Earnings at Pittsfield-based Berkshire Hills Bancorp (BHLB), parent company of Berkshire Bank, were down in the second quarter compared to the same period last year, with net income declining about 59.6 percent in the quarter, to a little less than $2.3 million dollars, from more than $5.7 million dollars last year.
For the first six months, net income was $6.2 million in 2009 compared to record earnings of $11.8 million in 2008. Major changes in the first six months included decreases of $2.5 million in net interest income and $2.1 million in fee income, together with increases of $3 million in FDIC insurance premiums and $2.8 million in the provision for loan losses, the company said.
The company’s second quarter earnings per share totaled $0.24 before an FDIC special assessment and preferred stock dividends. The FDIC assessment totaled $1.3 million for Berkshire, or $0.06 per share after-tax.
During the most recent quarter, Berkshire recorded a $3 million deemed dividend related to the repayment of its preferred stock to the Treasury. The deemed dividend, together with cash preferred stock dividends and accretion, reduced earnings available to common shareholders by $0.26 per share. After these charges of $0.06 per share for the FDIC assessment and $0.26 per share for preferred dividends, GAAP earnings per common share were ($0.08). The one-time deemed dividend had no impact on cash or on stockholders’ equity.
"We made solid progress in building our business in the second quarter and are optimistic about our prospects for sustained growth as we gain share from national competitors," said Michael P. Daly, President and Chief Executive Officer. "Before FDIC insurance expense, we further reduced core noninterest expense, resuming the downward trend in linked quarter core expense begun a year ago. We are positioning our company for higher earnings when economic conditions normalize. Additionally, our recent loan and securities growth occurred near the end of the second quarter and is expected to benefit net interest income beginning in the third quarter."
The board of directors declared a dividend of $0.16 per share to stockholders of record at the close of business Aug. 6, payable Aug. 20.
