Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — KBW Community Bank Investor Conference 2008
21 slides from Beacon Financial's conference presentation, Jul 30, 2008
Slide 1: KBW Community Bank Investor Conference
KBW Community Bank Investor Conference July 29, 2008 America's Most EXciting Bank”
Slide 2: Our Growing Franchise
Our Growing Franchise $2.5 billion in assets 38 bank branches and 10 insurance offices Three-state franchise – Massachusetts, New York, and Vermont Only locally headquartered financial services company in primary market $800 million in assets under management Insurance agency with almost 100 profess
Slide 3: Investor contacts
Kevin P. Riley EVP and CFO Phone: (413) 236-3195 Email: kriley@berkshirebank.com P.O. Box 1308, Pittsfield, MA 01202-1308 David H. Gonci Corporate Finance Officer Phone: (413) 281-1973 Email: dgonci@berkshirebank.com Shepard D. Rainie EVP and Chief Risk Officer Phone: (413) 236-3176 Email: srainie@b
Slide 4: Attractive Markets – MA, NY, VT
Attractive Markets – MA, NY, VT Residential property values more stable in Western MA Foreclosures remain low Albany prices – no decline (As of May 2008) HOUSE PRICES Berkshire markets still expanding Low unemployment IBM announces $1.5 billion New York Tech Valley investment (July 2008) (As of May
Slide 5: Building a Distinctive Culture
Building a Distinctive Culture Our Vision Core Values
Slide 6: Creating Value
Creating Value Veteran management team Diverse revenue sources Performance driven Differentiated brand and culture Leader in core markets Opportunity for growth in new markets
Slide 7: Solid First Half 2008 Results
Solid First Half 2008 Results 64.34% 60.60% Efficiency ratio 22.49% 31.21% Fee Income/Revenues 3.42% 3.43% Net Interest Margin 7.44% 7.10% Return on Equity 0.71% 0.94% Return on Assets (12%) 6% Change in EPS (year-to-year) SNL Bank and Thrift Median (as of 7/23/08) BHLB Performance Measure
Slide 8: 2008 Plan for Earnings Growth
2008 Plan for Earnings Growth EPS of $2.16 – 14% growth from core 2007 Record earnings of $22.4 million – 26% growth from core 2007 Higher net interest margin – from liability sensitive to neutral/asset sensitive Modest loan growth – low single digit Fee income at 30% of revenue – emphasis on wealth
Slide 9: Record Revenues and Earnings per Share in 2008
Record Revenues and Earnings per Share in 2008 Revenue growth from acquisitions and organic growth 2008 core EPS up 6% benefiting from higher margins and efficiencies Pre-provision core EPS up 15% in Q2 2008 Note: Core and GAAP EPS the same in last five quarters except for 3Q07 (core $0.49 and GAAP
Slide 10: Efficiency Ratio Now Improving
Efficiency Ratio Now Improving Spike in 2007 from insurance acquisition and de novo branches Bank ratio 58 – 60% excluding insurance Benefiting from higher margins, growth, and expense control Insurance ratio 66% due to different revenue/cost mix Note: Efficiency ratio is computed by dividing total
Slide 11: Net Interest Margin Highest Since 2003
Net Interest Margin Highest Since 2003 Benefited from Factory Point acquisition and balance sheet restructuring in Q3 2007 Utilizing interest rate swaps to manage interest rate risk Diligent pricing on deposit and loan products 3.45%
Slide 12: Fee Income Growing Strongly
Fee Income Growing Strongly Fees provide 30% of revenue Fee growth of 20% estimated for 2008
Slide 13: Loan Mix Managed for Quality Growth
Loan Mix Managed for Quality Growth Higher growth in commercial real estate, and commercial & industrial Indirect lending running off Residential and home equity focus on retail side Strong credit disciplines 1,978
Slide 14: Favorable Deposit Growth
Favorable Deposit Growth Strong growth in checking accounts Growing deposit base in New York and Pioneer Valley Personal core deposit growth offsetting high cost municipal run-off 1,811
Slide 15: Solid Credit Quality
Solid Credit Quality * Excludes $4 million (0.23%) charge for one fraud related commercial loan Nonperforming Loans to Total Loans Net Charge-offs to Average Loans Annualized
Slide 16: Diversified Construction and Development Loans
Diversified Construction and Development Loans $132 million Commercial C&D portfolio was 7% of total loans at 6/30/08 No C&D non-accruing at 6/30/08 $35 million Consumer Construction portfolio to individuals for single home construction as of 6/30/08 (millions) Other Consumer Residential Builder Sin
Slide 17: Seasoned Home Equity Portfolio
Seasoned Home Equity Portfolio $174 million balance at 6/30/08 (9% of total loans) 66% of balance acquired with Woronoco ($86 million in 2005) and Factory Point ($29 million in 2007) Conforming underwriting, maximum 80% CLTV No sub prime or Alt A programs Negligible delinquencies and charge-offs Res
Slide 18: Conservative Investment Portfolio
Conservative Investment Portfolio Unrealized loss of 21 basis points on $242 million total 6/30/08 No Government Sponsored Enterprise (GSE) equity securities except FHLB Boston stock $14 million corporate debt securities with $1.4 million unrealized loss (includes $9 million trust preferred) $3 mill
Slide 19: Solid Capital Footings
Solid Capital Footings Tangible equity at 6.3% of assets at 6/30/08, up from 6.2% at year-end 2007 Core return on tangible equity of 19% in first half of 2008 – strong tangible capital formation rate Tangible book value of $14.36 at 6/30/08, growing at 8% annualized rate in first half of 2008 Stock
Slide 20: Why Invest in Berkshire Hills
Why Invest in Berkshire Hills Strong and experienced management team Distinctive culture and core values Strong credit culture and asset quality discipline Above average growth in loans, deposits and fee income Earnings performance at record levels and growing Stock valuation metrics are attractive
Slide 21: For Questions, Please Contact
FOR QUESTIONS, PLEASE CONTACT: David Gonci, Corporate Finance Officer 413-281-1973 - dgonci@berkshirebank.com Ann-Marie Racine, Investor Relations Contact 413-236-3239 - aracine@berkshirebank.com Forward Looking Statements This presentation contains forward-looking statements (within the meaning of
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