# EDGAR Filing Document

**Accession Number:** 0001108134
**File Stem:** 0001104659-23-006943
**Filing Date:** 2023-1
**Character Count:** 61557
**Document Hash:** 80b3c011444f4b721161e0e1e6556651
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-23-006943.hdr.sgml**: 20230126

**ACCESSION NUMBER**: 0001104659-23-006943

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20230126

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230126

**DATE AS OF CHANGE**: 20230126

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** BERKSHIRE HILLS BANCORP INC
- **CENTRAL INDEX KEY:** 0001108134
- **STANDARD INDUSTRIAL CLASSIFICATION:** SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036]
- **IRS NUMBER:** 043510455
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-15781
- **FILM NUMBER:** 23556578

**BUSINESS ADDRESS:**
- **STREET 1:** 60 STATE STREET
- **STREET 2:** 38TH FLOOR
- **CITY:** BOSTON
- **STATE:** MA
- **ZIP:** 02109
- **BUSINESS PHONE:** 617-641-9206

**MAIL ADDRESS:**
- **STREET 1:** 60 STATE STREET
- **STREET 2:** 38TH FLOOR
- **CITY:** BOSTON
- **STATE:** MA
- **ZIP:** 02109

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): <u>January 26, 2023</u>

BERKSHIRE HILLS BANCORP, INC.

(Exact Name of Registrant as Specified in its Charter)

<u>Delaware</u> <u>001-15781</u> <u>04-3510455</u> <br> (State or Other Jurisdiction) of Incorporation) (Commission File No.) (I.R.S. Employer Identification No.)

<u>60 State Street<u>, Boston</u><u>, Massachusetts</u></u> <u>02109</u> <br> (Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code: <u>(800</u><u>) 773-5601</u><u>, ext. 133773</u>

<u>Not Applicable</u>

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

◻ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

◻ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

◻ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

◻ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | |
|:---|:---|
| **<u>Title of each class</u>** | **<u>Name of each exchange on which registered</u>** |
| Common stock, par value $0.01 per share BHLB | New York Stock Exchange |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

---

| | |
|:---|:---|
| **Item 2.02** | **<u>Results of Operations and Financial Condition</u>** |

---

On January 26, 2023, Berkshire Hills Bancorp, Inc. (the "Company"), the holding company for Berkshire Bank (the "Bank"), announced its financial results for the fourth quarter and year ended December 31, 2022. The news release containing the financial results is included as Exhibit 99.1 and shall not be deemed "filed" for any purpose.

The Company conducted a conference call/webcast on January 26, 2023, to discuss the financial results for the quarter and provide guidance about expected future results. A telephone replay of the call will be available through February 2, 2023. The webcast will be available on the Company's website at <u>ir.berkshirebank.com</u> for an extended period of time.

---

| | |
|:---|:---|
| **Item 7.01** | **<u>Regulation FD Disclosure</u>** |

---

The Company made available slides for a presentation that the Company utilized in connection with its conference call. A copy of the presentation can be found on the Company's website at <u>ir.berkshirebank.com</u>.

---

| | |
|:---|:---|
| **Item 9.01** | **<u>Financial Statements and Exhibits</u>** |

---

---

| | | |
|:---|:---|:---|
| (a) | Financial Statements of Businesses Acquired. Not applicable. | Financial Statements of Businesses Acquired. Not applicable. |
| (b) | Pro Forma Financial Information. Not applicable. | Pro Forma Financial Information. Not applicable. |
| (c) | Shell Company Transactions. Not applicable. | Shell Company Transactions. Not applicable. |
| (d) | Exhibits. |  |
|  | Exhibit No. | Description |
|  | [99.1](tm234453d1_ex99-1.htm) | [News Release dated January 26, 2023](tm234453d1_ex99-1.htm) |
|  | 104.1 | Cover Page for this Current Report on Form 8-K, formatted in Inline XBRL |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  |  | **Berkshire Hills Bancorp, Inc.** |
| DATE: January 26, 2023 | By: | /s/ Nitin J. Mhatre |
|  |  | Nitin J. Mhatre |
|  |  | President and Chief Executive Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

![](tm234453d1_ex99-1img001.jpg)

**BERKSHIRE HILLS REPORTS RECORD FOURTH QUARTER RESULTS**

BOSTON, January 26, 2023 - Berkshire Hills Bancorp, Inc. (NYSE: <u>BHLB</u>) today reported that fourth quarter 2022 earnings per share ("EPS") increased year-over-year by 64% to a fourth quarter record $0.69. For these periods, the non-GAAP measure of adjusted EPS increased by 52% to $0.64.

For the full year 2022, EPS decreased year-over-year by 15% to $2.02, and adjusted EPS increased by 30% to $2.19. GAAP results included gains in 2021 on the sale of business operations and charges in both years for branch consolidations. These are the primary items excluded from the measure of adjusted results.

Improvements in adjusted results for the fourth quarter and full year 2022 demonstrate positive operating leverage and progress from Berkshire's BEST strategic initiatives. Compared to the prior quarter, results included an 11% increase in net interest income, in conjunction with an increase in the net interest margin to 3.84%.

**FOURTH QUARTER FINANCIAL HIGHLIGHTS** (Changes are quarter-over-quarter unless otherwise stated. Non-GAAP measures are reconciled on pages F-9 and F-10).

&nbsp;&nbsp;&nbsp;&nbsp;· 10.1% return on equity; 10.6% return on tangible common equity (non-GAAP)

&nbsp;&nbsp;&nbsp;&nbsp;· 1.08% return on assets; 1.00% adjusted return on assets (non-GAAP)

&nbsp;&nbsp;&nbsp;&nbsp;· 9% increase quarter-over-quarter in total net revenue

&nbsp;&nbsp;&nbsp;&nbsp;· 3.84% net interest margin, increased from 3.48% in 3Q22 and 2.60% in 4Q21

&nbsp;&nbsp;&nbsp;&nbsp;· 58% efficiency ratio, improved from 62% in 3Q22 and 72% in 4Q21

&nbsp;&nbsp;&nbsp;&nbsp;· 1% increase in full year non-interest expense; flat adjusted non-interest
expense (non-GAAP)

&nbsp;&nbsp;&nbsp;&nbsp;· 5% broad-based loan growth (end of period)

&nbsp;&nbsp;&nbsp;&nbsp;· 1% increase in average deposits

&nbsp;&nbsp;&nbsp;&nbsp;· 0.60% delinquent and non-accruing loans/total loans – lowest in more
than a decade

&nbsp;&nbsp;&nbsp;&nbsp;· 9% reduction in period-end shares outstanding year-over-year reflecting stock
buybacks

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· 50% increase in quarterly shareholder dividend in the fourth quarter of 2022

CEO Nitin Mhatre stated "Berkshire finished the year with strong loan growth momentum, resulting in record fourth quarter revenue and earnings per share. The balance sheet remains strong and positively positioned to benefit from potential future interest rate increases. With these solid underpinnings, Berkshire increased its quarterly shareholder dividend by 50% in the fourth quarter, as well as repurchasing 2% of shares. We're pleased that our results have contributed to strong outperformance by our stock compared to the broad market and our industry. BHLB provided a 2022 calendar year total shareholder return exceeding 7% against a backdrop of market declines, with the S&P 500 index posting a negative 18% total return for the year."

"We have separately announced our CFO hire, and this follows recently announced executive hires for Commercial Banking and Credit. I'm pleased with the exceptional caliber of executives who are attracted by our strong team, promising business prospects, and purpose-focused vision. We also announced a $50 million share repurchase program for 2023, continuing our focus on balanced capital management and shareholder distributions."

"Berkshire's return on assets and return on tangible common equity improved to within its target range at the halfway point of its three year strategic plan. Berkshire also achieved the highest ESG ranking in our history, with a top 17% composite performance ranking in leading ESG indexes in the U.S. for its Environmental, Social and Governance ratings. We also recorded our highest employee engagement through our survey platform with Mercer. We rolled-out promotion of our new brand campaign theme of <u>"Where You Bank Matters"</u>, which captures the spirit of our vision to serve as a high-performing leading socially responsible community bank for all of our stakeholders. I thank the entire Berkshire team for our success in 2022 and all they do to maintain our forward momentum in delivering on our vision."

**RESULTS OF OPERATIONS**

**Earnings:** Fourth quarter 2022 EPS of $0.69 increased from $0.42 in the prior quarter, while adjusted EPS increased by 2% from $0.62 to $0.64. Adjusted results benefited from higher net interest income and lending related fee revenue. The increase in GAAP EPS also reflected a reduction in accrued branch consolidation expenses based on a reduction in total estimated costs.

On a year-over-year basis, fourth quarter results also increased from $0.42 reported for both GAAP EPS and adjusted EPS in 2021. This improvement was primarily due to higher net interest income, which has reflected growth in loans and in the interest margin in each of the last several quarters. Fourth quarter revenue increased by 30% year-over-year, while expense growth was held to 1%. The resulting positive operating leverage led to an improvement in the efficiency ratio to 58% in the most recent quarter, compared to 62% in the linked quarter and to 72% in the fourth quarter of 2021.

The fourth quarter 2022 return on equity measured 10.1% and the non-GAAP measure of adjusted return on tangible common equity measured 9.8%. The return on assets measured 1.08% and the non-GAAP measure of adjusted return on assets measured 1.00%.

Pre-tax Pre-Provision Net Revenue ("PPNR") increased quarter-over-quarter by 79% to $48 million and the non-GAAP measure of adjusted PPNR increased by 16% to $45 million. Adjusted PPNR more than doubled from $21 million on a year-over-year basis and moved within the Company's target range at the halfway point of its three year strategic plan.

**Revenue:** Revenue increased by 9% quarter-over-quarter and 30% year-over-year. Net interest income has been the primary driver of revenue growth in recent periods. Fourth quarter net interest income increased by $10 million, or 11%, compared to the linked quarter and by $33 million, or 47%, compared to the fourth quarter of 2021. The net interest margin has increased in successive quarters over the last year, reaching 3.84% in the fourth quarter of 2022, compared to 3.48% in the prior quarter and 2.60% in the fourth quarter of 2021.

This improvement was primarily due to the benefit of loan growth and positive sensitivity to increased market interest rates. The yield on average earning assets improved quarter-over-quarter to 4.56% from 3.91%. The cost of funds increased to 0.77% from 0.46%, while the cost of deposits increased to 0.69% from 0.33%. The Company's interest rate sensitivity remained positive at period-end and was positioned to benefit from further interest rate increases anticipated by the market.

Fee income benefited quarter-over-quarter from a $1 million increase in loan related fees, which partially offset the impact of higher charges for tax credit investment amortization. Fourth quarter fee income decreased year-over-year primarily due to the impact of lower SBA related fees in 2022 resulting from changes in the SBA program and in market demand.

**Provision for Credit Losses on Loans:** Berkshire recorded a $12 million provision for credit losses in the fourth quarter of 2022, bringing the full year provision to $11 million. The full year 2021 provision was a benefit of $0.5 million. Both years benefited from releases of pandemic related reserves, and the increase in 2022 also reflected a resumption of loan growth and changes in the loan mix. The fourth-quarter provision primarily reflected the impact of one commercial and industrial credit which filed for bankruptcy in the fourth quarter.

**Non-Interest Expense and Tax Expense:** Full year non-interest expense increased by 1% in 2022, while adjusted non-interest expense was flat.

Fourth quarter non-interest expense totaled $70 million in 2022, decreasing by 14% quarter-over-quarter and increasing by 1% on a year-over-year basis due primarily to branch consolidation expense. Fourth quarter adjusted non-interest expense totaled $73 million which was a 3% increase quarter-over-quarter and a 6% increase year-over-year. Technology costs reflect continued investment in digitization and the category of all other expenses increased primarily due to loan related costs. Full time equivalent staff totaled 1,310 positions at period-end, compared to 1,319 positions at the start of the year.

The effective GAAP tax rate was 15% in the final quarter and 19% for the year 2022, compared to 20% for the year 2021. Due to the timing of tax credit investments, both tax expense and non-interest income were reduced in the fourth quarter. These investments contributed $0.03 to EPS in the year 2022, compared to $0.02 in the year 2021.

**BALANCE SHEET** (references are to period-end balances unless otherwise stated)

**Summary:** Total loans grew by 5% quarter-over-quarter and by 22% year-over-year. Total deposits increased by 3% quarter-over-quarter and year-over-year. Period-end liquidity and capital remained strong, with the ratio of loans/deposits measuring 81% and the non-GAAP measure of tangible common equity/tangible assets measuring 8.0%.

**Loans:** Fourth quarter loan growth was concentrated in a $231 million increase in commercial loans and a $183 million increase in residential mortgages. For the full year, commercial loans increased by $640 million and residential mortgages increased by $824 million. Berkshire has expanded its lending teams over the last year, and business volumes and credit usage have benefited in some segments from improved market demand. Loan growth has also benefited from a decline in prepayments in the prevailing rising rate environment. All major loan categories increased by double digits in 2022 except for home equity loans. Reflecting higher interest rates, the fourth quarter loan yield increased year-over-year to 5.28% from 3.76%.

**Asset Quality:** Total delinquent and non-accruing loans measured 0.60% of total loans at year-end, the lowest in more than a decade. Reflecting the improved quality of the loan portfolio, the allowance for expected credit losses on loans declined to 1.15% of total loans from 1.21% at the start of the quarter. Net loan charge-offs totaled $12 million in the fourth quarter and $21 million for the year, or 0.27% of full year average loans. Charge-offs were concentrated in the second half of the year in one commercial and industrial credit which filed for bankruptcy in the fourth quarter.

**Deposits:** Total deposits increased by 3% year-over-year and quarter-over-quarter including higher period-end payroll deposit balances. Average deposits increased by 1% quarter-over-quarter and decreased by 2% year-over-year, including the impact of lower brokered time deposits. The fourth quarter cost of deposits increased year-over-year to 0.69% from 0.19%, including a 0.36% increase over the third quarter of 2022.

**Equity:** Total fourth quarter shareholders' equity increased quarter-over-quarter by 1% to $954 million. Stock buybacks in the most recent quarter totaled approximately $20 million consisting of approximately 661,000 shares. For the year 2022, stock repurchases totaled $125 million, consisting of 4.5 million shares. At period-end, book value per share totaled $21.51 and the non-GAAP measure of tangible book value per share totaled $20.95; both measures increased by 3% quarter-over-quarter.

**ESG & CORPORATE RESPONSIBILITY UPDATE** 

Berkshire Bank is committed to purpose-driven, community-centered banking that enhances value for all stakeholders as it pursues its vision of being a high-performing, leading socially responsible community bank in New England and beyond. Learn more about the steps Berkshire is taking at <u>berkshirebank.com/csr</u> and in its most recent <u>Corporate Responsibility Report</u>.

Key developments in the quarter include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **BEST Community Comeback:** Berkshire continues to accelerate progress towards the achievement
 of its "BEST Community Comeback" goals as it tracks inline or slightly ahead
 of program targets at year-end. The multi-year plan focuses on four key areas: fueling small
 businesses, community financing and philanthropy, financial access and empowerment, and funding
 environmental sustainability. Additional information and recent results can be found at <u>berkshirebank.com/comeback</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Current ESG Performance**: The Company improved on its BEST ESG goal
with a top 17% composite performance in leading ESG indexes in the U.S. for its Environmental, Social and Governance (ESG) ratings. This
included an upgraded rating from MSCI to "A". As of December 31, 2022 the Company has ratings of: MSCI ESG- A; ISS ESG Quality
Score - Environment: 3, Social: 1, Governance: 2; and Bloomberg ESG Disclosure- 62.81. The Company is also rated by Sustainalytics. Berkshire
continues to rank among the top 1% of all U.S. Banks for ESG in Bloomberg.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Sustainable Business Award**: The Sustainable Business Network named the Company <u>Massachusetts Sustainable Business of the Year</u> in the bank category in recognition of its collective efforts to
 build a more equitable economy and sustainable communities. This includes Berkshire's
 initial impact from the BEST Community Comeback, its sustainable financing activities along
 with work to create a more diverse, equitable and inclusive workplace.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Sustainability Bond:** Berkshire has begun to allocate
proceeds from its June 2022 Sustainability Bond issuance to eligible activities. The Company became the first public community bank with
assets under $150 billion to issue a bond whose proceeds would be dedicated to social and environmental projects. Projects supported
to date have created affordable housing, reduced greenhouse gas emissions and constructed green buildings **.** 

**INVESTOR CONFERENCE CALL AND INVESTOR PRESENTATION**

Berkshire will conduct a conference call/webcast at 10:00 a.m. eastern time on Thursday, January 26, 2023 to discuss results for the quarter and provide guidance about expected future results. The Company will also place an investor presentation at its website at <u>ir.berkshirebank.com</u>.

Participants are encouraged to pre-register for the conference call using the following link:

<u>https://www.netroadshow.com/events/login?show=5437e05c&confId=45736</u>

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 relations section of Berkshire's website at <u>ir.berkshirebank.com</u>.

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 844-200-6205 and using participant access code: 522984. 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 for one week by dialing 866-813-9403 and using access code: 971852. The webcast will be available on Berkshire's website for an extended period of time.

**ABOUT BERKSHIRE HILLS BANCORP**

Headquartered in Boston, Berkshire Hills Bancorp (<u>NYSE:BHLB</u>) is the parent of <u>Berkshire Bank</u>. Founded in 1846, the Bank's vision is to serve as a high-performing leading socially responsible community bank. It empowers the financial potential of its stakeholders by making banking available where, when and how it's needed through an uncompromising focus on exceptional customer service, digital banking, and positive community impact. Providing a wide range of financial solutions through its consumer banking, commercial banking and wealth management divisions, the Bank has approximately $11.7 billion in assets and a community-based footprint of 100 financial centers in Massachusetts, New York, Vermont, Connecticut and Rhode Island. Named one of <u>America's Most Trusted Companies 2022</u> by Newsweek, Berkshire is also listed in the <u>Bloomberg Gender-Equality Index</u> and a <u>Best Place to Work for LGBTQ+ Equality</u>. To learn more, follow us on <u>Facebook</u>, <u>Twitter</u>, <u>Instagram</u>, and <u>LinkedIn</u>.

**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 <u>www.sec.gov</u>. 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 adjusted earnings in evaluating operating trends, including components for adjusted 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, other gains/losses, merger costs, restructuring costs, goodwill impairment, and discontinued operations. In 2021, the Company recorded a third quarter net gain of $52 million on the sale of the Company's insurance subsidiary and the Mid-Atlantic branch operations. Expense adjustments in the first quarter 2021 were primarily related to branch consolidations. Third quarter 2021 adjustments included Federal Home Loan Bank borrowings prepayment costs. They also included other restructuring charges for efficiency initiatives in operations areas including write-downs on real estate moved to held for sale and severance related to staff reductions. The fourth quarter 2021 revenue adjustment was primarily related to trailing revenue on a previously reported sale, and the expense adjustment was due primarily to branch restructuring costs. The revenue adjustments in 2022 were related to fair market value changes in equity and trading investments. The restructuring expense adjustment in third and fourth quarters of 2022 primarily related to the termination of leasehold interests and the write-down of related right of use assets and leasehold improvements in conjunction with branch consolidations and real estate reductions.

The Company utilizes Adjusted Pre-Provision Net Revenue ("Adjusted PPNR") which measures adjusted income before credit loss provision and tax expense. PPNR is used by the investment community due to the volatility and variability across banks related to credit loss provision expense under the Current Expected Credit Loss accounting standard. The Company also calculates Adjusted PPNR/assets in order to utilize the PPNR measure in assessing its comparative operating profitability.

Non-GAAP 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 adjusted income. The efficiency ratio is adjusted for adjusted 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.

###

**CONTACTS**

**Investor Relations Contacts**

Kevin Conn, SVP, Investor Relations & Corporate Development<br> Email: <u>KAConn@berkshirebank.com</u><br> Tel: (617) 641-9206

David Gonci, Capital Markets Director<br> Email: <u>dgonci@berkshirebank.com</u><br> Tel: (413) 281-1973

**Media Contact:**

Gary Levante, SVP, Corporate Responsibility & Communications<br> Email: <u>glevante@berkshirebank.com</u><br> Tel: (413) 447-1737

---

| | |
|:---|:---|
| &nbsp;&nbsp; TABLE<br>INDEX<br>| &nbsp;&nbsp; <br>CONSOLIDATED UNAUDITED FINANCIAL SCHEDULES<br>|
| &nbsp;&nbsp;F-1 | &nbsp;&nbsp;Selected Financial Highlights |
| &nbsp;&nbsp;F-2 | &nbsp;&nbsp;Balance Sheets |
| &nbsp;&nbsp;F-3 | &nbsp;&nbsp;Loan and Deposit Analysis |
| &nbsp;&nbsp;F-4 | &nbsp;&nbsp;Statements of Income |
| &nbsp;&nbsp;F-5 | &nbsp;&nbsp;Statements of Income (Five Quarter Trend) |
| &nbsp;&nbsp;F-6 | &nbsp;&nbsp;Average Balances and Average Yields and Costs |
| &nbsp;&nbsp;F-7 | &nbsp;&nbsp;Asset Quality Analysis |
| &nbsp;&nbsp;F-8 | &nbsp;&nbsp;Asset Quality Analysis (continued) |
| &nbsp;&nbsp;F-9 | &nbsp;&nbsp;Reconciliation of Non-GAAP Financial Measures and Supplementary Data (Five Quarter Trend) |
| &nbsp;&nbsp;F-10 | &nbsp;&nbsp;Reconciliation of Non-GAAP Financial Measures and Supplementary Data (Year-to-Date) |

---

![](tm234453d1_ex99-1img002.jpg)

**SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED - (F-1)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Dec. 31,<br>2021 | March 31,<br>2022 | June 30,<br>2022 | Sept. 30,<br>2022 | **Dec. 31,**<br>**2022** |
| **NOMINAL AND PER SHARE DATA** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net earnings per common share, diluted | $0.42 | $0.42 | $0.50 | $0.42 | $**0.69** |
| &nbsp;&nbsp;&nbsp;Adjusted earnings per common share, diluted (2) | 0.42 | 0.43 | 0.51 | 0.62 | **0.64** |
| &nbsp;&nbsp;&nbsp;Net income, *(thousands)* | 20248 | 20196 | 23115 | 18717 | **30505** |
| &nbsp;&nbsp;&nbsp;Adjusted net income, *(thousands)* (2) | 20172 | 20789 | 23562 | 27928 | **28254** |
| &nbsp;&nbsp;&nbsp;Total common shares outstanding, end of period *(thousands)* | 48667 | 47792 | 45788 | 45040 | **44361** |
| &nbsp;&nbsp;&nbsp;Average diluted shares, *(thousands)* | 48340 | 48067 | 46102 | 45034 | **44484** |
| &nbsp;&nbsp;&nbsp;Total book value per common share, *(end of period)* | 24.30 | 22.89 | 22.15 | 20.93 | **21.51** |
| &nbsp;&nbsp;&nbsp;Tangible book value per common share, *(end of period)* (2) | 23.69 | 22.30 | 21.56 | 20.36 | **20.95** |
| &nbsp;&nbsp;&nbsp;Dividends per common share | 0.12 | 0.12 | 0.12 | 0.12 | **0.18** |
| &nbsp;&nbsp;&nbsp;Full-time equivalent staff | 1319 | 1333 | 1322 | 1300 | **1310** |
| **PERFORMANCE RATIOS** (3) |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Return on equity | 6.86% | 6.79% | 7.82% | 6.30% | **10.06%** |
| &nbsp;&nbsp;&nbsp;Adjusted return on equity (2) | 6.83 | 6.99 | 7.97 | 9.40 | **9.32** |
| &nbsp;&nbsp;&nbsp;Return on tangible common equity (2) | 7.37 | 7.29 | 8.33 | 6.76 | **10.59** |
| &nbsp;&nbsp;&nbsp;Adjusted return on tangible common equity (2) | 7.34 | 7.49 | 8.48 | 9.92 | **9.83** |
| &nbsp;&nbsp;&nbsp;Return on assets | 0.71 | 0.70 | 0.82 | 0.66 | **1.08** |
| &nbsp;&nbsp;&nbsp;Adjusted return on assets (2) | 0.71 | 0.72 | 0.84 | 0.99 | **1.00** |
| &nbsp;&nbsp;&nbsp;Net interest margin, fully taxable equivalent (FTE) (4)(5) | 2.60 | 2.61 | 3.11 | 3.48 | **3.84** |
| &nbsp;&nbsp;&nbsp;Efficiency ratio (2) | 71.98 | 72.61 | 66.60 | 62.01 | **58.25** |
| **FINANCIAL DATA *(in millions, end of period)*** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Total assets | $11555 | $12097 | $11579 | $11317 | $**11663** |
| &nbsp;&nbsp;&nbsp;Total earning assets | 10899 | 11401 | 10849 | 10604 | **10913** |
| &nbsp;&nbsp;&nbsp;Total loans | 6826 | 7267 | 7803 | 7943 | **8335** |
| &nbsp;&nbsp;&nbsp;Total deposits | 10069 | 10699 | 10115 | 9988 | **10327** |
| &nbsp;&nbsp;&nbsp;Loans/deposits (%) | 68% | 68% | 77% | 80% | **81%** |
| &nbsp;&nbsp;&nbsp;Total shareholders' equity | $1182 | $1094 | $1014 | $943 | $**954** |
| **ASSET QUALITY** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Allowance for credit losses, *(millions)* | $106 | $99 | $99 | $96 | $**96** |
| &nbsp;&nbsp;&nbsp;Net charge-offs, *(millions)* | (4) | (3) | (0) | (6) | **(12)** |
| &nbsp;&nbsp;&nbsp;Net charge-offs (QTD annualized)/average loans | 0.23% | 0.15% | 0.02% | 0.30% | **0.58%** |
| &nbsp;&nbsp;&nbsp;Provision (benefit)/expense, *(millions)* | $(3) | $(4) | $- | $3 | $**12** |
| &nbsp;&nbsp;&nbsp;Non-performing assets, *(millions)* | 37 | 32 | 29 | 40 | **33** |
| &nbsp;&nbsp;&nbsp;Non-performing loans/total loans | 0.52% | 0.41% | 0.34% | 0.48% | **0.37%** |
| &nbsp;&nbsp;&nbsp;Allowance for credit losses/non-performing loans | 300 | 335 | 368 | 254 | **309** |
| &nbsp;&nbsp;&nbsp;Allowance for credit losses/total loans | 1.55 | 1.37 | 1.27 | 1.21 | **1.15** |
| **CAPITAL RATIOS** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Common equity tier 1 capital to risk weighted assets(6) | 15.0% | 13.9% | 12.9% | 12.7% | **12.4%** |
| &nbsp;&nbsp;&nbsp;Tier 1 capital leverage ratio(6) | 10.5 | 10.3 | 10.2 | 10.1 | **10.2** |
| &nbsp;&nbsp;&nbsp;Tangible common shareholders' equity/tangible assets(2) | 10.0 | 8.8 | 8.5 | 8.1 | **8.0** |

---

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

(2) Non-GAAP
financial measure. Adjusted measurements are non-GAAP financial measures that are adjusted to exclude net non-adjusted 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.

(5) The
effect of purchase accounting accretion for loans, time deposits, and borrowings on the quarterly net interest margin was an increase
in all quarters, which is shown sequentially as follows beginning with the earliest quarter and ending with the most recent quarter:
0.06%, 0.03%, 0.03%, 0.01%, 0.00%

(6) Presented
as projected for December 31, 2022 and actual for the remaining periods.

![](tm234453d1_ex99-1img002.jpg)

**CONSOLIDATED BALANCE SHEETS - UNAUDITED - (F-2)**

---

| | | | |
|:---|:---|:---|:---|
|  | December 31, | September 30, | **December 31,** |
| (in thousands) | 2021 | 2022 | **2022** |
| **Assets** |  |  |  |
| Cash and due from banks | $109350 | $128509 | $**145342** |
| Short-term investments | 1518457 | 566404 | **540013** |
| Total cash and cash equivalents | 1627807 | 694913 | **685355** |
| Trading security | 8354 | 6812 | **6708** |
| Marketable equity securities, at fair value | 15453 | 12790 | **12856** |
| Securities available for sale, at fair value | 1877585 | 1470949 | **1423200** |
| Securities held to maturity, at amortized cost | 636503 | 592503 | **583453** |
| Federal Home Loan Bank stock and other restricted securities | 10800 | 7264 | **7219** |
| Total securities | 2548695 | 2090318 | **2033436** |
| Less: Allowance for credit losses on investment securities | (105) |  | **(91)** |
| Net securities | 2548590 | 2090223 | **2033345** |
| Loans held for sale | 6110 | 4124 | **4311** |
| Total loans | 6825847 | 7943481 | **8335309** |
| Less: Allowance for credit losses on loans | (106094) | (96013) | **(96270)** |
| Net loans | 6719753 | 7847468 | **8239039** |
| Premises and equipment, net | 94383 | 86809 | **85217** |
| Goodwill and other intangible assets | 29619 | 25761 | **24483** |
| Other assets | 524074 | 563946 | **587854** |
| Assets held for sale | 4577 | 3830 | **3260** |
| Total assets | $11554913 | $11317074 | $**11662864** |
| **Liabilities and shareholders' equity** |  |  |  |
| Demand deposits | $3008461 | $2896659 | $**2852127** |
| NOW and other deposits | 976401 | 1045970 | **1054596** |
| Money market deposits | 3293526 | 3388932 | **3723570** |
| Savings deposits | 1111625 | 1111304 | **1063269** |
| Time deposits | 1678940 | 1545256 | **1633707** |
| Total deposits | 10068953 | 9988121 | **10327269** |
| Senior borrowings | 13331 | 4494 | **4445** |
| Subordinated borrowings | 97513 | 121001 | **121064** |
| Total borrowings | 110844 | 125495 | **125509** |
| Other liabilities | 192681 | 260896 | **256024** |
| Total liabilities | 10372478 | 10374512 | **10708802** |
| Common shareholders' equity | 1182435 | 942562 | **954062** |
| Total shareholders' equity | 1182435 | 942562 | **954062** |
| Total liabilities and shareholders' equity | $11554913 | $11317074 | $**11662864** |

---

![](tm234453d1_ex99-1img002.jpg)

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

**<u>LOAN ANALYSIS</u>**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | | | Growth % | Growth % |
| (in millions) | December 31, 2021<br> Balance | September 30, 2022<br> Balance | December 31, 2022<br> Balance | Quarter ended <br> December 31, 2022 | Year to Date |
| Total commercial real estate | $3598 | $3902 | $4095 | 5% | 14% |
| Commercial and industrial loans | 1330 | 1435 | 1473 | 3 | 11 |
| Total commercial loans | 4928 | 5337 | 5568 | 4 | 13 |
| Total residential mortgages | 1392 | 2033 | 2216 | 9 | 59 |
| Home equity | 253 | 234 | 227 | (3) | (10) |
| Auto and other | 253 | 339 | 324 | (4) | 28 |
| Total consumer loans | 506 | 573 | 551 | (4) | 9 |
| Total loans | $6826 | $7943 | $8335 | 5% | 22% |

---

**<u>DEPOSIT ANALYSIS</u>**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | | | Growth % | Growth % |
| (in millions) | December 31, 2021<br> Balance | September 30, 2022<br> Balance | December 31, 2022<br> Balance | Quarter ended <br> December 31, 2022 | Year to Date |
| Non-interest bearing | $3008 | $2897 | $2852 | (2)% | (5)% |
| NOW and other | 976 | 1046 | 1054 | 1 | 8 |
| Money market | 3294 | 3389 | 3724 | 10 | 13 |
| Savings | 1112 | 1111 | 1063 | (4) | (4) |
| Time deposits | 1679 | 1545 | 1634 | 6 | (3) |
| Total deposits (1) | $10069 | $9988 | $10327 | 3% | 3% |

---

(1) Included in total deposits are brokered deposits of $120.9 million, $163.5 million, and $228.1 million at December 31, 2022, September 30, 2022, and December 31, 2021, respectively.

![](tm234453d1_ex99-1img002.jpg)

**CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED - (F-4)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended | Three Months Ended | Years Ended | Years Ended |
|  | December 31, | December 31, | December 31, | December 31, |
| (in thousands, except per share data) | 2022 | 2021 | 2022 | 2021 |
| Interest income | $121384 | $75860 | $387257 | $329065 |
| Interest expense | 19292 | 6548 | 42660 | 37899 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest income, *not FTE* | 102092 | 69312 | 344597 | 291166 |
| **Non-interest income** |  |  |  |  |
| Deposit related fees | 8293 | 7522 | 32026 | 29813 |
| Loan fees and revenue | 5058 | 9098 | 21731 | 35060 |
| Insurance commissions and fees |  |  |  | 7003 |
| Wealth management fees | 2255 | 2586 | 10008 | 10530 |
| Mortgage banking fees | 44 | 259 | 230 | 2056 |
| Other | (159) | 993 | 6973 | 6631 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-interest income excluding gains/(losses) | 15491 | 20458 | 70968 | 91093 |
| Securities gains/(losses), net | 163 | (106) | (2031) | (787) |
| Gain on sale of business operations and assets, net | - | 1057 | - | 52942 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-interest income | 15654 | 21409 | 68937 | 143248 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total net revenue** | **117746** | **90721** | **413534** | **434414** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total net revenue excluding (losses) | 117583 | 89770 | 415565 | 382259 |
| Provision expense/(benefit) for credit losses | 12000 | (3000) | 11000 | (500) |
| **Non-interest expense** |  |  |  |  |
| Compensation and benefits | 37968 | 37816 | 152741 | 150589 |
| Occupancy and equipment | 9431 | 9738 | 37638 | 41782 |
| Technology and communications | 9729 | 8599 | 35586 | 33803 |
| Professional services | 3153 | 2365 | 12043 | 15860 |
| Other expenses | 12350 | 10025 | 41799 | 38078 |
| Merger, restructuring and other non-operating expenses | (2617) | 864 | 8909 | 5781 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total non-interest expense** | **70014** | **69407** | **288716** | **285893** |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-interest expense excluding merger, restructuring and other | 72631 | 68543 | 279807 | 280112 |
| Income before income taxes | $35732 | $24314 | $113818 | $149021 |
| Income tax expense | 5227 | 4066 | 21285 | 30357 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net income** | $**30505** | $**20248** | $**92533** | $**118664** |
| **Basic earnings per common share** | $0.69 | $0.42 | $2.03 | $2.41 |
| **Diluted earnings per common share** | $**0.69** | $**0.42** | $**2.02** | $**2.39** |
| **Weighted average shares outstanding:** |  |  |  |  |
| Basic | 44105 | 47958 | 45564 | 49240 |
| Diluted | 44484 | 48340 | 45914 | 49554 |

---

![](tm234453d1_ex99-1img002.jpg)

**CONSOLIDATED STATEMENTS OF INCOME (5 Quarter Trend) - UNAUDITED - (F-5)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Dec. 31, | March 31, | June 30, | Sept. 30, | Dec. 31, |
| (in thousands, except per share data) | 2021 | 2022 | 2022 | 2022 | 2022 |
| Interest income | $75860 | $74823 | $87379 | $103671 | $121384 |
| Interest expense | 6548 | 5760 | 6021 | 11587 | 19292 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest income, *not FTE* | 69312 | 69063 | 81358 | 92084 | 102092 |
| Non-interest income |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposit related fees | 7522 | 7351 | 8005 | 8377 | 8293 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loan fees and revenue | 9098 | 8265 | 4623 | 3785 | 5058 |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance commissions and fees |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Wealth management fees | 2586 | 2625 | 2775 | 2353 | 2255 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage banking fees | 259 | 19 | 109 | 58 | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 993 | 3166 | 1812 | 2154 | (159) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest income excluding (losses)/gains | 20458 | 21426 | 17324 | 16727 | 15491 |
| &nbsp;&nbsp;&nbsp;&nbsp;Securities (losses)/gains, net | (106) | (745) | (973) | (476) | 163 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of business operations and assets, net | 1057 | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest income | 21409 | 20681 | 16351 | 16251 | 15654 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total net revenue** | **90721** | **89744** | **97709** | **108335** | **117746** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total net revenue excluding (losses)/gains | 89770 | 90489 | 98682 | 108811 | 117583 |
| Provision (benefit)/expense for credit losses | (3000) | (4000) |  | 3000 | 12000 |
| **Non-interest expense** |  |  |  |  |  |
| Compensation and benefits | 37816 | 37521 | 37830 | 39422 | 37968 |
| Occupancy and equipment | 9738 | 10067 | 9438 | 8702 | 9431 |
| Technology and communications | 8599 | 8527 | 8611 | 8719 | 9729 |
| Professional services | 2365 | 2692 | 2913 | 3285 | 3153 |
| Other expenses | 10025 | 9725 | 9648 | 10076 | 12350 |
| Merger, restructuring and other non-operating expenses | 864 | 18 | 35 | 11473 | (2617) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total non-interest expense** | **69407** | **68550** | **68475** | **81677** | **70014** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest expense excluding merger, restructuring and other | 68543 | 68532 | 68440 | 70204 | 72631 |
| Income before income taxes | $24314 | $25194 | $29234 | $23658 | $35732 |
| Income tax expense | 4066 | 4998 | 6119 | 4941 | 5227 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net income** | $**20248** | $**20196** | $**23115** | $**18717** | $**30505** |
| Diluted earnings per common share | $**0.42** | $**0.42** | $**0.50** | $**0.42** | $**0.69** |
| Weighted average shares outstanding: |  |  |  |  |  |
| Basic | 47958 | 47668 | 45818 | 44700 | 44105 |
| Diluted | 48340 | 48067 | 46102 | 45034 | 44484 |

---

![](tm234453d1_ex99-1img002.jpg)

**AVERAGE BALANCES AND AVERAGE YIELDS AND COSTS - UNAUDITED - (F-6)**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Dec. 31, 2021 | Dec. 31, 2021 | March 31, 2022 | March 31, 2022 | June 30, 2022 | June 30, 2022 | Sept. 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2022 |
| (in millions) | Average Balance | Average Yield/Rate | Average Balance | Average Yield/Rate | Average Balance | Average Yield/Rate | Average Balance | Average Yield/Rate | Average Balance | Average Yield/Rate |
| **Assets** |  |  |  |  |  |  |  |  |  |  |
| Commercial real estate | 3569 | 3.49% | 3651 | 3.35% | 3831 | 3.79% | 3926 | 4.53% | 3934 | 5.46% |
| Commercial and industrial loans | 1278 | 4.37 | 1373 | 4.14 | 1447 | 4.46 | 1449 | 5.21 | 1471 | 6.62 |
| Residential mortgages | 1403 | 3.82 | 1436 | 3.56 | 1652 | 3.57 | 1926 | 3.53 | 2114 | 3.56 |
| Consumer loans | 516 | 3.96 | 514 | 4.24 | 562 | 5.41 | 587 | 6.24 | 563 | 7.00 |
| **Total loans (1)** | **6766** | **3.76** | **6974** | **3.61** | **7492** | **3.99** | **7888** | **4.54** | **8082** | **5.28** |
| Securities (2) | 2367 | 2.04 | 2649 | 1.95 | 2621 | 1.97 | 2400 | 2.13 | 2294 | 2.20 |
| Short-term investments and loans held for sale | 1609 | 0.17 | 1202 | 0.17 | 476 | 0.57 | 342 | 1.96 | 267 | 3.05 |
| **Total earning assets** | **10742** | **2.84** | **10825** | **2.82** | **10589** | **3.34** | **10630** | **3.91** | **10643** | **4.56** |
| Goodwill and other intangible assets | 30 |  | 29 |  | 27 |  | 26 |  | 25 |  |
| Other assets | 655 |  | 639 |  | 644 |  | 659 |  | 653 |  |
| Total assets | 11427 |  | 11493 |  | 11260 |  | 11315 |  | 11321 |  |
| **Liabilities and shareholders' equity** |  |  |  |  |  |  |  |  |  |  |
| NOW and other | 1331 | 0.05% | 1456 | 0.04% | 1454 | 0.12% | 1362 | 0.48% | 1395 | 1.11% |
| Money market | 2731 | 0.16 | 2871 | 0.16 | 2811 | 0.19 | 2737 | 0.46 | 2819 | 1.16 |
| Savings | 1100 | 0.04 | 1117 | 0.03 | 1127 | 0.03 | 1129 | 0.03 | 1086 | 0.03 |
| Time | 1750 | 0.80 | 1624 | 0.71 | 1460 | 0.64 | 1528 | 0.85 | 1555 | 1.21 |
| **Total interest-bearing deposits** | **6912** | **0.28** | **7068** | **0.24** | **6852** | **0.24** | **6756** | **0.48** | **6855** | **0.98** |
| Borrowings (3) | 121 | 5.68 | 122 | 5.21 | 160 | 4.61 | 251 | 5.46 | 169 | 5.56 |
| **Total interest-bearing liabilities** | **7033** | **0.37** | **7190** | **0.32** | **7012** | **0.34** | **7007** | **0.66** | **7024** | **1.09** |
| Non-interest-bearing demand deposits | 3038 |  | 2968 |  | 2903 |  | 2913 |  | 2876 |  |
| Other liabilities | 175 |  | 146 |  | 163 |  | 206 |  | 208 |  |
| Total liabilities | 10246 |  | 10304 |  | 10078 |  | 10126 |  | 10108 |  |
| Common shareholders' equity | 1181 |  | 1189 |  | 1182 |  | 1189 |  | 1213 |  |
| Total shareholders' equity | 1181 |  | 1189 |  | 1182 |  | 1189 |  | 1213 |  |
| Total liabilities and shareholders' equity | 11427 |  | 11493 |  | 11260 |  | 11315 |  | 11321 |  |
| Net interest spread |  | 2.47% |  | 2.50% |  | 2.99% |  | 3.25% |  | 3.47% |
| Net interest margin, FTE (4) |  | 2.60 |  | 2.61 |  | 3.11 |  | 3.48 |  | 3.84 |
| Cost of funds |  | 0.26 |  | 0.23 |  | 0.24 |  | 0.46 |  | 0.77 |
| Cost of deposits |  | 0.19 |  | 0.17 |  | 0.17 |  | 0.33 |  | 0.69 |
| **Supplementary data** |  |  |  |  |  |  |  |  |  |  |
| Net Interest Income, *not FTE* | 69.312 |  | 69.063 |  | 81.358 |  | 92.084 |  | 102.092 |  |
| Fully taxable equivalent income adjustment | 1.604 |  | 1.524 |  | 1.560 |  | 1.715 |  | 1.845 |  |
| **Net Interest Income, FTE** | 70.916 |  | 70.587 |  | 82.918 |  | 93.799 |  | 103.937 |  |
| Total average non-maturity deposits | 8200 |  | 8412 |  | 8295 |  | 8141 |  | 8176 |  |
| Total average deposits | 9950 |  | 10037 |  | 9755 |  | 9669 |  | 9731 |  |
| Purchase accounting accretion | 1.548 |  | 0.717 |  | 0.773 |  | 0.280 |  | 0.182 |  |
| Total average tangible equity (5) | 1151 |  | 1160 |  | 1155 |  | 1163 |  | 1188 |  |

---

(1) Total loans include non-accruing loans.

(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.

(4) There was no effect of PPP loans on the quarterly net interest margin for the quarters presented.

(5) See page F-9 for details on the calculation of total average tangible equity.

![](tm234453d1_ex99-1img002.jpg)

**ASSET QUALITY ANALYSIS - UNAUDITED - (F-7)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Dec. 31, | March 31, | June 30, | Sept. 30, | Dec. 31, |
| (in thousands) | 2021 | 2022 | 2022 | 2022 | 2022 |
| **NON-PERFORMING ASSETS** |  |  |  |  |  |
| Non-accruing loans: |  |  |  |  |  |
| Commercial real estate | $13954 | $8984 | $8277 | $2976 | $2434 |
| Commercial and industrial loans | 6747 | 5618 | 4891 | 21008 | 17023 |
| Residential mortgages | 9825 | 11079 | 10331 | 10407 | 8612 |
| Consumer loans | 4800 | 4000 | 3385 | 3463 | 3045 |
| Total non-accruing loans | 35326 | 29681 | 26884 | 37854 | 31114 |
| Repossessed assets | 1736 | 2004 | 2004 | 2175 | 2209 |
| Total non-performing assets | $37062 | $31685 | $28888 | $40029 | $33323 |
| Total non-accruing loans/total loans | 0.52% | 0.41% | 0.34% | 0.48% | 0.37% |
| Total non-performing assets/total assets | 0.32% | 0.26% | 0.25% | 0.35% | 0.29% |
| **PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS** |  |  |  |  |  |
| Balance at beginning of period | $112916 | $106094 | $99475 | $99021 | $96013 |
| Charged-off loans | (7976) | (6048) | (1593) | (7424) | (12995) |
| Recoveries on charged-off loans | 4154 | 3429 | 1139 | 1416 | 1252 |
| Net loans charged-off | (3822) | (2619) | (454) | (6008) | (11743) |
| Provision (benefit)/expense for loan credit losses | (3000) | (4000) | - | 3000 | 12000 |
| Balance at end of period | $106094 | $99475 | $99021 | $96013 | $96270 |
| Allowance for credit losses/total loans | 1.55% | 1.37% | 1.27% | 1.21% | 1.15% |
| Allowance for credit losses/non-accruing loans | 300% | 335% | 368% | 254% | 309% |
| **NET LOAN CHARGE-OFFS** |  |  |  |  |  |
| Commercial real estate | $(2208) | $(3280) | $(76) | $(854) | $187 |
| Commercial and industrial loans | (1649) | 653 | (237) | (4931) | (10914) |
| Residential mortgages | (2) | (50) | (30) | 122 | 192 |
| Home equity | 106 | 135 | 33 | 1 | (128) |
| Auto and other consumer | (69) | (77) | (144) | (346) | (1080) |
| Total, net | $(3822) | $(2619) | $(454) | $(6008) | $(11743) |
| Net charge-offs (QTD annualized)/average loans | 0.23% | 0.15% | 0.02% | 0.30% | 0.58% |
| Net charge-offs (YTD annualized)/average loans | 0.29% | 0.15% | 0.08% | 0.16% | 0.27% |

---

![](tm234453d1_ex99-1img002.jpg)

**ASSET QUALITY ANALYSIS - UNAUDITED (F-8)**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | December 31, 2021 | December 31, 2021 | March 31, 2022 | March 31, 2022 | June 30, 2022 | June 30, 2022 | September 30, 2022 | September 30, 2022 | December 31, 2022 | December 31, 2022 |
| (in thousands) | Balance | Percent of <br> Total Loans | Balance | Percent of<br> Total Loans | Balance | Percent of<br> Total Loans | Balance | Percent of<br> Total Loans | Balance | Percent of<br> Total Loans |
| 30-89 Days delinquent | $39863 | 0.58% | $13517 | 0.19% | $36184 | 0.46% | $14662 | 0.18% | $12162 | 0.15% |
| 90+ Days delinquent and still accruing | 3270 | 0.05% | 6613 | 0.09% | 6760 | 0.09% | 6285 | 0.08% | 7038 | 0.08% |
| Total accruing delinquent loans | 43133 | 0.63% | 20130 | 0.28% | 42944 | 0.55% | 20947 | 0.26% | 19200 | 0.23% |
| Non-accruing loans | 35326 | 0.52% | 29681 | 0.41% | 26884 | 0.34% | 37854 | 0.48% | 31114 | 0.37% |
| Total delinquent and non-accruing loans | $78459 | 1.15% | $49811 | 0.69% | $69828 | 0.89% | $58801 | 0.74% | $50314 | 0.60% |

---

![](tm234453d1_ex99-1img002.jpg)

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | Dec. 31, | March 31, | June 30, | Sept. 30, | Dec. 31, |
| (in thousands) |  | 2021 | 2022 | 2022 | 2022 | 2022 |
| Total revenue | (A) | $90721 | $89744 | $97709 | $108335 | $117746 |
| Adj: Net securities losses/(gains) (1) |  | 106 | 745 | 973 | 476 | (163) |
| Adj: Net (gains) on sale of business operations and assets |  | (1057) | - | - | - | - |
| Total adjusted revenue (2) | (B) | $89770 | $90489 | $98682 | $108811 | $117583 |
| Total non-interest expense | (C) | $69407 | $68550 | $68475 | $81677 | $70014 |
| Less: Merger, restructuring and other expense |  | (864) | (18) | (35) | (11473) | 2617 |
| Adjusted non-interest expense (2) | (D) | $68543 | $68532 | $68440 | $70204 | $72631 |
| Pre-tax, pre-provision net revenue (PPNR) | (A-C) | $21314 | $21194 | $29234 | $26658 | $47732 |
| Adjusted pre-tax, pre-provision net revenue (PPNR) (2) | (B-D) | 21227 | 21957 | 30242 | 38607 | 44952 |
| Net income |  | $20248 | $20196 | $23115 | $18717 | $30505 |
| Adj: Net securities losses/(gains) (1) |  | 106 | 745 | 973 | 476 | (163) |
| Adj: Net (gains) on sale of business operations and assets |  | (1057) |  |  |  |  |
| Adj: Restructuring expense and other expense |  | 864 | 18 | 35 | 11473 | (2617) |
| Adj: Income taxes (expense)/benefit |  | 11 | (170) | (561) | (2738) | 529 |
| Total adjusted income (2) | (E) | $20172 | $20789 | $23562 | $27928 | $28254 |
| (in millions, except per share data) |  |  |  |  |  |  |
| Total average assets | (F) | $11427 | $11493 | $11260 | $11315 | $11321 |
| Total average shareholders' equity | (G) | 1181 | 1189 | 1182 | 1189 | 1213 |
| Total average tangible shareholders' equity (2)(3) | (H) | 1151 | 1160 | 1155 | 1164 | 1188 |
| Total average tangible common shareholders' equity (2)(3) | (I) | 1151 | 1160 | 1155 | 1164 | 1188 |
| Total accumulated other comprehensive (loss), period-end |  | (3) | (78) | (123) | (188) | (181) |
| Total tangible shareholders' equity, period-end (2)(3) | (J) | 1153 | 1066 | 987 | 917 | 930 |
| Total tangible common shareholders' equity, period-end (2)(3) | (K) | 1153 | 1066 | 987 | 917 | 930 |
| Total tangible assets, period-end (2)(3) | (L) | 11525 | 12069 | 11552 | 11291 | 11638 |
| Total common shares outstanding, period-end (*thousands*) | (M) | 48667 | 47792 | 45788 | 45040 | 44361 |
| Average diluted shares outstanding (*thousands*) | (N) | 48340 | 48067 | 46102 | 45034 | 44484 |
| GAAP earnings per common share, diluted (2) |  | $0.42 | $0.42 | $0.50 | $0.42 | $0.69 |
| Adjusted earnings per common share, diluted (2) | (E/N) | 0.42 | 0.43 | 0.51 | 0.62 | 0.64 |
| Tangible book value per common share, period-end (2) | (K/M) | 23.69 | 22.30 | 21.56 | 20.36 | 20.95 |
| Total tangible shareholders' equity/total tangible assets (2) | (J/L) | 10.00 | 8.83 | 8.54 | 8.12 | 7.99 |
| **Performance ratios** (4) |  |  |  |  |  |  |
| GAAP return on equity |  | 6.86% | 6.79 | 7.82% | 6.30% | 10.06% |
| Adjusted return on equity (2) | (E/G) | 6.83 | 6.99 | 7.97 | 9.40 | 9.32 |
| Return on tangible common equity (2)(5) |  | 7.37 | 7.29 | 8.33 | 6.76 | 10.59 |
| Adjusted return on tangible common equity (2)(5) | (E+Q)/(I) | 7.34 | 7.49 | 8.48 | 9.92 | 9.83 |
| GAAP return on assets |  | 0.71 | 0.70 | 0.82 | 0.66 | 1.08 |
| Adjusted return on assets (2) |  | 0.71 | 0.72 | 0.84 | 0.99 | 1.00 |
| PPNR from continuing operations/assets (2) |  | 0.75 | 0.74 | 1.04 | 0.94 | 1.69 |
| Adjusted PPNR/assets (2) |  | 0.74 | 0.76 | 1.07 | 1.36 | 1.59 |
| Efficiency ratio (2)(6) | (D-Q)/(B+O+R) | 71.98 | 72.61 | 66.60 | 62.01 | 58.25 |
| Net interest margin, FTE |  | 2.60 | 2.61 | 3.11 | 3.48 | 3.84 |
| **Supplementary data** *(in thousands)* |  |  |  |  |  |  |
| Tax benefit on tax-credit investments (7) | (O) | $2057 | $596 | $595 | $620 | $3068 |
| Non-interest income charge on tax-credit investments (8) | (P) | (1448) | (357) | (351) | (445) | (2355) |
| Net income on tax-credit investments | (O+P) | 609 | 239 | 244 | 175 | 713 |
| Intangible amortization | (Q) | $1288 | $1286 | $1286 | $1285 | $1277 |
| Fully taxable equivalent income adjustment | (R) | 1604 | 1524 | 1560 | 1715 | 1845 |

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(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 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) Adjusted return on tangible equity is computed by dividing the total adjusted income/(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 adjusted tangible non-interest expense by the sum of total net interest income on a fully taxable equivalent basis and total adjusted 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, new markets and solar.

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

![](tm234453d1_ex99-1img002.jpg)

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

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| | | | |
|:---|:---|:---|:---|
|  | | At or for the Years Ended | At or for the Years Ended |
|  | | Dec. 31, | Dec. 31, |
| (in thousands) |  | 2021 | 2022 |
| Total revenue | (A) | $434414 | $413534 |
| Adj: Net securities losses (1) |  | 787 | 2031 |
| Adj: Net (gains) on sale of business operations and assets |  | (52942) | - |
| Total adjusted revenue (2) | (B) | $382259 | $415565 |
| Total non-interest expense | (C) | $285893 | $288716 |
| Less: Merger, restructuring and other expense |  | (5781) | (8909) |
| Adjusted non-interest expense (2) | (D) | $280112 | $279807 |
| Pre-tax, pre-provision net revenue (PPNR) | (A-C) | $148521 | $124818 |
| Adjusted pre-tax, pre-provision net revenue (PPNR) (2) | (B-D) | 102147 | 135758 |
| Net income |  | $118664 | $92533 |
| Adj: Net securities losses (1) |  | 787 | 2031 |
| Adj: Net (gains) on sale of business operations and assets |  | (52942) |  |
| Adj: Restructuring expense and other expense |  | 5781 | 8909 |
| Adj: Income taxes benefit/(expense) |  | 11696 | (2940) |
| Total adjusted income (2) | (E) | $83986 | $100533 |
| (in millions, except per share data) |  |  |  |
| Total average assets | (F) | $12056 | $11347 |
| Total average shareholders' equity | (G) | 1166 | 1193 |
| Total average tangible shareholders' equity (2)(3) | (H) | 1134 | 1166 |
| Total average tangible common shareholders' equity (2)(3) | (I) | 1134 | 1166 |
| Total accumulated other comprehensive (loss), period-end |  | (3) | (181) |
| Total tangible shareholders' equity, period-end (2)(3) | (J) | 1153 | 930 |
| Total tangible common shareholders' equity, period-end (2)(3) | (K) | 1153 | 930 |
| Total tangible assets, period-end (2)(3) | (L) | 11525 | 11638 |
| Total common shares outstanding, period-end (*thousands*) | (M) | 48667 | 44361 |
| Average diluted shares outstanding (*thousands*) | (N) | 49554 | 45914 |
| GAAP earnings/(loss) per common share, diluted (2) |  | $2.39 | $2.02 |
| Adjusted earnings per common share, diluted (2) | (E/N) | 1.69 | 2.19 |
| Tangible book value per common share, period-end (2) | (K/M) | 23.69 | 20.95 |
| Total tangible shareholders' equity/total tangible assets (2) | (J/L) | 10.00 | 7.99 |
| **Performance ratios** (4) |  |  |  |
| GAAP return on equity |  | 10.18% | 7.76% |
| Adjusted return on equity (2) | (E/G) | 7.20 | 8.43 |
| Return on tangible common equity (2)(5) |  | 10.80 | 8.26 |
| Adjusted return on tangible common equity (2)(5) | (E+Q)/(I) | 7.74 | 8.94 |
| GAAP return on assets |  | 0.98 | 0.82 |
| Adjusted return on assets (2) |  | 0.70 | 0.89 |
| PPNR from continuing operations/assets (2) |  | 1.23 | 1.10 |
| Adjusted PPNR/assets (2) |  | 0.85 | 1.20 |
| Efficiency ratio (2)(6) | (D-Q)/(B+O+R) | 69.96 | 64.31 |
| Net interest margin, FTE |  | 2.60 | 3.26 |
| **Supplementary data** *(in thousands)* |  |  |  |
| Tax benefit on tax-credit investments (7) | (O) | $4372 | $4880 |
| Non-interest income charge on tax-credit investments (8) | (P) | (3445) | (3508) |
| Net income on tax-credit investments | (O+P) | 928 | 1372 |
| Intangible amortization | (Q) | $5200 | $5134 |
| Fully taxable equivalent income adjustment | (R) | 6344 | 6644 |

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(1) Net securities losses 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 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) Adjusted return on tangible equity is computed by dividing the total adjusted income/(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 adjusted tangible non-interest expense by the sum of total net interest income on a fully taxable equivalent basis and total adjusted 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, new markets, and solar.

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