Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Merger or Acquisition (June 2016)
20 slides from Beacon Financial's merger presentation, Jun 27, 2016
Slide 1: Forward Looking Statements
Forward Looking Statements This document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about the proposed merger of Berkshire Bank and First Choice. These statements include statements regarding the anticipated closing date of
Slide 2: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES This presentation references non-GAAP financial measures incorporating tangible equity and related measures, as well as core deposits. These measures are commonly used by investors in evaluating business combinations and financial condition. The calculation of tangible bo
Slide 3: Additional Information and Where to Find It
ADDITIONAL INFORMATION AND WHERE TO FIND IT In connection with the proposed merger, Berkshire will file with the Securities and Exchange Commission (“SEC”) a Registration Statement on Form S-4 that will include a Proxy Statement of First Choice and a Prospectus of Berkshire, as well as other relevan
Slide 4: Why First Choice?
Why First Choice? Financially attractive acquisition that immediately improves earnings, profitability, capital and liquidity ratios and further diversifies sources of revenue Upgrades and enhances Berkshire’s existing residential mortgage business with a nationally recognized “best in class” platfo
Slide 5: Acquisition of a $1.1 billion asset bank for 109% of Tangible Book Value
Acquisition of a $1.1 billion asset bank for 109% of Tangible Book Value Tangible book value (TBV) dilution at closing of 0.68% or $0.13 Targeted TBV earn-back of less than 1.25 years using the cross-over method¹ Targeted TBV earn-back of approximately 1.3 years using the simple method² Targeted ear
Slide 6: A Compelling Strategic Combination
A Compelling Strategic Combination Will enhance Berkshire’s fee income to greater than 30% of total operating revenues First Choice’s mortgage banking platform complements and enhances Berkshire’s residential mortgage compliance culture Banking franchise operates in a superior demographically attrac
Slide 7: Combined Franchise
Full service regional bank with a distinctive brand and culture, strong middle market opportunities and a solid foundation for growth Market capitalization based on $25.51 assumed stock price Source: BHLB and First Choice company financials and pro forma analysis Assets: $8.9 billion Loans: $6.2 bil
Slide 8: First Choice Bank Overview
Founded in 2007 $1.1 billion in total assets $436 million in net loans $906 million in deposits 8 Branches; $113 million in deposits per branch 6 in NJ; 2 in PA Scalable community banking platform One of the largest community banks operating in Mercer County, New Jersey 6th in deposit market share¹
Slide 9: Greater Princeton and Philadelphia Markets
Markets possess above average household income and estimated income growth Limited number of regional banking competitors in market area Mercer County possesses non-cyclical industry base consisting of healthcare, education, professional and business services, government, transportation and public u
Slide 10: First Choice Loan Services Overview
Note: Financial data as of 12/31/15 Source: First Choice Bank; for more information on First Choice Loan Services please visit “www.fcloans.com” First Choice Loan Services Overview Leading Residential and Consumer Mortgage Originator 2015 Funded Loan Production: $2.5 billion Concentrated on conventi
Slide 11: First Choice Loan Services Operating Metrics
Note: No servicing assets retained; borrower profile FY15 Core EBITDA excludes intercompany and all non-recurring items Source: First Choice Bank First Choice Loan Services Operating Metrics Purchase mortgage origination focused 72% purchase - distributed retail origination volume in 2015 Attractive
Slide 12: Transaction Overview
Merger Partner First Choice Bank (Private) Consideration Structure 0.5773 shares of BHLB for each outstanding First Choice share1 Aggregate Deal Value $111.7 million Consideration Mix 100% stock (represents 4.3 million BHLB shares) Termination Fee $4.1 million or approximately 3.5% of the aggregate
Slide 13: Transaction Assumptions
Key Assumptions Cost Savings Approximately 17% One-Time Transaction Charges $14.0 million after-tax Loan Mark Total mark of $29 million (6.4% of gross loans) Includes credit mark of ~$22 million Loan Loss Reserve Reversal of FCB’s loan loss allowance ($13.7 million) Core Deposit Intangible $4.2 mill
Slide 14: Attractive Transaction Multiples
BHLB / First Choice Bank Regional Transactions¹ Price / 2016 Est. Earnings 18x 23x Price / Book Value 108% 117% Price / Tangible Book Value 109% 120% Core Deposit Premium2 1.4% 4.4% Note: FCB’s financials are as of and for the twelve months ended 12/31/15; see appendix for TBV reconciliation Represe
Slide 15: Berkshire's Acquisition History
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Acquired Woronoco Bancorp, Inc. 6/1/2005 Assets: $898MM MA Acquired 6 independent insurance agencies 2006 MA Acquired Factory Point Bancorp, Inc. 9/21/2007 Assets: $339MM VT Acquired Rome Bancorp, Inc. 4/1/2011 Assets: $330MM NY Acquir
Slide 16: Appendix
Loan Composition Deposit Composition Appendix
Slide 17: Loan Composition
Total Loans: $5.73 billion Yield on Loans: 4.13% Note: Financial data as of quarter ended 3/31/16; yields reflect quarterly values; excludes HFS loans Source: Company financials Loan Composition BHLB Total Loans: $0.45 billion Yield on Loans: 4.40% FCB Combined – BHLB/FCB Total Loans: $6.18 billion
Slide 18: Deposit Composition
Total Deposits: $5.58 billion Cost of Deposits: 0.51% Note: Financial data as of quarter ended 3/31/16; costs reflect quarterly values Jumbo deposits defined as time deposits with balances greater than $100,000 Source: Company financials, SNL Financial Deposit Composition BHLB FCB Combined – BHLB/FC
Slide 19: Contact
If you have any questions, please contact: Allison O’Rourke 99 North Street Pittsfield, MA 01202 Investor Relations Officer (413) 236-3149 aorourke@berkshirebank.com
Slide 20: Contact
BHLB LLISTED] NYSE BERKSHIRE HitisBaNcoRP POPP POPODEEL EEL Le If you have any questions, please contact: Allison O’Rourke 99 North Street Pittsfield, MA 01202 Investor Relations Officer (413) 236-3149 aorourke@berkshirebank.com Kite is exciting. Let us help*
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