Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Merger or Acquisition (August 2007)
24 slides from Beacon Financial's merger presentation, Aug 1, 2007
Slide 1: Michael P. Daly, President and Chief Executive Officer
Michael P. Daly President and Chief Executive Officer NASDAQ : BHLB www.berkshirebank.com August 1, 2007
Slide 2: In the last two years we have...
In the last two years we have... Grown from 11 stores to 48 stores Expanded from Berkshire County into three states in our four state target market Became one of the top dozen banks in country in insurance revenue as percentage of operating revenue Consistently grown basic business lines at double d
Slide 3: Transitioning into a Regional Financial Enterprise
Transitioning into a Regional Financial Enterprise 5.9% Tangible equity/assets 12.7% Equity/assets 7.10% ROE 0.88% ROA 48 Stores $0.7 billion Assets under management $23.8 million Annualized net income $2.6 billion Total assets Proforma Combined 3/31/07 Size Berkshire Bank (31 branch stores) Factory
Slide 4: Key Steps in Our Growth
Key Steps in Our Growth Woronoco Bancorp – 10 branches - $850 million in assets Greater Springfield Massachusetts Region 15% deposit growth in 2006 25% commercial loan growth in 2006 New York de Novo Program – 10 branches in 2005 – 2007 New York Albany Capital Region $132 Million in deposits at June
Slide 5: New England Market Strengths
New England Market Strengths Map Source: Moody’s/Economy.com 5/24/07 – Map of Expansion New England Economic Partnership Compared to US average: Higher per capita income Lower unemployment Higher economic growth Primary market strengths: Quality of life Low, stable cost of living Access to New York
Slide 6: Expanded Leadership for a Regional Company
Expanded Leadership for a Regional Company Lawrence A. Bossidy Non-Executive Chairman of the Board Michael P. Daly President & Chief Executive Officer Retired Chairman & CEO of Honeywell International and Allied Signal, Former Vice Chair of General Electric Thomas W. Barney, CFP Senior Vice Presiden
Slide 7: Our Goals for Creating Value
Our Goals for Creating Value Create nationally recognized brand and business style Expand strong, high quality franchise through motivated teamwork and relationship building Take market share as a regional bank from national and community competitors as only locally headquartered regional bank in pr
Slide 8: How We Differentiate Ourselves: Culture and Brand
How We Differentiate Ourselves Enthusiastic and focused teamwork Culture Create exciting brand experience Brand
Slide 9: How We Differentiate Ourselves: Process and Relationships
How We Differentiate Ourselves Six Sigma service excellence, business sense, productivity, profitability Process Grow the “pool” of customers, products, and cross-sales Relationships
Slide 10: Creating a Culture of Excitement
Creating a Culture of Excitement “I’m So Excited!” – Pointer Sisters’ music and lyrics “America’s Most Exciting Bank” – service mark An exciting, memorable customer experience Employees “live” the brand everyday
Slide 11: Ongoing Growth in Core Earnings
Ongoing Growth in Core Earnings CAGR = 22% Note: De novo branch costs totaled $1.8 million in 2006. CAGR before de novo costs is 26%. ($ Millions) Pro forma Annualized w/FAPB $23.8 $17.6 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 2002 2003 2004 2005 2006
Slide 12: Diversified Loan Growth Based on Commercial Loans
CAGR = 24% $1,699 Diversified Loan Growth Based on Commercial Loans ($ Millions) Pro forma Annualized w/FAPB $1,988 $376 $707 $905 Note: Pro forma includes Factory Point as of 3/31/07. $757 $599 $343 $0 $400 $800 $1,200 $1,600 $2,000 2002 2003 2004 2005 2006 Commercial Residential Consumer
Slide 13: Deposit Growth Built on Core Accounts
CAGR = 18% $1,522 Deposit Growth Built on Core Accounts ($ Millions) Pro forma Annualized w/FAPB $1,825 $357 $440 $1,028 Note: Pro forma includes $13 million planned runoff of brokered time deposits. Pro forma includes Factory Point as of 3/31/07. $831 $370 $321 $0 $400 $800 $1,200 $1,600 $2,000 200
Slide 14: Net Interest Income Driven by Balance Sheet Growth
Net Interest Income Driven by Balance Sheet Growth Pro forma Annualized w/FAPB $75 CAGR = 10% $60 $0.0 $25.0 $50.0 $75.0 2002 2003 2004 2005 2006
Slide 15: Emphasis on Fee Income Growth
Emphasis on Fee Income Growth CAGR = 47% ($ Millions) Pro forma Annualized w/FAPB $28 $14 $5 $9 $22 2006 Pro forma w/Insurance Acquisition $6 $3 $13 $0 $4 $8 $12 $16 $20 $24 $28 2002 2003 2004 2005 2006 Deposit & loan fees Wealth management Insurance
Slide 16: Careful Attention to Operating Efficiencies
Careful Attention to Operating Efficiencies Excluding de novo branch costs 58.5% 56.1% Pro forma Annualized W/FAPB Efficiency ratio impacted by insurance and de novo branches 60.6% 57.7% 52.0% 54.0% 56.0% 58.0% 60.0% 62.0% 64.0% 66.0% 2002 2003 2004 2005 2006
Slide 17: Double Digit Core EPS Growth
Double Digit Core EPS Growth CAGR = 11% (13% before de novo costs) Note: De novo branch costs total $0.14 per share (after tax) in 2006. $1.32 $1.55 $1.92 $2.11 $2.00 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 2002 2003 2004 2005 2006
Slide 18: Effective Capital Utilization
Effective Capital Utilization 2007 Pro forma Annualized w/FAPB 6.0% Ratio of Tangible Equity/Tangible Assets 6.7% 0.0% 5.0% 10.0% 15.0% 2002 2003 2004 2005 2006
Slide 19: Conservative Asset Quality
Conservative Asset Quality Pro forma 3/31/07 w/FAPB 0.37% 0.10% 0.35% 0.07% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 2002 2003 2004 2005 2006 Nonperforming Assets/Total Assets Annualized Net Charge-offs/Average Loans
Slide 20: Compound Annual Growth 2002 - 2006
Compound Annual Growth 2002 - 2006 13% Core EPS before de novo costs 11% Core EPS 22% Core earnings 16% Core operating revenue Note: Core operating revenue includes annualized insurance revenues acquired in 2006.
Slide 21: BHLB ywawherkshirebank.com Page kSHIREHILCS)
BHLB ywawherkshirebank.com Page 21 kSHIREHILCS)
Slide 22: For questions, please contact
August 1, 2007 For questions, please contact: David Gonci Corporate Finance Officer (413) 281-1973 dgonci@berkshirebank.com 22
Slide 23: Forward Looking Information
Forward Looking Information Statements contained in this presentation contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current fact
Slide 24: Reconciliation of Non-GAAP Financial Measures
Berkshire Hills Bancorp, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures (Dollars in thousands, except share data) 2002 2003 2004 2005 2006 Net income (A) 2,097 $ 8,965 $ 11,509 $ 8,226 $ 11,263 $ Less: Gain on sale of securities, net (15,143) (3,077) (1,402) (3,532) 3,130 Plus:
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