Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Q1 2021 Earnings Presentation
22 slides from Beacon Financial's earnings presentation, Apr 29, 2021
Slide 1: Berkshire Bank 1Q 2021 Earnings Presentation
BERKSHIRE BANK 1 Q 2 0 2 1 E A R N I N G S P R E S E N TAT I O N APRIL 28, 2021
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. You can identify these statements from the use of the wo
Slide 3: 1Q 2021 - Highlights of the Quarter
1Q 2021 - HIGHLIGHTS OF THE QUARTER All comparisons year-over-year unless otherwise noted New Leadership and • New CEO, CFO and Senior Leaders to further improve bench strength of the bank Transformational • Driving positive change and focus; executing on near-term priorities and initiatives Strateg
Slide 4: New Senior Executives and Board Replenishment
NEW SENIOR EXECUTIVES AND BOARD REPLENISHMENT New Senior Executives at Berkshire: Nitin Mhatre Subhadeep Basu Kevin Conn Chief Executive SEVP, Chief Financial SVP, Investor Officer Officer Relations & Corp Dev 25+ Years in Banking; 23+ Years in Banking; 23+ Years in Institutional Citi, Webster Citi,
Slide 5: Financial Highlights - Income Statement
1 Q 2 0 2 1 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) HIGHLIGHTS 1Q20 4Q20 1Q21 QoQ % Change YoY % Change Net interest income $ 86.4 $ 75.7 $ 75.1 (0.8%) (13.1%) Non-interest income 1 5.6 23.3 26.2 12.4% nm • NIM stable QoQ and down YoY Total Revenue 92.0 99
Slide 6: Financial Highlights - Average Assets
1 Q 2 0 2 1 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 ($M) 2% 1% HIGHLIGHTS 11,492 11,642 11,710 • Loans excluding Held for Sale (HFS) down 8% QoQ and 16% 2,120 2,945 YoY driven by: 3,546 4.08% • Lower originations and higher prepayments for mortgages Investments • PPP forgive
Slide 7: Financial Highlights - Average Liabilities
1 Q 2 0 2 1 F I N A N C I A L H I G H L I G H T S – AV E R A G E L I A B I L I T I E S ($M) +2% 0% 11,118 1.11% 11,296 11,309 HIGHLIGHTS 228 284 358 1,849 2,542 2,537 • Lower cost deposits growing rapidly • Non-interest-bearing deposits up 0.60% 37% YoY; stable QoQ 0.48% • NOW & Other up 14% YoY and
Slide 8: 1Q 2021 Financial Highlights - NII and Margin
1Q 2021 FINANCI AL HIGHLIGHTS - NII AND MARGIN ($M) 1 NII AND MARGIN NII -13% NII -1% HIGHLIGHTS -0.42 3.04% 2.62% 2.61% 2.61% • NIM stable over the last 3 quarters; 2.62% down 42 bps YoY and up 1 bps QoQ 86.4 77.6 77.1 75.7 75.1 NII • NII down 1% QoQ and 13% YoY due NIM (%) to lower loan balances,
Slide 9: 1Q 2021 Financial Highlights - Fee Revenue
1Q 2021 FINANCI AL HIGHLIGHTS - FEE REVENUE ($M) +70% +34% HIGHLIGHTS • Non-Interest Income ex. Gains and Losses up 70% YoY including loan fees from: • SBA loan generation; PPP loan origination 26.2 • Higher swap fees pertaining to 19.6 commercial real estate loans 15.4 • PPP referral fees • Wealth
Slide 10: 1Q 2021 Financial Highlights - Expenses
1Q 2021 FINANCI AL HIGHLIGHTS - EXPENSES ($M) +5% +5% HIGHLIGHTS • Adjusted expenses up 5% YoY due to: • Higher professional services fees due to one time legal and advisory 71.3 71.3 74.7 expenses • Higher compensation and benefits expenses • Excluding professional services, all other total expense
Slide 11: 1Q 2021 Financial Highlights - Asset Quality
1Q 2021 FINANCI AL HIGHLIGHTS - ASSET QUALITY TRENDS POINT TO IMPROVING ASSET QUALITY Loan Modifications – COVID deferrals ($M) Non-Accrual Loans ($M) -14% -86% 65 1,542 0.80% 56 1,296 51 17.0% 45 47 0.73% 0.55% 0.53% 14.0% 0.48% 447 350 214 5.0% 4.3% 2.8% 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q2
Slide 12: 1Q 2021 - COVID Sensitive Segments
1Q 2021 - COVID SENSITIVE SEGMENTS TRENDS POINT TO IMPROVING ASSET QUALITY Covid sensitive segments include: • Hospitality, Firestone, Loan Balances ($M) COVID Deferrals ($M) Restaurant and Nursing/Assisted Living -3% 599 loans 903 912 868 840 -32% 466 -36% 273 275 -3% 176 222 224 588 588 153 546 53
Slide 13: 1Q 2021 - Hospitality & Firestone
1 Q 2 0 2 1 - H O S P I TA L I T Y & F I R E S T O N E H O S P I TA L I T Y FIRESTONE 3 . 9 % O F T O TA L 1 Q 2 1 L O A N S 3 . 0 % O F T O TA L 1 Q 2 1 L O A N S QoQ % QoQ % $M 3Q20 4Q20 1Q21 $M 3Q20 4Q20 1Q21 Change Change Loans $ 330 $ 301 $ 302 0% Loans $ 258 $ 246 $ 227 (8%) Covid Deferrals $
Slide 14: 1Q 2021 - Restaurants & Nursing/Assisted Living
1 Q 2 0 2 1 - R E S TA U R A N T S & N U R S I N G / A S S I S T E D L I V I N G R E S TA U R A N T S NURSING/ASSISTED LIVING 1 . 6 % O F T O TA L 1 Q 2 1 L O A N S 2 . 4 % O F T O TA L 1 Q 2 1 L O A N S QoQ % QoQ % $M 3Q20 4Q20 1Q21 $M 3Q20 4Q20 1Q21 Change Change Loans $ 135 $ 128 $ 123 (4%) Loans
Slide 15: 1Q 2021 - Capital and Liquidity
1 Q 2 0 2 1 – C A P I TA L A N D L I Q U I D I T Y C A P I TA L & L I Q U I D I T Y ( $ M ) (1) CET1 NOMINAL AND AS % OF RWA HIGHLIGHTS 1,162 1,145 1,150 1,030 13.8% 14.0% 942 •Very strong capital levels with a 14% 12.1% estimated CET1 ratio for 1Q21. 11.0% 11.4% • 230 bps higher than peer median CE
Slide 16: Operating Highlights - Transforming the Community Bank Model
1 Q 2 0 2 1 O P E R AT I N G H I G H L I G H T S TRANSFORMING THE COMMUNITY BANK MODEL Continuing to Optimize Our Footprint New England/New York Footprint • Consolidating 16 branches in New England and New York − 9 branches consolidated in 1Q21 − Rest of consolidation to occur in 2Q21 and 3Q21 • Sel
Slide 17: Operating Highlights - Transforming the Community Bank Model
1 Q 2 0 2 1 O P E R AT I N G H I G H L I G H T S TRANSFORMING THE COMMUNITY BANK MODEL Delivering an Omni-Channel experience with MyBanker • Highly personalized Concierge Banking • Exceptional and consistent customer experience • Higher customer satisfaction and retention Digital Transformation
Slide 18: Operating Highlights - Loan Originations
1 Q 2 0 2 1 O P E R AT I N G H I G H L I G H T S C O N S U M E R A N D C O M M E R C I A L B A N K I N G L O A N O R I G I N AT I O N S QoQ YoY $M 1Q20 4Q20 1Q21 % Change % Change Commercial Real Estate $ 59 $ 67 $ 121 81% 105% Commercial & Industrial 58 67 49 (27%) (16%) Total Commercial $ 117 $ 13
Slide 19: B.E.S.T. - Strategic Transformation Update
1 Q 2 0 2 1 - S T R AT E G I C T R A N S F O R M AT I O N U P D AT E Introducing B MILESTONES over next 3 years Berkshire’s E Exciting • Deliver ROE in excess of cost of capital • Improve our Efficiency Ratio by over 10% Strategic • Be “The Leading Socially Responsible S Transformation Omni-Channel
Slide 20: Appendix
APPENDIX 20 ><BerkshireHillsBancorp
Slide 21: Non-GAAP Reconciliation
N O N - G A A P R E C O N C I L I AT I O N At or for the Quarters Ended March 31, Dec. 31, March 31, (in thousands) 2020 2020 2021 Total revenue from continuing operations (A) $ 92,064 $ 99,036 $ 101,286 Adj: Net securities (gains)/losses (1) 9,730 (2,405) 31 Adj: Net (gains) on sale of business ope
Slide 22: 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 (gains)/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 b
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