Photo by James Sanna | Commercial Record staff
Berkshire Bank saw the impact of CECL implementation and the coronavirus pandemic in its earnings, as the Boston-based bank suffered losses in the first quarter. Berkshire, which maintains a significant branch network in Connecticut, had a net loss of $19.9 million in the first quarter compared to net income of $25.8 million in the fourth quarter. The net loss per diluted share was $0.40 in the first quarter compared to net earnings per diluted share of $0.51 in both the fourth and first quarters of 2019.
Berkshire CEO Richard Marotta said in a statement that Berkshire’s has prioritized helping communities during the current crisis, especially minority ones, “weather this storm and rebuild as soon as it is safe to do so.”
“We are proud to offer additional support and financial flexibility to our customers who may have been impacted, and are also funding significant programs to help small businesses,” Marotta said in the first quarter earnings statement. “We continue to maintain a strong balance sheet, with ample liquidity and regulatory capital to ensure we continue to perform our essential role. We intend to continue to lead, supporting our customers and neighbors throughout this pandemic, because we know that in the long haul when our communities prosper, Berkshire does too.”
Like several other Massachusetts stock banks, Berkshire Bank adopted the new current expected credit loss methodology the first quarter rather than deferring implementation of the accounting standard as allowed under the CARES Act. Berkshire Bank’s first quarter provision for credit losses was $35 million. Berkshire Bank. Using the previous accounting standard, the incurred method, the first quarter 2019 provision for credit losses was $4 million.
Berkshire, with a total loan portfolio of $9.3 billion, raised its total allowance for credit losses to $113.5 million, 1.22 percent of the total loan portfolio. Under the previous accounting method, the total allowance was 0.67 percent at the end of 2019. Almost 30 percent of Berkshire’s commercial loan portfolio, about $2.681 billion, is exposed to industries most affected by the coronavirus crisis.
Berkshire Bank’s total assets were unchanged from the fourth quarter at $13.2 billion.
