SEC Company Response from BERKSHIRE HILLS BANCORP INC (BHLB) (CIK 0001108134) (BBT) — Dec 19, 2011
BERKSHIRE HILLS BANCORP INC (BHLB) (CIK 0001108134)
Date: Dec. 19, 2011 · CIK: 0001108134 · Accession: 0001144204-11-070584
AI Filing Summary & Sentiment
File numbers found in text: 000-51584
Referenced dates: November 22, 2011
Letter
VIA EDGAR Securities and Exchange Commission Division of Corporation Finance Filed March 16, 2011 Form 10-Q for the Quarterly Period Ended September 30, 2011 Filed November 9, 2011 File No. 000-51584
Dear Mr. Nolan:
We are in receipt of your letter dated November 22, 2011 providing comments on the referenced filing for Berkshire Hills Bancorp, Inc. (the “Company” or “BHLB”). Berkshire’s responses are set forth below and are keyed to the staff’s comment letter.
The Company’s responses to the comment letter are noted below. Each response is preceded by the Staff’s comments as numbered in the Staff’s letter. To the extent determined to be appropriate, future filings will reflect disclosures that are consistent with these disclosures provided. Italicized text reflects new disclosures added to the filings.
Mr. John P. Nolan
December 19, 2011
Page 2 of 15
Form 10-Q for the quarterly period ended September 30, 2011
Consolidated Financial Statements
Consolidated Statements of Income, page 4
1.
Please revise your Consolidated Statements of Income in all future filings to present net interest followed by the provision for loan losses and a subtotal for net interest income after provision for loan losses before presenting non-interest and non-interest expense. Refer to Article 9 of Regulation S-X.
RESPONSE:
The Company acknowledges that Article 9 of Regulation S-X permits the disclosure of the subject financial information in the Consolidated Statements of Income or the notes to the Consolidated Statements of Income. The Company plans to continue to present the Consolidated Statements of Income in its present format. In this format, we present total net revenue which is an important financial measure used by the Company and others in evaluating its financial performance. This measure is prior to the provision for loan losses. In all future filings, the Company will provide a new note to the Consolidated Statements of Income to present net interest followed by the provision for loan losses and a subtotal for net interest income after provision for loan losses. This note was inadvertently omitted from the notes to the Consolidated Statements of Income in the subject Form.
Notes to Consolidated Financial Statements
Note 1. General – Significant accounting policies – Acquired Loans, page 9
2.
We note your disclosure that management chose to increase the loan loss provision by $300 thousand in the third quarter in an effort to indirectly build a reserve for the Bank’s purchased loan portfolios into the allowance for loan loss. Please tell us whether these loans were classified and accounted for under ASC 310-30 (loans acquired with deteriorated credit quality). Also, tell us and enhance future filing disclosure to address the specific facts and circumstances related to the underlying credit performance of these newly acquired loans and your overall credit environment subsequent to the acquisitions of these portfolios and how these factors were considered in the determination of your periodic loan provision.
RESPONSE:
The $300 thousand loan loss provision related to loans which were not classified and accounted for under ASC 310-30.
For loans that were classified and accounted for under ASC 310-30, valuation allowances shall reflect only those losses incurred by the investor after acquisition—that is, the present value of all cash flows expected at acquisition that ultimately are not to be received as outlined in ASC 310-30-30-1. The loss accrual or valuation allowance recorded by the investor should reflect only losses incurred by the investor, rather than losses incurred by the transferor or the investor's estimate at acquisition of credit losses over the life of the loan. Therefore, an additional requirement to recognize a loss prescribed in ASC 450-20 (FAS 5) would not be applicable to loans falling under Subtopic ASC 310-30. This guidance is specific to the valuation allowance prescribed for loans under the scope of ASC 310-30 and does not provide further guidance on the valuation allowance prescribed for loans that fall outside the scope of ASC 310-30.
Mr. John P. Nolan
December 19, 2011
Page 3 of 15
Loans that the Company acquired in acquisitions are initially recorded at fair value with no carryover of the related allowance for credit losses. For loans that do not meet the ASC 310-30 criteria, the Company accretes interest income on a level yield basis using the contractually required cash flows. Although these loans do not possess deteriorated credit quality since origination and are considered performing at the time of the acquisition, like most newly originated loans, they possess some level of inherent losses that are probable and estimable based on historic lending experience. As amounts related to credit quality are accreted, an estimate of provision should be measured and applied to the allowance for loan losses for credit losses previously considered in the purchase discount if estimated loss results in a net book value less than current book value. Therefore, the Company subjected loans that do not meet the ASC 310-30 criteria to ASC 450-20 (FAS 5) by collectively evaluating these loans for an allowance for loan loss. The Company applied a methodology similar to the methodology prescribed for originated loans, which includes the application of environmental factors to each category of loans.
The methodology to collectively evaluate the acquired loans outside the scope of ASC 310-30 includes the application of a number of environmental factors that reflect management’s best estimate of the level of incremental credit losses that might be recognized given current conditions. This is reviewed as part of the quarterly allowance for loan loss adequacy analysis. The analysis determines risk ratings for each environmental factor. Risk factors are then added to adjust for the current state of the portfolio by environmental factor. Note that the ASC 450-20 (FAS 5) adjustment is subsequent to and separate from the fair value adjustments recorded on each acquired loan outside the scope of ASC 310-30. As the loan portfolio matures and environmental factors change, the loan portfolio will be reassessed each quarter to determine an appropriate reserve allowance.
The underlying credit performance of the loan portfolio is presented throughout the Loan footnote on the September 30, 2011 Form 10-Q and will continue to be so presented in future filings. These tables include a summary of past due loans activity in the allowance for loan loss, summary of impaired loans and summary of non-accrual loans. All of these tables present a summary of acquired loans, which allows the user of the financial statements to identify the credit performance of the acquired loan portfolio. The Company placed reliance on the environmental factors noted above for the determination of a periodic loan provision. The Company’s disclosures will be updated accordingly and will include any new developments, if applicable.
Mr. John P. Nolan
December 19, 2011
Page 4 of 15
3.
Please tell us, and revise future filings to include, the carrying amount of loans that met the definition stipulated in ASC 310-30, loans that you analogized to ASC 310-30, and loans that do not meet the ASC 310-30 criteria for which the Company is accreting interest income on a level yield basis using the contractually required cash flows.
RESPONSE:
The Company categorized each loan as either meeting the definition stipulated in ASC 310-30 or loans that do not meet the ASC 310-30 criteria for which the Company is accreting interest income on a level yield basis using contractually required cash flows. The Company did not apply ASC 310-30 by analogy to any portion of the acquired loan portfolio, therefore, this concept does not apply. The loans that met the scope of ASC 310-30 are accounted for in accordance with ASC 310-30 as outlined in the Significant Accounting Policies section of the September 30, 2011 Form 10Q. For loans that do not meet ASC 310-30 criteria, the Company accretes interest income on a level yield basis using the contractually required cash flows as outlined in the Significant Accounting Policies section of the September 30, 2011 Form 10Q.
The Company will update its disclosures in future filings to disclose the following:
The carrying amount of the acquired loans at September 30, 2011 totaled $730.7 million. These loans consisted of loans determined to be impaired at the time of acquisition, which are accounted for in accordance with ASC Topic 310-30, with a carrying amount of $17.4 million and loans that were considered not impaired at the acquisition date with a carrying amount of $713.3 million.
The outstanding unpaid principal balance for all acquired credit impaired loans accounted for under ASC 310-30 loans as of September 30, 2011 was $31.4 million.
Note 3. Acquisitions, page 12
4.
Please provide us with, and revise future filings to include, the following information as it relates to your acquisitions of Legacy Bancorp, Inc. and Rome Bancorp, Inc.:
·
In tabular format, the carrying amount of each balance sheet line item prior to the merger, the adjustment recorded during purchase accounting and the carrying amount of each balance sheet line item immediately after the merger. Please separately present loans that met the criteria and are being accounted for in accordance with the ASC 310-30, loans that you analogized to ASC 310-30, and loans that are not accounted for under ASC 310-30 in this disclosure.
Mr. John P. Nolan
December 19, 2011
Page 5 of 15
·
A robust discussion of how you identified loans to be accounted for under ASC 310-30, including a description of whether and if so, how you aggregated loans into pools for accretion and impairment testing purposes. Identify the specific loan characteristics that were used for segregation and whether performing and nonperforming loans were separately segregated.
RESPONSE:
The Company elected to evaluate loans accounted for under ASC 310-30 on an individual basis for accretion and impairment testing purposes. Therefore, the aggregation of loans into pools for accretion and impairment purposes and the identification of specific loan characteristics that were used for segregation do not apply.
The Company will update our disclosures in future filings to disclose the following:
The results of Rome’s operations are included in the Consolidated Statements of Income from the date of acquisition. In connection with the merger, the consideration paid was recorded at fair value on the date of acquisition, as summarized in the following table in thousands, as of April 1, 2011.
Consideration Paid:
Amount
Berkshire Hills Bancorp common stock issued to Rome common stockholders
$ 55,419
Cash consideration paid to Rome common shareholders
22,683
Value of Rome stock previously purchased by Berkshire Hills
Cash consideration paid for Rome employee stock options
Total consideration paid
79,124
Fair Value of Net Assets Assumed including Identifiable Intangible Assets
62,781
Goodwill
$ 16,343
In connection with the merger, the assets acquired and the liabilities assumed were recorded at fair value on the date of acquisition, as summarized in the following table in thousands, as of Apri1 1, 2011.
As Acquired
Fair Value Adjustments
As Recorded at Acquisition
Recognized Amounts of Identifiable Assets Acquired and (Liabilities Assumed), At Fair Value:
Cash and short term investments
$ 33,533
$ -
$ 33,533
Investment securities
(a)
Loans
262,718
(5,114 ) (b)
257,604
Federal Home Loan Bank common stock
3,571
-
3,571
Bank owned life insurance
9,908
-
9,908
Premises and equipment
5,375
(643 ) (c)
4,732
Core deposit intangibles
-
4,820
(d)
4,820
Other assets
8,159
(440 ) (e)
7,719
Deposits
(228,681 )
(709 ) (f)
(229,390)
Borrowings
(30,000 )
-
(30,000 )
Other liabilities
(3,880 )
3,746
(g)
(134)
Total identifiable net assets
$ 61,115
$ 1,666
$ 62,781
Mr. John P. Nolan
December 19, 2011
Page 6 of 15
The table above includes balances associated with discontinued operations. Refer to Note 4 for further discussion of discontinued operations.
Explanation of Certain Fair Value Adjustments
(a)
The adjustment represents the write up of the book value of investments to their estimated fair value based on fair values on the date of acquisition
(b)
The adjustment represents the write down of the book value of loans to their estimated fair value based on current interest rates and expected cash flows, which includes an estimate of expected loan loss inherent in the portfolio. Loans that met the criteria and are being accounted for in accordance with ASC 310-30 had a carrying amount of $5.7 million. Non-Impaired Loans not accounted for under ASC 310-30 had a carrying value of $251.9 million.
(c)
The adjustment represents the write down of book value of premises and equipment to their estimated fair value at the acquisition date based on their appraised value
(d)
The adjustment represents the value of the core deposit base assumed in the acquisition. The core deposit asset was recorded as an identifiable intangible asset and will be amortized over the average life of the deposit base.
(e)
The adjustment represents the write down of book value of other assets to their estimated fair value at the acquisition date.
(f)
The adjustment is necessary because the weighted average interest rate of deposits exceeded the cost of similar funding at the time of acquisition.
(g)
The adjustment represents the write down of book value of other liabilities to their estimated fair value at the acquisition date.
The results of Legacy’s operations are included in the Consolidated Statements of Income from the date of acquisition. In connection with the merger, the consideration paid was recorded at fair value on the date of acquisition, as summarized in the following table in thousands, as of July 21, 2011.
Consideration Paid:
Amount
Berkshire Hills Bancorp common stock issued to Legacy common stockholders
$ 100,334
Cash consideration paid to Legacy common shareholders
10,043
Value of Legacy stock previously purchased by Berkshire Hills
5,616
Cash consideration paid for Legacy employee stock options
1,237
Option consideration paid for Legacy employee stock options
1,349
Contingent divestiture consideration recorded to Legacy common shareholders
1,146
Total consideration paid
119,725
Fair Value of Net Assets Assumed including Identifiable Intangible Asset
89,611
Goodwill
$ 30,144
Mr. John P. Nolan
December 19, 2011
Page 7 of 15
In connection with the merger, the assets acquired and the liabilities assumed were recorded at fair value on the date of acquisition, as summarized in the following table in thousands, as of July 21, 2011.
As Acquired
Fair Value Adjustment
As Recorded at Acquisition
Recognized Amounts of Identifiable Assets Acquired and (Liabilities Assumed), At Fair Value:
Cash and short term investments
$ 180,996
$ -
$ 180,996
Investment securities
53,177
(340 ) (a)
52,837
Loans
584,216
(18,367 ) (b)
565,849
Bank owned life insurance
16,896
-
16,896
Premises and equipment
18,032
(29 ) (c)
18,003
Core deposit intangibles
1,017
8,043
(d)
9,060
Other intangibles
2,124
1,
Show Raw Text
CORRESP
1
filename1.htm
Unassociated Document
LUSE GORMAN POMERENK & SCHICK
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
5335 WISCONSIN AVENUE, N.W., SUITE 780
WASHINGTON, D.C. 20015
TELEPHONE (202) 274-2000
FACSIMILE (202) 362-2902
www.LuseLaw.com
WRITER’S DIRECT DIAL NUMBER
WRITER’S E-MAIL
(202) 274-2009
mlevy@luselaw.com
December 19, 2011
VIA EDGAR
Mr. John P. Nolan
Senior Assistant Chief Accountant
Securities and Exchange Commission
Division of Corporation Finance
Washington, DC 20549
Re:
Berkshire Hills Bancorp, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2010
Filed March 16, 2011
Form 10-Q for the Quarterly Period Ended September 30, 2011
Filed November 9, 2011
File No. 000-51584
Dear Mr. Nolan:
We are in receipt of your letter dated November 22, 2011 providing comments on the referenced filing for Berkshire Hills Bancorp, Inc. (the “Company” or “BHLB”). Berkshire’s responses are set forth below and are keyed to the staff’s comment letter.
The Company’s responses to the comment letter are noted below. Each response is preceded by the Staff’s comments as numbered in the Staff’s letter. To the extent determined to be appropriate, future filings will reflect disclosures that are consistent with these disclosures provided. Italicized text reflects new disclosures added to the filings.
Mr. John P. Nolan
December 19, 2011
Page 2 of 15
Form 10-Q for the quarterly period ended September 30, 2011
Consolidated Financial Statements
Consolidated Statements of Income, page 4
1.
Please revise your Consolidated Statements of Income in all future filings to present net interest followed by the provision for loan losses and a subtotal for net interest income after provision for loan losses before presenting non-interest and non-interest expense. Refer to Article 9 of Regulation S-X.
RESPONSE:
The Company acknowledges that Article 9 of Regulation S-X permits the disclosure of the subject financial information in the Consolidated Statements of Income or the notes to the Consolidated Statements of Income. The Company plans to continue to present the Consolidated Statements of Income in its present format. In this format, we present total net revenue which is an important financial measure used by the Company and others in evaluating its financial performance. This measure is prior to the provision for loan losses. In all future filings, the Company will provide a new note to the Consolidated Statements of Income to present net interest followed by the provision for loan losses and a subtotal for net interest income after provision for loan losses. This note was inadvertently omitted from the notes to the Consolidated Statements of Income in the subject Form.
Notes to Consolidated Financial Statements
Note 1. General – Significant accounting policies – Acquired Loans, page 9
2.
We note your disclosure that management chose to increase the loan loss provision by $300 thousand in the third quarter in an effort to indirectly build a reserve for the Bank’s purchased loan portfolios into the allowance for loan loss. Please tell us whether these loans were classified and accounted for under ASC 310-30 (loans acquired with deteriorated credit quality). Also, tell us and enhance future filing disclosure to address the specific facts and circumstances related to the underlying credit performance of these newly acquired loans and your overall credit environment subsequent to the acquisitions of these portfolios and how these factors were considered in the determination of your periodic loan provision.
RESPONSE:
The $300 thousand loan loss provision related to loans which were not classified and accounted for under ASC 310-30.
For loans that were classified and accounted for under ASC 310-30, valuation allowances shall reflect only those losses incurred by the investor after acquisition—that is, the present value of all cash flows expected at acquisition that ultimately are not to be received as outlined in ASC 310-30-30-1. The loss accrual or valuation allowance recorded by the investor should reflect only losses incurred by the investor, rather than losses incurred by the transferor or the investor's estimate at acquisition of credit losses over the life of the loan. Therefore, an additional requirement to recognize a loss prescribed in ASC 450-20 (FAS 5) would not be applicable to loans falling under Subtopic ASC 310-30. This guidance is specific to the valuation allowance prescribed for loans under the scope of ASC 310-30 and does not provide further guidance on the valuation allowance prescribed for loans that fall outside the scope of ASC 310-30.
Mr. John P. Nolan
December 19, 2011
Page 3 of 15
Loans that the Company acquired in acquisitions are initially recorded at fair value with no carryover of the related allowance for credit losses. For loans that do not meet the ASC 310-30 criteria, the Company accretes interest income on a level yield basis using the contractually required cash flows. Although these loans do not possess deteriorated credit quality since origination and are considered performing at the time of the acquisition, like most newly originated loans, they possess some level of inherent losses that are probable and estimable based on historic lending experience. As amounts related to credit quality are accreted, an estimate of provision should be measured and applied to the allowance for loan losses for credit losses previously considered in the purchase discount if estimated loss results in a net book value less than current book value. Therefore, the Company subjected loans that do not meet the ASC 310-30 criteria to ASC 450-20 (FAS 5) by collectively evaluating these loans for an allowance for loan loss. The Company applied a methodology similar to the methodology prescribed for originated loans, which includes the application of environmental factors to each category of loans.
The methodology to collectively evaluate the acquired loans outside the scope of ASC 310-30 includes the application of a number of environmental factors that reflect management’s best estimate of the level of incremental credit losses that might be recognized given current conditions. This is reviewed as part of the quarterly allowance for loan loss adequacy analysis. The analysis determines risk ratings for each environmental factor. Risk factors are then added to adjust for the current state of the portfolio by environmental factor. Note that the ASC 450-20 (FAS 5) adjustment is subsequent to and separate from the fair value adjustments recorded on each acquired loan outside the scope of ASC 310-30. As the loan portfolio matures and environmental factors change, the loan portfolio will be reassessed each quarter to determine an appropriate reserve allowance.
The underlying credit performance of the loan portfolio is presented throughout the Loan footnote on the September 30, 2011 Form 10-Q and will continue to be so presented in future filings. These tables include a summary of past due loans activity in the allowance for loan loss, summary of impaired loans and summary of non-accrual loans. All of these tables present a summary of acquired loans, which allows the user of the financial statements to identify the credit performance of the acquired loan portfolio. The Company placed reliance on the environmental factors noted above for the determination of a periodic loan provision. The Company’s disclosures will be updated accordingly and will include any new developments, if applicable.
Mr. John P. Nolan
December 19, 2011
Page 4 of 15
3.
Please tell us, and revise future filings to include, the carrying amount of loans that met the definition stipulated in ASC 310-30, loans that you analogized to ASC 310-30, and loans that do not meet the ASC 310-30 criteria for which the Company is accreting interest income on a level yield basis using the contractually required cash flows.
RESPONSE:
The Company categorized each loan as either meeting the definition stipulated in ASC 310-30 or loans that do not meet the ASC 310-30 criteria for which the Company is accreting interest income on a level yield basis using contractually required cash flows. The Company did not apply ASC 310-30 by analogy to any portion of the acquired loan portfolio, therefore, this concept does not apply. The loans that met the scope of ASC 310-30 are accounted for in accordance with ASC 310-30 as outlined in the Significant Accounting Policies section of the September 30, 2011 Form 10Q. For loans that do not meet ASC 310-30 criteria, the Company accretes interest income on a level yield basis using the contractually required cash flows as outlined in the Significant Accounting Policies section of the September 30, 2011 Form 10Q.
The Company will update its disclosures in future filings to disclose the following:
The carrying amount of the acquired loans at September 30, 2011 totaled $730.7 million. These loans consisted of loans determined to be impaired at the time of acquisition, which are accounted for in accordance with ASC Topic 310-30, with a carrying amount of $17.4 million and loans that were considered not impaired at the acquisition date with a carrying amount of $713.3 million.
The outstanding unpaid principal balance for all acquired credit impaired loans accounted for under ASC 310-30 loans as of September 30, 2011 was $31.4 million.
Note 3. Acquisitions, page 12
4.
Please provide us with, and revise future filings to include, the following information as it relates to your acquisitions of Legacy Bancorp, Inc. and Rome Bancorp, Inc.:
·
In tabular format, the carrying amount of each balance sheet line item prior to the merger, the adjustment recorded during purchase accounting and the carrying amount of each balance sheet line item immediately after the merger. Please separately present loans that met the criteria and are being accounted for in accordance with the ASC 310-30, loans that you analogized to ASC 310-30, and loans that are not accounted for under ASC 310-30 in this disclosure.
Mr. John P. Nolan
December 19, 2011
Page 5 of 15
·
A robust discussion of how you identified loans to be accounted for under ASC 310-30, including a description of whether and if so, how you aggregated loans into pools for accretion and impairment testing purposes. Identify the specific loan characteristics that were used for segregation and whether performing and nonperforming loans were separately segregated.
RESPONSE:
The Company elected to evaluate loans accounted for under ASC 310-30 on an individual basis for accretion and impairment testing purposes. Therefore, the aggregation of loans into pools for accretion and impairment purposes and the identification of specific loan characteristics that were used for segregation do not apply.
The Company will update our disclosures in future filings to disclose the following:
The results of Rome’s operations are included in the Consolidated Statements of Income from the date of acquisition. In connection with the merger, the consideration paid was recorded at fair value on the date of acquisition, as summarized in the following table in thousands, as of April 1, 2011.
Consideration Paid:
Amount
Berkshire Hills Bancorp common stock issued to Rome common stockholders
$
55,419
Cash consideration paid to Rome common shareholders
22,683
Value of Rome stock previously purchased by Berkshire Hills
668
Cash consideration paid for Rome employee stock options
354
Total consideration paid
79,124
Fair Value of Net Assets Assumed including Identifiable Intangible Assets
62,781
Goodwill
$
16,343
In connection with the merger, the assets acquired and the liabilities assumed were recorded at fair value on the date of acquisition, as summarized in the following table in thousands, as of Apri1 1, 2011.
As Acquired
Fair Value Adjustments
As Recorded at Acquisition
Recognized Amounts of Identifiable Assets Acquired and (Liabilities Assumed), At Fair Value:
Cash and short term investments
$
33,533
$
-
$
33,533
Investment securities
412
6
(a)
418
Loans
262,718
(5,114
)
(b)
257,604
Federal Home Loan Bank common stock
3,571
-
3,571
Bank owned life insurance
9,908
-
9,908
Premises and equipment
5,375
(643
)
(c)
4,732
Core deposit intangibles
-
4,820
(d)
4,820
Other assets
8,159
(440
)
(e)
7,719
Deposits
(228,681
)
(709
)
(f)
(229,390)
Borrowings
(30,000
)
-
(30,000
)
Other liabilities
(3,880
)
3,746
(g)
(134)
Total identifiable net assets
$
61,115
$
1,666
$
62,781
Mr. John P. Nolan
December 19, 2011
Page 6 of 15
The table above includes balances associated with discontinued operations. Refer to Note 4 for further discussion of discontinued operations.
Explanation of Certain Fair Value Adjustments
(a)
The adjustment represents the write up of the book value of investments to their estimated fair value based on fair values on the date of acquisition
(b)
The adjustment represents the write down of the book value of loans to their estimated fair value based on current interest rates and expected cash flows, which includes an estimate of expected loan loss inherent in the portfolio. Loans that met the criteria and are being accounted for in accordance with ASC 310-30 had a carrying amount of $5.7 million. Non-Impaired Loans not accounted for under ASC 310-30 had a carrying value of $251.9 million.
(c)
The adjustment represents the write down of book value of premises and equipment to their estimated fair value at the acquisition date based on their appraised value
(d)
The adjustment represents the value of the core deposit base assumed in the acquisition. The core deposit asset was recorded as an identifiable intangible asset and will be amortized over the average life of the deposit base.
(e)
The adjustment represents the write down of book value of other assets to their estimated fair value at the acquisition date.
(f)
The adjustment is necessary because the weighted average interest rate of deposits exceeded the cost of similar funding at the time of acquisition.
(g)
The adjustment represents the write down of book value of other liabilities to their estimated fair value at the acquisition date.
The results of Legacy’s operations are included in the Consolidated Statements of Income from the date of acquisition. In connection with the merger, the consideration paid was recorded at fair value on the date of acquisition, as summarized in the following table in thousands, as of July 21, 2011.
Consideration Paid:
Amount
Berkshire Hills Bancorp common stock issued to Legacy common stockholders
$
100,334
Cash consideration paid to Legacy common shareholders
10,043
Value of Legacy stock previously purchased by Berkshire Hills
5,616
Cash consideration paid for Legacy employee stock options
1,237
Option consideration paid for Legacy employee stock options
1,349
Contingent divestiture consideration recorded to Legacy common shareholders
1,146
Total consideration paid
119,725
Fair Value of Net Assets Assumed including Identifiable Intangible Asset
89,611
Goodwill
$
30,144
Mr. John P. Nolan
December 19, 2011
Page 7 of 15
In connection with the merger, the assets acquired and the liabilities assumed were recorded at fair value on the date of acquisition, as summarized in the following table in thousands, as of July 21, 2011.
As Acquired
Fair Value Adjustment
As Recorded at Acquisition
Recognized Amounts of Identifiable Assets Acquired and (Liabilities Assumed), At Fair Value:
Cash and short term investments
$
180,996
$
-
$
180,996
Investment securities
53,177
(340
)
(a)
52,837
Loans
584,216
(18,367
)
(b)
565,849
Bank owned life insurance
16,896
-
16,896
Premises and equipment
18,032
(29
)
(c)
18,003
Core deposit intangibles
1,017
8,043
(d)
9,060
Other intangibles
2,124
1,