OPERATING SEGMENTS

12 Months Ended

Dec. 31, 2014

OPERATING SEGMENTS

OPERATING SEGMENTS

NOTE 21.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 (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 is as follows:

											Total
(In thousands)	Banking		Insurance		Parent			Eliminations			Consolidated
Year ended December 31, 2014
Net interest income	$	182,221	$	—	$	8,470		$	(12,000	)	$	178,691
Provision for loan losses	14,968		—		—			—			14,968
Non-interest income	37,406		10,364		25,230			(25,230		)	47,770
Non-interest expense	155,642		8,058		2,286			—			165,986
Income before income taxes	49,017		2,306		31,414			(37,230		)	45,507
Income tax expense (benefit)	13,085		1,008		(2,330		)	—			11,763
Net income	$	35,932	$	1,298	$	33,744		$	(37,230	)	$	33,744
Average assets (in millions)	$	6,149	$	27	$	27		$	(31	)	$	6,171

(In thousands)	Banking		Insurance		Parent			Eliminations			Consolidated
Year ended December 31, 2013
Net interest income	$	172,634	$	—	$	25,618		$	(29,500	)	$	168,752
Provision for loan losses	11,378		—		—			—			11,378
Non-interest income	48,238		9,994		15,414			(15,414		)	58,232
Non-interest expense	146,944		8,069		2,346			—			157,359
Income before income taxes	62,550		1,925		38,686			(44,914		)	58,247
Income tax expense (benefit)	18,802		759		(2,457		)	—			17,104
Net income	$	43,748	$	1,166	$	41,143		$	(44,914	)	$	41,143
Average assets (in millions)	$	5,279	$	27	$	741		$	(741	)	$	5,307

(In thousands)	Banking			Insurance		Parent			Eliminations			Consolidated
Year ended December 31, 2012
Net interest income	$	145,167		$	—	$	15,221		$	(17,000	)	$	143,388
Provision for loan losses	9,590			—		—			—			9,590
Non-interest income	43,330			10,726		19,678			(19,678		)	54,056
Non-interest expense	128,366			8,452		3,988			—			140,806
Income before income taxes	50,541			2,274		30,911			(36,678		)	47,048
Income tax expense (benefit)	14,597			903		(2,277		)	—			13,223
Net income from continuing operations	35,944			1,371		33,188			(36,678		)	33,825
Loss from discontinued operations before income taxes (including gain on disposal of $63)	(261		)	—		—			—			(261		)
Income tax benefit	376			—		—			—			376
Net loss from discontinued operations	(637		)	—		—			—			(637		)
Net income	$	35,307		$	1,371	$	33,188		$	(36,678	)	$	33,188
Average assets (in millions)	$	5,006		$	30	$	559		$	(392	)	$	5,203