PR Newswire | Jan 25, 2021 04:16PM EST

01/25 15:15 CST

Berkshire Hills Announces Fourth Quarter Results; Annual Meeting Date Announced BOSTON, Jan. 25, 2021

BOSTON, Jan. 25, 2021 /PRNewswire/ -- Berkshire Hills Bancorp, Inc. (NYSE: BHLB) today announced fourth quarter 2020 net income of $15 million, or $0.30 per share, compared to $21 million, or $0.42 per share, in the prior quarter. The fourth quarter non-GAAP measure of core earnings totaled $14 million, or $0.28 per share, compared to $26 million, or $0.53 per share, in the prior quarter. The change in earnings is primarily due to pandemic related impacts, including a $9 million increase in the noncash provision for expected credit losses.

FOURTH QUARTER FINANCIAL HIGHLIGHTS (non-GAAP measures are reconciled on pages F-9 and F-10)

* 2.61% net interest margin * 71% efficiency ratio * 9.3% equity/assets * 79% loans/deposits * $23.37 book value per share; $22.68 tangible book value per share (non-GAAP measure) * 0.80% annualized net charge-offs/loans * 0.52% non-performing assets/assets

Acting CEO and President Sean Gray stated, "Fourth quarter results declined primarily due to higher noncash provisioning for expected credit losses reflecting the persistence of pandemic impacts on economic activity. These impacts also contributed to lower operating revenue and higher operating expenses. In this environment, the Bank adhered to its financial and operating disciplines. Higher net charge-offs were primarily due to four hospitality relationships, including credits which were exited during the quarter. Total criticized loans decreased, along with loans with payment deferrals. The net interest margin was supported by a reduction in funding costs. We managed down our staffing, as well as occupancy, and technology costs. We continue to adjust operations to protect employees, customers and communities, including moving branch lobbies back to appointment-only access based on local conditions. Management's actions are targeted to position the Bank for improved results as public health and economic conditions improve."

Mr. Gray continued, "We recently announced important strategic initiatives, starting with our best of breed digital account opening platform. We've made the right technology investments to support customer preferences for electronic banking. Consistent with these shifts, we announced the planned consolidation of 16 branches in the first half of 2021. With the concierge banking offered by our growing team of MyBankers, we expect to smoothly transition customers to nearby branches. Separately, we entered into an agreement to sell our eight mid-Atlantic branches and we are opening a new Providence commercial banking office. When these initiatives are completed, we plan to have 106 branch offices located primarily in southern New England and eastern/central New York. These actions are targeted to focus and deepen meaningful engagement with our communities as a 21st century purpose-driven community bank that helps everyone access the services they need to live healthier financial lives."

ANNUAL MEETING

The Board of Directors determined that the Annual Meeting of Shareholders will be held on Thursday, May 20, 2021 and may be convened as a virtual meeting. The date of Thursday,March 25, 2021 was established as the record date for the determination of the shareholders entitled to notice of, and to vote at, the Annual Meeting. Further information about the annual meeting will be available in early April at the Company's website at ir.berkshirebank.com.

FINANCIAL CONDITION

Total assets increased quarter-over-quarter by $224 million, or 2%, to $12.8 billion due to a $514 million increase in short-term payroll deposits at year-end, which resulted in higher short-term investments. Excluding this increase, total assets decreased by $291 million, or 2%, due to ongoing loan runoff. Investment securities increased by $236 million as excess liquidity was reinvested into residential and commercial agency mortgage backed securities.

Total loans decreased by $901 million during the fourth quarter. Due to the pending agreement for the sale of the Mid-Atlantic branches, Berkshire has reclassified $301 million in loans as assets held for sale. Excluding this reclassification, total loans decreased by $600 million, or 7%, due to ongoing runoff in all major categories. Paycheck Protection Program ("PPP") loans decreased by $75 million to $633 million as the SBA loan forgiveness program was initiated.

Total criticized loans decreased by $36 million, or 9%, to $359 million during the fourth quarter, including the sale of $22 million in criticized hospitality loans. Total loans with active and in-process deferrals decreased by $97 million, or 22%, to $350 million as conditions improved for commercial borrowers.

Total delinquent and nonaccrual loans measured 1.14% of total loans at year-end, compared to 0.98% at the start of the quarter. Accruing delinquent loans decreased to 0.34% of total loans from 0.45% during the quarter. Total nonaccrual loans increased by $18 million to $65 million due primarily to two COVID sensitive commercial relationships which were rated as substandard prior to the pandemic, including one 2019 purchased credit deteriorated loan. Net charge-offs totaled $17 million, or 0.80% annualized compared to average loans. This included $12 million related to hospitality loans, of which $7 million was related to the above mentioned loan sale. The allowance for credit losses on loans decreased quarter-over-quarter due to the decrease in total loans, including the impact of charge-offs. The year-end ratio of the allowance to loans measured 1.58%. Excluding PPP loans, this ratio measured 1.71% at year-end, and was not materially changed in the second half of the year.

Total deposits decreased by $251 million during the fourth quarter. Due to the branch sale, the Company has reclassified $617 million in deposits as liabilities held for sale. Adjusting for this reclassification, total deposits increased by $367 million during the quarter, including the previously noted $514 million increase in short-term payroll deposits to $1.046 billion. This was offset by a $209 million decrease in brokered time deposits to $605 million. All other deposits increased by a total of $61 million, or 1%. Total borrowings decreased by $131 million to $572 million. The loans/deposits ratio measured 79% at year-end, decreasing from 86% at the start of the fourth quarter.

Year-end book value per share totaled $23.37 and the non-GAAP measure of tangible book value per share measured $22.68. Year-end equity/assets measured 9.3% and the non-GAAP measure of tangible equity/tangible assets was 9.0%. During the fourth quarter, the remaining balance of preferred stock was converted to common shares in accordance with contractual terms.

RESULTS OF OPERATIONS - FOURTH QUARTER

Berkshire's earnings declined in the fourth quarter compared to the prior quarter, reflecting ongoing impacts of the pandemic on the Company's results of operations. Most of the impact was due to the $9 million increase in the noncash provision for expected credit losses on loans. Further, interest income was negatively impacted by non-accrual loans and expense was affected by higher loan workout expense. GAAP earnings per share decreased by $0.12, or 29%, and the non-GAAP measure of core earnings per share decreased by $0.25 or 47%. The GAAP measure of pre-tax, pre-provision net revenue ("PPNR") increased quarter-over-quarter by $3 million to $27 million, while the non-GAAP measure of core PPNR decreased by $6 million to $24 million. The Company focuses on this measure of operations as a key measure of operating performance before accounting for estimations of future pandemic related credit losses. This decrease was due to a $2.6 million decrease in core revenue and a $3.7 million increase in core expense.

The revenue decrease included a $1 million decrease in net interest income as a result of lower earning assets and higher nonaccrual loans. The net interest margin was stable at 2.61% and benefited from a 0.14% decrease in the cost of deposits, along with higher interest revenue related to PPP loan forgiveness. Time deposit costs decreased including the impact of lower brokered deposits and maturities of higher rate CD's. The unamortized balance of deferred PPP fees totaled $13 million at year-end. Total fee income decreased by $1 million due to a seasonal decrease in mortgage banking revenue.

The provision for expected credit losses increased quarter-over-quarter by $9 million to $10 million, primarily due to a qualitative assessment of credit migration in the loan portfolio. The level of the year-end allowance is intended to absorb pandemic related expected credit losses over the next seven quarters based on information and third party forecasts at year-end.

Non-interest expense decreased quarter-over-quarter by $1 million, due to higher noncore costs recorded in the third quarter related to the CEO separation. The non-GAAP measure of core non-interest expense increased by $4 million due primarily to a lending operations project which was completed during the quarter. Full time equivalent staff in continuing operations at year-end totaled 1,505, compared to 1,507 positions at the start of the fourth quarter and to 1,550 positions at the start of the year. Occupancy and technology expense decreased quarter-over-quarter. The fourth quarter effective tax rate on continuing operations was a benefit of 10%.

Net non-core adjustments to core income totaled $1 million in the fourth quarter. A final loss was recorded on discontinued national mortgage banking operations as the Company completed the wind-down of these operations, with no further cost recognition expected. This was partially offset by net securities gains and other non-core items. The Company has announced strategic initiatives for the sale and consolidation of branches in the first half of 2021. The Company expects to recognize a noncore net gain on the sale of these operations and non-core charges in conjunction through these consolidations.

BE FIRST CORPORATE RESPONSIBILITY UPDATE

Berkshire is committed to delivering purpose-driven performance. Learn more about the steps Berkshire is taking to be a values-based brand for all its stakeholders at www.berkshirebank.com/csr and in its most recent Corporate Responsibility Report.

Key developments in the quarter and year include:

* Continued Investment in Community Recovery & Resiliency: As people and small businesses in neighborhoods across the Company's footprint struggle through the impacts of the COVID-19 pandemic, Berkshire's Foundation is answering the call providing a record $3.8 million in grant funding to 502 organizations in 2020. These critical investments included recent contributions to local food banks to meet increasing demand for services across the Company's footprint. * Enhancing Thirty Party ESG Ratings: The Company continued to improve its Environmental, Social and Governance (ESG) ratings with third party agencies and as of December 31, 2020 the Company received ratings of: MSCI ESG- BBB, ISS ESG Quality Score - Environment: 2, Social: 1, Governance: 3 and Bloomberg ESG Disclosure- 41.67. The company is also rated by Sustainalytics. Additionally, the Company is included in the Bloomberg Gender Equality Index. * Awards & Recognition: Berkshire was named a recipient of the 2020 Communitas Award for Leadership in Corporate Social Responsibility recognizing its' continued performance through the Be FIRST Commitment, as well as the company's comprehensive corporate responsibility, social impact and sustainability strategy. In addition, the Bank was recognized by the American Bankers Association Community Commitment Awards for its Be FIRST Commitment in the Economic Inclusion category.

INVESTOR CONFERENCE CALL AND INVESTOR PRESENTATION

Berkshire will post an investor presentation at its website at ir.berkshirebank.com with additional financial information and other information about the quarter.

Berkshire will also conduct a conference call/webcast at 10:00 a.m. Eastern time on Tuesday, January 26, 2021 to discuss the results for the quarter and provide guidance about expected future results. Participants are encouraged to pre-register for the conference call using the following link: https://dpregister.com/sreg/10151338/e0b6214914.Callers who pre-register will be given dial-in instructions and a unique PIN to gain immediate access to the call. Participants may pre-register at any time prior to the call and will immediately receive simple instructions via email. Additionally, participants may reach the registration link and access the webcast by logging in through the investor section of Berkshire's website at http://ir.berkshirebank.com. Those parties who do not have Internet access or are otherwise unable to pre-register for this event, may still participate at the above time by dialing 1-844-792-3726 and asking the Operator to join the Berkshire Hills Bancorp (BHLB) earnings call. Participants are requested to dial-in a few minutes before the scheduled start of the call. A telephone replay of the call will be available through Tuesday, February 2, 2021 by dialing 877-344-7529 and entering access number 10151338. The webcast will be available on Berkshire's website for an extended period of time.

ABOUT BERKSHIRE HILLS BANCORP

Berkshire Hills Bancorp is the parent of Berkshire Bank, a 21st century community bank pursuing purpose driven performance based on its Be FIRST corporate responsibility culture. Headquartered in Boston, Berkshire operates 130 banking offices in seven Northeastern states, with approximately $12.8 billion in assets.

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," "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 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.

Further, given its ongoing and dynamic nature, it is difficult to predict what continued effects the COVID-19 pandemic will have on our business and results of operations. The pandemic and the related local and national economic disruption may result in a continued decline in demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; an increase in our allowance for credit losses on loans; a decline in the value of loan collateral, including real estate; a greater decline in the yield on our interest-earning assets than the decline in the cost of our interest-bearing liabilities; and increased cybersecurity risks, as employees increasingly work remotely.

Accordingly, 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.

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 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 on pages F-9 and F-10 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 items which the Company does not view as related to its normalized operations. These items primarily include securities gains/losses, merger costs, restructuring costs, goodwill impairment, and discontinued operations. Discontinued operations are the Company's national mortgage banking operations which the Company exited. Merger costs consist primarily of severance/benefit related expenses, contract termination costs, systems conversion costs, variable compensation expenses, and professional fees. Merger costs in 2019 were primarily related to the acquisition of SI Financial Group. Restructuring costs generally consist of costs and losses associated with the disposition of assets and liabilities and lease terminations, including costs related to branch sales. Restructuring costs also include severance and consulting expenses related to the Company's strategic review. They also include costs related to the consolidation of branches, including eight branches for the full year of 2019. The Company recorded a full impairment of its goodwill in the second quarter of 2020, which was classified as noncore. Noncore charges in the third and fourth quarters of 2020 included costs related to separation with the former CEO in the third quarter, and consulting for the CEO succession process in both quarters. A non-core gain was recognized on the sale of a specialty commercial insurance business line in the fourth quarter.

The Company has introduced the measure of Core Pre-Provision Net Revenue ("Core PPNR") which measures core income before credit loss provision and tax expense. Due to the non-cash projections introduced into the calculation of income by the new CECL accounting standard, the investment community is placing more emphasis on PPNR in order to measure the results of operations and to compare them across banks which may have widely varying estimates of future economic conditions that affect their provision expense and reported earnings. The Company also calculates core PPNR/assets in order to utilize the PPNR measure in assessing its comparative operating profitability.

Non-core adjustments are presented net of an adjustment for income tax expense. This adjustment is determined as the difference between the GAAP tax rate and the effective tax rate applicable to core income. The efficiency ratio is adjusted for non-core revenue and expense items and for tax preference items. The Company also calculates measures related to tangible equity, which adjust equity (and assets where applicable) to exclude intangible assets due to the importance of these measures to the investment community. References to organic growth and organic change exclude balances acquired in bank mergers.

CONTACTSInvestor Relations ContactDavid Gonci; Capital Markets Director; 413-281-1973

Media Contacts:John LovalloEmail: jlovallo@levick.comTel: (917) 612-8419

Cate CroninEmail: ccronin@levick.comTel: (202) 738-7302

TABLE CONSOLIDATED UNAUDITED FINANCIAL SCHEDULES INDEX

F-1 Selected Financial Highlights

F-2 Balance Sheets

F-3 Loan and Deposit Analysis

F-4 Statements of Operations

F-5 Statements of Operations (Five Quarter Trend)

F-6 Average Yields and Costs

F-7 Average Balances

F-8 Asset Quality Analysis

F-9 Reconciliation of Non-GAAP Financial Measures

and Supplementary Data (Five Quarter Trend)

F-10 Reconciliation of Non-GAAP Financial Measures

and Supplementary Data (Year-to-Date)

BERKSHIRE HILLS BANCORP, INC.

SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1)

At or for the Quarters Ended (1)

Dec. 31, Sept. 30, June 30, March 31, Dec. 31,

2020 2020 2020 2020 2019

PER SHARE DATA

Net earnings/(loss) per common $ 0.30 $ 0.42 $ (10.93) $ (0.40) $ 0.51 share, diluted

Core earnings/(loss) per 0.28 0.53 (0.13) (0.07) 0.70 common share, diluted (2)

Total book value per common 23.37 23.03 22.79 33.90 34.65 share

Tangible book value per common 22.68 22.22 21.94 22.00 22.56 share (2)

Market price at period end 17.12 10.11 11.02 14.86 32.88

Dividends per common share 0.12 0.12 0.24 0.24 0.23

Dividends per preferred share NA 0.24 0.48 0.48 0.46

PERFORMANCE RATIOS (3)

Return on assets 0.48 % 0.67 % (16.38) % (0.62) % 0.78 %

Core return on assets (2) 0.45 0.84 (0.19) (0.11) 1.08

Return on equity 5.22 7.50 (131.17) (4.58) 5.90

Core return on equity (2) 4.89 9.33 (1.54) (0.84) 8.09

Core return on tangible common 5.50 10.27 (2.05) (0.94) 13.12 equity (2)

Net interest margin, fully taxable equivalent (FTE) (4) 2.61 2.61 2.62 3.04 3.11 (5)

Fee income/Net interest and fee income from continuing 18.84 19.82 18.45 15.46 18.11 operations

Efficiency ratio (2) 71.03 65.39 71.01 66.92 53.66

CHANGE (Year-to-date)

Total commercial loans (1) % 5 % 12 % (5) % (7) % (organic, annualized)

Total loans (organic, (12) (7) (3) (8) (9) annualized)

Total deposits (organic, 5 2 9 (10) 0 annualized)

Total net revenues from continuing operations (15) (15) (14) (14) 4 (compared to prior year)

(Loss)/earnings per common share (compared to prior year) (638) (847) (1,200) (178) (14)

Core earnings/(loss) per common share (compared to (75) (81) (116) (112) (14) prior year)(2)

FINANCIAL DATA (in millions)

Total assets $ 12,838 $ 12,614 $ 13,063 $ 13,122 $ 13,216

Total earning assets 12,090 11,832 12,267 11,785 11,916

Total securities 2,223 1,988 1,882 1,837 1,770

Total loans 8,082 8,982 9,370 9,303 9,502

Allowance for credit losses 127 134 139 114 64

Total intangible assets 35 41 42 598 599

Total deposits 10,216 10,467 10,776 10,072 10,336

Total shareholders' equity 1,188 1,179 1,164 1,722 1,759

Net income/(loss) 15.0 21.2 (549.4) (19.9) 25.8

Core income/(loss) (2) 14.1 26.4 (6.5) (3.6) 35.3

Purchase accounting accretion 2.2 2.5 2.1 3.1 5.1

Goodwill impairment - - 553.8 - -

ASSET QUALITY AND CONDITIONRATIOS

Net charge-offs (current quarter annualized)/average 0.80 % 0.27 % 0.17 % 0.45 % 0.17 % loans

Total non-performing assets/ 0.52 0.39 0.36 0.40 0.31 total assets

Allowance for credit losses/ 1.58 1.50 1.49 1.22 0.67 total loans

Loans/deposits 79 86 87 92 92

Shareholders' equity to total 9.25 9.35 8.91 13.13 13.31 assets

Tangible shareholders' equity 9.01 9.05 8.61 8.98 9.19 to tangible assets (2)

(1) Reconciliations of non-GAAP financial measures, including all references to core and tangible amounts, appear on pages F-9 and F-10.

Non-GAAP financial measure. Core measurements are non-GAAP financial measures(2) that are adjusted to exclude net non-core charges primarily related to acquisitions and restructuring activities. See pages F-9 and F-10 for reconciliations of non-GAAP financial measures.

(3) All performance ratios are annualized and are based on average balance sheet amounts, where applicable.

(4) Fully taxable equivalent considers the impact of tax advantaged investment securities and loans.

The effect of purchase accounting accretion for loans, time deposits, and borrowings on the quarterly net interest margin was an increase in all(5) quarters, which is shown sequentially as follows beginning with the most recent quarter and ending with the earliest quarter: 0.07%, 0.08%, 0.07%, 0.11%, 0.17%.

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2)

December 31, September 30, December 31,

(in thousands) 2020 2020 2019

Assets

Cash and due from banks $ 91,219 $ 90,537 $ 105,447

Short-term investments 1,466,656 844,755 474,382

Total cash and 1,557,875 935,292 579,829short-term investments

Trading security 9,708 9,525 10,769

Marketable equitysecurities, at fair 18,513 31,993 41,556value

Securities available 1,695,232 1,575,289 1,311,555for sale, at fair value

Securities held tomaturity, at amortized 465,091 330,197 357,979cost

Federal Home Loan Bankstock and other 34,873 40,520 48,019restricted securities

Total securities 2,223,417 1,987,524 1,769,878

Less: Allowance forcredit losses on (104) (96) -investment securities

Net securities 2,223,313 1,987,428 1,769,878

Loans held for sale 17,748 15,854 36,664

Total loans 8,081,519 8,982,336 9,502,428

Less: Allowance for (127,302) (134,414) (63,575)credit losses on loans

Net loans 7,954,217 8,847,922 9,438,853

Premises and equipment, 112,663 117,116 120,398net

Other real estate owned 149 40 -

Goodwill - - 553,762

Other intangible assets 34,819 40,947 45,615

Cash surrender value ofbank-owned life 232,695 231,217 227,894insurance

Other assets 387,230 425,675 288,945

Assets held for sale 317,304 - -

Assets from - 12,966 154,132discontinued operations

Total assets $ 12,838,013 $ 12,614,457 $ 13,215,970

Liabilities andshareholders' equity

Demand deposits $ 2,484,249 $ 2,585,173 $ 1,884,100

NOW and other deposits 1,003,005 1,522,289 1,492,569

Money market deposits 3,371,353 2,516,168 2,528,656

Savings deposits 972,116 952,836 841,283

Time deposits 2,385,085 2,890,093 3,589,369

Total deposits 10,215,808 10,466,559 10,335,977

Senior borrowings 474,357 605,483 730,501

Subordinated borrowings 97,280 97,223 97,049

Total borrowings 571,637 702,706 827,550

Other liabilities 232,730 251,220 267,398

Liabilities held for 630,065 - -sale

Liabilities from - 14,947 26,481discontinued operations

Total liabilities 11,650,240 11,435,432 11,457,406

Preferred shareholders' - 20,325 40,633equity

Common shareholders' 1,187,773 1,158,700 1,717,931equity

Total shareholders' 1,187,773 1,179,025 1,758,564equity

Total liabilities and $ 12,838,013 $ 12,614,457 $ 13,215,970shareholders' equity

Net common shares 50,833 50,306 49,585outstanding

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED - (F-3)

LOAN ANALYSIS

Organic Annualized Growth %

(in December 31, 2020 December 31, 2020 September 30, 2020 December 31, 2019 Quarter ended Year to Date millions) Balance HFS Balance Balance Balance December 31, 2020

Totalcommercial $ 3,647 $ 188 $ 3,943 $ 4,034 (11) % (5) %real estate

Commercialand 1,959 14 2,147 1,841 (32) 7industrialloans

Totalcommercial 5,606 202 6,090 5,875 (19) (1)loans

Totalresidential 1,813 63 2,122 2,685 (46) (30)mortgages

Home 295 31 350 381 (27) (14)equity

Auto and 368 5 420 561 (45) (34)other

Totalconsumer 663 36 770 942 (37) (26)loans

Total loans $ 8,082 $ 301 $ 8,982 $ 9,502 (27) % (12) %

DEPOSIT ANALYSIS

Organic Annualized Growth %

(in December 31, 2020 December 31, 2020 September 30, 2020 December 31, 2019 Quarter ended Year to Datemillions) Balance HFS Balance Balance Balance December 31, 2020

Demand $ 2,484 $ 107 $ 2,585 $ 1,884 1 % 38 %

NOW and 1,003 112 1,523 1,493 (107) (25)other

Money 3,372 220 2,516 2,529 171 42market

Savings 972 17 953 841 15 18

Time 2,385 161 2,890 3,589 (48) (29)deposits

Total $ 10,216 $ 617 $ 10,467 $ 10,336 14 % 5 %deposits

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - (F-4)

Three Months Ended Years Ended

December 31, December 31,

(in thousands,except per share 2020 2019 2020 2019data)

Interest anddividend incomefrom continuingoperations

Loans $ 79,756 $ 110,915 $ 358,015 $ 448,927

Securities and 12,375 14,526 51,767 60,586other

Total interest anddividend 92,131 125,441 409,782 509,513income

Interest expensefrom continuingoperations

Deposits 12,255 28,797 72,715 115,193

Borrowings 4,167 5,311 20,285 29,062

Total interest 16,422 34,108 93,000 144,255expense

Net interestincome from 75,709 91,333 316,782 365,258continuingoperations

Non-interestincome fromcontinuingoperations

Mortgage banking 543 172 5,190 788originations

Loan related 4,833 7,056 16,840 24,374income

Deposit related 7,523 8,264 27,905 31,352fees

Insurancecommissions and 2,319 2,471 10,770 10,957fees

Wealth management 2,359 2,239 9,285 9,353fees

Total fee 17,577 20,202 69,990 76,824income

Other 2,105 75 2,597 1,438

Securities gains/ 2,405 1,734 (7,520) 4,389(losses), net

Gain on sale ofbusiness 1,240 1,351 1,240 1,351operations andassets, net

Total non-interest 23,327 23,362 66,307 84,002income

Total net revenuefrom continuing 99,036 114,695 383,089 449,260operations

Provision for 10,000 5,351 75,878 35,419credit losses

Non-interestexpense fromcontinuingoperations

Compensation and 36,719 35,355 147,840 140,906benefits

Occupancy and 10,948 10,798 43,359 39,586equipment

Technology and 7,988 6,702 32,364 26,523communications

Marketing and 634 1,046 3,703 4,474promotion

Professional 4,055 2,288 11,907 10,798services

FDIC premiums and 1,218 471 5,876 3,861assessments

Other real estateowned and 44 4 125 154foreclosures

Amortization ofintangible 1,513 1,582 6,181 5,783assets

Goodwill - - 553,762 -impairment

Merger,restructuring and 523 5,713 5,839 28,046other expense

Other 8,154 6,328 29,283 29,726

Total non-interest 71,796 70,287 840,239 289,857expense

Income/(loss) fromcontinuingoperations before $ 17,240 $ 39,057 $ (533,028) $ 123,984incometaxes

Income tax (1,659) 6,421 (19,853) 22,463(benefit)/expense

Net income/(loss)from continuing $ 18,899 $ 32,636 $ (513,175) $ 101,521operations

(Loss) fromdiscontinued $ (5,114) $ (9,514) $ (26,855) $ (5,539)operations beforeincome taxes

Income tax (1,224) (2,629) (7,013) (1,468)(benefit)

Net (loss) fromdiscontinued $ (3,890) $ (6,885) $ (19,842) $ (4,071)operations

Net income/(loss) $ 15,009 $ 25,751 $ (533,017) $ 97,450

Preferred stock - 240 313 960dividend

Income/(loss)available to $ 15,009 $ 25,511 $ (533,330) $ 96,490commonshareholders

Basic earnings/(loss) per commonshare:

Continuing $ 0.38 $ 0.65 $ (10.21) $ 2.06Operations

Discontinued (0.08) (0.14) (0.39) (0.08)Operations

Total $ 0.30 $ 0.51 $ (10.60) $ 1.98

Diluted earnings/(loss) per commonshare:

Continuing $ 0.38 $ 0.65 $ (10.21) $ 2.05Operations

Discontinued (0.08) (0.14) (0.39) (0.08)Operations

Total $ 0.30 $ 0.51 $ (10.60) $ 1.97

Weighted averagesharesoutstanding:

Basic 50,308 50,494 50,270 49,263

Diluted 50,355 50,702 50,270 49,421

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend) - UNAUDITED - (F-5)

Dec. 31, Sept. 30, June 30, March 31, Dec. 31,

(in thousands,except per share 2020 2020 2020 2020 2019data)

Interest anddividend incomefrom continuingoperations

Loans $ 79,756 $ 85,688 $ 90,876 $ 101,695 $ 110,915

Securities and 12,375 12,080 12,812 14,500 14,526other

Total interest anddividend 92,131 97,768 103,688 116,195 125,441income

Interest expensefrom continuingoperations

Deposits 12,255 16,070 20,552 23,838 28,797

Borrowings 4,167 4,643 5,546 5,929 5,311

Total interest 16,422 20,713 26,098 29,767 34,108expense

Net interestincome from 75,709 77,055 77,590 86,428 91,333continuingoperations

Non-interestincome fromcontinuingoperations

Mortgage banking 543 2,044 1,644 959 172originations

Loan related 4,833 4,988 5,717 1,302 7,056income

Deposit related 7,523 7,062 5,373 7,947 8,264fees

Insurancecommissions and 2,319 2,660 2,767 3,024 2,471fees

Wealth management 2,359 2,299 2,057 2,570 2,239fees

Total fee 17,577 19,053 17,558 15,802 20,202income

Other 2,105 1,927 (999) (436) 75

Securities gains/ 2,405 (1,017) 822 (9,730) 1,734(losses), net

Gain on sale ofbusiness 1,240 - - - 1,351operations andassets, net

Total non-interest 23,327 19,963 17,381 5,636 23,362income

Total net revenuefrom continuing 99,036 97,018 94,971 92,064 114,695operations

Provision for 10,000 1,200 29,871 34,807 5,351credit losses

Non-interestexpense fromcontinuingoperations

Compensation and 36,719 34,809 39,403 36,909 35,355benefits

Occupancy and 10,948 11,084 10,195 11,132 10,798equipment

Technology and 7,988 8,540 7,755 8,081 6,702communications

Marketing and 634 1,002 902 1,165 1,046promotion

Professional 4,055 2,567 2,565 2,720 2,288services

FDIC premiums and 1,218 1,518 1,658 1,482 471assessments

Other real estateowned and 44 40 14 27 4foreclosures

Amortization ofintangible 1,513 1,530 1,558 1,580 1,582assets

Goodwill - - 553,762 - -impairment

Merger,restructuring and 523 5,316 - - 5,713other expense

Other 8,154 6,437 6,463 8,229 6,328

Total non-interest 71,796 72,843 624,275 71,325 70,287expense

Income/(loss) fromcontinuing $ 17,240 $ 22,975 $ (559,175) $ (14,068) $ 39,057operations beforeincome taxes

Income tax (1,659) (68) (16,130) (1,996) 6,421(benefit)/expense

Net income/(loss)from continuing $ 18,899 $ 23,043 $ (543,045) $ (12,072) $ 32,636operations

(Loss) fromdiscontinued $ (5,114) $ (2,477) $ (8,635) $ (10,629) $ (9,514)operations beforeincome taxes

Income tax (1,224) (659) (2,299) (2,831) (2,629)(benefit)

Net (loss) fromdiscontinued $ (3,890) $ (1,818) $ (6,336) $ (7,798) $ (6,885)operations

Net income/(loss) $ 15,009 $ 21,225 $ (549,381) $ (19,870) $ 25,751

Preferred stock - 58 130 125 240dividend

Income/(loss)available to $ 15,009 $ 21,167 $ (549,511) $ (19,995) $ 25,511commonshareholders

Basic earnings/(loss) per commonshare:

Continuing $ 0.38 $ 0.46 $ (10.80) $ (0.24) $ 0.65Operations

Discontinued (0.08) (0.04) (0.13) (0.16) (0.14)Operations

Total $ 0.30 $ 0.42 $ (10.93) $ (0.40) $ 0.51

Diluted earnings/(loss) per commonshare:

Continuing $ 0.38 $ 0.46 $ (10.80) $ (0.24) $ 0.65Operations

Discontinued (0.08) (0.04) (0.13) (0.16) (0.14)Operations

Total $ 0.30 $ 0.42 $ (10.93) $ (0.40) $ 0.51

Weighted averagesharesoutstanding:

Basic 50,308 50,329 50,246 50,204 50,494

Diluted 50,355 50,329 50,246 50,204 50,702

BERKSHIRE HILLS BANCORP, INC.

AVERAGE YIELDS AND COSTS (Fully Taxable Equivalent - Annualized) - UNAUDITED -(F-6)

Quarters Ended

Dec. 31, Sept. 30, June 30, March 31, Dec. 31,

2020 2020 2020 2020 2019

Earning assets

Loans:

Commercial real estate 3.34 % 3.52 % 3.78 % 4.41 % 4.80 %

Commercial and industrial 4.05 3.88 4.02 5.03 5.35loans

Residential mortgages 3.78 3.78 3.78 3.77 3.61

Consumer loans 3.41 3.59 3.72 4.28 4.38

Total loans 3.62 3.68 3.83 4.33 4.52

Securities 2.69 2.78 3.07 3.32 3.31

Short-term investments and 0.57 0.21 0.50 1.78 3.15loans held for sale

Total earning assets 3.17 3.31 3.50 4.08 4.27

Funding liabilities

Deposits:

NOW and other 0.17 0.24 0.30 0.46 0.54

Money market 0.32 0.38 0.58 0.98 1.18

Savings 0.08 0.10 0.10 0.13 0.14

Time 1.35 1.63 1.84 1.87 1.97

Total interest-bearing 0.62 0.81 1.01 1.18 1.35deposits

Borrowings 2.50 2.36 2.38 2.60 2.77

Total interest-bearing 0.79 0.95 1.16 1.33 1.48liabilities

Net interest spread 2.38 2.36 2.34 2.75 2.79

Net interest margin 2.61 2.61 2.62 3.04 3.11

Cost of funds (1) 0.60 0.73 0.92 1.11 1.23

Cost of deposits 0.47 0.61 0.79 0.96 1.11

(1) Cost of funds includes all deposits and borrowings.

BERKSHIRE HILLS BANCORP, INC.

AVERAGE BALANCES - UNAUDITED - (F-7)

Quarters Ended

Dec. 31, Sept. 30, June 30, March 31, Dec. 31,

(in thousands) 2020 2020 2020 2020 2019

Assets

Loans

Commercial real $ 3,843,263 $ 3,986,424 $ 4,005,018 $ 4,000,461 $ 4,056,244estate

Commercial and 2,055,978 2,191,749 2,152,820 1,795,813 1,768,039industrial loans

Residential 1,971,366 2,224,132 2,452,622 2,654,224 2,758,676mortgages

Consumer loans 725,810 800,824 865,318 921,810 974,889

Total loans (1) 8,596,417 9,203,129 9,475,778 9,372,308 9,557,848

Securities (2) 1,967,527 1,873,533 1,793,381 1,744,635 1,752,968

Short-terminvestments and 977,375 766,447 697,138 374,894 444,622loans held for sale

Total earning assets 11,541,319 11,843,109 11,966,297 11,491,837 11,755,438(3)

Goodwill and other 39,887 41,460 590,672 598,347 601,192intangible assets

Other assets 852,810 759,534 751,702 663,056 737,396

Assets fromdiscontinued 11,704 16,041 109,923 98,528 176,251operations

Total assets $ 12,445,720 $ 12,660,144 $ 13,418,594 $ 12,851,768 $ 13,270,277

Liabilities andshareholders' equity

Deposits

NOW and other $ 1,278,764 $ 1,243,487 $ 1,183,839 $ 1,159,388 $ 1,085,485

Money market 2,756,348 2,673,567 2,672,066 2,752,465 2,688,766

Savings 966,929 940,488 901,218 846,942 835,209

Time 2,628,608 3,056,419 3,399,222 3,333,070 3,827,175

Totalinterest-bearing 7,630,649 7,913,961 8,156,345 8,091,865 8,436,635deposits

Borrowings 657,622 777,369 942,033 949,316 853,911

Totalinterest-bearing 8,288,271 8,691,330 9,098,378 9,041,181 9,290,546liabilities

Non-interest-bearing 2,541,916 2,558,981 2,343,173 1,849,295 1,898,045demand deposits

Other liabilities 459,845 254,273 272,690 203,797 304,504

Liabilities fromdiscontinued 5,666 22,805 28,988 23,799 30,446operations

Total liabilities 11,295,698 11,527,389 11,743,229 11,118,072 11,523,541

Preferred 7,290 20,325 20,325 20,548 40,633shareholders' equity

Common shareholders' 1,142,732 1,112,430 1,655,040 1,713,148 1,706,103equity

Total shareholders' 1,150,022 1,132,755 1,675,365 1,733,696 1,746,736equity

Total liabilitiesand shareholders' $ 12,445,720 $ 12,660,144 $ 13,418,594 $ 12,851,768 $ 13,270,277equity

Supplementary data

Total averagenon-maturity $ 7,543,957 $ 7,416,523 $ 7,100,296 $ 6,608,090 $ 6,507,505deposits

Total average 10,172,565 10,472,942 10,499,518 9,941,160 10,334,680deposits

Fully taxableequivalent income 1,485 1,512 1,580 1,824 1,934adjustment

Total average 1,110,135 1,091,295 1,084,693 1,135,349 1,145,544tangible equity (4)

(1) Total loans include non-accruing loans.

(2) Average balances for securities available-for-sale are based on amortizedcost.

(3) Excludes discontinued operations for presentation purposes. Performanceratios are calculated including the impact of discontinued operations.

(4) See page F-9 for details on the calculation of total average tangibleequity.

BERKSHIRE HILLS BANCORP, INC.

ASSET QUALITY ANALYSIS - UNAUDITED - (F-8)

At or for the Quarters Ended

Dec. 31, Sept. 30, June 30, March 31, Dec. 31,

(in thousands) 2020 2020 2020 2020 2019

NON-PERFORMINGASSETS

Non-accruingloans:

Commercialreal estate $ 35,581 $ 14,777 $ 12,486 $ 16,938 $ 20,119(1)

Commercial andindustrial 12,921 15,035 15,045 18,370 11,373loans

Residential 8,347 7,928 9,840 9,636 3,343mortgages

Consumer loans 8,099 9,650 7,513 6,172 4,805

Totalnon-accruing 64,948 47,390 44,884 51,116 39,640loans

Other real 149 401 517 224 -estate owned

Repossessed 1,932 1,646 1,581 1,316 858assets

Totalnon-performing $ 67,029 $ 49,437 $ 46,982 $ 52,656 $ 40,498assets

Totalnon-accruing 0.80% 0.53% 0.48% 0.55% 0.42%loans/totalloans

Totalnon-performing 0.52% 0.39% 0.36% 0.40% 0.31%assets/totalassets

PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

Balance atbeginning of $ 134,414 $ 139,394 $ 113,510 $ 63,575 $ 62,230period

Adoption ofASU No. - - - 25,434 -2016-13 (2)

Balance afteradoption of 134,414 139,394 113,510 89,009 62,230ASU No.2016-13

Charged-off (18,314) (7,776) (7,274) (12,432) (4,485)loans

Recoveries oncharged-off 1,209 1,580 3,259 1,958 479loans

Net loans (17,105) (6,196) (4,015) (10,474) (4,006)charged-off

Provision forloan credit 9,993 1,216 29,899 34,975 5,351losses

Balance at end $ 127,302 $ 134,414 $ 139,394 $ 113,510 $ 63,575of period

Allowance forcredit losses/ 1.58% 1.50% 1.49% 1.22% 0.67%total loans

Allowance forcredit losses/ 196% 284% 311% 222% 160%non-accruingloans

NET LOANCHARGE-OFFS

Commercial $ (11,862) $ (635) $ (1,679) $ (5,990) $ (1,419)real estate

Commercial andindustrial (5,089) (5,551) (1,059) (3,728) (1,495)loans

Residential 250 517 (966) (19) (351)mortgages

Home equity 141 (57) (10) (107) (67)

Auto and other (545) (470) (301) (630) (674)consumer

Total, net $ (17,105) $ (6,196) $ (4,015) $ (10,474) $ (4,006)

Netcharge-offs(QTD 0.80% 0.27% 0.17% 0.45% 0.17%annualized)/average loans

Netcharge-offs(YTD 0.41% 0.29% 0.31% 0.45% 0.35%annualized)/average loans

DELINQUENT ANDNON-ACCRUINGLOANS/TOTALLOANS

30-89 Days 0.20% 0.31% 0.37% 0.43% 0.25%delinquent

90+ Daysdelinquent and 0.14% 0.14% 0.14% 0.05% 0.29%still accruing

Total accruingdelinquent 0.34% 0.45% 0.51% 0.48% 0.54%loans

Non-accruing 0.80% 0.53% 0.48% 0.55% 0.42%loans

Totaldelinquent and 1.14% 0.98% 0.99% 1.03% 0.96%non-accruingloans

(1) This balance includes $17 million of PCD loans.

(2) This balance includes $12 million of PCD confirmed losses as of January 1,2020.

BERKSHIRE HILLS BANCORP, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED- (F-9)

At or for the Quarters Ended

Dec. 31, Sept. 30, June 30, March 31, Dec. 31,

(in thousands) 2020 2020 2020 2020 2019

Net income/(loss) $ 15,009 $ 21,225 $ (549,381) $ (19,870) $ 25,751

Adj: Net securities (gains)/losses (1) (2,405) 1,017 (822) 9,730 (1,734)

Adj: Goodwill impairment - - 553,762 - -

Adj: Net (gains) on sale of business operations and assets (1,240) - - - -

Adj: Merger and acquisition expense - - - - 3,611

Adj: Restructuring expense and other expense 523 5,316 - - 2,102

Adj: Loss from discontinued operations before income taxes 5,114 2,477 8,635 10,629 9,514

Adj: Income taxes (2,939) (3,611) (18,658) (4,134) (3,910)

Total core income/(loss) (2) (A) $ 14,062 $ 26,424 $ (6,464) $ (3,645) $ 35,334

Total revenue from continuing operations $ 99,036 $ 97,018 $ 94,971 $ 92,064 $ 114,695

Adj: Net securities (gains)/losses (1) (2,405) 1,017 (822) 9,730 (1,734)

Adj: Net (gains) on sale of business operations and assets (1,240) - - - -

Total core revenue (2) (B) $ 95,391 $ 98,035 $ 94,149 $ 101,794 $ 112,961

Total non-interest expense from continuing operations $ 71,796 $ 72,843 $ 624,275 $ 71,325 $ 70,287

Less: Merger, restructuring and other expense (see above) (523) (5,316) - - (5,713)

Less: Goodwill impairment - - (553,762) - -

Core non-interest expense (2) (C) $ 71,273 $ 67,527 $ 70,513 $ 71,325 $ 64,574

Total revenue $ 98,479 $ 96,752 $ 90,383 $ 93,869 $ 116,860

Total non-interest expense 76,353 75,054 628,322 83,759 81,966

Pre-tax, pre-provision net revenue (PPNR) $ 22,126 $ 21,698 $ (537,939) $ 10,110 $ 34,894

Total revenue from continuing operations $ 99,036 $ 97,018 $ 94,971 $ 92,064 $ 114,695

Total non-interest expense from continuing operations 71,796 72,843 624,275 71,325 70,287

Pre-tax, pre-provision net revenue (PPNR) from continuing operations $ 27,240 $ 24,175 $ (529,304) $ 20,739 $ 44,408

Total core revenue (2) $ 95,391 $ 98,035 $ 94,149 $ 101,794 $ 112,961

Core non-interest expense (2) 71,273 67,527 70,513 71,325 64,574

Core pre-tax, pre-provision net revenue (PPNR) $ 24,118 $ 30,508 $ 23,636 $ 30,469 $ 48,387

(in millions, except per share data)

Total average assets (D) $ 12,446 $ 12,660 $ 13,419 $ 12,852 $ 13,270

Total average shareholders' equity (E) 1,150 1,133 1,675 1,734 1,747

Total average tangible shareholders' equity (2) (F) 1,110 1,091 1,085 1,135 1,146

Total average tangible common shareholders' equity (2) (G) 1,103 1,071 1,064 1,115 1,105

Total tangible shareholders' equity, period-end (2)(3) (H) 1,153 1,138 1,122 1,124 1,159

Total tangible common shareholders' equity, period-end (2)(3) (I) 1,153 1,118 1,101 1,104 1,119

Total tangible assets, period-end (2)(3) (J) 12,803 12,574 13,021 12,524 12,617

Total common shares outstanding, period-end (thousands) (K) 50,833 50,306 50,192 50,199 49,585

Average diluted shares outstanding (thousands) (L) 50,355 50,329 50,246 50,204 50,702

Core earnings/(loss) per common share, diluted(2) (A/L) $ 0.28 $ 0.53 $ (0.13) $ (0.07) $ 0.70

Tangible book value per common share, period-end (2) (I/K) 22.68 22.22 21.94 22.00 22.56

Total tangible shareholders' equity/total tangible assets (2) (H)/(J) 9.01 9.05 8.61 8.98 9.19

Performance ratios (4)

GAAP return on assets 0.48 % 0.67 % (16.38) % (0.62) % 0.78 %

Core return on assets (2) 0.45 0.84 (0.19) (0.11) 1.08

GAAP return on equity 5.22 7.50 (131.17) (4.58) 5.90

Core return on equity (2) (A/E) 4.89 9.33 (1.54) (0.84) 8.09

Core return on tangible common equity (2)(5) (A+O)/(G) 5.50 10.27 (2.05) (0.94) 13.12

PPNR/assets (2) 0.71 0.69 (16.04) 0.31 1.05

Core PPNR/assets (2) 0.78 0.97 0.71 0.96 1.48

Efficiency ratio (2)(6) (C-O)/(B+M+P) 71.03 65.39 71.01 66.92 53.66

Net interest margin 2.61 2.61 2.62 3.04 3.11

Supplementary data (in thousands)

Tax benefit on tax-credit investments (7) (M) $ 1,334 $ 1,377 $ 1,379 $ 608 $ 2,503

Non-interest income charge on tax-credit investments (8) (N) (971) (1,090) (1,097) (486) (1,996)

Net income on tax-credit investments (M+N) 363 287 282 122 507

Intangible amortization (O) $ 1,513 $ 1,530 $ 1,558 $ 1,580 $ 1,582

Fully taxable equivalent income adjustment (P) 1,485 1,512 1,580 1,824 1,934

(1) Net securities (gains)/losses include the change in fair value of theCompany's equity securities in compliance with the Company's adoption of ASU2016-01.

(2) Non-GAAP financial measure.

(3) Total tangible shareholders' equity is computed by taking totalshareholders' equity less the intangible assets at period-end.

Total tangible assets is computed by taking total assets less theintangible assets at period-end.

(4) Ratios are annualized and based on average balance sheet amounts, whereapplicable. Quarterly data may not sum to year-to-date data due

to rounding.

(5) Core return on tangible equity is computed by dividing the total coreincome/(loss) adjusted for the tax-effected amortization of intangible assets,

assuming a 27% marginal rate, by tangible equity.

(6) Efficiency ratio is computed by dividing total core tangible non-interestexpense by the sum of total net interest income on a fully

taxable equivalent basis and total core non-interest income adjusted toinclude tax credit benefit of tax shelter investments. The

Company uses this non-GAAP measure to provide important informationregarding its operational efficiency.

(7) The tax benefit is the direct reduction to the income tax provision due totax credits and deductions generated from investments in historic

rehabilitation and low-income housing.

(8) The non-interest income charge is the reduction to the tax-advantagedinvestments, which are incurred as the tax credits are generated.

BERKSHIRE HILLS BANCORP, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA - UNAUDITED - (F-10)

Years Ended

Dec. 31, Dec. 31,

(Dollars in thousands) 2020 2019

Net (loss)/income $ (533,017) $ 97,450

Adj: Net securities losses/(gains) (1) 7,520 (4,389)

Adj: Goodwill impairment 553,762 -

Adj: Net (gains) on sale of business operations and assets (1,240) -

Adj: Merger and acquisition expenses - 18,733

Adj: Restructuring expense and other 5,839 9,313

Adj: Loss from discontinued operations before income taxes 26,855 5,539

Adj: Income taxes (29,342) (7,799)

Total core income (2) (A) $ 30,377 $ 118,847

Total revenue from continuing operations $ 383,089 $ 449,260

Adj: Net securities losses/(gains) (1) 7,520 (4,389)

Adj: Net (gains) on sale of business operations and assets (1,240) -

Total core revenue(2) (B) $ 389,369 $ 444,871

Total non-interest expense from continuing operations $ 840,239 $ 289,857

Less: Merger, restructuring and other expense (see above) (5,839) (28,046)

Less: Goodwill impairment (553,762) -

Core non-interest expense (2) (C) $ 280,638 $ 261,811

Total revenue $ 379,483 $ 490,490

Total non-interest expense 863,488 336,626

Pre-tax, pre-provision net revenue (PPNR) $ (484,005) $ 153,864

Total revenue from continuing operations $ 383,089 $ 449,260

Total non-interest expense from continuing operations 840,239 289,857

Pre-tax, pre-provision net revenue (PPNR) from continuing operations $ (457,150) $ 159,403

Total core revenue (2) $ 389,369 $ 444,871

Core non-interest expense (2) 280,638 261,811

Core pre-tax, pre-provision net revenue (PPNR) $ 108,731 $ 183,060

(in millions, except per share data)

Total average assets (D) $ 12,861 $ 12,961

Total average shareholders' equity (E) 1,421 1,694

Total average tangible shareholders' equity (2) (F) 1,105 1,116

Total average tangible common shareholders' equity (2) (G) 1,088 1,076

Total tangible shareholders' equity, period-end (2)(3) (H) 1,153 1,159

Total tangible common shareholders' equity, period-end (2)(3) (I) 1,153 1,119

Total tangible assets, period-end (2)(3) (J) 12,803 12,613

Total common shares outstanding, period-end (thousands) (K) 50,833 49,585

Average diluted shares outstanding (thousands) (L) 50,308 49,421

Core earnings per common share, diluted(2) (A/L) $ 0.60 $ 2.40

Tangible book value per common share, period-end (2) (I/K) 22.68 22.56

Total tangible shareholders' equity/total tangible assets (2) (H)/(J) 9.01 9.19

Performance ratios (4)

GAAP return on assets (4.15) % 0.75 %

Core return on assets (2) (A/D) 0.24 0.93

GAAP return on equity (37.46) 5.75

Core return on equity (2) (A/E) 2.14 7.01

Core return on tangible common equity (2)(5) (A+O)/(G) 3.18 11.35

PPNR/assets (2) (3.76) 1.19

Core PPNR/assets (2) 0.85 1.41

Efficiency ratio (2)(6) (C-O)/(B+M+P) 68.53 55.63

Net interest margin 2.72 3.17

Supplementary data

Tax benefit on tax-credit investments (7) (M) $ 4,699 $ 7,950

Non-interest income charge on tax-credit investments (8) (N) (3,645) (6,455)

Net income on tax-credit investments (M+N) 1,054 1,495

Intangible amortization (O) 6,181 5,783

Fully taxable equivalent income adjustment (P) 6,402 7,451

(1) Net securities losses/(gains) include the change in fair value of the Company's equity securities in compliance with the Company's adoption

of ASU 2016-01.

(2) Non-GAAP financial measure.

(3) Total tangible shareholders' equity is computed by taking total shareholders' equity less the intangible assets at period-end.

Total tangible assets is computed by taking total assets less the intangible assets at period-end.

(4) 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.

(5) Core return on tangible equity is computed by dividing the total core income adjusted for the tax-effected amortization of

intangible assets, assuming a 27% marginal rate, by tangible equity.

(6) Efficiency ratio is computed by dividing total core tangible non-interest expense by the sum of total net interest income on a fully

taxable equivalent basis and total core non-interest income adjusted to include tax credit benefit of tax shelter investments. The

Company uses this non-GAAP measure to provide important information regarding its operational efficiency.

(7) The tax benefit is the direct reduction to the income tax provision due to tax credits and deductions generated from investments in

historic rehabilitation and low-income housing.

(8) The non-interest income charge is the reduction to the tax-advantaged investments, which are incurred as the tax credits are generated.

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SOURCE Berkshire Hills Bancorp, Inc.