Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Investor Presentation (May 2009)
26 slides from Beacon Financial's investor presentation, May 11, 2009
Slide 1: Follow-on Common Stock Offering
This presentation contains forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) which involve significant risks and uncertainties. Actual results may differ materially from the results discussed in these forward-looking statements, including factors
Slide 2: Safe Harbor Statement
Statements in the presentation regarding Berkshire Hills Bancorp that are not historical facts are "forward-looking statements". These statements reflect management's views of future events, and involve risks and uncertainties. For a discussion of factors that could cause actual results to differ ma
Slide 3: Presenters: Follow-on Common Stock Offering
P.O. Box 1308, Pittsfield, MA 01202 — Executive Offices — 66 West Street, Pittsfield, MA 01201 Follow-on Common Stock Offering May 11, 2009 Michael P. Daly President & Chief Executive Officer Kevin P. Riley EVP & Chief Financial Officer Shepard D. Rainie EVP & Chief Risk Officer
Slide 4: Offering Terms
Offering Terms Issuer: Berkshire Hills Bancorp, Inc. (NASDAQ: BHLB) Type of Security: Follow-on Public Common Stock Offering Transaction Size: Approximately $30 million Over-Allotment Option: 15% Expected Pricing Date: May 11, 2009 Use of Proceeds: General corporate purposes, which may include, amon
Slide 5: Capital Raising Rationale
Capital Raising Rationale Increase Berkshire Hill's ability to be opportunistic in a unique market environment Position the company to increase its tangible common equity / tangible assets ratio. TARP repayment anticipated from existing cash balances. Position the company for opportunities to increa
Slide 6: Our Growing Regional Franchise
Our Growing Regional Franchise $2.7 billion in assets as of March 31, 2009 48 financial centers Three-state franchise Massachusetts, New York and Vermont Largest locally headquartered regional financial services company in primary market $640 million in managed assets - wealth management and investm
Slide 7: Experienced Leadership Team
Experienced Leadership Team Michael P. Daly President and CEO Kevin Riley EVP, CFO Sean Gray SVP, Retail Banking Background Bank of America Consumer Market Executive Background TD Banknorth Co-Regional Executive Background Bank of America Managing Director Background KeyBank EVP CFO Lawrence A. Boss
Slide 8: Investment Opportunity
Investment Opportunity Experienced and proven management team Diverse revenue sources Performance driven Differentiated brand and culture Leader in core markets Opportunity for growth in existing and new markets Disciplined risk management culture
Slide 9: Positioned to Increase Market Share
Positioned to Increase Market Share Note: The Company has a pending agreement to acquire CNB Financial Corp. in Worcester, Massachusetts, parent of Commonwealth National Bank. Commonwealth has six branches and had $197 million in deposits as of June 30, 2008. It was ranked 19th in Worcester County,
Slide 10: Record Revenues and Earnings per Share in 2008
Record Revenues and Earnings per Share in 2008 Revenue growth from acquisitions and organic growth Improved net interest margin and efficiency ratio in 2008 Revenue Per Share Earnings per Share $8.28 $9.45 $9.95 $2.00 $4.00 $6.00 $8.00 $10.00 2006 2007 2008 $1.29 $1.44 $2.06 $0.50 $0.75 $1.00 $1.25
Slide 11: Solid 2008 Results
Solid 2008 Results Performance Measure BHLB Industry Change in core EPS (year-over-year) 8.4% (12.9%) Return on average assets 0.87% 0.50% Return on average equity 6.5% 4.2% Return on average tangible equity 16.2% 5.7% Net interest margin 3.44% 3.44% Fee income / operating revenue 28.3% 10.2% Effici
Slide 12: Overview of 1st Quarter 2009 Results
Overview of 1st Quarter 2009 Results Earnings per share of $0.27 Net interest margin of 3.11% Record levels of deposits, growing 6% in Q1 as customers sought safety in Berkshire's 100% insured deposit accounts Fee income of $8.4 million or 32% of total revenues Nonperforming assets decreased to 0.47
Slide 13: Recent Announcements
Recent Announcements Agreement to acquire CNB Financial, parent of $300 million Commonwealth National Bank with six branches in the Worcester, Mass. market Recruitment of New York commercial lending team Appointment of David Farrell as EVP, Integrated Services - Insurance and Wealth Management Appli
Slide 14: Strong Capital Ratios
Strong Capital Ratios Assumes a gross offering price of $24.11 based on Berkshire Hills' closing stock price on May 8, 2009, adjusted 7% for fees and expenses to a net price of $22.42 As of March 31, 2009 Tangible Common Equity / Tangible Assets 7.75% Proforma With Stock Offering (1) 8.75% Tangible
Slide 15: Solid Loan Performance
Solid Loan Performance Note: Delinquent loans include all accruing loans delinquent 30 days or more. Charge-offs are based on quarterly net charge-offs, annualized. 0.00% 0.50% 1.00% 1.50% 2.00% Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Non-performing Assets / Assets Delinquent Loans / Loans Net
Slide 16: Low Net Charge-Offs
Low Net Charge-Offs Annualized Net Charge First Quarter 2009 Quarter End Offs / Avg. Loans (Dollar Values in Thousands) Loan Balance (%) Residential $651,507 0.07% Home Equity 217,313 0.08% Auto & Other Consumer 123,430 1.84% Commercial Business 179,765 0.35% Commercial Real Estate- Other 665,001 0.
Slide 17: Loan Mix Managed for Quality Growth
Loan Mix Managed for Quality Growth 8% organic growth in 2008 Indirect lending running off at 49% annual rate Strong credit disciplines - no high LTV or sub-prime or Alt A loan programs All lending is to relationships in Berkshire's New England and New York lending areas Note: 2008 organic growth ex
Slide 18: Diversified Commercial Loan Industry Exposure
Diversified Commercial Loan Industry Exposure No loans to out of area relationships TOTAL COMMERCIAL LOANS = $977 MILLION As of March 31, 2009 Misc. Commercial 9% Other Services 11% Human Services 8% Apartments 8% Other CRE 8% Retailers 10% RE Development 9% Lodging 14% CRE Rental 23%
Slide 19: Modest and Diversified Commercial Construction Portfolio
Modest and Diversified Commercial Construction Portfolio TOTAL $132 MILLION = 7% OF TOTAL LOANS As of March 31, 2009 RESIDENTIAL C&D: $82 MILLION OTHER C&D: $50 MILLION Single Home Const. 5% Subdiv. Single Fam 16% Subdiv. Condo 25% Retail 10% Land Improved 3% Land Unimproved 8% Office 10% Other 6% H
Slide 20: Overview of Acquisition of CNB Financial
Overview of Acquisition of CNB Financial Purchase Price: $8.91 per share; $20.3 million in aggregate(1) Exchange Ratio: Fixed at 0.3696 Berkshire Hills shares per CNB share(2) Consideration: 100% stock Due Diligence: Completed comprehensive due diligence, including detailed review of loan and securi
Slide 21: Transaction Highlights and Rationale
Transaction Highlights and Rationale Through the acquisition of CNB Financial, Berkshire Hills will gain a meaningful presence in the Worcester market Second largest city in New England(1) Contiguous to Berkshire Hills' existing markets of operation, making this a logical market expansion and facili
Slide 22: Overview of CNB Financial Corp.
Overview of CNB Financial Corp. Map excludes the Berkshire Hills branch at 212 Main Street in Oriskany Falls, New York. Map includes offices of Berkshire Insurance Group Date of CNB Financial's bank subsidiary's founding CNB 2008 Financial Highlights: Total Assets: $295 million Gross Loans: $242 mil
Slide 23: CNB Financial's Loan Portfolio
CNB Financial's Loan Portfolio Low historic charge-off rate NPAs / Assets of 1.45% at December 31, 2008 Net charge-offs of 0.58% of average loans in 2008 (Dollar Values in Millions) December 31, 2008 Percent of Total Commercial and Industrial $53 22% Construction Loans $30 12% Other Commercial Real
Slide 24: Key Financial Estimates
Key Financial Estimates In the course of its due diligence, Berkshire Hills along with third-party advisors performed a comprehensive review of CNB's loan portfolio in order to understand and effectively account for any potential losses associated with the portfolio Expected credit mark amounts to a
Slide 25: Attractive Stock Metrics Compared to Peers
Attractive Stock Metrics Compared to Peers Pricing data as of May 8, 2009 Source: SNL Financial Price / Loans LTM Price TBV EPS Company City, State Ticker ($) (%) (x) Independent Bank Corp. Rockland, MA INDB 21.74 235 15.5 Washington Trust Bancorp, Inc. Westerly, RI WASH 18.49 173 13.9 First Niagara
Slide 26: Why Invest in Berkshire Hills?
Why Invest in Berkshire Hills? Strong and experienced management team Strong credit culture and risk management profile Strategy to be a regional consolidator, growing and diversifying our financial services offerings and gaining a leading share in attractive northeastern markets Above average long
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