PR Newswire | Oct 26, 2020 04:16PM EDT

10/26 15:15 CDT

Berkshire Hills Announces Third Quarter Results BOSTON, Oct. 26, 2020

BOSTON, Oct. 26, 2020 /PRNewswire/ -- Berkshire Hills Bancorp, Inc. (NYSE: BHLB) today announced third quarter net income of $21 million, or $0.42 per share, in 2020 compared to $23 million, or $0.44 per share, in 2019. The non-GAAP measure of core earnings totaled $26 million, or $0.53 per share, in the third quarter of 2020 compared to $24 million, or $0.46, per share in the third quarter of 2019. Compared to the linked quarter, results benefited from higher revenue and lower expense as the Company continues to adjust operations to improve operating profitability.

THIRD QUARTER FINANCIAL HIGHLIGHTS (Changes are compared to the prior quarter. Measures identified as non-GAAP are reconciled on pages F-9 and F-10)

* Revenue increased by 2% * Fee income increased by 9% * Non-interest expense decreased by 88%, while core non-interest expense decreased by 4% (non-GAAP measure which excludes second quarter goodwill impairment charge) * Efficiency ratio improved to 65% from 71% (non-GAAP measure) * Equity/assets ratio improved to 9.3% from 8.9% * Tangible equity/tangible assets ratio improved to 9.1% from 8.6% (non-GAAP measure) * 0.27% annualized net charge-offs/loans * 0.39% non-performing assets/assets

Acting CEO and President Sean Gray stated, "In the first half of the year, our priority was to quickly address the needs of our team members, customers, and communities being impacted by COVID-19. Starting in the third quarter, we began normalizing our operations and nearly returning to regular retail hours, while continuing to support higher digital transaction volumes. During the quarter, we continued our focus on managing our expenses and further strengthening our capital and liquidity metrics. We're working closely with our borrowers as they progress in normalizing their operations and meeting their credit obligations. This is reflected in our stable loan performance and resumption of regular payment schedules for most of the borrowers who initially requested deferrals at the outset of the pandemic."

Mr. Gray concluded, "Berkshire is evolving and adapting to the current environment, by having made investments that will support our customers and our Company today and into the future. We recently launched a best-in-class digital account opening experience that will extend our market outreach, improve customer experience, reduce fraud and allow us to operate more cost effectively. This is another step in building a 21st-century community bank that provides everyone equal access to the products and services they need to bank with dignity, achieve upward economic mobility and live healthier financial lives."

In addition to introducing its new digital account opening experience, the Company promoted Jason White, a recent Boston area CIO of the Year winner, to EVP- Chief Information Officer. The Company also announced the promotions of two leaders to the role of Regional President. Wealth Management Director Kate Hersey now leads the Boston region and Foundation Director Lori Gazzillo Kiely now leads the Berkshire County region. Now half of those holding the title of Regional President are women, furthering Berkshire's work in support of its Be FIRST Commitment. Berkshire Bank has also been recognized with the North American Inspiring Workplaces Award.

FINANCIAL CONDITION

Berkshire's balance sheet continued to strengthen during the most recent quarter. Total assets decreased by approximately $450 million, or 3%, to $12.6 billion in the third quarter of 2020. This was primarily due to a $388 million, or 4%, decrease in total loans reflecting continued runoff in all major loan categories. The biggest change was a $198 million, or 9%, decrease in residential mortgage balances due to accelerated prepayments in the low interest rate environment. Commercial loans outstanding included $708 million in Paycheck Protection Program ("PPP") loans, which were stable from the prior quarter-end. Total deposits decreased by $309 million, or 3%, to $10.5 billion primarily due to a $270 million decrease in brokered balances to $814 million. Other deposit balances shifted from higher rate maturing time deposits into non-maturity products due to current low interest rates. This contributed to a decrease in the cost of deposits to 0.61% from 0.79%. Wholesale funds decreased to $1.5 billion from $1.9 billion during the quarter. Retained earnings increased book value to $23.03 per common share and the non-GAAP measure of tangible book value to $22.22 per common share. Capital metrics also improved due to the earnings benefit and reduction in total assets. The Company has received notice for the conversion of its remaining outstanding preferred stock to common stock, which is not expected to have a material impact on the Company's financial condition and per share metrics.

Total delinquent accruing loans decreased to 0.45% of loans from 0.51% of loans during the most recent quarter, while non-accruing loans increased to 0.53% from 0.48%. Year-to-date net loan charge-offs measuring 0.29% of total loans remained below the levels recorded for the same period in 2019. Middle market commercial loan modifications have included an underwriting review and assessment of accrual status. Loans with payment modifications are expected to decrease further in the fourth quarter from levels previously reported. The allowance for credit losses on loans was little changed, measuring 1.50% of total loans at quarter-end, and 1.62% of loans excluding government-guaranteed PPP loans.

RESULTS OF OPERATIONS

Berkshire's operating profitability strengthened during the most recent quarter. Berkshire reported third quarter 2020 GAAP EPS of $0.42 per share. The Company's non-GAAP measure of core EPS totaled $0.53 per share. Measures of pre-tax pre-provision net revenue ("PPNR") also improved. Non-core charges primarily consisted of costs related to executive separation expense, together with losses on discontinued operations and securities.

Operating results were improved from the prior quarter due to higher revenues and lower expenses. Fee income growth of 9% primarily reflected higher deposit fees as transaction volumes increased. Non-interest income also benefited from recovery in financial instrument fair value adjustments following negative pandemic impacts in the first half of the year. Net interest income decreased by 1% in the third quarter due primarily to loan runoff. The net interest margin was little changed at 2.61%, as loan yields and deposit costs both declined due to the ongoing low interest rate environment.

Third quarter results benefited from lower operating expenses in part because second quarter expenses were elevated by $2.6 million in one-time awards accrued to compensate staff for expediting PPP loan processing to support businesses and paychecks during the economic lockdowns. Other compensation costs were also reduced during the quarter. The efficiency ratio, a non-GAAP financial measure, improved to 65% from 71% as a result of these improvements in revenue and expenses. Full time equivalent staff in continuing operations totaled 1,507 positions at period-end, compared to 1,550 positions at the start of the year. The credit loss provision decreased to $1 million, reflecting an improved economic outlook after the original pandemic downturn was recognized with high credit loss provisions in the first half of the year. The effective tax rate was a benefit of 4% due primarily to the impact of first half of the year expenses lowering the taxable income for the year.

BE FIRST CORPORATE RESPONSIBILITY UPDATE

Berkshire is committed to 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 include:

* Investing 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 responding and has provided nearly $3 million in grant funding to more than 400 organizations through the end of the third quarter. These critical investments are ensuring access to resources for underserved populations to become college and career ready, ensuring quality affordable housing and supporting small business growth and entrepreneurship. In addition, 75% of Berkshire's employees, through its award-winning XTEAM volunteer program contributed more than 6,000 hours of service. * Transitioning to a Low-Carbon Future: Berkshire is working towards transitioning its electricity to 100% renewable sources. The Company announced an agreement with Nexamp to subscribe to a community solar project in Massachusetts, lowering its carbon footprint and increasing the percentage of its energy supply procured from renewables while also reducing costs. * Enhancing Environmental & Social Governance Practices: The Company completed updates to its Responsible & Sustainable Business Policy to improve the quality and clarity of its policy and disclosure. The update included new language to address Fraud Reporting & Suspicious Activity as well as Conflict of Interest. In addition, the Company enhanced its Social and Environmental Credit Risk Framework by incorporating new policy and procedure into the existing Commercial Loan Policy to more effectively mitigate the social and environmental risks associated with highly sensitive industries. * Enhancing Protected Leave For Gender-Based Violence: Under the leadership of EVP, Chief Human Resources & Culture Officer Jackie Courtwright and through a unique collaboration with the non-profit FreeFrom, Berkshire enhanced protections for its employees experiencing gender-based violence by providing 15 days of paid leave a year to deal with the consequences of intimate partner violence, sexual assault, and human trafficking. This policy allows employees the ability to seek medical care, attend court proceedings, and relocate - all without missing a paycheck or depleting their accrued sick or vacation days. * Recognizing Impact & Results: Berkshire was named the winner of the North American Inspiring Workplaces Award for its diversity and culture programming recognizing the efforts of its Be FIRST Commitment and internal diversity work. The Company was also named one of Massachusetts Most Charitable Companies by the Boston Business Journal for the eighth consecutive year.

INVESTOR CONFERENCE CALL AND INVESTOR PRESENTATION

Berkshire will conduct a conference call/webcast at 10:00 a.m. eastern time on Tuesday, October 27, 2020 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/10148654/da6d986a50. 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, November 3, 2020 by dialing 877-344-7529 and entering access number 10148654. 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 which is transforming into 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 $12.6 billion in assets. Berkshire Bank serves the underbanked through the Reevx LabsTM platform.

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 loan losses; 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 is exiting pursuant to a sales agreement. 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 its goodwill in the second quarter of 2020, which was classified as noncore. Noncore charges in the third quarter of 2020 were primarily related to executive separation expense, which was principally the result of the separation with the CEO.

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 Cronin Email: 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)

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

2020 2020 2020 2019 2019

PER SHARE DATA

Net earnings/ (loss) per $ 0.42 $ (10.93) $ (0.40) $ 0.51 $ 0.44 common share, diluted

Core earnings/ (loss) per 0.53 (0.13) (0.07) 0.70 0.46 common share, diluted (2)

Total book value per 23.03 22.79 33.90 34.65 34.36 common share

Tangible book value per 22.22 21.94 22.00 22.56 22.42 common share (2)

Market price 10.11 11.02 14.86 32.88 29.29 at period end

Dividends per 0.12 0.24 0.24 0.23 0.23 common share

Dividends per preferred 0.24 0.48 0.48 0.46 0.46 share

PERFORMANCE RATIOS (3)

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

Core return on 0.84 (0.19) (0.11) 1.08 0.71 assets (2)

Return on 7.50 (131.17) (4.58) 5.90 5.12 equity

Core return on 9.33 (1.54) (0.84) 8.09 5.35 equity (2)

Core return on tangible 10.27 (2.05) (0.94) 13.12 8.74 common equity (2)

Net interest margin, fully taxable 2.61 2.62 3.04 3.11 3.22 equivalent (FTE) (4)(5)

Fee income/Net interest and fee income 19.82 18.45 15.46 18.11 17.61 from continuing operations

Efficiency 65.39 71.01 66.92 53.66 53.37 ratio (2)

CHANGE (Year-to-date)

Total commercial loans 5 % 12 % (5) % (7) % (9) % (organic, annualized)

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

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

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

(Loss)/ earnings per common share (847) (1,200) (178) (14) (26) (compared to prior year)

Core earnings/ (loss) per common share (81) (116) (112) (14) (18) (compared to prior year)(2)

FINANCIAL DATA (in millions)

Total assets $ 12,614 $ 13,063 $ 13,122 $ 13,216 $ 13,532

Total earning 11,832 12,267 11,785 11,916 12,174 assets

Total 1,988 1,882 1,837 1,770 1,861 securities

Total loans 8,982 9,370 9,303 9,502 9,719

Allowance for 134 139 114 64 62 credit losses

Total intangible 41 42 598 599 602 assets

Total 10,467 10,776 10,072 10,336 10,423 deposits

Total shareholders' 1,179 1,164 1,722 1,759 1,772 equity

Net income/ 21.2 (549.4) (19.9) 25.8 22.6 (loss)

Core income/ 26.4 (6.5) (3.6) 35.3 23.7 (loss) (2)

Purchase accounting 2.5 2.1 3.1 5.1 4.8 accretion

Goodwill - 553.8 - - - impairment

ASSET QUALITY AND CONDITION RATIOS

Net charge-offs (current 0.27 % 0.17 % 0.45 % 0.17 % 0.92 % quarter annualized)/ average loans

Total non-performing 0.39 0.36 0.40 0.31 0.28 assets/total assets

Allowance for credit losses/ 1.50 1.49 1.22 0.67 0.64 total loans

Loans/deposits 86 87 92 92 93

Shareholders' equity to 9.35 8.91 13.13 13.31 13.10 total assets

Tangible shareholders' equity to 9.05 8.61 8.98 9.19 9.05 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.

(2) Non-GAAP financial measure. Core measurements are non-GAAP financial measures 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.

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

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

The effect of purchase accounting accretion for loans, time deposits, and (5) borrowings on the quarterly net interest margin was an increase in all quarters,

which is shown sequentially as follows beginning with the most recent quarter and ending with the earliest quarter: 0.08%, 0.07%, 0.11%, 0.17%, 0.16%.

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2)

September 30, June 30, December 31,

(in thousands) 2020 2020 2019

Assets

Cash and due from banks $ 90,537 $ 102,105 $ 105,447

Short-term investments 844,755 942,047 474,382

Total cash and 935,292 1,044,152 579,829short-term investments

Trading security 9,525 9,519 10,769

Marketable equitysecurities, at fair 31,993 33,263 41,556value

Securities available for 1,575,289 1,458,036 1,311,555sale, at fair value

Securities held tomaturity, at amortized 330,197 334,895 357,979cost

Federal Home Loan Bankstock and other 40,520 46,139 48,019restricted securities

Total securities 1,987,524 1,881,852 1,769,878

Less: Allowance forcredit losses on (96) (113) -investment securities

Net securities 1,987,428 1,881,739 1,769,878

Loans held for sale 15,854 62,881 36,664

Total loans 8,982,336 9,370,271 9,502,428

Less: Allowance for (134,414) (139,394) (63,575)credit losses on loans

Net loans 8,847,922 9,230,877 9,438,853

Premises and equipment, 117,116 118,722 120,398net

Other real estate owned 40 40 -

Goodwill - - 553,762

Other intangible assets 40,947 42,477 45,615

Cash surrender value ofbank-owned life 231,217 229,812 227,894insurance

Other assets 425,675 430,592 288,945

Assets from discontinued 12,966 21,692 154,132operations

Total assets $ 12,614,457 $ 13,062,984 $ 13,215,970

Liabilities andshareholders' equity

Demand deposits $ 2,585,173 $ 2,573,786 $ 1,884,100

NOW and other deposits 1,522,289 1,453,397 1,492,569

Money market deposits 2,516,168 2,525,761 2,528,656

Savings deposits 952,836 932,243 841,283

Time deposits 2,890,093 3,290,721 3,589,369

Total deposits 10,466,559 10,775,908 10,335,977

Senior borrowings 605,483 719,638 730,501

Subordinated borrowings 97,223 97,165 97,049

Total borrowings 702,706 816,803 827,550

Other liabilities 251,220 280,843 267,398

Liabilities from 14,947 25,290 26,481discontinued operations

Total liabilities 11,435,432 11,898,844 11,457,406

Preferred shareholders' 20,325 20,325 40,633equity

Common shareholders' 1,158,700 1,143,815 1,717,931equity

Total shareholders' 1,179,025 1,164,140 1,758,564equity

Total liabilities and $ 12,614,457 $ 13,062,984 $ 13,215,970shareholders' equity

Net common shares 50,306 50,192 49,585outstanding

BERKSHIRE HILLS BANCORP, INC.

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

LOAN ANALYSIS

Annualized Growth %

Quarter Year(in September 30, 2020 June 30, 2020 December 31, 2019 ended tomillions) Balance Balance Balance September Date 30, 2020

Totalcommercial $ 3,943 $ 3,996 $ 4,034 (5) % (3) %real estate

Commercialand 2,147 2,222 1,841 (14) 22industrialloans

Totalcommercial 6,090 6,218 5,875 (8) 5loans

Totalresidential 2,122 2,320 2,685 (34) (28)mortgages

Home 350 364 381 (15) (11)equity

Auto and 420 468 561 (41) (34)other

Totalconsumer 770 832 942 (30) (24)loans

Total loans $ 8,982 $ 9,370 $ 9,502 (17) % (7) %

DEPOSIT ANALYSIS

Annualized Growth %

Quarter Year(in September 30, 2020 June 30, 2020 December 31, 2019 ended tomillions) Balance Balance Balance September Date 30, 2020

Demand $ 2,585 $ 2,574 $ 1,884 2 % 50 %

NOW and 1,523 1,453 1,493 19 3other

Money 2,516 2,526 2,529 (2) (1)market

Savings 953 932 841 9 18

Time 2,890 3,291 3,589 (49) (26)deposits

Total $ 10,467 $ 10,776 $ 10,336 (11) % 2 %deposits

BERKSHIRE HILLS BANCORP, INC.

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

Three Months Ended Nine Months Ended

September 30, September 30,

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

Interest anddividend incomefrom continuingoperations

Loans $ 85,688 $ 118,371 $ 278,259 $ 338,012

Securities and 12,080 15,354 39,392 46,060other

Total interest anddividend 97,768 133,725 317,651 384,072income

Interest expensefrom continuingoperations

Deposits 16,070 31,501 60,460 86,396

Borrowings 4,643 5,353 16,118 23,751

Total interest 20,713 36,854 76,578 110,147expense

Net interestincome from 77,055 96,871 241,073 273,925continuingoperations

Non-interestincome fromcontinuingoperations

Mortgage banking 2,044 292 4,647 616originations

Loan related 4,988 6,493 12,007 17,318income

Deposit related 7,062 8,705 20,382 23,088fees

Insurancecommissions and 2,660 2,895 8,451 8,486fees

Wealth management 2,299 2,325 6,926 7,114fees

Total fee 19,053 20,710 52,413 56,622income

Other 1,927 609 492 1,363

Securities(losses)/gains, (1,017) 87 (9,925) 2,655net

Total non-interest 19,963 21,406 42,980 60,640income

Total net revenuefrom continuing 97,018 118,277 284,053 334,565operations

Provision for 1,200 22,600 65,878 30,068credit losses

Non-interestexpense fromcontinuingoperations

Compensation and 34,809 37,272 111,121 105,551benefits

Occupancy and 11,084 9,893 32,411 28,788equipment

Technology and 8,540 6,849 24,376 19,821communications

Marketing and 1,002 1,006 3,069 3,428promotion

Professional 2,567 2,282 7,852 8,510services

FDIC premiums and 1,518 - 4,658 3,390assessments

Other real estateowned and 40 150 81 150foreclosures

Amortization ofintangible 1,530 1,526 4,668 4,201assets

Goodwill - - 553,762 -impairment

Merger,restructuring and 5,316 4,163 5,316 22,333other expense

Other 6,437 7,870 21,129 23,398

Total non-interest 72,843 71,011 768,443 219,570expense

Income/(loss) fromcontinuingoperations before $ 22,975 $ 24,666 $ (550,268) $ 84,927incometaxes

Income tax (68) 4,007 (18,194) 16,042(benefit)/expense

Net income/(loss)from continuing $ 23,043 $ 20,659 $ (532,074) $ 68,885operations

(Loss)/income fromdiscontinued $ (2,477) $ 2,747 $ (21,741) $ 3,975operations beforeincome taxes

Income tax (659) 790 (5,789) 1,161(benefit)/expense

Net (loss)/incomefrom discontinued $ (1,818) $ 1,957 $ (15,952) $ 2,814operations

Net income/(loss) $ 21,225 $ 22,616 $ (548,026) $ 71,699

Preferred stock 58 240 313 720dividend

Income/(loss)available to $ 21,167 $ 22,376 $ (548,339) $ 70,979commonshareholders

Basic earnings/(loss) per commonshare:

Continuing $ 0.46 $ 0.40 $ (10.58) $ 1.41Operations

Discontinued (0.04) 0.04 (0.32) 0.06Operations

Total $ 0.42 $ 0.44 $ (10.90) $ 1.47

Diluted earnings/(loss) per commonshare:

Continuing $ 0.46 $ 0.40 $ (10.58) $ 1.40Operations

Discontinued (0.04) 0.04 (0.32) 0.06Operations

Total $ 0.42 $ 0.44 $ (10.90) $ 1.46

Weighted averagesharesoutstanding:

Basic 50,329 51,422 50,256 48,846

Diluted 50,329 51,545 50,256 48,987

BERKSHIRE HILLS BANCORP, INC.

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

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

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

Interest anddividend incomefrom continuingoperations

Loans $ 85,688 $ 90,876 $ 101,695 $ 110,915 $ 118,371

Securities and 12,080 12,812 14,500 14,526 15,354other

Total interest anddividend 97,768 103,688 116,195 125,441 133,725income

Interest expensefrom continuingoperations

Deposits 16,070 20,552 23,838 28,797 31,501

Borrowings 4,643 5,546 5,929 5,311 5,353

Total interest 20,713 26,098 29,767 34,108 36,854expense

Net interestincome from 77,055 77,590 86,428 91,333 96,871continuingoperations

Non-interestincome fromcontinuingoperations

Mortgage banking 2,044 1,644 959 172 292originations

Loan related 4,988 5,717 1,302 7,056 6,493income

Deposit related 7,062 5,373 7,947 8,264 8,705fees

Insurancecommissions and 2,660 2,767 3,024 2,471 2,895fees

Wealth management 2,299 2,057 2,570 2,239 2,325fees

Total fee 19,053 17,558 15,802 20,202 20,710income

Other 1,927 (999) (436) 75 609

Securities(losses)/gains, (1,017) 822 (9,730) 1,734 87net

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

Total non-interest 19,963 17,381 5,636 23,362 21,406income

Total net revenuefrom continuing 97,018 94,971 92,064 114,695 118,277operations

Provision for 1,200 29,871 34,807 5,351 22,600credit losses

Non-interestexpense fromcontinuingoperations

Compensation and 34,809 39,403 36,909 35,355 37,272benefits

Occupancy and 11,084 10,195 11,132 10,798 9,893equipment

Technology and 8,540 7,755 8,081 6,702 6,849communications

Marketing and 1,002 902 1,165 1,046 1,006promotion

Professional 2,567 2,565 2,720 2,288 2,282services

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

Other real estateowned and 40 14 27 4 150foreclosures

Amortization ofintangible 1,530 1,558 1,580 1,582 1,526assets

Goodwill - 553,762 - - -impairment

Merger,restructuring and 5,316 - - 5,713 4,163other expense

Other 6,437 6,463 8,229 6,328 7,870

Total non-interest 72,843 624,275 71,325 70,287 71,011expense

Income/(loss) fromcontinuing $ 22,975 $ (559,175) $ (14,068) $ 39,057 $ 24,666operations beforeincome taxes

Income tax (68) (16,130) (1,996) 6,421 4,007(benefit)/expense

Net income/(loss)from continuing $ 23,043 $ (543,045) $ (12,072) $ 32,636 $ 20,659operations

(Loss)/income fromdiscontinued $ (2,477) $ (8,635) $ (10,629) $ (9,514) $ 2,747operations beforeincome taxes

Income tax (659) (2,299) (2,831) (2,629) 790(benefit)/expense

Net (loss)/incomefrom discontinued $ (1,818) $ (6,336) $ (7,798) $ (6,885) $ 1,957operations

Net income/(loss) $ 21,225 $ (549,381) $ (19,870) $ 25,751 $ 22,616

Preferred stock 58 130 125 240 240dividend

Income/(loss)available to $ 21,167 $ (549,511) $ (19,995) $ 25,511 $ 22,376commonshareholders

Basic earnings/(loss) per commonshare:

Continuing $ 0.46 $ (10.80) $ (0.24) $ 0.65 $ 0.40Operations

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

Total $ 0.42 $ (10.93) $ (0.40) $ 0.51 $ 0.44

Diluted earnings/(loss) per commonshare:

Continuing $ 0.46 $ (10.80) $ (0.24) $ 0.65 $ 0.40Operations

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

Total $ 0.42 $ (10.93) $ (0.40) $ 0.51 $ 0.44

Weighted averagesharesoutstanding:

Basic 50,329 50,246 50,204 50,494 51,422

Diluted 50,329 50,246 50,204 50,702 51,545

BERKSHIRE HILLS BANCORP, INC.

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

Quarters Ended

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

2020 2020 2020 2019 2019

Earning assets

Loans:

Commercial real estate 3.52 % 3.78 % 4.41 % 4.80 % 4.92 %

Commercial and industrial loans 3.88 4.02 5.03 5.35 5.58

Residential mortgages 3.78 3.78 3.77 3.61 3.73

Consumer loans 3.59 3.72 4.28 4.38 4.55

Total loans 3.68 3.83 4.33 4.52 4.67

Securities 2.78 3.07 3.32 3.31 3.41

Short-term investments and loans 0.21 0.50 1.78 3.15 4.11held for sale

Total earning assets 3.31 3.50 4.08 4.27 4.45

Funding liabilities

Deposits:

NOW and other 0.24 0.30 0.46 0.54 0.61

Money market 0.38 0.58 0.98 1.18 1.27

Savings 0.10 0.10 0.13 0.14 0.13

Time 1.63 1.84 1.87 1.97 2.02

Total interest-bearing deposits 0.81 1.01 1.18 1.35 1.43

Borrowings 2.36 2.38 2.60 2.77 3.12

Total interest-bearing 0.95 1.16 1.33 1.48 1.57liabilities

Net interest spread 2.36 2.34 2.75 2.79 2.88

Net interest margin 2.61 2.62 3.04 3.11 3.22

Cost of funds (1) 0.73 0.92 1.11 1.23 1.32

Cost of deposits 0.61 0.79 0.96 1.11 1.18

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

BERKSHIRE HILLS BANCORP, INC.

AVERAGE BALANCES - UNAUDITED - (F-7)

Quarters Ended

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

(in thousands) 2020 2020 2020 2019 2019

Assets

Loans

Commercial real $ 3,986,424 $ 4,005,018 $ 4,000,461 $ 4,056,244 $ 3,998,144estate

Commercial and 2,191,749 2,152,820 1,795,813 1,768,039 1,951,205industrial loans

Residential 2,224,132 2,452,622 2,654,224 2,758,676 2,849,216mortgages

Consumer loans 800,824 865,318 921,810 974,889 1,035,893

Total loans (1) 9,203,129 9,475,778 9,372,308 9,557,848 9,834,458

Securities (2) 1,873,533 1,793,381 1,744,635 1,752,968 1,846,985

Short-terminvestments and 766,447 697,138 374,894 444,622 309,897loans held for sale

Total earning assets 11,843,109 11,966,297 11,491,837 11,755,438 11,991,340(3)

Goodwill and other 41,460 590,672 598,347 601,192 603,762intangible assets

Other assets 759,534 751,702 663,056 737,396 668,218

Assets fromdiscontinued 16,041 109,923 98,528 176,251 204,339operations

Total assets $ 12,660,144 $ 13,418,594 $ 12,851,768 $ 13,270,277 $ 13,467,659

Liabilities andshareholders' equity

Deposits

NOW and other $ 1,243,487 $ 1,183,839 $ 1,159,388 $ 1,085,485 $ 1,111,637

Money market 2,673,567 2,672,066 2,752,465 2,688,766 2,624,639

Savings 940,488 901,218 846,942 835,209 838,445

Time 3,056,419 3,399,222 3,333,070 3,827,175 4,158,688

Totalinterest-bearing 7,913,961 8,156,345 8,091,865 8,436,635 8,733,409deposits

Borrowings 777,369 942,033 949,316 853,911 805,035

Totalinterest-bearing 8,691,330 9,098,378 9,041,181 9,290,546 9,538,444liabilities

Non-interest-bearing 2,558,981 2,343,173 1,849,295 1,898,045 1,864,964demand deposits

Other liabilities 254,273 272,690 203,797 304,504 267,922

Liabilities fromdiscontinued 22,805 28,988 23,799 30,446 28,206operations

Total liabilities 11,527,389 11,743,229 11,118,072 11,523,541 11,699,536

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

Common shareholders' 1,112,430 1,655,040 1,713,148 1,706,103 1,727,490equity

Total shareholders' 1,132,755 1,675,365 1,733,696 1,746,736 1,768,123equity

Total liabilitiesand shareholders' $ 12,660,144 $ 13,418,594 $ 12,851,768 $ 13,270,277 $ 13,467,659equity

Supplementary data

Total averagenon-maturity $ 7,416,523 $ 7,100,296 $ 6,608,090 $ 6,507,505 $ 6,439,685deposits

Total average 10,472,942 10,499,518 9,941,160 10,334,680 10,598,373deposits

Fully taxableequivalent income 1,512 1,580 1,824 1,934 1,826adjustment

Total average 1,091,295 1,084,693 1,135,349 1,145,544 1,164,361tangible 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

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

(in thousands) 2020 2020 2020 2019 2019

NON-PERFORMINGASSETS

Non-accruingloans:

Commercial $ 14,777 $ 12,486 $ 16,938 $ 20,119 $ 15,829real estate

Commercial andindustrial 15,035 15,045 18,370 11,373 12,224loans

Residential 7,928 9,840 9,636 3,343 3,062mortgages

Consumer loans 9,650 7,513 6,172 4,805 5,191

Totalnon-accruing 47,390 44,884 51,116 39,640 36,306loans

Other real 401 517 224 - -estate owned

Repossessed 1,646 1,581 1,316 858 1,003assets

Totalnon-performing $ 49,437 $ 46,982 $ 52,656 $ 40,498 $ 37,309assets

Totalnon-accruing 0.53% 0.48% 0.55% 0.42% 0.37%loans/totalloans

Totalnon-performing 0.39% 0.36% 0.40% 0.31% 0.28%assets/totalassets

PROVISION AND ALLOWANCE FOR CREDITLOSSES ON LOANS

Balance atbeginning of $ 139,394 $ 113,510 $ 63,575 $ 62,230 $ 62,156period

Adoption ofASU No. - - 25,434 - -2016-13 (1)

Balance afteradoption of 139,394 113,510 89,009 62,230 62,156ASU No.2016-13

Charged-off (7,776) (7,274) (12,432) (4,485) (23,524)loans

Recoveries oncharged-off 1,580 3,259 1,958 479 998loans

Net loans (6,196) (4,015) (10,474) (4,006) (22,526)charged-off

Provision forloan credit 1,216 29,899 34,975 5,351 22,600losses

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

Allowance forcredit losses/ 1.50% 1.49% 1.22% 0.67% 0.64%total loans

Allowance forcredit losses/ 284% 311% 222% 160% 171%non-accruingloans

NET LOANCHARGE-OFFS

Commercial $ (635) $ (1,679) $ (5,990) $ (1,419) $ (2,759)real estate

Commercial andindustrial (5,551) (1,059) (3,728) (1,495) (18,850)loans

Residential 517 (966) (19) (351) (140)mortgages

Home equity (57) (10) (107) (67) (71)

Auto and other (470) (301) (630) (674) (706)consumer

Total, net $ (6,196) $ (4,015) $ (10,474) $ (4,006) $ (22,526)

Net charge-offs(QTD 0.27% 0.17% 0.45% 0.17% 0.92%annualized)/average loans

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

DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS

30-89 Days 0.31% 0.37% 0.43% 0.25% 0.26%delinquent

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

Total accruingdelinquent 0.45% 0.51% 0.48% 0.54% 0.55%loans

Non-accruing 0.53% 0.48% 0.55% 0.42% 0.37%loans

Totaldelinquent and 0.98% 0.99% 1.03% 0.96% 0.92%non-accruingloans

(1) 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

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

(in thousands) 2020 2020 2020 2019 2019

Net income/(loss) $ 21,225 $ (549,381) $ (19,870) $ 25,751 $ 22,616

Adj: Net securities losses/(gains) (1) 1,017 (822) 9,730 (1,734) (87)

Adj: Goodwill impairment - 553,762 - - -

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

Adj: Merger and acquisition expense - - - 3,611 3,802

Adj: Restructuring expense and other expense 5,316 - - 2,102 361

Adj: Loss/(income) from discontinued operations before income taxes 2,477 8,635 10,629 9,514 (2,747)

Adj: Income taxes (3,611) (18,658) (4,134) (3,910) (281)

Total core income/(loss) (2) (A) $ 26,424 $ (6,464) $ (3,645) $ 35,334 $ 23,664

Total revenue from continuing operations $ 97,018 $ 94,971 $ 92,064 $ 114,695 $ 118,277

Adj: Net securities losses/(gains) (1) 1,017 (822) 9,730 (1,734) (87)

Total core revenue (2) (B) $ 98,035 $ 94,149 $ 101,794 $ 112,961 $ 118,190

Total non-interest expense from continuing operations $ 72,843 $ 624,275 $ 71,325 $ 70,287 $ 71,011

Less: Merger, restructuring and other expense (see above) (5,316) - - (5,713) (4,163)

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

Core non-interest expense (2) (C) $ 67,527 $ 70,513 $ 71,325 $ 64,574 $ 66,848

Total revenue $ 96,752 $ 90,383 $ 93,869 $ 116,860 $ 134,067

Total non-interest expense 75,054 628,322 83,759 81,966 84,054

Pre-tax, pre-provision net revenue (PPNR) $ 21,698 $ (537,939) $ 10,110 $ 34,894 $ 50,013

Total revenue from continuing operations $ 97,018 $ 94,971 $ 92,064 $ 114,695 $ 118,277

Total non-interest expense from continuing operations 72,843 624,275 71,325 70,287 71,011

Pre-tax, pre-provision net revenue (PPNR) from continuing operations $ 24,175 $ (529,304) $ 20,739 $ 44,408 $ 47,266

Total core revenue (2) $ 98,035 $ 94,149 $ 101,794 $ 112,961 $ 118,190

Core non-interest expense (2) 67,527 70,513 71,325 64,574 66,848

Core pre-tax, pre-provision net revenue (PPNR) $ 30,508 $ 23,636 $ 30,469 $ 48,387 $ 51,342

(in millions, except per share data)

Total average assets (D) $ 12,660 $ 13,419 $ 12,852 $ 13,270 $ 13,468

Total average shareholders' equity (E) 1,133 1,675 1,734 1,747 1,768

Total average tangible shareholders' equity (2) (F) 1,091 1,085 1,135 1,146 1,164

Total average tangible common shareholders' equity (2) (G) 1,071 1,064 1,115 1,105 1,124

Total tangible shareholders' equity, period-end (2)(3) (H) 1,138 1,122 1,124 1,159 1,170

Total tangible common shareholders' equity, period-end (2)(3) (I) 1,118 1,101 1,104 1,119 1,130

Total tangible assets, period-end (2)(3) (J) 12,574 13,021 12,524 12,617 12,930

Total common shares outstanding, period-end (thousands) (K) 50,306 50,192 50,199 49,585 50,394

Average diluted shares outstanding (thousands) (L) 50,329 50,246 50,204 50,702 51,545

Core earnings/(loss) per common share, diluted(2) (A/L) $ 0.53 $ (0.13) $ (0.07) $ 0.70 $ 0.46

Tangible book value per common share, period-end (2) (I/K) 22.22 21.94 22.00 22.56 22.42

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

Performance ratios (4)

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

Core return on assets (2) 0.84 (0.19) (0.11) 1.08 0.71

GAAP return on equity 7.50 (131.17) (4.58) 5.90 5.12

Core return on equity (2) (A/E) 9.33 (1.54) (0.84) 8.09 5.35

Core return on tangible common equity (2)(5) (A+O)/ 10.27 (2.05) (0.94) 13.12 8.74 (G)

PPNR/assets (2) 0.69 (16.04) 0.31 1.05 1.49

Core PPNR/assets (2) 0.97 0.71 0.96 1.48 1.55

Efficiency ratio (2)(6) (C-O)/ 65.39 71.01 66.92 53.66 53.37 (B+M+P)

Net interest margin 2.61 2.62 3.04 3.11 3.22

Supplementary data (in thousands)

Tax benefit on tax-credit investments (7) (M) $ 1,377 $ 1,379 $ 608 $ 2,503 $ 2,382

Non-interest income charge on tax-credit investments (8) (N) (1,090) (1,097) (486) (1,996) (1,942)

Net income on tax-credit investments (M+N) 287 282 122 507 440

Intangible amortization (O) $ 1,530 $ 1,558 $ 1,580 $ 1,582 $ 1,526

Fully taxable equivalent income adjustment (P) 1,512 1,580 1,824 1,934 1,826

(1) Net securities losses/(gains) 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 tangibleassets is computed by taking total assets less the intangible assets atperiod-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 equivalentbasis and total core non-interest income adjusted to include tax credit benefitof tax shelter investments. The Company uses this non-GAAP measure to provideimportant information regarding 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 historicrehabilitation 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)

At or for the Nine Months Ended

Sept. 30, Sept. 30,

(Dollars in thousands) 2020 2019

Net (loss)/income $ (548,026) $ 71,699

Adj: Net securities losses/(gains) (1) 9,925 (2,655)

Adj: Goodwill impairment 553,762 -

Adj: Merger and acquisition expenses - 15,122

Adj: Restructuring expense and other 5,316 7,211

Adj: Loss/(income) from discontinued operations before income taxes 21,741 (3,975)

Adj: Income taxes (26,403) (3,889)

Total core income (2) (A) $ 16,315 $ 83,513

Total revenue from continuing operations $ 284,053 $ 334,565

Adj: Net securities losses/(gains) (1) 9,925 (2,655)

Total core revenue(2) (B) $ 293,978 $ 331,910

Total non-interest expense from continuing operations $ 768,443 $ 219,570

Less: Merger, restructuring and other expense (see above) (5,316) (22,333)

Less: Goodwill impairment (553,762) -

Core non-interest expense (2) (C) $ 209,365 $ 197,237

Total revenue $ 281,004 $ 373,630

Total non-interest expense 787,135 254,660

Pre-tax, pre-provision net revenue (PPNR) $ (506,131) $ 118,970

Total revenue from continuing operations $ 284,053 $ 334,565

Total non-interest expense from continuing operations 768,443 219,570

Pre-tax, pre-provision net revenue (PPNR) from continuing operations $ (484,390) $ 114,995

Total core revenue (2) $ 293,978 $ 331,910

Core non-interest expense (2) 209,365 197,237

Core pre-tax, pre-provision net revenue (PPNR) $ 84,613 $ 134,673

(in millions, except per share data)

Total average assets (D) $ 13,001 $ 12,857

Total average shareholders' equity (E) 1,513 1,677

Total average tangible shareholders' equity (2) (F) 1,104 1,106

Total average tangible common shareholders' equity (2) (G) 1,083 1,066

Total tangible shareholders' equity, period-end (2)(3) (H) 1,138 1,170

Total tangible common shareholders' equity, period-end (2)(3) (I) 1,118 1,130

Total tangible assets, period-end (2)(3) (J) 12,574 12,930

Total common shares outstanding, period-end (thousands) (K) 50,306 50,394

Average diluted shares outstanding (thousands) (L) 50,290 48,987

Core earnings per common share, diluted(2) (A/L) $ 0.32 $ 1.70

Tangible book value per common share, period-end (2) (I/K) 22.22 22.42

Total tangible shareholders' equity/total tangible assets (2) (H)/(J) 9.05 9.05

Performance ratios (4)

GAAP return on assets (5.63) % 0.74 %

Core return on assets (2) (A/D) 0.17 0.88

GAAP return on equity (48.26) 5.70

Core return on equity (2) (A/E) 1.44 6.64

Core return on tangible common equity (2)(5) (A+O)/(G) 2.39 10.74

PPNR/assets (2) (5.19) 1.23

Core PPNR/assets (2) 0.87 1.40

Efficiency ratio (2)(6) (C-O)/ 67.72 56.30 (B+M+P)

Net interest margin 2.75 3.19

Supplementary data

Tax benefit on tax-credit investments (7) (M) $ 3,364 $ 5,447

Non-interest income charge on tax-credit investments (8) (N) (2,673) (4,459)

Net income on tax-credit investments (M+N) 691 988

Intangible amortization (O) 4,668 4,201

Fully taxable equivalent income adjustment (P) 4,917 5,517

(1) Net securities losses/(gains) 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 tangibleassets is computed by taking total assets less the intangible assets atperiod-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 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 equivalentbasis and total core non-interest income adjusted to include tax credit benefitof tax shelter investments. The Company uses this non-GAAP measure to provideimportant information regarding 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 historicrehabilitation 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.

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SOURCE Berkshire Hills Bancorp, Inc.