected the cumulative benefit of ongoing growth initiatives together with strategic optimization initiatives including the branch network sales and consolidations, and the sales of securities and targeted loan portfolios. Our results also benefited from strong credit discipline, rigorous expense management, investments in new client-facing bankers and enhancements to our digital platform and consumer product offerings. We achieved a 9.9% operating return on tangible common equity in the fourth quarter, and 9.6% for the full year, following a 10.1% result for the year 2023. Berkshire has been recognized by Newsweek as one of America's Best Regional Banks for the third year in a row, and our positive impact in the community was recognized by the American Bankers Association." Mr. Mhatre continued, "In December we announced a definitive agreement with Brookline Bancorp, Inc. for a merger of equals to create a preeminent Northeast banking franchise positioned to deliver an exceptional client experience and create greater value for shareholders. We had a strong response from investors and successfully executed a capital raise of $100 million of common stock to support the merger, a reflection of confidence in our plans and accomplishments. I want to thank our teams for their continued dedication to transforming our franchise and for their service to our stakeholders as we work toward an exciting new chapter." Berkshire CFO Brett Brbovic added, "Quarter-over-quarter operating income increased 5% on higher fee revenue and lower operating expense. The efficiency ratio was 62.4%, an improvement over prior periods. We posted a solid 3% growth in average deposits improving our loans to deposits profile further. The 4Q24 net interest margin was 3.14%, down 2 basis points linked quarter and up 3 basis points year over year. Asset quality remained solid, and liquidity and capital strength improved. Tangible book value per share advanced 1% linked quarter and 9% year-over-year." As of and For the Three Months Ended Dec. 31, 2024 Sept. 30, 2024 Dec. 31, 2023 Asset Quality Net loan charge-offs to average loans 0.14 % 0.24 % 0.20 % Non-performing loans to total loans 0.26 % 0.26 % 0.24 % Returns Return on average assets 0.68 % 1.28 % (0.05) % Operating return on average assets1 0.90 % 0.85 % 0.68 % Return on tangible common equity1 7.59 % 14.83 % (0.24) % Operating return on tangible common equity1 9.93 % 9.91 % 8.90 % Capital Ratios2 Tangible common equity/tangible assets1 9.4 % 9.1 % 8.0 % Tier 1 leverage 11.0 % 9.9 % 9.6 % Common equity Tier 1 13.0 % 11.9 % 12.0 % Tier 1 risk-based 13.2 % 12.2 % 12.3 % Total risk-based 15.4 % 14.4 % 14.4 % 1. See non-GAAP measures and reconciliation to GAAP beginning on page 12. All performance ratios are annualized and are basedon average balance sheet amounts, where applicable. 2. Presented as estimated for December 31, 2024 and actual for the remaining periods. 2 Berkshire Hills Bancorp, Inc. (NYSE: BHLB) is the parent company of Berkshire Bank, a relationship-driven, community-focused bank with $12.3 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 $12 billion in assets and branches in Massachusetts, Rhode Island, and New York. Q4 2024 Financial Highlights (comparisons are to the prior quarter unless otherwise noted). Income Statement. Fourth quarter GAAP income was $20 million, or $0.46 per share. Operating earnings totaled $26 million, or $0.60 per share. GAAP results included $6.6 million in non-operating expenses related primarily to the pending merger. Operating earnings increased $1.2 million, or 5%, linked quarter primarily due to a $1.2 million decrease in operating non-interest expense. The fourth quarter was the first full quarter after the ten branch sale. Fourth quarter operating EPS increased 3% linked quarter and 28% year-over-year, reflecting full year organic growth, improved efficiency, and lower provision expense. For the full year 2024, GAAP income was $61 million, or $1.43 per share, compared to $70 million, or $1.60 per share, in 2023. Full year 2024 operating income was $95 million, or $2.22 per share, increasing from $93 million, or $2.14 per share, in 2023. The increase in operating income included the benefit of decreases in credit loss provision expense and in operating expenses, offset by the impact of a lower net interest margin. The fourth quarter efficiency ratio improved to 62.4% from 63.7% linked quarter. Quarterly net interest income decreased linked quarter by $1.2 million to $87 million in 4Q24. The net interest margin decreased 2 basis points to 3.14%. The earning asset yield decreased 20 basis points. The loan yield decreased 23 basis points. The cost of funds decreased 17 basis points. The cost of deposits decreased 12 basis points. Provision for credit losses totaled $6 million, increasing $0.5 million linked quarter. Net loan charge-offs totaled $3.3 million, compared to $5.6 million linked quarter. The annualized loan net charge-off ratio was 0.14% for the quarter and 0.16% for the year. GAAP and operating non-interest income was $23 million. GAAP non-interest income decreased $14 million linked quarter due to a $16 million branch sale gain recorded in the prior quarter. Operating non-interest income increased $1.7 million linked quarter due primarily to higher SBA loan sale gains. Non-interest expense totaled $78 million on a GAAP basis and $71 million on an operating basis. GAAP non-interest expense increased $6 million linked quarter due to merger expenses recorded in the fourth quarter. Operating non-interest expense decreased $1.2 million linked quarter. The effective tax rate was 26% for the quarter and 23% for the year. The tax rate on operating income was 21% for the quarter and 23% for the year. 3 Loans. Compared to the linked quarter, total loans increased $173 million, or 2% to $9.4 billion. For the year, total loans increased $489 million, or 5%, excluding $144 million in consumer and mortgage loans sold in the branch sale and other transactions. Commercial real estate loans increased $107 million, or 2%, to $4.8 billion compared to the linked quarter. Commercial and industrial loans increased $52 million, or 4%, to $1.5 billion. Residential mortgage loans increased $13 million to $2.7 billion. Consumer loans increased $1 million to $374 million. The quarter-end allowance for credit losses on loans was unchanged linked quarter at 1.22% of total loans, and up from 1.17% at year-end 2023. Non-performing loans to total loans was unchanged at 0.26% for the quarter. Delinquent and non-performing loans were 0.52% of total loans, the lowest level in nearly two decades. Deposits. Compared to the linked quarter, total deposits increased $798 million to $10.4 billion. Total deposits excluding payroll and brokered deposits increased 3% linked quarter. For the year, total deposits increased $125 million, or 1%, excluding $383 million in deposits sold in the branch sale. Non-interest bearing deposits increased linked quarter by $57 million, or 3%,to $2.3 billion. Time deposits increased linked quarter by $57 million, or 2%, to $2.6 billion. Equity. Total shareholders' equity increased linked quarter by $97 million, or 9%, to $1.2 billion including a successful $100 million common stock issuance. For the year, equity increased by $155 million, or 15%. The ratio of tangible common equity to tangible assets measured 9.4% at period end. Conference Call and Investor Presentation. Berkshire will conduct a conference call/webcast at 9:00 a.m. Eastern time on Thursday, January 30, 2025 to discuss results for the quarter and provide guidance about expected future results. 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. 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. 4 INVESTOR CONTACTKevin ConnInvestor Relations617.641.9206[email protected] MEDIA CONTACTGary LevanteCorporate Communications413.447.1737[email protected] 5 BERKSHIRE HILLS BANCORP, INC. SELECTED FINANCIAL HIGHLIGHTS (1) At or for the Quarters Ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, 2024 2024 2024 2024 2023 NOMINAL AND PER SHARE DATA Net earnings/(loss) per common share, diluted $ 0.46 $ 0.88 $ 0.57 $ (0.47) $ (0.03) Operating earnings per common share, diluted (2)(3) 0.60 0.58 0.55 0.49 0.47 Net income/(loss), (thousands) 19,657 37,509 24,025 (20,188) (1,445) Operating net income, (thousands) (2)(3) 25,982 24,789 23,168 20,934 20,190 Net interest income, (thousands) non FTE 86,855 88,059 88,532 88,140 88,421 Net interest income, FTE (5) 88,798 90,082 90,545 90,146 90,442 Total common shares outstanding, end of period (thousands) 46,424 42,982 42,959 43,415 43,501 Average diluted shares, (thousands) 43,064 42,454 42,508 43,028 43,101 Total book value per common share, end of period 25.15 24.90 23.58 23.26 23.27 Tangible book value per common share, end of period (2)(3) 24.82 24.53 23.18 22.84 22.82 Dividends declared per common share 0.18 0.18 0.18 0.18 0.18 Dividend payout ratio (7) 39.40 % 20.63 % 32.74 % N/M % N/M % PERFORMANCE RATIOS (4) Return on equity 7.18 % 14.29 % 9.49 % (7.93) % (0.60) % Operating return on equity (2)(3) 9.49 9.44 9.15 8.23 8.36 Return on tangible common equity (2)(3) 7.59 14.83 9.99 (7.73) (0.24) Operating return on tangible common equity (2)(3) 9.93 9.91 9.65 8.73 8.90 Return on assets 0.68 1.28 0.82 (0.69) (0.05) Operating return on assets (2)(3) 0.90 0.85 0.79 0.71 0.68 Net interest margin, FTE (5) 3.14 3.16 3.20 3.15 3.11 Efficiency ratio (3) 62.43 63.74 63.40 66.26 67.77 FINANCIAL DATA (in millions, end of period) Total assets $ 12,273 $ 11,605 $ 12,219 $ 12,147 $ 12,431 Total earning assets 11,523 10,922 11,510 11,430 11,705 Total loans 9,385 9,212 9,229 9,086 9,040 Total funding liabilities 10,813 10,285 10,907 10,826 11,140 Total deposits 10,375 9,577 9,621 9,883 10,633 Loans/deposits (%) 90 % 96 % 96 % 92 % 85 % Total accumulated other comprehensive (loss) net of tax, end of period $ (106) $ (89) $ (115) $ (114) $ (143) Total shareholders' equity 1,167 1,070 1,013 1,010 1,012 ASSET QUALITY Allowance for credit losses, (millions) $ 115 $ 112 $ 112 $ 107 $ 105 Net charge-offs, (millions) (3) (6) (2) (4) (4) Net charge-offs (QTD annualized)/average loans 0.14 % 0.24 % 0.07 % 0.18 % 0.20 % Provision (benefit)/expense, (millions) $ 6 $ 6 $ 6 $ 6 $ 7 Non-performing assets, (millions) 27 27 24 24 24 Non-performing loans/total loans 0.26 % 0.26 % 0.23 % 0.24 % 0.24 % Allowance for credit losses/non-performing loans 469 467 525 500 492 Allowance for credit losses/total loans 1.22 1.22 1.22 1.18 1.17 CAPITAL RATIOS Risk weighted assets, (millions)(6) $ 9,747 $ 9,651 $ 9,604 $ 9,615 $ 9,552 Common equity Tier 1 capital to risk weighted assets (6) 13.0 % 11.9 % 11.6 % 11.6 % 12.0 % Tier 1 capital leverage ratio (6) 11.0 9.9 9.6 9.5 9.6 Tangible common shareholders' equity/tangible assets (3) 9.4 9.1 8.2 8.2 8.0 (1) All financial tables presented are unaudited. (2) Reconciliations of non-GAAP financial measures, including all references to operating and tangible amounts, appear on pages 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 pages 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) Presented as projected for December 31, 2024 and actual for the remaining periods. (7) Dividend payout ratio is based on dividends declared. 6 BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED BALANCE SHEETS December 31, September 30, December 31, (in thousands) 2024 2024 2023 Assets Cash and due from banks $ 182,776 $ 134,056 $ 148,148 Short-term investments 945,633 435,911 1,055,096 Total cash and cash equivalents 1,128,409 569,967 1,203,244 Trading securities, at fair value 5,258 5,560 6,142 Equity securities, at fair value 655 13,278 13,029 Securities available for sale, at fair value 655,723 661,740 1,022,285 Securities held to maturity, at amortized cost 507,658 512,277 543,351 Federal Home Loan Bank stock 19,565 30,685 22,689 Total securities 1,188,859 1,223,540 1,607,496 Less: Allowance for credit losses on investment securities (64) (65) (68) Net securities 1,188,795 1,223,475 1,607,428 Loans held for sale 3,076 50,634 2,237 Commercial real estate loans 4,848,824 4,741,689 4,527,012 Commercial and industrial loans 1,461,341 1,409,538 1,352,834 Residential mortgages 2,701,227 2,688,709 2,672,677 Consumer loans 373,602 372,386 487,163 Total loans 9,384,994 9,212,322 9,039,686 Less: Allowance for credit losses on loans (114,700) (112,047) (105,357) Net loans 9,270,294 9,100,275 8,934,329 Premises and equipment, net 56,609 54,667 68,915 Other intangible assets 15,064 16,192 19,664 Other assets 604,231 582,422 584,066 Assets held for sale 6,930 6,930 10,938 Total assets $ 12,273,408 $ 11,604,562 $ 12,430,821 Liabilities and shareholders' equity Non-interest bearing deposits $ 2,324,879 $ 2,267,595 $ 2,469,164 NOW and other deposits 841,406 748,737 858,644 Money market deposits 3,610,521 3,042,712 3,565,516 Savings deposits 1,021,716 998,549 1,053,810 Time deposits 2,576,682 2,519,896 2,686,250 Total deposits 10,375,204 9,577,489 10,633,384 Federal Home Loan Bank advances 316,482 585,542 385,223 Subordinated borrowings 121,612 121,549 121,363 Total borrowings 438,094 707,091 506,586 Other liabilities 292,686 249,531 278,630 Total liabilities 11,105,984 10,534,111 11,418,600 Common shareholders' equity 1,167,424 1,070,451 1,012,221 Total shareholders' equity 1,167,424 1,070,451 1,012,221 Total liabilities and shareholders' equity $ 12,273,408 $ 11,604,562 $ 12,430,821 7 BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended Years Ended December 31, December 31, (in thousands, except per share data) 2024 2023 2024 2023 Interest income $ 150,555 $ 150,537 $ 613,938 $ 576,299 Interest expense 63,700 62,116 262,352 207,252 Net interest income, non FTE 86,855 88,421 351,586 369,047 Non-interest income Deposit related fees 8,237 8,481 33,759 34,155 Loan related fees 3,039 2,058 11,280 10,595 Gain on SBA loans 4,635 2,382 12,648 10,334 Wealth management fees 2,658 2,394 10,840 10,197 Fair value adjustments on securities (352) 768 7 513 Other 4,943 591 13,576 2,045 Total non-interest income excluding gains and losses 23,160 16,674 82,110 67,839 Gain on sale of business operations and assets, net 193 - 16,241 - (Loss) on sale of securities (28) (25,057) (49,937) (25,057) Total non-interest income 23,325 (8,383) 48,414 42,782 Total net revenue 110,180 80,038 400,000 411,829 Provision expense for credit losses 6,000 7,000 23,999 31,999 Non-interest expense Compensation and benefits 38,929 40,095 160,453 159,281 Occupancy and equipment 7,334 8,553 31,469 35,718 Technology 10,241 11,326 40,395 41,878 Professional services 2,765 3,417 10,307 11,643 Regulatory expenses 1,851 1,854 7,395 7,019 Amortization of intangible assets 1,128 1,205 4,601 4,820 Marketing 2,013 1,107 4,522 5,377 Merger, restructuring and other non-operating expenses 6,557 3,669 9,493 6,261 Other expenses 6,757 7,766 27,851 29,511 Total non-interest expense 77,575 78,992 296,486 301,508 Total non-interest expense excluding non-operating expenses 71,018 75,323 286,993 295,247 Income before income taxes $ 26,605 $ (5,954) $ 79,515 $ 78,322 Income tax expense 6,948 (4,509) 18,512 8,724 Net income $ 19,657 $ (1,445) $ 61,003 $ 69,598 Basic earnings per common share $ 0.46 $ (0.03) $ 1.44 $ 1.61 Diluted earnings per common share $ 0.46 $ (0.03) $ 1.43 $ 1.60 Weighted average shares outstanding: Basic 42,661 42,852 42,508 43,288 Diluted 43,064 43,101 42,761 43,504 8 BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend) Dec. 31, Sept. 30, June 30, March 31, Dec. 31, (in thousands, except per share data) 2024 2024 2024 2024 2023 Interest income $ 150,555 $ 157,268 $ 154,109 $ 152,006 $ 150,537 Interest expense 63,700 69,209 65,577 63,866 62,116 Net interest income, non FTE 86,855 88,059 88,532 88,140 88,421 Non-interest income Deposit related fees 8,237 8,656 8,561 8,305 8,481 Loan related fees 3,039 3,214 2,364 2,663 2,058 Gain on SBA loans 4,635 3,020 3,294 1,699 2,382 Wealth management fees 2,658 2,685 2,613 2,884 2,394 Fair value adjustments on securities (352) 516 (42) (115) 768 Other 4,943 3,416 3,343 1,874 591 Total non-interest income excluding gains and losses 23,160 21,507 20,133 17,310 16,674 Gain on sale of business operations and assets, net 193 16,048 - - - Loss on sale of securities (28) - - (49,909) (25,057) Total non-interest income 23,325 37,555 20,133 (32,599) (8,383) Total net revenue 110,180 125,614 108,665 55,541 80,038 Provision expense for credit losses 6,000 5,500 6,499 6,000 7,000 Non-interest expense Compensation and benefits 38,929 40,663 40,126 40,735 40,095 Occupancy and equipment 7,334 7,373 8,064 8,698 8,553 Technology 10,241 10,014 10,236 9,904 11,326 Professional services 2,765 2,109 2,757 2,676 3,417 Regulatory expenses 1,851 1,851 1,848 1,845 1,854 Amortization of intangible assets 1,128 1,128 1,140 1,205 1,205 Marketing 2,013 861 532 1,116 1,107 Merger, restructuring and other non-operating expenses 6,557 (297) (384) 3,617 3,669 Other expenses 6,757 8,258 6,612 6,224 7,766 Total non-interest expense 77,575 71,960 70,931 76,020 78,992 Total non-interest expense excluding non-operating expenses 71,018 72,257 71,315 72,403 75,323 Income/(loss) before income taxes $ 26,605 $ 48,154 $ 31,235 $ (26,479) $ (5,954) Income tax expense/(benefit) 6,948 10,645 7,210 (6,291) (4,509) Net income/(loss) $ 19,657 $ 37,509 $ 24,025 $ (20,188) $ (1,445) Diluted earnings/(loss) per common share $ 0.46 $ 0.88 $ 0.57 $ (0.47) $ (0.03) Weighted average shares outstanding: Basic 42,661 42,170 42,437 42,777 42,852 Diluted 43,064 42,454 42,508 43,028 43,101 9 BERKSHIRE HILLS BANCORP, INC. AVERAGE BALANCES AND AVERAGE YIELDS AND COSTS Quarters Ended December 31, 2024 September 30, 2024 December 31, 2023 (in millions) AverageBalance Interest (1) AverageYield/Rate Average Balance Interest (1) Average Yield/Rate Average Balance Interest (1) Average Yield/Rate Assets Commercial real estate $ 4,772 $ 77 6.32 % $ 4,717 $ 79 6.54 % $ 4,469 $ 74 6.45 % Commercial and industrial loans 1,435 27 7.24 1,380 27 7.79 1,367 26 7.60 Residential mortgages 2,690 29 4.32 2,712 30 4.31 2,656 27 4.06 Consumer loans 374 6 6.29 424 8 7.43 498 9 7.31 Total loans 9,271 139 5.88 9,233 144 6.11 8,990 136 5.97 Securities (2) 1,347 9 2.66 1,340 8 2.49 2,080 12 2.40 Short-term investments and loans held for sale 466 5 4.25 563 7 4.98 350 4 4.22 New York branch loans held for sale (3) - - - 31 - 5.44 - - - Total earning assets 11,084 153 5.42 11,167 159 5.62 11,420 152 5.26 Goodwill and other intangible assets 15 17 20 Other assets 497 511 422 Total assets $ 11,596 $ 11,695 $ 11,862 Liabilities and shareholders' equity Non-interest-bearing demand deposits $ 2,293 $ - - % $ 2,250 $ - - % $ 2,488 $ - - % NOW and other 764 3 1.44 743 3 1.54 833 3 1.38 Money market 3,046 23 3.02 2,935 25 3.35 2,995 23 3.08 Savings 1,003 3 1.09 1,002 3 1.17 1,062 2 0.90 Time 2,553 27 4.22 2,430 26 4.31 2,558 25 3.77 Total deposits 9,659 56 2.30 9,360 57 2.42 9,936 53 2.11 Borrowings (4) 602 8 5.20 782 11 5.44 668 9 5.45 New York branch non-interest-bearing depositsheld for sale (3) - - - 51 - - - - - New York branch interest-bearing depositsheld for sale (3) - - - 207 1 2.87 - - - Total funding liabilities 10,261 64 2.47 10,400 69 2.64 10,604 62 2.32 Other liabilities 240 245 292 Total liabilities 10,501 10,645 10,896 Common shareholders' equity (5) 1,095 1,050 966 Total shareholders' equity 1,095 1,050 966 Total liabilities and shareholders' equity $ 11,596 $ 11,695 $ 11,862 Net interest margin, FTE 3.14 3.16 3.11 Supplementary data Net Interest Income, non FTE 86.855 88.059 88.421 FTE income adjustment 1.943 2.023 2.021 Net Interest Income, FTE 88.798 90.082 90.442 (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. Prior period balances and financial metrics have been updated to reflect the current presentation. 10 BERKSHIRE HILLS BANCORP, INC. ASSET QUALITY ANALYSIS At or for the Quarters Ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, (in thousands) 2024 2024 2024 2024 2023 NON-PERFORMING ASSETS Commercial real estate $ 10,393 $ 10,270 $ 5,976 $ 4,762 $ 4,453 Commercial and industrial loans 9,156 8,227 8,489 9,174 8,712 Residential mortgages 3,830 4,348 5,491 5,992 6,404 Consumer loans 1,068 1,124 1,392 1,526 1,838 Total non-performing loans 24,447 23,969 21,348 21,454 21,407 Repossessed assets 2,280 2,563 2,549 2,689 2,601 Total non-performing assets $ 26,727 $ 26,532 $ 23,897 $ 24,143 $ 24,008 Total non-performing loans/total loans 0.26 % 0.26 % 0.23 % 0.24 % 0.24 % Total non-performing assets/total assets 0.22 % 0.23 % 0.20 % 0.20 % 0.19 % PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS Balance at beginning of period $ 112,047 $ 112,167 $ 107,331 $ 105,357 $ 102,792 Charged-off loans (4,553) (7,091) (3,246) (5,636) (6,891) Recoveries on charged-off loans 1,206 1,471 1,583 1,610 2,456 Net loans charged-off (3,347) (5,620) (1,663) (4,026) (4,435) Provision (benefit)/expense for loan credit losses 6,000 5,500 6,499 6,000 7,000 Balance at end of period $ 114,700 $ 112,047 $ 112,167 $ 107,331 $ 105,357 Allowance for credit losses/total loans 1.22 % 1.22 % 1.22 % 1.18 % 1.17 % Allowance for credit losses/non-performing loans 469 % 467 % 525 % 500 % 492 % NET LOAN CHARGE-OFFS Commercial real estate $ (121) $ (999) $ 22 $ 292 $ 316 Commercial and industrial loans (2,309) (1,009) (711) (1,772) (2,309) Residential mortgages 552 273 316 98 55 Home equity 1 3 8 193 83 Other consumer loans (1,470) (3,888) (1,298) (2,837) (2,580) Total, net $ (3,347) $ (5,620) $ (1,663) $ (4,026) $ (4,435) Net charge-offs (QTD annualized)/average loans 0.14 % 0.24 % 0.07 % 0.18 % 0.20 % Net charge-offs (YTD annualized)/average loans 0.16 % 0.16 % 0.13 % 0.18 % 0.26 % DELINQUENT AND NON-PERFORMING LOANS Balance Percentof TotalLoans Balance Percent ofTotal Loans Balance Percent of Total Loans Balance Percent of Total Loans Balance Percent of Total Loans 30-89 Days delinquent $ 17,591 0.19 % $ 18,526 0.20 % $ 18,494 0.20 % $ 27,682 0.30 % $ 22,140 0.24 % 90+ Days delinquent and still accruing 6,417 0.07 % 6,280 0.07 % 11,672 0.13 % 5,882 0.06 % 5,537 0.06 % Total accruing delinquent loans 24,008 0.26 % 24,806 0.27 % 30,166 0.33 % 33,564 0.36 % 27,677 0.30 % Non-performing loans 24,447 0.26 % 23,969 0.26 % 21,348 0.23 % 21,454 0.24 % 21,407 0.24 % Total delinquent and non-performing loans $ 48,455 0.52 % $ 48,775 0.53 % $ 51,514 0.56 % $ 55,018 0.60 % $ 49,084 0.54 % 11 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 2024 were primarily related to the pending merger, branch sales and consolidations, and loss on sale of securities. Adjustments in 2023 were primarily related to branch consolidations, severance charges related to a workforce reduction, and loss on sale of AFS 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. 12 BERKSHIRE HILLS BANCORP, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA At or for the Quarters Ended Dec. 31, Sept. 30, June 30, March 31, Dec. 31, (in thousands) 2024 2024 2024 2024 2023 Total non-interest income $ 23,325 $ 37,555 $ 20,133 $ (32,599) $ (8,383) Adj: Net (gains) on sale of business operations and assets (193) (16,048) - - - Adj: Loss on sale of securities 28 - - 49,909 25,057 Total operating non-interest income (1) $ 23,160 $ 21,507 $ 20,133 $ 17,310 $ 16,674 Total revenue (A) $ 110,180 $ 125,614 $ 108,665 $ 55,541 $ 80,038 Adj: Net (gains) on sale of business operations and assets (193) (16,048) - - - Adj: Loss on sale of securities 28 - - 49,909 25,057 Total operating revenue (1) (B) $ 110,015 $ 109,566 $ 108,665 $ 105,450 $ 105,095 Total non-interest expense (C) $ 77,575 $ 71,960 $ 70,931 $ 76,020 $ 78,992 Adj: Merger, restructuring and other non-operating expenses (6,557) 297 384 (3,617) (3,669) Operating non-interest expense (1) (D) $ 71,018 $ 72,257 $ 71,315 $ 72,403 $ 75,323 Pre-tax, pre-provision net revenue (PPNR) (A-C) $ 32,605 $ 53,654 $ 37,734 $ (20,479) $ 1,046 Operating pre-tax, pre-provision net revenue (PPNR) (1) (B-D) 38,997 37,309 37,350 33,047 29,772 Net income/(loss) $ 19,657 $ 37,509 $ 24,025 $ (20,188) $ (1,445) Adj: Net (gains) on sale of business operations and assets (193) (16,048) - - - Adj: Loss on sale of securities 28 - - 49,909 25,057 Adj: Merger, restructuring expense and other non-operating expenses 6,557 (297) (384) 3,617 3,669 Adj: Income taxes (expense)/benefit (67) 3,625 (473) (12,404) (7,091) Total operating income (1) (E) $ 25,982 $ 24,789 $ 23,168 $ 20,934 $ 20,190 (in millions, except per share data) Total average assets (F) $ 11,596 $ 11,695 $ 11,692 $ 11,755 $ 11,862 Total average shareholders' equity (G) 1,095 1,050 1,013 1,018 966 Total average tangible shareholders' equity (1) (I) 1,080 1,034 995 999 946 Total accumulated other comprehensive (loss) net of tax, end of period (106) (89) (115) (114) (143) Total tangible shareholders' equity, end of period (1) (K) 1,152 1,054 996 991 993 Total tangible assets, end of period (1) (L) 12,258 11,588 12,202 12,128 12,411 Total common shares outstanding, end of period (thousands) (M) 46,424 42,982 42,959 43,415 43,501 Average diluted shares outstanding (thousands) (N) 43,064 42,454 42,508 43,028 43,101 Earnings/(loss) per common share, diluted (1) $ 0.46 $ 0.88 $ 0.57 $ (0.47) $ (0.03) Operating earnings per common share, diluted (1) (E/N) 0.60 0.58 0.55 0.49 0.47 Tangible book value per common share, end of period (1) (K/M) 24.82 24.53 23.18 22.84 22.82 Total tangible shareholders' equity/total tangible assets (1) (K/L) 9.40 9.10 8.16 8.17 8.00 Performance ratios (2) Return on equity 7.18 % 14.29 % 9.49 % (7.93) % (0.60) % Operating return on equity (1) (E/G) 9.49 9.44 9.15 8.23 8.36 Return on tangible common equity (1)(3) 7.59 14.83 9.99 (7.73) (0.24) Operating return on tangible common equity (1)(3) (E+Q)/(I) 9.93 9.91 9.65 8.73 8.90 Return on assets 0.68 1.28 0.82 (0.69) (0.05) Operating return on assets (1) (E/F) 0.90 0.85 0.79 0.71 0.68 Efficiency ratio (1)(6) (D-Q)/(B+O+R) 62.43 63.74 63.40 66.26 67.77 Supplementary data (in thousands) Tax benefit on tax-credit investments (4) (O) N/M N/M N/M N/M $ 2,252 Non-interest income tax-credit investments amortization (5) (P) N/M N/M N/M N/M (2,060) Net income on tax-credit investments (O+P) N/M N/M N/M N/M 193 Effective tax rate 26.1 % 22.1 % 23.1 % 23.8 % 75.7 % Intangible amortization (Q) $ 1,128 $ 1,128 $ 1,140 $ 1,205 $ 1,205 Fully taxable equivalent income adjustment (R) 1,943 2,023 2,013 2,006 2,021 (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. (4) The tax benefit is the direct reduction to the income tax provision due to tax credit investments. (5) The non-interest income amortization is the reduction to the tax-advantaged investments and are incurred as the tax credits are generated. (6) As of January 1, 2024, the Company elected the proportional amortization method for certain tax credits eliminating the need to adjust the efficiency ratio for tax credit impacts. Excluding the impact of tax credits in 2023, the efficiency ratio for the quarter ending December 31, 2023 was 69.19%. 13 BERKSHIRE HILLS BANCORP, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED At or for the Years Ended December 31, December 31, (in thousands) 2024 2023 Total non-interest income $ 48,414 $ 42,782 Adj: Net (gains) on sale of business operations and assets (16,241) - Adj: Loss on sale of securities 49,937 25,057 Total operating non-interest income (1) $ 82,110 $ 67,839 Total revenue (A) $ 400,000 $ 411,829 Adj: Net (gains) on sale of business operations and assets (16,241) - Adj: Loss on sale of securities 49,937 25,057 Total operating revenue (1) (B) $ 433,696 $ 436,886 Total non-interest expense (C) $ 296,486 $ 301,508 Less: Merger, restructuring and other non-operating expenses (9,493) (6,261) Operating non-interest expense (1) (D) $ 286,993 $ 295,247 Pre-tax, pre-provision net revenue (PPNR) (A-C) $ 103,514 $ 110,321 Operating pre-tax, pre-provision net revenue (PPNR) (1) (B-D) 146,703 141,639 Net income $ 61,003 $ 69,598 Adj: Net (gains) on sale of business operations and assets (16,241) - Adj: Loss on sale of securities 49,937 25,057 Adj: Merger, restructuring expense and other non-operating expenses 9,493 6,261 Adj: Income taxes (expense) (9,319) (7,723) Total operating income (1) (E) $ 94,873 $ 93,193 (in millions, except per share data) Total average assets (F) $ 11,683 $ 11,838 Total average shareholders' equity (G) 1,044 984 Total average tangible shareholders' equity (1) (I) 1,027 962 Total accumulated other comprehensive (loss) net of tax, end of period (106) (143) Total tangible shareholders' equity, end of period (1) (K) 1,152 993 Total tangible assets, end of period (1) (L) 12,258 12,411 Total common shares outstanding, end of period (thousands) (M) 46,424 43,501 Average diluted shares outstanding (thousands) (N) 42,761 43,504 Earnings per common share, diluted (1) $ 1.43 $ 1.60 Operating earnings per common share, diluted (1) (E/N) 2.22 2.14 Tangible book value per common share, end of period (1) (K/M) 24.82 22.82 Total tangible shareholders' equity/total tangible assets (1) (K/L) 9.40 8.00 Performance ratios (2) Return on equity 5.84 % 7.07 % Operating return on equity (1) (E/G) 9.09 9.47 Return on tangible common equity (1)(3) 6.27 7.60 Operating return on tangible common equity (1)(3) (E+Q)/(I) 9.56 10.05 Return on assets 0.52 0.59 Operating return on assets (1) (E/F) 0.81 0.79 Efficiency ratio (1)(6) (D-Q)/(B+O+R) 63.94 63.88 Net interest margin, FTE 3.16 3.27 Supplementary data (in thousands) Tax benefit on tax-credit investments (4) (O) N/M $ 9,863 Non-interest income charge on tax-credit investments (5) (P) N/M (8,018) Net income on tax-credit investments (O+P) N/M 1,845 Intangible amortization (Q) $ 4,601 $ 4,820 Fully taxable equivalent income adjustment (R) 7,985 7,870 (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. (4) The tax benefit is the direct reduction to the income tax provision due to tax credit investments. (5) The non-interest income amortization is the reduction to the tax-advantaged investments and are incurred as the tax credits are generated. (6) As of January 1, 2024, the Company elected the proportional amortization method for certain tax credits eliminating the need to adjust the efficiency ratio for tax credit impacts. Excluding the impact of tax credits in 2023, the efficiency ratio for the year ending December 31, 2023 was 65.30%. 14 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

Berkshire Hills Reports Strong Fourth Quarter Operating Results

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