Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Q2 2021 Earnings Presentation
20 slides from Beacon Financial's earnings presentation, Jul 21, 2021
Slide 1: Berkshire Hills Bancorp 2Q 2021 Earnings Presentation
BERKSHIRE HILLS BANCORP 2 Q 2 0 2 1 E AR N I N G S P R E S E N TAT I O N July 21, 2021
Slide 2: Forward-Looking Statements
F O R WA R D - L O O K I N G S TAT E M E N T S 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, including statements regarding our outlook for earnings,
Slide 3: 2Q 2021 - Highlights of the Quarter
2Q 2021 - HIGHLIGHTS OF THE QUARTER Solid financials with YoY improvements across all key metrics..... • EPS growth: GAAP EPS of $0.43 & Adjusted EPS of $0.44 (+$0.17 & +$0.12 QoQ respectively) Solid • Revenue growth: Adjusted revenue down -3% QoQ and up +4% YoY Financials • Lower expenses: Adjusted
Slide 4: 2Q 2021 Financial Highlights - Income Statement
2 Q 2 0 2 1 F I N A N C I A L H I G H L I G H T S - I N C O M E S TAT E M E N T GAAP Basis ($M) 2Q20 1Q21 2Q21 QoQ % YoY % HIGHLIGHTS Net interest income, non FTE $ 77.6 $ 75.1 $ 75.4 0% -3% On an adjusted basis: 1 Non-interest income 17.4 26.2 22.0 -16% 27% 1 • NII and NIM stable over last 3 quarte
Slide 5: 2Q 2021 Financial Highlights - Average Assets
2 Q 2 0 2 1 F I N A N C I A L H I G H L I G H T S – AV E R A G E A S S E T S -2% ($M) -0% HIGHLIGHTS 11,966 11,710 Loans -6% QoQ and -22% YoY driven by: 11,694 3.83% 3.84% 3.74% • Origination activity offset by: 2,491 3,546 4,009 • PPP forgiveness (in C&I book) in 2Q21 – $271M of loans forgiven with
Slide 6: 2Q 2021 Financial Highlights - Average Liabilities
2 Q 2 0 2 1 F I N A N C I A L H I G H L I G H T S – AV E R A G E L I A B I L I T I E S -4% ($M) -1% HIGHLIGHTS 11,744 303 11,309 11,243 • Significant improvement in cost of funds 0.92% 358 351 to 36bps; down 12bps QoQ and 56bps YoY 2,343 2,537 2,787 • Cost of deposits down to 25bps; down 0.79% 11bps
Slide 7: 2Q 2021 Financial Highlights - Funding Trends
2Q 2021 FINANCIAL HIGHLIGHTS - FUNDING TRENDS DEPOSITS ($M, AVG BAL) 1 +3% HIGHLIGHTS 9,243 9,419 9,370 9,284 9,506 • Low cost deposits (non-interest bearing and NOW, money market and savings) at 83% of total deposits 4,645 4,731 4,896 5,042 5,109 NOW, Money Market, Savings (N,M&S) • DDA at 29% of t
Slide 8: 2Q 2021 Financial Highlights - Fee Revenue
2Q 2021 FINANCIAL HIGHLIGHTS – FEE REVENUE ($K) HIGHLIGHTS +27% -16% • Adjusted Non-Interest Income2 -14% QoQ primarily driven by: 26,193 • Higher interchange, credit card, deposit 22,011 & swap fees and continuing growth in SBA originations in 2Q21 offset by: 17,381 ▪ Seasonally driven higher Wealt
Slide 9: 2Q 2021 Financial Highlights - Expenses
2Q 2021 FINANCIAL HIGHLIGHTS - EXPENSES ($M) HIGHLIGHTS -2% -8% • Adjusted expenses -8% QoQ primarily 75 driven by lower: 71 69 • Professional services expenses • Compensation expenses and payroll 71% taxes 71% 68% • Occupancy costs due to decreased branch maintenance expense • Efficiency ratio impr
Slide 10: 2Q 2021 Financial Highlights - Asset Quality
2Q 2021 FINANCIAL HIGHLIGHTS – ASSET QUALITY ($M) SIGNIFICANT IMPROVMENTS IN OVERALL ASSET QUALITY Loan Modifications – COVID deferrals Delinquency Trends -94% 1.18% 1,542 93 93 88 1.15% 91 0.92% 17.0% 0.99% 0.98% 28 447 35 48 41 66 350 -54% 18 214 47 65 56 48 5.0% 98 4.3% 2.8% 45 1.4% 2Q20 3Q20 4Q2
Slide 11: 2Q 2021 - COVID Sensitive Segments
2Q 2021 – COVID SENSITIVE SEGMENTS Covid sensitive segments include: Hospitality, Firestone, Restaurant & Nursing/Assisted Living loans ($M) SIGNIFICANT IMPROVMENTS IN COVID SENSITIVE SEGMENT ASSET QUALITY Loan Balances COVID Deferrals -9% -88% -2% 599 903 912 868 840 822 133 315 324 321 310 298 273
Slide 12: 2Q 2021 - Capital and Liquidity
2 Q 2 0 2 1 – C A P I TA L A N D L I Q U I D I T Y Capital Ratios ($M) 2017 2018 2019 2020 1Q21 2Q211 HIGHLIGHTS Common equity tier 1 ratio 11.0% 11.4% 12.1% 13.8% 14.2% 14.3% • CET1 and Total Capital Ratio for 2Q21 at 14.3% and 16.7% Tier 1 capital ratio 11.2% 11.6% 12.3% 14.1% 14.5% 14.6% respecti
Slide 13: Strengthening Berkshire Team and Winning Business
STRENGTHENING BERKSHIRE TEAM AND WINNING BUSINESS Retaining… Building… Retaining talented bankers & profitable customers – Adding new talented bankers and team leaders – • High retention rate of ~90% for all frontline bankers • Ben Garcia; ABL, NY; (Wells Fargo) • High retention rate of ~94% for Com
Slide 14: 2Q 2021 - BEST Progress vs Goal
2Q 2021 – “BEST” PROGRESS VS GOAL BEST 3 YEAR TARGET 10-12% 100-105 bps $180-200M Top 25% Top 25% ROTCE ROA PPNR2 ESG3 NPS4 Increase ROTCE Increase ROA Increase PPNR Become top quartile Become top quartile by 700-900bps* by 75-80bps* by $80-100M* bank by leading ESG Net Promoter Score indexes in US*
Slide 15: Appendix
APPENDIX 15 «BerkshireHillsBancorp
Slide 16: Non-GAAP Reconciliation
N O N - G A A P R E C O N C I L I AT I O N At or for the Quarters Ended June 30, Sept. 30, Dec. 31, March 31, June 30, (in thousands) 2020 2020 2020 2021 2021 Total revenue from continuing operations (A) $ 94,971 $ 97,018 $ 99,036 $ 101,286 $ 97,404 10 Adj: Net securities losses/(gains) (1) (822) 1,
Slide 17: Non-GAAP Reconciliation - Notes
N O N - G A A P R E C O N C I L I AT I O N - N O T E S (1) Net securities losses/(gains) 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 b
Slide 18: 2Q 2021 - Hospitality & Firestone
2 Q 2 0 2 1 – H O S P I TA L I T Y & F I R E S T O N E 4.5% of Total Jun-21 Loans 2.9% of Total Jun-21 Loans Hospitality ($M) 3Q20 4Q20 1Q21 2Q21 QoQ % Firestone ($M) 3Q20 4Q20 1Q21 2Q21 QoQ % Loans1 $330 $301 $302 $317 5% Loans $258 $246 $227 $207 -9% COVID Deferrals 160 146 109 68 -38% COVID Defer
Slide 19: 2Q 2021 - Restaurants & Nursing/Assisted Living
2 Q 2 0 2 1 – R E S TA U R A N T S & N U R S I N G / A S S I S T E D L I V I N G 1.7% of Total Jun-21 Loans 2.5% of Total Jun-21 Loans Restaurants ($M) 3Q20 4Q20 1Q21 2Q21 QoQ % Nursing/Assisted Living ($M) 3Q20 4Q20 1Q21 2Q21 QoQ % Loans $135 $128 $123 $121 -2% Loans $189 $193 $187 $177 -5% COVID D
Slide 20: 2Q 2021 - PPP Impact
2 Q 2 0 2 1 - P P P I M PA C T Balance Sheet ($M) 2Q20 3Q20 4Q20 1Q21 2Q21 Avg Earning Assets $11,966 $11,843 $11,642 $11,710 $11,694 Avg Loans 9,476 9,203 8,596 7,869 7,416 Avg PPP Loans (in C&I) 461 707 685 546 321 Avg Loans Ex PPP Loans 9,015 8,496 7,911 7,323 7,095 EOP PPP Loans 706 708 633 444
Berkshire Hills Bancorp — Q2 2021 Earnings Presentation on 6ix