10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: March 31, 2021

☐ 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.)
60 State Street	Boston	Massachusetts	02109
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (800) 773-5601, ext. 133773

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BHLB	The New York Stock Exchange

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 ý  No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 ý   No o

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

Large accelerated filer    o    Accelerated filer        ý     

Non-accelerated filer    o     Smaller reporting company    ☐

    Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     o

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

As of May 6, 2021, the Registrant had 51,203,211 shares of common stock, $0.01 par value per share, outstanding

BERKSHIRE HILLS BANCORP, INC.

FORM 10-Q

INDEX 

				Page
PART I.	FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (unaudited)
	Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020			4
	Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020			5
	Consolidated Statements of Comprehensive (Loss) for the Three Months Ended March 31, 2021 and 2020			7
	Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2021 and 2020			8
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020			9
	Notes to Consolidated Financial Statements (Unaudited)
		Note 1	Basis of Presentation	11
		Note 2	Discontinued Operations and Held for Sale	13
		Note 3	Trading Security	14
		Note 4	Securities Available for Sale, Held to Maturity, and Marketable Equity Securities	15
		Note 5	Loans and Allowance for Credit Losses	19
		Note 6	Deposits	31
		Note 7	Borrowed Funds	31
		Note 8	Derivative Financial Instruments and Hedging Activities	33
		Note 9	Leases	39
		Note 10	Other Commitments, Contingencies, Off- Balance Sheet Activities, and Pandemic Impact	41
		Note 11	Capital Ratios and Shareholders' Equity	42
		Note 12	Earnings/(Loss) per Share	46
		Note 13	Stock-Based Compensation Plans	47
		Note 14	Fair Value Measurements	48
		Note 15	Net Interest Income after Provision for Credit Losses	57
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			58
	Selected Financial Data			58
	Average Balances and Average Yields/Rates			60
	Non-GAAP Financial Measures			62
Item 3.	Quantitative and Qualitative Disclosures about Market Risk			75
Item 4.	Controls and Procedures			76

2

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	77
Item 1A.	Risk Factors	78
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	79
Item 3.	Defaults Upon Senior Securities	79
Item 4.	Mine Safety Disclosures	79
Item 5.	Other Information	79
Item 6.	Exhibits	80
Signatures		81

3

PART I

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

	March 31, 2021		December 31, 2020
(In thousands, except share data)
Assets
Cash and due from banks	$	81,285	$	91,219
Short-term investments	1,818,323		1,466,656
Total cash and cash equivalents	1,899,608		1,557,875
Trading security, at fair value	9,350		9,708
Marketable equity securities, at fair value	15,801		18,513
Securities available for sale, at fair value	1,627,330		1,695,232
Securities held to maturity (fair values of $627,297 and $491,855)	610,637		465,091
Federal Home Loan Bank stock and other restricted securities	28,680		34,873
Total securities	2,291,798		2,223,417
Less: Allowance for credit losses on held to maturity securities	(111)		(104)
Net securities	2,291,687		2,223,313
Loans held for sale	18,377		17,748
Total loans	7,658,778		8,081,519
Less: Allowance for credit losses on loans	(123,800)		(127,302)
Net loans	7,534,978		7,954,217
Premises and equipment, net	108,538		112,663
Other real estate owned	149		149
Other intangible assets	33,500		34,819
Cash surrender value of bank-owned life insurance policies	234,043		232,695
Other assets	332,766		387,230
Assets held for sale	303,697		317,304
Total assets	$	12,757,343	$	12,838,013
Liabilities
Demand deposits	$	2,750,393	$	2,484,249
NOW and other deposits	1,856,988		1,003,005
Money market deposits	2,486,261		3,371,353
Savings deposits	1,047,506		972,116
Time deposits	2,103,222		2,385,085
Total deposits	10,244,370		10,215,808
Short-term debt	—		40,000
Long-term Federal Home Loan Bank advances and other	351,354		434,357
Subordinated borrowings	97,338		97,280
Total borrowings	448,692		571,637
Other liabilities	229,832		232,730
Liabilities held for sale	659,310		630,065
Total liabilities	$	11,582,204	$	11,650,240
(continued)
	March 31, 2021		December 31, 2020
Shareholders’ equity
Common stock ($0.01 par value; 100,000,000 shares authorized and 51,903,190 shares issued and 50,988,285 shares outstanding in 2021; 51,903,190 shares issued and 50,833,087 shares outstanding in 2020)	528		528
Additional paid-in capital - common stock	1,424,349		1,427,239
Unearned compensation	(7,722)		(6,245)
Retained earnings (deficit)	(226,516)		(233,344)
Accumulated other comprehensive income	10,721		30,871
Treasury stock, at cost (914,905 shares in 2021 and 1,070,103 shares in 2020)	(26,221)		(31,276)
Total shareholders’ equity	1,175,139		1,187,773
Total liabilities and shareholders’ equity	$	12,757,343	$	12,838,013

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

4

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,
(In thousands, except per share data)	2021		2020
Interest and dividend income from continuing operations
Loans	$	75,933	$	101,695
Securities and other	12,220		14,500
Total interest and dividend income	88,153		116,195
Interest expense from continuing operations
Deposits	9,583		23,838
Borrowings	3,477		5,929
Total interest expense	13,060		29,767
Net interest income from continuing operations	75,093		86,428
Non-interest income from continuing operations
Deposit related fees	7,126		7,947
Insurance commissions and fees	3,130		3,024
Wealth management fees	2,772		2,570
Mortgage banking originations	802		959
Loan fees and revenue	10,246		1,302
Total fee income	24,076		15,802
Other, net	2,148		(436)
(Loss) on securities, net	(31)		(9,730)
Total non-interest income	26,193		5,636
Total net revenue from continuing operations	101,286		92,064
Provision for credit losses	6,500		34,807
Non-interest expense from continuing operations
Compensation and benefits	38,735		36,909
Occupancy and equipment	11,024		11,132
Technology and communications	8,593		8,081
Marketing and promotion	595		1,165
Professional services	6,614		2,720
FDIC premiums and assessments	1,120		1,482
Other real estate owned and foreclosures	2		27
Amortization of intangible assets	1,319		1,580
Acquisition, restructuring, and other expenses	3,486		—
Other	6,666		8,229
Total non-interest expense	78,154		71,325
Income/(loss) from continuing operations before income taxes	$	16,632	$	(14,068)
Income tax (benefit)/expense	3,601		(1,996)
Net income/(loss) from continuing operations	$	13,031	$	(12,072)
(Loss)/income from discontinued operations before income taxes	$	—	$	(10,629)
Income tax (benefit)/expense	—		(2,831)
Net (loss)/income from discontinued operations	$	—	$	(7,798)
Net income/(loss)	$	13,031	$	(19,870)
Preferred stock dividend	—		125
Income/(loss) available to common shareholders	$	13,031	$	(19,995)
(continued)

5

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (CONCLUDED)

	Three Months Ended March 31,
	2021		2020
Basic earnings/(loss) per common share:
Continuing operations	$	0.26	$	(0.24)
Discontinued operations	—		(0.16)
Total	$	0.26	$	(0.40)
Diluted earnings/(loss) per common share:
Continuing operations	$	0.26	$	(0.24)
Discontinued operations	—		(0.16)
Total	$	0.26	$	(0.40)
Weighted average shares outstanding:
Basic	50,330		50,204
Diluted	50,565		50,204

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

6

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)

	Three Months Ended March 31,
(In thousands)	2021		2020
Net income/(loss)	$	13,031	$	(19,870)
Other comprehensive income, before tax:
Changes in unrealized gain on debt securities available-for-sale	(27,013)		25,614
Income taxes related to other comprehensive income:
Changes in unrealized gain on debt securities available-for-sale	6,863		(6,590)
Total other comprehensive (loss)/income	(20,150)		19,024
Total comprehensive (loss)	$	(7,119)	$	(846)

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

7

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

	Preferred stock			Common stock			Additional paid-in capital		Unearned compensation		Retained earnings (deficit)		Accumulated other comprehensive income/(loss)		Treasury stock
(In thousands)	Shares	Amount		Shares	Amount												Total
Balance at December 31, 2019	522	$	40,633	49,585	$	517	$	1,422,441	$	(8,465)	$	361,082	$	11,993	$	(69,637)	$	1,758,564
Comprehensive income:
Net (loss)	—	—		—	—		—		—		(19,870)		—		—		(19,870)
Other comprehensive income	—	—		—	—		—		—		—		19,024		—		19,024
Total comprehensive (loss)	—	—		—	—		—		—		(19,870)		19,024		—		(846)
Impact of ASC 326 Adoption	—	—		—	—		—		—		(24,380)		—		—		(24,380)
Conversion of preferred stock to common stock	(261)	(20,308)		522	6		5,391		—		—		—		14,911		—
Cash dividends declared on common shares ($0.24 per share)	—	—		—	—		—		—		(12,050)		—		—		(12,050)
Cash dividends declared on preferred shares ($0.48 per share)	—	—		—	—		—		—		(125)		—		—		(125)
Treasury shares repurchased	—	—		(14)	—		—		—		—		—		(473)		(473)
Forfeited shares	—	—		(11)	—		(84)		375		—		—		(291)		—
Exercise of stock options	—	—		24	—		—		—		(215)		—		734		519
Restricted stock grants	—	—		108	—		52		(3,133)		—		—		3,081		—
Stock-based compensation	—	—		—	—		—		1,459		—		—		—		1,459
Other, net	—	—		(15)	—		—		—		—		—		(390)		(390)
Balance at March 31, 2020	261	$	20,325	50,199	$	523	$	1,427,800	$	(9,764)	$	304,442	$	31,017	$	(52,065)	$	1,722,278
Balance at December 31, 2020	—	$	—	50,833	$	528	$	1,427,239	$	(6,245)	$	(233,344)	$	30,871	$	(31,276)	$	1,187,773
Comprehensive income:
Net income	—	—		—	—		—		—		13,031		—		—		13,031
Other comprehensive (loss)	—	—		—	—		—		—		—		(20,150)		—		(20,150)
Total comprehensive income	—	—		—	—		—		—		13,031		(20,150)		—		(7,119)
Cash dividends declared on common shares ($0.12 per share)	—	—		—	—		—		—		(6,124)		—		—		(6,124)
Forfeited shares	—	—		(52)	—		(234)		1,333		—		—		(1,099)		—
Exercise of stock options	—	—		5	—		—		—		(79)		—		148		69
Restricted stock grants	—	—		210	—		(2,660)		(3,485)		—		—		6,145		—
Stock-based compensation	—	—		—	—		—		675		—		—		—		675
Other, net	—	—		(8)	—		4		—		—		—		(139)		(135)
Balance at March 31, 2021	—	$	—	50,988	$	528	$	1,424,349	$	(7,722)	$	(226,516)	$	10,721	$	(26,221)	$	1,175,139

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

8

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended March 31,
(In thousands)	2021		2020
Cash flows from operating activities:
Net income/(loss) from continuing operations	$	13,031	$	(12,072)
Net (loss) from discontinued operations	—		(7,798)
Net income/(loss)	$	13,031	$	(19,870)
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Provision for credit losses	6,500		34,807
Net amortization of securities	389		762
Change in unamortized net loan costs and premiums	(2,755)		386
Premises and equipment depreciation and amortization expense	2,839		2,680
Stock-based compensation expense	675		1,459
Accretion of purchase accounting entries, net	(1,305)		(3,121)
Amortization of other intangibles	1,319		1,580
Income from cash surrender value of bank-owned life insurance policies	(1,348)		(1,106)
Securities losses, net	31		9,730
Net change in loans held-for-sale	3,938		4,472
Loss on disposition of assets	2,811		—
Amortization of interest in tax-advantaged projects	33		486
Net change in other	(2,584)		(11,571)
Net cash provided by operating activities of continuing operations	23,574		28,492
Net cash provided (used) by operating activities of discontinued operations	—		6,560
Net cash provided by operating activities	23,574		35,052
Cash flows from investing activities:
Net decrease in trading security	192		181
Purchases of marketable equity securities	—		(11,437)
Proceeds from sales of marketable equity securities	2,849		12,329
Purchases of securities available for sale	(103,877)		(160,925)
Proceeds from sales of securities available for sale	—		3,520
Proceeds from maturities, calls, and prepayments of securities available for sale	166,998		90,758
Purchases of securities held to maturity	(155,417)		—
Proceeds from maturities, calls, and prepayments of securities held to maturity	9,377		20,372
Net change in loans	412,255		217,429
Net change in Mid-Atlantic region loans held for sale	16,830		—
Proceeds from surrender of bank-owned life insurance	—		553
Purchase of Federal Home Loan Bank stock	—		(6,741)
Proceeds from redemption of Federal Home Loan Bank stock	6,193		454
Net investment in limited partnership tax credits	—		(2,783)
Purchase of premises and equipment, net	(2,297)		(3,386)
Net cash provided by investing activities	353,103		160,324

9

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONCLUDED)

	Three Months Ended March 31,
(In thousands)	2021		2020
(continued)
Cash flows from financing activities:
Net increase/(decrease) in deposits	28,562		(262,203)
Net increase in Mid-Atlantic region deposits held for sale	29,245		—
Proceeds from Federal Home Loan Bank advances and other borrowings	—		315,854
Repayments of Federal Home Loan Bank advances and other borrowings	(123,022)		(102,382)
Purchase of treasury stock	—		(473)
Exercise of stock options	69		519
Common and preferred stock cash dividends paid	(6,124)		(12,175)
Settlement of derivative contracts with financial institution counterparties	36,326		(108,925)
Net cash used by financing activities	(34,944)		(169,785)
Net change in cash and cash equivalents	341,733		25,591
Cash and cash equivalents at beginning of period	1,557,875		579,829
Cash and cash equivalents at end of period	$	1,899,608	$	605,420
Supplemental cash flow information:
Interest paid on deposits	$	10,149	$	26,830
Interest paid on borrowed funds	3,655		6,033
Income taxes (refunded) paid, net	(2,386)		178
Other non-cash changes:
Other net comprehensive income	$	(20,150)	$	19,024
Impact to retained earnings from adoption of ASC 326, net of tax	—		24,380
Unsettled transactions related to security purchases	22,126		—
Reclass of seasoned loan portfolios to held-for-sale, net	9,500		27,940
Real estate owned acquired in settlement of loans	—		224

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

10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.           BASIS OF PRESENTATION

The Consolidated Financial Statements (the “financial statements”) of Berkshire Hills Bancorp, Inc. and its subsidiaries (the “Company” or “Berkshire”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company is a Delaware corporation, headquartered in Boston, Massachusetts, and the holding company for Berkshire Bank (the “Bank”), a Massachusetts-chartered trust company headquartered in Pittsfield, Massachusetts, and Berkshire Insurance Group, Inc. These financial statements include the accounts of the Company, its wholly-owned subsidiaries and the Bank’s consolidated subsidiaries. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise.

The Company has evaluated subsequent events for potential recognition and/or disclosure through the date these financial statements were issued.

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 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 disclosures Berkshire Hills Bancorp, Inc. previously filed with the Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. In management’s opinion, all adjustments necessary for a fair statement are reflected in the interim periods.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ from those estimates.

Refer to Note 10 – Other Commitments, Contingencies, and Off-Balance Sheet Activities for pandemic related risks and uncertainties.

Recently Adopted Accounting Principles

In August 2018, the FASB issued ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans.” This ASU amends and modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The amendments in this update remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. As ASU No. 2018-14 only revises disclosure requirements, the adoption did not have a material impact on the Company’s Consolidated Financial Statements.

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU No. 2019-12 removes specific exceptions to the general principles in FASB ASC Topic 740. It eliminates the need for an organization to analyze whether the following apply in a given period: (1) exception to the incremental approach for intraperiod tax allocation; (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments; and (3) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 also improves financial statement preparers’ application of income tax-related guidance and simplifies: (1) franchise taxes that are partially based on income; (2) transactions with a government that result in a step up in the tax basis of goodwill; (3) separate financial statements of legal entities that are not subject to tax; and (4) enacted changes in tax laws in interim periods. The adoption of ASU No. 2019-12 did not have a material impact on the Company's Consolidated Financial Statements.

11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In January 2020, the FASB issued ASU No. 2020-01, “Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force)”. ASU No. 2020-01 clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. In addition, this ASU provides direction that a company should not consider whether the underlying securities would be accounted for under the equity method or the fair value option when it is determining the accounting for certain forward contracts and purchased options, upon either settlement or exercise. The amendments are to be applied prospectively. The adoption of ASU No. 2020-01 did not have a material impact on the Company's Consolidated Financial Statements.

In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848): Scope.” ASU No. 2021-01 clarifies that certain optional expedients and exceptions in ASC 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU No. 2021-01 also amends the expedients and exceptions in ASC 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. ASU No. 2021-01 was effective upon issuance and generally can be applied through December 31, 2022. The adoption of ASU 2021-01 did not significantly impact the Company’s Consolidated Financial Statements.

Future Application of Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU No. 2020-04 provides temporary optional expedients and exceptions to GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as SOFR. For instance, entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Entities can also elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. Finally, entities can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. It is anticipated that this ASU will simplify any modifications that are executed between the selected start date (yet to be determined) and December 31, 2022 that are directly related to LIBOR transition by allowing prospective recognition of the continuation of the contract, rather than extinguishment of the old contract resulting in writing off unamortized fees/costs. The Company is currently evaluating the impact of adopting the new guidance on the Consolidated Financial Statements.

12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.           DISCONTINUED OPERATIONS AND HELD FOR SALE

During the first quarter of 2019, the Company reached the decision to pursue the sale of the national mortgage banking operations of First Choice Loan Services, Inc. (“FCLS”), – a subsidiary of the Bank. The decision was based on a number of strategic priorities and other factors, including the competitiveness of the mortgage industry. FCLS continued to operate and serve its customers as the Company initiated the process of identifying a buyer. As a result of these actions, the Company classified the operations of FCLS as discontinued under ASC 205-20. The Consolidated Balance Sheets, Consolidated Statements of Operations, and Consolidated Statements of Cash Flows present discontinued operations retrospectively for current and prior periods.

On May 7, 2020, the Company completed a transaction to sell certain assets and liabilities related to the operations of FCLS. During the fourth quarter of 2020, the Company completed the final wind-down of the operations of FCLS. Operating results for the year ended December 31, 2020, include expenses related to the wind-down of operations.

As of March 31, 2021 and December 31, 2020, there were no assets or liabilities related to the discontinued operations of FCLS.

The following presents operating results of the discontinued operations of FCLS for the three months ended March 31, 2021 and March 31, 2020:

	Three Months Ended March 31,
(In thousands)	2021		2020
Interest income	$	—	$	729
Interest expense	—		282
Net interest income	—		447
Non-interest income	—		1,358
Total net revenue	—		1,805
Non-interest expense	—		12,434
(Loss) from discontinued operations before income taxes	—		(10,629)
Income tax (benefit)	—		(2,831)
Net (loss) from discontinued operations	$	—	$	(7,798)

13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Mid-Atlantic Branch Sale

The Company has entered into an agreement to sell its eight Mid-Atlantic branches to Investors Bank of Short Hills, New Jersey, subject to customary regulatory approvals. The transfer is targeted for completion in the first half of 2021. The branch sale includes loans with a total balance of $284 million and deposit accounts with a total balance of $647 million as of March 31, 2021. These balances are included in assets held for sale and liabilities held for sale on the Consolidated Balance Sheets. The buyer has agreed to pay a premium equal to 3.0% of the final deposit balance transferred. The sale includes all branch premises and equipment, and the agreement provides that the buyer intends to offer employment to all associated staff. Berkshire expects to complete the net transfer with funds from short-term investments. The branch sale will have no effect on Berkshire’s Mid-Atlantic specialized commercial lending operations, including SBA lending at its 44 Business Capital Division and its asset-based lending relationships.

The following is a summary of the assets and liabilities related to the branch sale at March 31, 2021 and December 31, 2020:

(In thousands)	March 31, 2021		December 31, 2020
Assets
Loans	$	283,769	$	300,599
Other assets	19,928		16,705
Total assets	$	303,697	$	317,304
Liabilities
Deposits	$	646,622	$	617,377
Other liabilities	12,688		12,688
Total liabilities	$	659,310	$	630,065

NOTE 3.           TRADING SECURITY

The Company holds a tax-advantaged economic development bond accounted for at fair value. The security had an amortized cost of $8.5 million and $8.7 million, and a fair value of $9.3 million and $9.7 million, at March 31, 2021 and December 31, 2020, respectively. As discussed further in Note 8 - Derivative Financial Instruments and Hedging Activities, the Company 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 were no other securities in the trading portfolio at March 31, 2021 or December 31, 2020.

14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4. SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND MARKETABLE

        EQUITY SECURITIES

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

(In thousands)	Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance
March 31, 2021
Securities available for sale
Municipal bonds and obligations	$	83,922	$	6,378	$	—	$	90,300	$	—
Agency collateralized mortgage obligations	713,215		14,922		(3,583)		724,554		—
Agency mortgage-backed securities	453,042		2,813		(8,659)		447,196		—
Agency commercial mortgage-backed securities	267,596		4,020		(3,101)		268,515		—
Corporate bonds	44,294		729		(9)		45,014		—
Other bonds and obligations	50,691		1,068		(8)		51,751		—
Total securities available for sale	1,612,760		29,930		(15,360)		1,627,330		—
Securities held to maturity
Municipal bonds and obligations	266,609		16,884		(592)		282,901		71
Agency collateralized mortgage obligations	151,092		4,764		(1,054)		154,802		—
Agency mortgage-backed securities	65,052		155		(1,682)		63,525		—
Agency commercial mortgage-backed securities	124,379		398		(2,288)		122,489		—
Tax advantaged economic development bonds	3,210		75		—		3,285		40
Other bonds and obligations	295		—		—		295		—
Total securities held to maturity	610,637		22,276		(5,616)		627,297		111
Marketable equity securities	15,707		218		(124)		15,801		—
Total	$	2,239,104	$	52,424	$	(21,100)	$	2,270,428	$	111

(In thousands)	Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance
December 31, 2020
Securities available for sale
Municipal bonds and obligations	$	90,273	$	7,530	$	—	$	97,803	$	—
Agency collateralized mortgage obligations	740,225		16,836		(235)		756,826		—
Agency mortgage-backed securities	433,311		4,954		(133)		438,132		—
Agency commercial mortgage-backed securities	278,990		9,835		(175)		288,650		—
Corporate bonds	59,098		942		(10)		60,030		—
Other bonds and obligations	52,080		1,719		(8)		53,791		—
Total securities available for sale	1,653,977		41,816		(561)		1,695,232		—
Securities held to maturity
Municipal bonds and obligations	246,520		20,106		—		266,626		64
Agency collateralized mortgage obligations	153,561		5,989		(171)		159,379		—
Agency mortgage-backed securities	35,865		198		(29)		36,034		—
Agency commercial mortgage-backed securities	25,481		590		(12)		26,059		—
Tax advantaged economic development bonds	3,369		93		—		3,462		40
Other bonds and obligations	295		—		—		295		—
Total securities held to maturity	465,091		26,976		(212)		491,855		104
Marketable equity securities	18,061		767		(315)		18,513		—
Total	$	2,137,129	$	69,559	$	(1,088)	$	2,205,600	$	104

15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the activity in the allowance for credit losses for debt securities held to maturity by security type for the three months ended March 31, 2021 and 2020:

(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at December 31, 2020	$	64	$	40	$	104
Provision for credit losses	7		—		7
Balance at March 31, 2021	$	71	$	40	$	111

(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at December 31, 2019	$	—	$	—	$	—
Impact of ASC 326 adoption	83		226		309
Provision for credit losses - reversal	—		(168)		(168)
Balance at March 31, 2020	$	83	$	58	$	141

Credit Quality Information

The Company monitors the credit quality of held to maturity securities through credit ratings from various rating agencies. Credit ratings express opinions about the credit quality of a security and are utilized by the Company to make informed decisions. Investment grade securities are rated BBB-/Baa3 or higher and generally considered by the rating agencies and market participants to be of low credit risk. Conversely, securities rated below investment grade are considered to have distinctively higher credit risk than investment grade securities. For securities without credit ratings, the Company utilizes other financial information indicating the financial health of the underlying municipality, agency, or organization.

As of March 31, 2021, none of the Company's investment securities were delinquent or in non-accrual status.

The amortized cost and estimated fair value of available for sale (“AFS”) and held to maturity (“HTM”) securities segregated by contractual maturity at March 31, 2021 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.

	Available for sale				Held to maturity
	Amortized		Fair		Amortized		Fair
(In thousands)	Cost		Value		Cost		Value
Within 1 year	$	31,134	$	31,147	$	1,872	$	1,874
Over 1 year to 5 years	7,206		7,331		4,270		4,317
Over 5 years to 10 years	51,953		53,260		23,311		24,210
Over 10 years	88,614		95,327		240,661		256,080
Total bonds and obligations	178,907		187,065		270,114		286,481
Mortgage-backed securities	1,433,853		1,440,265		340,523		340,816
Total	$	1,612,760	$	1,627,330	$	610,637	$	627,297

During the three months ended March 31, 2021, purchases of AFS securities totaled $103.9 million. During the three months ended March 31, 2021, there were no sales of AFS securities. During the three months ended March 31, 2020, purchases of AFS securities totaled $160.9 million and the proceeds from the sale of AFS securities totaled $3.5 million. During the three months ended March 31, 2021, there were no gross gains or losses on AFS securities. During the three months ended March 31,2020, there were no gross gains on AFS securities and gross losses totaled $1 thousand. These gains and losses are included in gain/(loss) on securities, net on the consolidated statements of operations.

16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Securities available for sale and held to maturity 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
March 31, 2021
Securities available for sale
Agency collateralized mortgage obligations	$	3,583	$	150,110	$	—	$	—	$	3,583	$	150,110
Agency mortgage-backed securities	8,654		346,395		5		384		8,659		346,779
Agency commercial mortgage-backed securities	3,101		132,234		—		—		3,101		132,234
Corporate bonds	—		—		9		4,876		9		4,876
Other bonds and obligations	—		—		8		981		8		981
Total securities available for sale	$	15,338	$	628,739	$	22	$	6,241	$	15,360	$	634,980
Securities held to maturity
Municipal bonds and obligations	$	592	$	23,359	$	—	$	—	$	592	$	23,359
Agency collateralized mortgage obligations	1,054		83,449		—		—		1,054		83,449
Agency mortgage-backed securities	1,682		59,167		—		—		1,682		59,167
Agency commercial mortgage-backed securities	2,288		103,015		—		—		2,288		103,015
Total securities held to maturity	5,616		268,990		—		—		5,616		268,990
Total	$	20,954	$	897,729	$	22	$	6,241	$	20,976	$	903,970
December 31, 2020
Securities available for sale
Agency collateralized mortgage obligations	$	235	$	77,898	$	—	$	—	$	235	$	77,898
Agency mortgage-backed securities	131		39,939		2		256		133		40,195
Agency commercial mortgage-backed securities	175		51,435		—		—		175		51,435
Corporate bonds	10		4,875		—		—		10		4,875
Other bonds and obligations	—		—		8		1,030		8		1,030
Total securities available for sale	$	551	$	174,147	$	10	$	1,286	$	561	$	175,433
Securities held to maturity
Agency collateralized mortgage obligations	$	171	$	25,048	$	—	$	—	$	171	$	25,048
Agency mortgage-backed securities	29		20,710		—		—		29		20,710
Agency commercial mortgage-backed securities	12		10,216		—		—		12		10,216
Total securities held to maturity	212		55,974		—		—		212		55,974
Total	$	763	$	230,121	$	10	$	1,286	$	773	$	231,407

17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 March 31, 2021, 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 March 31, 2021:

AFS collateralized mortgage obligations

At March 31, 2021, 25 of the 256 securities in the Company’s portfolio of AFS collateralized mortgage obligations were in unrealized loss positions. Aggregate unrealized losses represented 2.2% of the amortized cost of securities in unrealized loss positions. 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 collateralized mortgage obligations. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

AFS commercial and residential mortgage-backed securities

At March 31, 2021, 33 of the 125 securities in the Company’s portfolio of AFS mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 2.4% of the amortized cost of securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of all of the Company’s mortgage-backed securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

AFS corporate bonds

At March 31, 2021, 1 of the 14 securities in the Company’s portfolio of AFS corporate bonds was in an unrealized loss position. Aggregate unrealized losses represents 0.2% of the amortized cost of the bond in an unrealized loss position. The Company reviews the financial strength of all of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities.

AFS other bonds and obligations

At March 31, 2021, 3 of the 6 securities in the Company’s portfolio of other bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 0.9% of the amortized cost of securities in unrealized loss positions. The securities are all investment grade rated, and there were no material underlying credit downgrades during the quarter. All securities are performing.

HTM municipal bonds and obligations

At March 31, 2021, 15 of the 207 securities in the Company’s portfolio of HTM municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 2.5% 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 quarter. All securities are performing.

HTM collateralized mortgage obligations

At March 31, 2021, 5 of the 13 securities in the Company’s portfolio of HTM collateralized mortgage obligations were in unrealized loss positions. Aggregate unrealized losses represented 1.3% of the amortized cost of the securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of all of the Company's collateralized residential mortgage obligations. The securities are investment grade rated, and there were no material underlying credit downgrades during the quarter. All securities are performing.

18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

HTM commercial and residential mortgage-backed securities

At March 31, 2021, 12 out of 14 securities in the Company’s portfolio of HTM mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 2.3% of the amortized cost of securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of the Company’s mortgage-backed securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

NOTE 5. LOANS AND ALLOWANCE FOR CREDIT LOSSES

The following is a summary of total loans by regulatory call report code with sub-segmentation based on underlying collateral for certain loan types:

(In thousands)	March 31, 2021		December 31, 2020
Construction	$	454,388	$	454,513
Commercial multifamily	483,646		483,350
Commercial real estate owner occupied	556,286		552,413
Commercial real estate non-owner occupied	2,129,572		2,119,263
Commercial and industrial	1,719,304		1,943,164
Residential real estate	1,774,504		1,931,681
Home equity	279,017		293,981
Consumer other	262,061		303,154
Total loans	$	7,658,778	$	8,081,519
Allowance for credit losses	123,800		127,302
Net loans	$	7,534,978	$	7,954,217

As of March 31, 2021, outstanding loans originated under the Small Business Administration ("SBA") Paycheck Protection Program ("PPP") totaled $444.2 million. These loans are 100% guaranteed by the SBA and the full principal amount of the loan may qualify for forgiveness. These loans are included in commercial and industrial.

During the three months ended March 31, 2021, the Company reclassified $9.5 million of commercial loans, reflecting its intent to sell these loans. These loans are not contained in the balances within this note and are accounted for at the lower of carrying value or fair market value.

Risk characteristics relevant to each portfolio segment are as follows:

Construction - Loans in this segment primarily include real estate development loans for which payment is derived from sale of the property or long term financing at completion. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions

Commercial real estate multifamily, owner occupied and non-owner - Loans in these segments are primarily owner-occupied or income-producing properties throughout New England and Northeastern New York. The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy, which in turn, will have an effect on the credit quality in this segment. Management monitors the cash flows of these loans.

Commercial and industrial loans - Loans in this segment are made to businesses and are generally secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets. Repayment is expected from the cash flows of the business. Loans in this segment include asset based loans which generally have no scheduled repayment and which are closely monitored against formula based collateral advance ratios. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment.

19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Residential real estate - All loans in this segment are collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Home equity and other consumer loans - Loans in this segment are primarily home equity lines of credit, automobile loans and other consumer loans. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Allowance for Credit Losses for Loans

The Allowance for Credit Losses for Loans (“ACLL”) is comprised of the allowance for loan losses and the allowance for unfunded commitments which is accounted for as a separate liability in other liabilities on the balance sheet. The level of the ACLL represents management’s estimate of expected credit losses over the expected life of the loans at the balance sheet date. The Company uses a static pool migration analysis method, applying expected historical loss trend and observed economic metrics. The level of the ACLL is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past and current events, utilizing a 7 quarter reasonable and supportable forecast period with a 1 year reversion period. The ACLL reserve is overlaid with qualitative factors based upon:

•the existence and growth of concentrations of credit;

•the volume and severity of past due financial assets, including nonaccrual assets;

•the institutions lending and credit review as well as the experience and ability of relevant management and staff and;

•the effect of other external factors such as regulatory, competition, regional market conditions, legal and technological environment and other events such as natural disasters;

•the effect of other economic factors such as economic stimulus and customer forbearance programs.

The allowance for unfunded commitments is maintained at a level by the Company to be sufficient to absorb expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit).

The Company’s activity in the allowance for credit losses for loans for the three months ended March 31, 2021 and March 31, 2020 was as follows:

(In thousands)	Balance at Beginning of Period		Impact of Adopting ASC 326		Sub-total		Charge-offs		Recoveries		Provision for Credit Losses		Balance at End of Period
Three months ended March 31, 2021
Construction	$	5,111	$	—	$	5,111	$	—	$	—	$	(714)	$	4,397
Commercial multifamily	5,916		—		5,916		(124)		62		497		6,351
Commercial real estate owner occupied	12,380		—		12,380		(376)		12		2,241		14,257
Commercial real estate non-owner occupied	35,850		—		35,850		(6,658)		126		5,243		34,561
Commercial and industrial	25,013		—		25,013		(3,320)		644		3,734		26,071
Residential real estate	28,491		—		28,491		(377)		437		(2,751)		25,800
Home equity	6,482		—		6,482		(77)		24		(680)		5,749
Consumer other	8,059		—		8,059		(528)		160		(1,077)		6,614
Total allowance for credit losses	$	127,302	$	—	$	127,302	$	(11,460)	$	1,465	$	6,493	$	123,800

20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands)	Balance at Beginning of Period		Impact of Adopting ASC 326		Sub-total		Charge-offs		Recoveries		Provision for Credit Losses		Balance at End of Period
Three months ended March 31, 2020
Construction	$	2,713	$	(342)	$	2,371	$	—	$	—	$	2,202	$	4,573
Commercial multifamily	4,413		(1,842)		2,571		—		—		1,882		4,453
Commercial real estate owner occupied	4,880		6,062		10,942		(6,376)		258		6,783		11,607
Commercial real estate non-owner occupied	16,344		11,201		27,545		(135)		47		1,406		28,863
Commercial and industrial	20,099		(2,189)		17,910		(4,916)		1,402		10,106		24,502
Residential real estate	9,970		6,799		16,769		(171)		70		9,389		26,057
Home equity	1,470		4,884		6,354		(77)		2		1,501		7,780
Consumer other	3,686		861		4,547		(758)		180		1,706		5,675
Total allowance for credit losses	$	63,575	$	25,434	$	89,009	$	(12,433)	$	1,959	$	34,975	$	113,510

21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s allowance for credit losses on unfunded commitments is recognized as a liability (other liability on consolidated balance sheet), with adjustments to the reserve recognized in other noninterest expense in the consolidated statement of operations. The Company’s activity in the allowance for credit losses on unfunded commitments for the three months ended March 31, 2021 and March 31, 2020 was as follows:

	Three Months Ended March 31,
(In thousands)	2021		2020
Balance at beginning of period	$	7,629	$	100
Impact of adopting ASC 326	—		7,993
Sub-Total	7,629		8,093
Expense for credit losses	200		330
Balance at end of period	$	7,829	$	8,423

Credit Quality Information

The Company monitors the credit quality of its portfolio by using internal risk ratings that are based on regulatory guidance. Loans that are given a Pass rating are not considered a problem credit. Loans that are classified as Special Mention loans are considered to have potential weaknesses and are evaluated closely by management. Substandard, including non-accruing loans, are loans for which a definitive weakness has been identified and which may make full collection of contractual cash flows questionable. Doubtful loans are those with identified weaknesses that make full collection of contractual cash flows, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

For commercial credits, the Company assigns an internal risk rating at origination and reviews the rating annual, semiannually, or quarterly depending on the risk rating. The rating is also reassessed at any point in time when management becomes aware of information that may affect the borrower’s ability to fulfill their obligations.

The Company risk rates its residential mortgages, including 1-4 family and residential construction loans, based on a three rating system: Pass, Special Mention, and Substandard. Loans that are current within 59 days are rated Pass. Residential mortgages that are 60-89 days delinquent are rated Special Mention. Loans delinquent for 90 days or greater are rated Substandard and generally placed on non-accrual status. 

22

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the Company’s loans by risk category:

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2021
Construction
Risk rating
Pass	$	25,422	$	43,662	$	275,525	$	65,371	$	27,177	$	2,501	$	1,000	$	—	$	440,658
Special Mention	—		—		—		313		—		—		—		—		313
Substandard	—		—		—		9,429		3,988		—		—		—		13,417
Total	$	25,422	$	43,662	$	275,525	$	75,113	$	31,165	$	2,501	$	1,000	$	—	$	454,388
Commercial multifamily:
Risk rating
Pass	$	17,100	$	31,295	$	55,210	$	74,123	$	78,148	$	219,175	$	61	$	—	$	475,112
Special Mention	—		—		2,187		—		—		—		—		—		2,187
Substandard	—		—		—		—		—		6,204		143		—		6,347
Total	$	17,100	$	31,295	$	57,397	$	74,123	$	78,148	$	225,379	$	204	$	—	$	483,646
Commercial real estate owner occupied:
Risk rating
Pass	$	13,652	$	53,164	$	81,473	$	99,224	$	63,148	$	218,342	$	1,506	$	—	$	530,509
Special Mention	—		535		3,389		1,136		1,966		2,432		—		—		9,458
Substandard	—		—		1,266		3,333		1,627		10,093		—		—		16,319
Total	$	13,652	$	53,699	$	86,128	$	103,693	$	66,741	$	230,867	$	1,506	$	—	$	556,286
Commercial real estate non-owner occupied:
Risk rating
Pass	$	77,638	$	174,898	$	292,528	$	469,718	$	218,525	$	725,223	$	17,394	$	—	$	1,975,924
Special Mention	—		231		270		2,971		6,904		58,403		1,059		—		69,838
Substandard	—		7,804		3,529		3,730		20,135		48,418		194		—		83,810
Total	$	77,638	$	182,933	$	296,327	$	476,419	$	245,564	$	832,044	$	18,647	$	—	$	2,129,572
Commercial and industrial:
Risk rating
Pass	$	25,240	$	563,757	$	131,781	$	203,153	$	110,240	$	182,949	$	372,075	$	—	$	1,589,195
Special Mention	—		1,952		9,887		7,477		3,881		4,011		10,806		—		38,014
Substandard	146		8,807		37,772		22,909		6,826		7,857		7,456		—		91,773
Doubtful	—		—		—		—		—		—		322		—		322
Total	$	25,386	$	574,516	$	179,440	$	233,539	$	120,947	$	194,817	$	390,659	$	—	$	1,719,304
Residential real estate
Risk rating
Pass	$	55,071	$	148,622	$	127,817	$	218,785	$	273,160	$	931,322	$	3,261	$	—	$	1,758,038
Special Mention	—		—		—		—		284		814		—		—		1,098
Substandard	—		700		31		1,836		2,434		10,367		—		—		15,368
Total	$	55,071	$	149,322	$	127,848	$	220,621	$	275,878	$	942,503	$	3,261	$	—	$	1,774,504

23

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2020
Construction
Risk rating
Pass	$	38,374	$	255,377	$	114,690	$	28,474	$	9,519	$	2,766	$	1,000	$	—	$	450,200
Special Mention	—		—		313		—		—		—		—		—		313
Substandard	—		—		—		4,000		—		—		—		—		4,000
Total	$	38,374	$	255,377	$	115,003	$	32,474	$	9,519	$	2,766	$	1,000	$	—	$	454,513
Commercial multifamily:
Risk rating
Pass	$	31,438	$	57,659	$	74,932	$	77,746	$	81,066	$	153,818	$	20	$	—	$	476,679
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		47		6,479		145		—		6,671
Total	$	31,438	$	57,659	$	74,932	$	77,746	$	81,113	$	160,297	$	165	$	—	$	483,350
Commercial real estate owner occupied:
Risk rating
Pass	$	58,327	$	84,839	$	104,797	$	64,693	$	44,300	$	169,197	$	1,194	$	—	$	527,347
Special Mention	535		2,569		1,136		1,009		800		2,579		—		—		8,628
Substandard	—		1,266		3,597		1,685		1,439		8,451		—		—		16,438
Total	$	58,862	$	88,674	$	109,530	$	67,387	$	46,539	$	180,227	$	1,194	$	—	$	552,413
Commercial real estate non-owner occupied:
Risk rating
Pass	$	180,520	$	292,386	$	435,440	$	223,935	$	303,221	$	497,066	$	15,393	$	—	$	1,947,961
Special Mention	—		279		2,068		6,958		11,798		44,961		1,068		—		67,132
Substandard	7,804		3,529		4,235		19,632		2,124		66,651		195		—		104,170
Total	$	188,324	$	296,194	$	441,743	$	250,525	$	317,143	$	608,678	$	16,656	$	—	$	2,119,263
Commercial and industrial:
Risk rating
Pass	$	754,260	$	159,046	$	205,651	$	130,985	$	48,326	$	148,222	$	368,769	$	—	$	1,815,259
Special Mention	1,467		5,753		5,267		2,851		1,601		65		12,408		—		29,412
Substandard	7,392		39,822		24,951		7,765		3,504		5,630		9,099		—		98,163
Doubtful	—		—		—		—		—		—		330		—		330
Total	$	763,119	$	204,621	$	235,869	$	141,601	$	53,431	$	153,917	$	390,606	$	—	$	1,943,164
Residential real estate
Risk rating
Pass	$	150,583	$	146,142	$	272,399	$	320,384	$	333,159	$	691,078	$	3,281	$	—	$	1,917,026
Special Mention	384		—		454		1,430		—		362		—		—		2,630
Substandard	991		39		703		902		417		8,964		9		—		12,025
Total	$	151,958	$	146,181	$	273,556	$	322,716	$	333,576	$	700,404	$	3,290	$	—	$	1,931,681

24

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For home equity and consumer other loan portfolio segments, Berkshire evaluates credit quality based on the aging status of the loan and by payment activity. The performing or nonperforming status is updated on an ongoing basis dependent upon improvement and deterioration in credit quality. The following table presents the amortized cost based on payment activity:

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2021
Home equity:
Payment performance
Performing	$	703	$	2,623	$	1,469	$	309	$	1,829	$	2,234	$	267,103	$	—	$	276,270
Nonperforming	—		—		—		—		—		—		2,747		—		2,747
Total	$	703	$	2,623	$	1,469	$	309	$	1,829	$	2,234	$	269,850	$	—	$	279,017
Consumer other:
Payment performance
Performing	$	4,870	$	14,084	$	30,924	$	87,205	$	57,753	$	54,399	$	7,965	$	—	$	257,200
Nonperforming	—		69		381		1,325		1,457		1,619		10		—		4,861
Total	$	4,870	$	14,153	$	31,305	$	88,530	$	59,210	$	56,018	$	7,975	$	—	$	262,061

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2020
Home equity:
Payment performance
Performing	$	2,445	$	1,960	$	316	$	1,859	$	499	$	1,882	$	282,123	$	—	$	291,084
Nonperforming	—		—		1		—		—		—		2,896		—		2,897
Total	$	2,445	$	1,960	$	317	$	1,859	$	499	$	1,882	$	285,019	$	—	$	293,981
Consumer other:
Payment performance
Performing	$	15,193	$	35,317	$	101,730	$	69,366	$	35,421	$	31,327	$	9,339	$	—	$	297,693
Nonperforming	39		316		1,511		1,599		1,585		407		4		—		5,461
Total	$	15,232	$	35,633	$	103,241	$	70,965	$	37,006	$	31,734	$	9,343	$	—	$	303,154

25

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of loans by past due status at March 31, 2021 and December 31, 2020:

(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans
March 31, 2021
Construction	$	3,988	$	—	$	—	$	3,988	$	450,400	$	454,388
Commercial multifamily	—		—		4,068		4,068		479,578		483,646
Commercial real estate owner occupied	6,174		487		4,610		11,271		545,015		556,286
Commercial real estate non-owner occupied	703		—		21,790		22,493		2,107,079		2,129,572
Commercial and industrial	9,479		1,540		9,486		20,505		1,698,799		1,719,304
Residential real estate	2,990		1,098		14,476		18,564		1,755,940		1,774,504
Home equity	647		159		2,747		3,553		275,464		279,017
Consumer other	1,052		248		4,764		6,064		255,997		262,061
Total	$	25,033	$	3,532	$	61,941	$	90,506	$	7,568,272	$	7,658,778

(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans
December 31, 2020
Construction	$	—	$	—	$	—	$	—	$	454,513	$	454,513
Commercial multifamily	—		—		757		757		482,593		483,350
Commercial real estate owner occupied	809		631		4,894		6,334		546,079		552,413
Commercial real estate non-owner occupied	315		168		38,389		38,872		2,080,391		2,119,263
Commercial and industrial	3,016		3,259		12,982		19,257		1,923,907		1,943,164
Residential real estate	2,068		2,630		11,115		15,813		1,915,868		1,931,681
Home equity	244		284		2,897		3,425		290,556		293,981
Consumer other	2,109		777		5,364		8,250		294,904		303,154
Total	$	8,561	$	7,749	$	76,398	$	92,708	$	7,988,811	$	8,081,519

26

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of loans on nonaccrual status and loans past due 90 days or more and still accruing as of March 31, 2021 and December 31, 2020:

(In thousands)	Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or Greater and Accruing		Interest Income Recognized on Nonaccrual
At or for the three months ended March 31, 2021
Construction	$	—	$	—	$	—	$	—
Commercial multifamily	4,068		4,068		—		—
Commercial real estate owner occupied	4,232		1,832		378		—
Commercial real estate non-owner occupied	18,856		11,691		2,934		—
Commercial and industrial	9,364		3,005		122		—
Residential real estate	11,941		7,419		2,535		—
Home equity	2,599		211		148		—
Consumer other	4,757		8		7		—
Total	$	55,817	$	28,234	$	6,124	$	—

The commercial and industrial loans nonaccrual amortized cost as of March 31, 2021 included medallion loans with a fair value of $1.4 million and a contractual balance of $45.0 million.

(In thousands)	Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or Greater and Accruing		Interest Income Recognized on Nonaccrual
At or for the three months ended December 31, 2020
Construction	$	—	$	—	$	—	$	—
Commercial multifamily	757		591		—		—
Commercial real estate owner occupied	4,509		2,290		385		—
Commercial real estate non-owner occupied	29,572		13,912		8,817		—
Commercial and industrial	12,441		4,725		541		—
Residential real estate	9,711		5,739		1,404		—
Home equity	2,654		159		243		—
Consumer other	5,304		2		60		—
Total	$	64,948	$	27,418	$	11,450	$	—

The commercial and industrial loans nonaccrual amortized cost as of December 31, 2020 included medallion loans with a fair value of $2.3 million and a contractual balance of $53.9 million.

The following table summarizes information about total loans rated Special Mention or lower at March 31, 2021 and December 31, 2020. The table below includes consumer loans that are Special Mention and Substandard accruing that are classified as performing based on payment activity.

(In thousands)	March 31, 2021		December 31, 2020
Non-Accrual	$	55,817	$	64,948
Substandard Accruing	179,150		185,207
Total Classified	234,967		250,155
Special Mention	121,437		109,299
Total Criticized	$	356,404	$	359,454

27

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A financial asset is considered collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. Expected credit losses for collateral-dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value. The following table presents the amortized cost basis of individually analyzed collateral-dependent loans by loan portfolio segment:

	Type of Collateral
(In thousands)	Real Estate		Investment Securities/Cash		Other
March 31, 2021
Construction	$	—	$	—	$	—
Commercial multifamily	4,070		—		—
Commercial real estate owner occupied	5,351		—		—
Commercial real estate non-owner occupied	20,805		—		—
Commercial and industrial	1,361		18		977
Residential real estate	7,048		—		—
Home equity	198		—		—
Consumer other	34		—		—
Total loans	$	38,867	$	18	$	977
December 31, 2020
Construction	$	—	$	—	$	—
Commercial multifamily	591		—		—
Commercial real estate owner occupied	5,714		—		—
Commercial real estate non-owner occupied	30,950		—		—
Commercial and industrial	973		36		3,758
Residential real estate	5,081		—		—
Home equity	145		—		—
Consumer other	51		—		—
Total loans	$	43,505	$	36	$	3,758

28

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Troubled Debt Restructuring Loans

The Company’s loan portfolio also includes certain loans that have been modified in a Troubled Debt Restructuring ("TDR"), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. TDRs are evaluated individually for impairment and may result in a specific allowance amount allocated to an individual loan.

The following table presents activity in TDRs for the three months ended March 31, 2021 and March 31, 2020:

(In thousands)	Balance at Beginning of Period		Principal Payments		TDR Status Change		Other Additions/(Reductions)		Newly Identified TDRs		Balance at End of Period
Three months ended March 31, 2021
Construction	$	—	$	—	$	—	$	—	$	—	$	—
Commercial multifamily	754		(13)		—		—		—		741
Commercial real estate owner occupied	1,731		(6)		—		—		—		1,725
Commercial real estate non-owner occupied	13,684		(14)		—		511		544		14,725
Commercial and industrial	2,686		(199)		—		—		146		2,633
Residential real estate	1,524		(31)		—		—		—		1,493
Home equity	133		(3)		—		—		—		130
Consumer other	36		(2)		—		—		—		34
Total	$	20,548	$	(268)	$	—	$	511	$	690	$	21,481

(In thousands)	Balance at Beginning of Period		Principal Payments		TDR Status Change		Other Additions/(Reductions)		Newly Identified TDRs		Balance at End of Period
Three months ended March 31, 2020
Construction	$	—	$	—	$	—	$	—	$	—	$	—
Commercial multifamily	793		(14)		—		—		—		779
Commercial real estate owner occupied	13,331		(5,693)		—		—		—		7,638
Commercial real estate non-owner occupied	1,373		—		—		—		—		1,373
Commercial and industrial	1,449		(37)		—		—		902		2,314
Residential real estate	2,045		(22)		—		—		—		2,023
Home equity	277		1		—		—		—		278
Consumer other	48		(4)		—		—		—		44
Total	$	19,316	$	(5,769)	$	—	$	—	$	902	$	14,449

29

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents loans modified as TDRs that occurred during the three months ended March 31, 2021 and March 31, 2020:

(dollars in thousands)	Total
Three months ended March 31, 2021
TDR:
Number of loans	4
Pre-modification outstanding recorded investment	$	690
Post-modification outstanding recorded investment	$	690
Three months ended March 31, 2020
TDR:
Number of loans	3
Pre-modification outstanding recorded investment	$	902
Post-modification outstanding recorded investment	$	902

There were no TDRs for which there was a payment default within twelve months following the modification during the three months ended March 31, 2021 and March 31, 2020.

Beginning in March 2020, the Company has offered three-month payment deferrals for customers with a current payment status who were negatively impacted by economic disruption caused by the COVID-19 pandemic. Refer to Note 10 - Other Commitments, Contingencies, and Off-Balance Sheet Activities for more information regarding these modifications.

30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6.               DEPOSITS

A summary of time deposits is as follows:

(In thousands)	March 31, 2021		December 31, 2020
Time less than $100,000	$	630,244	$	663,324
Time $100,000 through $250,000	999,329		1,219,210
Time more than $250,000	473,649		502,551
Total time deposits	$	2,103,222	$	2,385,085

Included in total deposits are brokered deposits of $431.5 million and $610.6 million at March 31, 2021 and December 31, 2020, respectively. Included in total deposits are reciprocal deposits of $100.7 million and $119.0 million at March 31, 2021 and December 31, 2020, respectively.

NOTE 7.               BORROWED FUNDS

Borrowed funds at March 31, 2021 and December 31, 2020 are summarized, as follows:

	March 31, 2021				December 31, 2020
			Weighted				Weighted
			Average				Average
(Dollars in thousands)	Principal		Rate		Principal		Rate
Short-term borrowings:
Advances from the FHLB	$	—	—	%	$	40,000	1.05	%
Total short-term borrowings:	—		—		40,000		1.05
Long-term borrowings:
Advances from the FHLB and other borrowings	351,354		1.88		434,357		1.89
Subordinated borrowings	74,455		7.00		74,411		7.00
Junior subordinated borrowing - Trust I	15,464		2.03		15,464		2.06
Junior subordinated borrowing - Trust II	7,419		1.88		7,405		1.92
Total long-term borrowings:	448,692		2.73		531,637		2.61
Total	$	448,692	2.73	%	$	571,637	2.50	%

Short-term debt includes Federal Home Loan Bank (“FHLB”) advances with an original maturity of less than one year and a short-term line-of-credit drawdown through a correspondent bank. The Bank also maintains a $3.0 million secured line of credit with the FHLB that bears a daily adjustable rate calculated by the FHLB. There was no outstanding balance on the FHLB line of credit for the periods ended March 31, 2021 and December 31, 2020. The Bank's available borrowing capacity with the FHLB was $1.4 billion and $1.6 billion for the periods ended March 31, 2021 and December 31, 2020, respectively.

The Bank is approved to borrow on a short-term basis from the Federal Reserve Bank of Boston as a non-member bank. The Bank has pledged certain loans and securities to the Federal Reserve Bank to support this arrangement. No borrowings with the Federal Reserve Bank under this arrangement took place for the periods ended March 31, 2021 and December 31, 2020. As a participant in the SBA Paycheck Protection Program ("PPP"), the Bank may pledge originated loans as collateral at face value to the Federal Reserve Bank of Boston for term financings. As of March 31, 2021, the Bank had no pledged PPP loans. The Bank's available borrowing capacity with the Federal Reserve Bank was $596.8 million and $815.6 million for the periods ended March 31, 2021 and December 31, 2020, respectively.

31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-term FHLB advances consist of advances with an original maturity of more than one year and are subject to prepayment penalties. The advances outstanding at March 31, 2021 included callable advances totaling $10.0 million and amortizing advances totaling $4.8 million. The advances outstanding at December 31, 2020 included callable advances totaling $10.0 million and amortizing advances totaling $5.2 million. All FHLB borrowings, including the line of credit, are secured by a blanket security agreement on certain qualified collateral, principally all residential first mortgage loans and certain securities.

A summary of maturities of FHLB advances as of March 31, 2021 is as follows:

	March 31, 2021
			Weighted Average
(In thousands, except rates)	Principal		Rate
Fixed rate advances maturing:
2021	$	272,985	1.86	%
2022	58,270		1.92
2023	10,659		2.16
2024	50		—
2025 and beyond	9,390		1.63
Total FHLB advances	$	351,354	1.88	%

The Company did not have variable-rate FHLB advances for the periods ended March 31, 2021 and December 31, 2020.

In September 2012, the Company issued fifteen year subordinated notes in the amount of $75.0 million at a discount of 1.15%. The interest rate is fixed at 6.875% for the first ten years. After ten years, the notes become callable and convert to an interest rate of three-month LIBOR rate plus 5.113%. The subordinated note includes reduction to the note principal balance of $184 thousand and $215 thousand for unamortized debt issuance costs as of March 31, 2021 and December 31, 2020, respectively.

The Company holds 100% of the common stock of Berkshire Hills Capital Trust I (“Trust I”) which is included in other assets with a cost of $0.5 million. The sole asset of Trust I is $15.5 million of the Company’s junior subordinated debentures due in 2035. These debentures bear interest at a variable rate equal to LIBOR plus 1.85% and had a rate of 2.03% and 2.06% at March 31, 2021 and December 31, 2020, respectively. The Company has the right to defer payments of interest for up to five years on the debentures at any time, or from time to time, with certain limitations, including a restriction on the payment of dividends to shareholders while such interest payments on the debentures have been deferred. The Company has not exercised this right to defer payments. The Company has the right to redeem the debentures at par value. Trust I is considered a variable interest entity for which the Company is not the primary beneficiary. Accordingly, Trust I is not consolidated into the Company’s financial statements.

The Company holds 100% of the common stock of SI Capital Trust II (“Trust II”) which is included in other assets with a cost of $0.2 million. The sole asset of Trust II is $8.2 million of the Company’s junior subordinated debentures due in 2036. These debentures bear interest at a variable rate equal to LIBOR plus 1.70% and had a rate of 1.88% and 1.92% at March 31, 2021 and December 31, 2020, respectively. The Company has the right to defer payments of interest for up to five years on the debentures at any time, or from time to time, with certain limitations, including a restriction on the payment of dividends to shareholders while such interest payments on the debentures have been deferred. The Company has not exercised this right to defer payments. The Company has the right to redeem the debentures at par value. Trust II is considered a variable interest entity for which the Company is not the primary beneficiary. Accordingly, Trust II is not consolidated into the Company’s financial statements.

32

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

As of March 31, 2021, the Company held derivatives with a total notional amount of $3.8 billion. The Company had economic hedges totaling $3.8 billion and $10.3 million non-hedging derivatives, which are not designated as hedges for accounting purposes with changes in fair value recorded directly through earnings. Economic hedges included interest rate swaps totaling $3.4 billion, risk participation agreements with dealer banks of $0.3 billion, and $8.7 million in forward commitment contracts.

As part of the Company’s risk management strategy, the Company enters into interest rate swap agreements to mitigate the interest rate risk inherent in certain of the Company’s assets and liabilities. Interest rate swap agreements involve the risk of dealing with both Bank customers and institutional derivative counterparties and their ability to meet contractual terms. The agreements are entered into with counterparties that meet established credit standards and contain master netting and collateral provisions protecting the at-risk party. The derivatives program is overseen by the Risk Management and Capital Committee of the Company’s Board of Directors. Based on adherence to the Company’s credit standards and the presence of the netting and collateral provisions, the Company believes that the credit risk inherent in these contracts was not significant at March 31, 2021.

The Company pledged collateral to derivative counterparties in the form of cash totaling $70.3 million and securities with an amortized cost of $36.9 million and a fair value of $37.1 million as of March 31, 2021. The Company does not typically require its commercial customers to post cash or securities as collateral on its program of back-to-back economic hedges. However certain language is written into the International Swaps Dealers Association, Inc. (“ISDA”) and loan documents where, in default situations, the Bank is allowed to access collateral supporting the loan relationship to recover any losses suffered on the derivative asset or liability. The Company may need to post additional collateral in the future in proportion to potential increases in unrealized loss positions.

Information about derivative assets and liabilities at March 31, 2021, follows:

			Weighted	Weighted Average Rate				Estimated
	Notional		Average			Contract		Fair Value
	Amount		Maturity	Received		pay rate		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	$	8,463	8.7	0.48	%	5.09	%	$	(1,432)
Interest rate swaps on loans with commercial loan customers	1,720,659		6.0	4.15	%	1.92	%	101,216
Offsetting interest rate swaps on loans with commercial loan customers (1)	1,720,659		6.0	1.92	%	4.15	%	(40,670)
Risk participation agreements with dealer banks	341,662		8.8					336
Forward sale commitments	8,661		0.2					326
Total economic hedges	3,800,104							59,776
Non-hedging derivatives:
Commitments to lend	10,316		0.2					185
Total non-hedging derivatives	10,316							185
Total	$	3,810,420						$	59,961

(1) Fair value estimates include the impact of $61.3 million settled to market contract agreements.

33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Information about derivative assets and liabilities at December 31, 2020, follows:

			Weighted	Weighted Average Rate				Estimated
	Notional		Average			Contract		Fair Value
	Amount		Maturity	Received		pay rate		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	$	8,654	8.9	0.52	%	5.09	%	$	(1,778)
Interest rate swaps on loans with commercial loan customers	1,734,978		6.1	4.15	%	1.95	%	159,016
Offsetting interest rate swaps on loans with commercial loan customers (1)	1,734,978		6.1	1.95	%	4.15	%	(64,645)
Risk participation agreements with dealer banks	326,862		8.0					665
Forward sale commitments	11,544		0.2					320
Total economic hedges	3,817,016							93,578
Non-hedging derivatives:
Commitments to lend	40,099		0.2					735
Total non-hedging derivatives	40,099							735
Total	$	3,857,115						$	94,313

(1) Fair value estimates include the impact of $97.6 million settled to market contract agreements.

34

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Economic hedges

As of March 31, 2021, the Company has an interest rate swap with a $8.5 million notional amount to swap out the fixed rate of interest on an economic development bond bearing a fixed rate of 5.09%, currently within the Company’s trading portfolio under the fair value option, in exchange for a LIBOR-based floating rate. The intent of the economic hedge is to improve the Company’s asset sensitivity to changing interest rates in anticipation of favorable average floating rates of interest over the 21-year life of the bond. The fair value changes of the economic development bond are mostly offset by fair value changes of the related interest rate swap.

The Company also offers certain derivative products directly to qualified commercial borrowers. The Company economically hedges derivative transactions executed with commercial borrowers by entering into mirror-image, offsetting derivatives with third-party financial institutions. The transaction allows the Company’s customer to convert a variable-rate loan to a fixed rate loan. Because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts mostly offset each other in earnings. Credit valuation loss adjustments arising from the difference in credit worthiness of the commercial loan and financial institution counterparties totaled $2.5 million as of March 31, 2021. The interest income and expense on these mirror image swaps exactly offset each other.

The Company has risk participation agreements with dealer banks. Risk participation agreements occur when the Company participates on a loan and a swap where another bank is the lead. The Company gets paid a fee to take on the risk associated with having to make the lead bank whole on Berkshire’s portion of the pro-rated swap should the borrower default. Changes in fair value are recorded in current period earnings.

The Company utilizes forward sale commitments to hedge interest rate risk and the associated effects on the fair value of interest rate lock commitments and loans originated for sale. The forward sale commitments are accounted for as derivatives with changes in fair value recorded in current period earnings.

The Company uses the following types of forward sale commitments contracts:

•Best efforts loan sales,

•Mandatory delivery loan sales, and

•To Be Announced (“TBA”) mortgage-backed securities sales.

A best efforts contract refers to a loan sale agreement where the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. The Company may enter into a best efforts contract once the price is known, which is shortly after the potential borrower’s interest rate is locked.

A mandatory delivery contract is a loan sale agreement where the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. Generally, the Company may enter into mandatory delivery contracts shortly after the loan closes with a customer.

The Company may sell TBA mortgage-backed securities to hedge the changes in fair value of interest rate lock commitments and held for sale loans, which do not have corresponding best efforts or mandatory delivery contracts. These security sales transactions are closed once mandatory contracts are written. On the closing date the price of the security is locked-in, and the sale is paired-off with a purchase of the same security. Settlement of the security purchase/sale transaction is done with cash on a net-basis.

35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-hedging derivatives

The Company enters into interest rate lock commitments (“IRLCs”), or commitments to lend, for residential mortgage loans, which commit the Company to lend funds to a potential borrower at a specific interest rate and within a specified period of time. IRLCs that relate to the origination of mortgage loans that will be held for sale are considered derivative financial instruments under applicable accounting guidance. Outstanding IRLCs expose the Company to the risk that the price of the mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of the rate lock to the funding of the loan. The IRLCs are free-standing derivatives which are carried at fair value with changes recorded in non-interest income in the Company’s consolidated statements of operations. Changes in the fair value of IRLCs subsequent to inception are based on changes in the fair value of the underlying loan resulting from the fulfillment of the commitment and changes in the probability that the loan will fund within the terms of the commitment, which is affected primarily by changes in interest rates and the passage of time.

Amounts included in the Consolidated Statements of Income related to economic hedges and non-hedging derivatives were as follows:

	Three Months Ended March 31,
(In thousands)	2021		2020
Economic hedges
Interest rate swap on industrial revenue bond:
Unrealized gain/(loss) recognized in other non-interest income	$	346	$	(563)
Interest rate swaps on loans with commercial loan customers:
Unrealized (loss)/gain recognized in other non-interest income	(60,302)		102,382
Favorable/(unfavorable) change in credit valuation adjustment recognized in other non-interest income	2,502		(2,538)
Offsetting interest rate swaps on loans with commercial loan customers:
Unrealized gain/(loss) recognized in other non-interest income	60,302		(102,382)
Risk participation agreements:
Unrealized (loss)/gain recognized in other non-interest income	(329)		266
Forward commitments:
Unrealized gain/(loss) recognized in other non-interest income	6		(4,263)
Realized gain/(loss) in other non-interest income	(6)		(1,922)
Non-hedging derivatives
Commitments to lend
Unrealized (loss)/gain recognized in other non-interest income	$	(550)	$	2,208
Realized gain in other non-interest income	1,352		9,300

36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Assets and Liabilities Subject to Enforceable Master Netting Arrangements

Interest Rate Swap Agreements (“Swap Agreements”)

The Company enters into swap agreements to facilitate the risk management strategies for commercial banking customers. The Company mitigates this risk by entering into equal and offsetting swap agreements with highly rated third party financial institutions. The swap agreements are free-standing derivatives and are recorded at fair value in the Company’s consolidated statements of condition. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral generally in the form of marketable securities is received or posted by the counterparty with net liability positions, respectively, in accordance with contract thresholds.

The Company had net asset positions with its financial institution counterparties totaling $1.3 million and $1.0 million as of March 31, 2021 and December 31, 2020, respectively. The Company had net asset positions with its commercial banking counterparties totaling $103.8 million and $159.0 million as of March 31, 2021 and December 31, 2020, respectively. The Company had net liability positions with its financial institution counterparties totaling $43.0 million and $66.8 million as of March 31, 2021 and December 31, 2020, respectively. The Company had net liability positions with its commercial banking counterparties totaling $2.6 million as of March 31, 2021. The Company had no net liability positions with its commercial banking counterparties as of December 31, 2020. The Company has collateral pledged to cover this liability.

The following table presents the assets and liabilities subject to an enforceable master netting arrangement as of March 31, 2021 and December 31, 2020:

Offsetting of Financial Assets and Derivative Assets

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Assets Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(In thousands)	Assets		Condition		Condition		Instruments		Collateral Received		Net Amount
March 31, 2021
Interest Rate Swap Agreements:
Institutional counterparties	$	3,086	$	(1,832)	$	1,254	$	—	$	—	$	1,254
Commercial counterparties	103,799		—		103,799		—		—		103,799
Total	$	106,885	$	(1,832)	$	105,053	$	—	$	—	$	105,053

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Liabilities Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(In thousands)	Liabilities		Condition		Condition		Instruments		Collateral Pledged		Net Amount
March 31, 2021
Interest Rate Swap Agreements:
Institutional counterparties	$	(104,770)	$	61,750	$	(43,020)	$	37,116	$	70,333	$	64,429
Commercial counterparties	(2,582)		—		(2,582)		—		—		(2,582)
Total	$	(107,352)	$	61,750	$	(45,602)	$	37,116	$	70,333	$	61,847

37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Offsetting of Financial Assets and Derivative Assets

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Assets Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(In thousands)	Assets		Condition		Condition		Instruments		Collateral Received		Net Amount
December 31, 2020
Interest Rate Swap Agreements:
Institutional counterparties	$	1,124	$	(78)	$	1,046	$	—	$	—	$	1,046
Commercial counterparties	159,016		—		159,016		—		—		159,016
Total	$	160,140	$	(78)	$	160,062	$	—	$	—	$	160,062

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Liabilities Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(In thousands)	Liabilities		Condition		Condition		Instruments		Collateral Pledged		Net Amount
December 31, 2020
Interest Rate Swap Agreements:
Institutional counterparties	$	(164,543)	$	97,740	$	(66,803)	$	37,815	$	75,070	$	46,082
Commercial counterparties	—		—		—		—		—		—
Total	$	(164,543)	$	97,740	$	(66,803)	$	37,815	$	75,070	$	46,082

38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9. LEASES

Substantially all of the leases in which the Company is the lessee are comprised of real estate property for branches, ATM locations, and office space. Most of the Company’s leases are classified as operating leases. At March 31, 2021, lease expiration dates ranged from 1 month to 19 years.

The following table represents the Consolidated Balance Sheets classification of the Company’s right-of-use (“ROU”) assets and lease liabilities:

(In thousands)		March 31, 2021		December 31, 2020
Lease Right-of-Use Assets	Classification
Operating lease right-of-use assets	Other assets	$	56,704	$	60,018
Finance lease right-of-use assets	Premises and equipment, net	7,066		7,197
Total Lease Right-of-Use Assets		$	63,770	$	67,215
Lease Liabilities
Operating lease liabilities	Other liabilities	$	61,481	$	63,894
Finance lease liabilities	Other liabilities	10,252		10,383
Total Lease Liabilities		$	71,733	$	74,277

Supplemental information related to leases was as follows:

	March 31, 2021		December 31, 2020
Weighted-Average Remaining Lease Term (in years)
Operating leases	9.8		9.8
Finance leases	13.6		13.8
Weighted-Average Discount Rate
Operating leases	2.82	%	2.81	%
Finance leases	5.00	%	5.00	%

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For real estate leases, non-lease components and other non-components, such as common area maintenance charges, real estate taxes, and insurance are not included in the measurement of the lease liability since they are generally able to be segregated.

The Company does not have any material sub-lease agreements.

Lease expense for operating leases for the three months ended March 31, 2021 was $2.8 million. Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities.

Lease expense for operating leases for the three months ended March 31, 2020 was $3.5 million, of which $0.5 million was related to discontinued operations. Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities.

39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental cash flow information related to leases was as follows:

	Three Months Ended
(In thousands)	March 31, 2021		March 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	3,330	$	3,628
Operating cash flows from finance leases	127		134
Financing cash flows from finance leases	131		124

(1) There were operating cash flows from operating leases related to discontinued operations of $0.5 million at March 31, 2020.

The following table presents a maturity analysis of the Company’s lease liability by lease classification at March 31, 2021:

(In thousands)	Operating Leases		Finance Leases
2021	$	7,966	$	766
2022	9,774		1,031
2023	8,549		1,037
2024	7,414		1,037
2025	5,727		1,037
Thereafter	31,593		9,223
Total undiscounted lease payments	71,023		14,131
Less amounts representing interest	(9,542)		(3,879)
Lease liability	$	61,481	$	10,252

40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10. OTHER COMMITMENTS, CONTINGENCIES, OFF-BALANCE SHEET ACTIVITIES, AND PANDEMIC IMPACT

In December 2019, a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in China and has since spread to a number of other countries, including the United States. In March 2020, the World Health Organization declared COVID-19 a global pandemic and the United States declared a National Public Health Emergency. The impact of the COVID-19 pandemic is fluid and continues to evolve, which is adversely affecting some of the Company’s clients. The COVID-19 pandemic and its associated impacts on trade (including supply chains and export levels), travel, employee productivity, unemployment, consumer spending, and other economic activities has resulted in less economic activity, lower equity market valuations and significant volatility and disruption in financial markets and has had an adverse effect on the Company’s business, financial condition and results of operations. The ultimate extent of the impact of the COVID-19 pandemic on the Company’s business, financial condition and results of operations is currently uncertain and will depend on various developments and other factors, including, among others, the duration and scope of the pandemic, as well as governmental, regulatory and private sector responses to the pandemic, and the associated impacts on the economy, financial markets, and our clients, employees, and vendors.

The Company’s business, financial condition and results of operations generally rely upon the ability of the Company’s borrowers to repay their loans, the value of collateral underlying the Company’s secured loans, and demand for loans and other products and services the Company offers, which are highly dependent on the business environment in the Company’s primary markets where it operates and in the United States as a whole.

At this time, it is difficult to quantify the impact COVID-19 will have on the Company during the current year. These circumstances could cause the Company to experience a material adverse effect on our business operations, asset valuations, financial condition, results of operations and prospects. Material adverse impacts may include all or a combination of valuation impairments on the Company’s intangible assets, investments, loans, loan servicing rights, deferred tax assets, lease right-of-use assets, or counter-party risk derivatives.

Beginning in March 2020, the Company has offered three-month payment deferrals for customers with a current payment status who were negatively impacted by economic disruption caused by the COVID-19 pandemic. As of March 31, 2021, the Company had 337 active modified loans outstanding with a carrying value of $173 million, which excluded loans returning to payment or awaiting evaluation for further deferral. As of December 31, 2020, the Company had 746 active modified loans outstanding with a carrying value of $316 million, which excluded loans returning to payment or awaiting evaluation for further deferral.The Company continues to accrue interest on these loans during the deferral period. In accordance with interagency guidance issued in March 2020 and Section 4013 (Temporary Relief from Troubled Debt Restructurings) of the CARES Act, these short-term deferrals are not considered troubled debt restructurings (“TDRs”) unless the borrower was previously experiencing financial difficulty. In addition, the risk-ratings on COVID-19 modified loans did not automatically change as a result of payment deferrals, and these loans will not be considered past due until after the deferral period is over and scheduled payments resume.

41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11.           CAPITAL RATIOS AND SHAREHOLDERS’ EQUITY

The actual and required capital ratios were as follows:

	March 31, 2021		December 31, 2020		Minimum Capital Requirement
Company (consolidated)
Total capital to risk weighted assets	16.6	%	16.1	%	8.0	%
Common equity tier 1 capital to risk weighted assets	14.2		13.8		4.5
Tier 1 capital to risk weighted assets	14.4		14.1		6.0
Tier 1 capital to average assets	9.5		9.4		4.0

	March 31, 2021		December 31, 2020		Regulatory Minimum to be Adequately Capitalized		Regulatory Minimum to be Well Capitalized
Bank
Total capital to risk weighted assets	15.4	%	15.0	%	8.0	%	10.0	%
Common equity tier 1 capital to risk weighted assets	14.2		13.9		4.5		6.5
Tier 1 capital to risk weighted assets	14.2		13.9		6.0		8.0
Tier 1 capital to average assets	9.3		9.2		4.0		5.0

The Company and the Bank are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Failure to meet capital requirements can initiate regulatory action. At each date shown, the Company met the minimum capital requirements and the Bank met the conditions to be classified as “well capitalized” under the relevant regulatory framework. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table above.

Effective January 1, 2015, the Company and the Bank became subject to the Basel III rule that requires the Company and the Bank to assess their Common equity Tier 1 capital to risk weighted assets. The Bank's Common equity Tier 1 capital to risk weighted assets exceeds the minimum to be well capitalized. In addition, the final capital rules added a requirement to maintain a minimum conservation buffer, composed of Common equity Tier 1 capital, of 2.5% of risk-weighted assets, to be phased in over three years and applied to the Common equity Tier 1 risk-based capital ratio, the Tier 1 risk-based capital ratio, and the Total risk-based capital ratio. As of January 1, 2019, banking organizations must maintain a minimum Common equity Tier 1 risk-based capital ratio of 7.0%, a minimum Tier 1 risk-based capital ratio of 8.5%, and a minimum Total risk-based capital ratio of 10.5%. The final capital rules impose restrictions on capital distributions and certain discretionary cash bonus payments if the minimum capital conservation buffer is not met.

At March 31, 2021, the capital levels of both the Company and the Bank exceeded all regulatory capital requirements and the Bank's regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. The capital levels of both the Company and the Bank at March 31, 2021 also exceeded the minimum capital requirements including the currently applicable capital conservation buffer of 2.5%.

42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accumulated other comprehensive income

Components of accumulated other comprehensive income is as follows:

(In thousands)	March 31, 2021		December 31, 2020
Other accumulated comprehensive income, before tax:
Net unrealized holding gain on AFS securities	$	17,975	$	44,988
Net unrealized holding (loss) on pension plans	(3,511)		(3,511)
Income taxes related to items of accumulated other comprehensive income:
Net unrealized tax (expense) on AFS securities	(4,667)		(11,530)
Net unrealized tax benefit on pension plans	924		924
Accumulated other comprehensive income	$	10,721	$	30,871

The following table presents the components of other comprehensive income for the three months ended March 31, 2021 and 2020:

(In thousands)	Before Tax		Tax Effect		Net of Tax
Three Months Ended March 31, 2021
Net unrealized holding gain on AFS securities:	x
Net unrealized (losses) arising during the period	$	(27,013)	$	6,863	$	(20,150)
Less: reclassification adjustment for gains realized in net income	—		—		—
Net unrealized holding (loss) on AFS securities	(27,013)		6,863		(20,150)
Other comprehensive (loss)	$	(27,013)	$	6,863	$	(20,150)
Three Months Ended March 31, 2020
Net unrealized holding gain on AFS securities:
Net unrealized gains arising during the period	$	25,613	$	(6,590)	$	19,023
Less: reclassification adjustment for (losses) realized in net income	(1)		—		(1)
Net unrealized holding gain on AFS securities	25,614		(6,590)		19,024
Other comprehensive income	$	25,614	$	(6,590)	$	19,024

43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the changes in each component of accumulated other comprehensive income, for the three ended March 31, 2021 and 2020:

(In thousands)	Net unrealized holding loss on AFS Securities		Net unrealized holding loss on pension plans		Total
Three Months Ended March 31, 2021
Balance at Beginning of Period	$	33,458	$	(2,587)	$	30,871
Other comprehensive income before reclassifications	(20,150)		—		(20,150)
Less: amounts reclassified from accumulated other comprehensive income	—		—		—
Total other comprehensive (loss)	(20,150)		—		(20,150)
Balance at End of Period	$	13,308	$	(2,587)	$	10,721
Three Months Ended March 31, 2020
Balance at Beginning of Period	$	14,204	$	(2,211)	$	11,993
Other comprehensive income before reclassifications	19,023		—		19,023
Less: amounts reclassified from accumulated other comprehensive income	(1)		—		(1)
Total other comprehensive income	19,024		—		19,024
Balance at End of Period	$	33,228	$	(2,211)	$	31,017

44

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the amounts reclassified out of each component of accumulated other comprehensive income for the three ended March 31, 2021 and 2020:

					Affected Line Item in the
	Three Months Ended March 31,				Statement where Net Income
(In thousands)	2021		2020		is Presented
Realized gains on AFS securities:
	$	—	$	(1)	Non-interest income
	—		—		Tax expense
	—		(1)		Net of tax
Total reclassifications for the period	$	—	$	(1)	Net of tax

45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12. EARNINGS/(LOSS) PER SHARE

Earnings/(loss) per share have been computed based on the following (average diluted shares outstanding are calculated using the treasury stock method):

	Three Months Ended March 31,
(In thousands, except per share data)	2021		2020
Income/(loss) from continuing operations	$	13,031	$	(12,072)
(Loss)/income from discontinued operations	—		(7,798)
Net income/(loss)	$	13,031	$	(19,870)
Average number of common shares issued	51,903		51,903
Less: average number of treasury shares	948		1,744
Less: average number of unvested stock award shares	625		488
Plus: average participating preferred shares	—		533
Average number of basic shares outstanding	50,330		50,204
Plus: dilutive effect of unvested stock award shares	235		—
Plus: dilutive effect of stock options outstanding	—		—
Average number of diluted shares outstanding	50,565		50,204
Basic earnings/(loss) per common share:
Continuing operations	$	0.26	$	(0.24)
Discontinued operations	—		(0.16)
Total	$	0.26	$	(0.40)
Diluted earnings/(loss) per common share:
Continuing operations	$	0.26	$	(0.24)
Discontinued operations	—		(0.16)
Total	$	0.26	$	(0.40)

For the three months ended March 31, 2021, 390 thousand shares of unvested restricted stock and all options outstanding were anti-dilutive and therefore excluded from the earnings per share calculation. For the three months ended March 31, 2020, all unvested restricted stock and options outstanding were considered anti-dilutive and therefore excluded from the earnings per share calculation.

46

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13. STOCK-BASED COMPENSATION PLANS

A combined summary of activity in the Company’s stock award and stock option plans for the three months ended March 31, 2021 is presented in the following table:

	Non-Vested Stock Awards Outstanding			Stock Options Outstanding
(Shares in thousands)	Number of Shares	Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Exercise Price
December 31, 2020	517	$	28.35	112	$	22.95
Granted	210	16.58		—	—
Acquired	—	—		—	—
Stock options exercised	—	—		(5)	13.70
Stock awards vested	(44)	30.63		—	—
Forfeited	(52)	25.82		—	—
Expired	—	—		(10)	17.46
March 31, 2021	631	$	20.09	97	$	24.85

During the three months ended March 31, 2021, proceeds from stock option exercises totaled $69 thousand. During the three months ended March 31, 2020, proceeds from stock option exercises totaled $519 thousand. During the three months ended March 31, 2021 and March 31, 2020, there were 44 thousand and 53 thousand shares vested in connection with stock awards, respectively. All of these shares were issued from available treasury stock. Stock-based compensation expense totaled $0.7 million and $1.5 million during the three months ended March 31, 2021 and 2020, respectively. Stock-based compensation expense is recognized over the requisite service period for all awards.

47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14. FAIR VALUE MEASUREMENTS

A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities that are carried at fair value.

Recurring Fair Value Measurements

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.

	March 31, 2021
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Trading security	$	—	$	—	$	9,350	$	9,350
Securities available for sale:
Municipal bonds and obligations	—		90,300		—		90,300
Agency collateralized mortgage obligations	—		724,554		—		724,554
Agency residential mortgage-backed securities	—		447,196		—		447,196
Agency commercial mortgage-backed securities	—		268,515		—		268,515
Corporate bonds	—		45,014		—		45,014
Other bonds and obligations	—		51,751		—		51,751
Marketable equity securities	15,129		672		—		15,801
Loans held for investment at fair value	—		—		1,448		1,448
Loans held for sale	—		8,877		—		8,877
Derivative assets	—		106,665		511		107,176
Capitalized servicing rights	—		—		2,968		2,968
Derivative liabilities	—		47,215		—		47,215

	December 31, 2020
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Trading security	$	—	$	—	$	9,708	$	9,708
Securities available for sale:
Municipal bonds and obligations	—		97,803		—		97,803
Agency collateralized mortgage obligations	—		756,826		—		756,826
Agency residential mortgage-backed securities	—		438,132		—		438,132
Agency commercial mortgage-backed securities	—		288,650		—		288,650
Corporate bonds	—		45,030		15,000		60,030
Other bonds and obligations	—		53,791		—		53,791
Marketable equity securities	17,841		672		—		18,513
Loans held for investment at fair value	—		—		2,265		2,265
Loans held for sale	—		12,992		4,756		17,748
Derivative assets	—		159,016		1,055		160,071
Capitalized servicing rights	—		—		3,033		3,033
Derivative liabilities	—		65,758		—		65,758

There were no transfers between levels during the three months ended March 31, 2021.

48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Trading Security at Fair Value. The Company holds one security designated as a trading security. It is a tax-advantaged economic development bond issued to the Company by a local nonprofit which provides wellness and health programs. The fair value of this security is determined based on a discounted cash flow methodology. Certain inputs to the fair value calculation are unobservable and there is little to no market activity in the security; therefore, the security meets the definition of a Level 3 security. The discount rate used in the valuation of the security is sensitive to movements in the 3-month LIBOR rate.

Securities Available for Sale and Marketable Equity Securities. Marketable equity securities classified as Level 1 consist of publicly-traded equity securities for which the fair values can be obtained through quoted market prices in active exchange markets. Marketable equity securities classified as Level 2 consist of securities with infrequent trades in active exchange markets, and pricing is primarily sourced from third party pricing services. AFS securities classified as Level 2 include most of the Company’s debt securities. The pricing on Level 2 and Level 3 was primarily sourced from third party pricing services, overseen by management, and is based on models that consider standard input factors such as dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and condition, among other things. Level 3 pricing includes inputs unobservable to market participants.

Loans Held for Investment. The Company’s held for investment loan portfolio includes loans originated by Company and loans acquired through business combinations. The Company intends to hold these assets until maturity as a part of its business operations. For one acquired portfolio subset, the Company previously accounted for these purchased-credit impaired loans as a pool under ASC 310, as they were determined to have common risk characteristics. These loans were recorded at fair value on acquisition date and subsequently evaluated for impairment collectively. Upon adoption of ASC 326, the Company elected the fair value option on this portfolio, recognizing an $11.2 million fair value write-down charged to Retained Earnings, net of deferred tax impact, as of January 1, 2020. The fair value of this loan portfolio is determined based on a discounted cash flow methodology. Certain inputs to the fair value calculation are unobservable; therefore, the loans meet the definition of Level 3 assets. The discount rate used in the valuation is consistent with assets that have significant credit deterioration. The cash flow assumptions include payment schedules for loans with current payment histories and estimated collateral value for delinquent loans. All of these loans were nonperforming as of March 31, 2021.

					Aggregate Fair Value
March 31, 2021	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for investment at fair value	$	1,448	$	44,969	$	(43,521)

					Aggregate Fair Value
December 31, 2020	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for investment at fair value	$	2,265	$	53,945	$	(51,680)

Loans Held for Sale. The Company elected the fair value option for all loans held for sale (HFS) originated for sale on or after May 1, 2012. Loans HFS are classified as Level 2 as the fair value is based on input factors such as quoted prices for similar loans in active markets.

					Aggregate Fair Value
March 31, 2021	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for sale	$	8,877	$	8,518	$	359

					Aggregate Fair Value
December 31, 2020	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for sale	$	12,992	$	12,639	$	353

49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The changes in fair value of loans held for sale for the three months ended March 31, 2021, were gains of $6 thousand. During the three months ended March 31, 2021, originations of loans held for sale totaled $44.0 million and sales of loans originated for sale totaled $46.9 million.

The changes in fair value of loans held for sale for the three months ended March 31, 2020, were losses of $49 thousand from continuing operations and gains of $0.5 million from discontinued operations. During the three months ended March 31, 2020, originations of loans held for sale from continuing operations totaled $16.6 million and sales of loans originated for sale from continuing operations totaled $21.1 million.

Interest Rate Swaps. The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings.

Although the Company has determined that the majority of the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of March 31, 2021, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Commitments to Lend. The Company enters into commitments to lend for residential mortgage loans intended for sale, which commit the Company to lend funds to a potential borrower at a specific interest rate and within a specified period of time. The estimated fair value of commitments to originate residential mortgage loans for sale is based on quoted prices for similar loans in active markets. However, this value is adjusted by a factor which considers the likelihood that the loan in a lock position will ultimately close, and by the non-refundable costs of originating the loan. The closing ratio is derived from the Bank’s internal data and is adjusted using significant management judgment. The costs to originate are primarily based on the Company’s internal commission rates that are not observable. As such, these commitments are classified as Level 3 measurements.

Forward Sale Commitments. The Company utilizes forward sale commitments as economic hedges against potential changes in the values of the commitments to lend and loans originated for sale. To Be Announced (“TBA”) mortgage-backed securities forward commitment sales are used as the hedging instrument, are classified as Level 1, and consist of publicly-traded debt securities for which identical fair values can be obtained through quoted market prices in active exchange markets. The fair values of the Company’s best efforts and mandatory delivery loan sale commitments are determined similarly to the commitments to lend using quoted prices in the market place that are observable. However, costs to originate and closing ratios included in the calculation are internally generated and are based on management’s judgment and prior experience, which are considered factors that are not observable. As such, best efforts and mandatory forward commitments are classified as Level 3 measurements.

Capitalized Servicing Rights. The Company accounts for certain capitalized servicing rights at fair value in its Consolidated Financial Statements, as the Company is permitted to elect the fair value option for each specific instrument. A loan servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans exceed adequate compensation for performing the servicing. The fair value of servicing rights is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy.

50

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below presents the changes in Level 3 assets and liabilities that were measured at fair value on a recurring basis for the three months ended March 31, 2021 and 2020.

	Assets (Liabilities)
			Securities		Loans						Capitalized
	Trading		Available		Held for		Commitments		Forward		Servicing
(In thousands)	Security		for Sale		Investment		to Lend		Commitments		Rights
Three Months Ended March 31, 2021
December 31, 2020	$	9,708	$	15,000	$	2,265	$	735	$	320	$	3,033
Maturities, calls, and prepayments of AFS Security	—		(15,000)		—		—				—
Unrealized (loss)/gain, net recognized in other non-interest income	(166)		—		414		818		6		(65)
Paydown of asset	(192)		—		(1,231)		—		—		—
Transfers to held for sale loans	—		—		—		(1,368)		—		—
March 31, 2021	$	9,350	$	—	$	1,448	$	185	$	326	$	2,968
Unrealized gain/(loss) relating to instruments still held at March 31, 2021	$	887	$	—	$	—	$	185	$	326	$	—

51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

			Securities		Loans				Capitalized
	Trading		Available		Held for		Commitments		Servicing
(In thousands)	Security		for Sale		Investment		to Lend (1)		Rights (1)
Three Months Ended March 31, 2020
December 31, 2019	$	10,769	$	42,966	$	—	$	2,628	$	12,299
Adoption of ASC 326	—		—		7660		—		—
Maturity of AFS security	—		(9,000)		—		—		—
Unrealized gain, net recognized in other non-interest income	(759)		—		(2,216)		—		—
Unrealized gain included in accumulated other comprehensive loss	—		538		—		—		—
Unrealized gain/(loss), net recognized in discontinued operations	—		—		—		11,039		(3,781)
Paydown of asset	(181)		—		(549)		—		—
Transfers to held for sale loans	—		—		—		(8,831)		—
Additions to servicing rights	—		—		—		—		—
March 31, 2020	$	9,829	$	34,504	$	4,895	$	4,836	$	8,518
Unrealized gains relating to instruments still held at March 31,2020	$	620	$	151	$	—	$	4,836	$	—

(1) Classified as assets from discontinued operations on the consolidated balance sheets.

Quantitative information about the significant unobservable inputs within Level 3 recurring assets and liabilities is as follows:

	Fair Value				Significant Unobservable Input
(In thousands)	March 31, 2021		Valuation Techniques	Unobservable Inputs	Value
Assets (Liabilities)
Trading security	$	9,350	Discounted Cash Flow	Discount Rate	2.66		%
Loan held for investment	1,448		Discounted Cash Flow	Discount Rate	25.00		%
				Collateral Value	$6.7 - $19.7
Commitments to lend	185		Historical Trend	Closing Ratio	74.29		%
			Pricing Model	Origination Costs, per loan	$	3
Forward commitments	326		Historical Trend	Closing Ratio	74.29		%
			Pricing Model	Origination Costs, per loan	$	3
Capitalized servicing rights	2,968		Discounted cash flow	Constant Prepayment Rate (CPR)	21.07		%
				Discount Rate	10.00		%
Total	$	14,277

52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	Fair Value				Significant Unobservable Input
(In thousands)	December 31, 2020		Valuation Techniques	Unobservable Inputs	Value
Assets (Liabilities)
Trading security	$	9,708	Discounted Cash Flow	Discount Rate	2.72		%
AFS Securities	15,000		Indication from Market Maker	Price	102.00		%
Loans held for investment	2,265		Discounted Cash Flow	Discount Rate	30.00		%
				Collateral Value	$8.1- $21.9
Commitments to lend	735		Historical Trend	Closing Ratio	74.54		%
			Pricing Model	Origination Costs, per loan	$	3
Forward commitments	320		Historical Trend	Closing Ratio	74.54		%
			Pricing Model	Origination Costs, per loan	$	3
Capitalized servicing rights	3,033		Discounted Cash Flow	Constant Prepayment Rate (CPR)	26.52		%
				Discount Rate	10.00		%
Total	$	31,061

53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-Recurring Fair Value Measurements

The Company is required, on a non-recurring basis, to adjust the carrying value or provide valuation allowances for certain assets using fair value measurements in accordance with GAAP. The following is a summary of applicable non-recurring fair value measurements. There are no liabilities measured at fair value on a non-recurring basis.

	March 31, 2021		December 31, 2020		Fair Value Measurement Date as of March 31, 2021
	Level 3		Level 3		Level 3
(In thousands)	Inputs		Inputs		Inputs
Assets
Individually evaluated	$	21,762	$	28,028	March 2021
Capitalized servicing rights	13,763		13,315		March 2021
Other real estate owned	149		149		March 2021
Total	$	35,674	$	41,492

Quantitative information about the significant unobservable inputs within Level 3 non-recurring assets is as follows:

	Fair Value
(In thousands)	March 31, 2021		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (1)
Assets
Individually evaluated	$	21,762	Fair Value of Collateral	Discounted Cash Flow - Loss Severity	0.32% to 100.00% (49.39%)
				Appraised Value	$0 to $11,842 ($7,827)
Capitalized servicing rights	13,763		Discounted Cash Flow	Constant Prepayment Rate (CPR)	11.32% to 19.49% (15.38%)
				Discount Rate	8.33% to 11.00% (9.12%)
Other Real Estate Owned	149		Fair Value of Collateral	Appraised Value	$182
Total	$	35,674

(1)     Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

	Fair Value
(In thousands)	December 31, 2020		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (1)
Assets
Individually evaluated	$	28,028	Fair Value of Collateral	Discounted Cash Flow - loss severity	0.07% to 100.00% (46.36%)
				Appraised Value	$0 to $11,432 ($9,800)
Capitalized servicing rights	13,315		Discounted Cash Flow	Constant Prepayment Rate (CPR)	14.49% to 23.29% (16.98%)
				Discount Rate	10.00% to 11.00% (10.56%)
Other Real Estate Owned	149		Fair Value of Collateral	Appraised Value	$94 - $182
Total	$	41,492

(1)     Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

There were no Level 1 or Level 2 nonrecurring fair value measurements for the periods ended March 31, 2021 and December 31, 2020.

54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Individually evaluated loans. Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records non-recurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans. Non-recurring adjustments can also include certain impairment amounts for collateral-dependent loans calculated when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation amount does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace. However, the choice of observable data is subject to significant judgment, and there are often adjustments based on judgment in order to make observable data comparable and to consider the impact of time, the condition of properties, interest rates, and other market factors on current values. Additionally, commercial real estate appraisals frequently involve discounting of projected cash flows, which relies inherently on unobservable data. Therefore, nonrecurring fair value measurement adjustments that relate to real estate collateral have generally been classified as Level 3. Estimates of fair value for other collateral that supports commercial loans are generally based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3. 

Capitalized loan servicing rights. A loan servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans exceed adequate compensation for performing the servicing. The fair value of servicing rights is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Adjustments are only recorded when the discounted cash flows derived from the valuation model are less than the carrying value of the asset. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy.

55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summary of Estimated Fair Values of Financial Instruments

The following tables summarize the estimated fair values (represents exit price), and related carrying amounts, of the Company’s financial instruments. Certain financial instruments and all non-financial instruments are excluded. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

	March 31, 2021
	Carrying		Fair
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	1,899,608	$	1,899,608	$	1,899,608	$	—	$	—
Trading security	9,350		9,350		—		—		9,350
Marketable equity securities	15,801		15,801		15,129		672		—
Securities available for sale	1,627,330		1,627,330		—		1,627,330		—
Securities held to maturity	610,637		627,297		—		624,012		3,285
FHLB bank stock and restricted securities	28,680		N/A		N/A		N/A		N/A
Net loans	7,534,978		7,778,261		—		—		7,778,261
Loans held for sale	18,377		18,377		—		8,877		9,500
Accrued interest receivable	45,990		45,990		—		45,990		—
Derivative assets	107,176		107,176		—		106,665		511
Financial Liabilities
Total deposits	$	10,244,370	$	10,256,878	$	—	$	10,256,878	$	—
Short-term debt	—		—		—		—		—
Long-term Federal Home Loan Bank advances and other	351,354		353,481		—		353,481		—
Subordinated borrowings	97,338		95,729		—		95,729		—
Derivative liabilities	47,215		47,215		—		47,215		—

	December 31, 2020
	Carrying		Fair
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	1,557,875	$	1,557,875	$	1,557,875	$	—	$	—
Trading security	9,708		9,708		—		—		9,708
Marketable equity securities	18,513		18,513		17,841		672		—
Securities available for sale and other	1,695,232		1,695,232		—		1,680,232		15,000
Securities held to maturity	465,091		491,855		—		488,393		3,462
FHLB bank stock and restricted securities	34,873		N/A		N/A		N/A		N/A
Net loans	7,954,217		8,243,437		—		—		8,243,437
Loans held for sale	17,748		17,748		—		12,992		4,756
Accrued interest receivable	46,919		46,919		—		46,919		—
Derivative assets	160,071		160,071		—		159,016		1,055
Assets held for sale	317,304		317,304		—		16,705		300,599
Financial Liabilities
Total deposits	$	10,215,808	$	10,230,822	$	—	$	10,230,822	$	—
Short-term debt	40,000		40,025		—		40,025		—
Long-term Federal Home Loan Bank advances	434,357		438,064		—		438,064		—
Subordinated borrowings	97,280		95,178		—		95,178		—
Derivative liabilities	65,758		65,758		—		65,758		—
Liabilities held for sale	630,065		631,268		—		631,268		—

56

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15. NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

Presented below is net interest income after provision for credit losses for the three months ended March 31, 2021 and 2020, respectively.

	Three Months Ended March 31,
(In thousands)	2021		2020
Net interest income from continuing operations	$	75,093	$	86,428
Provision for credit losses	6,500		34,807
Net interest income from continuing operations after provision for credit losses	$	68,593	$	51,621

57

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SELECTED FINANCIAL DATA

The following summary data is based in part on the consolidated financial statements and accompanying notes and other information appearing elsewhere in this or prior Forms 10-Q. Stock price information is for Berkshire’s common shares traded on the New York Stock exchange under the symbol “BHLB”.

	At or for the
	Three Months Ended March 31,
	2021			2020
NOMINAL AND PER SHARE DATA
Net earnings/(loss) per common share, diluted	$	0.26		$	(0.40)
Adjusted earnings/(loss) per common share, diluted (1)(2)	0.32			(0.07)
Net income/(loss), (thousands)	13,031			(19,870)
Adjusted net income/(loss), (thousands) (1)(2)	16,015			(3,645)
Total common shares outstanding, (thousands)	50,988			50,199
Average diluted shares, (thousands)	50,565			50,204
Total book value per common share	23.05			33.90
Tangible book value per common share (2)	22.39			22.00
Dividends per common share	0.12			0.24
Full-time equivalent staff, continuing operations	1,467			1,548
PERFORMANCE RATIOS (3)
Return on equity	4.50		%	(4.58)		%
Adjusted return on equity (1)(2)	5.53			(0.84)
Return on tangible common equity (1)(2)	4.98			(6.76)
Adjusted return on tangible common equity (1)(2)	6.04			(0.94)
Return on assets	0.42			(0.62)
Adjusted return on assets (1)(2)	0.51			(0.11)
Net interest margin, fully taxable equivalent (FTE) (4)(6)	2.62			3.04
Efficiency ratio (1)(2)	71.32			66.92
FINANCIAL DATA (in millions, end of period)
Total assets	$	12,757		$	13,122
Total earning assets	12,071			11,785
Total loans	7,659			9,303
Allowance for credit losses	124			114
Total deposits	10,244			10,072
Loans/deposits (%)	75			92
ASSET QUALITY (5)
Allowance for credit losses, (millions)	$	124		$	114
Net charge-offs, (millions)	(10)			(10)
Net charge-offs (QTD annualized)/average loans	0.51		%	0.45		%
Provision expense, (millions)	$	7		$	35
Non-performing assets, (millions)	58			53
Non-performing loans/total loans	0.73		%	0.55		%
Allowance for credit losses/non-performing loans	222			222
Allowance for credit losses/total loans	1.62			1.22
CAPITAL RATIOS
Common equity tier 1 capital to risk weighted assets	14.5		%	12.0		%
Tier 1 capital leverage ratio	9.5			9.4
Tangible common shareholders' equity/tangible assets (2)	9.0			8.8

58

	At or for the
	Three Months Ended March 31,
	2021		2020
FOR THE PERIOD: (In thousands)
Net interest income from continuing operations	$	75,093	$	86,428
Non-interest income from continuing operations	26,193		5,636
Net revenue from continuing operations	101,286		92,064
Provision for credit losses	6,500		34,807
Non-interest expense from continuing operations	78,154		71,325
Net income/(loss)	13,031		(19,870)
Adjusted income (1)(2)	16,015		(3,465)

____________________________________________________________________________________________

(1)  Adjusted measurements are non-GAAP financial measures that are adjusted to exclude net non-operating charges primarily related to acquisitions and restructuring activities. Refer to the Reconciliation of non-GAAP Financial Measures for additional information.

(2)     Non-GAAP financial measure. Refer to the Reconciliation of non-GAAP Financial Measures for additional information.

(3)  All performance ratios are annualized and are based on average balance sheet amounts, where applicable.

(4) Fully taxable equivalent considers the impact of tax advantaged investment securities and loans.

(5)    The effect of purchase accounting accretion for loans, time deposits, and borrowings on the net interest margin was an increase in all periods presented. The increase for the three months ended March 31, 2021 and 2020 was 0.05% and 0.11%, respectively.

59

AVERAGE BALANCES AND AVERAGE YIELDS/RATES

The following table presents average balances and an analysis of average rates and yields on an annualized fully taxable equivalent basis for the periods included:

	Three Months Ended March 31,
	2021				2020
(Dollars in millions)	Average Balance		Yield/Rate (FTE basis)		Average Balance		Yield/Rate (FTE basis)
Assets
Loans:
Commercial real estate	$	3,630	3.27	%	$	4,000	4.41	%
Commercial and industrial loans	1,865		4.62		1,796		5.03
Residential mortgages	1,740		3.71		2,654		3.77
Consumer loans	634		3.79		922		4.28
Total loans (1)	7,869		3.73		9,372		4.33
Investment securities (2)	2,195		2.36		1,745		3.32
Short-term investments & loans held for sale (3)	1,351		0.13		375		1.78
Mid-Atlantic region loans held for sale(4)	295				—
Total interest-earning assets	11,710		3.07		11,492		4.08
Intangible assets	34		X		598
Other non-interest earning assets	724				663
Assets from discontinued operations	—				99
Total assets	$	12,468			$	12,852
Liabilities and shareholders’ equity
Deposits:
NOW and other	$	1,325	0.15	%	$	1,159	0.46	%
Money market	2,802		0.27		2,753		0.98
Savings	1,003		0.08		847		0.13
Time	2,266		1.12		3,333		1.87
Total interest-bearing deposits	7,396		0.48		8,092		1.18
Borrowings and notes (5)	500		2.78		949		2.60
Mid-Atlantic region interest-bearing deposits(4)	518				—
Total interest-bearing liabilities	8,414		0.63		9,041		1.33
Non-interest-bearing demand deposits	2,537				1,849
Other non-interest earning liabilities	358				204
Liabilities from discontinued operations	—				24
Total liabilities	11,309				11,118
Total preferred shareholders' equity	—				21
Total common shareholders' equity	1,159				1,713
Total shareholders’ equity (2)	1,159				1,734
Total liabilities and stockholders’ equity	$	12,468			$	12,852

60

	Three Months Ended March 31,
	2021				2020
	Average Balance		Yield/Rate (FTE basis)		Average Balance		Yield/Rate (FTE basis)
Net interest spread			2.44	%			2.75	%
Net interest margin (6)			2.62				3.04
Cost of funds			0.48				1.11
Cost of deposits			0.36				0.96
Supplementary data
Total deposits (In millions)	$	9,932			$	9,941
Fully taxable equivalent income adj. (In thousands) (7)	1,494				1,824

____________________________________

(1)     The average balances of loans include nonaccrual loans and deferred fees and costs.

(2)     The average balance for securities available for sale is based on amortized cost. The average balance of equity also reflects this adjustment.

(3)     Interest income on loans held for sale is included in loan interest income on the income statement.

(4)    The Mid-Atlantic region loans are not included in the loan yields; however they are included in the total earning assets yield and the net interest margin. The Mid-Atlantic region deposits are not included in the deposit costs; however, they are included in the total interest-bearing liabilities cost.

(5)     The average balances of borrowings includes the capital lease obligation presented under other liabilities on the consolidated balance sheet.

(6)     Purchased accounting accretion totaled $1.3 and $3.1 million for the three months ended March 31, 2021 and 2020, respectively.

(7)    Fully taxable equivalent considers the impact of tax advantaged investment securities and loans.

61

NON-GAAP FINANCIAL MEASURES

This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). These non-GAAP measures are intended to provide the reader with additional supplemental perspectives on operating results, performance trends, and financial condition. Non-GAAP financial measures are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is provided below. In all cases, it should be understood that non-GAAP measures do not depict amounts that accrue directly to the benefit of shareholders. An item which management excludes when computing non-GAAP adjusted earnings can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP adjusted earnings information set forth is not necessarily comparable to non- GAAP information which may be presented by other companies. Each non-GAAP measure used by the Company in this report as supplemental financial data should be considered in conjunction with the Company’s GAAP financial information.

The Company utilizes the non-GAAP measure of adjusted earnings in evaluating operating trends, including components for operating revenue and expense. These measures exclude amounts which the Company views as unrelated to its normalized operations. These items primarily include securities gains/losses, merger costs, restructuring costs, goodwill impairment, and discontinued operations. Discontinued operations are the Company’s national mortgage banking operations for which the Company is pursuing sale opportunities. Merger costs consist primarily of severance/benefit related expenses, contract termination costs, systems conversion costs, variable compensation expenses, and professional fees. Restructuring costs generally consist of costs and losses associated with the disposition of assets and liabilities and lease terminations, including costs related to branch sales. Restructuring costs also include severance and consulting expenses related to the Company’s strategic review.

The Company also calculates adjusted earnings per share based on its measure of adjusted earnings and diluted common shares. The Company views these amounts as important to understanding its operating trends, particularly due to the impact of accounting standards related to merger and acquisition activity. Analysts also rely on these measures in estimating and evaluating the Company’s performance. Management believes that the computation of non-GAAP adjusted earnings and adjusted earnings per share may facilitate the comparison of the Company to other companies in the financial services industry. The Company also adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community.

62

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

The following table summarizes the reconciliation of non-GAAP items recorded for the periods indicated:

		At or for the Three Months Ended March 31,
(In thousands)		2021			2020
GAAP Net income/(loss)		$	13,031		$	(19,870)
Adj: Net losses/(gains) on securities (1)		31			9,730
Adj: Restructuring and other expense		3,486			—
Adj: Loss/(income) from discontinued operations before income taxes		—			10,629
Adj: Income taxes		(533)			(4,134)
Total adjusted income/(loss) (non-GAAP) (2)	(A)	$	16,015		$	(3,645)
GAAP Total revenue		$	101,286		$	92,064
Adj: Losses/(gains) on securities, net (1)		31			9,730
Total operating revenue (non-GAAP) (2)	(B)	$	101,317		$	101,794
GAAP Total non-interest expense		$	78,154		$	71,325
Less: Total non-operating expense (see above)		(3,486)			—
Operating non-interest expense (non-GAAP) (2)	(C)	$	74,668		$	71,325
(In millions, except per share data)
Total average assets	(D)	$	12,468		$	12,852
Total average shareholders’ equity	(E)	1,159			1,734
Total average tangible shareholders’ equity (2)	(F)	1,125			1,135
Total average tangible common shareholders' equity (2)	(G)	1,125			1,115
Total tangible shareholders’ equity, period-end (2)(3)	(H)	1,142			1,124
Total tangible common shareholders' equity, period-end (2)(3)	(I)	1,142			1,104
Total tangible assets, period-end (2)(3)	(J)	12,724			12,524
Total common shares outstanding, period-end (thousands)	(K)	50,988			50,199
Average diluted shares outstanding (thousands)	(L)	50,565			50,204
Earnings per common share, diluted		$	0.26		$	(0.40)
Adjusted earnings per common share, diluted (2)	(A/L)	0.32			(0.07)
Book value per common share, period-end		23.05			33.90
Tangible book value per common share, period-end (2)	(I/K)	22.39			22.00
Total shareholders' equity/total assets		9.21			13.13
Total tangible shareholder's equity/total tangible assets (2)	(H/J)	8.98			8.98
Performance ratios (4)
GAAP return on equity		4.50		%	(4.58)		%
Adjusted return on equity (2)	(A/E)	5.53			(0.84)
Return on tangible common equity (2)(5)		4.98			(6.76)
Adjusted return on tangible common equity (2)(5)	(A+O)/(G)	6.04			(0.94)
GAAP return on assets		0.42			(0.62)
Adjusted return on assets (2)	(A/D)	0.51			(0.11)
Efficiency ratio (2)	(C-O)/(B+M+P)	71.32			66.92
(in thousands)
Supplementary data (In thousands)
Tax benefit on tax-credit investments (6)	(M)	$	41		$	608
Non-interest income charge on tax-credit investments (7)	(N)	(33)			(486)
Net income on tax-credit investments	(M+N)	8			122
Intangible amortization	(O)	1,319			1,580
Fully taxable equivalent income adjustment	(P)	1,494			1,824

63

_________________________________________________________________________________________

(1)     Net securities losses/(gains) for the periods ending March 31, 2021 and 2020 include the change in fair value of the Company's equity securities in compliance with the Company's adoption of ASU 2016-01.

(2)    Non-GAAP financial measure.

(3)    Total tangible shareholders’ equity is computed by taking total shareholders’ equity less the intangible assets at period-end. Total tangible assets is computed by taking total assets less the intangible assets at period-end.

(4)     Ratios are annualized and based on average balance sheet amounts, where applicable.

(5)     Adjusted return on tangible common equity is computed by dividing the total adjusted income adjusted for the tax-affected amortization of intangible assets, assuming a 27% marginal rate, by tangible equity.

(6)     The tax benefit is the direct reduction to the income tax provision due to tax credits and deductions generated from investments in historic rehabilitation and low-income housing.

(7)     The non-interest income charge is the reduction to the tax-advantaged commercial project investments, which are incurred as the tax credits are generated.

64

GENERAL

Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding the financial condition and results of operations of the Company. The following discussion and analysis should be read in conjunction with the Company’s consolidated financial statements and the notes thereto appearing in Part I, Item 1 of this document and with the Company’s consolidated financial statements and the notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2020 Annual Report on Form 10-K. In the following discussion, income statement comparisons are against the same period of the previous year and balance sheet comparisons are against the previous fiscal year-end, unless otherwise noted. Operating results discussed herein are not necessarily indicative of the results for the year 2021 or any future period. In management’s discussion and analysis of financial condition and results of operations, certain reclassifications have been made to make prior periods comparable. Tax-equivalent adjustments are the result of increasing income from tax-advantaged loans and securities by an amount equal to the taxes that would be paid if the income were fully taxable based on a 27% marginal rate (including state income taxes net of federal benefit). In the discussion, unless otherwise specified, references to earnings per share and "EPS" refer to diluted earnings per common share.

Berkshire Hills Bancorp, Inc. (“Berkshire” or “the Company”) is a Delaware corporation headquartered in Boston and the holding company for Berkshire Bank (“the Bank”) and Berkshire Insurance Group, Inc. Established in 1846, the Bank operates as a commercial bank under a Massachusetts trust company charter.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (referred to as the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (referred to as the Securities Exchange Act), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these statements from the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including among other things, changes in general economic and business conditions, increased competitive pressures, changes in the interest rate environment, legislative and regulatory change, changes in the financial markets, and other risks and uncertainties disclosed from time to time in documents that Berkshire Hills Bancorp files with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and the Risk Factors in Item 1A of this report. Because of these and other uncertainties, Berkshire’s actual results, performance or achievements, or industry results, may be materially different from the results indicated by these forward-looking statements. In addition, Berkshire’s past results of operations do not necessarily indicate Berkshire’s combined future results. You should not place undue reliance on any of the forward-looking statements, which speak only as of the dates on which they were made. Berkshire is not undertaking an obligation to update forward-looking statements, even though its situation may change in the future, except as required under federal securities law. Berkshire qualifies all of its forward-looking statements by these cautionary statements.

65

SUMMARY

Berkshire recorded first quarter 2021 net income of $13 million, or $0.26, per share. The Company’s non-GAAP measure of adjusted earnings totaled $16 million, or $0.32 per share. Return on tangible common equity measured 5.0%, and the non-GAAP measure of adjusted return on tangible common equity measured 6.0%.

In the first half of 2020, the Company posted losses due to the COVID-19 pandemic. While operations returned to profitability in the third quarter of 2020, it remains below the levels achieved before the onset of the pandemic due to changes in the operating environment. The Company consolidated nine branch offices in the first quarter of 2021 as part of an announced plan to consolidate 16 branch offices in 2021. The Company also made progress towards completing the sale of its eight Mid-Atlantic branches targeted for the second quarter of 2021. These actions are planned to reduce the total branch count to 106 offices from 130 offices at the start of 2021.

The second wave of COVID-19 disease appears to have peaked in the most recent quarter, with many economic and social activities continuing to be restricted in the first quarter. Certain economic and social activities began to reopen in the second quarter of 2021. The Company’s market area generally was receiving COVID-19 vaccinations at a higher proportionate rate than many other regions at the beginning of the second quarter. Berkshire was active in channeling new rounds of federal stimulus to its markets during the quarter, supporting its customers and recognizing revenue and interest expense benefits from this support. Most key indicators of loan performance improved during the quarter, and provision expenses and the allowance for credit losses decreased. The heavy loss provisioning in the first half of 2020 is expected to absorb pandemic related credit losses that are expected to occur in upcoming quarters based on current conditions and forecasts.

In January 2021, Nitin J. Mhatre was appointed as President and Chief Executive Officer of the Company, following a national search undertaken by the Board after the separation of the previous CEO in August 2020. In March 2021, Subhadeep Basu was appointed as Senior Executive Vice President and Chief Financial Officer, following the resignation of the prior CFO. During the quarter, the Company also recruited teams and senior leadership in Mid-Atlantic asset based lending, Boston business banking, and Boston private banking, along with senior hires in investor relations and financial planning and analysis, together with a new chief diversity officer.

Also in March 2021, the Company entered into a Cooperation Agreement with HoldCo Asset Management, LP, an investment adviser owning approximately 3.3% of the Company’s outstanding shares. The Board nominated a principal of this shareholder, Michael Zeitzeff, for election as a director at the next annual meeting of shareholders. In connection with the Cooperation Agreement, the Board also nominated Deborah Bailey for election as a director. Ms. Bailey is a member of the Board of Governors of FINRA and previously served as Deputy Director of Banking Regulation and Supervision of the Board of Governors of the Federal Reserve.

In April 2021, the Company announced that the Board had approved a one year authorization for the repurchase of approximately 5% of the Company’s common stock. The Company also announced a planned investor strategic plan update on May 18, 2021 of its Berkshire Exciting Strategic Transformation (“BEST”) plans for improving Company performance over the next three years. This plan is targeted to make Berkshire’s purpose-driven community-dedicated bank better and stronger; with the goal of improving customer experience and enhancing value for shareholders.

Since the start of 2021, several significant local competitors have announced planned mergers and consolidations. These events may give rise to changes in competitive conditions and may in some cases create disruptions which could provide opportunities for market share gains as well as recruitment opportunities. Also, in the first quarter of 2021, long term interest rates increased as markets reacted to the economic stimulus provided by the federal government as well as higher growth expectations of the economy as it recovers from the pandemic. As a result unrealized gains on debt securities decreased, and expected lives of mortgage related assets increased. The stimulus is expected to result in record near-term economic growth.

66

Compared to the linked quarter, the Company recorded a 13% decrease in GAAP net income, while adjusted net income increased by 14%. First quarter adjusted income excludes $3 million in restructuring and other expenses. Quarter-over-quarter results benefited from higher revenues and lower credit loss provision expense.

FIRST QUARTER FINANCIAL HIGHLIGHTS (Comparisons are to the prior quarter unless otherwise stated)

•    2% increase in net revenue and 6% increase in net revenue excluding gains/(losses)

•    13% decrease in GAAP income; 14% increase in adjusted income (non-GAAP measure)

•    2.62% net interest margin, stable for last four quarters

•    35% reduction in provision for credit losses on loans

•    42% reduction in annualized net loan charge-offs to 0.51% of loans from 0.80%

•    86% decrease in COVID-19 loan modifications compared to June 30, 2020

•    26% reduction in wholesale funding to 7% of assets

•    $23.05 book value per share; $22.39 tangible book value per share (non-GAAP measure)

67

COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2021 AND DECEMBER 31, 2020

Summary: Total assets remained steady at $12.8 billion in the first quarter, and there was further progress in improving the structure and composition of the balance sheet. Proceeds from loan paydowns were primarily channeled into short-term investments. Growth in demand deposits was used to paydown maturing wholesale funds. Asset quality, liquidity, and capital metrics improved.

Investments: Short-term investments increased by $352 million to $1.82 billion in the first quarter due to the funds inflows from loan paydowns. The Company is targeting to use some of these balances to complete the planned branch sale and also to fund payoffs of maturing wholesale funds.

The portfolio of investment securities increased by $68 million to $2.29 billion. Amortizations and prepayments of higher yielding securities contributed to the decrease in the average portfolio yield to 2.36% from 2.69% in the first quarter of 2021 compared to the linked quarter. Securities purchases totaling $259 million were concentrated in agency mortgage backed and commercial mortgage backed securities. The portfolio is highly liquid, and the weighted average life of the bond portfolio was 3.7 years at period-end. All rated bonds are investment grade; unrated bonds totaling $26 million were all pass rated in the Company’s internal rating system. The portfolio of investment securities had an unrealized gain of $31 million, or 1.4% of cost at period-end, compared to $68 million, or 3.2% of cost at the start of the year, due to the rise in medium term interest rates during the first quarter. The Company continues to evaluate possible expansion of the securities portfolio to utilize a portion of excess short-term investments.

Loans: During the first quarter of 2021, total loans decreased by $423 million, or 5%, to $7.7 billion,

including a $189 million reduction attributable to the forgiveness of SBA guaranteed Paycheck Protection Program (“PPP”) loans. Through its relationship with a funding third party, Berkshire participated in the origination of $206 million of new PPP loans during the quarter, many of which provided further assistance to existing borrowers. Loan balances decreased in the other major loan categories reflecting targeted runoff and impacts from the pandemic and government relief programs, which have resulted in prepayments and reduced borrowing demand. Included in assets held for sale are $284 million in Mid-Atlantic loan balances which are targeted to be sold as part of the planned branch sale in the second quarter.

The $444 million balance of PPP loans at period-end is expected to be largely repaid through forgiveness by the SBA during 2021. The $181 million balance of indirect auto loans is expected to be largely repaid through amortization during 2021 and 2022. The Company targets to mostly offset continuing runoff of residential mortgage loans through direct and indirect mortgage originations in its footprint. The Company’s origination of loans improved quarter-over quarter and year-over year, and lending pipelines were firming near the end of the quarter, with further expansion expected from newly recruited teams.

The first quarter 2021 average loan portfolio yield was 3.73%. The yield on commercial real estate and residential mortgage loans decreased quarter-over-quarter due to ongoing prepayments and amortization of higher rate loans. The yield on commercial and industrial (“C&I”) loans increased quarter-over-quarter to 4.62% from 4.05% due to the forgiveness of PPP loans, which resulted in the recognition of $3.5 million in deferred revenue. The impact of this forgiveness on the C&I yield was approximately 0.76% during the most recent quarter.

The Company has designated certain industries as sensitive to direct and indirect COVID-19 impacts based on exposure, risk rating, and use of federally supported lending and loan modification programs. The Company has focused on hospitality, Firestone (specialty equipment lending), restaurants, and nursing/assisted living facilities, which collectively totaled $840 million at period-end. The Company’s greatest focus is on hospitality loans, which totaled $302 million at period-end and loans by the Company’s Firestone specialty equipment lending subsidiary, which totaled $227 million at period-end.

68

Asset Quality and Credit Loss Allowance: Most loan performance metrics improved during the first quarter of 2021. Total net loan charge-offs decreased by 42% to $10 million from $17 million in the prior quarter. Annualized net loan charge-offs measured 0.51% of first quarter average loans. First quarter charge-offs were comprised principally of loans to businesses in industries designated as COVID sensitive by the Company – hospitality, skilled nursing/assisted living, and Firestone equipment loans.

Total non-performing loans decreased by $9 million, or 14%, to $56 million due primarily to loans exited during the quarter. At period-end, the ratio of non-performing loans to total loans decreased to 0.73% from 0.80%. The decrease in non-performing loans was due to the exit of a hospitality loan which was sold for approximately $10 million. Non-performing loans to COVID sensitive industries decreased to $24 million from $36 million due to this loan sale, with total hospitality and Firestone nonaccruals decreasing to $4 million from $18 million.

Total COVID-19 related loan modifications, including in-process modifications, decreased to $214 million, or 2.8% of total loans from $350 million, or 4.3% of total loans, at the start of the quarter. Modifications to COVID sensitive industries decreased to $176 million from $275 million, with total hospitality and Firestone loan modifications decreasing to $153 million from $225 million. More than 90% of hospitality loans with modifications were on interest-only payment terms at period-end and were supported by interest reserves. Further improvement in hospitality modifications is expected to depend on the timing of recoveries in leisure and business travel activities. More than 90% of Firestone modifications were on interest-only payment terms at period-end and most were expected to return to regular payment schedules in the second quarter based on easing of various state restrictions.

Delinquent accruing loans increased to $35 million, or 0.45% of total loans from $28 million, or 0.34% of total loans during the first quarter of 2021. This increase was due to payment delays for SBA loans under the CARES act as a result of delay at the SBA payment processor at quarter-end, which are expected to be resolved in the second quarter.

Period-end criticized loans decreased to $356 million, at period-end, compared to $359 million at year-end 2020. Classified loans decreased to $235 million from $250 over this time. At period-end, criticized loans measured 4.7% of total loans and classified loans measured 3.1% of total loans. Criticized loans to COVID-19 sensitive industries decreased to $208 million from $223 million over the first quarter of 2021. Included in these totals were criticized loans to hospitality and Firestone borrowers, which declined to $146 million from $158 million.

The Company has traditionally viewed its potential problem loans as those loans from business activities which are rated as classified and continue to accrue interest. These loans have a possibility of loss if weaknesses are not corrected. Accruing classified loans totaled $179 million at period-end. Due to the circumstances of the pandemic, the Company also views deferred special mention loans as having elevated risk of deterioration. These loans totaled $46 million at period-end.

The Company’s estimate of expected credit losses at quarter-end resulted in a ratio of the allowance to total loans measuring 1.62%, which was little changed from 1.58% at the start of the quarter. Excluding the $444 million balance of PPP loans, the allowance was also little changed, measuring 1.72% of total loans at quarter-end. The outlook for expected credit losses as a result of improved economic forecasts was offset under the Company’s reserve calculation methodology by the continuing emergence of credit losses and the level of commercial loans with ongoing modifications. If economic forecasts remain stable or improve, and based on other conditions remaining unchanged, it is anticipated that COVID-related charge-offs could largely be absorbed by the current credit loss allowance. Under the above assumptions, the Company anticipates that the ratio of the allowance to total loans would decrease in 2022 to the general range of the level before the pandemic at the time of the adoption of the Current Expected Credit Losses (“CECL”) accounting methodology.

69

Deposits and Borrowings: Total deposits were unchanged at $10.2 billion in the first quarter of 2021, as a $266 million increase in demand deposits offset paydowns of maturing brokered deposits and lower payroll related balances. The growth in demand deposits benefited from the distribution of federal stimulus payments, together with some proceeds from the $206 million in PPP loans facilitated by the Company in the first quarter. Personal checking account balances increased by $98 million to $1.1 billion. Commercial checking account balances increased by $173 million to $1.6 billion. Payroll balances shifted from money market accounts to NOW accounts due to calendar impacts related to payroll cycles. These balances fluctuate daily and ended the period at $965 million. Some maturing higher cost retail time deposits shifted to other lower rate deposit products. The $282 million reduction in time deposits was primarily due to a $179 million reduction in brokered deposits to $431 million at period-end. At period-end, liabilities held for sale included $647 million in Mid-Atlantic branch deposit balances which are targeted for sale in the second quarter. Borrowings decreased in the first quarter by $123 million to $449 million, as maturing FHLBB borrowings were repaid from liquid assets. Wholesale funds, which include brokered deposits and borrowings, decreased during the quarter by $303 million, or 26%, to $880 million from $1.183 billion.

Derivative Financial Instruments: There were no material changes in the portfolio of outstanding derivative financial instruments, which totaled $3.8 billion in notional amount at period-end. The estimated fair value of these instruments was an asset of $60 million at period-end, which decreased from $94 million at year-end 2020 due to the impact of rising medium term interest rates on the value of outstanding commercial loan interest rate swaps.

Shareholders' Equity: Total shareholders’ equity decreased by $13 million, or 1%, to $1.175 billion during the first quarter. The Company recorded a $20 million decrease in accumulated other comprehensive income due to the after tax impact of a reduction in unrealized debt security gains resulting from the increase in medium term interest rates during the quarter. This was partially offset by the benefit of $7 million in retained earnings. Quarter-end book value per share totaled $23.05 and the non-GAAP measure of tangible book value per share measured $22.39. Capital metrics remained strong, with equity/assets measuring 9.2% and the non-GAAP measure of tangible equity/tangible assets was 9.0%. The Common Equity Tier 1 Ratio improved to 14.2% from 13.8% during the quarter.

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 and MARCH 31, 2020

Summary: The Company recorded first quarter net income of $13 million, or $0.26 per share in 2021, compared to a loss of $20 million, or $0.40 per share in 2020. The largest contributor to the $31 million improvement in pre-tax income from continuing operations was a $28 million reduction in the provision of credit losses on loans compared to the large provision made in the first quarter of 2020 reflecting the emergence of expected future pandemic related credit losses. Additionally, a $10 million charge was recorded in the first quarter of 2020 due to unrealized losses on equity securities as a result of the severe stock market contraction that initially resulted from the pandemic. While this charge did not recur in 2021, the income benefit was partially offset by a $7 million year-over-year increase in expenses related to branch restructuring and professional services. The total net loss in the first quarter of 2020 also reflected an $8 million loss on discontinued national mortgage banking operations. The Company’s non-GAAP measure of adjusted earnings excludes discontinued operations, securities gains and losses, and restructuring expenses. First quarter adjusted net income measured $16 million, or $0.32 per share in 2021, compared to an adjusted loss of $4 million, or $0.07 per share, in 2020. This $20 million improvement was primarily due to the $21 million after-tax reduction in the credit loss provision, offset by higher operating expenses in 2021.

The first quarter efficiency ratio moved adversely to 71% in 2021 compared to 67% in 2020. The first quarter 2020 return on assets was a loss due primarily to the credit loss provision. The first quarter 2021 GAAP return on assets measured 0.42%, and the non-GAAP measure of adjusted return on assets measured 0.51%

70

Revenue: Total first quarter net revenue from continuing operations increased year-over-year by $9 million due to the $10 million loss on equity securities in 2020 that resulted from the stock market decline as the pandemic led to widespread shutdowns. Excluding securities gains and losses, net revenue from continuing operations was unchanged at $101 million. An $11 million decrease in net interest income was offset by an $11 million increase in non-interest income excluding securities gains and losses.

Net Interest Income: Following the approximate 150 basis point downward parallel shock in interest rates near the end of the first quarter of 2020, net interest income decreased by 10% from $86 million in the first quarter of 2020 to $76 million in the following quarter. The net interest margin decreased from 3.04% to 2.62% for these respective periods. The quarterly net interest margin has remained generally stable since the second quarter of 2020, measuring 2.62% in the most recent quarter. For this period, net interest income decreased 3% to $75 million in the most recent quarter. Net interest income in the most recent period included a $3.5 million benefit from the recognition of deferred origination revenue related to PPP loans that were forgiven during the period. The balance of unamortized deferred PPP revenue decreased from $13 million to $7 million. Most of this balance is expected to be recognized in income as additional PPP loans are forgiven in upcoming quarters. The total impact of PPP loans on the net interest margin, including the 1% coupon on the loans, was an increase in the margin of 11 basis points in the most recent quarter. The effect of purchase accounting accretion from past bank acquisitions was to provide 5 basis points of margin benefit in the most recent quarter.

Over the last year, the yield on earning assets has declined steadily from 4.08% in the first quarter of 2020 to 3.07% in the first quarter of 2021, due to asset yield compression in the low rate environment as well as to a shift in mix from loans towards low yielding short-term investments. The cost of funds decreased from 1.11% to 0.48% over this time and the cost of deposits decreased from 0.96% to 0.36%. The cost of deposits has benefited from growth in demand deposits and decreases in higher cost brokered deposits and maturing retail time deposits. The cost of funds has also benefited from the paydown of borrowings. The quarterly cost of borrowings increased slightly due to the higher remaining proportional impact of subordinated debt as shorter term FHLBB borrowings are paid down.

Non-Interest Income: First quarter non-interest income excluding gains and losses increased year-over-year by $11 million to $26 million from $15 million. This was primarily due to an $8 million swing in changes in the fair value of financial instruments related to mortgage servicing rights, outstanding interest rate swap derivatives, and fair valued loans. Due to the decrease in interest rates in the first quarter of 2020, these impacts resulted in a total of $5 million in charges against non-interest income. In the most recent quarter, due to the increase in interest rates, these impacts provided a $3 million benefit to non-interest income. Fees related to the $206 million in PPP loan applications in the most recent quarter generated a $1.5 million fee revenue benefit during the quarter. The PPP program in 2021 is scheduled to be completed in May, and the Company does not expect material revenue from this program after the first quarter. Higher volumes in other lending related activities offset lower overdraft fees as a result of lower overdraft activity, which reflects consumer benefits from stimulus payments received during the quarter and previously.

Credit Loss Provision Expense: The first quarter provision decreased year-over-year to $6.5 million from $35 million. The expense in 2020 reflected the initial recognition of expected credit losses from the emergence of the pandemic. In the first quarter of 2021, the allowance balance decreased and the ratio of the allowance to loans was little changed. The amount of the provision could decrease in the future if expectations for economic factors and/or loan performance improve. The amount of the provision could increase if these expectations worsen. The provision may also be affected by changes in the size or mix of the loan portfolio.

Non-Interest Expense and Tax Expense: Total first quarter non-interest expense increased year-over-year by $7 million to $78 million from $71 million. Excluding $3 million in restructuring and other expense, the non-GAAP measure of adjusted expense increased year-over-year by $4 million to $75 million from $71 million. This was primarily due to higher professional services expense, which included $3 million in 2021 for legal, financial, and other advisory services related to management and board matters during the most recent quarter. A $2 million increase in compensation expense was offset by a $2 million decrease in the category of all other expense. Compensation expense increased due to higher business development accruals and severance expense. The decrease in all other expense was primarily related to lower loan workout and other commercial lending expense.

71

During the most recent quarter, the Company completed the consolidation of nine branch offices, reducing its total branch count from 130 offices at the start of the quarter to 121 offices at the end of the quarter. Full-time equivalent staff decreased to 1,467 positions at March 31, 2021, compared to 1,505 positions at year-end 2020. Full-time equivalent staff in continuing operations totaled 1,548 positions at the end of the first quarter of 2020. The first quarter 2021 effective tax rate was 22% due to a seasonal decrease in tax credit investments recorded during the quarter. In the first quarter of 2020, the Company received an effective tax benefit on continuing operations of 14% due to the $14 million pre-tax loss on continuing operations recorded in that period.

Discontinued Operations: In the fourth quarter of 2020, the Company completed the exit of its national mortgage banking operations. These operations generated a net loss of $20 million in 2020, of which $8 million was recorded in the first quarter of 2020. These operations are excluded from the Company’s measures of adjusted income.

Total Comprehensive Income: Total comprehensive income includes net income together with other comprehensive income, which primarily consists of unrealized gains/losses on debt securities available for sale, after tax. The decrease in interest rates in 2020 resulted in $19 million in other net comprehensive income and the increase in medium term interest rates in 2021 resulted in a $20 million other net comprehensive loss.

Liquidity and Cash Flows: The primary source of cash in the first quarter of 2021 was the decrease in total loans, and the primary use of cash was an increase in short-term investments. Growth in demand deposits contributed to the paydown of maturing wholesale funds. As a result, liquidity improved, with short-term investments increasing to 14% of total assets and total investments increasing to 32% of assets, from 11% and 29%, respectively, at the start of the year. The ratio of loans to deposits decreased to 75% from 79%. The ratio of wholesale funds to assets decreased to 7% from 9%. The Company expects to use approximately $300 million in liquidity to close the planned branch sale in the second quarter. The Company also expects that the majority of the remaining $444 million of outstanding PPP loans are expected to be repaid by the SBA through loan forgiveness in the coming months. The Company expects to repay approximately $475 million in maturing wholesale funds over the rest of the year.

At period-end, unused borrowing capacity at the FHLBB was $1.4 billion, compared to $1.0 billion at the start of the year. Borrowing availability at the Fed discount window was $0.6 billion and $0.8 billion for these dates respectively. Total cash held by the holding company was $92 million and $84 million for these respective dates. The Company targets to use cash at the holding company together with dividends from the Bank to fund dividends and stock repurchases over the coming year.

Capital Resources: Please see the “Shareholders’ Equity” section of the Comparison of Financial Condition for a discussion of shareholders’ equity together with the note on Shareholders' Equity in the consolidated financial statements. Additional information about regulatory capital is contained in the notes to the consolidated financial statements and in the Company's most recent Form 10-K.

The Company views its regulatory capital measures as providing it with a cushion of excess capital in relation to its operating condition and risk profile, and compared to peers. The Company’s last stock repurchase authorization was allowed to expire in 2020 without completion, due to the emergence of the pandemic. This authorization had been approved to facilitate the return of capital to shareholders as a result of planned reductions in the balance sheet which released capital that had been used to support loans and other assets which were no longer viewed as contributing to the Company’s strategic direction.

On April 28, 2021, the Company announced that its Board had approved a stock repurchase program pursuant to which the Company may repurchase up to 2,500,000 shares of its common stock through April 30, 2022. This represents approximately 5% of its outstanding shares as of March 31, 2021. The authorization does not constitute a commitment to repurchase shares. The Company may conduct the repurchases through open market purchases, block trades, unsolicited negotiated transactions, pursuant to a trading plan that may be adopted in accordance with Securities and Exchange Commission (“SEC”) Rule 10b5-1, or in any other manner that complies with the provisions of the Securities Exchange Act of 1934, as amended.

72

Off-Balance Sheet Arrangements and Contractual Obligations: In the normal course of operations, Berkshire engages in a variety of financial transactions that, in accordance with generally accepted accounting principles are not recorded in the Company’s financial statements. These transactions involve, to varying degrees, elements of credit, interest rate, and liquidity risk. Such transactions are used primarily to manage customers’ requests for funding and take the form of loan commitments and lines of credit. Further information about the Company’s off-balance sheet arrangements and information relating to payments due under contractual obligations is presented in the most recent Form 10-K. Changes in the fair value of derivative financial instruments and hedging activities are included on the balance sheet and information related to these matters is reported in the related footnote to the consolidated financial statements, and was included in management’s discussion of changes in financial condition. There were no major changes in off-balance sheet arrangements and contractual obligations during the first quarter of 2021.

Fair Value Measurements: Fair value measurements are discussed in the related financial statement footnote. The most significant measurements of recurring fair values of financial instruments primarily relate to securities available for sale, loans held for sale, and derivative instruments. These measurements were generally based on Level 2 market-based inputs. The premium or discount value of loans has historically been the most significant element of this period-end presentation. This premium or discount is a Level 3 estimate and reflects management’s subjective judgments. At period-end, the premium value of the loan portfolio was estimated at $243 million, or 3.2% of loans, compared to $289 million, or 3.6% of loans, at year-end 2020. The decrease in the premium value was primarily due to the increase in medium term interest rates during the period. Of note, the fair value of non-maturity deposits is made equal to their cost basis under accounting guidelines, and this value does not reflect any factors related to market and economic conditions as of the measurement date.

CORPORATE RESPONSIBILITY UPDATE

Berkshire is committed to purpose-driven, community-dedicated banking that enhances value for all its stakeholders. Learn more about the steps Berkshire is taking at www.berkshirebank.com/csr and in its most recent Corporate Responsibility Report.

Key developments in the quarter include:

•Corporate Responsibility Report- Earlier this month, the Company released its 2020 Corporate Responsibility Report, Meaningful Moments: Answering the Call. The report highlights how the Company’s 175 year heritage guided its response to the COVID-19 pandemic as well as its environmental, social, and governance performance. Berkshire seeks to enhance its purpose-driven, community-dedicated approach to banking to be the leading socially responsible bank in the communities it serves.

•Chief Diversity Officer- As the Bank continues to build on its efforts to be a diverse, inclusive and equitable Company, it has appointed Angela Dixon, a 30-year veteran in the Human Resources and the Diversity, Equity, Inclusion space to the role of Chief Diversity Officer. As Chief Diversity Officer, Dixon will be responsible for driving the Company’s diversity, equity and inclusion strategy in collaboration with executive management and each of Berkshire’s business lines. She will also work to enhance the impact of Berkshire’s existing diversity initiatives and programs.

•Bloomberg Gender Equality Index – Berkshire Bank's focus on diversity, ensuring gender equality and pay equity was highlighted as Bloomberg announced the company would be included in the 2021 Bloomberg Gender-Equality Index (GEI) for the second consecutive year. The GEI tracks the performance of public companies committed to disclosing their efforts to support gender equality through policy development, representation and transparency and rewards the top performing companies with inclusion in the index.

•Human Rights Campaign Best Places to Work for LGBTQ Equality- Berkshire received the top adjusted score of 100 on the Human Rights Campaign Foundation’s 2021 Corporate Equality Index (CEI), the nation’s foremost benchmarking survey and report measuring corporate policies and practices related to LGBTQ workplace equality. The CEI rates employers providing these crucial protections across four central pillars including non-discrimination policies; equitable benefits for LGBTQ workers and their families; supporting an inclusive culture; and corporate social responsibility

73

APPLICATION OF CRITICAL ACCOUNTING POLICIES

The Company’s significant accounting policies are described in Note 1 to the consolidated financial statements included in its most recent Annual Report on Form 10-K. Modifications to significant accounting policies made during the year are described in Note 1 to the consolidated financial statements included in Item 1 of this report. The preparation of the consolidated financial statements in accordance with GAAP and practices generally applicable to the financial services industry requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and to disclose contingent assets and liabilities. Actual results could differ from those estimates.

Management has identified the Company's most critical accounting policies as related to:

•    Allowance for Credit Losses

•    Fair Value of Financial Instruments

These particular significant accounting policies are considered most critical in that they are important to the Company’s financial condition and results, and they require management’s subjective and complex judgment as a result of the need to make estimates about the effects of matters that are inherently uncertain. Both of these most critical accounting policies were significant in determining income and financial condition based on events in 2021.

ENTERPRISE RISK MANAGEMENT

Following sections of this report on Form 10-Q include discussion of market risk and risk factors. Risk management is overseen by the Company’s Chief Risk Officer, who reports directly to the CEO. This position oversees risk management policy, credit, compliance, and information security. Enterprise risk assessments are brought to the Company’s Enterprise Risk Management Committee, and then are reported to the Board’s Risk Management and Capital Committee. The high level corporate risk assessment focuses on the following material business risks: credit risk, interest rate risk, price risk, liquidity risk, operational risk, compliance risk, strategic risk, and reputation risk, with the credit risk category having the highest weighting. Based on management's recent review, all risks were within corporate appetites. Increases in risks were noted for credit risk and compliance risk over the past year due largely to the pandemic; liquidity risks were declining due to elevated liquid assets. For all material business risks, residual risk was viewed as medium/low to medium due to mitigating controls functioning in the Company.

74

ITEM 3.                 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For additional discussion about the Company’s Quantitative and Qualitative Aspects of Market Risk, please review Item 7A of the most recent report on Form 10-K which sets forth the methodologies employed by the Company and the various aspects of its analysis of its interest rate sensitivity. Berkshire’s objective is to maintain a neutral or asset sensitive interest rate risk profile, as measured by the sensitivity of net interest income to market interest rate changes.

The Company’s asset sensitivity increased in the first quarter of 2021. This reflected the impact of loan portfolio runoff reinvested in short-term investments, as well as the increase in demand deposits which were used to paydown short-term wholesale borrowings. The percentage change in net interest income in the second year of a 200 basis point upward parallel ramp in interest rates increased to 10.8%, compared to 4.0% at the end of 2020. At period-end, the Company was positively sensitive to upward shocks, with the year one impact of an up 200 basis point shock being in the same range as the year two ramp impact cited above. Additionally, the Company’s model indicates that net interest income is positively sensitive to a yield curve twist that results in a steepening of the yield curve compared to conditions at first quarter period-end.

75

ITEM 4.           CONTROLS AND PROCEDURES

a)  Disclosure controls and procedures.

The principal executive officers, including the principal financial officer, based on their evaluation of disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q, have concluded that the Company’s disclosure controls and procedures were effective.

b)  Changes in internal control over financial reporting.

There were no changes in the Company’s internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

76

PART II

ITEM 1.            LEGAL PROCEEDINGS

As of March 31, 2021, neither the Company nor the Bank was involved in any pending legal proceedings believed by management to be material to the Company’s financial condition or results of operations. Periodically, there have been various claims and lawsuits involving the Bank, such as claims to enforce liens, condemnation proceedings on properties in which the Bank holds security interests, claims involving the making and servicing of real property loans, and other issues incident to the Bank’s business. A summary of certain legal matters involving unsettled litigation or pertaining to pending transactions are as follows:

On February 4, 2020, the Bank filed a complaint in the New York State Supreme Court for the County of Albany against Pioneer Bank (“Pioneer”) seeking damages of approximately $16.0 million. The complaint alleges that Pioneer is liable to the Bank for a credit loss of approximately $16.0 million suffered by the Bank in the third quarter of 2019 as a result of Pioneer’s breach of loan participation agreements in which it served as the lead bank, as well as constructive fraud, fraudulent concealment and/or negligent misrepresentation. Pioneer has filed a motion to dismiss aspects of the Bank’s complaint, to which the Bank is in the process of responding. The Company wrote down the underlying credit loss in its entirety in the third quarter of 2019, but recognized a partial recovery of $1.7 million early in the second quarter of 2020. The Company has not accrued for any additional anticipated recovery at this time.

On September 11, 2020, the Company received notice of a demand letter served on the Company and the Bank by a former mortgagee of the Bank pursuant to the Massachusetts Consumer Protection Act, M.G.L Ch. 93A (“Chapter 93A). The demand letter alleges that a mortgage payoff statement tendered by the Bank to the mortgagee included a mortgage discharge preparation fee that is purportedly impermissible under Massachusetts law. The demand letter also claims that the Bank failed to provide a copy of the recorded mortgage discharge to the mortgagee in a timely manner. The demand letter further purports to state claims on behalf of a putative class of similarly situated Massachusetts mortgage customers of the Bank, who allegedly may have suffered similar violations of Massachusetts law. The demand letter seeks monetary damages for the original mortgagee claimant and the putative class, plus double or treble damages and reasonable attorneys’ fees, as may be allowed under Chapter 93A. The Company and the Bank have retained outside litigation counsel, who has responded to the demand letter and denied all claims on behalf of the Company and the Bank. No class action or other lawsuit has been served on the Company or the Bank as of the date of this filing.

On or about August 10, 2020, a former employee of the Bank’s subsidiary First Choice Loan Services Inc. (“FCLS”) filed a complaint in the Court of Common Pleas, Bucks County Pennsylvania against FCLS and two of its former senior corporate officers generally alleging wrongful termination as a result of purported whistleblower retaliation and other violations of New Jersey state employment law. The complaint also purports to name the Bank and the Company as additional defendants, even though neither entity ever employed, paid wages to or contracted with the plaintiff. On November 16, 2020, the plaintiff filed a First Amended Complaint reiterating the same claims against the same defendants. The Company's liability insurer has provided outside litigation counsel to defend the Company and the Bank in this matter, as well as FCLS and its former senior corporate officers. On December 7, 2020, defense counsel filed Preliminary Objections on behalf of the Company, the Bank, FCLS and FCLS’s former senior corporate officers denying the plaintiff’s claims and seeking dismissal of the case and an order that the plaintiff’s claims must proceed through arbitration in accordance with contractual obligations set forth in plaintiff’s previous employment agreement with FCLS.

77

ITEM 1A.               RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed below and in Part I, “Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K, which could materially affect the Company's business, financial condition, or future operating results. Please also see the earlier discussion in this report about Enterprise Risk Management. The risks described in this form are not the only risks presently facing the Company. Additional risks and uncertainties not currently known to the Company, or currently deemed to be immaterial, also may materially adversely affect the Company's business, financial condition, and/or operating results. There were no other major changes in risk factors identified during the first quarter of 2021.

78

ITEM 2.               UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a)                Recent Sales of Unregistered Securities

The Company occasionally engages in the practice of transferring unregistered securities for the purpose of completing business transactions. These shares are issued to vendors or other organizations as consideration for services performed in accordance with each contract. During the three months ended March 31, 2021 and 2020 there were no shares transferred.

(b)                 Not applicable.

(c)                 The following table provides certain information with regard to shares repurchased by the Company in the first quarter of 2021:

	Total number of	Average price		Total number of shares purchased as part of publicly announced	Maximum number of shares that may yet be purchased under
Period	shares purchased	paid per share		plans or programs	the plans or programs
January 1-31, 2021	—	$	—	—	—
February 1-28, 2021	—	—		—	—
March 1-31, 2021	—	—		—	—
Total	—	$	—	—	—

On April 28, 2021, the Company announced that its Board of Directors has approved a stock repurchase program pursuant to which the Company may repurchase up to 2,500,000 shares of its common stock through April 30, 2022. This represents approximately 5% of its outstanding shares as of March 31, 2021.

ITEM 3.                DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.                  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.                OTHER INFORMATION

None.

79

ITEM 6.                   EXHIBITS

3.1	Amended and Restated Certificate of Incorporation of Berkshire Hills Bancorp, Inc.(1)
3.2	Amended and Restated Bylaws of Berkshire Hills Bancorp, Inc. (2)
4.1	Form of Common Stock Certificate of Berkshire Hills Bancorp, Inc. (3)
4.2	Certificate of Designations of Series B Non-Voting Preferred Stock of Berkshire Hills Bancorp, Inc. (4)
10.1	Employment Agreement between Berkshire Hills Bancorp, Inc., Berkshire Bank and Nitin J. Mhatre dated January 21, 2021 (5)
10.2	Cooperation Agreement, dated March 7, 2021, by and between Berkshire Hills Bancorp, Inc. and HoldCo Asset Management, LP. (6)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in Inline XBRL: (i) the Consolidated Statements of Condition, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements tagged as blocks of text and including detailed tags.
104	The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in Inline XBRL.

_______________________________________

(1)     Incorporated herein by reference from the Exhibits to the Form 10-Q as filed on August 9, 2018.

(2)    Incorporated herein by reference from the Exhibits to the Form 8-K as filed on June 26, 2017.

(3)    Incorporated herein by reference from the Exhibits to the Form S-1, Registration Statement and amendments thereto, initially filed on March 10, 2000, Registration No. 333-32146.

(4)    Incorporated herein by reference from the Exhibits to the Form 8-K as filed on October 16, 2017.

(5)    Incorporated herein by reference from Exhibit 10.1 to the Form 8-K as filed on January 26, 2021.

(6)    Incorporated herein by reference from Exhibit 10.1 to the Form 8-K as filed on March 8, 2021.

80

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BERKSHIRE HILLS BANCORP, INC.
Dated: May 10, 2021	By:	/s/ Nitin J. Mhatre
	Nitin J. Mhatre
	President and Chief Executive Officer
Dated: May 10, 2021	By:	/s/ Subhadeep Basu
	Subhadeep Basu
	Senior Executive Vice President, Chief Financial Officer

81

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Nitin J. Mhatre, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Berkshire Hills Bancorp, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 10, 2021	/s/ Nitin J. Mhatre
	Nitin J. Mhatre
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Subhadeep Basu, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Berkshire Hills Bancorp, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 10, 2021	/s/ Subhadeep Basu
	Subhadeep Basu
	Senior Executive Vice President, Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Berkshire Hills Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2021, as filed with the Securities and Exchange Commission (the “Report”), I, Nitin J. Mhatre, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

May 10, 2021	/s/ Nitin J. Mhatre
	Nitin J. Mhatre
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Berkshire Hills Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2021, as filed with the Securities and Exchange Commission (the “Report”), I, Subhadeep Basu, Senior Executive Vice President, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

May 10, 2021	/s/ Subhadeep Basu
	Subhadeep Basu
	Senior Executive Vice President, Chief Financial Officer

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2021	May 06, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	001-15781
Entity Registrant Name	BERKSHIRE HILLS BANCORP, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	04-3510455
Entity Address, Address Line One	60 State Street
Entity Address, City or Town	Boston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02109
City Area Code	800
Local Phone Number	773-5601
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	BHLB
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		51,203,211
Entity Central Index Key	0001108134
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Assets
Cash and due from banks	$ 81,285	$ 91,219
Short-term investments	1,818,323	1,466,656
Total cash and cash equivalents	1,899,608	1,557,875
Trading security, at fair value	9,350	9,708
Marketable equity securities, at fair value	15,801	18,513
Securities available for sale, at fair value	1,627,330	1,695,232
Securities held to maturity (fair values of $627,297 and $491,855)	610,637	465,091
Federal Home Loan Bank stock and other restricted securities	28,680	34,873
Total securities	2,291,798	2,223,417
Less: Allowance for credit losses on held to maturity securities	(111)	(104)
Net securities	2,291,687	2,223,313
Loans held for sale	18,377	17,748
Total loans	7,658,778	8,081,519
Less: Allowance for credit losses on loans	(123,800)	(127,302)
Net loans	7,534,978	7,954,217
Premises and equipment, net	108,538	112,663
Other real estate owned	149	149
Other intangible assets	33,500	34,819
Cash surrender value of bank-owned life insurance policies	234,043	232,695
Other assets	332,766	387,230
Assets from discontinued operations	303,697	317,304
Total assets	12,757,343	12,838,013
Liabilities
Demand deposits	2,750,393	2,484,249
NOW and other deposits	1,856,988	1,003,005
Money market deposits	2,486,261	3,371,353
Savings deposits	1,047,506	972,116
Time deposits	2,103,222	2,385,085
Total deposits	10,244,370	10,215,808
Short-term debt	0	40,000
Long-term Federal Home Loan Bank advances and other	351,354	434,357
Subordinated borrowings	97,338	97,280
Total borrowings	448,692	571,637
Other liabilities	229,832	232,730
Liabilities held for sale	659,310	630,065
Total liabilities	11,582,204	11,650,240
Shareholders’ equity
Common stock ($0.01 par value; 100,000,000 shares authorized and 51,903,190 shares issued and 50,988,285 shares outstanding in 2021; 51,903,190 shares issued and 50,833,087 shares outstanding in 2020)	528	528
Additional paid-in capital - common stock	1,424,349	1,427,239
Unearned compensation	(7,722)	(6,245)
Retained earnings (deficit)	(226,516)	(233,344)
Accumulated other comprehensive income	10,721	30,871
Treasury stock, at cost (914,905 shares in 2021 and 1,070,103 shares in 2020)	(26,221)	(31,276)
Total shareholders’ equity	1,175,139	1,187,773
Total liabilities and shareholders’ equity	$ 12,757,343	$ 12,838,013

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Fair Value	$ 627,297	$ 491,855
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	51,903,190	51,903,190
Common stock, shares outstanding (in shares)	50,988,285	50,833,087
Treasury stock (in shares)	914,905	1,070,103

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Interest and dividend income from continuing operations
Loans	$ 75,933	$ 101,695
Securities and other	12,220	14,500
Total interest and dividend income	88,153	116,195
Interest expense from continuing operations
Deposits	9,583	23,838
Borrowings	3,477	5,929
Total interest expense	13,060	29,767
Net interest income from continuing operations	75,093	86,428
Non-interest income from continuing operations
Total fee income	24,076	15,802
Other, net	2,148	(436)
(Loss) on securities, net	(31)	(9,730)
Total non-interest income	26,193	5,636
Total net revenue from continuing operations	101,286	92,064
Provision for credit losses	6,500	34,807
Non-interest expense from continuing operations
Compensation and benefits	38,735	36,909
Occupancy and equipment	11,024	11,132
Technology and communications	8,593	8,081
Marketing and promotion	595	1,165
Professional services	6,614	2,720
FDIC premiums and assessments	1,120	1,482
Other real estate owned and foreclosures	2	27
Amortization of intangible assets	1,319	1,580
Acquisition, restructuring, and other expenses	3,486	0
Other	6,666	8,229
Total non-interest expense	78,154	71,325
Income/(loss) from continuing operations before income taxes	16,632	(14,068)
Income tax (benefit)/expense	3,601	(1,996)
Net income/(loss) from continuing operations	13,031	(12,072)
(Loss)/income from discontinued operations before income taxes	0	(10,629)
Income tax (benefit)/expense	0	(2,831)
Net (loss)/income from discontinued operations	0	(7,798)
Net income/(loss)	13,031	(19,870)
Preferred stock dividend	0	125
Income/(loss) available to common shareholders	$ 13,031	$ (19,995)
Basic earnings/(loss) per common share:
Continuing operations (in dollars per share)	$ 0.26	$ (0.24)
Discontinued operations (in dollars per share)	0	(0.16)
Total (in dollars per share)	0.26	(0.40)
Diluted earnings/(loss) per common share:
Continuing operations (in dollars per share)	0.26	(0.24)
Discontinued operations (in dollars per share)	0	(0.16)
Total (in dollars per share)	$ 0.26	$ (0.40)
Weighted average shares outstanding:
Basic (in shares)	50,330	50,204
Diluted (in shares)	50,565	50,204
Deposit related fees
Non-interest income from continuing operations
Total fee income	$ 7,126	$ 7,947
Insurance commissions and fees
Non-interest income from continuing operations
Total fee income	3,130	3,024
Wealth management fees
Non-interest income from continuing operations
Total fee income	2,772	2,570
Mortgage banking originations
Non-interest income from continuing operations
Total fee income	802	959
Loan fees and revenue
Non-interest income from continuing operations
Total fee income	$ 10,246	$ 1,302

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Statement of Comprehensive Income [Abstract]
Net income/(loss)	$ 13,031	$ (19,870)
Other comprehensive income, before tax:
Changes in unrealized gain on debt securities available-for-sale	(27,013)	25,614
Income taxes related to other comprehensive income:
Changes in unrealized gain on debt securities available-for-sale	6,863	(6,590)
Total other comprehensive (loss)/income	(20,150)	19,024
Total comprehensive (loss)	$ (7,119)	$ (846)

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Preferred stock	Common stock	Additional paid-in capital	Unearned compensation	Retained earnings (deficit)	Accumulated other comprehensive income/(loss)	Treasury stock	Cumulative Effect, Period of Adoption, Adjustment	Cumulative Effect, Period of Adoption, Adjustment Retained earnings (deficit)
Balance at beginning of period (in shares) at Dec. 31, 2019		522	49,585
Balance at beginning of period at Dec. 31, 2019	$ 1,758,564	$ 40,633	$ 517	$ 1,422,441	$ (8,465)	$ 361,082	$ 11,993	$ (69,637)	$ (24,380)	$ (24,380)
Comprehensive income (loss)
Net income (loss)	(19,870)					(19,870)
Other comprehensive income (loss)	19,024						19,024
Total comprehensive income (loss)	(846)					(19,870)	19,024
Conversion of preferred stock to common stock (in shares)		(261)	522
Conversion of preferred stock to common stock	0	$ (20,308)	$ 6	5,391				14,911
Cash dividends declared on common shares	(12,050)					(12,050)
Cash dividends declared on preferred shares	(125)					(125)
Treasury shares repurchased (in shares)			(14)
Treasury shares repurchased	(473)							(473)
Forfeited shares (in shares)			(11)
Forfeited shares				(84)	375			(291)
Exercise of stock options (in shares)			24
Exercise of stock options	519					(215)		734
Restricted stock grants (in shares)			108
Restricted stock grants				52	(3,133)			3,081
Stock-based compensation	1,459				1,459
Other, net (in shares)			(15)
Other, net	(390)							(390)
Balance at end of period (in shares) at Mar. 31, 2020		261	50,199
Balance at end of period at Mar. 31, 2020	1,722,278	$ 20,325	$ 523	1,427,800	(9,764)	304,442	31,017	(52,065)
Balance at beginning of period (in shares) at Dec. 31, 2020		0	50,833
Balance at beginning of period at Dec. 31, 2020	1,187,773	$ 0	$ 528	1,427,239	(6,245)	(233,344)	30,871	(31,276)
Comprehensive income (loss)
Net income (loss)	13,031					13,031
Other comprehensive income (loss)	(20,150)						(20,150)
Total comprehensive income (loss)	(7,119)					13,031	(20,150)
Cash dividends declared on common shares	(6,124)					(6,124)
Forfeited shares (in shares)			(52)
Forfeited shares				(234)	1,333			(1,099)
Exercise of stock options (in shares)			5
Exercise of stock options	69					(79)		148
Restricted stock grants (in shares)			210
Restricted stock grants				(2,660)	(3,485)			6,145
Stock-based compensation	675				675
Other, net (in shares)			(8)
Other, net	(135)							(139)
Balance at end of period (in shares) at Mar. 31, 2021		0	50,988
Balance at end of period at Mar. 31, 2021	$ 1,175,139	$ 0	$ 528	$ 1,424,349	$ (7,722)	$ (226,516)	$ 10,721	$ (26,221)

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Statement of Stockholders' Equity [Abstract]
Common stock, cash dividends declared (in dollars per share)	$ 0.12	$ 0.24
Preferred stock, cash dividends declared (in dollars per share)		$ 0.48

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net income/(loss) from continuing operations	$ 13,031	$ (12,072)
Net (loss) from discontinued operations	0	(7,798)
Net income/(loss)	13,031	(19,870)
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Provision for credit losses	6,500	34,807
Net amortization of securities	389	762
Change in unamortized net loan costs and premiums	(2,755)	386
Premises and equipment depreciation and amortization expense	2,839	2,680
Stock-based compensation expense	675	1,459
Accretion of purchase accounting entries, net	(1,305)	(3,121)
Amortization of other intangibles	1,319	1,580
Income from cash surrender value of bank-owned life insurance policies	(1,348)	(1,106)
Securities losses, net	31	9,730
Net change in loans held-for-sale	3,938	4,472
Loss on disposition of assets	2,811	0
Amortization of interest in tax-advantaged projects	33	486
Net change in other	(2,584)	(11,571)
Net cash provided by operating activities of continuing operations	23,574	28,492
Net cash provided (used) by operating activities of discontinued operations	0	6,560
Net cash provided by operating activities	23,574	35,052
Cash flows from investing activities:
Net decrease in trading security	192	181
Purchases of marketable equity securities	0	(11,437)
Proceeds from sales of marketable equity securities	2,849	12,329
Purchases of securities available for sale	(103,877)	(160,925)
Proceeds from sales of securities available for sale	0	3,520
Proceeds from maturities, calls, and prepayments of securities available for sale	166,998	90,758
Purchases of securities held to maturity	(155,417)	0
Proceeds from maturities, calls, and prepayments of securities held to maturity	9,377	20,372
Net change in loans	412,255	217,429
Net change in Mid-Atlantic region loans held for sale	16,830	0
Proceeds from surrender of bank-owned life insurance	0	553
Purchase of Federal Home Loan Bank stock	0	(6,741)
Proceeds from redemption of Federal Home Loan Bank stock	6,193	454
Net investment in limited partnership tax credits	0	(2,783)
Purchase of premises and equipment, net	(2,297)	(3,386)
Net cash provided by investing activities	353,103	160,324
Cash flows from financing activities:
Net increase/(decrease) in deposits	28,562	(262,203)
Net increase in Mid-Atlantic region deposits held for sale	29,245	0
Proceeds from Federal Home Loan Bank advances and other borrowings	0	315,854
Repayments of Federal Home Loan Bank advances and other borrowings	(123,022)	(102,382)
Purchase of treasury stock	0	(473)
Exercise of stock options	69	519
Common and preferred stock cash dividends paid	(6,124)	(12,175)
Settlement of derivative contracts with financial institution counterparties	36,326	(108,925)
Net cash used by financing activities	(34,944)	(169,785)
Net change in cash and cash equivalents	341,733	25,591
Cash and cash equivalents at beginning of period	1,557,875	579,829
Cash and cash equivalents at end of period	1,899,608	605,420
Supplemental cash flow information:
Interest paid on deposits	10,149	26,830
Interest paid on borrowed funds	3,655	6,033
Income taxes (refunded) paid, net	(2,386)	178
Other non-cash changes:
Other net comprehensive income	(20,150)	19,024
Unsettled transactions related to security purchases	22,126	0
Reclass of seasoned loan portfolios to held-for-sale, net	9,500	27,940
Real estate owned acquired in settlement of loans	0	224
Retained earnings (deficit)
Cash flows from operating activities:
Net income/(loss)	13,031	(19,870)
Retained earnings (deficit) | Cumulative Effect, Period of Adoption, Adjustment
Other non-cash changes:
Impact to retained earnings from adoption of ASC 326, net of tax	$ 0	$ 24,380

XML

BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The Consolidated Financial Statements (the “financial statements”) of Berkshire Hills Bancorp, Inc. and its subsidiaries (the “Company” or “Berkshire”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company is a Delaware corporation, headquartered in Boston, Massachusetts, and the holding company for Berkshire Bank (the “Bank”), a Massachusetts-chartered trust company headquartered in Pittsfield, Massachusetts, and Berkshire Insurance Group, Inc. These financial statements include the accounts of the Company, its wholly-owned subsidiaries and the Bank’s consolidated subsidiaries. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise.

The Company has evaluated subsequent events for potential recognition and/or disclosure through the date these financial statements were issued.

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 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 disclosures Berkshire Hills Bancorp, Inc. previously filed with the Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. In management’s opinion, all adjustments necessary for a fair statement are reflected in the interim periods.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ from those estimates.

Refer to Note 10 – Other Commitments, Contingencies, and Off-Balance Sheet Activities for pandemic related risks and uncertainties.

Recently Adopted Accounting Principles

In August 2018, the FASB issued ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans.” This ASU amends and modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The amendments in this update remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. As ASU No. 2018-14 only revises disclosure requirements, the adoption did not have a material impact on the Company’s Consolidated Financial Statements.

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU No. 2019-12 removes specific exceptions to the general principles in FASB ASC Topic 740. It eliminates the need for an organization to analyze whether the following apply in a given period: (1) exception to the incremental approach for intraperiod tax allocation; (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments; and (3) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 also improves financial statement preparers’ application of income tax-related guidance and simplifies: (1) franchise taxes that are partially based on income; (2) transactions with a government that result in a step up in the tax basis of goodwill; (3) separate financial statements of legal entities that are not subject to tax; and (4) enacted changes in tax laws in interim periods. The adoption of ASU No. 2019-12 did not have a material impact on the Company's Consolidated Financial Statements.

In January 2020, the FASB issued ASU No. 2020-01, “Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force)”. ASU No. 2020-01 clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. In addition, this ASU provides direction that a company should not consider whether the underlying securities would be accounted for under the equity method or the fair value option when it is determining the accounting for certain forward contracts and purchased options, upon either settlement or exercise. The amendments are to be applied prospectively. The adoption of ASU No. 2020-01 did not have a material impact on the Company's Consolidated Financial Statements.

In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848): Scope.” ASU No. 2021-01 clarifies that certain optional expedients and exceptions in ASC 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU No. 2021-01 also amends the expedients and exceptions in ASC 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. ASU No. 2021-01 was effective upon issuance and generally can be applied through December 31, 2022. The adoption of ASU 2021-01 did not significantly impact the Company’s Consolidated Financial Statements.

Future Application of Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU No. 2020-04 provides temporary optional expedients and exceptions to GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as SOFR. For instance, entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Entities can also elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. Finally, entities can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. It is anticipated that this ASU will simplify any modifications that are executed between the selected start date (yet to be determined) and December 31, 2022 that are directly related to LIBOR transition by allowing prospective recognition of the continuation of the contract, rather than extinguishment of the old contract resulting in writing off unamortized fees/costs. The Company is currently evaluating the impact of adopting the new guidance on the Consolidated Financial Statements.

XML

DISCONTINUED OPERATIONS AND HELD FOR SALE

3 Months Ended

Mar. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS AND HELD FOR SALE

DISCONTINUED OPERATIONS AND HELD FOR SALE

During the first quarter of 2019, the Company reached the decision to pursue the sale of the national mortgage banking operations of First Choice Loan Services, Inc. (“FCLS”), – a subsidiary of the Bank. The decision was based on a number of strategic priorities and other factors, including the competitiveness of the mortgage industry. FCLS continued to operate and serve its customers as the Company initiated the process of identifying a buyer. As a result of these actions, the Company classified the operations of FCLS as discontinued under ASC 205-20. The Consolidated Balance Sheets, Consolidated Statements of Operations, and Consolidated Statements of Cash Flows present discontinued operations retrospectively for current and prior periods.

On May 7, 2020, the Company completed a transaction to sell certain assets and liabilities related to the operations of FCLS. During the fourth quarter of 2020, the Company completed the final wind-down of the operations of FCLS. Operating results for the year ended December 31, 2020, include expenses related to the wind-down of operations.

As of March 31, 2021 and December 31, 2020, there were no assets or liabilities related to the discontinued operations of FCLS.

The following presents operating results of the discontinued operations of FCLS for the three months ended March 31, 2021 and March 31, 2020:

	Three Months Ended March 31,
(In thousands)	2021		2020
Interest income	$	—	$	729
Interest expense	—		282
Net interest income	—		447
Non-interest income	—		1,358
Total net revenue	—		1,805
Non-interest expense	—		12,434
(Loss) from discontinued operations before income taxes	—		(10,629)
Income tax (benefit)	—		(2,831)
Net (loss) from discontinued operations	$	—	$	(7,798)

Mid-Atlantic Branch Sale

The Company has entered into an agreement to sell its eight Mid-Atlantic branches to Investors Bank of Short Hills, New Jersey, subject to customary regulatory approvals. The transfer is targeted for completion in the first half of 2021. The branch sale includes loans with a total balance of $284 million and deposit accounts with a total balance of $647 million as of March 31, 2021. These balances are included in assets held for sale and liabilities held for sale on the Consolidated Balance Sheets. The buyer has agreed to pay a premium equal to 3.0% of the final deposit balance transferred. The sale includes all branch premises and equipment, and the agreement provides that the buyer intends to offer employment to all associated staff. Berkshire expects to complete the net transfer with funds from short-term investments. The branch sale will have no effect on Berkshire’s Mid-Atlantic specialized commercial lending operations, including SBA lending at its 44 Business Capital Division and its asset-based lending relationships.

The following is a summary of the assets and liabilities related to the branch sale at March 31, 2021 and December 31, 2020:

(In thousands)	March 31, 2021		December 31, 2020
Assets
Loans	$	283,769	$	300,599
Other assets	19,928		16,705
Total assets	$	303,697	$	317,304
Liabilities
Deposits	$	646,622	$	617,377
Other liabilities	12,688		12,688
Total liabilities	$	659,310	$	630,065

XML

TRADING SECURITY	3 Months Ended
	Mar. 31, 2021
Investments, Debt and Equity Securities [Abstract]
TRADING SECURITY	TRADING SECURITYThe Company holds a tax-advantaged economic development bond accounted for at fair value. The security had an amortized cost of $8.5 million and $8.7 million, and a fair value of $9.3 million and $9.7 million, at March 31, 2021 and December 31, 2020, respectively. As discussed further in Note 8 - Derivative Financial Instruments and Hedging Activities, the Company 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 were no other securities in the trading portfolio at March 31, 2021 or December 31, 2020.

XML

SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND MARKETABLE EQUITY SECURITIES

3 Months Ended

Mar. 31, 2021

Investments, Debt and Equity Securities [Abstract]

SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND MARKETABLE EQUITY SECURITIES

SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND MARKETABLE

        EQUITY SECURITIES

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

(In thousands)	Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance
March 31, 2021
Securities available for sale
Municipal bonds and obligations	$	83,922	$	6,378	$	—	$	90,300	$	—
Agency collateralized mortgage obligations	713,215		14,922		(3,583)		724,554		—
Agency mortgage-backed securities	453,042		2,813		(8,659)		447,196		—
Agency commercial mortgage-backed securities	267,596		4,020		(3,101)		268,515		—
Corporate bonds	44,294		729		(9)		45,014		—
Other bonds and obligations	50,691		1,068		(8)		51,751		—
Total securities available for sale	1,612,760		29,930		(15,360)		1,627,330		—
Securities held to maturity
Municipal bonds and obligations	266,609		16,884		(592)		282,901		71
Agency collateralized mortgage obligations	151,092		4,764		(1,054)		154,802		—
Agency mortgage-backed securities	65,052		155		(1,682)		63,525		—
Agency commercial mortgage-backed securities	124,379		398		(2,288)		122,489		—
Tax advantaged economic development bonds	3,210		75		—		3,285		40
Other bonds and obligations	295		—		—		295		—
Total securities held to maturity	610,637		22,276		(5,616)		627,297		111
Marketable equity securities	15,707		218		(124)		15,801		—
Total	$	2,239,104	$	52,424	$	(21,100)	$	2,270,428	$	111

(In thousands)	Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance
December 31, 2020
Securities available for sale
Municipal bonds and obligations	$	90,273	$	7,530	$	—	$	97,803	$	—
Agency collateralized mortgage obligations	740,225		16,836		(235)		756,826		—
Agency mortgage-backed securities	433,311		4,954		(133)		438,132		—
Agency commercial mortgage-backed securities	278,990		9,835		(175)		288,650		—
Corporate bonds	59,098		942		(10)		60,030		—
Other bonds and obligations	52,080		1,719		(8)		53,791		—
Total securities available for sale	1,653,977		41,816		(561)		1,695,232		—
Securities held to maturity
Municipal bonds and obligations	246,520		20,106		—		266,626		64
Agency collateralized mortgage obligations	153,561		5,989		(171)		159,379		—
Agency mortgage-backed securities	35,865		198		(29)		36,034		—
Agency commercial mortgage-backed securities	25,481		590		(12)		26,059		—
Tax advantaged economic development bonds	3,369		93		—		3,462		40
Other bonds and obligations	295		—		—		295		—
Total securities held to maturity	465,091		26,976		(212)		491,855		104
Marketable equity securities	18,061		767		(315)		18,513		—
Total	$	2,137,129	$	69,559	$	(1,088)	$	2,205,600	$	104

The following table summarizes the activity in the allowance for credit losses for debt securities held to maturity by security type for the three months ended March 31, 2021 and 2020:

(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at December 31, 2020	$	64	$	40	$	104
Provision for credit losses	7		—		7
Balance at March 31, 2021	$	71	$	40	$	111

(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at December 31, 2019	$	—	$	—	$	—
Impact of ASC 326 adoption	83		226		309
Provision for credit losses - reversal	—		(168)		(168)
Balance at March 31, 2020	$	83	$	58	$	141

Credit Quality Information

The Company monitors the credit quality of held to maturity securities through credit ratings from various rating agencies. Credit ratings express opinions about the credit quality of a security and are utilized by the Company to make informed decisions. Investment grade securities are rated BBB-/Baa3 or higher and generally considered by the rating agencies and market participants to be of low credit risk. Conversely, securities rated below investment grade are considered to have distinctively higher credit risk than investment grade securities. For securities without credit ratings, the Company utilizes other financial information indicating the financial health of the underlying municipality, agency, or organization.

As of March 31, 2021, none of the Company's investment securities were delinquent or in non-accrual status.

The amortized cost and estimated fair value of available for sale (“AFS”) and held to maturity (“HTM”) securities segregated by contractual maturity at March 31, 2021 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.

	Available for sale				Held to maturity
	Amortized		Fair		Amortized		Fair
(In thousands)	Cost		Value		Cost		Value
Within 1 year	$	31,134	$	31,147	$	1,872	$	1,874
Over 1 year to 5 years	7,206		7,331		4,270		4,317
Over 5 years to 10 years	51,953		53,260		23,311		24,210
Over 10 years	88,614		95,327		240,661		256,080
Total bonds and obligations	178,907		187,065		270,114		286,481
Mortgage-backed securities	1,433,853		1,440,265		340,523		340,816
Total	$	1,612,760	$	1,627,330	$	610,637	$	627,297

During the three months ended March 31, 2021, purchases of AFS securities totaled $103.9 million. During the three months ended March 31, 2021, there were no sales of AFS securities. During the three months ended March 31, 2020, purchases of AFS securities totaled $160.9 million and the proceeds from the sale of AFS securities totaled $3.5 million. During the three months ended March 31, 2021, there were no gross gains or losses on AFS securities. During the three months ended March 31,2020, there were no gross gains on AFS securities and gross losses totaled $1 thousand. These gains and losses are included in gain/(loss) on securities, net on the consolidated statements of operations.

Securities available for sale and held to maturity 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
March 31, 2021
Securities available for sale
Agency collateralized mortgage obligations	$	3,583	$	150,110	$	—	$	—	$	3,583	$	150,110
Agency mortgage-backed securities	8,654		346,395		5		384		8,659		346,779
Agency commercial mortgage-backed securities	3,101		132,234		—		—		3,101		132,234
Corporate bonds	—		—		9		4,876		9		4,876
Other bonds and obligations	—		—		8		981		8		981
Total securities available for sale	$	15,338	$	628,739	$	22	$	6,241	$	15,360	$	634,980
Securities held to maturity
Municipal bonds and obligations	$	592	$	23,359	$	—	$	—	$	592	$	23,359
Agency collateralized mortgage obligations	1,054		83,449		—		—		1,054		83,449
Agency mortgage-backed securities	1,682		59,167		—		—		1,682		59,167
Agency commercial mortgage-backed securities	2,288		103,015		—		—		2,288		103,015
Total securities held to maturity	5,616		268,990		—		—		5,616		268,990
Total	$	20,954	$	897,729	$	22	$	6,241	$	20,976	$	903,970
December 31, 2020
Securities available for sale
Agency collateralized mortgage obligations	$	235	$	77,898	$	—	$	—	$	235	$	77,898
Agency mortgage-backed securities	131		39,939		2		256		133		40,195
Agency commercial mortgage-backed securities	175		51,435		—		—		175		51,435
Corporate bonds	10		4,875		—		—		10		4,875
Other bonds and obligations	—		—		8		1,030		8		1,030
Total securities available for sale	$	551	$	174,147	$	10	$	1,286	$	561	$	175,433
Securities held to maturity
Agency collateralized mortgage obligations	$	171	$	25,048	$	—	$	—	$	171	$	25,048
Agency mortgage-backed securities	29		20,710		—		—		29		20,710
Agency commercial mortgage-backed securities	12		10,216		—		—		12		10,216
Total securities held to maturity	212		55,974		—		—		212		55,974
Total	$	763	$	230,121	$	10	$	1,286	$	773	$	231,407

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 March 31, 2021, 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 March 31, 2021:

AFS collateralized mortgage obligations

At March 31, 2021, 25 of the 256 securities in the Company’s portfolio of AFS collateralized mortgage obligations were in unrealized loss positions. Aggregate unrealized losses represented 2.2% of the amortized cost of securities in unrealized loss positions. 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 collateralized mortgage obligations. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

AFS commercial and residential mortgage-backed securities

At March 31, 2021, 33 of the 125 securities in the Company’s portfolio of AFS mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 2.4% of the amortized cost of securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of all of the Company’s mortgage-backed securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

AFS corporate bonds

At March 31, 2021, 1 of the 14 securities in the Company’s portfolio of AFS corporate bonds was in an unrealized loss position. Aggregate unrealized losses represents 0.2% of the amortized cost of the bond in an unrealized loss position. The Company reviews the financial strength of all of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities.

AFS other bonds and obligations

At March 31, 2021, 3 of the 6 securities in the Company’s portfolio of other bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 0.9% of the amortized cost of securities in unrealized loss positions. The securities are all investment grade rated, and there were no material underlying credit downgrades during the quarter. All securities are performing.

HTM municipal bonds and obligations

At March 31, 2021, 15 of the 207 securities in the Company’s portfolio of HTM municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 2.5% 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 quarter. All securities are performing.

HTM collateralized mortgage obligations

At March 31, 2021, 5 of the 13 securities in the Company’s portfolio of HTM collateralized mortgage obligations were in unrealized loss positions. Aggregate unrealized losses represented 1.3% of the amortized cost of the securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of all of the Company's collateralized residential mortgage obligations. The securities are investment grade rated, and there were no material underlying credit downgrades during the quarter. All securities are performing.

HTM commercial and residential mortgage-backed securities

At March 31, 2021, 12 out of 14 securities in the Company’s portfolio of HTM mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 2.3% of the amortized cost of securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of the Company’s mortgage-backed securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES

3 Months Ended

Mar. 31, 2021

Credit Loss [Abstract]

LOANS AND ALLOWANCE FOR CREDIT LOSSES

LOANS AND ALLOWANCE FOR CREDIT LOSSES

The following is a summary of total loans by regulatory call report code with sub-segmentation based on underlying collateral for certain loan types:

(In thousands)	March 31, 2021		December 31, 2020
Construction	$	454,388	$	454,513
Commercial multifamily	483,646		483,350
Commercial real estate owner occupied	556,286		552,413
Commercial real estate non-owner occupied	2,129,572		2,119,263
Commercial and industrial	1,719,304		1,943,164
Residential real estate	1,774,504		1,931,681
Home equity	279,017		293,981
Consumer other	262,061		303,154
Total loans	$	7,658,778	$	8,081,519
Allowance for credit losses	123,800		127,302
Net loans	$	7,534,978	$	7,954,217

As of March 31, 2021, outstanding loans originated under the Small Business Administration ("SBA") Paycheck Protection Program ("PPP") totaled $444.2 million. These loans are 100% guaranteed by the SBA and the full principal amount of the loan may qualify for forgiveness. These loans are included in commercial and industrial.

During the three months ended March 31, 2021, the Company reclassified $9.5 million of commercial loans, reflecting its intent to sell these loans. These loans are not contained in the balances within this note and are accounted for at the lower of carrying value or fair market value.

Risk characteristics relevant to each portfolio segment are as follows:

Construction - Loans in this segment primarily include real estate development loans for which payment is derived from sale of the property or long term financing at completion. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions

Commercial real estate multifamily, owner occupied and non-owner - Loans in these segments are primarily owner-occupied or income-producing properties throughout New England and Northeastern New York. The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy, which in turn, will have an effect on the credit quality in this segment. Management monitors the cash flows of these loans.

Commercial and industrial loans - Loans in this segment are made to businesses and are generally secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets. Repayment is expected from the cash flows of the business. Loans in this segment include asset based loans which generally have no scheduled repayment and which are closely monitored against formula based collateral advance ratios. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment.

Residential real estate - All loans in this segment are collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Home equity and other consumer loans - Loans in this segment are primarily home equity lines of credit, automobile loans and other consumer loans. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Allowance for Credit Losses for Loans

The Allowance for Credit Losses for Loans (“ACLL”) is comprised of the allowance for loan losses and the allowance for unfunded commitments which is accounted for as a separate liability in other liabilities on the balance sheet. The level of the ACLL represents management’s estimate of expected credit losses over the expected life of the loans at the balance sheet date. The Company uses a static pool migration analysis method, applying expected historical loss trend and observed economic metrics. The level of the ACLL is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past and current events, utilizing a 7 quarter reasonable and supportable forecast period with a 1 year reversion period. The ACLL reserve is overlaid with qualitative factors based upon:

•the existence and growth of concentrations of credit;

•the volume and severity of past due financial assets, including nonaccrual assets;

•the institutions lending and credit review as well as the experience and ability of relevant management and staff and;

•the effect of other external factors such as regulatory, competition, regional market conditions, legal and technological environment and other events such as natural disasters;

•the effect of other economic factors such as economic stimulus and customer forbearance programs.

The allowance for unfunded commitments is maintained at a level by the Company to be sufficient to absorb expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit).

The Company’s activity in the allowance for credit losses for loans for the three months ended March 31, 2021 and March 31, 2020 was as follows:

(In thousands)	Balance at Beginning of Period		Impact of Adopting ASC 326		Sub-total		Charge-offs		Recoveries		Provision for Credit Losses		Balance at End of Period
Three months ended March 31, 2021
Construction	$	5,111	$	—	$	5,111	$	—	$	—	$	(714)	$	4,397
Commercial multifamily	5,916		—		5,916		(124)		62		497		6,351
Commercial real estate owner occupied	12,380		—		12,380		(376)		12		2,241		14,257
Commercial real estate non-owner occupied	35,850		—		35,850		(6,658)		126		5,243		34,561
Commercial and industrial	25,013		—		25,013		(3,320)		644		3,734		26,071
Residential real estate	28,491		—		28,491		(377)		437		(2,751)		25,800
Home equity	6,482		—		6,482		(77)		24		(680)		5,749
Consumer other	8,059		—		8,059		(528)		160		(1,077)		6,614
Total allowance for credit losses	$	127,302	$	—	$	127,302	$	(11,460)	$	1,465	$	6,493	$	123,800

(In thousands)	Balance at Beginning of Period		Impact of Adopting ASC 326		Sub-total		Charge-offs		Recoveries		Provision for Credit Losses		Balance at End of Period
Three months ended March 31, 2020
Construction	$	2,713	$	(342)	$	2,371	$	—	$	—	$	2,202	$	4,573
Commercial multifamily	4,413		(1,842)		2,571		—		—		1,882		4,453
Commercial real estate owner occupied	4,880		6,062		10,942		(6,376)		258		6,783		11,607
Commercial real estate non-owner occupied	16,344		11,201		27,545		(135)		47		1,406		28,863
Commercial and industrial	20,099		(2,189)		17,910		(4,916)		1,402		10,106		24,502
Residential real estate	9,970		6,799		16,769		(171)		70		9,389		26,057
Home equity	1,470		4,884		6,354		(77)		2		1,501		7,780
Consumer other	3,686		861		4,547		(758)		180		1,706		5,675
Total allowance for credit losses	$	63,575	$	25,434	$	89,009	$	(12,433)	$	1,959	$	34,975	$	113,510

The Company’s allowance for credit losses on unfunded commitments is recognized as a liability (other liability on consolidated balance sheet), with adjustments to the reserve recognized in other noninterest expense in the consolidated statement of operations. The Company’s activity in the allowance for credit losses on unfunded commitments for the three months ended March 31, 2021 and March 31, 2020 was as follows:

	Three Months Ended March 31,
(In thousands)	2021		2020
Balance at beginning of period	$	7,629	$	100
Impact of adopting ASC 326	—		7,993
Sub-Total	7,629		8,093
Expense for credit losses	200		330
Balance at end of period	$	7,829	$	8,423

Credit Quality Information

The Company monitors the credit quality of its portfolio by using internal risk ratings that are based on regulatory guidance. Loans that are given a Pass rating are not considered a problem credit. Loans that are classified as Special Mention loans are considered to have potential weaknesses and are evaluated closely by management. Substandard, including non-accruing loans, are loans for which a definitive weakness has been identified and which may make full collection of contractual cash flows questionable. Doubtful loans are those with identified weaknesses that make full collection of contractual cash flows, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

For commercial credits, the Company assigns an internal risk rating at origination and reviews the rating annual, semiannually, or quarterly depending on the risk rating. The rating is also reassessed at any point in time when management becomes aware of information that may affect the borrower’s ability to fulfill their obligations.

The Company risk rates its residential mortgages, including 1-4 family and residential construction loans, based on a three rating system: Pass, Special Mention, and Substandard. Loans that are current within 59 days are rated Pass. Residential mortgages that are 60-89 days delinquent are rated Special Mention. Loans delinquent for 90 days or greater are rated Substandard and generally placed on non-accrual status. 

The following table presents the Company’s loans by risk category:

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2021
Construction
Risk rating
Pass	$	25,422	$	43,662	$	275,525	$	65,371	$	27,177	$	2,501	$	1,000	$	—	$	440,658
Special Mention	—		—		—		313		—		—		—		—		313
Substandard	—		—		—		9,429		3,988		—		—		—		13,417
Total	$	25,422	$	43,662	$	275,525	$	75,113	$	31,165	$	2,501	$	1,000	$	—	$	454,388
Commercial multifamily:
Risk rating
Pass	$	17,100	$	31,295	$	55,210	$	74,123	$	78,148	$	219,175	$	61	$	—	$	475,112
Special Mention	—		—		2,187		—		—		—		—		—		2,187
Substandard	—		—		—		—		—		6,204		143		—		6,347
Total	$	17,100	$	31,295	$	57,397	$	74,123	$	78,148	$	225,379	$	204	$	—	$	483,646
Commercial real estate owner occupied:
Risk rating
Pass	$	13,652	$	53,164	$	81,473	$	99,224	$	63,148	$	218,342	$	1,506	$	—	$	530,509
Special Mention	—		535		3,389		1,136		1,966		2,432		—		—		9,458
Substandard	—		—		1,266		3,333		1,627		10,093		—		—		16,319
Total	$	13,652	$	53,699	$	86,128	$	103,693	$	66,741	$	230,867	$	1,506	$	—	$	556,286
Commercial real estate non-owner occupied:
Risk rating
Pass	$	77,638	$	174,898	$	292,528	$	469,718	$	218,525	$	725,223	$	17,394	$	—	$	1,975,924
Special Mention	—		231		270		2,971		6,904		58,403		1,059		—		69,838
Substandard	—		7,804		3,529		3,730		20,135		48,418		194		—		83,810
Total	$	77,638	$	182,933	$	296,327	$	476,419	$	245,564	$	832,044	$	18,647	$	—	$	2,129,572
Commercial and industrial:
Risk rating
Pass	$	25,240	$	563,757	$	131,781	$	203,153	$	110,240	$	182,949	$	372,075	$	—	$	1,589,195
Special Mention	—		1,952		9,887		7,477		3,881		4,011		10,806		—		38,014
Substandard	146		8,807		37,772		22,909		6,826		7,857		7,456		—		91,773
Doubtful	—		—		—		—		—		—		322		—		322
Total	$	25,386	$	574,516	$	179,440	$	233,539	$	120,947	$	194,817	$	390,659	$	—	$	1,719,304
Residential real estate
Risk rating
Pass	$	55,071	$	148,622	$	127,817	$	218,785	$	273,160	$	931,322	$	3,261	$	—	$	1,758,038
Special Mention	—		—		—		—		284		814		—		—		1,098
Substandard	—		700		31		1,836		2,434		10,367		—		—		15,368
Total	$	55,071	$	149,322	$	127,848	$	220,621	$	275,878	$	942,503	$	3,261	$	—	$	1,774,504

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2020
Construction
Risk rating
Pass	$	38,374	$	255,377	$	114,690	$	28,474	$	9,519	$	2,766	$	1,000	$	—	$	450,200
Special Mention	—		—		313		—		—		—		—		—		313
Substandard	—		—		—		4,000		—		—		—		—		4,000
Total	$	38,374	$	255,377	$	115,003	$	32,474	$	9,519	$	2,766	$	1,000	$	—	$	454,513
Commercial multifamily:
Risk rating
Pass	$	31,438	$	57,659	$	74,932	$	77,746	$	81,066	$	153,818	$	20	$	—	$	476,679
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		47		6,479		145		—		6,671
Total	$	31,438	$	57,659	$	74,932	$	77,746	$	81,113	$	160,297	$	165	$	—	$	483,350
Commercial real estate owner occupied:
Risk rating
Pass	$	58,327	$	84,839	$	104,797	$	64,693	$	44,300	$	169,197	$	1,194	$	—	$	527,347
Special Mention	535		2,569		1,136		1,009		800		2,579		—		—		8,628
Substandard	—		1,266		3,597		1,685		1,439		8,451		—		—		16,438
Total	$	58,862	$	88,674	$	109,530	$	67,387	$	46,539	$	180,227	$	1,194	$	—	$	552,413
Commercial real estate non-owner occupied:
Risk rating
Pass	$	180,520	$	292,386	$	435,440	$	223,935	$	303,221	$	497,066	$	15,393	$	—	$	1,947,961
Special Mention	—		279		2,068		6,958		11,798		44,961		1,068		—		67,132
Substandard	7,804		3,529		4,235		19,632		2,124		66,651		195		—		104,170
Total	$	188,324	$	296,194	$	441,743	$	250,525	$	317,143	$	608,678	$	16,656	$	—	$	2,119,263
Commercial and industrial:
Risk rating
Pass	$	754,260	$	159,046	$	205,651	$	130,985	$	48,326	$	148,222	$	368,769	$	—	$	1,815,259
Special Mention	1,467		5,753		5,267		2,851		1,601		65		12,408		—		29,412
Substandard	7,392		39,822		24,951		7,765		3,504		5,630		9,099		—		98,163
Doubtful	—		—		—		—		—		—		330		—		330
Total	$	763,119	$	204,621	$	235,869	$	141,601	$	53,431	$	153,917	$	390,606	$	—	$	1,943,164
Residential real estate
Risk rating
Pass	$	150,583	$	146,142	$	272,399	$	320,384	$	333,159	$	691,078	$	3,281	$	—	$	1,917,026
Special Mention	384		—		454		1,430		—		362		—		—		2,630
Substandard	991		39		703		902		417		8,964		9		—		12,025
Total	$	151,958	$	146,181	$	273,556	$	322,716	$	333,576	$	700,404	$	3,290	$	—	$	1,931,681

For home equity and consumer other loan portfolio segments, Berkshire evaluates credit quality based on the aging status of the loan and by payment activity. The performing or nonperforming status is updated on an ongoing basis dependent upon improvement and deterioration in credit quality. The following table presents the amortized cost based on payment activity:

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2021
Home equity:
Payment performance
Performing	$	703	$	2,623	$	1,469	$	309	$	1,829	$	2,234	$	267,103	$	—	$	276,270
Nonperforming	—		—		—		—		—		—		2,747		—		2,747
Total	$	703	$	2,623	$	1,469	$	309	$	1,829	$	2,234	$	269,850	$	—	$	279,017
Consumer other:
Payment performance
Performing	$	4,870	$	14,084	$	30,924	$	87,205	$	57,753	$	54,399	$	7,965	$	—	$	257,200
Nonperforming	—		69		381		1,325		1,457		1,619		10		—		4,861
Total	$	4,870	$	14,153	$	31,305	$	88,530	$	59,210	$	56,018	$	7,975	$	—	$	262,061

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2020
Home equity:
Payment performance
Performing	$	2,445	$	1,960	$	316	$	1,859	$	499	$	1,882	$	282,123	$	—	$	291,084
Nonperforming	—		—		1		—		—		—		2,896		—		2,897
Total	$	2,445	$	1,960	$	317	$	1,859	$	499	$	1,882	$	285,019	$	—	$	293,981
Consumer other:
Payment performance
Performing	$	15,193	$	35,317	$	101,730	$	69,366	$	35,421	$	31,327	$	9,339	$	—	$	297,693
Nonperforming	39		316		1,511		1,599		1,585		407		4		—		5,461
Total	$	15,232	$	35,633	$	103,241	$	70,965	$	37,006	$	31,734	$	9,343	$	—	$	303,154

The following is a summary of loans by past due status at March 31, 2021 and December 31, 2020:

(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans
March 31, 2021
Construction	$	3,988	$	—	$	—	$	3,988	$	450,400	$	454,388
Commercial multifamily	—		—		4,068		4,068		479,578		483,646
Commercial real estate owner occupied	6,174		487		4,610		11,271		545,015		556,286
Commercial real estate non-owner occupied	703		—		21,790		22,493		2,107,079		2,129,572
Commercial and industrial	9,479		1,540		9,486		20,505		1,698,799		1,719,304
Residential real estate	2,990		1,098		14,476		18,564		1,755,940		1,774,504
Home equity	647		159		2,747		3,553		275,464		279,017
Consumer other	1,052		248		4,764		6,064		255,997		262,061
Total	$	25,033	$	3,532	$	61,941	$	90,506	$	7,568,272	$	7,658,778

(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans
December 31, 2020
Construction	$	—	$	—	$	—	$	—	$	454,513	$	454,513
Commercial multifamily	—		—		757		757		482,593		483,350
Commercial real estate owner occupied	809		631		4,894		6,334		546,079		552,413
Commercial real estate non-owner occupied	315		168		38,389		38,872		2,080,391		2,119,263
Commercial and industrial	3,016		3,259		12,982		19,257		1,923,907		1,943,164
Residential real estate	2,068		2,630		11,115		15,813		1,915,868		1,931,681
Home equity	244		284		2,897		3,425		290,556		293,981
Consumer other	2,109		777		5,364		8,250		294,904		303,154
Total	$	8,561	$	7,749	$	76,398	$	92,708	$	7,988,811	$	8,081,519

The following is a summary of loans on nonaccrual status and loans past due 90 days or more and still accruing as of March 31, 2021 and December 31, 2020:

(In thousands)	Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or Greater and Accruing		Interest Income Recognized on Nonaccrual
At or for the three months ended March 31, 2021
Construction	$	—	$	—	$	—	$	—
Commercial multifamily	4,068		4,068		—		—
Commercial real estate owner occupied	4,232		1,832		378		—
Commercial real estate non-owner occupied	18,856		11,691		2,934		—
Commercial and industrial	9,364		3,005		122		—
Residential real estate	11,941		7,419		2,535		—
Home equity	2,599		211		148		—
Consumer other	4,757		8		7		—
Total	$	55,817	$	28,234	$	6,124	$	—

The commercial and industrial loans nonaccrual amortized cost as of March 31, 2021 included medallion loans with a fair value of $1.4 million and a contractual balance of $45.0 million.

(In thousands)	Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or Greater and Accruing		Interest Income Recognized on Nonaccrual
At or for the three months ended December 31, 2020
Construction	$	—	$	—	$	—	$	—
Commercial multifamily	757		591		—		—
Commercial real estate owner occupied	4,509		2,290		385		—
Commercial real estate non-owner occupied	29,572		13,912		8,817		—
Commercial and industrial	12,441		4,725		541		—
Residential real estate	9,711		5,739		1,404		—
Home equity	2,654		159		243		—
Consumer other	5,304		2		60		—
Total	$	64,948	$	27,418	$	11,450	$	—

The commercial and industrial loans nonaccrual amortized cost as of December 31, 2020 included medallion loans with a fair value of $2.3 million and a contractual balance of $53.9 million.

The following table summarizes information about total loans rated Special Mention or lower at March 31, 2021 and December 31, 2020. The table below includes consumer loans that are Special Mention and Substandard accruing that are classified as performing based on payment activity.

(In thousands)	March 31, 2021		December 31, 2020
Non-Accrual	$	55,817	$	64,948
Substandard Accruing	179,150		185,207
Total Classified	234,967		250,155
Special Mention	121,437		109,299
Total Criticized	$	356,404	$	359,454

A financial asset is considered collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. Expected credit losses for collateral-dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value. The following table presents the amortized cost basis of individually analyzed collateral-dependent loans by loan portfolio segment:

	Type of Collateral
(In thousands)	Real Estate		Investment Securities/Cash		Other
March 31, 2021
Construction	$	—	$	—	$	—
Commercial multifamily	4,070		—		—
Commercial real estate owner occupied	5,351		—		—
Commercial real estate non-owner occupied	20,805		—		—
Commercial and industrial	1,361		18		977
Residential real estate	7,048		—		—
Home equity	198		—		—
Consumer other	34		—		—
Total loans	$	38,867	$	18	$	977
December 31, 2020
Construction	$	—	$	—	$	—
Commercial multifamily	591		—		—
Commercial real estate owner occupied	5,714		—		—
Commercial real estate non-owner occupied	30,950		—		—
Commercial and industrial	973		36		3,758
Residential real estate	5,081		—		—
Home equity	145		—		—
Consumer other	51		—		—
Total loans	$	43,505	$	36	$	3,758

Troubled Debt Restructuring Loans

The Company’s loan portfolio also includes certain loans that have been modified in a Troubled Debt Restructuring ("TDR"), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. TDRs are evaluated individually for impairment and may result in a specific allowance amount allocated to an individual loan.

The following table presents activity in TDRs for the three months ended March 31, 2021 and March 31, 2020:

(In thousands)	Balance at Beginning of Period		Principal Payments		TDR Status Change		Other Additions/(Reductions)		Newly Identified TDRs		Balance at End of Period
Three months ended March 31, 2021
Construction	$	—	$	—	$	—	$	—	$	—	$	—
Commercial multifamily	754		(13)		—		—		—		741
Commercial real estate owner occupied	1,731		(6)		—		—		—		1,725
Commercial real estate non-owner occupied	13,684		(14)		—		511		544		14,725
Commercial and industrial	2,686		(199)		—		—		146		2,633
Residential real estate	1,524		(31)		—		—		—		1,493
Home equity	133		(3)		—		—		—		130
Consumer other	36		(2)		—		—		—		34
Total	$	20,548	$	(268)	$	—	$	511	$	690	$	21,481

(In thousands)	Balance at Beginning of Period		Principal Payments		TDR Status Change		Other Additions/(Reductions)		Newly Identified TDRs		Balance at End of Period
Three months ended March 31, 2020
Construction	$	—	$	—	$	—	$	—	$	—	$	—
Commercial multifamily	793		(14)		—		—		—		779
Commercial real estate owner occupied	13,331		(5,693)		—		—		—		7,638
Commercial real estate non-owner occupied	1,373		—		—		—		—		1,373
Commercial and industrial	1,449		(37)		—		—		902		2,314
Residential real estate	2,045		(22)		—		—		—		2,023
Home equity	277		1		—		—		—		278
Consumer other	48		(4)		—		—		—		44
Total	$	19,316	$	(5,769)	$	—	$	—	$	902	$	14,449

The following table presents loans modified as TDRs that occurred during the three months ended March 31, 2021 and March 31, 2020:

(dollars in thousands)	Total
Three months ended March 31, 2021
TDR:
Number of loans	4
Pre-modification outstanding recorded investment	$	690
Post-modification outstanding recorded investment	$	690
Three months ended March 31, 2020
TDR:
Number of loans	3
Pre-modification outstanding recorded investment	$	902
Post-modification outstanding recorded investment	$	902

There were no TDRs for which there was a payment default within twelve months following the modification during the three months ended March 31, 2021 and March 31, 2020.

Beginning in March 2020, the Company has offered three-month payment deferrals for customers with a current payment status who were negatively impacted by economic disruption caused by the COVID-19 pandemic. Refer to Note 10 - Other Commitments, Contingencies, and Off-Balance Sheet Activities for more information regarding these modifications.

XML

DEPOSITS

3 Months Ended

Mar. 31, 2021

Deposits [Abstract]

DEPOSITS

DEPOSITS

A summary of time deposits is as follows:

(In thousands)	March 31, 2021		December 31, 2020
Time less than $100,000	$	630,244	$	663,324
Time $100,000 through $250,000	999,329		1,219,210
Time more than $250,000	473,649		502,551
Total time deposits	$	2,103,222	$	2,385,085

Included in total deposits are brokered deposits of $431.5 million and $610.6 million at March 31, 2021 and December 31, 2020, respectively. Included in total deposits are reciprocal deposits of $100.7 million and $119.0 million at March 31, 2021 and December 31, 2020, respectively.

XML

BORROWED FUNDS

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

BORROWED FUNDS

BORROWED FUNDS

Borrowed funds at March 31, 2021 and December 31, 2020 are summarized, as follows:

	March 31, 2021				December 31, 2020
			Weighted				Weighted
			Average				Average
(Dollars in thousands)	Principal		Rate		Principal		Rate
Short-term borrowings:
Advances from the FHLB	$	—	—	%	$	40,000	1.05	%
Total short-term borrowings:	—		—		40,000		1.05
Long-term borrowings:
Advances from the FHLB and other borrowings	351,354		1.88		434,357		1.89
Subordinated borrowings	74,455		7.00		74,411		7.00
Junior subordinated borrowing - Trust I	15,464		2.03		15,464		2.06
Junior subordinated borrowing - Trust II	7,419		1.88		7,405		1.92
Total long-term borrowings:	448,692		2.73		531,637		2.61
Total	$	448,692	2.73	%	$	571,637	2.50	%

Short-term debt includes Federal Home Loan Bank (“FHLB”) advances with an original maturity of less than one year and a short-term line-of-credit drawdown through a correspondent bank. The Bank also maintains a $3.0 million secured line of credit with the FHLB that bears a daily adjustable rate calculated by the FHLB. There was no outstanding balance on the FHLB line of credit for the periods ended March 31, 2021 and December 31, 2020. The Bank's available borrowing capacity with the FHLB was $1.4 billion and $1.6 billion for the periods ended March 31, 2021 and December 31, 2020, respectively.

The Bank is approved to borrow on a short-term basis from the Federal Reserve Bank of Boston as a non-member bank. The Bank has pledged certain loans and securities to the Federal Reserve Bank to support this arrangement. No borrowings with the Federal Reserve Bank under this arrangement took place for the periods ended March 31, 2021 and December 31, 2020. As a participant in the SBA Paycheck Protection Program ("PPP"), the Bank may pledge originated loans as collateral at face value to the Federal Reserve Bank of Boston for term financings. As of March 31, 2021, the Bank had no pledged PPP loans. The Bank's available borrowing capacity with the Federal Reserve Bank was $596.8 million and $815.6 million for the periods ended March 31, 2021 and December 31, 2020, respectively.

Long-term FHLB advances consist of advances with an original maturity of more than one year and are subject to prepayment penalties. The advances outstanding at March 31, 2021 included callable advances totaling $10.0 million and amortizing advances totaling $4.8 million. The advances outstanding at December 31, 2020 included callable advances totaling $10.0 million and amortizing advances totaling $5.2 million. All FHLB borrowings, including the line of credit, are secured by a blanket security agreement on certain qualified collateral, principally all residential first mortgage loans and certain securities.

A summary of maturities of FHLB advances as of March 31, 2021 is as follows:

	March 31, 2021
			Weighted Average
(In thousands, except rates)	Principal		Rate
Fixed rate advances maturing:
2021	$	272,985	1.86	%
2022	58,270		1.92
2023	10,659		2.16
2024	50		—
2025 and beyond	9,390		1.63
Total FHLB advances	$	351,354	1.88	%

The Company did not have variable-rate FHLB advances for the periods ended March 31, 2021 and December 31, 2020.

In September 2012, the Company issued fifteen year subordinated notes in the amount of $75.0 million at a discount of 1.15%. The interest rate is fixed at 6.875% for the first ten years. After ten years, the notes become callable and convert to an interest rate of three-month LIBOR rate plus 5.113%. The subordinated note includes reduction to the note principal balance of $184 thousand and $215 thousand for unamortized debt issuance costs as of March 31, 2021 and December 31, 2020, respectively.

The Company holds 100% of the common stock of Berkshire Hills Capital Trust I (“Trust I”) which is included in other assets with a cost of $0.5 million. The sole asset of Trust I is $15.5 million of the Company’s junior subordinated debentures due in 2035. These debentures bear interest at a variable rate equal to LIBOR plus 1.85% and had a rate of 2.03% and 2.06% at March 31, 2021 and December 31, 2020, respectively. The Company has the right to defer payments of interest for up to five years on the debentures at any time, or from time to time, with certain limitations, including a restriction on the payment of dividends to shareholders while such interest payments on the debentures have been deferred. The Company has not exercised this right to defer payments. The Company has the right to redeem the debentures at par value. Trust I is considered a variable interest entity for which the Company is not the primary beneficiary. Accordingly, Trust I is not consolidated into the Company’s financial statements.

The Company holds 100% of the common stock of SI Capital Trust II (“Trust II”) which is included in other assets with a cost of $0.2 million. The sole asset of Trust II is $8.2 million of the Company’s junior subordinated debentures due in 2036. These debentures bear interest at a variable rate equal to LIBOR plus 1.70% and had a rate of 1.88% and 1.92% at March 31, 2021 and December 31, 2020, respectively. The Company has the right to defer payments of interest for up to five years on the debentures at any time, or from time to time, with certain limitations, including a restriction on the payment of dividends to shareholders while such interest payments on the debentures have been deferred. The Company has not exercised this right to defer payments. The Company has the right to redeem the debentures at par value. Trust II is considered a variable interest entity for which the Company is not the primary beneficiary. Accordingly, Trust II is not consolidated into the Company’s financial statements.

XML

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

3 Months Ended

Mar. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

As of March 31, 2021, the Company held derivatives with a total notional amount of $3.8 billion. The Company had economic hedges totaling $3.8 billion and $10.3 million non-hedging derivatives, which are not designated as hedges for accounting purposes with changes in fair value recorded directly through earnings. Economic hedges included interest rate swaps totaling $3.4 billion, risk participation agreements with dealer banks of $0.3 billion, and $8.7 million in forward commitment contracts.

As part of the Company’s risk management strategy, the Company enters into interest rate swap agreements to mitigate the interest rate risk inherent in certain of the Company’s assets and liabilities. Interest rate swap agreements involve the risk of dealing with both Bank customers and institutional derivative counterparties and their ability to meet contractual terms. The agreements are entered into with counterparties that meet established credit standards and contain master netting and collateral provisions protecting the at-risk party. The derivatives program is overseen by the Risk Management and Capital Committee of the Company’s Board of Directors. Based on adherence to the Company’s credit standards and the presence of the netting and collateral provisions, the Company believes that the credit risk inherent in these contracts was not significant at March 31, 2021.

The Company pledged collateral to derivative counterparties in the form of cash totaling $70.3 million and securities with an amortized cost of $36.9 million and a fair value of $37.1 million as of March 31, 2021. The Company does not typically require its commercial customers to post cash or securities as collateral on its program of back-to-back economic hedges. However certain language is written into the International Swaps Dealers Association, Inc. (“ISDA”) and loan documents where, in default situations, the Bank is allowed to access collateral supporting the loan relationship to recover any losses suffered on the derivative asset or liability. The Company may need to post additional collateral in the future in proportion to potential increases in unrealized loss positions.

Information about derivative assets and liabilities at March 31, 2021, follows:

			Weighted	Weighted Average Rate				Estimated
	Notional		Average			Contract		Fair Value
	Amount		Maturity	Received		pay rate		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	$	8,463	8.7	0.48	%	5.09	%	$	(1,432)
Interest rate swaps on loans with commercial loan customers	1,720,659		6.0	4.15	%	1.92	%	101,216
Offsetting interest rate swaps on loans with commercial loan customers (1)	1,720,659		6.0	1.92	%	4.15	%	(40,670)
Risk participation agreements with dealer banks	341,662		8.8					336
Forward sale commitments	8,661		0.2					326
Total economic hedges	3,800,104							59,776
Non-hedging derivatives:
Commitments to lend	10,316		0.2					185
Total non-hedging derivatives	10,316							185
Total	$	3,810,420						$	59,961

(1) Fair value estimates include the impact of $61.3 million settled to market contract agreements.

Information about derivative assets and liabilities at December 31, 2020, follows:

			Weighted	Weighted Average Rate				Estimated
	Notional		Average			Contract		Fair Value
	Amount		Maturity	Received		pay rate		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	$	8,654	8.9	0.52	%	5.09	%	$	(1,778)
Interest rate swaps on loans with commercial loan customers	1,734,978		6.1	4.15	%	1.95	%	159,016
Offsetting interest rate swaps on loans with commercial loan customers (1)	1,734,978		6.1	1.95	%	4.15	%	(64,645)
Risk participation agreements with dealer banks	326,862		8.0					665
Forward sale commitments	11,544		0.2					320
Total economic hedges	3,817,016							93,578
Non-hedging derivatives:
Commitments to lend	40,099		0.2					735
Total non-hedging derivatives	40,099							735
Total	$	3,857,115						$	94,313

(1) Fair value estimates include the impact of $97.6 million settled to market contract agreements.

Economic hedges

As of March 31, 2021, the Company has an interest rate swap with a $8.5 million notional amount to swap out the fixed rate of interest on an economic development bond bearing a fixed rate of 5.09%, currently within the Company’s trading portfolio under the fair value option, in exchange for a LIBOR-based floating rate. The intent of the economic hedge is to improve the Company’s asset sensitivity to changing interest rates in anticipation of favorable average floating rates of interest over the 21-year life of the bond. The fair value changes of the economic development bond are mostly offset by fair value changes of the related interest rate swap.

The Company also offers certain derivative products directly to qualified commercial borrowers. The Company economically hedges derivative transactions executed with commercial borrowers by entering into mirror-image, offsetting derivatives with third-party financial institutions. The transaction allows the Company’s customer to convert a variable-rate loan to a fixed rate loan. Because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts mostly offset each other in earnings. Credit valuation loss adjustments arising from the difference in credit worthiness of the commercial loan and financial institution counterparties totaled $2.5 million as of March 31, 2021. The interest income and expense on these mirror image swaps exactly offset each other.

The Company has risk participation agreements with dealer banks. Risk participation agreements occur when the Company participates on a loan and a swap where another bank is the lead. The Company gets paid a fee to take on the risk associated with having to make the lead bank whole on Berkshire’s portion of the pro-rated swap should the borrower default. Changes in fair value are recorded in current period earnings.

The Company utilizes forward sale commitments to hedge interest rate risk and the associated effects on the fair value of interest rate lock commitments and loans originated for sale. The forward sale commitments are accounted for as derivatives with changes in fair value recorded in current period earnings.

The Company uses the following types of forward sale commitments contracts:

•Best efforts loan sales,

•Mandatory delivery loan sales, and

•To Be Announced (“TBA”) mortgage-backed securities sales.

A best efforts contract refers to a loan sale agreement where the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. The Company may enter into a best efforts contract once the price is known, which is shortly after the potential borrower’s interest rate is locked.

A mandatory delivery contract is a loan sale agreement where the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. Generally, the Company may enter into mandatory delivery contracts shortly after the loan closes with a customer.

The Company may sell TBA mortgage-backed securities to hedge the changes in fair value of interest rate lock commitments and held for sale loans, which do not have corresponding best efforts or mandatory delivery contracts. These security sales transactions are closed once mandatory contracts are written. On the closing date the price of the security is locked-in, and the sale is paired-off with a purchase of the same security. Settlement of the security purchase/sale transaction is done with cash on a net-basis.

Non-hedging derivatives

The Company enters into interest rate lock commitments (“IRLCs”), or commitments to lend, for residential mortgage loans, which commit the Company to lend funds to a potential borrower at a specific interest rate and within a specified period of time. IRLCs that relate to the origination of mortgage loans that will be held for sale are considered derivative financial instruments under applicable accounting guidance. Outstanding IRLCs expose the Company to the risk that the price of the mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of the rate lock to the funding of the loan. The IRLCs are free-standing derivatives which are carried at fair value with changes recorded in non-interest income in the Company’s consolidated statements of operations. Changes in the fair value of IRLCs subsequent to inception are based on changes in the fair value of the underlying loan resulting from the fulfillment of the commitment and changes in the probability that the loan will fund within the terms of the commitment, which is affected primarily by changes in interest rates and the passage of time.

Amounts included in the Consolidated Statements of Income related to economic hedges and non-hedging derivatives were as follows:

	Three Months Ended March 31,
(In thousands)	2021		2020
Economic hedges
Interest rate swap on industrial revenue bond:
Unrealized gain/(loss) recognized in other non-interest income	$	346	$	(563)
Interest rate swaps on loans with commercial loan customers:
Unrealized (loss)/gain recognized in other non-interest income	(60,302)		102,382
Favorable/(unfavorable) change in credit valuation adjustment recognized in other non-interest income	2,502		(2,538)
Offsetting interest rate swaps on loans with commercial loan customers:
Unrealized gain/(loss) recognized in other non-interest income	60,302		(102,382)
Risk participation agreements:
Unrealized (loss)/gain recognized in other non-interest income	(329)		266
Forward commitments:
Unrealized gain/(loss) recognized in other non-interest income	6		(4,263)
Realized gain/(loss) in other non-interest income	(6)		(1,922)
Non-hedging derivatives
Commitments to lend
Unrealized (loss)/gain recognized in other non-interest income	$	(550)	$	2,208
Realized gain in other non-interest income	1,352		9,300

Assets and Liabilities Subject to Enforceable Master Netting Arrangements

Interest Rate Swap Agreements (“Swap Agreements”)

The Company enters into swap agreements to facilitate the risk management strategies for commercial banking customers. The Company mitigates this risk by entering into equal and offsetting swap agreements with highly rated third party financial institutions. The swap agreements are free-standing derivatives and are recorded at fair value in the Company’s consolidated statements of condition. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral generally in the form of marketable securities is received or posted by the counterparty with net liability positions, respectively, in accordance with contract thresholds.

The Company had net asset positions with its financial institution counterparties totaling $1.3 million and $1.0 million as of March 31, 2021 and December 31, 2020, respectively. The Company had net asset positions with its commercial banking counterparties totaling $103.8 million and $159.0 million as of March 31, 2021 and December 31, 2020, respectively. The Company had net liability positions with its financial institution counterparties totaling $43.0 million and $66.8 million as of March 31, 2021 and December 31, 2020, respectively. The Company had net liability positions with its commercial banking counterparties totaling $2.6 million as of March 31, 2021. The Company had no net liability positions with its commercial banking counterparties as of December 31, 2020. The Company has collateral pledged to cover this liability.

The following table presents the assets and liabilities subject to an enforceable master netting arrangement as of March 31, 2021 and December 31, 2020:

Offsetting of Financial Assets and Derivative Assets

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Assets Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(In thousands)	Assets		Condition		Condition		Instruments		Collateral Received		Net Amount
March 31, 2021
Interest Rate Swap Agreements:
Institutional counterparties	$	3,086	$	(1,832)	$	1,254	$	—	$	—	$	1,254
Commercial counterparties	103,799		—		103,799		—		—		103,799
Total	$	106,885	$	(1,832)	$	105,053	$	—	$	—	$	105,053

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Liabilities Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(In thousands)	Liabilities		Condition		Condition		Instruments		Collateral Pledged		Net Amount
March 31, 2021
Interest Rate Swap Agreements:
Institutional counterparties	$	(104,770)	$	61,750	$	(43,020)	$	37,116	$	70,333	$	64,429
Commercial counterparties	(2,582)		—		(2,582)		—		—		(2,582)
Total	$	(107,352)	$	61,750	$	(45,602)	$	37,116	$	70,333	$	61,847

Offsetting of Financial Assets and Derivative Assets

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Assets Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(In thousands)	Assets		Condition		Condition		Instruments		Collateral Received		Net Amount
December 31, 2020
Interest Rate Swap Agreements:
Institutional counterparties	$	1,124	$	(78)	$	1,046	$	—	$	—	$	1,046
Commercial counterparties	159,016		—		159,016		—		—		159,016
Total	$	160,140	$	(78)	$	160,062	$	—	$	—	$	160,062

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Liabilities Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(In thousands)	Liabilities		Condition		Condition		Instruments		Collateral Pledged		Net Amount
December 31, 2020
Interest Rate Swap Agreements:
Institutional counterparties	$	(164,543)	$	97,740	$	(66,803)	$	37,815	$	75,070	$	46,082
Commercial counterparties	—		—		—		—		—		—
Total	$	(164,543)	$	97,740	$	(66,803)	$	37,815	$	75,070	$	46,082

XML

LEASES

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

LEASES

LEASES

Substantially all of the leases in which the Company is the lessee are comprised of real estate property for branches, ATM locations, and office space. Most of the Company’s leases are classified as operating leases. At March 31, 2021, lease expiration dates ranged from 1 month to 19 years.

The following table represents the Consolidated Balance Sheets classification of the Company’s right-of-use (“ROU”) assets and lease liabilities:

(In thousands)		March 31, 2021		December 31, 2020
Lease Right-of-Use Assets	Classification
Operating lease right-of-use assets	Other assets	$	56,704	$	60,018
Finance lease right-of-use assets	Premises and equipment, net	7,066		7,197
Total Lease Right-of-Use Assets		$	63,770	$	67,215
Lease Liabilities
Operating lease liabilities	Other liabilities	$	61,481	$	63,894
Finance lease liabilities	Other liabilities	10,252		10,383
Total Lease Liabilities		$	71,733	$	74,277

Supplemental information related to leases was as follows:

	March 31, 2021		December 31, 2020
Weighted-Average Remaining Lease Term (in years)
Operating leases	9.8		9.8
Finance leases	13.6		13.8
Weighted-Average Discount Rate
Operating leases	2.82	%	2.81	%
Finance leases	5.00	%	5.00	%

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For real estate leases, non-lease components and other non-components, such as common area maintenance charges, real estate taxes, and insurance are not included in the measurement of the lease liability since they are generally able to be segregated.

The Company does not have any material sub-lease agreements.

Lease expense for operating leases for the three months ended March 31, 2021 was $2.8 million. Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities.

Lease expense for operating leases for the three months ended March 31, 2020 was $3.5 million, of which $0.5 million was related to discontinued operations. Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities.

Supplemental cash flow information related to leases was as follows:

	Three Months Ended
(In thousands)	March 31, 2021		March 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	3,330	$	3,628
Operating cash flows from finance leases	127		134
Financing cash flows from finance leases	131		124

(1) There were operating cash flows from operating leases related to discontinued operations of $0.5 million at March 31, 2020.

The following table presents a maturity analysis of the Company’s lease liability by lease classification at March 31, 2021:

(In thousands)	Operating Leases		Finance Leases
2021	$	7,966	$	766
2022	9,774		1,031
2023	8,549		1,037
2024	7,414		1,037
2025	5,727		1,037
Thereafter	31,593		9,223
Total undiscounted lease payments	71,023		14,131
Less amounts representing interest	(9,542)		(3,879)
Lease liability	$	61,481	$	10,252

LEASES

LEASES

Substantially all of the leases in which the Company is the lessee are comprised of real estate property for branches, ATM locations, and office space. Most of the Company’s leases are classified as operating leases. At March 31, 2021, lease expiration dates ranged from 1 month to 19 years.

The following table represents the Consolidated Balance Sheets classification of the Company’s right-of-use (“ROU”) assets and lease liabilities:

(In thousands)		March 31, 2021		December 31, 2020
Lease Right-of-Use Assets	Classification
Operating lease right-of-use assets	Other assets	$	56,704	$	60,018
Finance lease right-of-use assets	Premises and equipment, net	7,066		7,197
Total Lease Right-of-Use Assets		$	63,770	$	67,215
Lease Liabilities
Operating lease liabilities	Other liabilities	$	61,481	$	63,894
Finance lease liabilities	Other liabilities	10,252		10,383
Total Lease Liabilities		$	71,733	$	74,277

Supplemental information related to leases was as follows:

	March 31, 2021		December 31, 2020
Weighted-Average Remaining Lease Term (in years)
Operating leases	9.8		9.8
Finance leases	13.6		13.8
Weighted-Average Discount Rate
Operating leases	2.82	%	2.81	%
Finance leases	5.00	%	5.00	%

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For real estate leases, non-lease components and other non-components, such as common area maintenance charges, real estate taxes, and insurance are not included in the measurement of the lease liability since they are generally able to be segregated.

The Company does not have any material sub-lease agreements.

Lease expense for operating leases for the three months ended March 31, 2021 was $2.8 million. Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities.

Lease expense for operating leases for the three months ended March 31, 2020 was $3.5 million, of which $0.5 million was related to discontinued operations. Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities.

Supplemental cash flow information related to leases was as follows:

	Three Months Ended
(In thousands)	March 31, 2021		March 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	3,330	$	3,628
Operating cash flows from finance leases	127		134
Financing cash flows from finance leases	131		124

(1) There were operating cash flows from operating leases related to discontinued operations of $0.5 million at March 31, 2020.

The following table presents a maturity analysis of the Company’s lease liability by lease classification at March 31, 2021:

(In thousands)	Operating Leases		Finance Leases
2021	$	7,966	$	766
2022	9,774		1,031
2023	8,549		1,037
2024	7,414		1,037
2025	5,727		1,037
Thereafter	31,593		9,223
Total undiscounted lease payments	71,023		14,131
Less amounts representing interest	(9,542)		(3,879)
Lease liability	$	61,481	$	10,252

XML

OTHER COMMITMENTS, CONTINGENCIES, OFF-BALANCE SHEET ACTIVITIES, AND PANDEMIC IMPACT

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

OTHER COMMITMENTS, CONTINGENCIES, OFF-BALANCE SHEET ACTIVITIES, AND PANDEMIC IMPACT

OTHER COMMITMENTS, CONTINGENCIES, OFF-BALANCE SHEET ACTIVITIES, AND PANDEMIC IMPACT

In December 2019, a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in China and has since spread to a number of other countries, including the United States. In March 2020, the World Health Organization declared COVID-19 a global pandemic and the United States declared a National Public Health Emergency. The impact of the COVID-19 pandemic is fluid and continues to evolve, which is adversely affecting some of the Company’s clients. The COVID-19 pandemic and its associated impacts on trade (including supply chains and export levels), travel, employee productivity, unemployment, consumer spending, and other economic activities has resulted in less economic activity, lower equity market valuations and significant volatility and disruption in financial markets and has had an adverse effect on the Company’s business, financial condition and results of operations. The ultimate extent of the impact of the COVID-19 pandemic on the Company’s business, financial condition and results of operations is currently uncertain and will depend on various developments and other factors, including, among others, the duration and scope of the pandemic, as well as governmental, regulatory and private sector responses to the pandemic, and the associated impacts on the economy, financial markets, and our clients, employees, and vendors.

The Company’s business, financial condition and results of operations generally rely upon the ability of the Company’s borrowers to repay their loans, the value of collateral underlying the Company’s secured loans, and demand for loans and other products and services the Company offers, which are highly dependent on the business environment in the Company’s primary markets where it operates and in the United States as a whole.

At this time, it is difficult to quantify the impact COVID-19 will have on the Company during the current year. These circumstances could cause the Company to experience a material adverse effect on our business operations, asset valuations, financial condition, results of operations and prospects. Material adverse impacts may include all or a combination of valuation impairments on the Company’s intangible assets, investments, loans, loan servicing rights, deferred tax assets, lease right-of-use assets, or counter-party risk derivatives.

Beginning in March 2020, the Company has offered three-month payment deferrals for customers with a current payment status who were negatively impacted by economic disruption caused by the COVID-19 pandemic. As of March 31, 2021, the Company had 337 active modified loans outstanding with a carrying value of $173 million, which excluded loans returning to payment or awaiting evaluation for further deferral. As of December 31, 2020, the Company had 746 active modified loans outstanding with a carrying value of $316 million, which excluded loans returning to payment or awaiting evaluation for further deferral.The Company continues to accrue interest on these loans during the deferral period. In accordance with interagency guidance issued in March 2020 and Section 4013 (Temporary Relief from Troubled Debt Restructurings) of the CARES Act, these short-term deferrals are not considered troubled debt restructurings (“TDRs”) unless the borrower was previously experiencing financial difficulty. In addition, the risk-ratings on COVID-19 modified loans did not automatically change as a result of payment deferrals, and these loans will not be considered past due until after the deferral period is over and scheduled payments resume.

XML

CAPITAL RATIOS AND SHAREHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2021

Stockholders' Equity Note [Abstract]

CAPITAL RATIOS AND SHAREHOLDERS' EQUITY

CAPITAL RATIOS AND SHAREHOLDERS’ EQUITY

The actual and required capital ratios were as follows:

	March 31, 2021		December 31, 2020		Minimum Capital Requirement
Company (consolidated)
Total capital to risk weighted assets	16.6	%	16.1	%	8.0	%
Common equity tier 1 capital to risk weighted assets	14.2		13.8		4.5
Tier 1 capital to risk weighted assets	14.4		14.1		6.0
Tier 1 capital to average assets	9.5		9.4		4.0

	March 31, 2021		December 31, 2020		Regulatory Minimum to be Adequately Capitalized		Regulatory Minimum to be Well Capitalized
Bank
Total capital to risk weighted assets	15.4	%	15.0	%	8.0	%	10.0	%
Common equity tier 1 capital to risk weighted assets	14.2		13.9		4.5		6.5
Tier 1 capital to risk weighted assets	14.2		13.9		6.0		8.0
Tier 1 capital to average assets	9.3		9.2		4.0		5.0

The Company and the Bank are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Failure to meet capital requirements can initiate regulatory action. At each date shown, the Company met the minimum capital requirements and the Bank met the conditions to be classified as “well capitalized” under the relevant regulatory framework. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table above.

Effective January 1, 2015, the Company and the Bank became subject to the Basel III rule that requires the Company and the Bank to assess their Common equity Tier 1 capital to risk weighted assets. The Bank's Common equity Tier 1 capital to risk weighted assets exceeds the minimum to be well capitalized. In addition, the final capital rules added a requirement to maintain a minimum conservation buffer, composed of Common equity Tier 1 capital, of 2.5% of risk-weighted assets, to be phased in over three years and applied to the Common equity Tier 1 risk-based capital ratio, the Tier 1 risk-based capital ratio, and the Total risk-based capital ratio. As of January 1, 2019, banking organizations must maintain a minimum Common equity Tier 1 risk-based capital ratio of 7.0%, a minimum Tier 1 risk-based capital ratio of 8.5%, and a minimum Total risk-based capital ratio of 10.5%. The final capital rules impose restrictions on capital distributions and certain discretionary cash bonus payments if the minimum capital conservation buffer is not met.

At March 31, 2021, the capital levels of both the Company and the Bank exceeded all regulatory capital requirements and the Bank's regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. The capital levels of both the Company and the Bank at March 31, 2021 also exceeded the minimum capital requirements including the currently applicable capital conservation buffer of 2.5%.

Accumulated other comprehensive income

Components of accumulated other comprehensive income is as follows:

(In thousands)	March 31, 2021		December 31, 2020
Other accumulated comprehensive income, before tax:
Net unrealized holding gain on AFS securities	$	17,975	$	44,988
Net unrealized holding (loss) on pension plans	(3,511)		(3,511)
Income taxes related to items of accumulated other comprehensive income:
Net unrealized tax (expense) on AFS securities	(4,667)		(11,530)
Net unrealized tax benefit on pension plans	924		924
Accumulated other comprehensive income	$	10,721	$	30,871

The following table presents the components of other comprehensive income for the three months ended March 31, 2021 and 2020:

(In thousands)	Before Tax		Tax Effect		Net of Tax
Three Months Ended March 31, 2021
Net unrealized holding gain on AFS securities:	x
Net unrealized (losses) arising during the period	$	(27,013)	$	6,863	$	(20,150)
Less: reclassification adjustment for gains realized in net income	—		—		—
Net unrealized holding (loss) on AFS securities	(27,013)		6,863		(20,150)
Other comprehensive (loss)	$	(27,013)	$	6,863	$	(20,150)
Three Months Ended March 31, 2020
Net unrealized holding gain on AFS securities:
Net unrealized gains arising during the period	$	25,613	$	(6,590)	$	19,023
Less: reclassification adjustment for (losses) realized in net income	(1)		—		(1)
Net unrealized holding gain on AFS securities	25,614		(6,590)		19,024
Other comprehensive income	$	25,614	$	(6,590)	$	19,024

The following table presents the changes in each component of accumulated other comprehensive income, for the three ended March 31, 2021 and 2020:

(In thousands)	Net unrealized holding loss on AFS Securities		Net unrealized holding loss on pension plans		Total
Three Months Ended March 31, 2021
Balance at Beginning of Period	$	33,458	$	(2,587)	$	30,871
Other comprehensive income before reclassifications	(20,150)		—		(20,150)
Less: amounts reclassified from accumulated other comprehensive income	—		—		—
Total other comprehensive (loss)	(20,150)		—		(20,150)
Balance at End of Period	$	13,308	$	(2,587)	$	10,721
Three Months Ended March 31, 2020
Balance at Beginning of Period	$	14,204	$	(2,211)	$	11,993
Other comprehensive income before reclassifications	19,023		—		19,023
Less: amounts reclassified from accumulated other comprehensive income	(1)		—		(1)
Total other comprehensive income	19,024		—		19,024
Balance at End of Period	$	33,228	$	(2,211)	$	31,017

The following table presents the amounts reclassified out of each component of accumulated other comprehensive income for the three ended March 31, 2021 and 2020:

					Affected Line Item in the
	Three Months Ended March 31,				Statement where Net Income
(In thousands)	2021		2020		is Presented
Realized gains on AFS securities:
	$	—	$	(1)	Non-interest income
	—		—		Tax expense
	—		(1)		Net of tax
Total reclassifications for the period	$	—	$	(1)	Net of tax

XML

EARNINGS / (LOSS) PER SHARE

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

EARNINGS / (LOSS) PER SHARE

EARNINGS/(LOSS) PER SHARE

Earnings/(loss) per share have been computed based on the following (average diluted shares outstanding are calculated using the treasury stock method):

	Three Months Ended March 31,
(In thousands, except per share data)	2021		2020
Income/(loss) from continuing operations	$	13,031	$	(12,072)
(Loss)/income from discontinued operations	—		(7,798)
Net income/(loss)	$	13,031	$	(19,870)
Average number of common shares issued	51,903		51,903
Less: average number of treasury shares	948		1,744
Less: average number of unvested stock award shares	625		488
Plus: average participating preferred shares	—		533
Average number of basic shares outstanding	50,330		50,204
Plus: dilutive effect of unvested stock award shares	235		—
Plus: dilutive effect of stock options outstanding	—		—
Average number of diluted shares outstanding	50,565		50,204
Basic earnings/(loss) per common share:
Continuing operations	$	0.26	$	(0.24)
Discontinued operations	—		(0.16)
Total	$	0.26	$	(0.40)
Diluted earnings/(loss) per common share:
Continuing operations	$	0.26	$	(0.24)
Discontinued operations	—		(0.16)
Total	$	0.26	$	(0.40)

For the three months ended March 31, 2021, 390 thousand shares of unvested restricted stock and all options outstanding were anti-dilutive and therefore excluded from the earnings per share calculation. For the three months ended March 31, 2020, all unvested restricted stock and options outstanding were considered anti-dilutive and therefore excluded from the earnings per share calculation.

XML

STOCK-BASED COMPENSATION PLANS

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS

A combined summary of activity in the Company’s stock award and stock option plans for the three months ended March 31, 2021 is presented in the following table:

	Non-Vested Stock Awards Outstanding			Stock Options Outstanding
(Shares in thousands)	Number of Shares	Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Exercise Price
December 31, 2020	517	$	28.35	112	$	22.95
Granted	210	16.58		—	—
Acquired	—	—		—	—
Stock options exercised	—	—		(5)	13.70
Stock awards vested	(44)	30.63		—	—
Forfeited	(52)	25.82		—	—
Expired	—	—		(10)	17.46
March 31, 2021	631	$	20.09	97	$	24.85

During the three months ended March 31, 2021, proceeds from stock option exercises totaled $69 thousand. During the three months ended March 31, 2020, proceeds from stock option exercises totaled $519 thousand. During the three months ended March 31, 2021 and March 31, 2020, there were 44 thousand and 53 thousand shares vested in connection with stock awards, respectively. All of these shares were issued from available treasury stock. Stock-based compensation expense totaled $0.7 million and $1.5 million during the three months ended March 31, 2021 and 2020, respectively. Stock-based compensation expense is recognized over the requisite service period for all awards.

XML

FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities that are carried at fair value.

Recurring Fair Value Measurements

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.

	March 31, 2021
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Trading security	$	—	$	—	$	9,350	$	9,350
Securities available for sale:
Municipal bonds and obligations	—		90,300		—		90,300
Agency collateralized mortgage obligations	—		724,554		—		724,554
Agency residential mortgage-backed securities	—		447,196		—		447,196
Agency commercial mortgage-backed securities	—		268,515		—		268,515
Corporate bonds	—		45,014		—		45,014
Other bonds and obligations	—		51,751		—		51,751
Marketable equity securities	15,129		672		—		15,801
Loans held for investment at fair value	—		—		1,448		1,448
Loans held for sale	—		8,877		—		8,877
Derivative assets	—		106,665		511		107,176
Capitalized servicing rights	—		—		2,968		2,968
Derivative liabilities	—		47,215		—		47,215

	December 31, 2020
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Trading security	$	—	$	—	$	9,708	$	9,708
Securities available for sale:
Municipal bonds and obligations	—		97,803		—		97,803
Agency collateralized mortgage obligations	—		756,826		—		756,826
Agency residential mortgage-backed securities	—		438,132		—		438,132
Agency commercial mortgage-backed securities	—		288,650		—		288,650
Corporate bonds	—		45,030		15,000		60,030
Other bonds and obligations	—		53,791		—		53,791
Marketable equity securities	17,841		672		—		18,513
Loans held for investment at fair value	—		—		2,265		2,265
Loans held for sale	—		12,992		4,756		17,748
Derivative assets	—		159,016		1,055		160,071
Capitalized servicing rights	—		—		3,033		3,033
Derivative liabilities	—		65,758		—		65,758

There were no transfers between levels during the three months ended March 31, 2021.

Trading Security at Fair Value. The Company holds one security designated as a trading security. It is a tax-advantaged economic development bond issued to the Company by a local nonprofit which provides wellness and health programs. The fair value of this security is determined based on a discounted cash flow methodology. Certain inputs to the fair value calculation are unobservable and there is little to no market activity in the security; therefore, the security meets the definition of a Level 3 security. The discount rate used in the valuation of the security is sensitive to movements in the 3-month LIBOR rate.

Securities Available for Sale and Marketable Equity Securities. Marketable equity securities classified as Level 1 consist of publicly-traded equity securities for which the fair values can be obtained through quoted market prices in active exchange markets. Marketable equity securities classified as Level 2 consist of securities with infrequent trades in active exchange markets, and pricing is primarily sourced from third party pricing services. AFS securities classified as Level 2 include most of the Company’s debt securities. The pricing on Level 2 and Level 3 was primarily sourced from third party pricing services, overseen by management, and is based on models that consider standard input factors such as dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and condition, among other things. Level 3 pricing includes inputs unobservable to market participants.

Loans Held for Investment. The Company’s held for investment loan portfolio includes loans originated by Company and loans acquired through business combinations. The Company intends to hold these assets until maturity as a part of its business operations. For one acquired portfolio subset, the Company previously accounted for these purchased-credit impaired loans as a pool under ASC 310, as they were determined to have common risk characteristics. These loans were recorded at fair value on acquisition date and subsequently evaluated for impairment collectively. Upon adoption of ASC 326, the Company elected the fair value option on this portfolio, recognizing an $11.2 million fair value write-down charged to Retained Earnings, net of deferred tax impact, as of January 1, 2020. The fair value of this loan portfolio is determined based on a discounted cash flow methodology. Certain inputs to the fair value calculation are unobservable; therefore, the loans meet the definition of Level 3 assets. The discount rate used in the valuation is consistent with assets that have significant credit deterioration. The cash flow assumptions include payment schedules for loans with current payment histories and estimated collateral value for delinquent loans. All of these loans were nonperforming as of March 31, 2021.

					Aggregate Fair Value
March 31, 2021	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for investment at fair value	$	1,448	$	44,969	$	(43,521)

					Aggregate Fair Value
December 31, 2020	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for investment at fair value	$	2,265	$	53,945	$	(51,680)

Loans Held for Sale. The Company elected the fair value option for all loans held for sale (HFS) originated for sale on or after May 1, 2012. Loans HFS are classified as Level 2 as the fair value is based on input factors such as quoted prices for similar loans in active markets.

					Aggregate Fair Value
March 31, 2021	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for sale	$	8,877	$	8,518	$	359

					Aggregate Fair Value
December 31, 2020	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for sale	$	12,992	$	12,639	$	353

The changes in fair value of loans held for sale for the three months ended March 31, 2021, were gains of $6 thousand. During the three months ended March 31, 2021, originations of loans held for sale totaled $44.0 million and sales of loans originated for sale totaled $46.9 million.

The changes in fair value of loans held for sale for the three months ended March 31, 2020, were losses of $49 thousand from continuing operations and gains of $0.5 million from discontinued operations. During the three months ended March 31, 2020, originations of loans held for sale from continuing operations totaled $16.6 million and sales of loans originated for sale from continuing operations totaled $21.1 million.

Interest Rate Swaps. The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings.

Although the Company has determined that the majority of the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of March 31, 2021, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Commitments to Lend. The Company enters into commitments to lend for residential mortgage loans intended for sale, which commit the Company to lend funds to a potential borrower at a specific interest rate and within a specified period of time. The estimated fair value of commitments to originate residential mortgage loans for sale is based on quoted prices for similar loans in active markets. However, this value is adjusted by a factor which considers the likelihood that the loan in a lock position will ultimately close, and by the non-refundable costs of originating the loan. The closing ratio is derived from the Bank’s internal data and is adjusted using significant management judgment. The costs to originate are primarily based on the Company’s internal commission rates that are not observable. As such, these commitments are classified as Level 3 measurements.

Forward Sale Commitments. The Company utilizes forward sale commitments as economic hedges against potential changes in the values of the commitments to lend and loans originated for sale. To Be Announced (“TBA”) mortgage-backed securities forward commitment sales are used as the hedging instrument, are classified as Level 1, and consist of publicly-traded debt securities for which identical fair values can be obtained through quoted market prices in active exchange markets. The fair values of the Company’s best efforts and mandatory delivery loan sale commitments are determined similarly to the commitments to lend using quoted prices in the market place that are observable. However, costs to originate and closing ratios included in the calculation are internally generated and are based on management’s judgment and prior experience, which are considered factors that are not observable. As such, best efforts and mandatory forward commitments are classified as Level 3 measurements.

Capitalized Servicing Rights. The Company accounts for certain capitalized servicing rights at fair value in its Consolidated Financial Statements, as the Company is permitted to elect the fair value option for each specific instrument. A loan servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans exceed adequate compensation for performing the servicing. The fair value of servicing rights is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy.

The table below presents the changes in Level 3 assets and liabilities that were measured at fair value on a recurring basis for the three months ended March 31, 2021 and 2020.

	Assets (Liabilities)
			Securities		Loans						Capitalized
	Trading		Available		Held for		Commitments		Forward		Servicing
(In thousands)	Security		for Sale		Investment		to Lend		Commitments		Rights
Three Months Ended March 31, 2021
December 31, 2020	$	9,708	$	15,000	$	2,265	$	735	$	320	$	3,033
Maturities, calls, and prepayments of AFS Security	—		(15,000)		—		—				—
Unrealized (loss)/gain, net recognized in other non-interest income	(166)		—		414		818		6		(65)
Paydown of asset	(192)		—		(1,231)		—		—		—
Transfers to held for sale loans	—		—		—		(1,368)		—		—
March 31, 2021	$	9,350	$	—	$	1,448	$	185	$	326	$	2,968
Unrealized gain/(loss) relating to instruments still held at March 31, 2021	$	887	$	—	$	—	$	185	$	326	$	—

			Securities		Loans				Capitalized
	Trading		Available		Held for		Commitments		Servicing
(In thousands)	Security		for Sale		Investment		to Lend (1)		Rights (1)
Three Months Ended March 31, 2020
December 31, 2019	$	10,769	$	42,966	$	—	$	2,628	$	12,299
Adoption of ASC 326	—		—		7660		—		—
Maturity of AFS security	—		(9,000)		—		—		—
Unrealized gain, net recognized in other non-interest income	(759)		—		(2,216)		—		—
Unrealized gain included in accumulated other comprehensive loss	—		538		—		—		—
Unrealized gain/(loss), net recognized in discontinued operations	—		—		—		11,039		(3,781)
Paydown of asset	(181)		—		(549)		—		—
Transfers to held for sale loans	—		—		—		(8,831)		—
Additions to servicing rights	—		—		—		—		—
March 31, 2020	$	9,829	$	34,504	$	4,895	$	4,836	$	8,518
Unrealized gains relating to instruments still held at March 31,2020	$	620	$	151	$	—	$	4,836	$	—

(1) Classified as assets from discontinued operations on the consolidated balance sheets.

Quantitative information about the significant unobservable inputs within Level 3 recurring assets and liabilities is as follows:

	Fair Value				Significant Unobservable Input
(In thousands)	March 31, 2021		Valuation Techniques	Unobservable Inputs	Value
Assets (Liabilities)
Trading security	$	9,350	Discounted Cash Flow	Discount Rate	2.66		%
Loan held for investment	1,448		Discounted Cash Flow	Discount Rate	25.00		%
				Collateral Value	$6.7 - $19.7
Commitments to lend	185		Historical Trend	Closing Ratio	74.29		%
			Pricing Model	Origination Costs, per loan	$	3
Forward commitments	326		Historical Trend	Closing Ratio	74.29		%
			Pricing Model	Origination Costs, per loan	$	3
Capitalized servicing rights	2,968		Discounted cash flow	Constant Prepayment Rate (CPR)	21.07		%
				Discount Rate	10.00		%
Total	$	14,277

	Fair Value				Significant Unobservable Input
(In thousands)	December 31, 2020		Valuation Techniques	Unobservable Inputs	Value
Assets (Liabilities)
Trading security	$	9,708	Discounted Cash Flow	Discount Rate	2.72		%
AFS Securities	15,000		Indication from Market Maker	Price	102.00		%
Loans held for investment	2,265		Discounted Cash Flow	Discount Rate	30.00		%
				Collateral Value	$8.1- $21.9
Commitments to lend	735		Historical Trend	Closing Ratio	74.54		%
			Pricing Model	Origination Costs, per loan	$	3
Forward commitments	320		Historical Trend	Closing Ratio	74.54		%
			Pricing Model	Origination Costs, per loan	$	3
Capitalized servicing rights	3,033		Discounted Cash Flow	Constant Prepayment Rate (CPR)	26.52		%
				Discount Rate	10.00		%
Total	$	31,061

Non-Recurring Fair Value Measurements

The Company is required, on a non-recurring basis, to adjust the carrying value or provide valuation allowances for certain assets using fair value measurements in accordance with GAAP. The following is a summary of applicable non-recurring fair value measurements. There are no liabilities measured at fair value on a non-recurring basis.

	March 31, 2021		December 31, 2020		Fair Value Measurement Date as of March 31, 2021
	Level 3		Level 3		Level 3
(In thousands)	Inputs		Inputs		Inputs
Assets
Individually evaluated	$	21,762	$	28,028	March 2021
Capitalized servicing rights	13,763		13,315		March 2021
Other real estate owned	149		149		March 2021
Total	$	35,674	$	41,492

Quantitative information about the significant unobservable inputs within Level 3 non-recurring assets is as follows:

	Fair Value
(In thousands)	March 31, 2021		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (1)
Assets
Individually evaluated	$	21,762	Fair Value of Collateral	Discounted Cash Flow - Loss Severity	0.32% to 100.00% (49.39%)
				Appraised Value	$0 to $11,842 ($7,827)
Capitalized servicing rights	13,763		Discounted Cash Flow	Constant Prepayment Rate (CPR)	11.32% to 19.49% (15.38%)
				Discount Rate	8.33% to 11.00% (9.12%)
Other Real Estate Owned	149		Fair Value of Collateral	Appraised Value	$182
Total	$	35,674

(1)     Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

	Fair Value
(In thousands)	December 31, 2020		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (1)
Assets
Individually evaluated	$	28,028	Fair Value of Collateral	Discounted Cash Flow - loss severity	0.07% to 100.00% (46.36%)
				Appraised Value	$0 to $11,432 ($9,800)
Capitalized servicing rights	13,315		Discounted Cash Flow	Constant Prepayment Rate (CPR)	14.49% to 23.29% (16.98%)
				Discount Rate	10.00% to 11.00% (10.56%)
Other Real Estate Owned	149		Fair Value of Collateral	Appraised Value	$94 - $182
Total	$	41,492

(1)     Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

There were no Level 1 or Level 2 nonrecurring fair value measurements for the periods ended March 31, 2021 and December 31, 2020.

Individually evaluated loans. Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records non-recurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans. Non-recurring adjustments can also include certain impairment amounts for collateral-dependent loans calculated when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation amount does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace. However, the choice of observable data is subject to significant judgment, and there are often adjustments based on judgment in order to make observable data comparable and to consider the impact of time, the condition of properties, interest rates, and other market factors on current values. Additionally, commercial real estate appraisals frequently involve discounting of projected cash flows, which relies inherently on unobservable data. Therefore, nonrecurring fair value measurement adjustments that relate to real estate collateral have generally been classified as Level 3. Estimates of fair value for other collateral that supports commercial loans are generally based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3. 

Capitalized loan servicing rights. A loan servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans exceed adequate compensation for performing the servicing. The fair value of servicing rights is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Adjustments are only recorded when the discounted cash flows derived from the valuation model are less than the carrying value of the asset. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy.

Summary of Estimated Fair Values of Financial Instruments

The following tables summarize the estimated fair values (represents exit price), and related carrying amounts, of the Company’s financial instruments. Certain financial instruments and all non-financial instruments are excluded. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

	March 31, 2021
	Carrying		Fair
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	1,899,608	$	1,899,608	$	1,899,608	$	—	$	—
Trading security	9,350		9,350		—		—		9,350
Marketable equity securities	15,801		15,801		15,129		672		—
Securities available for sale	1,627,330		1,627,330		—		1,627,330		—
Securities held to maturity	610,637		627,297		—		624,012		3,285
FHLB bank stock and restricted securities	28,680		N/A		N/A		N/A		N/A
Net loans	7,534,978		7,778,261		—		—		7,778,261
Loans held for sale	18,377		18,377		—		8,877		9,500
Accrued interest receivable	45,990		45,990		—		45,990		—
Derivative assets	107,176		107,176		—		106,665		511
Financial Liabilities
Total deposits	$	10,244,370	$	10,256,878	$	—	$	10,256,878	$	—
Short-term debt	—		—		—		—		—
Long-term Federal Home Loan Bank advances and other	351,354		353,481		—		353,481		—
Subordinated borrowings	97,338		95,729		—		95,729		—
Derivative liabilities	47,215		47,215		—		47,215		—

	December 31, 2020
	Carrying		Fair
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	1,557,875	$	1,557,875	$	1,557,875	$	—	$	—
Trading security	9,708		9,708		—		—		9,708
Marketable equity securities	18,513		18,513		17,841		672		—
Securities available for sale and other	1,695,232		1,695,232		—		1,680,232		15,000
Securities held to maturity	465,091		491,855		—		488,393		3,462
FHLB bank stock and restricted securities	34,873		N/A		N/A		N/A		N/A
Net loans	7,954,217		8,243,437		—		—		8,243,437
Loans held for sale	17,748		17,748		—		12,992		4,756
Accrued interest receivable	46,919		46,919		—		46,919		—
Derivative assets	160,071		160,071		—		159,016		1,055
Assets held for sale	317,304		317,304		—		16,705		300,599
Financial Liabilities
Total deposits	$	10,215,808	$	10,230,822	$	—	$	10,230,822	$	—
Short-term debt	40,000		40,025		—		40,025		—
Long-term Federal Home Loan Bank advances	434,357		438,064		—		438,064		—
Subordinated borrowings	97,280		95,178		—		95,178		—
Derivative liabilities	65,758		65,758		—		65,758		—
Liabilities held for sale	630,065		631,268		—		631,268		—

XML

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

3 Months Ended

Mar. 31, 2021

Banking and Thrift, Interest [Abstract]

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

Presented below is net interest income after provision for credit losses for the three months ended March 31, 2021 and 2020, respectively.

	Three Months Ended March 31,
(In thousands)	2021		2020
Net interest income from continuing operations	$	75,093	$	86,428
Provision for credit losses	6,500		34,807
Net interest income from continuing operations after provision for credit losses	$	68,593	$	51,621

XML

BASIS OF PRESENTATION (Policies)

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

BASIS OF PRESENTATION

The Consolidated Financial Statements (the “financial statements”) of Berkshire Hills Bancorp, Inc. and its subsidiaries (the “Company” or “Berkshire”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company is a Delaware corporation, headquartered in Boston, Massachusetts, and the holding company for Berkshire Bank (the “Bank”), a Massachusetts-chartered trust company headquartered in Pittsfield, Massachusetts, and Berkshire Insurance Group, Inc. These financial statements include the accounts of the Company, its wholly-owned subsidiaries and the Bank’s consolidated subsidiaries. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise.

The Company has evaluated subsequent events for potential recognition and/or disclosure through the date these financial statements were issued.

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 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 disclosures Berkshire Hills Bancorp, Inc. previously filed with the Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. In management’s opinion, all adjustments necessary for a fair statement are reflected in the interim periods.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ from those estimates.

Recently Adopted Accounting Principles and Future Application of Accounting Pronouncements

Recently Adopted Accounting Principles

In August 2018, the FASB issued ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans.” This ASU amends and modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The amendments in this update remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. As ASU No. 2018-14 only revises disclosure requirements, the adoption did not have a material impact on the Company’s Consolidated Financial Statements.

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU No. 2019-12 removes specific exceptions to the general principles in FASB ASC Topic 740. It eliminates the need for an organization to analyze whether the following apply in a given period: (1) exception to the incremental approach for intraperiod tax allocation; (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments; and (3) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 also improves financial statement preparers’ application of income tax-related guidance and simplifies: (1) franchise taxes that are partially based on income; (2) transactions with a government that result in a step up in the tax basis of goodwill; (3) separate financial statements of legal entities that are not subject to tax; and (4) enacted changes in tax laws in interim periods. The adoption of ASU No. 2019-12 did not have a material impact on the Company's Consolidated Financial Statements.

In January 2020, the FASB issued ASU No. 2020-01, “Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force)”. ASU No. 2020-01 clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. In addition, this ASU provides direction that a company should not consider whether the underlying securities would be accounted for under the equity method or the fair value option when it is determining the accounting for certain forward contracts and purchased options, upon either settlement or exercise. The amendments are to be applied prospectively. The adoption of ASU No. 2020-01 did not have a material impact on the Company's Consolidated Financial Statements.

In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848): Scope.” ASU No. 2021-01 clarifies that certain optional expedients and exceptions in ASC 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU No. 2021-01 also amends the expedients and exceptions in ASC 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. ASU No. 2021-01 was effective upon issuance and generally can be applied through December 31, 2022. The adoption of ASU 2021-01 did not significantly impact the Company’s Consolidated Financial Statements.

Future Application of Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU No. 2020-04 provides temporary optional expedients and exceptions to GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as SOFR. For instance, entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Entities can also elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. Finally, entities can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. It is anticipated that this ASU will simplify any modifications that are executed between the selected start date (yet to be determined) and December 31, 2022 that are directly related to LIBOR transition by allowing prospective recognition of the continuation of the contract, rather than extinguishment of the old contract resulting in writing off unamortized fees/costs. The Company is currently evaluating the impact of adopting the new guidance on the Consolidated Financial Statements.

XML

DISCONTINUED OPERATIONS AND HELD FOR SALE (Tables)

3 Months Ended

Mar. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

Summary of Discontinued Operations

The following presents operating results of the discontinued operations of FCLS for the three months ended March 31, 2021 and March 31, 2020:

	Three Months Ended March 31,
(In thousands)	2021		2020
Interest income	$	—	$	729
Interest expense	—		282
Net interest income	—		447
Non-interest income	—		1,358
Total net revenue	—		1,805
Non-interest expense	—		12,434
(Loss) from discontinued operations before income taxes	—		(10,629)
Income tax (benefit)	—		(2,831)
Net (loss) from discontinued operations	$	—	$	(7,798)

The following is a summary of the assets and liabilities related to the branch sale at March 31, 2021 and December 31, 2020:

(In thousands)	March 31, 2021		December 31, 2020
Assets
Loans	$	283,769	$	300,599
Other assets	19,928		16,705
Total assets	$	303,697	$	317,304
Liabilities
Deposits	$	646,622	$	617,377
Other liabilities	12,688		12,688
Total liabilities	$	659,310	$	630,065

XML

SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND MARKETABLE EQUITY SECURITIES (Tables)

3 Months Ended

Mar. 31, 2021

Investments, Debt and Equity Securities [Abstract]

Summary of Securities Available for Sale, Held to Maturity, and Marketable Equity Securities

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

(In thousands)	Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance
March 31, 2021
Securities available for sale
Municipal bonds and obligations	$	83,922	$	6,378	$	—	$	90,300	$	—
Agency collateralized mortgage obligations	713,215		14,922		(3,583)		724,554		—
Agency mortgage-backed securities	453,042		2,813		(8,659)		447,196		—
Agency commercial mortgage-backed securities	267,596		4,020		(3,101)		268,515		—
Corporate bonds	44,294		729		(9)		45,014		—
Other bonds and obligations	50,691		1,068		(8)		51,751		—
Total securities available for sale	1,612,760		29,930		(15,360)		1,627,330		—
Securities held to maturity
Municipal bonds and obligations	266,609		16,884		(592)		282,901		71
Agency collateralized mortgage obligations	151,092		4,764		(1,054)		154,802		—
Agency mortgage-backed securities	65,052		155		(1,682)		63,525		—
Agency commercial mortgage-backed securities	124,379		398		(2,288)		122,489		—
Tax advantaged economic development bonds	3,210		75		—		3,285		40
Other bonds and obligations	295		—		—		295		—
Total securities held to maturity	610,637		22,276		(5,616)		627,297		111
Marketable equity securities	15,707		218		(124)		15,801		—
Total	$	2,239,104	$	52,424	$	(21,100)	$	2,270,428	$	111

(In thousands)	Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance
December 31, 2020
Securities available for sale
Municipal bonds and obligations	$	90,273	$	7,530	$	—	$	97,803	$	—
Agency collateralized mortgage obligations	740,225		16,836		(235)		756,826		—
Agency mortgage-backed securities	433,311		4,954		(133)		438,132		—
Agency commercial mortgage-backed securities	278,990		9,835		(175)		288,650		—
Corporate bonds	59,098		942		(10)		60,030		—
Other bonds and obligations	52,080		1,719		(8)		53,791		—
Total securities available for sale	1,653,977		41,816		(561)		1,695,232		—
Securities held to maturity
Municipal bonds and obligations	246,520		20,106		—		266,626		64
Agency collateralized mortgage obligations	153,561		5,989		(171)		159,379		—
Agency mortgage-backed securities	35,865		198		(29)		36,034		—
Agency commercial mortgage-backed securities	25,481		590		(12)		26,059		—
Tax advantaged economic development bonds	3,369		93		—		3,462		40
Other bonds and obligations	295		—		—		295		—
Total securities held to maturity	465,091		26,976		(212)		491,855		104
Marketable equity securities	18,061		767		(315)		18,513		—
Total	$	2,137,129	$	69,559	$	(1,088)	$	2,205,600	$	104

Debt Securities, Held-to-maturity, Allowance for Credit Loss

The following table summarizes the activity in the allowance for credit losses for debt securities held to maturity by security type for the three months ended March 31, 2021 and 2020:

(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at December 31, 2020	$	64	$	40	$	104
Provision for credit losses	7		—		7
Balance at March 31, 2021	$	71	$	40	$	111

(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at December 31, 2019	$	—	$	—	$	—
Impact of ASC 326 adoption	83		226		309
Provision for credit losses - reversal	—		(168)		(168)
Balance at March 31, 2020	$	83	$	58	$	141

Schedule of Estimated Fair Value of Available for Sale (“AFS”) and Held to Maturity (“HTM”) Securities Segregated by Contractual Maturity

The amortized cost and estimated fair value of available for sale (“AFS”) and held to maturity (“HTM”) securities segregated by contractual maturity at March 31, 2021 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.

	Available for sale				Held to maturity
	Amortized		Fair		Amortized		Fair
(In thousands)	Cost		Value		Cost		Value
Within 1 year	$	31,134	$	31,147	$	1,872	$	1,874
Over 1 year to 5 years	7,206		7,331		4,270		4,317
Over 5 years to 10 years	51,953		53,260		23,311		24,210
Over 10 years	88,614		95,327		240,661		256,080
Total bonds and obligations	178,907		187,065		270,114		286,481
Mortgage-backed securities	1,433,853		1,440,265		340,523		340,816
Total	$	1,612,760	$	1,627,330	$	610,637	$	627,297

Schedule of Securities Available for Sale and Held to Maturity with Unrealized Losses, Segregated by Duration

Securities available for sale and held to maturity 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
March 31, 2021
Securities available for sale
Agency collateralized mortgage obligations	$	3,583	$	150,110	$	—	$	—	$	3,583	$	150,110
Agency mortgage-backed securities	8,654		346,395		5		384		8,659		346,779
Agency commercial mortgage-backed securities	3,101		132,234		—		—		3,101		132,234
Corporate bonds	—		—		9		4,876		9		4,876
Other bonds and obligations	—		—		8		981		8		981
Total securities available for sale	$	15,338	$	628,739	$	22	$	6,241	$	15,360	$	634,980
Securities held to maturity
Municipal bonds and obligations	$	592	$	23,359	$	—	$	—	$	592	$	23,359
Agency collateralized mortgage obligations	1,054		83,449		—		—		1,054		83,449
Agency mortgage-backed securities	1,682		59,167		—		—		1,682		59,167
Agency commercial mortgage-backed securities	2,288		103,015		—		—		2,288		103,015
Total securities held to maturity	5,616		268,990		—		—		5,616		268,990
Total	$	20,954	$	897,729	$	22	$	6,241	$	20,976	$	903,970
December 31, 2020
Securities available for sale
Agency collateralized mortgage obligations	$	235	$	77,898	$	—	$	—	$	235	$	77,898
Agency mortgage-backed securities	131		39,939		2		256		133		40,195
Agency commercial mortgage-backed securities	175		51,435		—		—		175		51,435
Corporate bonds	10		4,875		—		—		10		4,875
Other bonds and obligations	—		—		8		1,030		8		1,030
Total securities available for sale	$	551	$	174,147	$	10	$	1,286	$	561	$	175,433
Securities held to maturity
Agency collateralized mortgage obligations	$	171	$	25,048	$	—	$	—	$	171	$	25,048
Agency mortgage-backed securities	29		20,710		—		—		29		20,710
Agency commercial mortgage-backed securities	12		10,216		—		—		12		10,216
Total securities held to maturity	212		55,974		—		—		212		55,974
Total	$	763	$	230,121	$	10	$	1,286	$	773	$	231,407

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables)

3 Months Ended

Mar. 31, 2021

Credit Loss [Abstract]

Schedule of Loans

The following is a summary of total loans by regulatory call report code with sub-segmentation based on underlying collateral for certain loan types:

(In thousands)	March 31, 2021		December 31, 2020
Construction	$	454,388	$	454,513
Commercial multifamily	483,646		483,350
Commercial real estate owner occupied	556,286		552,413
Commercial real estate non-owner occupied	2,129,572		2,119,263
Commercial and industrial	1,719,304		1,943,164
Residential real estate	1,774,504		1,931,681
Home equity	279,017		293,981
Consumer other	262,061		303,154
Total loans	$	7,658,778	$	8,081,519
Allowance for credit losses	123,800		127,302
Net loans	$	7,534,978	$	7,954,217

Schedule of Allowance for Credit Losses for Loans, Activity

The Company’s activity in the allowance for credit losses for loans for the three months ended March 31, 2021 and March 31, 2020 was as follows:

(In thousands)	Balance at Beginning of Period		Impact of Adopting ASC 326		Sub-total		Charge-offs		Recoveries		Provision for Credit Losses		Balance at End of Period
Three months ended March 31, 2021
Construction	$	5,111	$	—	$	5,111	$	—	$	—	$	(714)	$	4,397
Commercial multifamily	5,916		—		5,916		(124)		62		497		6,351
Commercial real estate owner occupied	12,380		—		12,380		(376)		12		2,241		14,257
Commercial real estate non-owner occupied	35,850		—		35,850		(6,658)		126		5,243		34,561
Commercial and industrial	25,013		—		25,013		(3,320)		644		3,734		26,071
Residential real estate	28,491		—		28,491		(377)		437		(2,751)		25,800
Home equity	6,482		—		6,482		(77)		24		(680)		5,749
Consumer other	8,059		—		8,059		(528)		160		(1,077)		6,614
Total allowance for credit losses	$	127,302	$	—	$	127,302	$	(11,460)	$	1,465	$	6,493	$	123,800

(In thousands)	Balance at Beginning of Period		Impact of Adopting ASC 326		Sub-total		Charge-offs		Recoveries		Provision for Credit Losses		Balance at End of Period
Three months ended March 31, 2020
Construction	$	2,713	$	(342)	$	2,371	$	—	$	—	$	2,202	$	4,573
Commercial multifamily	4,413		(1,842)		2,571		—		—		1,882		4,453
Commercial real estate owner occupied	4,880		6,062		10,942		(6,376)		258		6,783		11,607
Commercial real estate non-owner occupied	16,344		11,201		27,545		(135)		47		1,406		28,863
Commercial and industrial	20,099		(2,189)		17,910		(4,916)		1,402		10,106		24,502
Residential real estate	9,970		6,799		16,769		(171)		70		9,389		26,057
Home equity	1,470		4,884		6,354		(77)		2		1,501		7,780
Consumer other	3,686		861		4,547		(758)		180		1,706		5,675
Total allowance for credit losses	$	63,575	$	25,434	$	89,009	$	(12,433)	$	1,959	$	34,975	$	113,510

Schedule of Allowance for Credit Losses on Unfunded Loan Commitments, Activity

The Company’s activity in the allowance for credit losses on unfunded commitments for the three months ended March 31, 2021 and March 31, 2020 was as follows:

	Three Months Ended March 31,
(In thousands)	2021		2020
Balance at beginning of period	$	7,629	$	100
Impact of adopting ASC 326	—		7,993
Sub-Total	7,629		8,093
Expense for credit losses	200		330
Balance at end of period	$	7,829	$	8,423

Schedule of Loans by Risk Rating

The following table presents the Company’s loans by risk category:

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2021
Construction
Risk rating
Pass	$	25,422	$	43,662	$	275,525	$	65,371	$	27,177	$	2,501	$	1,000	$	—	$	440,658
Special Mention	—		—		—		313		—		—		—		—		313
Substandard	—		—		—		9,429		3,988		—		—		—		13,417
Total	$	25,422	$	43,662	$	275,525	$	75,113	$	31,165	$	2,501	$	1,000	$	—	$	454,388
Commercial multifamily:
Risk rating
Pass	$	17,100	$	31,295	$	55,210	$	74,123	$	78,148	$	219,175	$	61	$	—	$	475,112
Special Mention	—		—		2,187		—		—		—		—		—		2,187
Substandard	—		—		—		—		—		6,204		143		—		6,347
Total	$	17,100	$	31,295	$	57,397	$	74,123	$	78,148	$	225,379	$	204	$	—	$	483,646
Commercial real estate owner occupied:
Risk rating
Pass	$	13,652	$	53,164	$	81,473	$	99,224	$	63,148	$	218,342	$	1,506	$	—	$	530,509
Special Mention	—		535		3,389		1,136		1,966		2,432		—		—		9,458
Substandard	—		—		1,266		3,333		1,627		10,093		—		—		16,319
Total	$	13,652	$	53,699	$	86,128	$	103,693	$	66,741	$	230,867	$	1,506	$	—	$	556,286
Commercial real estate non-owner occupied:
Risk rating
Pass	$	77,638	$	174,898	$	292,528	$	469,718	$	218,525	$	725,223	$	17,394	$	—	$	1,975,924
Special Mention	—		231		270		2,971		6,904		58,403		1,059		—		69,838
Substandard	—		7,804		3,529		3,730		20,135		48,418		194		—		83,810
Total	$	77,638	$	182,933	$	296,327	$	476,419	$	245,564	$	832,044	$	18,647	$	—	$	2,129,572
Commercial and industrial:
Risk rating
Pass	$	25,240	$	563,757	$	131,781	$	203,153	$	110,240	$	182,949	$	372,075	$	—	$	1,589,195
Special Mention	—		1,952		9,887		7,477		3,881		4,011		10,806		—		38,014
Substandard	146		8,807		37,772		22,909		6,826		7,857		7,456		—		91,773
Doubtful	—		—		—		—		—		—		322		—		322
Total	$	25,386	$	574,516	$	179,440	$	233,539	$	120,947	$	194,817	$	390,659	$	—	$	1,719,304
Residential real estate
Risk rating
Pass	$	55,071	$	148,622	$	127,817	$	218,785	$	273,160	$	931,322	$	3,261	$	—	$	1,758,038
Special Mention	—		—		—		—		284		814		—		—		1,098
Substandard	—		700		31		1,836		2,434		10,367		—		—		15,368
Total	$	55,071	$	149,322	$	127,848	$	220,621	$	275,878	$	942,503	$	3,261	$	—	$	1,774,504

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2020
Construction
Risk rating
Pass	$	38,374	$	255,377	$	114,690	$	28,474	$	9,519	$	2,766	$	1,000	$	—	$	450,200
Special Mention	—		—		313		—		—		—		—		—		313
Substandard	—		—		—		4,000		—		—		—		—		4,000
Total	$	38,374	$	255,377	$	115,003	$	32,474	$	9,519	$	2,766	$	1,000	$	—	$	454,513
Commercial multifamily:
Risk rating
Pass	$	31,438	$	57,659	$	74,932	$	77,746	$	81,066	$	153,818	$	20	$	—	$	476,679
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		47		6,479		145		—		6,671
Total	$	31,438	$	57,659	$	74,932	$	77,746	$	81,113	$	160,297	$	165	$	—	$	483,350
Commercial real estate owner occupied:
Risk rating
Pass	$	58,327	$	84,839	$	104,797	$	64,693	$	44,300	$	169,197	$	1,194	$	—	$	527,347
Special Mention	535		2,569		1,136		1,009		800		2,579		—		—		8,628
Substandard	—		1,266		3,597		1,685		1,439		8,451		—		—		16,438
Total	$	58,862	$	88,674	$	109,530	$	67,387	$	46,539	$	180,227	$	1,194	$	—	$	552,413
Commercial real estate non-owner occupied:
Risk rating
Pass	$	180,520	$	292,386	$	435,440	$	223,935	$	303,221	$	497,066	$	15,393	$	—	$	1,947,961
Special Mention	—		279		2,068		6,958		11,798		44,961		1,068		—		67,132
Substandard	7,804		3,529		4,235		19,632		2,124		66,651		195		—		104,170
Total	$	188,324	$	296,194	$	441,743	$	250,525	$	317,143	$	608,678	$	16,656	$	—	$	2,119,263
Commercial and industrial:
Risk rating
Pass	$	754,260	$	159,046	$	205,651	$	130,985	$	48,326	$	148,222	$	368,769	$	—	$	1,815,259
Special Mention	1,467		5,753		5,267		2,851		1,601		65		12,408		—		29,412
Substandard	7,392		39,822		24,951		7,765		3,504		5,630		9,099		—		98,163
Doubtful	—		—		—		—		—		—		330		—		330
Total	$	763,119	$	204,621	$	235,869	$	141,601	$	53,431	$	153,917	$	390,606	$	—	$	1,943,164
Residential real estate
Risk rating
Pass	$	150,583	$	146,142	$	272,399	$	320,384	$	333,159	$	691,078	$	3,281	$	—	$	1,917,026
Special Mention	384		—		454		1,430		—		362		—		—		2,630
Substandard	991		39		703		902		417		8,964		9		—		12,025
Total	$	151,958	$	146,181	$	273,556	$	322,716	$	333,576	$	700,404	$	3,290	$	—	$	1,931,681

For home equity and consumer other loan portfolio segments, Berkshire evaluates credit quality based on the aging status of the loan and by payment activity. The performing or nonperforming status is updated on an ongoing basis dependent upon improvement and deterioration in credit quality. The following table presents the amortized cost based on payment activity:

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of March 31, 2021
Home equity:
Payment performance
Performing	$	703	$	2,623	$	1,469	$	309	$	1,829	$	2,234	$	267,103	$	—	$	276,270
Nonperforming	—		—		—		—		—		—		2,747		—		2,747
Total	$	703	$	2,623	$	1,469	$	309	$	1,829	$	2,234	$	269,850	$	—	$	279,017
Consumer other:
Payment performance
Performing	$	4,870	$	14,084	$	30,924	$	87,205	$	57,753	$	54,399	$	7,965	$	—	$	257,200
Nonperforming	—		69		381		1,325		1,457		1,619		10		—		4,861
Total	$	4,870	$	14,153	$	31,305	$	88,530	$	59,210	$	56,018	$	7,975	$	—	$	262,061

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2020
Home equity:
Payment performance
Performing	$	2,445	$	1,960	$	316	$	1,859	$	499	$	1,882	$	282,123	$	—	$	291,084
Nonperforming	—		—		1		—		—		—		2,896		—		2,897
Total	$	2,445	$	1,960	$	317	$	1,859	$	499	$	1,882	$	285,019	$	—	$	293,981
Consumer other:
Payment performance
Performing	$	15,193	$	35,317	$	101,730	$	69,366	$	35,421	$	31,327	$	9,339	$	—	$	297,693
Nonperforming	39		316		1,511		1,599		1,585		407		4		—		5,461
Total	$	15,232	$	35,633	$	103,241	$	70,965	$	37,006	$	31,734	$	9,343	$	—	$	303,154

The following table summarizes information about total loans rated Special Mention or lower at March 31, 2021 and December 31, 2020. The table below includes consumer loans that are Special Mention and Substandard accruing that are classified as performing based on payment activity.

(In thousands)	March 31, 2021		December 31, 2020
Non-Accrual	$	55,817	$	64,948
Substandard Accruing	179,150		185,207
Total Classified	234,967		250,155
Special Mention	121,437		109,299
Total Criticized	$	356,404	$	359,454

Summary of Past Due Loans

The following is a summary of loans by past due status at March 31, 2021 and December 31, 2020:

(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans
March 31, 2021
Construction	$	3,988	$	—	$	—	$	3,988	$	450,400	$	454,388
Commercial multifamily	—		—		4,068		4,068		479,578		483,646
Commercial real estate owner occupied	6,174		487		4,610		11,271		545,015		556,286
Commercial real estate non-owner occupied	703		—		21,790		22,493		2,107,079		2,129,572
Commercial and industrial	9,479		1,540		9,486		20,505		1,698,799		1,719,304
Residential real estate	2,990		1,098		14,476		18,564		1,755,940		1,774,504
Home equity	647		159		2,747		3,553		275,464		279,017
Consumer other	1,052		248		4,764		6,064		255,997		262,061
Total	$	25,033	$	3,532	$	61,941	$	90,506	$	7,568,272	$	7,658,778

(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans
December 31, 2020
Construction	$	—	$	—	$	—	$	—	$	454,513	$	454,513
Commercial multifamily	—		—		757		757		482,593		483,350
Commercial real estate owner occupied	809		631		4,894		6,334		546,079		552,413
Commercial real estate non-owner occupied	315		168		38,389		38,872		2,080,391		2,119,263
Commercial and industrial	3,016		3,259		12,982		19,257		1,923,907		1,943,164
Residential real estate	2,068		2,630		11,115		15,813		1,915,868		1,931,681
Home equity	244		284		2,897		3,425		290,556		293,981
Consumer other	2,109		777		5,364		8,250		294,904		303,154
Total	$	8,561	$	7,749	$	76,398	$	92,708	$	7,988,811	$	8,081,519

Summary of Loans on Nonaccrual Status and Loans Past Due

The following is a summary of loans on nonaccrual status and loans past due 90 days or more and still accruing as of March 31, 2021 and December 31, 2020:

(In thousands)	Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or Greater and Accruing		Interest Income Recognized on Nonaccrual
At or for the three months ended March 31, 2021
Construction	$	—	$	—	$	—	$	—
Commercial multifamily	4,068		4,068		—		—
Commercial real estate owner occupied	4,232		1,832		378		—
Commercial real estate non-owner occupied	18,856		11,691		2,934		—
Commercial and industrial	9,364		3,005		122		—
Residential real estate	11,941		7,419		2,535		—
Home equity	2,599		211		148		—
Consumer other	4,757		8		7		—
Total	$	55,817	$	28,234	$	6,124	$	—

The commercial and industrial loans nonaccrual amortized cost as of March 31, 2021 included medallion loans with a fair value of $1.4 million and a contractual balance of $45.0 million.

(In thousands)	Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or Greater and Accruing		Interest Income Recognized on Nonaccrual
At or for the three months ended December 31, 2020
Construction	$	—	$	—	$	—	$	—
Commercial multifamily	757		591		—		—
Commercial real estate owner occupied	4,509		2,290		385		—
Commercial real estate non-owner occupied	29,572		13,912		8,817		—
Commercial and industrial	12,441		4,725		541		—
Residential real estate	9,711		5,739		1,404		—
Home equity	2,654		159		243		—
Consumer other	5,304		2		60		—
Total	$	64,948	$	27,418	$	11,450	$	—

Schedule of Collateral Dependent Loans

The following table presents the amortized cost basis of individually analyzed collateral-dependent loans by loan portfolio segment:

	Type of Collateral
(In thousands)	Real Estate		Investment Securities/Cash		Other
March 31, 2021
Construction	$	—	$	—	$	—
Commercial multifamily	4,070		—		—
Commercial real estate owner occupied	5,351		—		—
Commercial real estate non-owner occupied	20,805		—		—
Commercial and industrial	1,361		18		977
Residential real estate	7,048		—		—
Home equity	198		—		—
Consumer other	34		—		—
Total loans	$	38,867	$	18	$	977
December 31, 2020
Construction	$	—	$	—	$	—
Commercial multifamily	591		—		—
Commercial real estate owner occupied	5,714		—		—
Commercial real estate non-owner occupied	30,950		—		—
Commercial and industrial	973		36		3,758
Residential real estate	5,081		—		—
Home equity	145		—		—
Consumer other	51		—		—
Total loans	$	43,505	$	36	$	3,758

Schedule of Troubled Debt Restructurings, Activity

The following table presents activity in TDRs for the three months ended March 31, 2021 and March 31, 2020:

(In thousands)	Balance at Beginning of Period		Principal Payments		TDR Status Change		Other Additions/(Reductions)		Newly Identified TDRs		Balance at End of Period
Three months ended March 31, 2021
Construction	$	—	$	—	$	—	$	—	$	—	$	—
Commercial multifamily	754		(13)		—		—		—		741
Commercial real estate owner occupied	1,731		(6)		—		—		—		1,725
Commercial real estate non-owner occupied	13,684		(14)		—		511		544		14,725
Commercial and industrial	2,686		(199)		—		—		146		2,633
Residential real estate	1,524		(31)		—		—		—		1,493
Home equity	133		(3)		—		—		—		130
Consumer other	36		(2)		—		—		—		34
Total	$	20,548	$	(268)	$	—	$	511	$	690	$	21,481

(In thousands)	Balance at Beginning of Period		Principal Payments		TDR Status Change		Other Additions/(Reductions)		Newly Identified TDRs		Balance at End of Period
Three months ended March 31, 2020
Construction	$	—	$	—	$	—	$	—	$	—	$	—
Commercial multifamily	793		(14)		—		—		—		779
Commercial real estate owner occupied	13,331		(5,693)		—		—		—		7,638
Commercial real estate non-owner occupied	1,373		—		—		—		—		1,373
Commercial and industrial	1,449		(37)		—		—		902		2,314
Residential real estate	2,045		(22)		—		—		—		2,023
Home equity	277		1		—		—		—		278
Consumer other	48		(4)		—		—		—		44
Total	$	19,316	$	(5,769)	$	—	$	—	$	902	$	14,449

Schedule of Loans Modified as TDRs

The following table presents loans modified as TDRs that occurred during the three months ended March 31, 2021 and March 31, 2020:

(dollars in thousands)	Total
Three months ended March 31, 2021
TDR:
Number of loans	4
Pre-modification outstanding recorded investment	$	690
Post-modification outstanding recorded investment	$	690
Three months ended March 31, 2020
TDR:
Number of loans	3
Pre-modification outstanding recorded investment	$	902
Post-modification outstanding recorded investment	$	902

XML

DEPOSITS (Tables)

3 Months Ended

Mar. 31, 2021

Deposits [Abstract]

Summary of Time Deposits

A summary of time deposits is as follows:

(In thousands)	March 31, 2021		December 31, 2020
Time less than $100,000	$	630,244	$	663,324
Time $100,000 through $250,000	999,329		1,219,210
Time more than $250,000	473,649		502,551
Total time deposits	$	2,103,222	$	2,385,085

XML

BORROWED FUNDS (Tables)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of Borrowed Funds

Borrowed funds at March 31, 2021 and December 31, 2020 are summarized, as follows:

	March 31, 2021				December 31, 2020
			Weighted				Weighted
			Average				Average
(Dollars in thousands)	Principal		Rate		Principal		Rate
Short-term borrowings:
Advances from the FHLB	$	—	—	%	$	40,000	1.05	%
Total short-term borrowings:	—		—		40,000		1.05
Long-term borrowings:
Advances from the FHLB and other borrowings	351,354		1.88		434,357		1.89
Subordinated borrowings	74,455		7.00		74,411		7.00
Junior subordinated borrowing - Trust I	15,464		2.03		15,464		2.06
Junior subordinated borrowing - Trust II	7,419		1.88		7,405		1.92
Total long-term borrowings:	448,692		2.73		531,637		2.61
Total	$	448,692	2.73	%	$	571,637	2.50	%

Summary of Maturities of FHLBB Advances

A summary of maturities of FHLB advances as of March 31, 2021 is as follows:

	March 31, 2021
			Weighted Average
(In thousands, except rates)	Principal		Rate
Fixed rate advances maturing:
2021	$	272,985	1.86	%
2022	58,270		1.92
2023	10,659		2.16
2024	50		—
2025 and beyond	9,390		1.63
Total FHLB advances	$	351,354	1.88	%

XML

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

3 Months Ended

Mar. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Interest Rate Swap Agreements and Non-Hedging Derivative Assets and Liabilities

Information about derivative assets and liabilities at March 31, 2021, follows:

			Weighted	Weighted Average Rate				Estimated
	Notional		Average			Contract		Fair Value
	Amount		Maturity	Received		pay rate		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	$	8,463	8.7	0.48	%	5.09	%	$	(1,432)
Interest rate swaps on loans with commercial loan customers	1,720,659		6.0	4.15	%	1.92	%	101,216
Offsetting interest rate swaps on loans with commercial loan customers (1)	1,720,659		6.0	1.92	%	4.15	%	(40,670)
Risk participation agreements with dealer banks	341,662		8.8					336
Forward sale commitments	8,661		0.2					326
Total economic hedges	3,800,104							59,776
Non-hedging derivatives:
Commitments to lend	10,316		0.2					185
Total non-hedging derivatives	10,316							185
Total	$	3,810,420						$	59,961

(1) Fair value estimates include the impact of $61.3 million settled to market contract agreements.

Information about derivative assets and liabilities at December 31, 2020, follows:

			Weighted	Weighted Average Rate				Estimated
	Notional		Average			Contract		Fair Value
	Amount		Maturity	Received		pay rate		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	$	8,654	8.9	0.52	%	5.09	%	$	(1,778)
Interest rate swaps on loans with commercial loan customers	1,734,978		6.1	4.15	%	1.95	%	159,016
Offsetting interest rate swaps on loans with commercial loan customers (1)	1,734,978		6.1	1.95	%	4.15	%	(64,645)
Risk participation agreements with dealer banks	326,862		8.0					665
Forward sale commitments	11,544		0.2					320
Total economic hedges	3,817,016							93,578
Non-hedging derivatives:
Commitments to lend	40,099		0.2					735
Total non-hedging derivatives	40,099							735
Total	$	3,857,115						$	94,313

(1) Fair value estimates include the impact of $97.6 million settled to market contract agreements.

Schedule of Amounts Included in the Consolidated Statements of Income Related to Economic Hedges and Non-Hedging Derivatives

Amounts included in the Consolidated Statements of Income related to economic hedges and non-hedging derivatives were as follows:

	Three Months Ended March 31,
(In thousands)	2021		2020
Economic hedges
Interest rate swap on industrial revenue bond:
Unrealized gain/(loss) recognized in other non-interest income	$	346	$	(563)
Interest rate swaps on loans with commercial loan customers:
Unrealized (loss)/gain recognized in other non-interest income	(60,302)		102,382
Favorable/(unfavorable) change in credit valuation adjustment recognized in other non-interest income	2,502		(2,538)
Offsetting interest rate swaps on loans with commercial loan customers:
Unrealized gain/(loss) recognized in other non-interest income	60,302		(102,382)
Risk participation agreements:
Unrealized (loss)/gain recognized in other non-interest income	(329)		266
Forward commitments:
Unrealized gain/(loss) recognized in other non-interest income	6		(4,263)
Realized gain/(loss) in other non-interest income	(6)		(1,922)
Non-hedging derivatives
Commitments to lend
Unrealized (loss)/gain recognized in other non-interest income	$	(550)	$	2,208
Realized gain in other non-interest income	1,352		9,300

Schedule of Assets Subject to an Enforceable Master Netting Arrangement

Offsetting of Financial Assets and Derivative Assets

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Assets Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(In thousands)	Assets		Condition		Condition		Instruments		Collateral Received		Net Amount
March 31, 2021
Interest Rate Swap Agreements:
Institutional counterparties	$	3,086	$	(1,832)	$	1,254	$	—	$	—	$	1,254
Commercial counterparties	103,799		—		103,799		—		—		103,799
Total	$	106,885	$	(1,832)	$	105,053	$	—	$	—	$	105,053

Offsetting of Financial Assets and Derivative Assets

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Assets Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(In thousands)	Assets		Condition		Condition		Instruments		Collateral Received		Net Amount
December 31, 2020
Interest Rate Swap Agreements:
Institutional counterparties	$	1,124	$	(78)	$	1,046	$	—	$	—	$	1,046
Commercial counterparties	159,016		—		159,016		—		—		159,016
Total	$	160,140	$	(78)	$	160,062	$	—	$	—	$	160,062

Schedule of Liabilities Subject to an Enforceable Master Netting Arrangement

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Liabilities Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(In thousands)	Liabilities		Condition		Condition		Instruments		Collateral Pledged		Net Amount
March 31, 2021
Interest Rate Swap Agreements:
Institutional counterparties	$	(104,770)	$	61,750	$	(43,020)	$	37,116	$	70,333	$	64,429
Commercial counterparties	(2,582)		—		(2,582)		—		—		(2,582)
Total	$	(107,352)	$	61,750	$	(45,602)	$	37,116	$	70,333	$	61,847

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Liabilities Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(In thousands)	Liabilities		Condition		Condition		Instruments		Collateral Pledged		Net Amount
December 31, 2020
Interest Rate Swap Agreements:
Institutional counterparties	$	(164,543)	$	97,740	$	(66,803)	$	37,815	$	75,070	$	46,082
Commercial counterparties	—		—		—		—		—		—
Total	$	(164,543)	$	97,740	$	(66,803)	$	37,815	$	75,070	$	46,082

XML

LEASES (Tables)

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Schedule of ROU Assets and Lease Liabilities

The following table represents the Consolidated Balance Sheets classification of the Company’s right-of-use (“ROU”) assets and lease liabilities:

(In thousands)		March 31, 2021		December 31, 2020
Lease Right-of-Use Assets	Classification
Operating lease right-of-use assets	Other assets	$	56,704	$	60,018
Finance lease right-of-use assets	Premises and equipment, net	7,066		7,197
Total Lease Right-of-Use Assets		$	63,770	$	67,215
Lease Liabilities
Operating lease liabilities	Other liabilities	$	61,481	$	63,894
Finance lease liabilities	Other liabilities	10,252		10,383
Total Lease Liabilities		$	71,733	$	74,277

Supplemental Information Related to Leases

Supplemental information related to leases was as follows:

	March 31, 2021		December 31, 2020
Weighted-Average Remaining Lease Term (in years)
Operating leases	9.8		9.8
Finance leases	13.6		13.8
Weighted-Average Discount Rate
Operating leases	2.82	%	2.81	%
Finance leases	5.00	%	5.00	%

Summary of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases was as follows:

	Three Months Ended
(In thousands)	March 31, 2021		March 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	3,330	$	3,628
Operating cash flows from finance leases	127		134
Financing cash flows from finance leases	131		124

(1) There were operating cash flows from operating leases related to discontinued operations of $0.5 million at March 31, 2020.

Schedule of Maturity Analysis of Operating Lease Liability

The following table presents a maturity analysis of the Company’s lease liability by lease classification at March 31, 2021:

(In thousands)	Operating Leases		Finance Leases
2021	$	7,966	$	766
2022	9,774		1,031
2023	8,549		1,037
2024	7,414		1,037
2025	5,727		1,037
Thereafter	31,593		9,223
Total undiscounted lease payments	71,023		14,131
Less amounts representing interest	(9,542)		(3,879)
Lease liability	$	61,481	$	10,252

Schedule of Maturity Analysis of Finance Lease Liability

The following table presents a maturity analysis of the Company’s lease liability by lease classification at March 31, 2021:

(In thousands)	Operating Leases		Finance Leases
2021	$	7,966	$	766
2022	9,774		1,031
2023	8,549		1,037
2024	7,414		1,037
2025	5,727		1,037
Thereafter	31,593		9,223
Total undiscounted lease payments	71,023		14,131
Less amounts representing interest	(9,542)		(3,879)
Lease liability	$	61,481	$	10,252

XML

CAPITAL RATIOS AND SHAREHOLDERS' EQUITY (Tables)

3 Months Ended

Mar. 31, 2021

Stockholders' Equity Note [Abstract]

Schedule of Actual and Required Capital Ratios

The actual and required capital ratios were as follows:

	March 31, 2021		December 31, 2020		Minimum Capital Requirement
Company (consolidated)
Total capital to risk weighted assets	16.6	%	16.1	%	8.0	%
Common equity tier 1 capital to risk weighted assets	14.2		13.8		4.5
Tier 1 capital to risk weighted assets	14.4		14.1		6.0
Tier 1 capital to average assets	9.5		9.4		4.0

	March 31, 2021		December 31, 2020		Regulatory Minimum to be Adequately Capitalized		Regulatory Minimum to be Well Capitalized
Bank
Total capital to risk weighted assets	15.4	%	15.0	%	8.0	%	10.0	%
Common equity tier 1 capital to risk weighted assets	14.2		13.9		4.5		6.5
Tier 1 capital to risk weighted assets	14.2		13.9		6.0		8.0
Tier 1 capital to average assets	9.3		9.2		4.0		5.0

Schedule of Components of Accumulated Other Comprehensive Income

Components of accumulated other comprehensive income is as follows:

(In thousands)	March 31, 2021		December 31, 2020
Other accumulated comprehensive income, before tax:
Net unrealized holding gain on AFS securities	$	17,975	$	44,988
Net unrealized holding (loss) on pension plans	(3,511)		(3,511)
Income taxes related to items of accumulated other comprehensive income:
Net unrealized tax (expense) on AFS securities	(4,667)		(11,530)
Net unrealized tax benefit on pension plans	924		924
Accumulated other comprehensive income	$	10,721	$	30,871

Schedule of Components of Other Comprehensive Income

The following table presents the components of other comprehensive income for the three months ended March 31, 2021 and 2020:

(In thousands)	Before Tax		Tax Effect		Net of Tax
Three Months Ended March 31, 2021
Net unrealized holding gain on AFS securities:	x
Net unrealized (losses) arising during the period	$	(27,013)	$	6,863	$	(20,150)
Less: reclassification adjustment for gains realized in net income	—		—		—
Net unrealized holding (loss) on AFS securities	(27,013)		6,863		(20,150)
Other comprehensive (loss)	$	(27,013)	$	6,863	$	(20,150)
Three Months Ended March 31, 2020
Net unrealized holding gain on AFS securities:
Net unrealized gains arising during the period	$	25,613	$	(6,590)	$	19,023
Less: reclassification adjustment for (losses) realized in net income	(1)		—		(1)
Net unrealized holding gain on AFS securities	25,614		(6,590)		19,024
Other comprehensive income	$	25,614	$	(6,590)	$	19,024

Schedule of Gross Changes in Each Component of Accumulated Other Comprehensive Income

The following table presents the changes in each component of accumulated other comprehensive income, for the three ended March 31, 2021 and 2020:

(In thousands)	Net unrealized holding loss on AFS Securities		Net unrealized holding loss on pension plans		Total
Three Months Ended March 31, 2021
Balance at Beginning of Period	$	33,458	$	(2,587)	$	30,871
Other comprehensive income before reclassifications	(20,150)		—		(20,150)
Less: amounts reclassified from accumulated other comprehensive income	—		—		—
Total other comprehensive (loss)	(20,150)		—		(20,150)
Balance at End of Period	$	13,308	$	(2,587)	$	10,721
Three Months Ended March 31, 2020
Balance at Beginning of Period	$	14,204	$	(2,211)	$	11,993
Other comprehensive income before reclassifications	19,023		—		19,023
Less: amounts reclassified from accumulated other comprehensive income	(1)		—		(1)
Total other comprehensive income	19,024		—		19,024
Balance at End of Period	$	33,228	$	(2,211)	$	31,017

Schedule of Amounts Reclassified Out of Each Component of Accumulated Other Comprehensive Income

The following table presents the amounts reclassified out of each component of accumulated other comprehensive income for the three ended March 31, 2021 and 2020:

					Affected Line Item in the
	Three Months Ended March 31,				Statement where Net Income
(In thousands)	2021		2020		is Presented
Realized gains on AFS securities:
	$	—	$	(1)	Non-interest income
	—		—		Tax expense
	—		(1)		Net of tax
Total reclassifications for the period	$	—	$	(1)	Net of tax

XML

EARNINGS / (LOSS) PER SHARE (Tables)

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Schedule of Earnings Per Share

Earnings/(loss) per share have been computed based on the following (average diluted shares outstanding are calculated using the treasury stock method):

	Three Months Ended March 31,
(In thousands, except per share data)	2021		2020
Income/(loss) from continuing operations	$	13,031	$	(12,072)
(Loss)/income from discontinued operations	—		(7,798)
Net income/(loss)	$	13,031	$	(19,870)
Average number of common shares issued	51,903		51,903
Less: average number of treasury shares	948		1,744
Less: average number of unvested stock award shares	625		488
Plus: average participating preferred shares	—		533
Average number of basic shares outstanding	50,330		50,204
Plus: dilutive effect of unvested stock award shares	235		—
Plus: dilutive effect of stock options outstanding	—		—
Average number of diluted shares outstanding	50,565		50,204
Basic earnings/(loss) per common share:
Continuing operations	$	0.26	$	(0.24)
Discontinued operations	—		(0.16)
Total	$	0.26	$	(0.40)
Diluted earnings/(loss) per common share:
Continuing operations	$	0.26	$	(0.24)
Discontinued operations	—		(0.16)
Total	$	0.26	$	(0.40)

XML

STOCK-BASED COMPENSATION PLANS (Tables)

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Summary of Activity in the Stock Award and Stock Option Plans

A combined summary of activity in the Company’s stock award and stock option plans for the three months ended March 31, 2021 is presented in the following table:

	Non-Vested Stock Awards Outstanding			Stock Options Outstanding
(Shares in thousands)	Number of Shares	Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Exercise Price
December 31, 2020	517	$	28.35	112	$	22.95
Granted	210	16.58		—	—
Acquired	—	—		—	—
Stock options exercised	—	—		(5)	13.70
Stock awards vested	(44)	30.63		—	—
Forfeited	(52)	25.82		—	—
Expired	—	—		(10)	17.46
March 31, 2021	631	$	20.09	97	$	24.85

XML

FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Summary of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis Segregated by the Level of the Valuation Inputs Within the Fair Value Hierarchy Utilized to Measure Fair Value

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.

	March 31, 2021
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Trading security	$	—	$	—	$	9,350	$	9,350
Securities available for sale:
Municipal bonds and obligations	—		90,300		—		90,300
Agency collateralized mortgage obligations	—		724,554		—		724,554
Agency residential mortgage-backed securities	—		447,196		—		447,196
Agency commercial mortgage-backed securities	—		268,515		—		268,515
Corporate bonds	—		45,014		—		45,014
Other bonds and obligations	—		51,751		—		51,751
Marketable equity securities	15,129		672		—		15,801
Loans held for investment at fair value	—		—		1,448		1,448
Loans held for sale	—		8,877		—		8,877
Derivative assets	—		106,665		511		107,176
Capitalized servicing rights	—		—		2,968		2,968
Derivative liabilities	—		47,215		—		47,215

	December 31, 2020
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Trading security	$	—	$	—	$	9,708	$	9,708
Securities available for sale:
Municipal bonds and obligations	—		97,803		—		97,803
Agency collateralized mortgage obligations	—		756,826		—		756,826
Agency residential mortgage-backed securities	—		438,132		—		438,132
Agency commercial mortgage-backed securities	—		288,650		—		288,650
Corporate bonds	—		45,030		15,000		60,030
Other bonds and obligations	—		53,791		—		53,791
Marketable equity securities	17,841		672		—		18,513
Loans held for investment at fair value	—		—		2,265		2,265
Loans held for sale	—		12,992		4,756		17,748
Derivative assets	—		159,016		1,055		160,071
Capitalized servicing rights	—		—		3,033		3,033
Derivative liabilities	—		65,758		—		65,758

Schedule of Loans Held for Sale

					Aggregate Fair Value
March 31, 2021	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for investment at fair value	$	1,448	$	44,969	$	(43,521)

					Aggregate Fair Value
December 31, 2020	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for investment at fair value	$	2,265	$	53,945	$	(51,680)

Loans Held for Sale. The Company elected the fair value option for all loans held for sale (HFS) originated for sale on or after May 1, 2012. Loans HFS are classified as Level 2 as the fair value is based on input factors such as quoted prices for similar loans in active markets.

					Aggregate Fair Value
March 31, 2021	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for sale	$	8,877	$	8,518	$	359

					Aggregate Fair Value
December 31, 2020	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for sale	$	12,992	$	12,639	$	353

Schedule of Changes in Level 3 Assets and Liabilities That Were Measured at Fair Value on a Recurring Basis

The table below presents the changes in Level 3 assets and liabilities that were measured at fair value on a recurring basis for the three months ended March 31, 2021 and 2020.

	Assets (Liabilities)
			Securities		Loans						Capitalized
	Trading		Available		Held for		Commitments		Forward		Servicing
(In thousands)	Security		for Sale		Investment		to Lend		Commitments		Rights
Three Months Ended March 31, 2021
December 31, 2020	$	9,708	$	15,000	$	2,265	$	735	$	320	$	3,033
Maturities, calls, and prepayments of AFS Security	—		(15,000)		—		—				—
Unrealized (loss)/gain, net recognized in other non-interest income	(166)		—		414		818		6		(65)
Paydown of asset	(192)		—		(1,231)		—		—		—
Transfers to held for sale loans	—		—		—		(1,368)		—		—
March 31, 2021	$	9,350	$	—	$	1,448	$	185	$	326	$	2,968
Unrealized gain/(loss) relating to instruments still held at March 31, 2021	$	887	$	—	$	—	$	185	$	326	$	—

			Securities		Loans				Capitalized
	Trading		Available		Held for		Commitments		Servicing
(In thousands)	Security		for Sale		Investment		to Lend (1)		Rights (1)
Three Months Ended March 31, 2020
December 31, 2019	$	10,769	$	42,966	$	—	$	2,628	$	12,299
Adoption of ASC 326	—		—		7660		—		—
Maturity of AFS security	—		(9,000)		—		—		—
Unrealized gain, net recognized in other non-interest income	(759)		—		(2,216)		—		—
Unrealized gain included in accumulated other comprehensive loss	—		538		—		—		—
Unrealized gain/(loss), net recognized in discontinued operations	—		—		—		11,039		(3,781)
Paydown of asset	(181)		—		(549)		—		—
Transfers to held for sale loans	—		—		—		(8,831)		—
Additions to servicing rights	—		—		—		—		—
March 31, 2020	$	9,829	$	34,504	$	4,895	$	4,836	$	8,518
Unrealized gains relating to instruments still held at March 31,2020	$	620	$	151	$	—	$	4,836	$	—

(1) Classified as assets from discontinued operations on the consolidated balance sheets.

Schedule of Quantitative Information About the Significant Unobservable Inputs Within Level 3

Quantitative information about the significant unobservable inputs within Level 3 recurring assets and liabilities is as follows:

	Fair Value				Significant Unobservable Input
(In thousands)	March 31, 2021		Valuation Techniques	Unobservable Inputs	Value
Assets (Liabilities)
Trading security	$	9,350	Discounted Cash Flow	Discount Rate	2.66		%
Loan held for investment	1,448		Discounted Cash Flow	Discount Rate	25.00		%
				Collateral Value	$6.7 - $19.7
Commitments to lend	185		Historical Trend	Closing Ratio	74.29		%
			Pricing Model	Origination Costs, per loan	$	3
Forward commitments	326		Historical Trend	Closing Ratio	74.29		%
			Pricing Model	Origination Costs, per loan	$	3
Capitalized servicing rights	2,968		Discounted cash flow	Constant Prepayment Rate (CPR)	21.07		%
				Discount Rate	10.00		%
Total	$	14,277

	Fair Value				Significant Unobservable Input
(In thousands)	December 31, 2020		Valuation Techniques	Unobservable Inputs	Value
Assets (Liabilities)
Trading security	$	9,708	Discounted Cash Flow	Discount Rate	2.72		%
AFS Securities	15,000		Indication from Market Maker	Price	102.00		%
Loans held for investment	2,265		Discounted Cash Flow	Discount Rate	30.00		%
				Collateral Value	$8.1- $21.9
Commitments to lend	735		Historical Trend	Closing Ratio	74.54		%
			Pricing Model	Origination Costs, per loan	$	3
Forward commitments	320		Historical Trend	Closing Ratio	74.54		%
			Pricing Model	Origination Costs, per loan	$	3
Capitalized servicing rights	3,033		Discounted Cash Flow	Constant Prepayment Rate (CPR)	26.52		%
				Discount Rate	10.00		%
Total	$	31,061

The following is a summary of applicable non-recurring fair value measurements. There are no liabilities measured at fair value on a non-recurring basis.

	March 31, 2021		December 31, 2020		Fair Value Measurement Date as of March 31, 2021
	Level 3		Level 3		Level 3
(In thousands)	Inputs		Inputs		Inputs
Assets
Individually evaluated	$	21,762	$	28,028	March 2021
Capitalized servicing rights	13,763		13,315		March 2021
Other real estate owned	149		149		March 2021
Total	$	35,674	$	41,492

Summary of Applicable Non-Recurring Fair Value Measurements

Quantitative information about the significant unobservable inputs within Level 3 non-recurring assets is as follows:

	Fair Value
(In thousands)	March 31, 2021		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (1)
Assets
Individually evaluated	$	21,762	Fair Value of Collateral	Discounted Cash Flow - Loss Severity	0.32% to 100.00% (49.39%)
				Appraised Value	$0 to $11,842 ($7,827)
Capitalized servicing rights	13,763		Discounted Cash Flow	Constant Prepayment Rate (CPR)	11.32% to 19.49% (15.38%)
				Discount Rate	8.33% to 11.00% (9.12%)
Other Real Estate Owned	149		Fair Value of Collateral	Appraised Value	$182
Total	$	35,674

(1)     Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

	Fair Value
(In thousands)	December 31, 2020		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (1)
Assets
Individually evaluated	$	28,028	Fair Value of Collateral	Discounted Cash Flow - loss severity	0.07% to 100.00% (46.36%)
				Appraised Value	$0 to $11,432 ($9,800)
Capitalized servicing rights	13,315		Discounted Cash Flow	Constant Prepayment Rate (CPR)	14.49% to 23.29% (16.98%)
				Discount Rate	10.00% to 11.00% (10.56%)
Other Real Estate Owned	149		Fair Value of Collateral	Appraised Value	$94 - $182
Total	$	41,492

(1)     Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

Summary of Estimated Fair Values, and Related Carrying Amounts, of Financial Instruments

The following tables summarize the estimated fair values (represents exit price), and related carrying amounts, of the Company’s financial instruments. Certain financial instruments and all non-financial instruments are excluded. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

	March 31, 2021
	Carrying		Fair
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	1,899,608	$	1,899,608	$	1,899,608	$	—	$	—
Trading security	9,350		9,350		—		—		9,350
Marketable equity securities	15,801		15,801		15,129		672		—
Securities available for sale	1,627,330		1,627,330		—		1,627,330		—
Securities held to maturity	610,637		627,297		—		624,012		3,285
FHLB bank stock and restricted securities	28,680		N/A		N/A		N/A		N/A
Net loans	7,534,978		7,778,261		—		—		7,778,261
Loans held for sale	18,377		18,377		—		8,877		9,500
Accrued interest receivable	45,990		45,990		—		45,990		—
Derivative assets	107,176		107,176		—		106,665		511
Financial Liabilities
Total deposits	$	10,244,370	$	10,256,878	$	—	$	10,256,878	$	—
Short-term debt	—		—		—		—		—
Long-term Federal Home Loan Bank advances and other	351,354		353,481		—		353,481		—
Subordinated borrowings	97,338		95,729		—		95,729		—
Derivative liabilities	47,215		47,215		—		47,215		—

	December 31, 2020
	Carrying		Fair
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	1,557,875	$	1,557,875	$	1,557,875	$	—	$	—
Trading security	9,708		9,708		—		—		9,708
Marketable equity securities	18,513		18,513		17,841		672		—
Securities available for sale and other	1,695,232		1,695,232		—		1,680,232		15,000
Securities held to maturity	465,091		491,855		—		488,393		3,462
FHLB bank stock and restricted securities	34,873		N/A		N/A		N/A		N/A
Net loans	7,954,217		8,243,437		—		—		8,243,437
Loans held for sale	17,748		17,748		—		12,992		4,756
Accrued interest receivable	46,919		46,919		—		46,919		—
Derivative assets	160,071		160,071		—		159,016		1,055
Assets held for sale	317,304		317,304		—		16,705		300,599
Financial Liabilities
Total deposits	$	10,215,808	$	10,230,822	$	—	$	10,230,822	$	—
Short-term debt	40,000		40,025		—		40,025		—
Long-term Federal Home Loan Bank advances	434,357		438,064		—		438,064		—
Subordinated borrowings	97,280		95,178		—		95,178		—
Derivative liabilities	65,758		65,758		—		65,758		—
Liabilities held for sale	630,065		631,268		—		631,268		—

XML

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES (Tables)

3 Months Ended

Mar. 31, 2021

Banking and Thrift, Interest [Abstract]

Schedule of Net Interest Income After Provision for Loan Losses

Presented below is net interest income after provision for credit losses for the three months ended March 31, 2021 and 2020, respectively.

	Three Months Ended March 31,
(In thousands)	2021		2020
Net interest income from continuing operations	$	75,093	$	86,428
Provision for credit losses	6,500		34,807
Net interest income from continuing operations after provision for credit losses	$	68,593	$	51,621

XML

DISCONTINUED OPERATIONS AND HELD FOR SALE - Results of Discontinued Operation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
(Loss) from discontinued operations before income taxes	$ 0	$ (10,629)
Income tax (benefit)	0	(2,831)
Net (loss)/income from discontinued operations	0	(7,798)
First Choice Loan Services, Inc. | Discontinued Operations, Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Interest income	0	729
Interest expense	0	282
Net interest income	0	447
Non-interest income	0	1,358
Total net revenue	0	1,805
Non-interest expense	0	12,434
(Loss) from discontinued operations before income taxes	0	(10,629)
Income tax (benefit)	0	(2,831)
Net (loss)/income from discontinued operations	$ 0	$ (7,798)

XML

DISCONTINUED OPERATIONS AND HELD FOR SALE - Narrative (Details) - Mid-Atlantic Branch - Discontinued Operations, Held-for-sale $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($) branch	Dec. 31, 2020 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loans	$ 283,769	$ 300,599
Deposits	$ 646,622	$ 617,377
Premium on deposits, percent	3.00%
Number of branches sold | branch	8

XML

DISCONTINUED OPERATIONS AND HELD FOR SALE - Assets and Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Assets
Total assets	$ 303,697	$ 317,304
Liabilities
Total liabilities	659,310	630,065
Mid-Atlantic Branch | Discontinued Operations, Held-for-sale
Assets
Loans	283,769	300,599
Other assets	19,928	16,705
Total assets	303,697	317,304
Liabilities
Deposits	646,622	617,377
Other liabilities	12,688	12,688
Total liabilities	$ 659,310	$ 630,065

XML

TRADING SECURITY (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Investments, Debt and Equity Securities [Abstract]
Amortized cost	$ 8,500	$ 8,700
Trading security, at fair value	$ 9,350	$ 9,708

XML

SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND MARKETABLE EQUITY SECURITIES - Summary of Securities Available for Sale and Held to Maturity (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Securities available for sale
Amortized  Cost	$ 1,612,760	$ 1,653,977
Gross Unrealized Gains	29,930	41,816
Gross Unrealized Losses	(15,360)	(561)
Securities available for sale, at fair value	1,627,330	1,695,232
Allowance	0	0
Securities held to maturity
Amortized  Cost	610,637	465,091
Gross Unrealized Gains	22,276	26,976
Gross Unrealized Losses	(5,616)	(212)
Fair Value	627,297	491,855
Allowance	111	104	$ 141	$ 0
Marketable equity securities, amortized cost	15,707	18,061
Marketable equity securities, gross unrealized gains	218	767
Marketable equity securities, gross unrealized losses	(124)	(315)
Marketable equity securities, fair value	15,801	18,513
Total, amortized cost basis	2,239,104	2,137,129
Total, gross unrealized gain	52,424	69,559
Total, gross unrealized loss	(21,100)	(1,088)
Total, fair value	2,270,428	2,205,600
Total, Allowance	111	104
Municipal bonds and obligations
Securities available for sale
Amortized  Cost	83,922	90,273
Gross Unrealized Gains	6,378	7,530
Gross Unrealized Losses	0	0
Securities available for sale, at fair value	90,300	97,803
Allowance	0	0
Securities held to maturity
Amortized  Cost	266,609	246,520
Gross Unrealized Gains	16,884	20,106
Gross Unrealized Losses	(592)	0
Fair Value	282,901	266,626
Allowance	71	64	83	0
Agency collateralized mortgage obligations
Securities available for sale
Amortized  Cost	713,215	740,225
Gross Unrealized Gains	14,922	16,836
Gross Unrealized Losses	(3,583)	(235)
Securities available for sale, at fair value	724,554	756,826
Allowance	0	0
Securities held to maturity
Amortized  Cost	151,092	153,561
Gross Unrealized Gains	4,764	5,989
Gross Unrealized Losses	(1,054)	(171)
Fair Value	154,802	159,379
Allowance	0	0
Agency mortgage-backed securities
Securities available for sale
Amortized  Cost	453,042	433,311
Gross Unrealized Gains	2,813	4,954
Gross Unrealized Losses	(8,659)	(133)
Securities available for sale, at fair value	447,196	438,132
Allowance	0	0
Securities held to maturity
Amortized  Cost	65,052	35,865
Gross Unrealized Gains	155	198
Gross Unrealized Losses	(1,682)	(29)
Fair Value	63,525	36,034
Allowance	0	0
Agency commercial mortgage-backed securities
Securities available for sale
Amortized  Cost	267,596	278,990
Gross Unrealized Gains	4,020	9,835
Gross Unrealized Losses	(3,101)	(175)
Securities available for sale, at fair value	268,515	288,650
Allowance	0	0
Securities held to maturity
Amortized  Cost	124,379	25,481
Gross Unrealized Gains	398	590
Gross Unrealized Losses	(2,288)	(12)
Fair Value	122,489	26,059
Allowance	0	0
Corporate bonds
Securities available for sale
Amortized  Cost	44,294	59,098
Gross Unrealized Gains	729	942
Gross Unrealized Losses	(9)	(10)
Securities available for sale, at fair value	45,014	60,030
Allowance	0	0
Tax advantaged economic development bonds
Securities held to maturity
Amortized  Cost	3,210	3,369
Gross Unrealized Gains	75	93
Gross Unrealized Losses	0	0
Fair Value	3,285	3,462
Allowance	40	40	$ 58	$ 0
Other bonds and obligations
Securities available for sale
Amortized  Cost	50,691	52,080
Gross Unrealized Gains	1,068	1,719
Gross Unrealized Losses	(8)	(8)
Securities available for sale, at fair value	51,751	53,791
Allowance	0	0
Securities held to maturity
Amortized  Cost	295	295
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	295	295
Allowance	$ 0	$ 0

XML

SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND MARKETABLE EQUITY SECURITIES - Debt Securities, Held to Maturity, Allowance for Credit Losses Rollforward (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 104	$ 0
Provision for credit losses	7	(168)
Ending balance	111	141
Cumulative Effect, Period of Adoption, Adjustment
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward]
Beginning balance		(309)
Municipal bonds and obligations
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward]
Beginning balance	64	0
Provision for credit losses	7	0
Ending balance	71	83
Municipal bonds and obligations | Cumulative Effect, Period of Adoption, Adjustment
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward]
Beginning balance		(83)
Tax advantaged economic development bonds
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward]
Beginning balance	40	0
Provision for credit losses	0	(168)
Ending balance	$ 40	58
Tax advantaged economic development bonds | Cumulative Effect, Period of Adoption, Adjustment
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward]
Beginning balance		$ (226)

XML

SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND MARKETABLE EQUITY SECURITIES - Schedule of Maturity of Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Available for sale, Amortized Cost
Within 1 year	$ 31,134
Over 1 year to 5 years	7,206
Over 5 years to 10 years	51,953
Over 10 years	88,614
Total bonds and obligations	178,907
Mortgage-backed securities	1,433,853
Amortized  Cost	1,612,760	$ 1,653,977
Available for sale, Fair Value
Within 1 year	31,147
Over 1 year to 5 years	7,331
Over 5 years to 10 years	53,260
Over 10 years	95,327
Total bonds and obligations	187,065
Mortgage-backed securities	1,440,265
Fair Value	1,627,330	1,695,232
Held to maturity, Amortized Cost
Within 1 year	1,872
Over 1 year to 5 years	4,270
Over 5 years to 10 years	23,311
Over 10 years	240,661
Total bonds and obligations	270,114
Mortgage-backed securities	340,523
Amortized  Cost	610,637	465,091
Held to maturity, Fair Value
Within 1 year	1,874
Over 1 year to 5 years	4,317
Over 5 years to 10 years	24,210
Over 10 years	256,080
Total bonds and obligations	286,481
Mortgage-backed securities	340,816
Fair Value	$ 627,297	$ 491,855

XML

SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND MARKETABLE EQUITY SECURITIES - Narrative (Details)	3 Months Ended
	Mar. 31, 2021 USD ($) security branch	Mar. 31, 2020 USD ($)
Investment Holdings [Line Items]
Purchases of securities available for sale | $	$ 103,877,000	$ 160,925,000
Proceeds from sale of available-for-sale securities | $	0	3,520,000
Debt securities, available-for-sale, realized gain | $	0	0
Debt securities, available-for-sale, realized loss | $	$ 0	$ 1,000
Agency collateralized mortgage obligations
Investment Holdings [Line Items]
Available-for-sale, securities in unrealized loss positions	25
Available for sale securities portfolio, number of securities	256
Available for sale securities, continuous unrealized loss position, aggregate losses	2.20%
Mortgage-backed securities
Investment Holdings [Line Items]
Available-for-sale, securities in unrealized loss positions	33
Available for sale securities portfolio, number of securities	125
Available for sale securities, continuous unrealized loss position, aggregate losses	2.40%
Mortgage-backed securities | Held-to-maturity Securities
Investment Holdings [Line Items]
Held-to-maturity, securities in unrealized loss positions	5
Held-to-maturity securities portfolio, number of securities | branch	13
Debt securities, continuous unrealized loss position, qualitative disclosure, aggregate losses percentage	1.30%
Corporate bonds
Investment Holdings [Line Items]
Available-for-sale, securities in unrealized loss positions	1
Available for sale securities portfolio, number of securities	14
Available for sale securities, continuous unrealized loss position, aggregate losses	0.20%
Other bonds and obligations
Investment Holdings [Line Items]
Available-for-sale, securities in unrealized loss positions	3
Available for sale securities portfolio, number of securities	6
Available for sale securities, continuous unrealized loss position, aggregate losses	0.90%
Municipal bonds and obligations | Held-to-maturity Securities
Investment Holdings [Line Items]
Held-to-maturity, securities in unrealized loss positions	15
Held-to-maturity securities portfolio, number of securities | branch	207
Debt securities, continuous unrealized loss position, qualitative disclosure, aggregate losses percentage	2.50%
Agency mortgage-backed securities | Held-to-maturity Securities
Investment Holdings [Line Items]
Held-to-maturity, securities in unrealized loss positions	12
Held-to-maturity securities portfolio, number of securities | branch	14
Debt securities, continuous unrealized loss position, qualitative disclosure, aggregate losses percentage	2.30%

XML

SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND MARKETABLE EQUITY SECURITIES - Summary of Securities with Unrealized Losses (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Debt securities, available for sale securities, less than twelve months, gross unrealized losses	$ 15,338	$ 551
Debt securities, available for sale securities, over twelve months, gross unrealized losses	22	10
Debt securities, available for sale securities, continuous unrealized loss position, accumulated loss	15,360	561
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract]
Debt securities, available for sale securities, continuous unrealized loss position, less than twelve months, fair value	628,739	174,147
Debt securities, available for sale securities, continuous unrealized loss position, over twelve months, fair value	6,241	1,286
Debt securities, available for sale securities, continuous unrealized loss position, fair value	634,980	175,433
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss [Abstract]
Held-to-maturity securities, continuous unrealized loss position, less than twelve months, accumulated loss	5,616	212
Held-to-maturity securities, continuous unrealized loss position, over twelve months, gross unrealized losses	0	0
Held to maturity securities, accumulated unrecognized holding loss	5,616	212
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract]
Held to maturity securities, accumulated unrecognized holding loss, less than twelve months, fair value	268,990	55,974
Held to maturity securities, accumulated unrecognized holding loss, over twelve months, fair value	0	0
Held to maturity securities, accumulated unrecognized holding loss, fair value	268,990	55,974
Securities available for sale and held to maturity
Held to maturity and available for sale securities continuous unrealized loss position, less than twelve months, aggregate losses	20,954	763
Held to maturity and available for sale securities continuous unrealized loss position, less than twelve months, fair value	897,729	230,121
Held to maturity and available for sale securities continuous unrealized loss position, over twelve months, aggregate losses	22	10
Held to maturity and available for sale securities continuous unrealized loss position, over twelve months, fair value	6,241	1,286
Held to maturity and available for sale securities continuous unrealized loss position, aggregate losses	20,976	773
Held to maturity and available for sale securities continuous unrealized loss position, fair value	903,970	231,407
Agency collateralized mortgage obligations
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Debt securities, available for sale securities, less than twelve months, gross unrealized losses	3,583	235
Debt securities, available for sale securities, over twelve months, gross unrealized losses	0	0
Debt securities, available for sale securities, continuous unrealized loss position, accumulated loss	3,583	235
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract]
Debt securities, available for sale securities, continuous unrealized loss position, less than twelve months, fair value	150,110	77,898
Debt securities, available for sale securities, continuous unrealized loss position, over twelve months, fair value	0	0
Debt securities, available for sale securities, continuous unrealized loss position, fair value	150,110	77,898
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss [Abstract]
Held-to-maturity securities, continuous unrealized loss position, less than twelve months, accumulated loss	1,054	171
Held-to-maturity securities, continuous unrealized loss position, over twelve months, gross unrealized losses	0	0
Held to maturity securities, accumulated unrecognized holding loss	1,054	171
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract]
Held to maturity securities, accumulated unrecognized holding loss, less than twelve months, fair value	83,449	25,048
Held to maturity securities, accumulated unrecognized holding loss, over twelve months, fair value	0	0
Held to maturity securities, accumulated unrecognized holding loss, fair value	83,449	25,048
Agency mortgage-backed securities
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Debt securities, available for sale securities, less than twelve months, gross unrealized losses	8,654	131
Debt securities, available for sale securities, over twelve months, gross unrealized losses	5	2
Debt securities, available for sale securities, continuous unrealized loss position, accumulated loss	8,659	133
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract]
Debt securities, available for sale securities, continuous unrealized loss position, less than twelve months, fair value	346,395	39,939
Debt securities, available for sale securities, continuous unrealized loss position, over twelve months, fair value	384	256
Debt securities, available for sale securities, continuous unrealized loss position, fair value	346,779	40,195
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss [Abstract]
Held-to-maturity securities, continuous unrealized loss position, less than twelve months, accumulated loss	1,682	29
Held-to-maturity securities, continuous unrealized loss position, over twelve months, gross unrealized losses	0	0
Held to maturity securities, accumulated unrecognized holding loss	1,682	29
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract]
Held to maturity securities, accumulated unrecognized holding loss, less than twelve months, fair value	59,167	20,710
Held to maturity securities, accumulated unrecognized holding loss, over twelve months, fair value	0	0
Held to maturity securities, accumulated unrecognized holding loss, fair value	59,167	20,710
Agency commercial mortgage-backed securities
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Debt securities, available for sale securities, less than twelve months, gross unrealized losses	3,101	175
Debt securities, available for sale securities, over twelve months, gross unrealized losses	0	0
Debt securities, available for sale securities, continuous unrealized loss position, accumulated loss	3,101	175
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract]
Debt securities, available for sale securities, continuous unrealized loss position, less than twelve months, fair value	132,234	51,435
Debt securities, available for sale securities, continuous unrealized loss position, over twelve months, fair value	0	0
Debt securities, available for sale securities, continuous unrealized loss position, fair value	132,234	51,435
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss [Abstract]
Held-to-maturity securities, continuous unrealized loss position, less than twelve months, accumulated loss	2,288	12
Held-to-maturity securities, continuous unrealized loss position, over twelve months, gross unrealized losses	0	0
Held to maturity securities, accumulated unrecognized holding loss	2,288	12
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract]
Held to maturity securities, accumulated unrecognized holding loss, less than twelve months, fair value	103,015	10,216
Held to maturity securities, accumulated unrecognized holding loss, over twelve months, fair value	0	0
Held to maturity securities, accumulated unrecognized holding loss, fair value	103,015	10,216
Corporate bonds
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Debt securities, available for sale securities, less than twelve months, gross unrealized losses	0	10
Debt securities, available for sale securities, over twelve months, gross unrealized losses	9	0
Debt securities, available for sale securities, continuous unrealized loss position, accumulated loss	9	10
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract]
Debt securities, available for sale securities, continuous unrealized loss position, less than twelve months, fair value	0	4,875
Debt securities, available for sale securities, continuous unrealized loss position, over twelve months, fair value	4,876	0
Debt securities, available for sale securities, continuous unrealized loss position, fair value	4,876	4,875
Other bonds and obligations
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Debt securities, available for sale securities, less than twelve months, gross unrealized losses	0	0
Debt securities, available for sale securities, over twelve months, gross unrealized losses	8	8
Debt securities, available for sale securities, continuous unrealized loss position, accumulated loss	8	8
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract]
Debt securities, available for sale securities, continuous unrealized loss position, less than twelve months, fair value	0	0
Debt securities, available for sale securities, continuous unrealized loss position, over twelve months, fair value	981	1,030
Debt securities, available for sale securities, continuous unrealized loss position, fair value	981	$ 1,030
Municipal bonds and obligations
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss [Abstract]
Held-to-maturity securities, continuous unrealized loss position, less than twelve months, accumulated loss	592
Held-to-maturity securities, continuous unrealized loss position, over twelve months, gross unrealized losses	0
Held to maturity securities, accumulated unrecognized holding loss	592
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract]
Held to maturity securities, accumulated unrecognized holding loss, less than twelve months, fair value	23,359
Held to maturity securities, accumulated unrecognized holding loss, over twelve months, fair value	0
Held to maturity securities, accumulated unrecognized holding loss, fair value	$ 23,359

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES Summary of Total Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Financing Receivable, Allowance for Credit Loss [Line Items]
Total loans	$ 7,658,778	$ 8,081,519
Less: Allowance for credit losses on loans	123,800	127,302	$ 113,510	$ 63,575
Net loans	7,534,978	7,954,217
Commercial | Construction
Financing Receivable, Allowance for Credit Loss [Line Items]
Total loans	454,388	454,513
Less: Allowance for credit losses on loans	4,397	5,111	4,573	2,713
Commercial | Commercial multifamily
Financing Receivable, Allowance for Credit Loss [Line Items]
Total loans	483,646	483,350
Less: Allowance for credit losses on loans	6,351	5,916	4,453	4,413
Commercial real estate | Commercial real estate owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Total loans	556,286	552,413
Less: Allowance for credit losses on loans	14,257	12,380	11,607	4,880
Commercial real estate | Commercial real estate non-owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Total loans	2,129,572	2,119,263
Less: Allowance for credit losses on loans	34,561	35,850	28,863	16,344
Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Total loans	1,719,304	1,943,164
Less: Allowance for credit losses on loans	26,071	25,013	24,502	20,099
Residential mortgages | Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Total loans	1,774,504	1,931,681
Less: Allowance for credit losses on loans	25,800	28,491	26,057	9,970
Consumer loans | Home equity
Financing Receivable, Allowance for Credit Loss [Line Items]
Total loans	279,017	293,981
Less: Allowance for credit losses on loans	5,749	6,482	7,780	1,470
Consumer loans | Consumer other
Financing Receivable, Allowance for Credit Loss [Line Items]
Total loans	262,061	303,154
Less: Allowance for credit losses on loans	$ 6,614	$ 8,059	$ 5,675	$ 3,686

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Financing Receivable, Allowance for Credit Loss [Line Items]
Net loans	$ 7,534,978	$ 7,954,217
Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing receivable, nonaccrual, medallion loans, fair value	1,400	2,300
Financing receivable, nonaccrual, medallion loans, contractual balance	45,000	$ 53,900
Commercial Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing receivable, reclassification, held for sale	9,500
Small Business Administration (SBA), CARES Act, Paycheck Protection Program
Financing Receivable, Allowance for Credit Loss [Line Items]
Net loans	$ 444,200

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES Allowance for Credit Loss Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	$ 127,302	$ 63,575
Charge-offs	(11,460)	(12,433)
Recoveries	1,465	1,959
Provision for Credit Losses	6,493	34,975
Balance at End of Period	123,800	113,510
Commercial | Construction
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	5,111	2,713
Charge-offs	0	0
Recoveries	0	0
Provision for Credit Losses	(714)	2,202
Balance at End of Period	4,397	4,573
Commercial | Commercial multifamily
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	5,916	4,413
Charge-offs	(124)	0
Recoveries	62	0
Provision for Credit Losses	497	1,882
Balance at End of Period	6,351	4,453
Commercial real estate | Commercial real estate owner occupied
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	12,380	4,880
Charge-offs	(376)	(6,376)
Recoveries	12	258
Provision for Credit Losses	2,241	6,783
Balance at End of Period	14,257	11,607
Commercial real estate | Commercial real estate non-owner occupied
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	35,850	16,344
Charge-offs	(6,658)	(135)
Recoveries	126	47
Provision for Credit Losses	5,243	1,406
Balance at End of Period	34,561	28,863
Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	25,013	20,099
Charge-offs	(3,320)	(4,916)
Recoveries	644	1,402
Provision for Credit Losses	3,734	10,106
Balance at End of Period	26,071	24,502
Residential mortgages | Residential real estate
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	28,491	9,970
Charge-offs	(377)	(171)
Recoveries	437	70
Provision for Credit Losses	(2,751)	9,389
Balance at End of Period	25,800	26,057
Consumer loans | Home equity
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	6,482	1,470
Charge-offs	(77)	(77)
Recoveries	24	2
Provision for Credit Losses	(680)	1,501
Balance at End of Period	5,749	7,780
Consumer loans | Consumer other
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	8,059	3,686
Charge-offs	(528)	(758)
Recoveries	160	180
Provision for Credit Losses	(1,077)	1,706
Balance at End of Period	6,614	5,675
Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	0
Balance at End of Period		25,434
Cumulative Effect, Period of Adoption, Adjustment | Commercial | Construction
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	0
Balance at End of Period		(342)
Cumulative Effect, Period of Adoption, Adjustment | Commercial | Commercial multifamily
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	0
Balance at End of Period		(1,842)
Cumulative Effect, Period of Adoption, Adjustment | Commercial real estate | Commercial real estate owner occupied
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	0
Balance at End of Period		6,062
Cumulative Effect, Period of Adoption, Adjustment | Commercial real estate | Commercial real estate non-owner occupied
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	0
Balance at End of Period		11,201
Cumulative Effect, Period of Adoption, Adjustment | Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	0
Balance at End of Period		(2,189)
Cumulative Effect, Period of Adoption, Adjustment | Residential mortgages | Residential real estate
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	0
Balance at End of Period		6,799
Cumulative Effect, Period of Adoption, Adjustment | Consumer loans | Home equity
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	0
Balance at End of Period		4,884
Cumulative Effect, Period of Adoption, Adjustment | Consumer loans | Consumer other
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	0
Balance at End of Period		861
Cumulative Effect, Period of Adoption, Adjusted Balance
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	127,302
Balance at End of Period		89,009
Cumulative Effect, Period of Adoption, Adjusted Balance | Commercial | Construction
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	5,111
Balance at End of Period		2,371
Cumulative Effect, Period of Adoption, Adjusted Balance | Commercial | Commercial multifamily
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	5,916
Balance at End of Period		2,571
Cumulative Effect, Period of Adoption, Adjusted Balance | Commercial real estate | Commercial real estate owner occupied
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	12,380
Balance at End of Period		10,942
Cumulative Effect, Period of Adoption, Adjusted Balance | Commercial real estate | Commercial real estate non-owner occupied
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	35,850
Balance at End of Period		27,545
Cumulative Effect, Period of Adoption, Adjusted Balance | Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	25,013
Balance at End of Period		17,910
Cumulative Effect, Period of Adoption, Adjusted Balance | Residential mortgages | Residential real estate
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	28,491
Balance at End of Period		16,769
Cumulative Effect, Period of Adoption, Adjusted Balance | Consumer loans | Home equity
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	6,482
Balance at End of Period		6,354
Cumulative Effect, Period of Adoption, Adjusted Balance | Consumer loans | Consumer other
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	$ 8,059
Balance at End of Period		$ 4,547

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES Allowance for Credit Losses Activity, Unfunded Loan Commitments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Off-Balance Sheet, Credit Loss, Liability [Roll Forward]
Balance at beginning of period	$ 7,629	$ 100
Expense for credit losses	200	330
Balance at end of period	7,829	8,423
Cumulative Effect, Period of Adoption, Adjustment
Off-Balance Sheet, Credit Loss, Liability [Roll Forward]
Balance at beginning of period	0	7,993
Cumulative Effect, Period of Adoption, Adjusted Balance
Off-Balance Sheet, Credit Loss, Liability [Roll Forward]
Balance at beginning of period	$ 7,629	$ 8,093

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES Loan Risk by Category (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Financing Receivable, Allowance for Credit Loss [Line Items]
Total loans	$ 7,658,778	$ 8,081,519
Commercial | Construction
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	25,422	38,374
Loans originated in year before current fiscal year	43,662	255,377
Loans originated in two years before current fiscal year	275,525	115,003
Loans originated in three years before current fiscal year	75,113	32,474
Loans originated in four years before current fiscal year	31,165	9,519
Prior	2,501	2,766
Revolving Loans Amortized Cost Basis	1,000	1,000
Revolving Loans Converted to Term	0	0
Total loans	454,388	454,513
Commercial | Commercial multifamily
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	17,100	31,438
Loans originated in year before current fiscal year	31,295	57,659
Loans originated in two years before current fiscal year	57,397	74,932
Loans originated in three years before current fiscal year	74,123	77,746
Loans originated in four years before current fiscal year	78,148	81,113
Prior	225,379	160,297
Revolving Loans Amortized Cost Basis	204	165
Revolving Loans Converted to Term	0	0
Total loans	483,646	483,350
Commercial real estate | Commercial real estate owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	13,652	58,862
Loans originated in year before current fiscal year	53,699	88,674
Loans originated in two years before current fiscal year	86,128	109,530
Loans originated in three years before current fiscal year	103,693	67,387
Loans originated in four years before current fiscal year	66,741	46,539
Prior	230,867	180,227
Revolving Loans Amortized Cost Basis	1,506	1,194
Revolving Loans Converted to Term	0	0
Total loans	556,286	552,413
Commercial real estate | Commercial real estate non-owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	77,638	188,324
Loans originated in year before current fiscal year	182,933	296,194
Loans originated in two years before current fiscal year	296,327	441,743
Loans originated in three years before current fiscal year	476,419	250,525
Loans originated in four years before current fiscal year	245,564	317,143
Prior	832,044	608,678
Revolving Loans Amortized Cost Basis	18,647	16,656
Revolving Loans Converted to Term	0	0
Total loans	2,129,572	2,119,263
Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	25,386	763,119
Loans originated in year before current fiscal year	574,516	204,621
Loans originated in two years before current fiscal year	179,440	235,869
Loans originated in three years before current fiscal year	233,539	141,601
Loans originated in four years before current fiscal year	120,947	53,431
Prior	194,817	153,917
Revolving Loans Amortized Cost Basis	390,659	390,606
Revolving Loans Converted to Term	0	0
Total loans	1,719,304	1,943,164
Residential mortgages | Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	55,071	151,958
Loans originated in year before current fiscal year	149,322	146,181
Loans originated in two years before current fiscal year	127,848	273,556
Loans originated in three years before current fiscal year	220,621	322,716
Loans originated in four years before current fiscal year	275,878	333,576
Prior	942,503	700,404
Revolving Loans Amortized Cost Basis	3,261	3,290
Revolving Loans Converted to Term	0	0
Total loans	1,774,504	1,931,681
Consumer loans | Home equity
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	703	2,445
Loans originated in year before current fiscal year	2,623	1,960
Loans originated in two years before current fiscal year	1,469	317
Loans originated in three years before current fiscal year	309	1,859
Loans originated in four years before current fiscal year	1,829	499
Prior	2,234	1,882
Revolving Loans Amortized Cost Basis	269,850	285,019
Revolving Loans Converted to Term	0	0
Total loans	279,017	293,981
Consumer loans | Consumer other
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	4,870	15,232
Loans originated in year before current fiscal year	14,153	35,633
Loans originated in two years before current fiscal year	31,305	103,241
Loans originated in three years before current fiscal year	88,530	70,965
Loans originated in four years before current fiscal year	59,210	37,006
Prior	56,018	31,734
Revolving Loans Amortized Cost Basis	7,975	9,343
Revolving Loans Converted to Term	0	0
Total loans	262,061	303,154
Pass | Commercial | Construction
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	25,422	38,374
Loans originated in year before current fiscal year	43,662	255,377
Loans originated in two years before current fiscal year	275,525	114,690
Loans originated in three years before current fiscal year	65,371	28,474
Loans originated in four years before current fiscal year	27,177	9,519
Prior	2,501	2,766
Revolving Loans Amortized Cost Basis	1,000	1,000
Revolving Loans Converted to Term	0	0
Total loans	440,658	450,200
Pass | Commercial | Commercial multifamily
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	17,100	31,438
Loans originated in year before current fiscal year	31,295	57,659
Loans originated in two years before current fiscal year	55,210	74,932
Loans originated in three years before current fiscal year	74,123	77,746
Loans originated in four years before current fiscal year	78,148	81,066
Prior	219,175	153,818
Revolving Loans Amortized Cost Basis	61	20
Revolving Loans Converted to Term	0	0
Total loans	475,112	476,679
Pass | Commercial real estate | Commercial real estate owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	13,652	58,327
Loans originated in year before current fiscal year	53,164	84,839
Loans originated in two years before current fiscal year	81,473	104,797
Loans originated in three years before current fiscal year	99,224	64,693
Loans originated in four years before current fiscal year	63,148	44,300
Prior	218,342	169,197
Revolving Loans Amortized Cost Basis	1,506	1,194
Revolving Loans Converted to Term	0	0
Total loans	530,509	527,347
Pass | Commercial real estate | Commercial real estate non-owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	77,638	180,520
Loans originated in year before current fiscal year	174,898	292,386
Loans originated in two years before current fiscal year	292,528	435,440
Loans originated in three years before current fiscal year	469,718	223,935
Loans originated in four years before current fiscal year	218,525	303,221
Prior	725,223	497,066
Revolving Loans Amortized Cost Basis	17,394	15,393
Revolving Loans Converted to Term	0	0
Total loans	1,975,924	1,947,961
Pass | Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	25,240	754,260
Loans originated in year before current fiscal year	563,757	159,046
Loans originated in two years before current fiscal year	131,781	205,651
Loans originated in three years before current fiscal year	203,153	130,985
Loans originated in four years before current fiscal year	110,240	48,326
Prior	182,949	148,222
Revolving Loans Amortized Cost Basis	372,075	368,769
Revolving Loans Converted to Term	0	0
Total loans	1,589,195	1,815,259
Pass | Residential mortgages | Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	55,071	150,583
Loans originated in year before current fiscal year	148,622	146,142
Loans originated in two years before current fiscal year	127,817	272,399
Loans originated in three years before current fiscal year	218,785	320,384
Loans originated in four years before current fiscal year	273,160	333,159
Prior	931,322	691,078
Revolving Loans Amortized Cost Basis	3,261	3,281
Revolving Loans Converted to Term	0	0
Total loans	1,758,038	1,917,026
Special Mention | Commercial | Construction
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	0	0
Loans originated in year before current fiscal year	0	0
Loans originated in two years before current fiscal year	0	313
Loans originated in three years before current fiscal year	313	0
Loans originated in four years before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total loans	313	313
Special Mention | Commercial | Commercial multifamily
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	0	0
Loans originated in year before current fiscal year	0	0
Loans originated in two years before current fiscal year	2,187	0
Loans originated in three years before current fiscal year	0	0
Loans originated in four years before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total loans	2,187	0
Special Mention | Commercial real estate | Commercial real estate owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	0	535
Loans originated in year before current fiscal year	535	2,569
Loans originated in two years before current fiscal year	3,389	1,136
Loans originated in three years before current fiscal year	1,136	1,009
Loans originated in four years before current fiscal year	1,966	800
Prior	2,432	2,579
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total loans	9,458	8,628
Special Mention | Commercial real estate | Commercial real estate non-owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	0	0
Loans originated in year before current fiscal year	231	279
Loans originated in two years before current fiscal year	270	2,068
Loans originated in three years before current fiscal year	2,971	6,958
Loans originated in four years before current fiscal year	6,904	11,798
Prior	58,403	44,961
Revolving Loans Amortized Cost Basis	1,059	1,068
Revolving Loans Converted to Term	0	0
Total loans	69,838	67,132
Special Mention | Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	0	1,467
Loans originated in year before current fiscal year	1,952	5,753
Loans originated in two years before current fiscal year	9,887	5,267
Loans originated in three years before current fiscal year	7,477	2,851
Loans originated in four years before current fiscal year	3,881	1,601
Prior	4,011	65
Revolving Loans Amortized Cost Basis	10,806	12,408
Revolving Loans Converted to Term	0	0
Total loans	38,014	29,412
Special Mention | Residential mortgages | Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	0	384
Loans originated in year before current fiscal year	0	0
Loans originated in two years before current fiscal year	0	454
Loans originated in three years before current fiscal year	0	1,430
Loans originated in four years before current fiscal year	284	0
Prior	814	362
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total loans	1,098	2,630
Substandard Accruing | Commercial | Construction
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	0	0
Loans originated in year before current fiscal year	0	0
Loans originated in two years before current fiscal year	0	0
Loans originated in three years before current fiscal year	9,429	4,000
Loans originated in four years before current fiscal year	3,988	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total loans	13,417	4,000
Substandard Accruing | Commercial | Commercial multifamily
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	0	0
Loans originated in year before current fiscal year	0	0
Loans originated in two years before current fiscal year	0	0
Loans originated in three years before current fiscal year	0	0
Loans originated in four years before current fiscal year	0	47
Prior	6,204	6,479
Revolving Loans Amortized Cost Basis	143	145
Revolving Loans Converted to Term	0	0
Total loans	6,347	6,671
Substandard Accruing | Commercial real estate | Commercial real estate owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	0	0
Loans originated in year before current fiscal year	0	1,266
Loans originated in two years before current fiscal year	1,266	3,597
Loans originated in three years before current fiscal year	3,333	1,685
Loans originated in four years before current fiscal year	1,627	1,439
Prior	10,093	8,451
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total loans	16,319	16,438
Substandard Accruing | Commercial real estate | Commercial real estate non-owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	0	7,804
Loans originated in year before current fiscal year	7,804	3,529
Loans originated in two years before current fiscal year	3,529	4,235
Loans originated in three years before current fiscal year	3,730	19,632
Loans originated in four years before current fiscal year	20,135	2,124
Prior	48,418	66,651
Revolving Loans Amortized Cost Basis	194	195
Revolving Loans Converted to Term	0	0
Total loans	83,810	104,170
Substandard Accruing | Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	146	7,392
Loans originated in year before current fiscal year	8,807	39,822
Loans originated in two years before current fiscal year	37,772	24,951
Loans originated in three years before current fiscal year	22,909	7,765
Loans originated in four years before current fiscal year	6,826	3,504
Prior	7,857	5,630
Revolving Loans Amortized Cost Basis	7,456	9,099
Revolving Loans Converted to Term	0	0
Total loans	91,773	98,163
Substandard Accruing | Residential mortgages | Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	0	991
Loans originated in year before current fiscal year	700	39
Loans originated in two years before current fiscal year	31	703
Loans originated in three years before current fiscal year	1,836	902
Loans originated in four years before current fiscal year	2,434	417
Prior	10,367	8,964
Revolving Loans Amortized Cost Basis	0	9
Revolving Loans Converted to Term	0	0
Total loans	15,368	12,025
Doubtful | Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	0	0
Loans originated in year before current fiscal year	0	0
Loans originated in two years before current fiscal year	0	0
Loans originated in three years before current fiscal year	0	0
Loans originated in four years before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	322	330
Revolving Loans Converted to Term	0	0
Total loans	322	330
Performing | Consumer loans | Home equity
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	703	2,445
Loans originated in year before current fiscal year	2,623	1,960
Loans originated in two years before current fiscal year	1,469	316
Loans originated in three years before current fiscal year	309	1,859
Loans originated in four years before current fiscal year	1,829	499
Prior	2,234	1,882
Revolving Loans Amortized Cost Basis	267,103	282,123
Revolving Loans Converted to Term	0	0
Total loans	276,270	291,084
Performing | Consumer loans | Consumer other
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	4,870	15,193
Loans originated in year before current fiscal year	14,084	35,317
Loans originated in two years before current fiscal year	30,924	101,730
Loans originated in three years before current fiscal year	87,205	69,366
Loans originated in four years before current fiscal year	57,753	35,421
Prior	54,399	31,327
Revolving Loans Amortized Cost Basis	7,965	9,339
Revolving Loans Converted to Term	0	0
Total loans	257,200	297,693
Performing | Special Mention
Financing Receivable, Allowance for Credit Loss [Line Items]
Total loans	121,437	109,299
Performing | Substandard Accruing
Financing Receivable, Allowance for Credit Loss [Line Items]
Total loans	179,150	185,207
Nonperforming | Consumer loans | Home equity
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	0	0
Loans originated in year before current fiscal year	0	0
Loans originated in two years before current fiscal year	0	1
Loans originated in three years before current fiscal year	0	0
Loans originated in four years before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	2,747	2,896
Revolving Loans Converted to Term	0	0
Total loans	2,747	2,897
Nonperforming | Consumer loans | Consumer other
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans originated in current fiscal year	0	39
Loans originated in year before current fiscal year	69	316
Loans originated in two years before current fiscal year	381	1,511
Loans originated in three years before current fiscal year	1,325	1,599
Loans originated in four years before current fiscal year	1,457	1,585
Prior	1,619	407
Revolving Loans Amortized Cost Basis	10	4
Revolving Loans Converted to Term	0	0
Total loans	$ 4,861	$ 5,461

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES Loans Past Due (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	$ 90,506	$ 92,708
Current	7,568,272	7,988,811
Total loans	7,658,778	8,081,519
Commercial | Construction
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	3,988	0
Current	450,400	454,513
Total loans	454,388	454,513
Commercial | Commercial multifamily
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	4,068	757
Current	479,578	482,593
Total loans	483,646	483,350
Commercial real estate | Commercial real estate owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	11,271	6,334
Current	545,015	546,079
Total loans	556,286	552,413
Commercial real estate | Commercial real estate non-owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	22,493	38,872
Current	2,107,079	2,080,391
Total loans	2,129,572	2,119,263
Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	20,505	19,257
Current	1,698,799	1,923,907
Total loans	1,719,304	1,943,164
Residential mortgages | Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	18,564	15,813
Current	1,755,940	1,915,868
Total loans	1,774,504	1,931,681
Consumer loans | Home equity
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	3,553	3,425
Current	275,464	290,556
Total loans	279,017	293,981
Consumer loans | Consumer other
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	6,064	8,250
Current	255,997	294,904
Total loans	262,061	303,154
30-59 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	25,033	8,561
30-59 Days Past Due | Commercial | Construction
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	3,988	0
30-59 Days Past Due | Commercial | Commercial multifamily
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	0	0
30-59 Days Past Due | Commercial real estate | Commercial real estate owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	6,174	809
30-59 Days Past Due | Commercial real estate | Commercial real estate non-owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	703	315
30-59 Days Past Due | Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	9,479	3,016
30-59 Days Past Due | Residential mortgages | Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	2,990	2,068
30-59 Days Past Due | Consumer loans | Home equity
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	647	244
30-59 Days Past Due | Consumer loans | Consumer other
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	1,052	2,109
60-89 Days Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	3,532	7,749
60-89 Days Past Due | Commercial | Construction
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	0	0
60-89 Days Past Due | Commercial | Commercial multifamily
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	0	0
60-89 Days Past Due | Commercial real estate | Commercial real estate owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	487	631
60-89 Days Past Due | Commercial real estate | Commercial real estate non-owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	0	168
60-89 Days Past Due | Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	1,540	3,259
60-89 Days Past Due | Residential mortgages | Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	1,098	2,630
60-89 Days Past Due | Consumer loans | Home equity
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	159	284
60-89 Days Past Due | Consumer loans | Consumer other
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	248	777
90 Days or Greater Past Due
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	61,941	76,398
90 Days or Greater Past Due | Commercial | Construction
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	0	0
90 Days or Greater Past Due | Commercial | Commercial multifamily
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	4,068	757
90 Days or Greater Past Due | Commercial real estate | Commercial real estate owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	4,610	4,894
90 Days or Greater Past Due | Commercial real estate | Commercial real estate non-owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	21,790	38,389
90 Days or Greater Past Due | Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	9,486	12,982
90 Days or Greater Past Due | Residential mortgages | Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	14,476	11,115
90 Days or Greater Past Due | Consumer loans | Home equity
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	2,747	2,897
90 Days or Greater Past Due | Consumer loans | Consumer other
Financing Receivable, Allowance for Credit Loss [Line Items]
Total Past Due	$ 4,764	$ 5,364

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES Summary of Nonaccrual Loans and Loans Past Due (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	$ 55,817	$ 64,948
Nonaccrual With No Related Allowance	28,234	27,418
Past Due 90 Days or Greater and Accruing	6,124	11,450
Interest Income Recognized on Nonaccrual	0	0
Commercial | Construction
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Nonaccrual With No Related Allowance	0	0
Past Due 90 Days or Greater and Accruing	0	0
Interest Income Recognized on Nonaccrual	0	0
Commercial | Commercial multifamily
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	4,068	757
Nonaccrual With No Related Allowance	4,068	591
Past Due 90 Days or Greater and Accruing	0	0
Interest Income Recognized on Nonaccrual	0	0
Commercial real estate | Commercial real estate owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	4,232	4,509
Nonaccrual With No Related Allowance	1,832	2,290
Past Due 90 Days or Greater and Accruing	378	385
Interest Income Recognized on Nonaccrual	0	0
Commercial real estate | Commercial real estate non-owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	18,856	29,572
Nonaccrual With No Related Allowance	11,691	13,912
Past Due 90 Days or Greater and Accruing	2,934	8,817
Interest Income Recognized on Nonaccrual	0	0
Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	9,364	12,441
Nonaccrual With No Related Allowance	3,005	4,725
Past Due 90 Days or Greater and Accruing	122	541
Interest Income Recognized on Nonaccrual	0	0
Residential mortgages | Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	11,941	9,711
Nonaccrual With No Related Allowance	7,419	5,739
Past Due 90 Days or Greater and Accruing	2,535	1,404
Interest Income Recognized on Nonaccrual	0	0
Consumer loans | Home equity
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	2,599	2,654
Nonaccrual With No Related Allowance	211	159
Past Due 90 Days or Greater and Accruing	148	243
Interest Income Recognized on Nonaccrual	0	0
Consumer loans | Consumer other
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	4,757	5,304
Nonaccrual With No Related Allowance	8	2
Past Due 90 Days or Greater and Accruing	7	60
Interest Income Recognized on Nonaccrual	$ 0	$ 0

XML

LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES Summary of Total Loans Rated Special Mention or Lower (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing receivable, before allowance for credit loss	$ 7,658,778	$ 8,081,519
Non-Accrual | Performing
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing receivable, before allowance for credit loss	55,817	64,948
Substandard Accruing | Performing
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing receivable, before allowance for credit loss	179,150	185,207
Total Classified | Performing
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing receivable, before allowance for credit loss	234,967	250,155
Special Mention | Performing
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing receivable, before allowance for credit loss	121,437	109,299
Total Criticized | Performing
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing receivable, before allowance for credit loss	$ 356,404	$ 359,454

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES Summary of Collateral Dependent Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	$ 55,817	$ 64,948
Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	38,867	43,505
Investment Securities/Cash
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	18	36
Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	977	3,758
Commercial | Construction
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Commercial | Construction | Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Commercial | Construction | Investment Securities/Cash
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Commercial | Construction | Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Commercial | Commercial multifamily
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	4,068	757
Commercial | Commercial multifamily | Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	4,070	591
Commercial | Commercial multifamily | Investment Securities/Cash
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Commercial | Commercial multifamily | Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Commercial real estate | Commercial real estate owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	4,232	4,509
Commercial real estate | Commercial real estate owner occupied | Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	5,351	5,714
Commercial real estate | Commercial real estate owner occupied | Investment Securities/Cash
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Commercial real estate | Commercial real estate owner occupied | Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Commercial real estate | Commercial real estate non-owner occupied
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	18,856	29,572
Commercial real estate | Commercial real estate non-owner occupied | Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	20,805	30,950
Commercial real estate | Commercial real estate non-owner occupied | Investment Securities/Cash
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Commercial real estate | Commercial real estate non-owner occupied | Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Commercial and industrial loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	9,364	12,441
Commercial and industrial loans | Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	1,361	973
Commercial and industrial loans | Investment Securities/Cash
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	18	36
Commercial and industrial loans | Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	977	3,758
Residential mortgages | Residential real estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	11,941	9,711
Residential mortgages | Residential real estate | Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	7,048	5,081
Residential mortgages | Residential real estate | Investment Securities/Cash
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Residential mortgages | Residential real estate | Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Consumer loans | Home equity
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	2,599	2,654
Consumer loans | Home equity | Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	198	145
Consumer loans | Home equity | Investment Securities/Cash
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Consumer loans | Home equity | Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Consumer loans | Consumer other
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	4,757	5,304
Consumer loans | Consumer other | Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	34	51
Consumer loans | Consumer other | Investment Securities/Cash
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	0	0
Consumer loans | Consumer other | Other
Financing Receivable, Allowance for Credit Loss [Line Items]
Non-accrual loans	$ 0	$ 0

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES Schedule of Troubled Debt Restructurings, Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Trouble Debt Restructuring on Financing Receivables [Roll Forward]
Balance at beginning of the period	$ 20,548	$ 19,316
Principal Payments	(268)	(5,769)
TDR Status Change	0	0
Other reductions	511	0
Newly identified TDRs	690	902
Balance at end of the period	21,481	14,449
Commercial | Construction
Trouble Debt Restructuring on Financing Receivables [Roll Forward]
Balance at beginning of the period	0	0
Principal Payments	0	0
TDR Status Change	0	0
Other reductions	0	0
Newly identified TDRs	0	0
Balance at end of the period	0	0
Commercial | Commercial multifamily
Trouble Debt Restructuring on Financing Receivables [Roll Forward]
Balance at beginning of the period	754	793
Principal Payments	(13)	(14)
TDR Status Change	0	0
Other reductions	0	0
Newly identified TDRs	0	0
Balance at end of the period	741	779
Commercial real estate | Commercial real estate owner occupied
Trouble Debt Restructuring on Financing Receivables [Roll Forward]
Balance at beginning of the period	1,731	13,331
Principal Payments	(6)	(5,693)
TDR Status Change	0	0
Other reductions	0	0
Newly identified TDRs	0	0
Balance at end of the period	1,725	7,638
Commercial real estate | Commercial real estate non-owner occupied
Trouble Debt Restructuring on Financing Receivables [Roll Forward]
Balance at beginning of the period	13,684	1,373
Principal Payments	(14)	0
TDR Status Change	0	0
Other reductions	511	0
Newly identified TDRs	544	0
Balance at end of the period	14,725	1,373
Commercial and industrial loans
Trouble Debt Restructuring on Financing Receivables [Roll Forward]
Balance at beginning of the period	2,686	1,449
Principal Payments	(199)	(37)
TDR Status Change	0	0
Other reductions	0	0
Newly identified TDRs	146	902
Balance at end of the period	2,633	2,314
Residential mortgages | Residential real estate
Trouble Debt Restructuring on Financing Receivables [Roll Forward]
Balance at beginning of the period	1,524	2,045
Principal Payments	(31)	(22)
TDR Status Change	0	0
Other reductions	0	0
Newly identified TDRs	0	0
Balance at end of the period	1,493	2,023
Consumer loans | Home equity
Trouble Debt Restructuring on Financing Receivables [Roll Forward]
Balance at beginning of the period	133	277
Principal Payments	(3)	1
TDR Status Change	0	0
Other reductions	0	0
Newly identified TDRs	0	0
Balance at end of the period	130	278
Consumer loans | Consumer other
Trouble Debt Restructuring on Financing Receivables [Roll Forward]
Balance at beginning of the period	36	48
Principal Payments	(2)	(4)
TDR Status Change	0	0
Other reductions	0	0
Newly identified TDRs	0	0
Balance at end of the period	$ 34	$ 44

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES Loans Modified as Troubled Debt Restructurings (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($) Loan	Mar. 31, 2020 USD ($) Loan
Credit Loss [Abstract]
Number of loans | Loan	4,000	3,000
Pre-modification outstanding recorded investment	$ 690	$ 902
Post-modification outstanding recorded investment	$ 690	$ 902

XML

DEPOSITS (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Deposits [Abstract]
Time less than $100,000	$ 630,244	$ 663,324
Time $100,000 through $250,000	999,329	1,219,210
Time more than $250,000	473,649	502,551
Total time deposits	2,103,222	2,385,085
Brokered time deposits	431,500	610,600
Reciprocal deposits	$ 100,700	$ 119,000

XML

BORROWED FUNDS - Summary of Borrowed Funds (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Principal, Short-term borrowings	$ 0	$ 40,000
Principal, Long-term borrowings	448,692	531,637
Total borrowings	$ 448,692	$ 571,637
Weighted average rate on short-term borrowings	0.00%	1.05%
Weighted average rate on long-term borrowings	2.73%	2.61%
Weighted average rate	2.73%	2.50%
Advances from the FHLB
Debt Instrument [Line Items]
Principal, Short-term borrowings	$ 0	$ 40,000
Principal, Long-term borrowings	$ 351,354	$ 434,357
Weighted average rate on short-term borrowings	0.00%	1.05%
Weighted average rate on long-term borrowings	1.88%	1.89%
Subordinated borrowings
Debt Instrument [Line Items]
Principal, Long-term borrowings	$ 74,455	$ 74,411
Weighted average rate on long-term borrowings	7.00%	7.00%
Junior subordinated borrowing - Trust I
Debt Instrument [Line Items]
Principal, Long-term borrowings	$ 15,464	$ 15,464
Weighted average rate on long-term borrowings	2.03%	2.06%
Junior subordinated borrowing - Trust II
Debt Instrument [Line Items]
Principal, Long-term borrowings	$ 7,419	$ 7,405
Weighted average rate on long-term borrowings	1.88%	1.92%

XML

BORROWED FUNDS - Narrative (Details) - USD ($)	1 Months Ended	3 Months Ended
	Sep. 30, 2012	Mar. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Line of credit, current		$ 3,000,000.0
Short-term debt		0	$ 40,000,000
Long-term borrowings		448,692,000	531,637,000
Advances from the FHLB
Debt Instrument [Line Items]
Long-term line of credit		0	0
Line of credit facility, remaining borrowing capacity		1,400,000,000	1,600,000,000
Short-term debt		0	40,000,000
Long-term borrowings		351,354,000	434,357,000
Federal Home Loan Bank Certificates And Obligations F H L B Callable Advances
Debt Instrument [Line Items]
Long-term borrowings		10,000,000.0	10,000,000.0
Federal Home Loan Bank Certificates And Obligations F H L B Amortizing Advances
Debt Instrument [Line Items]
Long-term borrowings		4,800,000	5,200,000
Subordinated borrowings
Debt Instrument [Line Items]
Long-term borrowings		74,455,000	74,411,000
Maturity period	15 years
Principal amount of debt issued	$ 75,000,000.0
Discount rate	1.15%
Fixed interest rate	6.875%
Maturity period with fixed interest rate	10 years
Subordinated borrowings | LIBOR
Debt Instrument [Line Items]
Interest rate margin	5.113%
Unamortized debt issuance expense		$ 184,000	$ 215,000
Junior subordinated borrowing | Trust I
Debt Instrument [Line Items]
Common stock of trust		100.00%
Common stock of trust included in other asset		$ 500,000
Sole asset of trust in form of debt		$ 15,500,000
Variable interest rate		2.03%	2.06%
Period up to which interest payments can be deferred		5 years
Junior subordinated borrowing | Trust II
Debt Instrument [Line Items]
Common stock of trust		100.00%
Common stock of trust included in other asset		$ 200,000
Sole asset of trust in form of debt		$ 8,200,000
Variable interest rate		1.88%	1.92%
Period up to which interest payments can be deferred		5 years
Junior subordinated borrowing | LIBOR | Trust I
Debt Instrument [Line Items]
Interest rate margin		1.85%
Junior subordinated borrowing | LIBOR | Trust II
Debt Instrument [Line Items]
Interest rate margin		1.70%
Federal Reserve Bank Advances
Debt Instrument [Line Items]
Line of credit facility, remaining borrowing capacity		$ 596,800,000	$ 815,600,000
Short-term debt		$ 0	$ 0

XML

BORROWED FUNDS - Summary of Maturities of FHLB (Details) - Fixed rate advances $ in Thousands	Mar. 31, 2021 USD ($)
Principal
2021	$ 272,985
2022	58,270
2023	10,659
2024	50
2025 and beyond	9,390
Total FHLB advances	$ 351,354
Weighted Average Rate
Weighted Average Rate
2021	1.86%
2022	1.92%
2023	2.16%
2024	0.00%
2025 and beyond	1.63%
Total FHLB advances	1.88%

XML

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Derivative [Line Items]
Notional amount	$ 3,810,420,000	$ 3,857,115,000
Cash collateral pledged	70,300,000
Amortized cost of securities pledged as collateral to derivative counterparties	36,900,000
Fair value of securities as pledged collateral to derivative counterparties	37,100,000
Commercial counterparties
Derivative [Line Items]
Net asset position	1,300,000	1,000,000.0
Interest rate swaps
Derivative [Line Items]
Notional amount	8,500,000
Cash collateral pledged	70,333,000	75,070,000
Interest rate swaps | Commercial counterparties
Derivative [Line Items]
Cash collateral pledged	0	0
Net asset position	103,800,000	159,000,000.0
Derivative liability, amount offset against collateral	2,600,000	0
Interest rate swaps | Institutional counterparties
Derivative [Line Items]
Cash collateral pledged	70,333,000	75,070,000
Derivative liability, amount offset against collateral	43,000,000.0	66,800,000
Not Designated as Hedging Instrument
Derivative [Line Items]
Notional amount	10,316,000	$ 40,099,000
Economic hedges
Derivative [Line Items]
Notional amount	3,800,000,000
Credit valuation adjustments	$ 2,500,000
Economic hedges | Interest rate swap on tax advantaged economic development bond
Derivative [Line Items]
Fixed rate of interest	5.09%
Maturity period	21 years
Economic hedges | Interest rate swaps
Derivative [Line Items]
Notional amount	$ 3,400,000,000
Economic hedges | Risk participation agreements with dealer banks
Derivative [Line Items]
Notional amount	300,000,000
Economic hedges | Forward sale commitments
Derivative [Line Items]
Notional amount	$ 8,700,000

XML

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Derivative Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 3,810,420	$ 3,857,115
Estimated fair value asset (liability)	59,961	94,313
Impact of settled to market contracts	61,300	97,600
Interest rate swaps
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	8,500
Total economic hedges
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	3,800,000
Total economic hedges | Interest rate swaps
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	3,400,000
Total economic hedges | Risk participation agreements with dealer banks
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	300,000
Total economic hedges | Forward sale commitments
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	8,700
Designated as Hedging Instrument | Total economic hedges
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	3,800,104	3,817,016
Estimated fair value asset (liability)	59,776	93,578
Designated as Hedging Instrument | Total economic hedges | Interest rate swaps | Interest rate swap on tax advantaged economic development bond
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 8,463	$ 8,654
Weighted average maturity	8 years 8 months 12 days	8 years 10 months 24 days
Weighted average rate, received	0.48%	0.52%
Weighted average rate, contract pay rate	5.09%	5.09%
Estimated fair value asset (liability)	$ (1,432)	$ (1,778)
Designated as Hedging Instrument | Total economic hedges | Interest rate swaps | Loans with commercial loan customers
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 1,720,659	$ 1,734,978
Weighted average maturity	6 years	6 years 1 month 6 days
Weighted average rate, received	4.15%	4.15%
Weighted average rate, contract pay rate	1.92%	1.95%
Estimated fair value asset (liability)	$ 101,216	$ 159,016
Designated as Hedging Instrument | Total economic hedges | Reverse interest rate swaps | Loans with commercial loan customers
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 1,720,659	$ 1,734,978
Weighted average maturity	6 years	6 years 1 month 6 days
Weighted average rate, received	1.92%	1.95%
Weighted average rate, contract pay rate	4.15%	4.15%
Estimated fair value asset (liability)	$ (40,670)	$ (64,645)
Designated as Hedging Instrument | Total economic hedges | Risk participation agreements with dealer banks
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 341,662	$ 326,862
Weighted average maturity	8 years 9 months 18 days	8 years
Estimated fair value asset (liability)	$ 336	$ 665
Designated as Hedging Instrument | Total economic hedges | Forward sale commitments
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 8,661	$ 11,544
Weighted average maturity	2 months 12 days	2 months 12 days
Estimated fair value asset (liability)	$ 326	$ 320
Not Designated as Hedging Instrument
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	10,316	40,099
Estimated fair value asset (liability)	185	735
Not Designated as Hedging Instrument | Commitments to lend
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 10,316	$ 40,099
Weighted average maturity	2 months 12 days	2 months 12 days
Estimated fair value asset (liability)	$ 185	$ 735

XML

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Economic Hedges and Non-hedging Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Interest rate swaps | Economic hedges | Industrial revenue bond
Derivative [Line Items]
Unrealized (loss)/gain recognized in other non-interest income	$ 346	$ (563)
Interest rate swaps | Economic hedges | Loans with commercial loan customers
Derivative [Line Items]
Unrealized (loss)/gain recognized in other non-interest income	(60,302)	102,382
Favorable/(unfavorable) change in credit valuation adjustment recognized in other non-interest income	2,502	(2,538)
Reverse interest rate swaps | Economic hedges | Loans with commercial loan customers
Derivative [Line Items]
Unrealized (loss)/gain recognized in other non-interest income	60,302	(102,382)
Risk participation agreements | Economic hedges
Derivative [Line Items]
Unrealized (loss)/gain recognized in other non-interest income	(329)	266
Forward commitments | Economic hedges
Derivative [Line Items]
Unrealized (loss)/gain recognized in other non-interest income	6	(4,263)
Realized gain/(loss) in other non-interest income	(6)	(1,922)
Commitments to lend | Non-hedging derivatives
Derivative [Line Items]
Unrealized (loss)/gain recognized in other non-interest income	(550)	2,208
Realized gain/(loss) in other non-interest income	$ 1,352	$ 9,300

XML

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Offsetting of Financial Assets and Derivative Assets (Details) - Interest rate swaps - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Offsetting of Financial Assets and Derivative Assets
Gross amounts of recognized assets	$ 106,885	$ 160,140
Gross amounts offset in the Statements of Condition	(1,832)	(78)
Net amounts of assets presented in the Statements of Condition	105,053	160,062
Gross amounts not offset in the Statements of Condition, financial instruments	0	0
Gross amounts not offset in the Statements of Condition, cash collateral received	0	0
Net Amount	105,053	160,062
Institutional counterparties
Offsetting of Financial Assets and Derivative Assets
Gross amounts of recognized assets	3,086	1,124
Gross amounts offset in the Statements of Condition	(1,832)	(78)
Net amounts of assets presented in the Statements of Condition	1,254	1,046
Gross amounts not offset in the Statements of Condition, financial instruments	0	0
Gross amounts not offset in the Statements of Condition, cash collateral received	0	0
Net Amount	1,254	1,046
Commercial counterparties
Offsetting of Financial Assets and Derivative Assets
Gross amounts of recognized assets	103,799	159,016
Gross amounts offset in the Statements of Condition	0	0
Net amounts of assets presented in the Statements of Condition	103,799	159,016
Gross amounts not offset in the Statements of Condition, financial instruments	0	0
Gross amounts not offset in the Statements of Condition, cash collateral received	0	0
Net Amount	$ 103,799	$ 159,016

XML

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Offsetting Financial Liabilities and Derivative Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Offsetting of Financial Liabilities and Derivative Liabilities
Gross amounts not offset in the Statements of Condition, cash collateral pledged	$ 70,300
Interest rate swaps
Offsetting of Financial Liabilities and Derivative Liabilities
Gross amounts of recognized liabilities	(107,352)	$ (164,543)
Gross amounts offset in the Statements of Condition	61,750	97,740
Net amounts of liabilities presented in the Statements of Condition	(45,602)	(66,803)
Gross amounts not offset in the Statements of Condition, financial instruments	37,116	37,815
Gross amounts not offset in the Statements of Condition, cash collateral pledged	70,333	75,070
Net Amount	61,847	46,082
Interest rate swaps | Institutional counterparties
Offsetting of Financial Liabilities and Derivative Liabilities
Gross amounts of recognized liabilities	(104,770)	(164,543)
Gross amounts offset in the Statements of Condition	61,750	97,740
Net amounts of liabilities presented in the Statements of Condition	(43,020)	(66,803)
Gross amounts not offset in the Statements of Condition, financial instruments	37,116	37,815
Gross amounts not offset in the Statements of Condition, cash collateral pledged	70,333	75,070
Net Amount	64,429	46,082
Interest rate swaps | Commercial counterparties
Offsetting of Financial Liabilities and Derivative Liabilities
Gross amounts of recognized liabilities	(2,582)	0
Gross amounts offset in the Statements of Condition	0	0
Net amounts of liabilities presented in the Statements of Condition	(2,582)	0
Gross amounts not offset in the Statements of Condition, financial instruments	0	0
Gross amounts not offset in the Statements of Condition, cash collateral pledged	0	0
Net Amount	$ (2,582)	$ 0

XML

LEASES - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Lessee, Lease, Description [Line Items]
Operating lease expense	$ 2.8	$ 3.5
Minimum
Lessee, Lease, Description [Line Items]
Operating lease contract term	1 month
Maximum
Lessee, Lease, Description [Line Items]
Operating lease contract term	19 years
Discontinued Operations
Lessee, Lease, Description [Line Items]
Operating lease expense		$ 0.5

XML

LEASES - Assets and Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Lease Right-of-Use Assets
Operating lease right-of-use assets	$ 56,704	$ 60,018
Finance lease right-of-use assets	7,066	7,197
Total Lease Right-of-Use Assets	63,770	67,215
Lease Liabilities
Operating lease liabilities	61,481	63,894
Finance lease liabilities	10,252	10,383
Total Lease Liabilities	$ 71,733	$ 74,277
Operating lease, right of use asset, statement of financial position	Other assets	Other assets
Finance lease, right of use asset, statement of financial position	Premises and equipment, net	Premises and equipment, net
Operating lease, liability, statement of financial position	Other liabilities	Other liabilities
Finance lease, liability, statement of financial position	Other liabilities	Other liabilities

XML

LEASES - Supplemental Lease Information (Details)	Mar. 31, 2021	Dec. 31, 2020
Leases [Abstract]
Operating lease, weighted average remaining lease term	9 years 9 months 18 days	9 years 9 months 18 days
Finance Lease, Weighted Average Remaining Lease Term	13 years 7 months 6 days	13 years 9 months 18 days
Operating lease, weighted average discount rate, percent	2.82%	2.81%
Finance lease, weighted average discount rate, percent	5.00%	5.00%

XML

LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 3,330	$ 3,628
Operating cash flows from finance leases	127	134
Financing cash flows from finance leases	131	$ 124
Discontinued Operations
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 500

XML

LEASES - Maturity Analysis of Lease Liability (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Operating Leases
2021	$ 7,966
2022	9,774
2023	8,549
2024	7,414
2025	5,727
Thereafter	31,593
Total undiscounted lease payments	71,023
Less amounts representing interest	(9,542)
Lease liability	61,481	$ 63,894
Finance Leases
2021	766
2022	1,031
2023	1,037
2024	1,037
2025	1,037
Thereafter	9,223
Total undiscounted lease payments	14,131
Less amounts representing interest	(3,879)
Lease liability	$ 10,252	$ 10,383

XML

OTHER COMMITMENTS, CONTINGENCIES, OFF-BALANCE SHEET ACTIVITIES, AND PANDEMIC IMPACT Narrative (Details) $ in Millions	Mar. 31, 2021 USD ($) Loan	Dec. 31, 2020 USD ($) Loan
Commitments and Contingencies Disclosure [Abstract]
Active modified loans | Loan	337	746
Active modified loans, carrying value | $	$ 173.0	$ 316.0

XML

CAPITAL RATIOS AND SHAREHOLDERS' EQUITY - Actual and Required Capital Ratios (Details)	Mar. 31, 2021	Dec. 31, 2020
Tier 1 capital to risk-weighted assets
Total capital to risk weighted assets	0.166	0.161
Common equity tier 1 capital to risk weighted assets	14.20%	13.80%
Tier 1 capital to risk weighted assets	0.144	0.141
Tier 1 capital to average assets	0.095	0.094
Bank
Tier 1 capital to risk-weighted assets
Total capital to risk weighted assets	0.154	0.150
Common equity tier 1 capital to risk weighted assets	14.20%	13.90%
Tier 1 capital to risk weighted assets	0.142	0.139
Tier 1 capital to average assets	0.093	0.092

XML

CAPITAL RATIOS AND SHAREHOLDERS' EQUITY - Components of AOCI (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]
Total shareholders’ equity	$ 1,175,139	$ 1,187,773	$ 1,722,278	$ 1,758,564
Accumulated other comprehensive income
Accumulated Other Comprehensive Income (Loss) [Line Items]
Total shareholders’ equity	10,721	30,871	31,017	11,993
Net unrealized holding gain on AFS securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other accumulated comprehensive income (loss), before tax	17,975	44,988
Income taxes related to items of accumulated other comprehensive income	(4,667)	(11,530)
Total shareholders’ equity	13,308	33,458	33,228	14,204
Net unrealized holding (loss) on pension plans
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other accumulated comprehensive income (loss), before tax	(3,511)	(3,511)
Income taxes related to items of accumulated other comprehensive income	924	924
Total shareholders’ equity	$ (2,587)	$ (2,587)	$ (2,211)	$ (2,211)

XML

CAPITAL RATIOS AND SHAREHOLDERS' EQUITY - Components of OCI (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Net unrealized gains (losses) arising during the period
Net of Tax	$ (20,150)	$ 19,023
Less: reclassification adjustment for gains realized in net income
Net of Tax	0	(1)
Other comprehensive income (loss)
Before Tax	(27,013)	25,614
Tax Effect	6,863	(6,590)
Total other comprehensive (loss)/income	(20,150)	19,024
Net unrealized holding gain on AFS securities
Net unrealized gains (losses) arising during the period
Before Tax	(27,013)	25,613
Tax Effect	6,863	(6,590)
Net of Tax	(20,150)	19,023
Less: reclassification adjustment for gains realized in net income
Before Tax	0	(1)
Tax Effect	0	0
Net of Tax	0	(1)
Other comprehensive income (loss)
Before Tax	(27,013)	25,614
Tax Effect	6,863	(6,590)
Total other comprehensive (loss)/income	$ (20,150)	$ 19,024

XML

CAPITAL RATIOS AND SHAREHOLDERS' EQUITY - Changes in AOCI (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at beginning of period	$ 1,187,773	$ 1,758,564
Other comprehensive income (loss) before reclassifications	(20,150)	19,023
Less: amounts reclassified from accumulated other comprehensive income	0	(1)
Total other comprehensive (loss)/income	(20,150)	19,024
Balance at end of period	1,175,139	1,722,278
Accumulated other comprehensive income
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at beginning of period	30,871	11,993
Total other comprehensive (loss)/income	(20,150)	19,024
Balance at end of period	10,721	31,017
Net unrealized holding gain on AFS securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at beginning of period	33,458	14,204
Other comprehensive income (loss) before reclassifications	(20,150)	19,023
Less: amounts reclassified from accumulated other comprehensive income	0	(1)
Total other comprehensive (loss)/income	(20,150)	19,024
Balance at end of period	13,308	33,228
Net unrealized holding (loss) on pension plans
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at beginning of period	(2,587)	(2,211)
Other comprehensive income (loss) before reclassifications	0	0
Less: amounts reclassified from accumulated other comprehensive income	0	0
Total other comprehensive (loss)/income	0	0
Balance at end of period	$ (2,587)	$ (2,211)

XML

CAPITAL RATIOS AND SHAREHOLDERS' EQUITY - Amounts Reclassified Out of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Amounts reclassified out of each component of accumulated other comprehensive income
Non-interest income	$ 26,193	$ 5,636
Tax expense	(3,601)	1,996
Income/(loss) available to common shareholders	13,031	(19,995)
Amount Reclassified From Accumulated Other Comprehensive Income (loss)
Amounts reclassified out of each component of accumulated other comprehensive income
Income/(loss) available to common shareholders	0	(1)
Realized gains on AFS securities | Amount Reclassified From Accumulated Other Comprehensive Income (loss)
Amounts reclassified out of each component of accumulated other comprehensive income
Non-interest income	0	(1)
Tax expense	0	0
Income/(loss) available to common shareholders	$ 0	$ (1)

XML

EARNINGS / (LOSS) PER SHARE - Schedule of Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Earnings per share
Income/(loss) from continuing operations	$ 13,031	$ (12,072)
(Loss)/income from discontinued operations	0	(7,798)
Net income/(loss)	$ 13,031	$ (19,870)
Average number of common shares issued (in shares)	51,903	51,903
Less: average number of treasury shares (in shares)	948	1,744
Less: average number of unvested stock award shares (in shares)	625	488
Plus: average participating preferred shares (in shares)	0	533
Average number of basic common shares outstanding (in shares)	50,330	50,204
Average number of diluted common shares outstanding (in shares)	50,565	50,204
Basic earnings/(loss) per common share:
Continuing operations (in dollars per share)	$ 0.26	$ (0.24)
Discontinued operations (in dollars per share)	0	(0.16)
Total (in dollars per share)	0.26	(0.40)
Diluted earnings/(loss) per common share:
Continuing operations (in dollars per share)	0.26	(0.24)
Discontinued operations (in dollars per share)	0	(0.16)
Total (in dollars per share)	$ 0.26	$ (0.40)
Unvested stock award shares
Earnings per share
Plus: dilutive effect of share-based payment arrangements (in shares)	235	0
Stock options
Earnings per share
Plus: dilutive effect of share-based payment arrangements (in shares)	0	0

XML

EARNINGS / (LOSS) PER SHARE - Narrative (Details) shares in Thousands	3 Months Ended
	Mar. 31, 2021 shares
Unvested stock award shares
Anti-dilutive securities
Securities excluded from the earnings per share calculations (in shares)	390

XML

STOCK-BASED COMPENSATION PLANS - Summary of Activity (Details) - $ / shares shares in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Non-Vested Stock Awards Outstanding
Non-vested Stock Awards Outstanding, Number of Shares
Balance at the beginning of the period (in shares)	517
Granted (in shares)	210
Stock awards vested (in shares)	(44)
Forfeited (in shares)	(52)
Balance at the end of the period (in shares)	631
Non-vested Stock Awards Outstanding, Weighted-Average Grant Date Fair Value
Balance at the beginning of the period (in dollars per share)	$ 28.35
Granted (in dollars per share)	16.58
Stock awards vested (in dollars per share)	30.63
Forfeited (in dollars per share)	25.82
Balance at the end of the period (in dollars per share)	$ 20.09
Stock Options Outstanding
Non-vested Stock Awards Outstanding, Number of Shares
Stock awards vested (in shares)	(44)	(53)
Stock Options Outstanding, Number of Shares
Balance at the beginning of the period (in shares)	112
Granted (in shares)	0
Acquired (in shares)	0
Stock options exercised (in shares)	(5)
Forfeited (in shares)	0
Expired (in shares)	(10)
Balance at the end of the period (in shares)	97
Stock Options Outstanding, Weighted-Average Exercise Price
Balance at the beginning of the period (in dollars per share)	$ 22.95
Granted (in dollars per share)	0
Acquired (in dollars per share)	0
Stock options exercised (in dollars per share)	13.70
Forfeited (in dollars per share)	0
Expired (in dollars per share)	17.46
Balance at the end of the period (in dollars per share)	$ 24.85

XML

STOCK-BASED COMPENSATION PLANS - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise of stock options	$ 69	$ 519
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise of stock options	$ 69	$ 519
Stock awards vested (in shares)	44	53
Non-Vested Stock Awards Outstanding
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock awards vested (in shares)	44
Total compensation cost	$ 700	$ 1,500

XML

FAIR VALUE MEASUREMENTS - Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 1,627,330	$ 1,695,232
Marketable equity securities	15,801	18,513
Total Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security	9,350	9,708
Securities available for sale	1,627,330	1,695,232
Marketable equity securities	15,801	18,513
Loans held for investment at fair value	7,778,261	8,243,437
Loans held for sale	18,377	17,748
Derivative assets	107,176	160,071
Derivative liabilities	47,215	65,758
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security	0	0
Securities available for sale	0	0
Marketable equity securities	15,129	17,841
Loans held for investment at fair value	0	0
Loans held for sale	0	0
Derivative assets	0	0
Derivative liabilities	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security	0	0
Securities available for sale	1,627,330	1,680,232
Marketable equity securities	672	672
Loans held for investment at fair value	0	0
Loans held for sale	8,877	12,992
Derivative assets	106,665	159,016
Derivative liabilities	47,215	65,758
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security	9,350	9,708
Securities available for sale	0	15,000
Marketable equity securities	0	0
Loans held for investment at fair value	7,778,261	8,243,437
Loans held for sale	9,500	4,756
Derivative assets	511	1,055
Derivative liabilities	0	0
Recurring | Total Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security	9,350	9,708
Loans held for sale	8,877	17,748
Derivative assets	107,176	160,071
Capitalized servicing rights	2,968	3,033
Derivative liabilities	47,215	65,758
Recurring | Total Fair Value | Debt securities | Municipal bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	90,300	97,803
Recurring | Total Fair Value | Debt securities | Agency collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	724,554	756,826
Recurring | Total Fair Value | Debt securities | Agency residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	447,196	438,132
Recurring | Total Fair Value | Debt securities | Agency commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	268,515	288,650
Recurring | Total Fair Value | Debt securities | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	45,014	60,030
Recurring | Total Fair Value | Debt securities | Other bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	51,751	53,791
Recurring | Total Fair Value | Marketable equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable equity securities	15,801	18,513
Loans held for investment at fair value	1,448	2,265
Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security	0	0
Loans held for sale	0	0
Derivative assets	0	0
Capitalized servicing rights	0	0
Derivative liabilities	0	0
Recurring | Level 1 | Debt securities | Municipal bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring | Level 1 | Debt securities | Agency collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring | Level 1 | Debt securities | Agency residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring | Level 1 | Debt securities | Agency commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring | Level 1 | Debt securities | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring | Level 1 | Debt securities | Other bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring | Level 1 | Marketable equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable equity securities	15,129	17,841
Loans held for investment at fair value	0	0
Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security	0	0
Loans held for sale	8,877	12,992
Derivative assets	106,665	159,016
Capitalized servicing rights	0	0
Derivative liabilities	47,215	65,758
Recurring | Level 2 | Debt securities | Municipal bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	90,300	97,803
Recurring | Level 2 | Debt securities | Agency collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	724,554	756,826
Recurring | Level 2 | Debt securities | Agency residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	447,196	438,132
Recurring | Level 2 | Debt securities | Agency commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	268,515	288,650
Recurring | Level 2 | Debt securities | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	45,014	45,030
Recurring | Level 2 | Debt securities | Other bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	51,751	53,791
Recurring | Level 2 | Marketable equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable equity securities	672	672
Loans held for investment at fair value	0	0
Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security	9,350	9,708
Securities available for sale		15,000
Loans held for sale	0	4,756
Derivative assets	511	1,055
Capitalized servicing rights	2,968	3,033
Derivative liabilities	0	0
Recurring | Level 3 | Debt securities | Municipal bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring | Level 3 | Debt securities | Agency collateralized mortgage obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring | Level 3 | Debt securities | Agency residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring | Level 3 | Debt securities | Agency commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring | Level 3 | Debt securities | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	15,000
Recurring | Level 3 | Debt securities | Other bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Recurring | Level 3 | Marketable equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable equity securities	0	0
Loans held for investment at fair value	$ 1,448	$ 2,265

XML

FAIR VALUE MEASUREMENTS - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($) security	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)	Jan. 01, 2020 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Number of trading securities in the portfolio | security	1
Retained earnings write-down	$ 226,516		$ 233,344
Continuing Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Payments for origination of mortgage loans held-for-sale	44,000	$ 16,600
Proceeds from sale and collection of loans held-for-sale	46,900	21,100
Continuing Operations | Loans Held for Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gains (losses) in fair value of loans held for sale included in earnings	$ (6)	(49)
Discontinued Operations | Loans Held for Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gains (losses) in fair value of loans held for sale included in earnings		$ (500)
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | Loans Held for Investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Retained earnings write-down				$ 11,200

XML

FAIR VALUE MEASUREMENTS - Loans Held for Investment (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets from discontinued operations	$ 303,697	$ 317,304
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets from discontinued operations		16,705
Loans Held for Investment | Continuing Operations | Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loan held for investment	1,448	2,265
Assets from discontinued operations	44,969	53,945
Aggregate fair value less aggregate unpaid principal	$ (43,521)	$ (51,680)

XML

FAIR VALUE MEASUREMENTS - Loans Held for Sale (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Loans Held for Sale
Aggregate Unpaid Principal	$ 303,697	$ 317,304
Level 2
Loans Held for Sale
Aggregate Fair Value	8,877	12,992
Aggregate Unpaid Principal		16,705
Recurring | Level 2
Loans Held for Sale
Aggregate Fair Value	8,877	12,992
Continuing Operations | Recurring | Loans Held for Sale | Level 2
Loans Held for Sale
Aggregate Fair Value	8,877	12,992
Aggregate Unpaid Principal	8,518	12,639
Aggregate fair value less aggregate unpaid principal	$ 359	$ 353

XML

FAIR VALUE MEASUREMENTS - Changes in Level 3 (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Commitments to lend
Changes in Level 3 assets that were measured at fair value on a recurring basis
Unrealized (loss)/gain, net recognized in other non-interest income	$ 818	$ 0
Unrealized gains (losses) relating to instruments still held at the end of the period	185	4,836
Derivative Asset (Liability)
Beginning balance	735	2,628
Unrealized (loss)/gain, net recognized in other non-interest income	818	0
Transfers to held for sale loans	(1,368)	(8,831)
Ending balance	185	4,836
Forward Contracts
Changes in Level 3 assets that were measured at fair value on a recurring basis
Unrealized (loss)/gain, net recognized in other non-interest income	6
Unrealized gains (losses) relating to instruments still held at the end of the period	326
Derivative Asset (Liability)
Beginning balance	320
Unrealized (loss)/gain, net recognized in other non-interest income	6
Ending balance	326
Trading Security
Changes in Level 3 assets that were measured at fair value on a recurring basis
Balance at the beginning of the period	9,708	10,769
Unrealized (loss)/gain, net recognized in other non-interest income	(166)	(759)
Paydown of asset	(192)	(181)
Balance at the end of the period	9,350	9,829
Unrealized gains (losses) relating to instruments still held at the end of the period		620
Derivative Asset (Liability)
Unrealized (loss)/gain, net recognized in other non-interest income	(166)	(759)
Available-for-sale Securities
Changes in Level 3 assets that were measured at fair value on a recurring basis
Balance at the beginning of the period	15,000	42,966
Maturities, calls, and prepayments of AFS Security	(15,000)	(9,000)
Unrealized gain (loss) included in accumulated other comprehensive income		(538)
Balance at the end of the period	0	34,504
Unrealized gains (losses) relating to instruments still held at the end of the period		151
Capitalized servicing rights
Changes in Level 3 assets that were measured at fair value on a recurring basis
Balance at the beginning of the period	3,033	12,299
Unrealized (loss)/gain, net recognized in other non-interest income	(65)	0
Additions to servicing rights		0
Balance at the end of the period	2,968	8,518
Unrealized gains (losses) relating to instruments still held at the end of the period		0
Derivative Asset (Liability)
Unrealized (loss)/gain, net recognized in other non-interest income	(65)	0
Loans Held for Investment
Changes in Level 3 assets that were measured at fair value on a recurring basis
Balance at the beginning of the period	2,265	0
Unrealized (loss)/gain, net recognized in other non-interest income	414	(2,216)
Paydown of asset	(1,231)	(549)
Balance at the end of the period	1,448	4,895
Unrealized gains (losses) relating to instruments still held at the end of the period	0	0
Derivative Asset (Liability)
Unrealized (loss)/gain, net recognized in other non-interest income	414	(2,216)
Loans Held for Investment | Cumulative Effect, Period of Adoption, Adjustment
Changes in Level 3 assets that were measured at fair value on a recurring basis
Balance at the beginning of the period		7,660
Trading Assets, Excluding Debt and Equity Securities
Changes in Level 3 assets that were measured at fair value on a recurring basis
Unrealized gains (losses) relating to instruments still held at the end of the period	$ 887
Discontinued Operations | Commitments to lend
Changes in Level 3 assets that were measured at fair value on a recurring basis
Unrealized gain/(loss), net recognized in discontinued operations		11,039
Derivative Asset (Liability)
Unrealized gain/(loss), net recognized in discontinued operations		11,039
Discontinued Operations | Trading Security
Changes in Level 3 assets that were measured at fair value on a recurring basis
Unrealized gain/(loss), net recognized in discontinued operations		0
Derivative Asset (Liability)
Unrealized gain/(loss), net recognized in discontinued operations		0
Discontinued Operations | Capitalized servicing rights
Changes in Level 3 assets that were measured at fair value on a recurring basis
Unrealized gain/(loss), net recognized in discontinued operations		(3,781)
Derivative Asset (Liability)
Unrealized gain/(loss), net recognized in discontinued operations		$ (3,781)

XML

FAIR VALUE MEASUREMENTS - Unobservable Inputs Recurring (Details) $ in Thousands	Mar. 31, 2021 USD ($) uSDPerLoan	Dec. 31, 2020 USD ($) uSDPerLoan
Quantitative information about the significant unobservable inputs within Level 3
Trading security	$ 9,350	$ 9,708
Securities available for sale, at fair value	1,627,330	1,695,232
Level 3
Quantitative information about the significant unobservable inputs within Level 3
Securities available for sale, at fair value	0	15,000
Level 3 | Recurring
Quantitative information about the significant unobservable inputs within Level 3
Trading security	9,350	9,708
Securities available for sale, at fair value		15,000
Loan held for investment	1,448	2,265
Total	$ 14,277	$ 31,061
Level 3 | Recurring | Discounted Cash Flow | Measurement Input, Discount Rate [Member]
Quantitative information about the significant unobservable inputs within Level 3
Trading security, significant unobservable input value	0.0266	0.0272
Loan held for investment, measurement input	0.2500	0.3000
Level 3 | Recurring | Forward commitments
Quantitative information about the significant unobservable inputs within Level 3
Derivative asset	$ 326	$ 320
Level 3 | Recurring | Forward commitments | Historical Trend | Closing Ratio
Quantitative information about the significant unobservable inputs within Level 3
Derivative asset, significant unobservable input value	0.7429	0.7454
Level 3 | Recurring | Forward commitments | Pricing Model | Origination Costs, per loan
Quantitative information about the significant unobservable inputs within Level 3
Derivative asset, significant unobservable input value | uSDPerLoan	3,000	3
Level 3 | Recurring | Commitments to lend
Quantitative information about the significant unobservable inputs within Level 3
Derivative asset	$ 185	$ 735
Level 3 | Recurring | Commitments to lend | Historical Trend | Closing Ratio
Quantitative information about the significant unobservable inputs within Level 3
Derivative asset, significant unobservable input value	0.7429	0.7454
Level 3 | Recurring | Commitments to lend | Pricing Model | Origination Costs, per loan
Quantitative information about the significant unobservable inputs within Level 3
Derivative asset, significant unobservable input value | uSDPerLoan	3,000	3,000
Level 3 | Recurring | Capitalized servicing rights
Quantitative information about the significant unobservable inputs within Level 3
Capitalized servicing rights	$ 2,968	$ 3,033
Level 3 | Recurring | Capitalized servicing rights | Discounted Cash Flow | Measurement Input, Discount Rate [Member]
Quantitative information about the significant unobservable inputs within Level 3
Servicing asset, significant unobservable input value	0.1000	0.1000
Level 3 | Recurring | Capitalized servicing rights | Discounted Cash Flow | Measurement Input, Constant Prepayment Rate [Member]
Quantitative information about the significant unobservable inputs within Level 3
Servicing asset, significant unobservable input value	0.2107	0.2652
Available-for-sale Securities | Level 3 | Recurring | Indication from Market Maker | Price
Quantitative information about the significant unobservable inputs within Level 3
Debt securities, available-for-sale, measurement input		0.010200
Minimum | Level 3 | Recurring | Discounted Cash Flow | Collateral Value
Quantitative information about the significant unobservable inputs within Level 3
Loan held for investment, measurement input	6,700,000	8,100,000
Maximum | Level 3 | Recurring | Discounted Cash Flow | Collateral Value
Quantitative information about the significant unobservable inputs within Level 3
Loan held for investment, measurement input	19,700,000	21,900,000

XML

FAIR VALUE MEASUREMENTS - Measured on Non-recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Quantitative information about the significant unobservable inputs within Level 3
Other real estate owned	$ 149	$ 149
Non-recurring | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Individually evaluated	21,762	28,028
Capitalized servicing rights	13,763	13,315
Other real estate owned	149	149
Total	$ 35,674	$ 41,492

XML

FAIR VALUE MEASUREMENTS - Unobservable Inputs Non-recurring (Details) $ in Thousands	Mar. 31, 2021 USD ($) security	Dec. 31, 2020 USD ($) security
Quantitative information about the significant unobservable inputs within Level 3
Other Real Estate Owned	$ 149	$ 149
Non-recurring | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Individually evaluated	21,762	28,028
Capitalized servicing rights	13,763	13,315
Other Real Estate Owned	149	149
Total	35,674	41,492
Non-recurring | Fair Value of Collateral | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Individually evaluated	$ 21,762	$ 28,028
Non-recurring | Minimum | Measurement Input, Loss Severity [Member] | Fair Value of Collateral | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Impaired loans, significant unobservable input value	0.0032	0.0007
Non-recurring | Minimum | Measurement Input, Appraised Value [Member] | Fair Value of Collateral | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Impaired loans, significant unobservable input value	0	0
Non-recurring | Maximum | Measurement Input, Loss Severity [Member] | Fair Value of Collateral | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Impaired loans, significant unobservable input value	1.0000	1.0000
Non-recurring | Maximum | Measurement Input, Appraised Value [Member] | Fair Value of Collateral | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Impaired loans, significant unobservable input value	11,842	11,432
Non-recurring | Weighted Average | Measurement Input, Loss Severity [Member] | Fair Value of Collateral | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Impaired loans, significant unobservable input value	0.4939	0.4636
Non-recurring | Weighted Average | Measurement Input, Appraised Value [Member] | Fair Value of Collateral | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Impaired loans, significant unobservable input value	7,827	9,800
Non-recurring | Capitalized servicing rights | Discounted Cash Flow | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Capitalized servicing rights	$ 13,763	$ 13,315
Non-recurring | Capitalized servicing rights | Minimum | Measurement Input, Constant Prepayment Rate [Member] | Discounted Cash Flow | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Servicing asset, significant unobservable input value	0.1132	0.1449
Non-recurring | Capitalized servicing rights | Minimum | Measurement Input, Discount Rate [Member] | Discounted Cash Flow | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Servicing asset, significant unobservable input value	0.0833	0.1000
Non-recurring | Capitalized servicing rights | Maximum | Measurement Input, Constant Prepayment Rate [Member] | Discounted Cash Flow | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Servicing asset, significant unobservable input value	0.1949	0.2329
Non-recurring | Capitalized servicing rights | Maximum | Measurement Input, Discount Rate [Member] | Discounted Cash Flow | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Servicing asset, significant unobservable input value	0.1100	0.1100
Non-recurring | Capitalized servicing rights | Weighted Average | Measurement Input, Constant Prepayment Rate [Member] | Discounted Cash Flow | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Servicing asset, significant unobservable input value	0.1538	0.1698
Non-recurring | Capitalized servicing rights | Weighted Average | Measurement Input, Discount Rate [Member] | Discounted Cash Flow | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Servicing asset, significant unobservable input value	0.0912	0.1056
Other Real Estate Owned | Non-recurring | Fair Value of Collateral | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Other Real Estate Owned	$ 149	$ 149
Other Real Estate Owned | Non-recurring | Minimum | Measurement Input, Appraised Value [Member] | Fair Value of Collateral | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Other real estate owned, significant unobservable input value | security		94
Other Real Estate Owned | Non-recurring | Maximum | Measurement Input, Appraised Value [Member] | Fair Value of Collateral | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Other real estate owned, significant unobservable input value | security	182	182

XML

FAIR VALUE MEASUREMENTS - Fair Values and Carrying Amounts (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Financial Assets
Marketable equity securities	$ 15,801	$ 18,513
Securities available for sale	1,627,330	1,695,232
Securities held to maturity	627,297	491,855
FHLB bank stock and restricted securities	28,680	34,873
Assets from discontinued operations	303,697	317,304
Financial Liabilities
Liabilities held for sale	659,310	630,065
Level 1
Financial Assets
Cash and cash equivalents	1,899,608	1,557,875
Trading security	0	0
Marketable equity securities	15,129	17,841
Securities available for sale	0	0
Securities held to maturity	0	0
Net loans	0	0
Loans held for sale	0	0
Accrued interest receivable	0	0
Derivative assets	0	0
Assets from discontinued operations		0
Financial Liabilities
Total deposits	0	0
Short-term debt	0	0
Long-term Federal Home Loan Bank advances and other	0	0
Subordinated borrowings	0	0
Derivative liabilities	0	0
Liabilities held for sale		0
Level 2
Financial Assets
Cash and cash equivalents	0	0
Trading security	0	0
Marketable equity securities	672	672
Securities available for sale	1,627,330	1,680,232
Securities held to maturity	624,012	488,393
Net loans	0	0
Loans held for sale	8,877	12,992
Accrued interest receivable	45,990	46,919
Derivative assets	106,665	159,016
Assets from discontinued operations		16,705
Financial Liabilities
Total deposits	10,256,878	10,230,822
Short-term debt	0	40,025
Long-term Federal Home Loan Bank advances and other	353,481	438,064
Subordinated borrowings	95,729	95,178
Derivative liabilities	47,215	65,758
Liabilities held for sale		631,268
Level 3
Financial Assets
Cash and cash equivalents	0	0
Trading security	9,350	9,708
Marketable equity securities	0	0
Securities available for sale	0	15,000
Securities held to maturity	3,285	3,462
Net loans	7,778,261	8,243,437
Loans held for sale	9,500	4,756
Accrued interest receivable	0	0
Derivative assets	511	1,055
Assets from discontinued operations		300,599
Financial Liabilities
Total deposits	0	0
Short-term debt	0	0
Long-term Federal Home Loan Bank advances and other	0	0
Subordinated borrowings	0	0
Derivative liabilities	0	0
Liabilities held for sale		0
Carrying Amount
Financial Assets
Cash and cash equivalents	1,899,608	1,557,875
Trading security	9,350	9,708
Marketable equity securities	15,801	18,513
Securities available for sale	1,627,330	1,695,232
Securities held to maturity	610,637	465,091
FHLB bank stock and restricted securities	28,680	34,873
Net loans	7,534,978	7,954,217
Loans held for sale	18,377	17,748
Accrued interest receivable	45,990	46,919
Derivative assets	107,176	160,071
Assets from discontinued operations		317,304
Financial Liabilities
Total deposits	10,244,370	10,215,808
Short-term debt	0	40,000
Long-term Federal Home Loan Bank advances and other	351,354	434,357
Subordinated borrowings	97,338	97,280
Derivative liabilities	47,215	65,758
Liabilities held for sale		630,065
Fair Value
Financial Assets
Cash and cash equivalents	1,899,608	1,557,875
Trading security	9,350	9,708
Marketable equity securities	15,801	18,513
Securities available for sale	1,627,330	1,695,232
Securities held to maturity	627,297	491,855
Net loans	7,778,261	8,243,437
Loans held for sale	18,377	17,748
Accrued interest receivable	45,990	46,919
Derivative assets	107,176	160,071
Assets from discontinued operations		317,304
Financial Liabilities
Total deposits	10,256,878	10,230,822
Short-term debt	0	40,025
Long-term Federal Home Loan Bank advances and other	353,481	438,064
Subordinated borrowings	95,729	95,178
Derivative liabilities	$ 47,215	65,758
Liabilities held for sale		$ 631,268

XML

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Banking and Thrift, Interest [Abstract]
Net interest income from continuing operations	$ 75,093	$ 86,428
Provision for credit losses	6,500	34,807
Net interest income from continuing operations after provision for credit losses	$ 68,593	$ 51,621

XML

Label	Element	Value
Accounting Standards Update [Extensible List]	us-gaap_AccountingStandardsUpdateExtensibleList	Accounting Standards Update 2016-13 [Member]