Berkshire Hills Reports Second Quarter Net Income of $24 Million, or $0.55 Earnings per Share

10% EPS Growth Year-over-Year

• Period-end loan growth of 2%; total deposits unchanged

• Net loan charge-offs decreased $1.1 million; credit loss allowance increased $2.2 million commensurate with loan growth

• TCE ratio of 7.9 percent and CET1 ratio of 12.1 percent

• Repurchased $12 million of stock in 2Q23

BerkshireHills Bancorp logo (Berkshire Hills Bancorp, Inc.)

BOSTON, July 20, 2023 /PRNewswire/ — Berkshire Hills Bancorp, Inc. (NYSE: BHLB) today reported results for the second quarter of 2023. These results along with comparison periods are summarized below:

($ in millions, except per share data)		June 30, 2023		Mar. 31, 2023		June 30, 2022
Net income	$	23.9	$	27.6	$	$23.1
Per share		0.55		0.63		0.50
1		23.9		27.6		23.6
Per share		0.55		0.63		0.51
Net interest income, non FTE	$	92.8	$	97.5	$	81.4
Net interest income, FTE		94.7		99.4		82.9
Net interest margin, FTE		3.24 %		3.58 %		3.11 %
Non-interest income		17.1		16.6		16.4
1		17.1		16.6		17.3
Non-interest expense	$	74.0	$	72.0	$	68.5
1		74.0		72.0		68.4
1		63.6 %		59.5 %		66.6 %
Average balances
Loans	$	8,791	$	8,515	$	7,492
Deposits		9,568		9,676		9,755
Period-end balances
Loans		8,882		8,682		7,803
Deposits		10,068		10,068		10,115
1. See non-GAAP financial measures and reconciliation to GAAP measures on page 12.

Berkshire CEO Nitin Mhatre stated, "I'm pleased with our progress, as we continue to grow the company strategically while posting higher earnings per share year-over-year. In this dynamic banking environment, Berkshire's teams are serving clients and communities with focus and discipline. Reflecting the quality of our underwriting and business model, credit performance remains strong and deposits have been resilient. In the second quarter, we allocated our $100 million sustainability bond issuance to targeted social and environmental projects. We're proud to be a leader promoting strong support to the communities in our footprint"

CFO David Rosato added, "Second quarter GAAP net income of $23.9 million increased 3% year-over-year, generating an 8.3 percent return on average tangible common equity. The cumulative impact of Federal Reserve Bank interest rate hikes has resulted in higher funding costs for Berkshire Bank and the industry, compressing net interest margins and operating profitability. Net income decreased 14 percent linked quarter, primarily reflecting lower net interest income. Net interest margin of 3.24 percent improved 13 basis points from a year ago, but declined 34 basis points linked-quarter. Further expansion of average loan yields was more than offset by higher deposit and borrowing costs. Period-end loan balances grew 2 percent while deposits were unchanged. The period-end loan to deposit ratio measured 88 percent and the ratio of tangible common equity to tangible assets stood at 7.9 percent. Common stock repurchases totaled $12 million for the quarter."

_ __ As of and For the Three Months Ended______
			June 30, 2023		Mar. 31, 2023		June 30, 2022
Asset Quality
Net loan charge-offs to average loans			0.26 %		0.32 %		0.02 %
Non-performing loans to total loans			0.32 %		0.31 %		0.34 %
Returns
1			0.78 %		0.94 %		0.82 %
1			8.26 %		9.59 %		8.33 %
2
1			7.9 %		7.9 %		8.5 %
Tier 1 leverage			9.6 %		9.9 %		10.2 %
Common equity Tier 1			12.1 %		12.1 %		12.9 %
Tier 1 risk-based			12.3 %		12.4 %		13.2 %
Total risk-based			14.4 %		14.4 %		16.1 %
1. See non-GAAP measures and reconciliation to GAAP beginning on page 12. All performance ratios are annualized and are based on average balance sheet amounts, where applicable. 2. Presented as projected for June 30, 2023 and actual for the remaining periods.

Headquartered in Boston, Berkshire Hills Bancorp is the parent of Berkshire Bank. Providing a wide range of financial solutions through its consumer banking, commercial banking and wealth management divisions, the Bank has approximately $12.1 billion in assets and a community-based footprint of 100 financial centers in Massachusetts, New York, Vermont, Connecticut and Rhode Island. Access more information about Berkshire Hills Bancorp at ir.berkshirebank.com.

2Q 2023 Financial Highlights

Income Statement

• GAAP and operating earnings totaled $23.9 million, or $0.55 per share.

• Net interest income totaled $92.8 million in 2Q23 compared to $97.5 million in 1Q23.

  • One additional calendar day in 2Q23 (1% increase in net interest income).

• Net interest margin decreased 34 basis points from 1Q23 to 3.24% reflecting:

  • Higher cost of funds (increase of 58 basis points).

    • Includes higher deposit costs (increase of 41 basis points).

    • Includes $600 million increase in higher cost average borrowings.

  • Higher yields on the loan portfolio (increase of 20 basis points).

• Provision for credit losses on loans totaled $8.0 million.

  • Allowance for credit losses on loans increased $2.2 million.

  • Net loan charge-offs totaled $5.8 million.

  • Net annualized loan charge-off ratio of 0.26%.

• Non-interest income totaled $17.1 million in 2Q23 compared to $16.6 million in 1Q23.

  • Deposit related fees included $215 thousand in higher commercial cash management fees.

  • Loan related non-interest revenue included $754 thousand in higher interest rate swap income.

  • Gain on SBA loan sales increased $416 thousand.

  • Wealth management revenue seasonally decreased $156 thousand. At June 30, 2023, wealth assets under management were $1.4 billion.

• Non-interest expense totaled $74.0 million in 2Q23, compared to $72.0 million in 1Q23.

  • Compensation and benefits expense increased $889 thousand.

  • Occupancy and equipment expense decreased $409 thousand.

  • Technology and communications expense increased $994 thousand.

  • The efficiency ratio was 63.6% for 2Q23 compared to 59.5% for 1Q23.

• The effective income tax rate was 14.2% for 2Q23 and 15.6% for the first six months of 2023 compared to 18.7% for the full year of 2022.

Loans

• Commercial real estate loans totaled $4.3 billion at June 30, 2023, an $84 million increase from March 31, 2023.

  • Average commercial real estate loans totaled $4.3 billion in 2Q23, a $117 million increase from 1Q23.

• Commercial and industrial loans totaled $1.5 billion at June 30, 2023, an $88 million decrease from March 31, 2023.

  • Average commercial and industrial loans totaled $1.5 billion in 2Q23, a $31 million decrease from 1Q23.

• Residential mortgage loans totaled $2.6 billion at June 30, 2023, a $215 million increase from March 31, 2023.

  • Average residential mortgage loans totaled $2.5 billion in 2Q23, a $205 million increase from 1Q23.

• Consumer loans totaled $517 million at June 30, 2023, a $10 million decrease from March 31, 2023.

  • Average consumer loans totaled $524 million in 2Q23, a $15 million decrease from 1Q23.

• Total non-performing loans to total loans was 0.32% at June 30, 2023 compared to 0.31% at March 31, 2023.

• The allowance for credit losses to total loans was 1.13% at June 30, 2023, unchanged from March 31, 2023.

Deposits

• Non-interest bearing deposits totaled $2.6 billion at June 30, 2023, a $56 million decrease from March 31, 2023.

  • Average non-interest bearing deposits totaled $2.6 billion in 2Q23, a $112 million decrease from 1Q23.

• Time deposits totaled $2.4 billion at June 30, 2023, $323 million increase from March 31, 2023.

  • Average time deposits totaled $2.3 billion in 2Q23, a $479 million increase from 1Q23.

2Q 2023 ESG & CORPORATE RESPONSIBILITY HIGHLIGHTS

Berkshire is a performance and purpose-driven, values-guided, community-centered bank. Berkshire's ESG activities are central to its strategy. Key highlights in the quarter include:

• The Company announced the allocation of its inaugural $100 million sustainability bond which helped create 330 units of affordable and workforce housing along with more than 200,000 square feet of green building development. Further details can be found in Berkshire's Sustainability Bond Report which highlights how proceeds were allocated to support affordable housing, workforce housing, green building and financial access and inclusion projects in communities across New England and New York.

• Berkshire maintained its top quartile ESG rating performance and was named the recipient of the LGBT Corporate Ally Award from the Boston Business Journal.

Forward Looking Statements: This document contains "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. You can identify these statements from the use of the words "may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," "remain," "target" and similar expressions. There are many factors that could cause actual results to differ significantly from expectations described in the forward-looking statements. For a discussion of such factors, please see Berkshire's most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission and available on the SEC's website at www.sec.gov. You should not place undue reliance on forward-looking statements, which reflect our expectations only as of the date of this document. Berkshire does not undertake any obligation to update forward-looking statements.

INVESTOR CONTACTKevin ConnInvestor Relations617.641.9206kaconn@berkshirebank.com

MEDIA CONTACTGary LevanteCorporate Communications413.447.1737glevante@berkshirebank.com

BERKSHIRE HILLS BANCORP, INC. SELECTED FINANCIAL HIGHLIGHTS (1)
			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,
			2023		2023		2022		2022		2022
NOMINAL AND PER SHARE DATA
	Net earnings per common share, diluted		$ 0.55		$ 0.63		$ 0.69		$ 0.42		$ 0.50
	(2)(3)		0.55		0.63		0.64		0.62		0.51
	Net income, (thousands)		23,861		27,637		30,505		18,717		23,115
	Operating net income, (thousands) (2)(3)		23,878		27,608		28,254		27,928		23,562
	Net interest income, (thousands) non FTE		92,759		97,533		102,092		92,084		81,358
	(5)		94,721		99,441		103,937		93,799		82,918
	Total common shares outstanding, end of period		44,033		44,411		44,361		45,040		45,788
	Average diluted shares, (thousands)		43,532		44,036		44,484		45,034		46,102
	Total book value per common share, end of period		22.11		22.42		21.51		20.93		22.15
	Tangible book value per common share, end of period (2)(3)		21.60		21.89		20.95		20.36		21.56
	Dividends per common share		0.18		0.18		0.18		0.12		0.12
	Dividend payout ratio		33.47	%	28.98	%	26.59	%	29.35	%	25.24	%
	Return on equity		7.82	%	9.11	%	10.06	%	6.30	%	7.82	%
	Operating return on equity		7.82		9.10		9.32		9.40		7.97
	(2)(3)		8.26		9.59		10.59		6.76		8.33
	Operating return on tangible common equity		8.27		9.59		9.83		9.92		8.48
	Return on assets		0.78		0.94		1.08		0.66		0.82
	(2)(3)		0.78		0.94		1.00		0.99		0.84
	(5)		3.24		3.58		3.84		3.48		3.11
	(3)		63.57		59.51		58.25		62.01		66.60
FINANCIAL DATA (in millions, end of period)
	Total assets		$ 12,090		$ 12,320		$ 11,663		$ 11,317		$ 11,579
	Total earning assets		11,370		11,615		10,913		10,604		10,849
	Total loans		8,882		8,682		8,335		7,943		7,803
	Total deposits		10,068		10,068		10,327		9,988		10,115
	(%)		88	%	86	%	81	%	80	%	77	%
	Total accumulated other comprehensive (loss) net of tax, end of period		$ (186)		$ (159)		$ (181)		$ (188)		$ (123)
	Total shareholders' equity		973		995		954		943		1,014
ASSET QUALITY
	Allowance for credit losses, (millions)		$ 100		$ 98		$ 96		$ 96		$ 99
	Net charge-offs, (millions)		(6)		(7)		(12)		(6)		(0)
	Net charge-offs (QTD annualized)/average loans		0.26	%	0.32	%	0.58	%	0.30	%	0.02	%
	Provision (benefit)/expense, (millions)		$ 8		$ 9		$ 12		$ 3		$ -
	Non-performing assets, (millions)		31		29		33		40		29
	Non-performing loans/total loans		0.32	%	0.31	%	0.37	%	0.48	%	0.34	%
	Allowance for credit losses/non-performing loans		353		363		309		254		368
	Allowance for credit losses/total loans		1.13		1.13		1.15		1.21		1.27
CAPITAL RATIOS
	Risk weighted assets, (millions)(6)		$ 9,518		$ 9,454		$ 9,151		$ 8,823		$ 8,718
	(6)		12.1	%	12.1	%	12.4	%	12.7	%	13.0	%
	(6)		9.6		9.9		10.2		10.1		10.2
	(3)		7.9		7.9		8.0		8.1		8.5
(1)	All financial tables presented are unaudited.
(2)	Reconciliations of non-GAAP financial measures, including all references to operating and tangible amounts, appear on pages 12 and 13.
(3)	Non-GAAP financial measure. Operating measurements are non-GAAP financial measures that are adjusted to exclude net non-operating charges primarily related to acquisitions and restructuring activities. See pages 12 and 13 for reconciliations of non-GAAP financial measures.
(4)	All performance ratios are annualized and are based on average balance sheet amounts, where applicable.
(5)	Fully taxable equivalent considers the impact of tax advantaged investment securities and loans.
(6)	Presented as projected for June 30, 2023 and actual for the remaining periods.

BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED BALANCE SHEETS
	June 30,	March 31,	December 31,	June 30,
(in thousands)	2023	2023	2022	2022
Assets
Cash and due from banks	$ 120,285	$ 121,589	$ 145,342	$ 156,470
Short-term investments	520,315	884,973	540,013	714,547
Total cash and cash equivalents	640,600	1,006,562	685,355	871,017
Trading securities, at fair value	6,405	6,584	6,708	7,040
Equity securities, at fair value	12,868	13,072	12,856	14,154
Securities available for sale, at fair value	1,340,331	1,407,271	1,423,200	1,697,019
Securities held to maturity, at amortized cost	563,765	574,606	583,453	602,611
Federal Home Loan Bank stock	34,714	44,245	7,219	9,365
Total securities	1,958,083	2,045,778	2,033,436	2,330,189
Less: Allowance for credit losses on investment securities	(71)	(71)	(91)	(94)
Net securities	1,958,012	2,045,707	2,033,345	2,330,095
Loans held for sale	8,708	1,906	4,311	1,062
Commercial real estate loans	4,315,202	4,231,510	4,095,079	3,919,678
Commercial and industrial loans	1,464,922	1,553,340	1,473,316	1,471,446
Residential mortgages	2,584,959	2,369,614	2,216,410	1,819,341
Consumer loans	517,319	527,503	550,504	592,986
Total loans	8,882,402	8,681,967	8,335,309	7,803,451
Less: Allowance for credit losses on loans	(100,219)	(97,991)	(96,270)	(99,021)
Net loans	8,782,183	8,583,976	8,239,039	7,704,430
Premises and equipment, net	76,903	78,710	85,217	89,657
Other intangible assets	22,074	23,279	24,483	27,046
Other assets	593,621	571,616	587,854	550,275
Assets held for sale	8,220	8,220	3,260	5,386
Total assets	$ 12,090,321	$ 12,319,976	$ 11,662,864	$ 11,578,968
Liabilities and shareholders' equity
Non-interest bearing deposits	$ 2,594,528	$ 2,650,937	$ 2,852,127	$ 2,921,347
NOW and other deposits	944,775	959,417	1,054,596	2,247,544
Money market deposits	3,005,081	3,274,630	3,723,570	2,327,004
Savings deposits	1,088,405	1,069,915	1,063,269	1,143,352
Time deposits	2,435,618	2,112,646	1,633,707	1,475,417
Total deposits	10,068,407	10,067,545	10,327,269	10,114,664
Federal Home Loan Bank advances	674,345	904,395	4,445	58,542
Subordinated borrowings	121,238	121,176	121,064	195,659
Total borrowings	795,583	1,025,571	125,509	254,201
Other liabilities	252,950	231,380	256,024	196,053
Total liabilities	11,116,940	11,324,496	10,708,802	10,564,918
Common shareholders' equity	973,381	995,480	954,062	1,014,050
Total shareholders' equity	973,381	995,480	954,062	1,014,050
Total liabilities and shareholders' equity	$ 12,090,321	$ 12,319,976	$ 11,662,864	$ 11,578,968

BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME
	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except per share data)	2023		2022		2023		2022
Interest income	$ 145,425		$ 87,379		$ 277,741		$ 162,202
Interest expense	52,666		6,021		87,449		11,781
Net interest income, non FTE	92,759		81,358		190,292		150,421
Non-interest income
Deposit related fees	8,571		8,005		16,882		15,356
Loan fees and other	3,189		1,113		5,658		6,052
Gain on SBA loan sales	2,910		3,619		5,404		6,964
Wealth management fees	2,583		2,775		5,322		5,400
Other	(137)		1,812		222		4,978
Total non-interest income excluding (losses)/gains	17,116		17,324		33,488		38,750
Fair value adjustments on securities	(22)		(973)		212		(1,718)
Total non-interest income	17,094		16,351		33,700		37,032
Total net revenue	109,853		97,709		223,992		187,453
Provision expense/(benefit) for credit losses	8,000		-		16,999		(4,000)
Non-interest expense
Compensation and benefits	39,960		37,830		79,031		75,351
Occupancy and equipment	8,970		9,438		18,349		19,505
Technology and communications	10,465		8,611		19,936		17,138
Professional services	2,526		2,913		5,803		5,605
Other expenses	12,106		9,648		22,899		19,373
Merger, restructuring and other non-operating expenses	21		35		(15)		53
Total non-interest expense	74,048		68,475		146,003		137,025
Total non-interest expense excluding merger, restructuring and other	74,027		68,440		146,018		136,972
Income before income taxes	$ 27,805		$ 29,234		$ 60,990		$ 54,428
Income tax expense	3,944		6,119		9,492		11,117
Net income	$ 23,861		$ 23,115		$ 51,498		$ 43,311
Basic earnings per common share	$ 0.55		$ 0.50		$ 1.18		$ 0.93
Diluted earnings per common share	$ 0.55		$ 0.50		$ 1.18		$ 0.92
Weighted average shares outstanding:
Basic	43,443		45,818		43,564		46,733
Diluted	43,532		46,102		43,780		47,074

BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME (5 Quarter Trend)
		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,
(in thousands, except per share data)		2023		2023		2022		2022		2022
Interest income		$ 145,425		$ 132,316		$ 121,384		$ 103,671		$ 87,379
Interest expense		52,666		34,783		19,292		11,587		6,021
Net interest income, non FTE		92,759		97,533		102,092		92,084		81,358
Non-interest income
Deposit related fees		8,571		8,311		8,293		8,377		8,005
Loan fees and other		3,189		2,469		2,123		1,292		1,113
Gain on SBA loan sales		2,910		2,494		2,979		2,551		3,619
Wealth management fees		2,583		2,739		2,255		2,353		2,775
Other		(137)		359		(159)		2,154		1,812
Total non-interest income excluding (losses)/gains		17,116		16,372		15,491		16,727		17,324
Fair value adjustments on securities		(22)		234		163		(476)		(973)
Total non-interest income		17,094		16,606		15,654		16,251		16,351
Total net revenue		109,853		114,139		117,746		108,335		97,709
Provision expense/(benefit) for credit losses		8,000		8,999		12,000		3,000		-
Non-interest expense
Compensation and benefits		39,960		39,071		37,968		39,422		37,830
Occupancy and equipment		8,970		9,379		9,431		8,702		9,438
Technology and communications		10,465		9,471		9,729		8,719		8,611
Professional services		2,526		3,277		3,153		3,285		2,913
Other expenses		12,106		10,793		12,350		10,076		9,648
Merger, restructuring and other non-operating expenses		21		(36)		(2,617)		11,473		35
Total non-interest expense		74,048		71,955		70,014		81,677		68,475
Total non-interest expense excluding merger, restructuring and other		74,027		71,991		72,631		70,204		68,440
Income before income taxes		$ 27,805		$ 33,185		$ 35,732		$ 23,658		$ 29,234
Income tax expense		3,944		5,548		5,227		4,941		6,119
Net income		$ 23,861		$ 27,637		$ 30,505		$ 18,717		$ 23,115
Diluted earnings per common share		$ 0.55		$ 0.63		$ 0.69		$ 0.42		$ 0.50
Weighted average shares outstanding:
Basic		43,443		43,693		44,105		44,700		45,818
Diluted		43,532		44,036		44,484		45,034		46,102

BERKSHIRE HILLS BANCORP, INC. AVERAGE BALANCES AND AVERAGE YIELDS AND COSTS
	Quarters Ended
		June 30, 2023					March 31, 2023					June 30, 2022
(in $ millions)			(1)					Interest (1)					(1)
Assets
Commercial real estate		4,283	67	6.16	%		4,166	61	5.88	%		3,831	37	3.79	%
Commercial and industrial loans		1,496	27	7.27			1,527	26	6.92			1,447	16	4.46
Residential mortgages		2,488	24	3.87			2,283	21	3.70			1,652	15	3.57
Consumer loans		524	9	7.28			539	10	7.24			562	8	5.41
Total loans		8,791	127	5.77			8,515	118	5.57			7,492	75	3.99
(2)		2,236	13	2.27			2,261	13	2.23			2,621	13	1.97
Short-term investments and loans HFS		560	7	4.94			313	3	4.24			476	1	0.57
Total earning assets		11,587	147	5.05			11,089	134	4.85			10,589	89	3.34
Goodwill and other intangible assets		22					24					27
Other assets		665					692					644
Total assets		12,274					11,805					11,260
Liabilities and shareholders' equity
Non-interest-bearing demand deposits		2,594	-	-	%		2,706	-	-	%		2,903	-	-	%
NOW and other		1,055	4	1.35			1,456	6	1.64			1,454	-	0.12
Money market		2,555	14	2.13			2,659	10	1.59			2,811	2	0.19
Savings		1,077	-	0.50			1,047	-	0.10			1,127	-	0.03
Time		2,287	18	3.07			1,808	10	2.13			1,460	2	0.64
Total cost deposits		9,568	36	1.51			9,676	26	1.09			9,755	4	0.17
(3)		1,288	17	5.14			688	9	5.06			160	2	4.61
Total funding liabilities		10,856	53	1.94			10,364	35	1.36			9,915	6	0.24
Other liabilities		197					227					163
Total liabilities		11,053					10,591					10,078
Common shareholders' equity		1,221					1,214					1,182
Total shareholders' equity		1,221					1,214					1,182
Total liabilities and shareholders' equity		12,274					11,805					11,260
Net interest margin, FTE				3.24					3.58					3.11
Total average non-maturity deposits		7,281					7,868					8,295
Supplementary data
Net Interest Income, non FTE		92.759					97.533					81.358
FTE income adjustment		1.962					1.908					1.560
Net Interest Income, FTE		94.721					99.441					82.918
(1) Interest income and expense presented on a fully taxable equivalent basis.
(2) Average balances for securities available-for-sale are based on amortized cost.
(3) Average balances for borrowings includes the financing lease obligation which is presented under other liabilities on the consolidated balance sheet.

BERKSHIRE HILLS BANCORP, INC. ASSET QUALITY ANALYSIS
	June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,
(in thousands)	2023		2023		2022		2022		2022
NON-PERFORMING ASSETS
Commercial real estate	$ 1,509		$ 2,546		$ 2,434		$ 2,976		$ 8,277
Commercial and industrial loans	15,597		12,155		17,023		21,008		4,891
Residential mortgages	8,728		9,442		8,612		10,407		10,331
Consumer loans	2,565		2,848		3,045		3,463		3,385
Total non-performing loans	28,399		26,991		31,114		37,854		26,884
Repossessed assets	2,549		2,462		2,209		2,175		2,004
Total non-performing assets	$ 30,948		$ 29,453		$ 33,323		$ 40,029		$ 28,888
Total non-performing loans/total loans	0.32 %		0.31 %		0.37 %		0.48 %		0.34 %
Total non-performing assets/total assets	0.26 %		0.24 %		0.29 %		0.35 %		0.25 %
PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS
Balance at beginning of period	$ 97,991		$ 96,270		$ 96,013		$ 99,021		$ 99,475
Adoption of ASU No. 2022-02	-		(401)		-		-		-
Balance after adoption of ASU No. 2022-02	97,991		95,869		96,013		99,021		99,475
Charged-off loans	(7,686)		(7,936)		(12,995)		(7,424)		(1,593)
Recoveries on charged-off loans	1,914		1,059		1,252		1,416		1,139
Net loans charged-off	(5,772)		(6,877)		(11,743)		(6,008)		(454)
Provision (benefit)/expense for loan credit losses	8,000		8,999		12,000		3,000		-
Balance at end of period	$ 100,219		$ 97,991		$ 96,270		$ 96,013		$ 99,021
Allowance for credit losses/total loans	1.13 %		1.13 %		1.15 %		1.21 %		1.27 %
Allowance for credit losses/non-performing loans	353 %		363 %		309 %		254 %		368 %
NET LOAN CHARGE-OFFS
Commercial real estate	$ 664		$ 122		$ 187		$ (854)		$ (76)
Commercial and industrial loans	(4,146)		(5,695)		(10,914)		(4,931)		(237)
Residential mortgages	(143)		305		192		122		(30)
Home equity	126		16		(128)		1		33
Auto and other consumer	(2,273)		(1,625)		(1,080)		(346)		(144)
Total, net	$ (5,772)		$ (6,877)		$ (11,743)		$ (6,008)		$ (454)
Net charge-offs (QTD annualized)/average loans	0.26 %		0.32 %		0.58 %		0.30 %		0.02 %
Net charge-offs (YTD annualized)/average loans	0.29 %		0.32 %		0.27 %		0.16 %		0.08 %
DELINQUENT AND NON-PERFORMING LOANS	Balance	Percent of Total Loans	Balance	Percent of Total Loans	Balance	Percent of Total Loans	Balance	Percent of Total Loans	Balance	Percent of Total Loans
30-89 Days delinquent	$ 15,147	0.17 %	$ 14,210	0.16 %	$ 12,162	0.15 %	$ 14,662	0.18 %	$ 36,184	0.46 %
90+ Days delinquent and still accruing	7,812	0.09 %	6,937	0.08 %	7,038	0.08 %	6,285	0.08 %	6,760	0.09 %
Total accruing delinquent loans	22,959	0.26 %	21,147	0.24 %	19,200	0.23 %	20,947	0.26 %	42,944	0.55 %
Non-performing loans	28,399	0.32 %	26,991	0.31 %	31,114	0.37 %	37,854	0.48 %	26,884	0.34 %
Total delinquent and non-performing loans	$ 51,358	0.58 %	$ 48,138	0.55 %	$ 50,314	0.60 %	$ 58,801	0.74 %	$ 69,828	0.89 %

BERKSHIRE HILLS BANCORP, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA
			June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,
(in thousands)			2023		2023		2022		2022		2022
Total non-interest income			$ 17,094		$ 16,606		$ 15,654		$ 16,251		$ 16,351
(1)			-		-		(163)		476		973
(2)			$ 17,094		$ 16,606		$ 15,491		$ 16,727		$ 17,324
Total revenue	(A)		$ 109,853		$ 114,139		$ 117,746		$108,335		$ 97,709
(1)			-		-		(163)		476		973
(2)	(B)		$ 109,853		$ 114,139		$ 117,583		$108,811		$ 98,682
Total non-interest expense	(C)		$ 74,048		$ 71,955		$ 70,014		$ 81,677		$ 68,475
Adj: Merger, restructuring and other non-operating expenses			(21)		36		2,617		(11,473)		(35)
Operating non-interest expense (2)	(D)		$ 74,027		$ 71,991		$ 72,631		$ 70,204		$ 68,440
Pre-tax, pre-provision net revenue (PPNR)	(A-C)		$ 35,805		$ 42,184		$ 47,732		$ 26,658		$ 29,234
(2)	(B-D)		35,826		42,148		44,952		38,607		30,242
Net income			$ 23,861		$ 27,637		$ 30,505		$ 18,717		$ 23,115
(1)			-		-		(163)		476		973
Adj: Restructuring expense and other non-operating expenses			21		(36)		(2,617)		11,473		35
Adj: Income taxes (expense)/benefit			(4)		7		529		(2,738)		(561)
(2)	(E)		$ 23,878		$ 27,608		$ 28,254		$ 27,928		$ 23,562
(in millions, except per share data)
Total average assets	(F)		$ 12,274		$ 11,805		$ 11,321		$ 11,315		$ 11,260
Total average shareholders' equity	(G)		1,221		1,214		1,213		1,189		1,182
(2)	(H)		1,198		1,190		1,188		1,164		1,155
Total accumulated other comprehensive (loss) net of tax, end of period			(186)		(159)		(181)		(188)		(123)
(2)	(J)		951		972		930		917		987
(2)	(L)		12,068		12,297		11,638		11,291		11,552
thousands	(M)		44,033		44,411		44,361		45,040		45,788
thousands	(N)		43,532		44,036		44,484		45,034		46,102
GAAP earnings per common share, diluted			$ 0.55		$ 0.63		$ 0.69		$ 0.42		$ 0.50
(2)	(E/N)		0.55		0.63		0.64		0.62		0.51
(2)	(J/M)		21.60		21.89		20.95		20.36		21.56
(2)	(J/L)		7.88		7.91		7.99		8.12		8.54
GAAP return on equity			7.82	%	9.11	%	10.06	%	6.30		7.82	%
(2)	(E/G)		7.82		9.10		9.32		9.40		7.97
(2)(4)			8.26		9.59		10.59		6.76		8.33
(2)(4)	(E+Q)/(H)		8.27		9.59		9.83		9.92		8.48
GAAP return on assets			0.78		0.94		1.08		0.66		0.82
(2)	(E/F)		0.78		0.94		1.00		0.99		0.84
(2)	(D-Q)/(B+O+R)		63.57		59.51		58.25		62.01		66.60
(in thousands)
(5)	(O)		$ 2,735		$ 2,897		$ 3,068		$ 620		$ 595
(6)	(P)		(2,210)		(2,285)		(2,355)		(445)		(351)
Net income on tax-credit investments	(O+P)		525		612		713		175		244
Intangible amortization	(Q)		$ 1,205		$ 1,205		$ 1,277		$ 1,285		$ 1,286
Fully taxable equivalent income adjustment	(R)		1,962		1,908		1,845		1,715		1,560
(1) Starting March 31, 2023, fair value adjustments on securities are included in operating income.
(2) Non-GAAP financial measure.
(3) 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.
(4) Amortization of intangible assets is adjusted assuming a 27% marginal tax rate.
(5) The tax benefit is the direct reduction to the income tax provision due to tax credit investments.
(6) The non-interest income amortization is the reduction to the tax-advantaged investments and are incurred as the tax credits are generated.

BERKSHIRE HILLS BANCORP, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED
		At or for the Six Months Ended
			June 30,		June 30,
(in thousands)			2023		2022
Total non-interest income			$ 33,700		$ 37,032
(1)			-		1,718
(2)			$ 33,700		$ 38,750
Total revenue	(A)		$ 223,992		$ 187,453
(1)			-		1,718
(2)	(B)		$ 223,992		$ 189,171
Total non-interest expense	(C)		$ 146,003		$ 137,025
Less: Merger, restructuring and other non-operating expenses			15		(53)
	(D)		$ 146,018		$ 136,972
Pre-tax, pre-provision net revenue (PPNR)	(A-C)		$ 77,989		$ 50,428
(2)	(B-D)		77,974		52,199
Net income			$ 51,498		$ 43,311
(1)			-		1,718
Adj: Restructuring expense and other non-operating expenses			(15)		53
Adj: Income taxes (expense)/benefit			3		(731)
(2)	(E)		$ 51,486		$ 44,351
(in millions, except per share data)
Total average assets	(F)		$ 12,040		$ 11,376
Total average shareholders' equity	(G)		1,217		1,185
(2)	(H)		1,194		1,157
Total accumulated other comprehensive (loss) net of tax, end of period			(186)		(123)
(2)	(J)		951		987
(2)	(L)		12,068		11,552
thousands	(M)		44,033		45,788
thousands	(N)		43,780		47,074
GAAP earnings/(loss) per common share, diluted			$ 1.18		$ 0.92
Operating earnings per common share, diluted	(E/N)		1.18		0.94
(2)	(J/M)		21.60		21.56
(2)	(J/L)		7.88		8.54
GAAP return on equity			8.46	%	7.31	%
(2)	(E/G)		8.46		7.49
(2)(4)			8.92		7.81
Operating return on tangible common equity	(E+Q)/(H)		8.92		7.99
GAAP return on assets			0.86		0.76
(2)	(E/F)		0.86		0.78
	(D-Q)/(B+O+R)		61.50		69.48
Net interest margin, FTE			3.40		2.86
(in thousands)
(5)	(O)		$ 5,632		$ 1,191
(6)	(P)		(4,495)		(708)
Net income on tax-credit investments	(O+P)		1,137		483
Intangible amortization	(Q)		$ 2,410		$ 2,572
Fully taxable equivalent income adjustment	(R)		3,869		3,084
(1) Starting March 31, 2023, fair value adjustments on securities are included in operating income.
(2) Non-GAAP financial measure.
(3) 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.
(4) Amortization of intangible assets is adjusted assuming a 27% marginal tax rate.
(5) The tax benefit is the direct reduction to the income tax provision due to tax credit investments.
(6) The non-interest income amortization is the reduction to the tax-advantaged investments and are incurred as the tax credits are generated.

SOURCE Berkshire Hills Bancorp, Inc.

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