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OPERATING SEGMENTS
 9 Months Ended
Sep. 30, 2014
OPERATING SEGMENTS  
OPERATING SEGMENTS

NOTE 12. OPERATING SEGMENTS

 

The Company has two reportable operating segments, Banking and Insurance, which are delineated by the consolidated subsidiaries of Berkshire Hills Bancorp, Inc.  Banking includes the activities of the Bank and its subsidiaries, which provide retail and commercial banking, along with wealth management and investment services.  Insurance includes the activities of Berkshire Insurance Group, Inc. (“BIG”), which provides retail and commercial insurance services.  The only other consolidated financial activity of the Company is the Parent, which consists of the transactions of Berkshire Hills Bancorp, Inc. Management fees for corporate services provided by the Bank to BIG and the Parent are eliminated.

 

The accounting policies of each reportable segment are the same as those of the Company.  The Insurance segment and the Parent reimburse the Bank for administrative services provided to them.  Income tax expense for the individual segments is calculated based on the activity of the segments, and the Parent records the tax expense or benefit necessary to reconcile to the consolidated total.  The Parent does not allocate capital costs.  Average assets include securities available-for-sale based on amortized cost.

 

A summary of the Company’s operating segments was as follows:

 

(In thousands) 

 

Banking

 

Insurance

 

Parent

 

Eliminations

 

Total Consolidated

 

Three months ended September 30, 2014

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

45,786

 

$

—

 

$

5,163

 

$

(6,000

)

$

44,949

 

Provision for loan losses

 

3,685

 

—

 

—

 

—

 

3,685

 

Non-interest income

 

12,009

 

2,632

 

6,693

 

(6,693

)

14,641

 

Non-interest expense

 

37,388

 

1,983

 

316

 

—

 

39,687

 

Income before income taxes

 

16,722

 

649

 

11,540

 

(12,693

)

16,218

 

Income tax expense (benefit)

 

4,426

 

252

 

(448

)

—

 

4,230

 

Net income

 

$

12,296

 

$

397

 

$

11,988

 

$

(12,693

)

$

11,988

 

 

 

 

 

 

 

 

 

 

 

 

 

Average assets (in millions)

 

$

6,249

 

$

27

 

$

766

 

$

(777

)

$

6,265

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 2013

 

 

 

 

 

 

 

 

 

 

 

Net interest income (expense)

 

$

46,808

 

$

—

 

$

(939

)

$

—

 

$

45,869

 

Provision for loan losses

 

3,178

 

—

 

—

 

—

 

3,178

 

Non-interest income

 

9,645

 

2,469

 

9,033

 

(9,033

)

12,114

 

Non-interest expense

 

40,229

 

1,981

 

572

 

2

 

42,784

 

Income before income taxes

 

13,046

 

488

 

7,522

 

(9,035

)

12,021

 

Income tax expense (benefit)

 

4,313

 

188

 

(584

)

—

 

3,917

 

Net income

 

$

8,733

 

$

300

 

$

8,106

 

$

(9,035

)

$

8,104

 

 

 

 

 

 

 

 

 

 

 

 

 

Average assets (in millions)

 

$

5,259

 

$

28

 

$

736

 

$

(735

)

$

5,287

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 2014

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

134,740

 

$

—

 

$

3,304

 

$

(6,000

)

$

132,044

 

Provision for loan losses

 

11,070

 

—

 

—

 

—

 

11,070

 

Non-interest income

 

25,429

 

8,141

 

18,713

 

(18,713

)

33,570

 

Non-interest expense

 

116,932

 

6,192

 

1,185

 

—

 

124,309

 

Income before income taxes

 

32,167

 

1,949

 

20,832

 

(24,713

)

30,235

 

Income tax expense (benefit)

 

8,642

 

761

 

(1,515

)

—

 

7,888

 

Net income

 

$

23,525

 

$

1,188

 

$

22,347

 

$

(24,713

)

$

22,347

 

 

 

 

 

 

 

 

 

 

 

 

 

Average assets (in millions)

 

$

6,065

 

$

27

 

$

744

 

$

(747

)

$

6,088

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 2013

 

 

 

 

 

 

 

 

 

 

 

Net interest income (expense)

 

$

131,796

 

$

—

 

$

12,114

 

$

(15,000

)

$

128,910

 

Provision for loan losses

 

8,278

 

—

 

—

 

—

 

8,278

 

Non-interest income

 

34,664

 

7,851

 

18,523

 

(18,520

)

42,518

 

Non-interest expense

 

112,181

 

6,152

 

1,868

 

1

 

120,202

 

Income before income taxes

 

46,001

 

1,699

 

28,769

 

(33,521

)

42,948

 

Income tax expense (benefit)

 

13,521

 

656

 

(1,835

)

—

 

12,342

 

Net income

 

$

32,480

 

$

1,043

 

$

30,604

 

$

(33,521

)

$

30,606

 

 

 

 

 

 

 

 

 

 

 

 

 

Average assets (in millions)

 

$

5,212

 

$

27

 

$

746

 

$

(743

)

$

5,242