BERKSHIRE HILLS BANCORP INC

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 operating earnings can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP operating 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 operating 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 restructuring costs. 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.

The Company also calculates operating earnings per share based on its measure of operating 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. Adjustments in 2025 were primarily related to the pending merger. Adjustments in 2024 were primarily related to branch sales and consolidations, and loss on sale of securities.

Management believes that the computation of non-GAAP operating earnings and operating 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.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

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

(1) Non-GAAP financial measure.

(2) 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.

(3) Ratios are annualized and based on average balance sheet amounts, where applicable. Quarterly data may not sum to year-to-date data due to rounding.

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

(5) The tax benefit is the direct reduction to the income tax provision due to tax credits and deductions generated from investments in tax equity investments.

(6) The non-interest income amortization is the reduction to the tax-advantaged investments and are incurred as the tax credits are generated.

(7) As of January 1, 2024, the Company elected the proportional amortization method for certain tax credits eliminating the need to adjust the efficiency ratio for tax credit impacts.

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 2024 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. Financial results discussed herein are not necessarily indicative of the results for the year 2025 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”) which operates as a commercial bank under a Massachusetts trust company charter. Established in 1846, the Bank provides business and consumer banking, mortgage, wealth management, and investment services. Berkshire's stock is traded on the New York Stock Exchange. It has $12.0 billion in assets and operates 83 branch offices in New England and New York.

Proposed Transaction with Brookline Bancorp, Inc. On December 16, 2024, Berkshire Hills Bancorp, Inc., Commerce Acquisition Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Berkshire formed solely to facilitate the merger (“Merger Sub”) and Brookline Bancorp, Inc., a Delaware corporation (“Brookline”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Brookline, with Brookline as the surviving entity, and immediately thereafter, Brookline will merge with and into Berkshire, with Berkshire as the surviving entity (collectively, the “Merger”). As a result of the Merger, the separate corporate existence of Brookline will cease, and Berkshire will continue as the surviving corporation. Under the terms of the Merger Agreement, which was unanimously approved by the Boards of Directors of both companies, each outstanding share of Brookline common stock will be exchanged for the right to receive 0.42 shares of Berkshire common stock. Holders of Brookline common stock will receive cash in lieu of fractional shares of Berkshire common stock. As a result of the proposed transaction and a $100 million common stock offering completed by Berkshire to support the proposed transaction, Berkshire stockholders will own approximately 55% and Brookline stockholders will own approximately 45% of the outstanding shares of the combined company. The proposed transaction is expected to close in the second half of 2025, subject to satisfaction of customary closing conditions, including receipt of required regulatory approvals and approvals from Berkshire and Brookline stockholders.

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these statements from the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “remain,” “target” and similar expressions. There are many factors that could cause actual results to differ significantly from expectations described in the forward-looking statements. For a discussion of such factors, please see the sections titled “Forward-Looking Statements” and “Risk Factors” in Berkshire’s most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission and available on the SEC’s website at www.sec.gov. These factors include, but are not limited to, the occurrence of any event, change or other circumstances that could give rise to the right of Berkshire or Brookline to terminate the merger agreement; the outcome of any legal proceedings that may be instituted against Berkshire or Brookline; delays in completing the proposed transaction with Brookline; the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction) or stockholder approvals, or to satisfy any of the other conditions to the proposed transaction on a timely basis or at all, including the ability of Berkshire and

Brookline to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the impact of certain restrictions during the pendency of the proposed transaction on the parties’ ability to pursue certain business opportunities and strategic transactions; diversion of management’s attention from ongoing business operations and opportunities; and potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction.

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

OVERVIEW

First quarter earnings per share were $0.56 in 2025 compared to a loss of $(0.47) per share in 2024. The non-GAAP measure of operating earnings per share increased year-over-year by 22% to $0.60 from $0.49. This reflected positive operating leverage from revenue growth and expense reduction. This included the benefit of the Company’s 2024 strategic initiatives including the sale of ten New York branches, three branch consolidations, front line staff expansion, and enhanced digital banking tools. Per share results in 2025 include the impact of $100 million in common shares issued in December 2024 in connection with the planned merger with Brookline Bancorp. First quarter non-operating adjustments were primarily related to the pending merger in 2025 and to branch sales and consolidations and securities sales in 2024.

The Company’s first quarter return on tangible common equity was 9.02% in 2025 versus (7.73)% in 2024. The non-GAAP measure of operating return on tangible common equity was 9.66% and 8.73% in these respective periods, reflecting the benefit of five quarters of sequential quarterly growth in operating earnings. Return on assets has also improved over this interval, measuring 0.88% on a GAAP basis and 0.94% on an operating basis in the most recent quarter.

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND MARCH 31, 2024

Summary. First quarter results were net income of $26 million in 2025 compared to a net loss of $20 million in 2024. Results in 2024 include a $50 million non-operating loss on the sale of securities. First quarter operating income increased year-over-year by $7 million, or 32%, to $28 million reflecting a $5 million increase in operating revenue and a $4 million decrease in operating expenses. Operating revenue increased due to a $2 million increase in net interest income and a $3 million increase in operating non-interest income. The efficiency ratio improved year-over-year to 59.5% from 66.3%, achieving the most favorable quarterly level in two years.

Net Interest Income. First quarter net interest income increased year-over-year by $2 million, or 2%, to $90 million due a 3% increase in the net interest margin to 324 basis points from 314 basis points. This increase was primarily due to the reinvestment of the proceeds of the $0.4 billion from sales of lower yielding securities in the first quarter of 2024 into higher yielding loans in subsequent periods. Additionally net income benefited from the investment of proceeds from the stock offering in December 2024. Both loan yields and deposit costs decreased year-over-year due to a 100 basis reduction in the federal funds rate in the second half of 2024. First quarter net interest income in 2025 did not include the contribution related to the ten branches, including $383 million in deposits, which were sold during the third quarter of 2024.

Non-Interest Income. First quarter non-interest income was $21million in 2025 compared to a $33 million loss in 2024. Excluding the $50 million non-operating loss on the 2024 securities sale, the non-GAAP measure of operating non-interest income increased $3 million, or 19%, year-over-year. Gain on SBA loan sales increased $1.6 million on higher business volumes and loan related fees increased $1.1 million.

Provision Expense for Credit Losses. First quarter 2025 provision expense decreased year-over-year by $0.5 million to $5.5 million. In the most recent quarter, net loan charge-offs totaled $3.5 million and measured 0.15% of average loans. The ratio of the allowance to loans increased to 1.24% at period-end from 1.22% at the start of the year, including the qualitative impact of increased economic uncertainties on expected credit loss expense.

Non-Interest Expense. Non-interest expense decreased year-over-year to $70 million from $76 million. First quarter non-operating expense was $2.4 million in 2025 and $3.6 million 2024. This expense was primarily related to the pending merger in 2025 and to the pending New York branch sale in 2024. The non-GAAP measure of operating non-interest expense decreased $4.5 million, or 6%, year-over year. This included the impact from the sale of ten New York branches and the consolidation of three other branches, bringing the total branch count down to 83 offices. Most major categories of operating expense decreased year-over-year, with the largest decreases in occupancy and equipment ($1.0 million), professional services ($1.0 million), and loan servicing related costs in the category of other non-interest expense ($2.1 million).

Within compensation expense, a $1.5 million reduction in salary expense to $26.6 million was mostly offset by a $1.7 million increase in incentive expense to $7.9 million, reflecting the Company’s strategic initiatives. Full time equivalent staff totaled 1,186 positions at March 31, 2025, compared to 1,216 positions at year-end 2024 and 1,340 positions at March 31, 2024. There were 40 positions transferred in the branch sales in the third quarter of 2024.

Income Tax Expense. The first quarter effective tax rate was 26% in 2025 compared to 24% in 2024.

COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2025 COMPARED TO DECEMBER 31, 2024

General. Total assets decreased 2% to $12.0 billion at period-end from $12.3 billion at year-end 2024, primarily reflecting the impact on cash and equivalents from seasonal run-off of higher year-end overnight deposits. Total loans increased by 0.5% in the quarter. Measures of asset quality remained favorable; delinquent and non-performing loans were 0.42% of total period-end loans; this was the lowest quarterly level in nearly two decades. Loans/deposits measured 95% at period-end and tangible common equity/tangible assets measured 9.9%.

Loans. Total loans increased $44 million to $9.43 billion due to 1% increases in commercial real estate loans and residential mortgage loans. During the quarter, the Bank sold the remaining portfolio of Upstart-related consumer loans which totaled $7 million at year-end 2024. First quarter consumer loan net charge-offs included the net loss on this sale. The yield on average loans decreased by 8 basis points to 5.80% for the first quarter of 2025, compared to the fourth quarter of 2024. At period-end, 44% of loans repriced within three months.

Based on the supervisory definition of commercial real estate loans which excludes owner-occupied properties, the supervisory measure of commercial real estate loans to total bank regulatory capital measured 289% at period-end and was not materially changed from 292% at year-end 2024. The supervisory measure of construction loans to bank regulatory capital measured 52% and 54% at these respective dates.

Asset Quality and Allowance for Credit Losses on Loans. Loan performance indicators remained at historically favorable levels. Period-end non-performing loans measured 0.25% of total loans and accruing delinquent loans were 0.17% of total loans. The comparable measures at year-end 2024 were 0.26% for both of these measures.

Net charge-offs were 0.15% annualized compared to average loans, and measured 0.08% of average loans excluding Upstart-related loans. The ratio of the allowance to total loans increased to 1.24% at period-end from 1.22% at year-end 2024. The allowance related to residential mortgages and home equity loans increased primarily due to increases in qualitative factors related to economic, tariff, and recessionary concerns. This was partially offset by a decrease in the consumer loan reserve following the sale of the Upstart loan portfolio.

Criticized loans increased to 3.00% of total loans at period-end from 2.62% at year-end 2024. This was largely due to an increase in substandard loans to 1.56% of total loans from 1.20% for these respective dates. This primarily reflected two commercial real estate loans totaling $29 million which remained on accrual status. Potential problems loans, which are defined as accruing classified loans, increased to $124 million at period-end from $88 million at year-end 2024, primarily due to the above two loans.

Deposits and Borrowings. Total end of period deposits decreased $495 million to $9.88 billion primarily due to runoff of seasonally high year-end payroll related balances. Total end of period deposits excluding payroll and brokered deposits increased $11 million during the quarter. Average deposits increased quarter-over-quarter by $188 million, or 2%, due to $179 million in higher average balances maintained by payroll clients during the quarter. The average cost of deposits decreased 12 basis points to 2.18% in the first quarter of 2025 compared to the fourth quarter of 2024. Total period-end borrowings increased $247 million during the quarter to $685 million due to the seasonal decline in deposits.

Derivative Financial Instruments. The notional amount of derivative financial instruments totaled $5.2 billion at period end, compared to $4.9 billion at year-end 2024. Cash flow hedges decreased by $75 million and interest rate swaps on commercial loans increased by $156 million, or 8%. The net fair value of these instruments at period-end was a liability of $23 million, decreasing from a liability of $31 million at year-end 2024. Included in derivative financial instruments are $725 million in cash flow hedges on commercial loans, of which $200 million mature in 2025, $425 million mature in 2026, and $100 million mature in 2027. The Company recorded a $155 thousand charge to interest expense for the realized loss on cash flow hedging instruments in the first quarter of 2025, compared to a charge of $157 thousand in the first quarter of 2024.

Shareholders’ Equity. Total shareholders’ equity increased $29 million, or 3%, to $1.2 billion during the quarter. This included the benefit of an $11 million decrease to $95 million in the accumulated other comprehensive loss due to improved securities prices. The common equity Tier 1 ratio increased to 13.2% at period-end from 13.0% at year-end 2024. Book value per share increased by $0.66, or 3%, to $25.81 per share during the quarter, and the non-GAAP measure of tangible book value per share increased by $0.68, or 3%, to $25.50.

Liquidity and Cash Flows

Liquidity is defined as the ability to generate sufficient cash flows to meet all present and future funding requirements at reasonable costs for the Company, including the Bank. Liquidity management addresses both the Company’s ability to fund new loans and investments pursuant to commitments and as opportunities arise, to meet customer deposit withdrawals and to repay borrowings and subordinated notes as they mature. The Company views its liquidity as satisfactory for current conditions as well as for stressed scenarios in its liquidity testing models.

At March 31, 2025, liquid assets totaling $1.5 billion included $0.8 billion in cash and equivalents and $0.7 billion in securities available for sale. Liquid assets declined from $1.8 billion at year-end 2024 due to the runoff of seasonally high overnight deposits at year-end. Similarly wholesale funds increased to $1.1 billion from $0.9 billion, and consisted of $0.7 billion in borrowings and $0.4 billion in brokered deposits at period-end. The ratio of loans to deposits increased to 95% at period end from 90% at year-end 2024.

Unused borrowing availability at period-end from the Federal Home Loan Bank of Boston and the Federal Reserve Bank of Boston totaled $3.9 billion, compared to $4.1 billion at year-end 2024. Borrowings from these sources are supported by collateral, to the extent utilized. Cash balances at the holding company totaled $145 million at period-end, including the net proceeds from the $100 million capital placement in December 2024.

During the first quarter of 2025, seasonal deposit outflows were the primary use of funds which was funded from cash and equivalents and increased borrowings.

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 capital resources and regulatory capital is contained in the notes to the consolidated financial statements and in the Company's most recent Form 10-K.

The Company’s goal is to maintain sound capitalization and use capital generation to support organic growth and shareholder distributions in the form of dividends and stock repurchases. The Company’s goal is to maintain a “well-capitalized” regulatory designation under projected and stressed financial projections.

While the Company monitors the book value of equity and related metrics, it primarily manages capital based on regulatory capital measures, with a focus on the common equity Tier 1 capital ratio. This ratio measured 13.2% at period end, compared to 13.0% at year-end 2024.

In acting as a source of strength for the Bank, the Company relies in the long term on capital distributions from the Bank in order to provide operating and capital service for the Company, which in turn can access national financial markets to provide financial support to the Bank. Capital distributions from the Bank to the parent company presently require approval by the FDIC.

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 on Loans

• Fair Value Measurements

These 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 policies were significant in determining income and financial condition in the financial statements. There is further discussion of the application of these policies in the Company's most recent Form 10-K.