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Berkshire Hills to record Q3 charge related to loan in default

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Berkshire Hills to record Q3 charge related to loan in default

Berkshire Hills Bancorp Inc. will record a charge-off on the full balance of a loan relationship determined to be in default as a result of potentially fraudulent activity by the borrower and related interests.

Berkshire Hills will take an after-tax charge of about $12 million, or 23 cents per share, to third-quarter net income. Unit Berkshire Bank owned an interest with an approximate balance of $16 million in the loan. The company said it has no other lending or deposit exposure to the borrower.

In a September research note, Sandler O'Neill analysts Mark Fitzgibbon and John LaViola suspected the borrower is MyPayrollHR, based on the size of the loan and the timing of the event.