Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Merger or Acquisition (May 2017)
16 slides from Beacon Financial's merger presentation, May 22, 2017
Slide 1: Berkshire Hills announces acquisition of Commerce Bancshares
May 22, 2017 Berkshire Hills announces acquisition of Commerce Bancshares 1
Slide 2: Overview of the Transaction
Overview of the Transaction Strategically Compelling • Accelerates growth in Greater Boston and Eastern MA • Builds on existing ~$1.5 billion in loans and ~$200 million in Boston - based deposits (1) • Enhances density in desirable and growing markets • Pro forma market share rank of #1 in the city
Slide 3: Transaction Summary
Transaction Summary Merger Partner • Commerce Bancshares, parent company of Commerce Bank & Trust Transaction Structure • Fixed exchange ratio: 5.9mm shares of BHLB stock (0.9300x exchange ratio) (1) • Deal value: $209 million based on May 19, 2017 BHLB closing price • Consideration: 100% stock (1)
Slide 4: Largest Regional Bank Headquartered in Massachusetts
Largest Regional Bank Headquartered in Massachusetts (1) Pro forma metrics (2) » Assets: $11.5 billion » Loans: $ 8.2 billion » Deposits: $ 8.7 billion » Revenue (1Q17 annualized) : $475 million » Branches: 113 » Footprint: New England, New York, New Jersey and Pennsylvania » Market Cap: approximate
Slide 5: Commerce Bank Overview
Commerce Bank Overview Established Banking Platform with Commercial Lending Expertise, Strong Growth and Access to Vibrant Markets • Founded in 1955 in Worcester, MA • $2.2 billion in total assets • $1.5 b illion in loans • $2.0 billion in deposits • 16 branches; $ 61 million median deposits per bra
Slide 6: Complementary Balance Sheet Profiles
Loan composition Deposit Complementary Balance Sheet Profiles Consumer 15% Residential real estate¹ 34% CRE 29% C&D 5% C&I 17% Transaction 27% Savings & MMDA 37% Total time 2 36% Combined Consumer 6% Residential real estate¹ 15% CRE 30% C&D 5% C&I 44% Transaction 24% Savings & MMDA 65% Total time 2
Slide 7: Boston Expansion
Boston Expansion Establishing the first Regional Bank headquartered in Boston in decades (1) Worcester MA Boston MA Population 940M 4,832M GDP (2015) $39B $397B % Change Y/Y 3.6% 4.6% Avg household income $90M $112M Unemployment rate (12/2016) 3.0% 2.3% Total deposits $17B $309B % Change Y/Y 7.1% 2.
Slide 8: Transaction Assumptions
Transaction Assumptions Key Assumptions Synergies • 20% of Commerce’s expense base • $32 million one - time transaction costs (pre - tax) Core deposit intangible • ~$19mm core deposit intangibles or ~1% Regulatory costs • Berkshire has been preparing to cross $10bn for several years – expected incre
Slide 9: Estimated Pro Forma Impact
Estimated Pro Forma Impact Key Transaction Impacts to Berkshire Hills (1) 2018E EPS Accretion (2) ~4 - 5% IRR ~15%+ Tangible Book Value Dilution ~(0.7%) Tangible Book Value Earnback ~1.0 yr As of March 31, 2017 Capital Ratios Berkshire Hills Commerce Pro Forma (3) TCE / TA 7.6% 6.9% 7.6% +/ - Levera
Slide 10: Pro Forma Capital Raise Scenarios
Pro Forma Capital Raise Scenarios Pro Forma For Acquisition and Capital (1) 12/31/2017 BHLB Without Capital Raise $100 Million Capital Raise $160 Million Capital Raise Key Transaction Impacts to Berkshire Hills 2018E EPS Accretion (2) 2.57 (3) 10.62% 4.43% 1.47% Initial TBV Accretion (Dilution) - 5.
Slide 11: Well prepared for $10 Billion Asset Threshold
Current Strategy: » This pending acquisition allows Berkshire to meet the breakeven point at which it can fully absorb the impact of additional regulatory burden » Seeking to manage transition efficiently and support growing ROA from scale efficiencies » Additional impacts include: » ~$5mm in lost r
Slide 12: Acquisition history timeline 2005-2017
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 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 13: Appendix
Appendix ot Life is exciting. Let us help.
Slide 14: 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 and Commerce Bancshares. These statements include statements regarding the anticipated closing date
Slide 15: 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 tangibl
Slide 16: 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 Commerce Bancshares and a Prospectus of Berkshire, as well as othe
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