Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Q4 2022 Earnings Presentation
21 slides from Beacon Financial's earnings presentation, Jan 26, 2023
Slide 1: Berkshire Hills Bancorp 4Q 2022 Earnings Presentation
BERKSHIRE HILLS BANCORP 4 Q 2 0 2 2 E AR N I N G S P R E S E N TAT I O N January 26, 2023
Slide 2: Forward-Looking Statements
F O R WA R D - L O O K I N G S TAT E M E N T S This document contains “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our outlook for earnings,
Slide 3: 4Q22 and FY2022 Highlights
4Q22 AND FY2022 HIGHLIGHTS 4Q22 FY2022 Strong improvement across all key financial metrics1 • Adj Revenue of $118m (+8% QoQ) • Adj Revenue of $416m (+9% YoY) Financial • Adj EPS of $0.64 (+2% QoQ) • Adj EPS of $2.19 (+30% YoY) Performance • Adj ROTCE of 9.83% (-9 bps QoQ) • Adj ROTCE of 8.94% (+120
Slide 4: 4Q 2022 – BEST Progress vs. Goal
4Q 2022 – “BEST” PROGRESS VS. GOAL BEST 3 YEAR TARGET for JUNE 2024 10-12% 100-105 bps $180-200M Top 25% Top 25% ROTCE ROA PPNR2 ESG NPS3 Increase ROTCE Increase ROA Increase PPNR Become top quartile Become top quartile by 700-900bps* by 75-80bps* by $80-100M* bank by leading Net Promoter Score ESG
Slide 5: FY 2022 Financial Highlights – Income Statement
F Y 2 0 2 2 F I N A N C I A L H I G H L I G H T S – I N C O M E S TAT E M E N T GAAP Basis ($M) FY20 FY21 FY22 '21 vs. '22 HIGHLIGHTS Net interest income, non FTE $316.8 $291.2 $344.6 18% 2 Non-interest income 66.3 143.2 68.9 -52% • Differentiated, responsible, and Revenue 383.1 434.4 413.5 -5% prof
Slide 6: 4Q 2022 Financial Highlights – Income Statement
4 Q 2 0 2 2 F I N A N C I A L H I G H L I G H T S – I N C O M E S TAT E M E N T GAAP Basis ($M) 4Q21 3Q22 4Q22 QoQ % YoY % HIGHLIGHTS Net interest income, non FTE $69.3 $92.1 $102.1 11% 47% Non-interest income 21.4 16.3 15.7 -4% -27% • Strong 4Q22 results driven by Revenue 90.7 108.3 117.7 9% 30% lo
Slide 7: 4Q 2022 Financial Highlights – Average Assets
4 Q 2 0 2 2 F I N A N C I A L H I G H L I G H T S – AV E R A G E A S S E T S -1% +0% ($M) 10,742 HIGHLIGHTS 10,630 10,643 342 267 1,609 • Broad based Avg. Loan growth 2,400 2,294 continued; +2% and +19% QoQ and YoY, respectively 2,367 5.28% o On an end of period basis, loans 4.54% grew 5% QoQ and 22
Slide 8: 4Q 2022 Financial Highlights – Average Liabilities
4 Q 2 0 2 2 F I N A N C I A L H I G H L I G H T S – AV E R A G E L I A B I L I T I E S ($M) -2% 0% HIGHLIGHTS 10,071 9,920 9,901 0.77% • Total deposits +1% QoQ and -2% YoY 3,038 2,913 2,876 0.69% • Non-interest-bearing deposits 0.46% -1% QoQ and -5% YoY 0.26% 0.33% o Non-interest-bearing deposits as
Slide 9: 4Q 2022 Financial Highlights – NII and NIM
4Q 2022 FINANCIAL HIGHLIGHTS – NII AND NIM +47% +11% ($M) 102.1 HIGHLIGHTS 92.1 81.4 • Robust NII growth driven by loan 69.3 69.1 balance growth and improved margins NII o NII +11% QoQ and +47% YoY • Significant NIM improvements driven by rate environment as loan betas continue to outpace deposit be
Slide 10: 4Q 2022 Financial Highlights – Fee Revenue
4Q 2022 FINANCIAL HIGHLIGHTS – FEE REVENUE ($M) -24% HIGHLIGHTS 20.5 -7% 16.7 • Adjusted non-interest income 15.5 -7% QoQ and -24% YoY • Improvements in the core components of adjusted non- interest income; Excluding tax credit impairments, fees grew QoQ o Loan fees +34% QoQ related to increase in S
Slide 11: 4Q 2022 Financial Highlights – Expenses
4Q 2022 FINANCIAL HIGHLIGHTS – EXPENSES +6% ($M) +3% HIGHLIGHTS 72.6 68.5 68.5 68.4 70.2 • Expenses +3% QoQ and +6% YoY o Compensation & Benefits -4% QoQ and flat YoY o Occupancy & Equipment +8% QoQ related to seasonality of heating and snow removal costs across branch network 4Q21 1Q22 2Q22 3Q22 4Q
Slide 12: 4Q 2022 Financial Highlights – Asset Quality
4Q 2022 FINANCIAL HIGHLIGHTS – ASSET QUALITY ($M) DELINQUENCY TRENDS HIGHLIGHTS -36% 78 1.15% • Credit quality remains strong with leading indicators 70 at historic lows -14% 0.89% • Total delinquencies plus NPL down 14% QoQ and 59 36% YoY; Total delinquencies plus NPL as % Total 43 50 0.74% 50 Loan
Slide 13: 4Q 2022 – Capital and Liquidity Levels
4 Q 2 0 2 2 – C A P I TA L A N D L I Q U I D I T Y L E V E L S EOP LOAN / DEPOSIT RATIO HIGHLIGHTS 80% 81% 77% • Capital levels remain strong to support balance sheet 68% 68% growth, share repurchases, and dividends • Liquidity position continues to support loan growth • 4Q22 TCE / TA of 8.0% (decre
Slide 14: 2023 Outlook
2023 OUTLOOK 2022 Actuals 2023 Outlook Average • Loans: $7.6Bn • Loan Growth: +11% to +12% Balance Sheet • Deposits: $9.8Bn • Deposit Growth: +3% to +5% NII • GAAP: $345M • NII Growth: +15% to +16% Non FTE Non-interest • GAAP: $69M1 • Adj. Non-interest Income Growth: -10% to -12%2 Income • Adjusted:
Slide 15: Appendix
APPENDIX 15 »BerkshireHillsBancorp
Slide 16: Bolstering Strong Leadership Team with Seasoned Executives
B O L ST ERING ST R O N G L EAD ER SH IP T EAM W IT H SEASO N ED EXEC U TIVES Chief Financial Officer Head of Commercial Banking Chief Credit Officer R. David Rosato James “Jim” Brown Philip Jurgeleit Mr. Rosato is a seasoned Chief Financial Officer Mr. Jurgeleit brings more than 30 years of credit
Slide 17: De-Risking of Balance Sheet Continues
DE-RISKING OF BALANCE SHEET CONTINUES ($M) EOP Balances FIRESTONE UPSTART -16% -13% -8% 158.2 152.7 151.9 133.4 139.9 14.3 4Q21 3Q22 4Q22 4Q21 3Q22 4Q22 INDIRECT AUTO AIRCRAFT -44% -32% 110.0 30.1 -5% -5% 21.5 20.5 64.8 61.3 4Q21 3Q22 4Q22 4Q21 3Q22 4Q22 17
Slide 18: Non-GAAP Reconciliation
N O N - G A A P R E C O N C I L I AT I O N ( 2 0 2 1 - 2 0 2 2 ) At or for the Years Ended Dec. 31, Dec. 31, (in thousands) 2021 2022 Total revenue (A) $ 434,414 $ 413,534 Adj: Net securities losses/(gains) (1) 787 2,031 Adj: Net (gains) on sale of business operations and assets (52,942) - Total adj
Slide 19: Non-GAAP Reconciliation – Notes
N O N - G A A P R E C O N C I L I AT I O N – N O T E S (1) Net securities losses include the change in fair value of the Company's equity securities in compliance with the Company's adoption of ASU 2016-01. (2) Non-GAAP financial measure. (3) Total tangible shareholders' equity is computed by taking
Slide 20: Non-GAAP Reconciliation (By Quarter)
N O N - G A A P R E C O N C I L I AT I O N ( B Y Q U A R T E R ) Dec. 31, March 31, June 30, Sept. 30, Dec. 31, (in thousands) 2021 2022 2022 2022 2022 Total revenue (A) $ 90,721 $ 89,744 $ 97,709 $ 108,335 $ 117,746 Adj: Net securities losses/(gains) (1) 106 745 973 476 (163) Adj: Net (gains) on sa
Slide 21: Non-GAAP Reconciliation – Notes / TBVPS
N O N - G A A P R E C O N C I L I AT I O N – N O T E S / T B V P S (1) Net securities losses/(gains) include the change in fair value of the Company's equity securities in compliance with the Company's adoption of ASU 2016-01. (2) Non-GAAP financial measure. (3) Total tangible shareholders' equity i
Berkshire Hills Bancorp — Q4 2022 Earnings Presentation on 6ix