PITTSFIELD -- Berkshire Hills Bancorp Inc. increased its core earnings per share by five percent during the first quarter of 2014 despite paying several one-time costs associated with the finalization of an acquisition that was announced last year.
Total earnings for Berkshire Bank’s holding company were $10.4 million during the first quarter, or 42 cents a share. It was s slight increase from the previous quarter when the bank’s earnings were $10 million, or 40 cents a share.
But those one-time costs caused Berkshire’s total earnings to drop from a record $13.5 million during the first quarter of 2013, when earnings registered 54 cents per share.
Those costs were associated with Berkshire’s acquisition of 20 Bank of America branches in central New York, a deal that was finalized on Jan. 17. Non-core charges related to that transaction were 46 cents per share after tax, including a decrease of 25 cents per share that was recorded as a loss on the termination of interest swap hedges. That latter charge had no impact on equity for the shareholders of Berkshire’s largest and only publicly traded bank.
"There’s a lot in there, but from an operating point of view it was a good strong quarter," said David Gonci, Berkshire’s Capital Markets director. "We had 10 percent in top line (revenue) growth and five percent in bottom line growth. It’s typical to have one-time charges in an acquisition."
Gonci said the drop in Berkshire’s first quarter numbers also reflected a decrease in mortgage activity, which was strong at the beginning of 2013, but tailed off in the middle of last year.
In a statement, Berkshire President and CEO Michael P. Daly said the bank started the year with "solid growth," noting that commercial loans increased at a 9 percent annualized rate during the first quarter as lending teams across the bank’s five state footprint continue to increase their market share.
With the acquisition of those 20 new branches finalized, Berkshire now has 90 full service offices, including 46 in New York state. The bank’s total assets increased by $338 million to $6 billion during the first quarter, up from $5.6 billion during the previous quarter, and $5.2 billion from the same time period last year.
Other first quarter highlights included a 7 percent increase in Berkshire’s net interest income, a 14 percent rise in fee income, an 11 percent annualized inc-
rease in consumer loans, and a 10 percent increase in dep-
osits, including those from the acquired branches. Total loans increased by 62 percent, with most of that jump coming in the quarter’s final month.
The board of directors voted to declare a cash dividend of 18 cents per share to shareholders of record on May 15, which will be payable on May 29. The dividend equates to a 2.8 percent annualized yield based on the $25.56 average closing price of Berkshire’s common stock during the first quarter of 2014.
To reach Tony Dobrowolski: