Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: June 30, 2014

 

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                    to                   

 

Commission File Number: 001-15781

 

BERKSHIRE HILLS BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

04-3510455

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

24 North Street, Pittsfield, Massachusetts

 

01201

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (413) 443-5601

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one)

 

Large Accelerated Filer o

 

Accelerated Filer x

 

 

 

Non-Accelerated Filer o

 

Smaller Reporting Company o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)  Yes o  No x

 

The Registrant had 25,167,129 shares of common stock, par value $0.01 per share, outstanding as of August 6, 2014.

 

 

 


 


Table of Contents

 

BERKSHIRE HILLS BANCORP, INC.

FORM 10-Q

 

INDEX

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

 

 

 

Item 1.

Consolidated Financial Statements (unaudited)

 

 

 

 

 

Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013

4

 

 

 

 

Consolidated Statements of Income for the Three and Six Months Ended June 30, 2014 and 2013

5

 

 

 

 

Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2014 and 2013

6

 

 

 

 

Consolidated Statements of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2014 and 2013

7

 

 

 

 

Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013

8

 

 

 

 

Notes to Consolidated Financial Statements

 

 

Note 1

Basis of Presentation

10

 

Note 2

Branch Acquisition

11

 

Note 3

Trading Security

13

 

Note 4

Securities Available for Sale and Held to Maturity

14

 

Note 5

Loans

18

 

Note 6

Loan Loss Allowance

29

 

Note 7

Deposits

33

 

Note 8

Borrowed Funds

33

 

Note 9

Stockholders’ Equity

34

 

Note 10

Earnings per Share

39

 

Note 11

Stock-Based Compensation Plans

39

 

Note 12

Operating Segments

40

 

Note 13

Derivative Financial Instruments and Hedging Activities

41

 

Note 14

Fair Value Measurements

47

 

Note 15

Net Interest Income after Provision for Loan Losses

55

 

Note 16

Subsequent Events

55

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

56

 

 

 

 

Selected Financial Data

60

 

 

 

 

Average Balances and Average Yields/Rates

61

 

 

 

 

Non-GAAP Financial Measures

62

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

72

 

 

 

Item 4.

Controls and Procedures

73

 

2



Table of Contents

 

PART II.

OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

74

 

 

 

Item 1A.

Risk Factors

74

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

74

 

 

 

Item 3.

Defaults Upon Senior Securities

75

 

 

 

Item 4.

Mine Safety Disclosures

75

 

 

 

Item 5.

Other Information

75

 

 

 

Item 6.

Exhibits

75

 

 

 

Signatures

 

77

 

3


 


Table of Contents

 

PART I

 

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,

 

December 31,

 

(In thousands, except share data)

 

2014

 

2013

 

Assets

 

 

 

 

 

Cash and due from banks

 

$

81,642

 

$

56,841

 

Short-term investments

 

31,236

 

18,698

 

Total cash and cash equivalents

 

112,878

 

75,539

 

 

 

 

 

 

 

Trading security

 

14,971

 

14,840

 

Securities available for sale, at fair value

 

1,080,668

 

760,048

 

Securities held to maturity (fair values of $44,359 and $45,764)

 

43,178

 

44,921

 

Federal Home Loan Bank stock and other restricted securities

 

59,479

 

50,282

 

Total securities

 

1,198,296

 

870,091

 

 

 

 

 

 

 

Loans held for sale, at fair value

 

20,185

 

15,840

 

 

 

 

 

 

 

Residential mortgages

 

1,397,231

 

1,384,274

 

Commercial real estate

 

1,579,500

 

1,417,120

 

Commercial and industrial loans

 

727,959

 

687,293

 

Consumer loans

 

745,613

 

691,836

 

Total loans

 

4,450,303

 

4,180,523

 

Less: Allowance for loan losses

 

(34,353

)

(33,323

)

Net loans

 

4,415,950

 

4,147,200

 

 

 

 

 

 

 

Premises and equipment, net

 

86,936

 

84,459

 

Other real estate owned

 

2,445

 

2,758

 

Goodwill

 

264,770

 

256,871

 

Other intangible assets

 

13,761

 

13,791

 

Cash surrender value of bank-owned life insurance policies

 

102,988

 

101,530

 

Deferred tax assets, net

 

37,911

 

50,711

 

Other assets

 

55,254

 

54,009

 

Total assets

 

$

6,311,374

 

$

5,672,799

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Demand deposits

 

$

794,574

 

$

677,917

 

NOW deposits

 

416,879

 

353,612

 

Money market deposits

 

1,425,348

 

1,383,856

 

Savings deposits

 

478,770

 

431,496

 

Time deposits

 

1,362,992

 

1,001,648

 

Total deposits

 

4,478,563

 

3,848,529

 

Short-term debt

 

900,000

 

872,510

 

Long-term Federal Home Loan Bank advances

 

64,179

 

101,918

 

Subordinated borrowings

 

89,713

 

89,679

 

Total borrowings

 

1,053,892

 

1,064,107

 

Other liabilities

 

88,456

 

82,101

 

Total liabilities

 

5,620,911

 

4,994,737

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

Common stock ($.01 par value; 50,000,000 shares authorized and 26,525,466 shares issued and 25,115,138 shares outstanding in 2014; 26,525,466 shares issued and 25,036,169 shares outstanding in 2013)

 

265

 

265

 

Additional paid-in capital

 

585,340

 

587,247

 

Unearned compensation

 

(6,888

)

(5,563

)

Retained earnings

 

142,249

 

141,958

 

Accumulated other comprehensive income (loss)

 

4,276

 

(9,057

)

Treasury stock, at cost (1,410,328 shares in 2014 and 1,489,297 shares in 2013)

 

(34,779

)

(36,788

)

Total stockholders’ equity

 

690,463

 

678,062

 

Total liabilities and stockholders’ equity

 

$

6,311,374

 

$

5,672,799

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

4



Table of Contents

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

(In thousands, except per share data)

 

2014

 

2013

 

2014

 

2013

 

Interest and dividend income

 

 

 

 

 

 

 

 

 

Loans

 

$

42,309

 

$

45,443

 

$

84,803

 

$

92,524

 

Securities and other

 

8,866

 

4,254

 

16,167

 

8,054

 

Total interest and dividend income

 

51,175

 

49,697

 

100,970

 

100,578

 

Interest expense

 

 

 

 

 

 

 

 

 

Deposits

 

4,478

 

5,052

 

9,199

 

10,415

 

Borrowings

 

2,368

 

3,541

 

4,676

 

7,122

 

Total interest expense

 

6,846

 

8,593

 

13,875

 

17,537

 

Net interest income

 

44,329

 

41,104

 

87,095

 

83,041

 

Non-interest income

 

 

 

 

 

 

 

 

 

Loan related income

 

1,846

 

2,644

 

3,094

 

5,361

 

Mortgage banking income

 

691

 

2,129

 

1,063

 

4,346

 

Deposit related fees

 

6,610

 

4,805

 

12,049

 

9,064

 

Insurance commissions and fees

 

2,460

 

2,407

 

5,509

 

5,404

 

Wealth management fees

 

2,294

 

2,070

 

4,843

 

4,334

 

Total fee income

 

13,901

 

14,055

 

26,558

 

28,509

 

Other

 

402

 

546

 

926

 

890

 

Gain on sale of securities, net

 

203

 

1,005

 

237

 

1,005

 

Loss on termination of hedges

 

 

 

(8,792

)

 

Total non-interest income

 

14,506

 

15,606

 

18,929

 

30,404

 

Total net revenue

 

58,835

 

56,710

 

106,024

 

113,445

 

Provision for loan losses

 

3,989

 

2,700

 

7,385

 

5,100

 

Non-interest expense

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

20,279

 

18,151

 

40,138

 

35,892

 

Occupancy and equipment

 

6,656

 

5,737

 

13,470

 

11,505

 

Technology and communications

 

3,800

 

3,480

 

7,578

 

6,471

 

Marketing and promotion

 

621

 

603

 

1,142

 

1,241

 

Professional services

 

1,024

 

1,764

 

2,176

 

3,254

 

FDIC premiums and assessments

 

1,029

 

890

 

2,038

 

1,718

 

Other real estate owned and foreclosures

 

33

 

284

 

556

 

307

 

Amortization of intangible assets

 

1,274

 

1,345

 

2,580

 

2,722

 

Acquisition, restructuring and conversion related expenses

 

190

 

775

 

6,491

 

5,839

 

Other

 

4,357

 

4,906

 

8,454

 

8,469

 

Total non-interest expense

 

39,263

 

37,935

 

84,623

 

77,418

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

15,583

 

16,075

 

14,016

 

30,927

 

Income tax expense

 

4,119

 

4,038

 

3,658

 

8,425

 

Net income

 

$

11,464

 

$

12,037

 

$

10,358

 

$

22,502

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.46

 

$

0.49

 

$

0.42

 

$

0.91

 

Diluted

 

$

0.46

 

$

0.48

 

$

0.42

 

$

0.90

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

24,715

 

24,779

 

24,707

 

24,863

 

Diluted

 

24,809

 

24,956

 

24,821

 

25,049

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

5



Table of Contents

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

(In thousands)

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

11,464

 

$

12,037

 

$

10,358

 

$

22,502

 

Other comprehensive income, before tax:

 

 

 

 

 

 

 

 

 

Changes in unrealized gain (loss) on securities available-for-sale

 

11,113

 

(13,431

)

17,133

 

(12,698

)

Changes in unrealized (loss) gain on derivative hedges

 

(3,267

)

6,155

 

1,266

 

7,598

 

Changes in unrealized gain on terminated swaps

 

 

236

 

3,237

 

471

 

Income taxes related to other comprehensive income:

 

 

 

 

 

 

 

 

 

Changes in unrealized gain (loss) on securities available-for-sale

 

(4,261

)

5,077

 

(6,481

)

4,758

 

Changes in unrealized (loss) gain on derivative hedges

 

1,322

 

(2,481

)

(510

)

(3,057

)

Changes in unrealized gain on terminated swaps

 

 

(95

)

(1,312

)

(303

)

Total other comprehensive income (loss)

 

4,907

 

(4,539

)

13,333

 

(3,231

)

Total comprehensive income

 

$

16,371

 

$

7,498

 

$

23,691

 

$

19,271

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

6


 


Table of Contents

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

other

 

 

 

 

 

 

 

Common stock

 

paid-in

 

Unearned

 

Retained

 

comprehensive

 

Treasury

 

 

 

(In thousands)

 

Shares

 

Amount

 

capital

 

compensation

 

earnings

 

(loss) income

 

stock

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2012

 

25,148

 

$

265

 

$

585,360

 

$

(3,035

)

$

122,014

 

$

(2,979

)

$

(34,360

)

$

667,265

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

22,502

 

 

 

22,502

 

Other comprehensive loss

 

 

 

 

 

 

(3,231

)

 

(3,231

)

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19,271

 

Cash dividends declared ($0.36 per share)

 

 

 

 

 

(9,068

)

 

 

(9,068

)

Treasury stock purchased

 

(348

)

 

 

 

 

 

(8,868

)

(8,868

)

Forfeited shares

 

(6

)

 

10

 

140

 

 

 

(150

)

 

Exercise of stock options

 

195

 

 

 

 

(2,518

)

 

5,100

 

2,582

 

Restricted stock grants

 

155

 

 

(690

)

(3,717

)

 

 

4,407

 

 

Stock-based compensation

 

 

 

585

 

1,227

 

 

 

 

1,812

 

Net tax benefit related to stock-based compensation

 

 

 

1,150

 

 

 

 

 

1,150

 

Other, net

 

(48

)

 

(14

)

 

 

 

(1,160

)

(1,174

)

Balance at June 30, 2013

 

25,096

 

$

265

 

$

586,401

 

$

(5,385

)

$

132,930

 

$

(6,210

)

$

(35,031

)

$

672,970

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2013

 

25,036

 

$

265

 

$

587,247

 

$

(5,563

)

$

141,958

 

$

(9,057

)

$

(36,788

)

$

678,062

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

10,358

 

 

 

10,358

 

Other comprehensive income

 

 

 

 

 

 

13,333

 

 

13,333

 

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23,691

 

Cash dividends declared ($0.18 per share)

 

 

 

 

 

(9,122

)

 

 

(9,122

)

Treasury stock purchased

 

(100

)

 

 

 

 

 

(2,467

)

(2,467

)

Forfeited shares

 

(7

)

 

(6

)

156

 

 

 

(150

)

 

Exercise of stock options

 

72

 

 

 

 

(945

)

 

1,793

 

848

 

Restricted stock grants

 

130

 

 

44

 

(3,264

)

 

 

3,220

 

 

Stock-based compensation

 

 

 

41

 

1,783

 

 

 

 

1,824

 

Net tax benefit related to stock-based compensation

 

 

 

(1,980

)

 

 

 

 

(1,980

)

Other, net

 

(16

)

 

(6

)

 

 

 

(387

)

(393

)

Balance at June 30, 2014

 

25,115

 

$

265

 

$

585,340

 

$

(6,888

)

$

142,249

 

$

4,276

 

$

(34,779

)

$

690,463

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

7


 


Table of Contents

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

Six Months Ended June 30,

 

(In thousands)

 

2014

 

2013

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

Net (loss) income

 

$

10,358

 

$

22,502

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Provision for loan losses

 

7,385

 

5,100

 

Net amortization of securities

 

1,008

 

739

 

Change in unamortized net loan costs and premiums

 

(1,008

)

(2,890

)

Premises and equipment depreciation and amortization expense

 

4,037

 

3,610

 

Stock-based compensation expense

 

1,824

 

1,812

 

Accretion of purchase accounting entries, net

 

(3,479

)

(8,884

)

Amortization of other intangibles

 

2,580

 

2,722

 

Write down of other real estate owned

 

160

 

 

Excess tax loss from stock-based payment arrangements

 

(93

)

(1,150

)

Income from cash surrender value of bank-owned life insurance policies

 

(1,458

)

(1,394

)

Gain on sales of securities, net

 

(237

)

(1,005

)

Net (increase) decrease in loans held for sale

 

(4,345

)

21,267

 

Loss on disposition of assets

 

715

 

1,596

 

Loss (gain) on sale of real estate

 

170

 

(67

)

Loss on termination of hedges

 

3,237

 

 

Net change in other

 

3,968

 

(938

)

Net cash provided by operating activities

 

24,822

 

43,020

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Net decrease in trading security

 

268

 

253

 

Proceeds from sales of securities available for sale

 

79,550

 

4,591

 

Proceeds from maturities, calls and prepayments of securities available for sale

 

68,342

 

66,176

 

Purchases of securities available for sale

 

(447,063

)

(185,300

)

Proceeds from maturities, calls and prepayments of securities held to maturity

 

2,764

 

2,493

 

Purchases of securities held to maturity

 

(1,021

)

(1,073

)

Net change in loans

 

(268,616

)

120,860

 

Proceeds from sale of Federal Home Loan Bank stock

 

379

 

2,118

 

Purchase of Federal Home Loan Bank stock

 

(9,576

)

 

Net investment in limited partnership tax credits

 

(2,884

)

 

Proceeds from the sale of premises and equipment

 

1,756

 

 

Purchase of premises and equipment, net

 

(4,302

)

(7,280

)

Acquisitions, net of cash paid

 

423,416

 

 

Proceeds from sale of other real estate

 

799

 

1,472

 

Net cash (used in) provided by in investing activities

 

(156,188

)

4,310

 

 

(continued)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

8



Table of Contents

 

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONCLUDED)

 

 

 

Six Months Ended June 30,

 

(In thousands)

 

2014

 

2013

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Net increase (decrease) in deposits

 

189,568

 

(283,650

)

Proceeds from Federal Home Loan Bank advances and other borrowings

 

2,935,035

 

491,360

 

Repayments of Federal Home Loan Bank advances and other borrowings

 

(2,945,250

)

(258,975

)

Purchase of treasury stock

 

(2,467

)

(8,868

)

Exercise of stock options

 

848

 

2,582

 

Excess tax loss from stock-based payment arrangements

 

93

 

1,150

 

Common stock cash dividends paid

 

(9,122

)

(9,068

)

Net cash provided by (used in) financing activities

 

168,705

 

(65,469

)

 

 

 

 

 

 

Net change in cash and cash equivalents

 

37,339

 

(18,139

)

 

 

 

 

 

 

Cash and cash equivalents at beginning of year

 

75,539

 

98,244

 

 

 

 

 

 

 

Cash and cash equivalents at end of year

 

$

112,878

 

$

80,105

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

Interest paid on deposits

 

$

9,177

 

$

10,411

 

Interest paid on borrowed funds

 

5,533

 

7,018

 

Income taxes paid, net

 

71

 

978

 

 

 

 

 

 

 

Acquisition of non-cash assets and liabilities:

 

 

 

 

 

Assets acquired

 

18,064

 

 

Liabilities assumed

 

(441,550

)

(919

)

 

 

 

 

 

 

Other non-cash changes:

 

 

 

 

 

Other net comprehensive income (loss)

 

10,096

 

(3,231

)

Real estate owned acquired in settlement of loans

 

816

 

2,189

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

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NOTE 1.               BASIS OF PRESENTATION

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and contain all adjustments, consisting solely of normal, recurring adjustments, necessary for a fair presentation of results for such periods.

 

In addition, these interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X, and accordingly, certain information and footnote disclosures normally included in financial statements prepared according to U.S. GAAP have been omitted.

 

The results for any interim period are not necessarily indicative of results for the full year. These consolidated financial statements should be read in conjunction with the audited financial statements and note disclosures for Berkshire Hills Bancorp, Inc. (the “Company”) previously filed with the Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

 

Reclassifications

 

Certain items in prior financial statements have been reclassified to conform to the current presentation.

 

Recently Adopted Accounting Principles

 

On January 1, 2014 we adopted Accounting Standards Update (“ASU”) ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” to eliminate diversity in practice. This ASU requires that companies net their unrecognized tax benefits against all same-jurisdiction net operating losses or tax credit carryforwards that would be used to settle the position with a tax authority. The adoption of this ASU did not have a material effect on our consolidated financial statements.

 

Future Application of Accounting Pronouncements

 

In June 2014, the FASB issued ASU No. 2014-11 related to repurchase-to-maturity transactions, repurchase financing and disclosures. The pronouncement changes the accounting for repurchase-to-maturity transactions and linked repurchase financings to secured borrowing accounting, which is consistent with the accounting for other repurchase agreements. The pronouncement also requires two new disclosures. The first disclosure requires an entity to disclose information on transfers accounted for as sales in transactions that are economically similar to repurchase agreements. The second disclosure provides increased transparency about the types of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings. The pronouncement is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. Early adoption is not permitted. The adoption of this pronouncement is not expected to have a material impact on our consolidated financial statements.

 

In May 2014, the FASB issued ASU No. 2014-09 related to the recognition of revenue from contracts with customers. The new revenue pronouncement creates a single source of revenue guidance for all companies in all industries and is more principles-based than current revenue guidance. The pronouncement provides a five-step model for a company to recognize revenue when it transfers control of goods or services to customers at an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. The five steps are (1) identify the contract with the customer, (2) identify the separate performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the separate performance obligations and (5) recognize revenue when each performance obligation is satisfied. The pronouncement is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2016 using either a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. Early adoption is not permitted. The Company is currently evaluating the impact of the adoption of this pronouncement on its Consolidated Financial Statements.

 

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NOTE 2.               BRANCH ACQUISITION

 

New York Branch Acquisition

 

On January 17, 2014, Berkshire Bank purchased twenty branch banking offices located in central and eastern New York State, from Bank of America, National Association. Berkshire Bank received $423.1 million in cash, which was net of $17.4 million cash consideration paid and acquisition costs, and assumed certain related deposit liabilities associated with these branches (the “branch acquisition”).  Consideration paid included a 2.25% premium on deposits received. The branch acquisition increased the Bank’s customer base and lending opportunities, and enhanced the Bank’s geographical market presence between Albany and Syracuse, New York.  In addition, the acquired deposits augmented the Bank’s sources of liquidity.

 

On the acquisition date, the acquired branches had assets with a carrying value of approximately $8.9 million, including loans outstanding with a carrying value of approximately $4.5 million, as well as deposits with a carrying value of approximately $440.5 million. The results from the acquired branch operations are included in the Company’s Consolidated Statement of Income from the date of acquisition.

 

The assets and liabilities obtained and assumed in the branch acquisition were recorded at fair value based on management’s best estimate using information available at the date of acquisition.  Consideration paid, and fair values of the assets acquired and liabilities assumed are summarized in the following table:

 

 

 

 

 

Fair Value

 

As Recorded at

 

(in thousands)

 

As Acquired

 

Adjustments

 

Acquisition

 

Consideration paid:

 

 

 

 

 

 

 

Cash consideration paid to Bank of Amercia

 

 

 

 

 

$

17,105

 

Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value:

 

 

 

 

 

 

 

Cash and short-term investments

 

$

440,521

 

$

 

$

440,521

 

Loans

 

4,541

 

(533

)(a)

4,008

 

Premises and equipment

 

4,381

 

(710

)(b)

3,671

 

Core deposit intangibles

 

 

2,550

(c)

2,550

 

Other intangibles

 

 

(79

)(d)

(79

)

Deposits

 

(440,507

)

(15

)(e)

(440,522

)

Other liabilities

 

 

(944

)(f)

(944

)

Total identifiable net assets

 

$

8,936

 

$

269

 

$

9,205

 

 

 

 

 

 

 

 

 

Goodwill

 

 

 

 

 

$

7,900

 

 

Explanation of Certain Fair Value Adjustments

 

(a)       The adjustment represents the write down of the book value of loans to their estimated fair value based on current interest rates and expected cash flows, which includes an estimate of expected loan loss inherent in the portfolio.  Loans that met the criteria and are being accounted for in accordance with ASC 310-30 had a carrying amount of $201 thousand.  Non-impaired loans not accounted for under 310-30 had a carrying value of $4.3 million.

(b)       The amount represents the adjustment of the book value of buildings, and furniture and equipment, to their estimated fair value based on appraisals and other methods.  The adjustments will be depreciated over the estimated economic lives of the assets.

(c)        The adjustment represents the value of the core deposit base assumed in the acquisition.  The core deposit asset was recorded as an identifiable intangible asset and will be amortized over the estimated useful life of the deposit base.

(d)       Represents an intangible liability related to assumed leases, which was recorded as an identifiable intangible and will be amortized over the remaining life of the leases.

(e)        The adjustment is necessary because the weighted average interest rate of deposits exceeded the cost of similar funding at the time of acquisition.

(f)         Represents an establishment of a reserve on certain acquired lines of credit, which were determined to have specific credit risk at the time of acquisition.

 

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Table of Contents

 

Except for collateral dependent loans with deteriorated credit quality, the fair values for loans acquired were estimated using cash flow projections based on the remaining maturity and repricing terms.  Cash flows were adjusted by estimating future credit losses and the rate of prepayments.  Projected monthly cash flows were then discounted to present value using a risk-adjusted market rate for similar loans.  For collateral dependent loans with deteriorated credit quality, to estimate the fair value we analyzed the value of the underlying collateral of the loans, assuming the fair values of the loans were derived from the eventual sale of the collateral.  Those values were discounted using market derived rates of return, with consideration given to the period of time and costs associated with the foreclosure and disposition of the collateral.  There was no carryover of the seller’s allowance for credit losses associated with the loans that were acquired in the branch acquisition as the loans were initially recorded at fair value.

 

Information about the acquired loan portfolio subject to ASC 310-30 as of January 17, 2014 is as follows (in thousands):

 

 

 

ASC 310-30 Loans

 

Contractually required principal and interest at acquisition

 

$

201

 

Contractual cash flows not expected to be collected (nonaccretable discount)

 

(100

)

Expected cash flows at acquisition

 

101

 

Interest component of expected cash flows (accretable premium)

 

20

 

Fair value of acquired loans

 

$

121

 

 

The core deposit intangible asset recognized is being amortized over its estimated useful life of approximately nine years utilizing a straight-line method.  Other intangibles consist of leasehold intangible liability, which is amortized over the remaining life of three years using a straight-line method.

 

The goodwill, which is not amortized for book purposes, was assigned to our banking segment and is not deductible for tax purposes.

 

The fair value of savings and transaction deposit accounts acquired in the branch acquisition was assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand.  The fair value of time deposits was estimated by discounting the contractual future cash flows using market rates offered for time deposits of similar remaining maturities.

 

Direct acquisition and integration costs of the branch acquisition were expensed as incurred, and totaled $3.7 million during the six months ending June 30, 2014, and none during the same period of 2013.

 

The following table presents selected unaudited pro forma financial information reflecting the branch acquisition assuming it was completed as of January 1, 2013.  The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the combined financial results of the Company and acquired branches had the transaction actually been completed at the beginning of the periods presented, nor does it indicate future results for any other interim or full-year period.  Pro forma basic and diluted earnings per common share were calculated using Berkshire’s actual weighted-average shares outstanding for the periods presented.  The unaudited pro forma information is based on the actual financial statements of Berkshire for the periods shown, and on the calculated results of the acquired branches for the 2013 period shown and in 2014 until the date of acquisition, at which time their operations became included in Berkshire’s financial statements.

 

The unaudited pro forma information, for the six months ended June 30, 2014 and 2013, set forth below reflects adjustments related to (a) purchase accounting fair value adjustments; (b) amortization of core deposit and other intangibles; and (c) adjustments to interest income and expense due to additional investments and borrowing reductions as a result of the branch acquisition.  Direct acquisition and integration-related costs incurred by the Company during 2014 are reversed; as those expenses are assumed to have occurred prior to 2013.  Furthermore, the unaudited pro forma information does not reflect management’s estimate of any revenue-enhancing opportunities beyond investment of cash received from deposits, or anticipated cost-savings.

 

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Information in the following table is shown in thousands, except earnings per share:

 

 

 

Pro Forma (unaudited)

 

 

 

Six months ended June 30,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Net interest income

 

$

88,221

 

$

86,428

 

Non-interest income

 

19,138

 

32,914

 

Net income

 

12,982

 

22,030

 

 

 

 

 

 

 

Pro forma earnings per share:

 

 

 

 

 

Basic

 

$

0.53

 

$

0.89

 

Diluted

 

$

0.52

 

$

0.88

 

 

NOTE 3.               TRADING SECURITY

 

The Company holds a tax advantaged economic development bond that is being accounted for at fair value. The security had an amortized cost of $12.8 million and $13.1 million, and a fair value of $14.9 million and $14.8 million, at June 30, 2014 and December 31, 2013, respectively. As discussed further in Note 13 - Derivative Financial Instruments and Hedging Activities, the Company has entered into a swap contract to swap-out the fixed rate of the security in exchange for a variable rate. The Company does not purchase securities with the intent of selling them in the near term, and there are no other securities in the trading portfolio at June 30, 2014.

 

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Table of Contents

 

NOTE 4. SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY

 

The following is a summary of securities available for sale and held to maturity:

 

(In thousands)

 

Amortized Cost

 

Gross
Unrealized
Gains

 

Gross
Unrealized
Losses

 

Fair Value

 

June 30, 2014

 

 

 

 

 

 

 

 

 

Securities available for sale

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

Municipal bonds and obligations

 

$

133,188

 

$

4,739

 

$

(513

)

$

137,414

 

Government-guaranteed residential mortgage-backed securities

 

79,095

 

787

 

(159

)

79,723

 

Government-sponsored residential mortgage-backed securities

 

796,407

 

5,956

 

(5,272

)

797,091

 

Trust preferred securities

 

15,763

 

1,170

 

(1,276

)

15,657

 

Other bonds and obligations

 

3,237

 

1

 

(73

)

3,165

 

Total debt securities

 

1,027,690

 

12,653

 

(7,293

)

1,033,050

 

Marketable equity securities

 

45,139

 

3,194

 

(715

)

47,618

 

Total securities available for sale

 

1,072,829

 

15,847

 

(8,008

)

1,080,668

 

 

 

 

 

 

 

 

 

 

 

Securities held to maturity

 

 

 

 

 

 

 

 

 

Municipal bonds and obligations

 

4,259

 

 

 

4,259

 

Government-sponsored residential mortgage-backed securities

 

71

 

3

 

 

74

 

Tax advantaged economic development bonds

 

38,509

 

1,377

 

(199

)

39,687

 

Other bonds and obligations

 

339

 

 

 

339

 

Total securities held to maturity

 

43,178

 

1,380

 

(199

)

44,359

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,116,007

 

$

17,227

 

$

(8,207

)

$

1,125,027

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

 

 

 

 

 

 

 

 

Securities available for sale

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

Municipal bonds and obligations

 

$

77,852

 

$

1,789

 

$

(1,970

)

$

77,671

 

Government-guaranteed residential mortgage-backed securities

 

78,885

 

544

 

(658

)

78,771

 

Government-sponsored residential mortgage-backed securities

 

531,441

 

2,000

 

(10,783

)

522,658

 

Corporate bonds

 

40,945

 

157

 

(1,822

)

39,280

 

Trust preferred securities

 

16,927

 

1,249

 

(1,565

)

16,611

 

Other bonds and obligations

 

3,250

 

 

(166

)

3,084

 

Total debt securities

 

749,300

 

5,739

 

(16,964

)

738,075

 

Marketable equity securities

 

20,042

 

2,266

 

(335

)

21,973

 

Total securities available for sale

 

769,342

 

8,005

 

(17,299

)

760,048

 

 

 

 

 

 

 

 

 

 

 

Securities held to maturity

 

 

 

 

 

 

 

 

 

Municipal bonds and obligations

 

4,244

 

 

 

4,244

 

Government-sponsored residential mortgage-backed securities

 

73

 

2

 

 

75

 

Tax advantaged economic development bonds

 

40,260

 

1,255

 

(414

)

41,101

 

Other bonds and obligations

 

344

 

 

 

344

 

Total securities held to maturity

 

44,921

 

1,257

 

(414

)

45,764

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

814,263

 

$

9,262

 

$

(17,713

)

$

805,812

 

 

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Table of Contents

 

The amortized cost and estimated fair value of available for sale (“AFS”) and held to maturity (“HTM”) securities, segregated by contractual maturity at June 30, 2014 are presented below.  Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.  Mortgage-backed securities are shown in total, as their maturities are highly variable.  Equity securities have no maturity and are also shown in total.

 

 

 

Available for sale

 

Held to maturity

 

 

 

Amortized

 

Fair

 

Amortized

 

Fair

 

(In thousands)

 

Cost

 

Value

 

Cost

 

Value

 

 

 

 

 

 

 

 

 

 

 

Within 1 year

 

$

 

$

 

$

1,423

 

$

1,423

 

Over 1 year to 5 years

 

1,258

 

1,278

 

17,241

 

18,131

 

Over 5 years to 10 years

 

17,922

 

18,245

 

11,558

 

11,546

 

Over 10 years

 

133,008

 

136,713

 

12,885

 

13,185

 

Total bonds and obligations

 

152,188

 

156,236

 

43,107

 

44,285

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities

 

45,139

 

47,618

 

 

 

Residential mortgage-backed securities

 

875,502

 

876,814

 

71

 

74

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,072,829

 

$

1,080,668

 

$

43,178

 

$

44,359

 

 

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Table of Contents

 

Securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows:

 

 

 

Less Than Twelve Months

 

Over Twelve Months

 

Total

 

 

 

Gross

 

 

 

Gross

 

 

 

Gross

 

 

 

 

 

Unrealized

 

Fair

 

Unrealized

 

Fair

 

Unrealized

 

Fair

 

(In thousands)

 

Losses

 

Value

 

Losses

 

Value

 

Losses

 

Value

 

June 30, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal bonds and obligations

 

$

2

 

$

401

 

$

511

 

$

12,503

 

$

513

 

$

12,904

 

Government-guaranteed residential mortgage-backed securities

 

43

 

11,313

 

116

 

4,437

 

159

 

15,750

 

Government-sponsored residential mortgage-backed securities

 

1,022

 

151,880

 

4,250

 

160,445

 

5,272

 

312,325

 

Trust preferred securities

 

 

 

1,276

 

2,288

 

1,276

 

2,288

 

Other bonds and obligations

 

1

 

53

 

72

 

2,937

 

73

 

2,990

 

Total debt securities

 

1,068

 

163,647

 

6,225

 

182,610

 

7,293

 

346,257

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities

 

472

 

17,514

 

243

 

2,757

 

715

 

20,271

 

Total securities available for sale

 

1,540

 

181,161

 

6,468

 

185,367

 

8,008

 

366,528

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax advantaged economic development bonds

 

 

 

199

 

7,932

 

199

 

7,932

 

Total securities held to maturity

 

 

 

199

 

7,932

 

199

 

7,932

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,540

 

$

181,161

 

$

6,667

 

$

193,299

 

$

8,207

 

$

374,460

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal bonds and obligations

 

$

1,657

 

$

17,776

 

$

313

 

$

1,854

 

$

1,970

 

$

19,630

 

Government guaranteed residential mortgage-backed securities

 

658

 

35,631

 

 

 

658

 

35,631

 

Government-sponsored residential mortgage-backed securities

 

10,783

 

423,203

 

 

 

10,783

 

423,203

 

Corporate bonds

 

1,822

 

29,124

 

 

 

1,822

 

29,124

 

Trust preferred securities

 

 

 

1,565

 

2,039

 

1,565

 

2,039

 

Other bonds and obligations

 

166

 

3,082

 

 

 

166

 

3,082

 

Total debt securities

 

15,086

 

508,816

 

1,878

 

3,893

 

16,964

 

512,709

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities

 

117

 

1,653

 

218

 

1,782

 

335

 

3,435

 

Total securities available for sale

 

15,203

 

510,469

 

2,096

 

5,675

 

17,299

 

516,144

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax advantaged economic development bonds

 

57

 

9,429

 

357

 

7,901

 

414

 

17,330

 

Total securities held to maturity

 

57

 

9,429

 

357

 

7,901

 

414

 

17,330

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

15,260

 

$

519,898

 

$

2,453

 

$

13,576

 

$

17,713

 

$

533,474

 

 

Debt Securities

 

The Company expects to recover its amortized cost basis on all debt securities in its AFS and HTM portfolios. Furthermore, the Company does not intend to sell nor does it anticipate that it will be required to sell any of its securities in an unrealized loss position as of June 30, 2014, prior to this recovery. The Company’s ability and intent to hold these securities until recovery is supported by the Company’s strong capital and liquidity positions as well as its historically low portfolio turnover. The following summarizes, by investment security type, the basis for the conclusion that the debt securities in an unrealized loss position within the Company’s AFS and HTM portfolios were not other-than-temporarily impaired at June 30, 2014:

 

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Table of Contents

 

AFS municipal bonds and obligations

 

At June 30, 2014, 19 of the total 193 securities in the Company’s portfolio of AFS municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 3.8% of the amortized cost of securities in unrealized loss positions. The Company continually monitors the municipal bond sector of the market carefully and periodically evaluates the appropriate level of exposure to the market.  At this time, the Company feels the bonds in this portfolio carry minimal risk of default and the Company is appropriately compensated for that risk.  There were no material underlying credit downgrades during the second quarter of 2014.  All securities are performing.

 

AFS residential mortgage-backed securities

 

At June 30, 2014, 55 out of the total 240 securities in the Company’s portfolios of AFS residential mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 1.6% of the amortized cost of securities in unrealized loss positions within the AFS portfolio. The Federal National Mortgage Association (“FNMA”), Federal Home Loan Mortgage Corporation (“FHLMC”) and Government National Mortgage Association (“GNMA”) guarantee the contractual cash flows of all of the Company’s residential mortgage-backed securities. The securities are investment grade rated and there were no material underlying credit downgrades during the past quarter. All securities are performing.

 

AFS trust preferred securities

 

At June 30, 2014, 2 out of the total 5 securities in the Company’s portfolio of AFS trust preferred securities were in unrealized loss positions. Aggregate unrealized losses represented 35.8% of the amortized cost of securities in unrealized loss positions. The Company’s evaluation of the present value of expected cash flows on these securities supports its conclusions about the recoverability of the securities’ amortized cost basis. Of the 2 securities, 1 security is investment grade rated.  The Company reviews the financial strength of all of the single issue trust issuers and has concluded that the amortized cost remains supported by the market value of these securities and they are performing.

 

At June 30, 2014, $1.1 million of the total unrealized losses was attributable to a $2.8 million investment in a Mezzanine Class B tranche of a $360 million pooled trust preferred security collateralized by banking and insurance entities. The Company evaluated the security, with a Level 3 fair value of $1.4 million, for potential other-than-temporary-impairment (“OTTI”) at June 30, 2014 and determined that OTTI was not evident based on both the Company’s ability and intent to hold the security until the recovery of its remaining amortized cost and the protection from credit loss afforded by $44 million in excess subordination above current and projected losses. The security is performing.

 

AFS other bonds and obligations

 

At June 30, 2014, 4 of the total 8 securities in the Company’s portfolio of other bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 2.4% of the amortized cost of securities in unrealized loss positions. The securities are investment grade rated and there were no material underlying credit downgrades during the second quarter of 2014. All securities are performing.

 

HTM tax advantaged economic development bonds

 

At June 30, 2014, 1 of the total 7 securities in the Company’s portfolio of tax advantaged economic development bonds was in an unrealized loss position. Aggregate unrealized losses represented 2.5% of the amortized cost of securities in unrealized loss positions. The Company has the intent of maintaining these bonds to recovery. These securities are performing.  The Company expects to receive all future cash flows associated with these securities.

 

Marketable Equity Securities

 

In evaluating its marketable equity securities portfolio for OTTI, the Company considers its ability to more likely than not hold an equity security to recovery.  The Company additionally considers other various factors including

 

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the length of time and the extent to which the fair value has been less than cost and the financial condition and near term prospects of the issuer.  Any OTTI is recognized immediately through earnings.

 

At June 30, 2014, 9 out of the total 29 securities in the Company’s portfolio of marketable equity securities were in an unrealized loss position. The unrealized loss represented 3.4% of the amortized cost of the securities. The Company has the ability and intent to hold the securities until a recovery of their cost basis and does not consider the securities other-than-temporarily impaired at June 30, 2014.  As new information becomes available in future periods, changes to the Company’s assumptions may be warranted and could lead to a different conclusion regarding the OTTI of these securities.

 

NOTE 5. LOANS

 

The Company’s loan portfolio is segregated into the following segments: residential mortgage, commercial real estate, commercial and industrial, and consumer. Residential mortgage loans include classes for 1- 4 family owner occupied and construction loans.  Commercial real estate loans include construction, single and multi-family, and other commercial real estate classes.  Commercial and industrial loans include asset based lending loans, lease financing and other commercial business loan classes.  Consumer loans include home equity, direct and indirect auto and other.  These portfolio segments each have unique risk characteristics that are considered when determining the appropriate level for the allowance for loan losses.

 

A substantial portion of the loan portfolio is secured by real estate in western Massachusetts, southern Vermont, northeastern New York, and in the Bank’s other New England lending areas. The ability of many of the Bank’s borrowers to honor their contracts is dependent, among other things, on the specific economy and real estate markets of these areas.

 

Total loans include business activity loans and acquired loans. Acquired loans are those loans acquired from the acquisitions of the 20 acquired branches, Beacon Federal Bancorp, Inc., The Connecticut Bank and Trust Company, Legacy Bancorp, Inc., and Rome Bancorp, Inc. The following is a summary of total loans:

 

 

 

June 30, 2014

 

December 31, 2013

 

(In thousands)

 

Business
Activities Loans

 

Acquired
Loans

 

Total

 

Business
Activities Loans

 

Acquired
Loans

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgages:

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family

 

$

1,073,431

 

$

305,595

 

$

1,379,026

 

$

1,027,737

 

$

333,367

 

$

1,361,104

 

Construction

 

17,162

 

1,043

 

18,205

 

18,158

 

5,012

 

23,170

 

Total residential mortgages

 

1,090,593

 

306,638

 

1,397,231

 

1,045,895

 

338,379

 

1,384,274