Berkshire Hills Reports 57% Fourth Quarter Core EPS Growth

PITTSFIELD, Mass., Jan. 31, 2012/PRNewswire/ -- Berkshire Hills Bancorp, Inc. (NASDAQ: BHLB) reported fourth quarter 2011 core earnings per share totaling $0.44, increasing by 57% compared to $0.28in the fourth quarter of 2010.  This increase resulted from ongoing organic growth together with the benefit of the acquisitions of Rome Bancorp and Legacy Bancorp.  Fourth quarter GAAP net income included merger related expenses, together with income from discontinued operations.   These non-core items together equated to a net charge of $0.04per share and resulted in GAAP net income of $0.40per share, compared to $0.26per share in the fourth quarter of 2010.

For the full year, core earnings per share increased by 53% to $1.56in 2011, compared to $1.02in 2010.  GAAP net earnings per share totaled $0.98for the year 2011 compared to $1.00in 2010.

FOURTH QUARTER FINANCIAL HIGHLIGHTS (Revenue and expense comparisons are to the prior year fourth quarter, unless otherwise noted.  Fourth quarter results in 2011 include the operations of Legacy Bancorp and Rome Bancorp, which were acquired earlier in 2011.)

• 57% increase in core earnings per share
• 7% organic annualized growth in total commercial loans
• 8% organic annualized deposit growth
• 3.61% net interest margin, improved from 3.30% in the fourth quarter of 2010
• 0.66% non-performing assets/total assets
• 0.27% annualized net loan charge-offs/average loans
• 0.93% core ROA (0.85% GAAP ROA)
• 59% efficiency ratio

Berkshire President and CEO, Michael P. Daly, stated, "We continued our strong organic growth in targeted areas through year-end, resulting in 11% annualized core EPS growth for the fourth quarter, compared to the linked quarter.  We converted the Legacy core system in November, and will have the full benefit of these additional cost saves beginning in 2012.  Our merger integrations are now completed, allowing us to focus on revenue enhancements going forward.  We brought in our core operating expenses below budget, and our return on assets and efficiency continue to improve as we benefit from the positive operating leverage of revenue growth and disciplined expense management."

Mr. Daly continued, "For the year, we achieved 53% accretion in core earnings per share.  We also accreted tangible book value per share, despite the impact of two bank acquisitions.  Tangible book value per share ended the year at $15.61, while total book value per share ended the year at $26.20.  Our asset quality metrics remain favorable and our capital ratios improved during the year. In the fourth quarter, we announced the recruitment of a seasoned commercial lending team to anchor our Westborough Massachusettscommercial office.  Through this initiative and our pending acquisition of The Connecticut Bank and Trust Company (CBT), we are positioned to expand our presence in our central and eastern New England markets.  CBT's performance continues to be within our expectations and we look forward to the planned financial and market benefits of this pending acquisition.  We are focused on executing on these growth  initiatives as we continue to target a $2.00core EPS run rate by the end of 2012."

DIVIDEND DECLARED

The Board of Directors voted to declare a cash dividend of $0.17per share to shareholders of record at the close of business on February 16, 2012, payable on March 1, 2012.  The dividend was increased in the prior quarter by 6% from the previous $0.16per share level.  This dividend equates to a 3.4% annualized yield based on the $20.11average closing price of Berkshire's common stock in the fourth quarter of 2011.  

ANNUAL MEETING DATE SET

The Board of Directors has voted that the Annual Meeting of Shareholders shall be held on May 10, 2012at the Crowne Plaza Hotel, One West Street, Pittsfield, Massachusettsat 10:00 a.m.The date of March 15, 2012was established as the record date for the determination of the shareholders entitled to notice of, and to vote at, the Annual Meeting.  

BRANCH DIVESTITURES

In order to minimize potential anti-competitive effects of the Legacy acquisition, Berkshireagreed to sell four Legacy Berkshire County branches in conjunction with the Legacy merger agreement.  These branches were sold in the fourth quarter of 2011 and Berkshirereceived a 6% deposit premium totaling $8.9 millionand paid a $1.1 million($0.14per share) distribution to former Legacy shareholders for a portion of these proceeds pursuant to the Legacy merger agreement.  This divestiture included $148 millionin deposits, along with certain loans, premises, equipment, and other assets.  Berkshire recognized pre-tax income of $5.0 millionand net income of $1.1 millionrelated to this sale, which is included in income from discontinued operations in the most recent quarter.

Additionally, Berkshiremade a separate determination to divest the deposits of four former Legacy New York branches, including three office facilities, that were not within its financial performance objectives.  Berkshire entered into an agreement to sell these branches, with total year-end deposits of $55 million, for a 2.5% deposit premium.  These branches were designated as discontinued operations in Berkshire's financial statements at year-end 2011.  This divestiture was completed in January 2012and is not expected to have a material effect on 2012 income.

During the third and fourth quarters of 2011, the operations related to the above eight branches were classified as discontinued operations.  They operated at a net loss of $5 thousandin the third quarter and $161 thousandin the fourth quarter, including divestiture related costs and before the net gain on the Berkshire County branches.  The balance sheet at September 30, 2011included all eight branches as discontinued operations, and the year-end balance sheet included the four New York branches as discontinued operations.

FINANCIAL CONDITION

Changes in financial condition in 2011 included the impact of the acquisition of Rome Bancorp on April 1and the acquisition of Legacy Bancorp on July 21, less the branch divestiture noted above.  Due to the branch divestiture, total assets decreased by 3% to $4.0 billionin the fourth quarter.  Including the benefit of the bank acquisitions, total assets increased by 38% for the year 2011.

Total loans were $3.0 billionat year-end 2011, unchanged during the third quarter and up 38% for the year, including 2% organic growth plus the benefit of the bank acquisitions.  Berkshire has focused on originations of higher margin commercial loans, which grew at a 7% organic annualized rate in the fourth quarter and at a 6% organic rate for the year.  This growth was in commercial business loans, which grew by 11% in the fourth quarter and at a 29% organic rate for the year, including the benefit of Berkshire's asset based lending group.  Berkshire also expects to benefit from the recruitment of an established commercial lending team announced in December, which will operate from the Company's new Westboroughoffice serving the commercial middle market in central and eastern Massachusetts.  In the current low rate environment, the Company continued to sell a significant portion of fixed rate residential mortgage originations, and the mortgage portfolio was flat for the year on an organic basis before the benefit of bank acquisitions.  The low mortgage rate environment and economic conditions constrained demand for home equity loans, contributing to a 13% organic decline in consumer loan balances for the year.  

Asset performance metrics remained favorable throughout the year and at year-end.  Non-performing assets were 0.66% of total assets at year-end, compared to 0.59% at the start of the year.  Annualized net loan charge-offs measured 0.27% of average loans for the fourth quarter and for the full year.  Accruing delinquent loans improved to 0.89% of total loans during the quarter.

Total deposits were $3.1 billionat year-end 2011, increasing at an 8% annualized organic rate in the fourth quarter and 10% organically for the full year, and up 41% in total for the year including the benefit of the bank acquisitions.  Full year organic deposit growth benefited from a 15% organic increase in transaction accounts, including a 22% increase in demand deposit balances reflecting ongoing organic retail and commercial account growth.  Money market account growth also contributed to total deposit growth, including the benefit of institutional balance growth and ongoing promotional offerings during the year.  

Total outstanding common shares increased by 50% to 21.1 million in 2011 due to shares issued as merger consideration.  Tangible book value per share increased to $15.61at year-end 2011.  Total book value per share decreased to $26.20, reflecting current market prices assigned to new shares issued as merger consideration.  The ratio of tangible equity/assets increased to 8.8% at year-end 2011 compared to 8.0% at the start of the year.  

RESULTS OF OPERATIONS

The fourth quarter of 2011 was the first full quarterly period to include the benefit in continuing operations of both the Legacy and Romeoperations.  Most categories of income and expense increased in the fourth quarter and for the year 2011 compared to 2010 due to the benefit of these mergers.  Most core profitability measurements improved including the benefit of these mergers, together with positive operating leverage resulting from organic revenue growth and disciplined expense management.  Earnings per share reflect the impact of the additional shares issued for these acquisitions.  

Fourth quarter core earnings of $9.3 millionincreased by 135% in 2011, compared to 2010, and core earnings per share increased by 57% to $0.44(including the impact of the newly issued shares).  The core return on assets increased to 0.93% from 0.56%, and the GAAP ROA improved to 0.85% from 0.51%.  The core return on tangible equity improved to 11.6% in the most recent quarter, while the return on total equity improved to 6.2%.  

Fourth quarter total net revenue increased by 45% to $40 millionin 2011 due to the benefit of the bank acquisitions and organic growth.  Net interest income increased by 55% and fee income increased by 18%.  The acquired banks had fewer fee income sources compared to Berkshire.  The net interest margin improved to 3.61% in the fourth quarter of 2011, compared to 3.30% in the same quarter of 2010.  This improvement reflected the fair valued margins of acquired banks, together with the continuing benefit of disciplined pricing of loans and deposits.  The benefit of checking account growth has contributed to the ongoing improvement in the Company's funding costs.   As expected, the net interest margin decreased from 3.74% in the prior quarter due to the benefit last quarter from the prepayment of discounted loans.    

The fourth quarter provision for loan losses totaled $2.3 millionin 2011, compared to $2.0 millionin 2010.  The Company benefited from continuing favorable loan charge-offs and higher loan recoveries in the most recent quarter.   The loan loss allowance measured 1.10% of total loans at year-end 2011.  Under current accounting standards, loans acquired through the bank mergers were booked at their $823 millionfair value, with no initial related allowance.  

Fourth quarter and annual results included non-core activity related to the mergers and discontinued operations.  Non-core income is summarized on pages F-9 and F-10.  Fourth quarter core income was $9.3 million, compared to net income of $8.5 million.  Non-core adjustments  to GAAP income (after-tax) included $1.7 millionfor non-recurring items and ($0.9) millionfor discontinued operations.  For the year 2011, core income was $27.9 million, compared to net income of $17.6 million.  Net non-core adjustments were $11.2 millionfor non-recurring items and ($0.9) millionfor discontinued operations.  Substantially all of the non-recurring items were merger related.  The full year tax rate on these items was 37%, resulting in a 53% fourth quarter tax rate when merger analysis was completed at year-end.  The tax rate on discontinued operations was 80% due to the non-deductibility of goodwill for income tax purposes in determining the taxable gain on divestiture.

Fourth quarter non-interest expense totaled $29.5 million.   By year-end, Berkshirehad completed substantially all of its targeted cost saves related to these mergers.  This progress is reflected in the efficiency ratio, which improved to 59% in the fourth quarter of 2011.  Results have benefited from lower industry premiums for FDIC insurance expense and have reflected additional charges in 2011 related to the liquidation of foreclosed real estate.  The tax rate on core earnings measured 24% for the year, resulting in a 22% rate for the fourth quarter.

NOTE ON ACCOUNTING CORRECTION

Based on a review of its tax credit investment limited partnership interests in the second  quarter, Berkshiredetermined that its net income had been understated by an immaterial amount in prior periods.  These interests primarily relate to low income housing, community development, and solar energy related investments.  The Company has corrected its accounting for these interests, including adjustments to non-interest income to reflect book losses in these interests, which are more than offset by the reduction of income tax expense resulting from federal income tax credits.  The enclosed financial statements include the impact of these immaterial corrections to current and prior period financial information presented.  

CONFERENCE CALL

Berkshirewill conduct a conference call/webcast at 10:00 A.M. eastern timeon Wednesday, February 1, 2012to discuss the results for the quarter and guidance about expected future results.  Participants should dial-in to the call a few minutes before it begins. Information about the conference call follows:

A telephone replay of the call will be available through February 8, 2012by calling 877-344-7529 and entering access code: 10008299.  The webcast and a podcast will be available at Berkshire's website above for an extended period of time. 

BACKGROUND

Berkshire Hills Bancorp is the parent of Berkshire Bank - America's Most Exciting Bank(SM).  The Company has $4 billionin assets and 59 full service branch offices in Massachusetts, New York, and Vermontproviding personal and business banking, insurance, and wealth management services.  Berkshire Bank provides 100% deposit insurance protection for all deposit accounts, regardless of amount, based on a combination of FDIC insurance and the Depositors Insurance Fund (DIF).  Berkshire has a pending agreement to acquire CBT - The Connecticut Bank and Trust Company headquartered in Hartford, Connecticut.  For more information, visit www.berkshirebank.com or call 800-773-5601.  

FORWARD LOOKING STATEMENTS

This document may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.  There are several 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.  Berkshiredoes not undertake any obligation to update forward-looking statements made in this document.

This document also may contain forward-looking statements about the proposed merger of Berkshireand CBT. Certain factors that could cause actual results to differ materially from expected results include delays in completing the merger, difficulties in achieving cost savings from the merger or in achieving such cost savings within the expected time frame, difficulties in integrating Berkshireand CBT, increased competitive pressures, changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the business in which Berkshireand CBT are engaged, changes in the securities markets and other risks and uncertainties disclosed from time to time in documents that Berkshirefiles with the Securities and Exchange Commission.

ADDITIONAL INFORMATION FOR SHAREHOLDERS  

The proposed merger transaction with CBT will be submitted to CBT stockholders for their consideration. Berkshirewill file with the SEC a Registration Statement on Form S-4 that will include a Proxy Statement of CBT and a Prospectus of Berkshire, as well as other relevant documents concerning the proposed transaction with the SEC. Stockholders of CBT are urged to read the Registration Statement and the Proxy Statement/Prospectus when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. You will be able to obtain a free copy of the Registration Statement, Proxy Statement/Prospectus, as well as other filings containing information about Berkshireand CBT at the SEC's Internet site (www.sec.gov) and at CBT's Internet site (www.thecbt.com).

Berkshireand CBT and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of CBT in connection with the proposed merger. Information about the directors and executive officers of Berkshireis set forth in the proxy statement, dated March 24, 2011, for Berkshire's 2011 annual meeting of stockholders, as filed with the SEC on Schedule 14A.  Information about the directors and executive officers of CBT is set forth in the proxy statement, dated April 18, 2011, for CBT's 2011 annual meeting of stockholders, which is available at CBT's Internet site. Additional information regarding the interests of such participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus when it becomes available.

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 in the accompanying financial tables.  In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders.  The Company utilizes the non-GAAP measure of core earnings in evaluating operating trends, including components for core revenue and expense.  These measures exclude amounts which the Company views as unrelated to its normalized operations, including merger costs and restructuring costs.  Similarly, the efficiency ratio is also adjusted for these non-core items.  The Company also adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community.  Non-GAAP adjustments in 2010 and 2011 are primarily related to expense charges related to the Romeand Legacy mergers.  These charges consist primarily of severance/benefit related expenses, contract termination costs, and professional fees.  There are additionally non-GAAP adjustments related to non-recurring securities gains and core systems conversion costs.  Tax adjustments are based on an analysis of tax accruals for core income and for GAAP income, with the net difference included with non-core items and reflecting the timing impacts of tax expense estimates.  Core revenue, expense, and income measures in the fourth quarter also exclude results related to discontinued operations, including divestiture  income and related tax expense.

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED BALANCE SHEETS - UNAUDITED
	December 31,		September 30,		December 31,
(In thousands)	2011		2011		2010
Assets
Cash and due from banks	$             46,713		$                40,070		$             24,643
Short-term investments	28,646		94,428		19,497
Trading security	17,395		17,501		16,155
Securities available for sale, at fair value	419,756		395,546		310,242
Securities held to maturity, at amortized cost	58,912		58,262		56,436
Federal Home Loan Bank stock and other restricted securities	37,118		37,148		23,120
Total securities	533,181		508,457		405,953
Loans held for sale	1,455		475		1,043
Residential mortgages	1,018,664		1,045,363		644,973
Commercial mortgages	1,142,985		1,158,140		925,573
Commercial business loans	423,548		382,159		286,087
Consumer loans	371,373		368,898		285,529
Total loans	2,956,570

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED
LOAN ANALYSIS
										Organic annualized growth %
(Dollars in millions)		December 31, 2011 Balance		September 30, 2011 Balance		Impact of Mergers and Divestitures		December 31, 2010 Balance		Fourth Quarter 2011		Year 2011
Total residential mortgages		$               1,019		$                   1,046		$                         374		$                    645		(10)	%	(0)	%
Total commercial mortgages		1,143		1,158		223		926		(5)		(1)
Total commercial business loans		424		382		56		286		44		29

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
	Three Months Ended				Years Ended
	December 31,				December 31,
(In thousands, except per share data)	2011		2010		2011		2010
Interest and dividend income
Loans	$      35,466		$      25,005		$      124,398		$       98,359
Securities and other	3,562		3,364		13,862		13,918
Total interest and dividend income	39,028		28,369		138,260		112,277
Interest expense
Deposits	5,792		6,121		23,372		26,316
Borrowings and junior subordinated debentures	2,101		2,153		8,368		9,014
Total interest expense	7,893		8,274		31,740		35,330
Net interest income	31,135		20,095		106,520		76,947
Non-interest income
Loan related fees	856		1,125		3,161		3,386
Deposit related fees	3,848		2,871		13,640		10,880
Insurance commissions and fees	2,145		2,150		11,088		11,136
Wealth management fees

BERKSHIRE HILLS BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
	Quarters Ended
	Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,
(In thousands, except per share data)	2011		2011		2011		2011		2010
Interest and dividend income
Loans	$      35,466		$     35,719		$       28,607		$        24,606		$      25,005
Securities and other	3,562		3,547		3,446		3,307		3,364
Total interest and dividend income	39,028		39,266		32,053		27,913		28,369
Interest expense
Deposits	5,792		6,097		5,768		5,715		6,121
Borrowings and junior subordinated debentures	2,101		2,131		2,084		2,052		2,153
Total interest expense	7,893		8,228		7,852		7,767		8,274
Net interest income	31,135		31,038		24,201		20,146		20,095
Non-interest income

BERKSHIRE HILLS BANCORP, INC.
ASSET QUALITY ANALYSIS
	At or for the Quarters Ended
	Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,
(Dollars in thousands)	2011		2011		2011		2011		2010
NON-PERFORMING ASSETS
Non-accruing loans:
Residential mortgages	$        7,010		$             4,750		$           2,811		$        1,529		$        2,174
Commercial mortgages	14,280		13,721		9,600		9,510		9,488
Commercial business loans	990		1,399		1,764		1,507		1,305
Consumer loans	1,954		1,834		862		763		745
Total non-accruing loans	24,234		21,704		15,037		13,309		13,712
Other real estate owned	1,900		2,200		1,700		2,400		3,386
Total non-performing assets	$      26,134		$           23,904		$         16,737		$      15,709		$      17,098
Total non-accruing loans/total loans	0.82%		0.72%		0.61%		0.62%		0.64%
Total non-performing assets/total assets	0.66%		0.58%		0.52%		0.54%		0.59%
PROVISION AND ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$      32,181		$           31,919		$         31,898		$      31,898		$      31,836
Charged-off loans	(2,313)		(2,061)		(1,564)		(1,758)		(2,216)
Recoveries on charged-off loans	313		123		85		158		278
Net loans charged-off	(2,000)		(1,938)		(1,479)		(1,600)		(1,938)
Provision for loan losses	2,263		2,200		1,500		1,600		2,000
Balance at end of period	$      32,444		$           32,181		$         31,919		$      31,898		$      31,898
Allowance for loan losses/total loans	1.10%		1.07%		1.30%		1.49%		1.49%
Allowance for loan losses/non-accruing loans	134%		148%		212%		240%		233%

BERKSHIRE HILLS BANCORP, INC.
SELECTED FINANCIAL HIGHLIGHTS
			At or for the Quarters Ended
			Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,
			2011		2011		2011		2011		2010
PERFORMANCE RATIOS
	Core return on assets		0.93%		0.89%		0.72%		0.59%		0.56%
	Return on total assets		0.85		0.45		0.23		0.39		0.51
	Core return on equity		6.74		6.50		5.15		4.31		4.08
	Return on total equity		6.16		3.31		1.67		2.89		3.72
	Net interest margin, fully taxable equivalent		3.61		3.74		3.52		3.30		3.30

BERKSHIRE HILLS BANCORP, INC.
AVERAGE BALANCES
	Quarters Ended
	Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,
(In thousands)	2011		2011		2011		2011		2010
Assets
Loans:
Residential mortgages	$        1,039,025		$        1,004,950		$           802,460		$           651,059		$          639,470
Commercial mortgages	1,156,155		1,140,691		973,557		929,564

BERKSHIRE HILLS BANCORP, INC.
AVERAGE YIELDS  (Fully Taxable Equivalent - Annualized)
	Quarters Ended
	Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,
	2011		2011		2011		2011		2010
Earning assets
Loans:
Residential mortgages	4.68	%	4.82	%	4.97	%	5.04	%	5.01	%
Commercial mortgages	5.17		5.44		4.74		4.68		4.91
Commercial business loans	4.44		4.78		4.89		4.69		4.83
Consumer loans	4.03		4.17		3.97		3.63		3.72
Total loans	4.74		4.97		4.74		4.65		4.77
Securities	3.26		3.53		4.07		4.01		3.94
Short-term investments	0.14		0.03		0.19		0.13		0.11
Total earning assets	4.49		4.72		4.64		4.53		4.60

BERKSHIRE HILLS BANCORP, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
		At or for the Quarters Ended
		Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,
(Dollars in thousands)		2011		2011		2011		2011		2010
Net income		$         8,477		$         4,392		$         1,877		$       2,835		$       3,600
Adj: Gain on sale of securities, net		(8)		-		(6)		-		-
Adj:  Other non-recurring loss (gain)		12		(1,975)		(124)		-		-
Plus: Non-recurring and merger expenses		3,678		9,091		5,451		1,708		426
Adj:  Income taxes		(1,947)		(2,884)		(1,400)		(316)		(78)
Less: pre-tax income from discontinued operations		(4,692)		8		-		-		-
Plus: income taxes from discontinued operations		3,773		(3)		-		-		-
Total core income	(A)	$         9,293		$         8,629		$         5,798		$       4,227		$       3,948
Total non-interest income		$         8,825		$       10,766		$         8,170		$       8,009		$       7,431
Adj: Gain on sale of securities, net		(8)		-		(6)		-		-
Adj:  All other non-recurring loss (gain)		12		(1,975)		(124)		-		-
Total core non-interest income		8,829		8,791		8,040		8,009		7,431
Net interest income		31,135		31,551		24,201		20,146		20,095
Total core revenue		$       39,964		$       40,342		$       32,241		$     28,155		$     27,526
Total non-interest expense		$       29,533		$       35,320		$       28,623		$     23,189		$     21,415
Less: Non-recurring and merger expenses		(3,678)		(9,091)		(5,451)		(1,708)		(426)
Core non-interest expense		25,855		26,229		23,172		21,481		20,989
Less: Amortization of intangible assets		(1,314)		(1,382)		(935)		(716)		(718)
Total core tangible non-interest expense		$       24,541		$       24,847		$       22,237		$     20,765		$     20,271
(Dollars in millions, except per share data)
Total average assets	(B)	$         3,977		$         3,871		$         3,214		$       2,876		$       2,827
Total average stockholders' equity	(C)	551		531		450		392		387
Total stockholders' equity, period-end		554		547		445		391		389
Less:  Intangible assets, period-end		(224)		(233)		(193)		(172)		(173)
Total tangible stockholders' equity, period-end	(D)	330		314		252		219		216
Total shares outstanding, period-end (thousands)	(E)	21,147		21,134		16,721		14,115		14,076
Average diluted shares outstanding (thousands)	(F)	21,043		20,105		16,601		13,981		13,934
Core earnings per share, diluted	(A/F)	$           0.44		$           0.43		$           0.35		$         0.30		$         0.28
Core earnings per share, diluted	(D/E)	$         15.61		$         14.86		$         15.07		$       15.52		$       15.35

BERKSHIRE HILLS BANCORP, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
		At or for the Years Ended
		December 31,		December 31,
(Dollars in thousands)		2011		2010
Net income (loss)		$          17,581		$          13,858
Adj: Gain on sale of securities, net		(14)		-
Adj: Non-recurring income		(2,087)		-
Plus: All other non-recurring and merger expenses		19,928		447
Adj: Income taxes		(6,547)		(87)
Plus: pre-tax income from discontinued operations		(4,684)		-
Less: income taxes from discontinued operations		3,770		-
Total core income	(A)	$          27,947		$          14,218
Plus: Amortization of intangible assets		4,236		3,021
Total tangible core income		$          32,183		$          17,239
Total non-interest income		$          35,803		$          29,751
Adj: Gain on sale of securities, net		(14)		-
Adj: Non-recurring income		(2,087)

CONTACTS

Investor Relations Contact
David H. Gonci
Investor Relations Officer
413-281-1973

Media Contact
Lori Gazzillo
AVP, Community Relations
413-822-1695

SOURCE Berkshire Hills Bancorp, Inc.