Upside To The Economic Downturn

With all the bad news about Banks in this last year, it seems that local Berkshire Banks are doing pretty well.

That's the news Berkshire Eagle Business reporter, Tony Dobrowolski, wrote about in the Saturday May 23 and Tuesday May 26 issues of the Berkshire Eagle. In his Saturday article, Berkshire Bank To Return $40 Million To Treasury, Dobrowolski reports:

Berkshire Bank has received approval to return $40 million that it received last fall as part of the federal Troubled Asset Relief Program. Following approval from the U.S. Treasury Department, the bank said it expects to return the money by the end of the month, drawing funds from its cash assets. It does not expect to sell additional stock to repay the government. Berkshire received the funds as part of the Capital Purchase Program, which was a core component of the Troubled Asset Relief Program — or TARP — that set aside $787 billion to help keep the country's credit flowing. The Capital Purchase Program was only available to banks that already had strong reserves."

Legacy Bank had earlier requested $20 million from TARP and then its Board turned it down. Apparently they didn't like the requirements that went along with accepting the money. Turnabout from Berkshire Bank appears to be for similar reasons. The reason for the loan originally was to release credit to other needy banks. The May 23 report indicates they can expand credit without the TARP. National controversy surrounding TARP appeared to have its impact on Berkshire Bank's decision as well.

Dobrolowski's Tuesday article, Local Banks Make The List, reports,

"Berkshire County's two largest banks are the only county companies included in the Boston Globe's recent rankings of the top 100 publicly traded corporations in Massachusetts. Berkshire Hills Bancorp of Pittsfield, the holding company for Berkshire Bank, is ranked 41st. Legacy Bancorp of Pittsfield, the holding company for Legacy Banks, is 84th. Berkshire Bancorp was 78th in The Globe's top 100 rankings last year. This is Legacy's first time on the list, said the bank's President and CEO J. Williar Dunlaevy."I'm proud for the bank," Dunlaevy said on Friday, adding that companies that make the list usually benefit from their size. "I have to give credit to the bank and the community. I think it's great that Berkshire County would have two banks among the top 100 firms in the state."

Last November we wrote a blog post about Berkshire Bank, Berkshire Bank Applies For Bailout Money. Conditions in November involving banks indicated that "bailout" meant unsound. Berkshire Bank and Legacy did not believe themselves unsound. In the case of Berkshire Bank they wanted to expand credit lending to area banks and businesses. Their recent statement indicates they can do this without either government help or stockholder help, that sufficient cash reserves exist. Their turnabout is also to restore whatever lack of confidence local consumers may have had in the bank with their initial acceptance of government funds.

This represents a glimmer of good news in an otherwise large ocean of bad news about banks. Thought you would like to hear a little good news for a change!!

Berkshire Bank Applies For Bailout Money

November saw continued effects of the economic crisis, only this time it is Pittsfield's own Berkshire Bank.

In an article, Berkshire Bank has applied for $40 million from U.S. financial bailout, dated November 21, in the Berkshire Eagle, Tony Dobrowolski reported that President and CEO, Michael Daly said that "funding from the Troubled Asset Relief Program or TARP is available only to banks that are financially strong. Berkshire Bank had $333 million in capital during the third quarter and has posted record earnings this year...The idea of TARP has been to find the strongest banks they can to access additional capital. The stronger banks (then) can use their capital reserves to help weaker banks that may be looking for lending partners."

Dobrowolski also reported Daly's intentions should the federal application be accepted. The bank will invest the money while looking for loan opportunities.

According to Berkshire Bank's website, the bank has $2.5 billion dollars total assets, $781 million in assets under management, and 38 branches, and that it is the largest bank headquartered in Western Massachusetts. It is also heavily involved in business and communitiy activities in Pittsfield and Berkshire County.

To date this is the only western Massachusetts bank to take advantage of the Federal $700 billion bailout.