Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Investor Presentation (November 2015)
26 slides from Beacon Financial's investor presentation, Nov 4, 2015
Slide 1: Forward Looking Statements
Forward Looking Statements This document contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. There are several factors that could cause actual results to differ significantly from expectations described in the forward-looking statements. For a disc
Slide 2: Why Invest in Us
Why Invest in Us Well positioned footprint in attractive markets Strong core earnings momentum led by diversified revenue drivers and controlled expenses AMEB culture – results driven Acquisition discipline and integration experience Focused on long-term profitability goals and shareholder value 3
Slide 3: Well Positioned Footprint in Attractive Markets
Well Positioned Footprint in Attractive Markets 4 Only regional bank operating across this central footprint Favorable positioning in rural markets
Slide 4: Strong Core Earnings Momentum
Strong Core Earnings Momentum 5 Note: Growth includes acquisitions. GAAP EPS was $0.42 in 4Q13 and $0.49 in 3Q15. GAAP revenue was $55.6 million and $69.7 million for those same periods. 17% Core EPS Growth (Y/Y 3Q) 17% Core Revenue Growth (Y/Y 3Q) $0.40 $0.54 $52 $70 $0.30 $0.35 $0.40 $0.45 $0.50 $
Slide 5: Diversified Revenue Drivers: Commercial lending and fee business growth
Focused on commercial lending and fee business growth Note: All data based on 3Q15; C&I including owner-occupied real estate makes up half of the commercial loan book Diversified Revenue Drivers CRE: 35% C&I: 20% 6 48% 11% 5% 19% 17% Fee Income Mix Deposit Fees Loan Fees Mortgage Banking Fees Insura
Slide 6: Double Digit Total Loan Growth
Double Digit Total Loan Growth $ Millions 22% 4% 45% 27% 21% total loan growth YTD 9% organic total loan growth YTD Leveraging deal flow from team recruitment Targeted reductions in auto portfolio to manage margin and asset sensitivity goals Continued market share growth Healthy pipeline going into
Slide 7: Diversified Deposit Growth Strategies
Diversified Deposit Growth Strategies 18% increase in total deposits YTD 11% increase in organic total deposits YTD Organic account growth, DDA focus 6% annualized organic growth in DDA’s YTD Diversifying deposit sources – institutional and brokered Branch consolidations/relocations improving market
Slide 8: Redefining Customer Engagement
Redefining Customer Engagement Engaging Branches Friendlier pods replace teller lines Automated cash handling – lowers cost and improves customer engagement Community rooms bring in traffic Universal bankers create one stop shop for personal banking and insurance needs Virtual / Alternative Sophisti
Slide 9: Diversified Revenue Drivers
Diversified Revenue Drivers Emphasis on building fee income and enhancing cross-sell initiatives Spotlight on WM Stronger investment team in place Regional hires in E. MA and NY $1.4 billion in AUM Solid referral pipeline Spotlight on Small Biz Re-engineered across footprint Pipeline doubled y/y #1
Slide 10: Controlled Expenses
Controlled Expenses Efficiency ratio of 60.4% - with goal of returning sub-60% 26 branches closed, consolidated or sold since 2011 7 branches consolidated in 1H15; 1 sold (expected close 4Q15) Additional branches under review New branches are smaller and more efficient 10% cost saves and 10% revenue
Slide 11: Talent Recruitment Drives Growth
Talent Recruitment Drives Growth Success with recruited teams driving growth and profitability Key Characteristics Established, well respected talent formerly attached to large banks focused outside our regions Solid relationships within community Strong integration within and across business lines
Slide 12: AMEB Culture
AMEB Culture People, attitude and energy RIGHT core values – Respect, Integrity, Guts, Having Fun and Teamwork Engaging and innovative customer experience Driven to make a difference 13
Slide 13: Acquisition Discipline and Integration Experience
Acquisition Discipline and Integration Experience 14 Rome (NY) Legacy (MA) CBT (CT) Beacon (NY) Hampden (MA) Combined Date closed 4/2011 7/2011 4/2012 10/2012 4/2015 Assets ($millions) 330 970 280 1,025 700 3,305 (Total) Price/TBV (%) 120 110 140 111 133 123 (average) EPS accretion ($) 0.10 0.10 0.0
Slide 14: Focused on Long-term Profitability Goals and Building Shareholder Value
Focused on Long-term Profitability Goals and Building Shareholder Value Grew core EPS 6% q/q and 17% y/y Sequential improvements in core ROE and ROA 4% improvement in Core ROE q/q and 15% y/y 6% improvement in Core ROA q/q and 18% y/y NIM expanding ex-accretion due to improved loan yields and fundin
Slide 15: Why Invest in Us
Why Invest in Us Well positioned footprint in attractive markets Strong core earnings momentum led by diversified revenue drivers and controlled expenses AMEB culture – results driven Acquisition discipline and integration experience Focused on long-term profitability goals and shareholder value Tic
Slide 16: Appendix
Appendix Who We Are 9mos15 Strategic Highlights Firestone Financial Acquisition Hampden Bank Acquisition Focus on Building Infrastructure Focus on Asset Liability Management Financial Performance and Goals Non-GAAP Reconciliation 17
Slide 17: Who We Are
Who We Are Full service regional bank with a distinctive brand and culture, strong middle market opportunities, a solid foundation and ongoing momentum Assets: $7.8 billion Loans: $5.7 billion Deposits: $5.5 billion Wealth AUM: $1.4 billion Core Revenue: $280 million (Q3 annualized) Branches: 93 Foo
Slide 18: 9Mo15 Strategic Highlights
9Mo15 Strategic Highlights Solid core earnings growth and improving profitability Grew core EPS in each of the last 7 quarters Ongoing sequential improvements in core ROE and core ROA Announced and closed acquisition of specialty lender Firestone Financial (announced May 22 and closed August 7, 2015
Slide 19: Firestone Financial Acquisition
Firestone Financial Acquisition On August 7, 2015 Berkshire closed the acquisition of specialty lender Firestone Financial. With $200 million in assets, Firestone is operating as a wholly owned subsidiary of Berkshire Bank and provides secured installment loan equipment financing for small and mediu
Slide 20: Hampden Bank Acquisition
Hampden Bank Acquisition On April 17, 2015 Berkshire closed the in-market acquisition of Hampden Bancorp (HBNK) in an all-stock transaction. The combined franchise now has 17 branches in the Greater Springfield area, a top 5 deposit market share position and a market cap exceeding $800 million. 21 F
Slide 21: Focus on Building Infrastructure
Focus on Building Infrastructure National showcase for Archer risk/enterprise management solution Expanded financial planning and analysis resources for data driven management New retail loan originations platform implemented across footprint and virtual channel Installed top ranked loan analytics s
Slide 22: Focus on Asset Liability Management
Focus on Asset Liability Management Targeting to protect and enhance income when rate/credit cycle turns Active balance sheet management 2014 branch purchase added 11% to deposits – a stable, rural , low cost funding addition Near term margin compression with conservative investment strategy Long te
Slide 23: Financial Performance and Goals
Financial Performance and Goals 2012 2013 2014 9mos15 Financial Goals Core revenue growth 40% 13% 7% 11% y/y 7 - 10%+ ann Net interest margin 3.62% 3.63% 3.26% 3.29% 3.30%+ Fee income/revenue 26% 22% 24% 22% 30% Efficiency ratio 59% 61% 63% 62% < 60% Core ROA 0.98% 0.88% 0.73% 0.81% 1%+ Core ROE 7.5
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation Note: Core results exclude acquisition, divestiture, systems conversion, accounting correction, discontinued operations and restructuring net charges after tax 25 (Dollars in thousands) 2012 2013 2014 9mos15 Net income 33,188 $ 41,143 $ 33,744 $ 33,504 $ Non-core revenue (net
Slide 25: If you have any questions, please 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 26: If you have any questions, please 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 Life is exciting. Let us help.
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