Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Sterne Agee Financial Institutions Investor Conference 2013
23 slides from Beacon Financial's conference presentation, Feb 12, 2013
Slide 1: Sterne Agee Financial Institutions Investor Conference February 11–13, 2013
Sterne Agee Financial Institutions Investor Conference February 11 – 13, 2013
Slide 2: Presenters and contacts
David H. Gonci Capital Markets Director dgonci@berkshirebank.com 413-281-1973 Michael P. Daly Chairman, President & CEO mdaly@berkshirebank.com 413-236-3194 1 Allison P. O’Rourke VP, Investor Relations Officer aorourke@berkshirebank.com 413-236-3149 Richard M. Marotta EVP, Chief Risk Officer rmarott
Slide 3: Berkshire Hills Bancorp
Berkshire Hills Bancorp Regional bank with $5.3 billion in assets 75 full service branches in 4 states: MA, NY, CT and VT 10 commercial and residential lending offices in Central/Eastern MA Retail and commercial banking, insurance and wealth management 2 Presence in high value, strong markets – I-90
Slide 4: Creating Shareholder Value
Creating Shareholder Value Financial Drivers Organic revenue growth Core return on equity Core EPS growth Human Capital Team and culture Process and infrastructure Team recruitment 3 Market Dynamics Regional presence Competitive positioning Fee Businesses Mortgage banking Insurance Wealth management
Slide 5: Organic Growth Positioning
Organic Growth Positioning Western New England (Berkshire County/Vermont) – Top market share; stable markets; higher margins New York (Albany and Central NY) – Solid regional share; growing markets; strong de novo growth Hartford/Springfield – Solid regional share; central location; market opportuni
Slide 6: Revenue Growth
Revenue Growth Growth From Multiple Strategies 5 Quarterly Revenue ($ million) Note: Revenue in 11Q3 excludes $2 million non-core gain on Legacy stock; in 12Q4 excludes $1.4MM non-core gain on Beacon stock. Growth includes organic, de novo, product and M&A strategies Growth results from spread incom
Slide 7: Increased Core Return on Equity
Increased Core Return on Equity Percent 6 Key metric for performance goals Target of 10% plus Nearing 9% planned when Beacon integrated 15% investment benchmark Component of management compensation
Slide 8: Managing Equity for Strength and Return
Managing Equity for Strength and Return Core Return on Tangible Equity Tangible Common Equity / Assets Percent Percent 7 Note: Core return on tangible equity is core income before intangible amortization divided by tangible equity.
Slide 9: Performance Improvement
Performance Improvement Greater Efficiency Efficiency Ratio (Percent) 8 Core Return on Assets Core ROA (Basis Points) 59.7%
Slide 10: Core EPS Growth
Core EPS Growth 29% FY 2012 Growth, Positive Operating Leverage 9 Cents 54¢ 26 cent (93%) increase in quarterly core EPS over 2years 7 cents was projected due to M&A Benefits from revenue growth, efficiencies, multiple earnings levers Component of management compensation
Slide 11: Human Capital – Team and Culture
Human Capital – Team and Culture Team recruitment Building senior and middle management Brand and culture AMEB U (America’s Most Exciting Bank University) Performance management – results and behaviors Scorecards and stack ranking Compensation – rewarding performers Predictive Index and 360s 10 “If
Slide 12: Process and Infrastructure
Process and Infrastructure Core systems conversion Benefits - efficiency, product capabilities, service delivery, integration and scalability Six Sigma process improvement Leveraging core systems conversion Business line best practices Lean Six Sigma Fee business integration Acquisition integration
Slide 13: Regional Presence
Regional Presence 12 Berkshire County/Vermont, New York, Hartford/Springfield New lending offices in central and eastern Massachusetts Berkshire branches in green; Berkshire lending offices in blue
Slide 14: Market Strengths – New England and Central/Eastern NY
13 Market Strengths – New England and Central/Eastern NY Held up better than most regions during recession Less of a bubble developed prior to recession Diversified economy with strong services and technology drivers Ongoing economic growth Market positioning opportunity for Berkshire Handful of nat
Slide 15: Fee Business – Mortgage Banking
Fee Business – Mortgage Banking 14 8 lending offices in Eastern Massachusetts Recent annualized originations run rate over $1 billion High profile association endorsement Integration and insurance cross sales Strong margins in current environment Spreading best practices across the franchise
Slide 16: Fee Business - Insurance
Fee Business - Insurance Personal and commercial full service with increasing commercial share Enhancing commercial financial services products Taking advantage of firming conditions Opportunities for expansion in regions Leveraging across distribution networks Acquisition opportunities in regional
Slide 17: Fee Business - Wealth Management
Fee Business - Wealth Management Over $1 billion in assets under management Emphasizing financial planning services Focus on pricing strategy and value proposition Uniform product and service delivery Leveraging across distribution networks Acquisition opportunities in regional markets 16
Slide 18: Recent M&A History
Recent M & A History 18 PRO FORMA FINANCIAL DATA WITH MERGERS Pre Mergers With Mergers ($ millions except per share and branch data) 12/31/10 12/31/12 Assets $ 2,881 $ 5,295 Loans 2,142 3,989 Intangible assets 173 274 Deposits 2,204 4,100 Stockholders' equity 389 666 Shares outstanding (thousands) 1
Slide 19: Navigating the Business Landscape
Navigating the Business Landscape 19 Many moving pieces in the business landscape and increasing uncertainties: Interest rates and margins Economic outlook Regulatory expectations Political environment Maintaining focus on revenue and earnings momentum Speed of reaction Flexibility Multiple earnings
Slide 20: Why Invest In Us
20 Why Invest In Us Focused on shareholder return Solid strategies for growth and performance Proven track record for results Experienced executive team Strong financial condition Higher market capitalization exceeding $600+ million - increasing stock profile 100% buy ratings from the equity analyst
Slide 21: Forward Looking Statements
FORWARD LOOKING STATEMENTS. This document contains certain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements include statements about anticipated financial results. Forward-looking statements can be identified by the fact that they do not
Slide 22: Financial Performance and Goals
Note: Core results exclude merger, divestiture, and systems conversion net charges after tax totaling $0.4 million in 2010, $10.4 million in 2011, and $3.9 million in Q4 2012. GAAP EPS for those periods was $1.00, $0.98 and $0.38 respectively. Core ROTE includes amortization of intangible assets in
Slide 23: If you have any questions, please contact
If you have any questions, please contact: Allison O’Rourke P.O. Box 1308 Pittsfield, MA 01202 Investor Relations Officer (413) 236-3149 aorourke@berkshirebank.com Committed to the RIGHT core values: Respect Integrity Guts Having Fun Teamwork
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