Berkshire Hills Bancorp 8K Berkshire Hills Reports Higher Third Quarter Net Income of $37.5 million, or $0.88 Per Share | BHLB 24 Oct 24

Exhibit 99.1

Berkshire Hills Reports Higher Third Quarter Net Income of $37.5 million, or $0.88 Per Share

Operating EPS of $0.58 increased 5% linked quarter and 16% year-over-year

$16 million non-operating gain on branch sale ($0.30 per share after tax)

Operating revenue up 1% linked quarter and 2% year-over-year

14.8% return on tangible common equity; 9.9% operating return on tangible common equity

Branch sale and loan sale are expected to further improve long-term profitability

BOSTON, October 24, 2024 - Berkshire Hills Bancorp, Inc. (NYSE: BHLB) today reported results for the third quarter of 2024. These results along with comparison periods are summarized below:

($ in millions, except per share data)	Three Months Ended
	Sept. 30, 2024			June 30, 2024			Sept. 30, 2023
Net income	$	37.5		$	24.0		$	19.5
Per share		0.88			0.57			0.45
Operating earnings¹		24.8			23.2			21.5
Per share		0.58			0.55			0.50

Net interest income, non FTE	$	88.1		$	88.5		$	90.3
Net interest income, FTE		90.1			90.5			92.3
Net interest margin, FTE		3.16	%		3.20	%		3.18	%
Non-interest income		37.6			20.1			17.5
Operating non-interest income¹		21.5			20.1			17.5

Non-interest expense	$	72.0		$	70.9		$	76.5
Operating non-interest expense¹		72.3			71.3			73.9
Efficiency ratio¹		63.7	%		63.4	%		65.1	%

Average balances²
Loans	$	9,233		$	9,157		$	8,952
Deposits		9,360			9,296			9,630

Period-end balances²
Loans		9,212			9,229			8,984
Deposits		9,577			9,621			9,981

1. See non-GAAP financial measures and reconciliation to GAAP measures beginning on page 12.

2. Loans and deposits in 2Q24 exclude balances held for sale in branch transaction of $57 million and $483 million respectively (average), and $55 million and $474 million (end of period). The branch sale was completed in 3Q24. End of period loans in 3Q24 exclude $46.5 million in Upstart-related consumer loans held for sale. This sale was completed on October 16, 2024.

Berkshire CEO Nitin Mhatre stated, “We are pleased to report a robust quarter reflecting accelerating momentum across key business drivers. Quarterly operating income has increased sequentially throughout this year driven by calibrated loan growth, improving credit quality and continued expense management. Third quarter operating income per share increased 16% year over year. This quarter also saw approximately 1% growth in average deposit balances. During the quarter, we completed the sale of ten branch offices. Including branch consolidations, the total branch count has been reduced by 14% this year to 83 offices. Also, after quarter-end, the Company’s balance sheet was further strengthened through the sale of $46.5 million in consumer loans.”

Berkshire CFO Brett Brbovic added, “Operating revenue grew 1% linked quarter and benefited from loan growth and increased loan related fees.The net interest margin decreased modestly to 3.16% from 3.20% linked quarter and 3.18% year-over-year. The provision for credit losses decreased $1.0 million reflecting lower recent loss trends. Operating expense increased $0.9 million, with lower occupancy and technology costs offset by higher miscellaneous expenses. The allowance for credit losses on loans remained steady at 1.22% of total loans. Capital strength improved, with the tangible common equity ratio improving to 9.1% from 8.2%.”

	As of and For the Three Months Ended
	Sept. 30, 2024			June 30, 2024			Sept. 30, 2023
Asset Quality
Net loan charge-offs to average loans		0.24	%		0.07	%		0.24	%
Non-performing loans to total loans		0.26	%		0.23	%		0.30	%

Returns
Return on average assets		1.28	%		0.82	%		0.66	%
Operating return on average assets¹		0.85	%		0.79	%		0.73	%
Return on tangible common equity¹		14.83	%		9.99	%		8.45	%
Operating return on tangible common equity¹		9.91	%		9.65	%		9.27	%

Capital Ratios²
Tangible common equity/tangible assets¹		9.1	%		8.2	%		7.7	%
Tier 1 leverage		9.9	%		9.6	%		9.8	%
Common equity Tier 1		11.9	%		11.6	%		12.1	%
Tier 1 risk-based		12.2	%		11.9	%		12.3	%
Total risk-based		14.4	%		14.1	%		14.4	%

1. See non-GAAP measures and reconciliation to GAAP beginning on page 12. All performance ratios are annualized and are based on average balance sheet amounts, where applicable.

2. Presented as estimated for September 30, 2024 and actual for the remaining periods.

Berkshire Hills Bancorp, Inc. (NYSE: BHLB) is the parent company of Berkshire Bank, a relationship-driven, community-focused bank with $11.6 billion in assets and 83 financial centers in New England and New York. Berkshire is headquartered in Boston and offers commercial, retail, wealth, and private banking solutions.

3Q 2024 Financial Highlights (comparisons are to the prior quarter unless otherwise noted).

Income Statement. GAAP income was $37.5 million, or $0.88 per share. Operating earnings totaled $24.8 million, or $0.58 per share. GAAP results included the gain on the completion of the sale of ten New York branches. Operating income advanced 7% linked quarter including the benefit of higher operating revenue and a lower provision for credit losses.

•

Net interest income totaled $88.1 million in 3Q24 compared to $88.5 million in 2Q24.

•

Net interest margin decreased 4 basis points linked quarter to 3.16%.

The earning asset yield increased 5 basis points.

•

The loan yield increased 6 basis points.

○

The cost of funds increased 11 basis points.

•

The cost of deposits increased 7 basis points.

•

Provision for credit losses totaled $5.5 million, a decrease of $1.0 million linked quarter.

○

Net loan charge-offs totaling $5.6 million included $3.9 million in consumer losses which included a $1.9 million charge-off recorded for the Upstart-related consumer loan sale.

○

The net annualized loan charge-off ratio was 0.24%. Excluding the impact of consumer loans sold, annualized net loan charge-offs were 0.16% of average third quarter loans.

•

GAAP non-interest income of $37.6 million included a $16.0 million non-operating gain on the New York branch sale. Operating non-interest income totaled $21.5 million, an increase of 7% linked quarter.

○

Linked quarter growth was primarily in loan related fees which increased 36% including higher interest rate swap income and commercial loan servicing fees.

○

All other fee income categories increased except gains on SBA sales, which remained strong following a recent high in the linked quarter.

•

Non-interest expense totaled $72.0 million on a GAAP basis and $72.3 million on an operating basis. Operating non-interest expense increased 1% linked quarter and decreased 2% year-over-year.

○

Compensation and benefits expense increased $0.5 million linked quarter.

○

Occupancy, equipment, and technology expense decreased $0.9 million.

○

The category of other expense increased $1.6 million primarily due to one commercial check fraud.

○

The efficiency ratio was 63.7% compared to 63.4% linked quarter.

•

The effective tax rate was 22% for the quarter and the year-to-date.

Loans. Total loans decreased $16 million linked quarter to $9.21 billion due to the $46.5 million transfer of Upstart-related consumer loans to held for sale. Adjusted for this transfer, total loans increased by $30 million.

Commercial real estate loans increased $35 million to $4.74 billion.

Commercial and industrial loans decreased $12 million to $1.41 billion.

Residential mortgage loans increased $14 million to $2.69 billion.

Consumer loans decreased $53 million to $372 million due to the pending Upstart loan sale. This sale was completed on October 16, 2024. The remaining balance of Upstart-related loans was $10 million at quarter-end.

The allowance for credit losses on loans to total loans was 1.22% at September 30, 2024, unchanged from the prior quarter-end.

Non-performing loans to total loans was 0.26% at September 30, 2024, compared to 0.23% at prior quarter-end.

Deposits. Total deposits decreased $44 million to $9.58 billion. Total average deposits increased $64 million, or 1%, to $9.36 billion. Deposits decreased year-over-year due to the branch sale.

Non-interest bearing deposits increased $46 million to $2.26 billion, increasing to 24% of total deposits from 23%.

Non-maturity interest bearing deposits decreased $260 million to $4.79 billion.

Time deposits increased $170 million to $2.52 billion.

Equity. Total shareholders’ equity increased $58 million to $1.07 billion. Book value per share increased 6% to $24.90 and tangible book value per share increased 6% to $24.53. Accumulated other comprehensive income increased $25 million, reflecting lower market interest rates at period-end.

3Q 2024 Corporate Responsibility and Sustainability Highlights

Berkshire was recognized as a Top Charitable Contributor by the Boston Business Journal for the 12^th consecutive year and named to Newsweek’s list of America’s Greatest Workplaces.

Berkshire maintained its top quartile environmental, social and governance performance in the banking sector and was listed as an “Outperformer” in the R-Factor™ rating as of October 2024.

The Bank achieved targets for lending in low-moderate income communities, increasing minority homeownership, and support for green projects through its multi-year Community Comeback program.

Conference Call and Investor Presentation. Berkshire will conduct a conference call/webcast at 9:00 a.m. eastern time on Thursday, October 24, 2024 to discuss results for the quarter and provide guidance about expected future results. Instructions for listening to the call may be found at the Company’s website at ir.berkshirebank.com. Additional materials relating to the call may also be accessed at this website. The call will be archived at the website and will be available for an extended period of time.

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 the sections titled “Forward-Looking Statements” and “Risk Factors” in Berkshire’s most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission and available on the SEC’s website at www.sec.gov. You should not place undue reliance on forward-looking statements, which reflect our expectations only as of the date of this document. Berkshire does not undertake any obligation to update forward-looking statements.

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INVESTOR CONTACT

Kevin Conn

Investor Relations

617.641.9206

kaconn@berkshirebank.com

MEDIA CONTACT

Gary Levante

Corporate Communications

413.447.1737

glevante@berkshirebank.com

SELECTED FINANCIAL HIGHLIGHTS (1)

	At or for the Quarters Ended
	Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,
	2024			2024			2024			2023			2023
NOMINAL AND PER SHARE DATA
Net earnings/(loss) per common share, diluted	$	0.88		$	0.57		$	(0.47	)	$	(0.03	)	$	0.45
Operating earnings per common share, diluted (2)(3)		0.58			0.55			0.49			0.47			0.50
Net income/(loss), (thousands)		37,509			24,025			(20,188	)		(1,445	)		19,545
Operating net income, (thousands) (2)(3)		24,789			23,168			20,934			20,190			21,516
Net interest income, (thousands) non FTE		88,059			88,532			88,140			88,421			90,334
Net interest income, FTE (5)		90,082			90,545			90,146			90,442			92,314
Total common shares outstanding, end of period (thousands)		42,982			42,959			43,415			43,501			43,822
Average diluted shares, (thousands)		42,454			42,508			43,028			43,101			43,347
Total book value per common share, end of period		24.90			23.58			23.26			23.27			21.70
Tangible book value per common share, end of period (2)(3)		24.53			23.18			22.84			22.82			21.23
Dividends declared per common share		0.18			0.18			0.18			0.18			0.18
Dividend payout ratio (7)		20.63	%		32.74	%		N/M	%		N/M	%		40.56	%

PERFORMANCE RATIOS (4)
Return on equity		14.29	%		9.49	%		(7.93	)%		(0.60	)%		7.91	%
Operating return on equity (2)(3)		9.44			9.15			8.23			8.36			8.71
Return on tangible common equity (2)(3)		14.83			9.99			(7.73	)		(0.24	)		8.45
Operating return on tangible common equity (2)(3)		9.91			9.65			8.73			8.90			9.27
Return on assets		1.28			0.82			(0.69	)		(0.05	)		0.66
Operating return on assets (2)(3)		0.85			0.79			0.71			0.68			0.73
Net interest margin, FTE (5)		3.16			3.20			3.15			3.11			3.18
Efficiency ratio (3)		63.74			63.40			66.26			67.77			65.05

FINANCIAL DATA (in millions, end of period)
Total assets	$	11,605		$	12,219		$	12,147		$	12,431		$	12,140
Total earning assets		10,922			11,510			11,430			11,705			11,400
Total loans		9,212			9,229			9,086			9,040			8,984
Total funding liabilities		10,285			10,907			10,826			11,140			10,906
Total deposits		9,577			9,621			9,883			10,633			9,981
Loans/deposits (%)		96	%		96	%		92	%		85	%		90	%
Total accumulated other comprehensive (loss) net of tax, end of period	$	(89	)	$	(115	)	$	(114	)	$	(143	)	$	(218	)
Total shareholders' equity		1,070			1,013			1,010			1,012			951

ASSET QUALITY
Allowance for credit losses, (millions)	$	112		$	112		$	107		$	105		$	103
Net charge-offs, (millions)		(6	)		(2	)		(4	)		(4	)		(5	)
Net charge-offs (QTD annualized)/average loans		0.24	%		0.07	%		0.18	%		0.20	%		0.24	%
Provision (benefit)/expense, (millions)	$	6		$	6		$	6		$	7		$	8
Non-performing assets, (millions)		27			24			24			24			29
Non-performing loans/total loans		0.26	%		0.23	%		0.24	%		0.24	%		0.30	%
Allowance for credit losses/non-performing loans		467			525			500			492			386
Allowance for credit losses/total loans		1.22			1.22			1.18			1.17			1.14

CAPITAL RATIOS
Risk weighted assets, (millions)(6)	$	9,638		$	9,604		$	9,615		$	9,552		$	9,594
Common equity Tier 1 capital to risk weighted assets (6)		11.9	%		11.6	%		11.6	%		12.0	%		12.1	%
Tier 1 capital leverage ratio (6)		9.9			9.6			9.5			9.6			9.8
Tangible common shareholders' equity/tangible assets (3)		9.1			8.2			8.2			8.0			7.7

(1)

All financial tables presented are unaudited.

(2)

Reconciliations of non-GAAP financial measures, including all references to operating and tangible amounts, appear on pages 13 and 14.

(3)

Non-GAAP financial measure. Operating measurements are non-GAAP financial measures that are adjusted to exclude net non-operating charges primarily related to acquisitions and restructuring activities. See pages 13 and 14 for reconciliations of non-GAAP financial measures.

(4)

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

(5)

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

(6)

Presented as projected for September 30, 2024 and actual for the remaining periods.

(7)

Dividend payout ratio is based on dividends declared.

CONSOLIDATED BALANCE SHEETS

	September 30,			June 30,			December 31,			September 30,
(in thousands)	2024			2024			2023			2023
Assets
Cash and due from banks	$	134,056		$	112,085		$	148,148		$	120,634
Short-term investments		435,911			988,207			1,055,096			542,836
Total cash and cash equivalents		569,967			1,100,292			1,203,244			663,470

Trading securities, at fair value		5,560			5,699			6,142			6,171
Equity securities, at fair value		13,278			12,736			13,029			12,325
Securities available for sale, at fair value		661,740			611,711			1,022,285			1,260,391
Securities held to maturity, at amortized cost		512,277			520,239			543,351			552,981
Federal Home Loan Bank stock		30,685			35,010			22,689			38,912
Total securities		1,223,540			1,185,395			1,607,496			1,870,780
Less: Allowance for credit losses on investment securities		(65	)		(65	)		(68	)		(69	)
Net securities		1,223,475			1,185,330			1,607,428			1,870,711

Loans held for sale		50,634			52,072			2,237			2,342

Commercial real estate loans		4,741,689			4,706,810			4,527,012			4,453,573
Commercial and industrial loans		1,409,538			1,421,921			1,352,834			1,384,038
Residential mortgages		2,688,709			2,674,611			2,672,677			2,640,210
Consumer loans		372,386			425,184			487,163			506,556
Total loans		9,212,322			9,228,526			9,039,686			8,984,377
Less: Allowance for credit losses on loans		(112,047	)		(112,167	)		(105,357	)		(102,792	)
Net loans		9,100,275			9,116,359			8,934,329			8,881,585

Premises and equipment, net		54,667			55,893			68,915			70,042
Other intangible assets		16,192			17,319			19,664			20,869
Other assets		582,422			615,882			584,066			619,777
Assets held for sale		6,930			76,307			10,938			11,157
Total assets	$	11,604,562		$	12,219,454		$	12,430,821		$	12,139,953

Liabilities and shareholders' equity
Non-interest bearing deposits	$	2,267,595		$	2,222,012		$	2,469,164		$	2,530,441
NOW and other deposits		748,737			766,641			858,644			843,032
Money market deposits		3,042,712			3,278,753			3,565,516			3,075,307
Savings deposits		998,549			1,004,320			1,053,810			1,086,329
Time deposits		2,519,896			2,349,733			2,686,250			2,445,435
Total deposits		9,577,489			9,621,459			10,633,384			9,980,544

Federal Home Loan Bank advances		585,542			689,606			385,223			804,295
Subordinated borrowings		121,549			121,487			121,363			121,300
Total borrowings		707,091			811,093			506,586			925,595

Other liabilities		249,531			287,312			278,630			282,805
Liabilities held for sale		-			486,648			-			-
Total liabilities		10,534,111			11,206,512			11,418,600			11,188,944

Common shareholders' equity		1,070,451			1,012,942			1,012,221			951,009
Total shareholders' equity		1,070,451			1,012,942			1,012,221			951,009
Total liabilities and shareholders' equity	$	11,604,562		$	12,219,454		$	12,430,821		$	12,139,953

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in thousands, except per share data)	2024			2023			2024			2023
Interest income	$	157,268		$	148,021		$	463,383		$	425,762
Interest expense		69,209			57,687			198,652			145,136
Net interest income, non FTE		88,059			90,334			264,731			280,626
Non-interest income
Deposit related fees		8,656			8,792			25,522			25,674
Loan related fees		3,214			2,879			8,241			8,537
Gain on SBA loans		3,020			2,548			8,013			7,952
Wealth management fees		2,685			2,481			8,182			7,803
Fair value adjustments on securities		516			(467	)		359			(255	)
Other		3,416			1,232			8,633			1,454
Total non-interest income excluding gains and losses		21,507			17,465			58,950			51,165
Gain on sale of business operations and assets, net		16,048			-			16,048			-
(Loss) on sale of AFS securities		-			-			(49,909	)		-
Total non-interest income		37,555			17,465			25,089			51,165
Total net revenue		125,614			107,799			289,820			331,791

Provision expense for credit losses		5,500			8,000			17,999			24,999
Non-interest expense
Compensation and benefits		40,663			40,155			121,524			119,186
Occupancy and equipment		7,373			8,816			24,135			27,165
Technology		10,014			10,616			30,154			30,552
Professional services		2,109			2,423			7,542			8,226
Regulatory expenses		1,851			1,905			5,544			5,165
Amortization of intangible assets		1,128			1,205			3,473			3,615
Marketing		861			1,552			2,509			4,270
Merger, restructuring and other non-operating expenses		(297	)		2,607			2,936			2,592
Other expenses		8,258			7,234			21,094			21,745
Total non-interest expense		71,960			76,513			218,911			222,516
Total non-interest expense excluding non-operating expenses		72,257			73,906			215,975			219,924

Income before income taxes	$	48,154		$	23,286		$	52,910		$	84,276
Income tax expense		10,645			3,741			11,564			13,233
Net income	$	37,509		$	19,545		$	41,346		$	71,043

Basic earnings per common share	$	0.89		$	0.45		$	0.97		$	1.64
Diluted earnings per common share	$	0.88		$	0.45		$	0.97		$	1.63

Weighted average shares outstanding:
Basic		42,170			43,164			42,456			43,435
Diluted		42,454			43,347			42,658			43,640

CONSOLIDATED STATEMENTS OF OPERATIONS (5 Quarter Trend)

	Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,
(in thousands, except per share data)	2024			2024			2024			2023			2023
Interest income	$	157,268		$	154,109		$	152,006		$	150,537		$	148,021
Interest expense		69,209			65,577			63,866			62,116			57,687
Net interest income, non FTE		88,059			88,532			88,140			88,421			90,334
Non-interest income
Deposit related fees		8,656			8,561			8,305			8,481			8,792
Loan related fees		3,214			2,364			2,663			2,058			2,879
Gain on SBA loans		3,020			3,294			1,699			2,382			2,548
Wealth management fees		2,685			2,613			2,884			2,394			2,481
Fair value adjustments on securities		516			(42	)		(115	)		768			(467	)
Other		3,416			3,343			1,874			591			1,232
Total non-interest income excluding gains and losses		21,507			20,133			17,310			16,674			17,465
Gain on sale of business operations and assets, net		16,048			-			-			-			-
Loss on sale of AFS securities		-			-			(49,909	)		(25,057	)		-
Total non-interest income		37,555			20,133			(32,599	)		(8,383	)		17,465
Total net revenue		125,614			108,665			55,541			80,038			107,799

Provision expense for credit losses		5,500			6,499			6,000			7,000			8,000
Non-interest expense
Compensation and benefits		40,663			40,126			40,735			40,095			40,155
Occupancy and equipment		7,373			8,064			8,698			8,553			8,816
Technology		10,014			10,236			9,904			11,326			10,616
Professional services		2,109			2,757			2,676			3,417			2,423
Regulatory expenses		1,851			1,848			1,845			1,854			1,905
Amortization of intangible assets		1,128			1,140			1,205			1,205			1,205
Marketing		861			532			1,116			1,107			1,552
Merger, restructuring and other non-operating expenses		(297	)		(384	)		3,617			3,669			2,607
Other expenses		8,258			6,612			6,224			7,766			7,234
Total non-interest expense		71,960			70,931			76,020			78,992			76,513
Total non-interest expense excluding non-operating expenses		72,257			71,315			72,403			75,323			73,906

Income/(loss) before income taxes	$	48,154		$	31,235		$	(26,479	)	$	(5,954	)	$	23,286
Income tax expense/(benefit)		10,645			7,210			(6,291	)		(4,509	)		3,741
Net income/(loss)	$	37,509		$	24,025		$	(20,188	)	$	(1,445	)	$	19,545


Diluted earnings/(loss) per common share	$	0.88		$	0.57		$	(0.47	)	$	(0.03	)	$	0.45

Weighted average shares outstanding:
Basic		42,170			42,437			42,777			42,852			43,164
Diluted		42,454			42,508			43,028			43,101			43,347

AVERAGE BALANCES AND AVERAGE YIELDS AND COSTS

	Quarters Ended
	September 30, 2024							June 30, 2024							September 30, 2023
(in millions)	Average Balance		Interest (1)		Average Yield/Rate			Average Balance		Interest (1)		Average Yield/Rate			Average Balance		Interest (1)		Average Yield/Rate
Assets
Commercial real estate	$	4,717	$	79		6.54	%	$	4,649	$	77		6.52	%	$	4,385	$	71		6.32	%
Commercial and industrial loans		1,380		27		7.79			1,384		27		7.62			1,436		27		7.48
Residential mortgages		2,712		30		4.31			2,694		28		4.21			2,618		26		3.97
Consumer loans		424		8		7.43			430		8		7.47			513		9		7.33
Total loans		9,233		144		6.11			9,157		140		6.05			8,952		133		5.88
Securities (2)		1,340		8		2.49			1,332		8		2.44			2,171		13		2.40
Short-term investments and loans held for sale		563		7		4.98			597		8		5.07			267		3		4.76
New York branch loans held for sale (3)		31		0		5.44			57		1		5.86			-		-		-
Total earning assets		11,167		159		5.62			11,143		157		5.57			11,390		149		5.19
Goodwill and other intangible assets		17							18							21
Other assets		511							531							449
Total assets	$	11,695						$	11,692						$	11,860

Liabilities and shareholders' equity
Non-interest-bearing demand deposits	$	2,250	$	-		-	%	$	2,244	$	-		-	%	$	2,553	$	0		-	%
NOW and other		743		3		1.54			763		3		1.44			858		2		1.15
Money market		2,935		25		3.35			2,909		24		3.32			2,697		18		2.69
Savings		1,002		3		1.17			1,004		3		1.06			1,082		2		0.77
Time		2,430		26		4.31			2,376		25		4.22			2,440		22		3.43
Total deposits		9,360		57		2.42			9,296		55		2.35			9,630		44		1.81
Borrowings (4)		782		11		5.44			610		9		5.55			1,010		14		5.32
New York branch non-interest-bearing deposits held for sale (3)		51		-		-			97		-		-			-		-		-
New York branch interest-bearing deposits held for sale (3)		207		1		2.87			386		3		2.80			-		-		-
Total funding liabilities		10,400		69		2.64			10,389		67		2.53			10,640		58		2.15

Other liabilities		245							290							232
Total liabilities		10,645							10,679							10,872

Common shareholders' equity (5)		1,050							1,013							988
Total shareholders' equity		1,050							1,013							988
Total liabilities and shareholders' equity	$	11,695						$	11,692						$	11,860
Net interest margin, FTE						3.16							3.20							3.18

Supplementary data
Net Interest Income, non FTE		88.059							88.532							90.334
FTE income adjustment		2.023							2.013							1.980
Net Interest Income, FTE		90.082							90.545							92.314

(1)

Interest income and expense presented on a fully taxable equivalent basis.

(2)

Average balances for securities available-for-sale are based on amortized cost.

(3)

New York branch loans and deposits moved to held for sale on March 4, 2024.

(4)

Average balances for borrowings includes the financing lease obligation which is presented under other liabilities on the consolidated balance sheet.

(5)

Unrealized gains and losses, net of tax, are included in average equity. Prior period balances and financial metrics have been updated to reflect the current presentation.

ASSET QUALITY ANALYSIS

	At or for the Quarters Ended
	Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,
(in thousands)	2024			2024			2024			2023			2023
NON-PERFORMING ASSETS
Commercial real estate	$	10,270		$	5,976		$	4,762		$	4,453		$	5,288
Commercial and industrial loans		8,227			8,489			9,174			8,712			11,028
Residential mortgages		4,348			5,491			5,992			6,404			8,060
Consumer loans		1,124			1,392			1,526			1,838			2,260
Total non-performing loans		23,969			21,348			21,454			21,407			26,636
Repossessed assets		2,563			2,549			2,689			2,601			2,548
Total non-performing assets	$	26,532		$	23,897		$	24,143		$	24,008		$	29,184

Total non-performing loans/total loans		0.26	%		0.23	%		0.24	%		0.24	%		0.30	%
Total non-performing assets/total assets		0.23	%		0.20	%		0.20	%		0.19	%		0.24	%

PROVISION AND ALLOWANCE FOR CREDIT LOSSES ON LOANS
Balance at beginning of period	$	112,167		$	107,331		$	105,357		$	102,792		$	100,219
Charged-off loans		(7,091	)		(3,246	)		(5,636	)		(6,891	)		(6,744	)
Recoveries on charged-off loans		1,471			1,583			1,610			2,456			1,317
Net loans charged-off		(5,620	)		(1,663	)		(4,026	)		(4,435	)		(5,427	)
Provision (benefit)/expense for loan credit losses		5,500			6,499			6,000			7,000			8,000
Balance at end of period	$	112,047		$	112,167		$	107,331		$	105,357		$	102,792

Allowance for credit losses/total loans		1.22	%		1.22	%		1.18	%		1.17	%		1.14	%
Allowance for credit losses/non-performing loans		467	%		525	%		500	%		492	%		386	%

NET LOAN CHARGE-OFFS
Commercial real estate	$	(999	)	$	22		$	292		$	316		$	97
Commercial and industrial loans		(1,009	)		(711	)		(1,772	)		(2,309	)		(3,345	)
Residential mortgages		273			316			98			55			23
Home equity		3			8			193			83			208
Other consumer loans		(3,888	)		(1,298	)		(2,837	)		(2,580	)		(2,410	)
Total, net	$	(5,620	)	$	(1,663	)	$	(4,026	)	$	(4,435	)	$	(5,427	)

Net charge-offs (QTD annualized)/average loans		0.24	%		0.07	%		0.18	%		0.20	%		0.24	%
Net charge-offs (YTD annualized)/average loans		0.16	%		0.13	%		0.18	%		0.26	%		0.28	%

DELINQUENT AND NON-PERFORMING LOANS	Balance		Percent of Total Loans			Balance		Percent of Total Loans			Balance		Percent of Total Loans			Balance		Percent of Total Loans			Balance		Percent of Total Loans
30-89 Days delinquent	$	18,526		0.20	%	$	18,494		0.20	%	$	27,682		0.30	%	$	22,140		0.24	%	$	18,700		0.21	%
90+ Days delinquent and still accruing		6,280		0.07	%		11,672		0.13	%		5,882		0.06	%		5,537		0.06	%		5,744		0.06	%
Total accruing delinquent loans		24,806		0.27	%		30,166		0.33	%		33,564		0.36	%		27,677		0.30	%		24,444		0.27	%
Non-performing loans		23,969		0.26	%		21,348		0.23	%		21,454		0.24	%		21,407		0.24	%		26,636		0.30	%
Total delinquent and non-performing loans	$	48,775		0.53	%	$	51,514		0.56	%	$	55,018		0.60	%	$	49,084		0.54	%	$	51,080		0.57	%

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 are intended to provide the reader with additional supplemental perspectives on operating results, performance trends, and financial condition. Non-GAAP financial measures 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 provided below. In all cases, it should be understood that non-GAAP measures do not depict amounts that accrue directly to the benefit of shareholders. An item which management excludes when computing non-GAAP operating earnings can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP operating earnings information set forth is not necessarily comparable to non- GAAP information which may be presented by other companies. Each non-GAAP measure used by the Company in this report as supplemental financial data should be considered in conjunction with the Company’s GAAP financial information.

The Company utilizes the non-GAAP measure of operating earnings in evaluating operating trends, including components for operating revenue and expense. These measures exclude amounts which the Company views as unrelated to its normalized operations. These items primarily include restructuring costs. Restructuring costs generally consist of costs and losses associated with the disposition of assets and liabilities and lease terminations, including costs related to branch consolidations.

The Company also calculates operating earnings per share based on its measure of operating earnings and diluted common shares. The Company views these amounts as important to understanding its operating trends, particularly due to the impact of accounting standards related to merger and acquisition activity. Analysts also rely on these measures in estimating and evaluating the Company’s performance. Adjustments in 2024 were primarily related to branch sales and loss on sale of AFS securities. Adjustments in 2023 were primarily related to branch consolidations, severance charges related to a workforce reduction, and loss on sale of AFS securities.

Management believes that the computation of non-GAAP operating earnings and operating earnings per share may facilitate the comparison of the Company to other companies in the financial services industry. The Company also adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA

		At or for the Quarters Ended
		Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,
(in thousands)		2024			2024			2024			2023			2023
Total non-interest income		$	37,555		$	20,133		$	(32,599	)	$	(8,383	)	$	17,465
Adj: Net (gains) on sale of business operations and assets			(16,048	)
Adj: Loss on sale of AFS securities			-			-			49,909			25,057			-
Total operating non-interest income (1)		$	21,507		$	20,133		$	17,310		$	16,674		$	17,465

Total revenue	(A)	$	125,614		$	108,665		$	55,541		$	80,038		$	107,799
Adj: Net (gains) on sale of business operations and assets			(16,048	)		-			-			-			-
Adj: Loss on sale of AFS securities			-			-			49,909			25,057			-
Total operating revenue (1)	(B)	$	109,566		$	108,665		$	105,450		$	105,095		$	107,799

Total non-interest expense	(C)	$	71,960		$	70,931		$	76,020		$	78,992		$	76,513
Adj: Merger, restructuring and other non-operating expenses			297			384			(3,617	)		(3,669	)		(2,607	)
Operating non-interest expense (1)	(D)	$	72,257		$	71,315		$	72,403		$	75,323		$	73,906

Pre-tax, pre-provision net revenue (PPNR)	(A-C)	$	53,654		$	37,734		$	(20,479	)	$	1,046		$	31,286
Operating pre-tax, pre-provision net revenue (PPNR) (1)	(B-D)		37,309			37,350			33,047			29,772			33,893

Net income/(loss)		$	37,509		$	24,025		$	(20,188	)	$	(1,445	)	$	19,545
Adj: Net (gains) on sale of business operations and assets			(16,048	)		-			-			-			-
Adj: Loss on sale of AFS securities			-			-			49,909			25,057			-
Adj: Restructuring expense and other non-operating expenses			(297	)		(384	)		3,617			3,669			2,607
Adj: Income taxes (expense)/benefit			3,625			(473	)		(12,404	)		(7,091	)		(636	)
Total operating income (1)	(E)	$	24,789		$	23,168		$	20,934		$	20,190		$	21,516

(in millions, except per share data)
Total average assets	(F)	$	11,695		$	11,692		$	11,755		$	11,862		$	11,860
Total average shareholders' equity	(G)		1,050			1,013			1,018			966			988
Total average tangible shareholders' equity (1)	(I)		1,034			995			999			946			967
Total accumulated other comprehensive (loss) net of tax, end of period			(89	)		(115	)		(114	)		(143	)		(218	)
Total tangible shareholders' equity, end of period (1)	(K)		1,054			996			991			993			930
Total tangible assets, end of period (1)	(L)		11,588			12,202			12,128			12,411			12,119

Total common shares outstanding, end of period (thousands)	(M)		42,982			42,959			43,415			43,501			43,822
Average diluted shares outstanding (thousands)	(N)		42,454			42,508			43,028			43,101			43,347

Earnings/(loss) per common share, diluted (1)		$	0.88		$	0.57		$	(0.47	)	$	(0.03	)	$	0.45
Operating earnings per common share, diluted (1)	(E/N)		0.58			0.55			0.49			0.47			0.50
Tangible book value per common share, end of period (1)	(K/M)		24.53			23.18			22.84			22.82			21.23
Total tangible shareholders' equity/total tangible assets (1)	(K/L)		9.10			8.16			8.17			8.00			7.68

Performance ratios (2)
Return on equity			14.29	%		9.49	%		(7.93	)%		(0.60	)%		7.91	%
Operating return on equity (1)	(E/G)		9.44			9.15			8.23			8.36			8.71
Return on tangible common equity (1)(3)			14.83			9.99			(7.73	)		(0.24	)		8.45
Operating return on tangible common equity (1)(3)	(E+Q)/(I)		9.91			9.65			8.73			8.90			9.27
Return on assets			1.28			0.82			(0.69	)		(0.05	)		0.66
Operating return on assets (1)	(E/F)		0.85			0.79			0.71			0.68			0.73
Efficiency ratio (1)(6)	(D-Q)/(B+O+R)		63.74			63.40			66.26			67.77			65.05

Supplementary data (in thousands)
Tax benefit on tax-credit investments (4)	(O)		N/M			N/M			N/M		$	2,252		$	1,979
Non-interest income tax-credit investments amortization (5)	(P)		N/M			N/M			N/M			(2,060	)		(1,463	)
Net income on tax-credit investments	(O+P)		N/M			N/M			N/M			193			516
Effective tax rate			22.1	%		23.1	%		23.8	%		75.7	%		16.1	%

Intangible amortization	(Q)	$	1,128		$	1,140		$	1,205		$	1,205		$	1,205
Fully taxable equivalent income adjustment	(R)		2,023			2,013			2,006			2,021			1,980

(1)

Non-GAAP financial measure.

(2)

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.

(3)

Amortization of intangible assets is adjusted assuming a 27% marginal tax rate.

(4)

The tax benefit is the direct reduction to the income tax provision due to tax credit investments.

(5)

The non-interest income amortization is the reduction to the tax-advantaged investments and are incurred as the tax credits are generated.

(6)

As of January 1, 2024, the Company elected the proportional amortization method for certain tax credits eliminating the need to adjust the efficiency ratio for tax credit impacts.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED

		At or for the Nine Months Ended
		September 30,			September 30,
(in thousands)		2024			2023
Total non-interest income		$	25,089		$	51,165
Adj: Net (gains) on sale of business operations and assets			(16,048	)
Adj: Loss on sale of AFS securities			49,909			-
Total operating non-interest income (1)		$	58,950		$	51,165

Total revenue	(A)	$	289,820		$	331,791
Adj: Net (gains) on sale of business operations and assets			(16,048	)		-
Adj: Loss on sale of AFS securities			49,909			-
Total operating revenue (1)	(B)	$	323,681		$	331,791

Total non-interest expense	(C)	$	218,911		$	222,516
Less: Merger, restructuring and other non-operating expenses			(2,936	)		(2,592	)
Operating non-interest expense (1)	(D)	$	215,975		$	219,924

Pre-tax, pre-provision net revenue (PPNR)	(A-C)	$	70,909		$	109,275
Operating pre-tax, pre-provision net revenue (PPNR) (1)	(B-D)		107,706			111,867

Net income		$	41,346		$	71,043
Adj: Net (gains) on sale of business operations and assets			(16,048	)		-
Adj: Loss on sale of AFS securities			49,909			-
Adj: Restructuring expense and other non-operating expenses			2,936			2,592
Adj: Income taxes (expense)			(9,252	)		(633	)
Total operating income (1)	(E)	$	68,891		$	73,002

(in millions, except per share data)
Total average assets	(F)	$	11,713		$	11,830
Total average shareholders' equity	(G)		1,027			990
Total average tangible shareholders' equity (1)	(I)		1,009			967
Total accumulated other comprehensive (loss) net of tax, end of period			(89	)		(218	)
Total tangible shareholders' equity, end of period (1)	(K)		1,054			930
Total tangible assets, end of period (1)	(L)		11,588			12,119

Total common shares outstanding, end of period (thousands)	(M)		42,982			43,822
Average diluted shares outstanding (thousands)	(N)		42,658			43,640

Earnings per common share, diluted (1)		$	0.97		$	1.63
Operating earnings per common share, diluted (1)	(E/N)		1.61			1.67
Tangible book value per common share, end of period (1)	(K/M)		24.53			21.22
Total tangible shareholders' equity/total tangible assets (1)	(K/L)		9.10			7.67

Performance ratios (2)
Return on equity			5.37	%		9.57	%
Operating return on equity (1)	(E/G)		8.94			9.83
Return on tangible common equity (1)(3)			5.80			10.16
Operating return on tangible common equity (1)(3)	(E+Q)/(I)		9.43			10.43
Return on assets			0.47			0.80
Operating return on assets (1)	(E/F)		0.78			0.82
Efficiency ratio (1)(6)	(D-Q)/(B+O+R)		64.45			62.65
Net interest margin, FTE			3.17			3.33


Supplementary data (in thousands)
Tax benefit on tax-credit investments (4)	(O)		N/M		$	7,611
Non-interest income charge on tax-credit investments (5)	(P)		N/M			(5,959	)
Net income on tax-credit investments	(O+P)		N/M			1,652

Intangible amortization	(Q)	$	3,473		$	3,615
Fully taxable equivalent income adjustment	(R)		6,042			5,850

(1)