Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Sandler O'Neill & Partners Investor Meetings (June 2008)
21 slides from Beacon Financial's conference presentation, Jun 3, 2008
Slide 1: Sandler O'Neill & Partners Investor Meetings
Sandler O'Neill & Partners Investor Meetings June 3, 2008 - mr America's Most EXciting Bank”
Slide 2: Our Growing Regional Franchise and Financial Highlights
esha Bak Ameri Moat ting Bak (Our Growing Regional Franchise + $25 bili in assets +98 bank branches and ‘insurance otces + Threestste ranchise - Massachusetts, New York, and Vermont + Ony loesly headquartered regional nancial services Company in primary market + $800 milion in assets Under mangement
Slide 3: Michael P. Daly and Kevin P. Riley contact details
Michael P. Daly President and Chief Executive Officer Berkshire Bank – “America’s Most Exciting Bank” P. O. Box 1308 Pittsfield, MA 01202-1308 Phone: (413) 236-3194 Email: mdaly@berkshirebank.com Kevin P. Riley Chief Financial Officer Berkshire Bank – “America’s Most Exciting Bank” P. O. Box 1308 Pi
Slide 4: Experienced Management Team
Experienced Management Team 30 (First Agricultural Bank) SVP/Human Resources Linda Johnston 14 (Fleet Investment Services, Bank of Boston’s Private Bank) SVP/Wealth management Tom Barney 2 (Former owner MassOne) President, Berkshire Insurance Ross Gorman 2 (Bank of America) EVP/Chief Risk Officer Sh
Slide 5: Creating Value
Creating Value Veteran management team Diverse revenue sources Performance driven Strong commercial orientation Differentiated brand and culture Leader in core markets Opportunity for growth in new markets
Slide 6: Building a Distinctive Culture
Building a Distinctive Culture Vision To be a world-class financial services company through an engaging and exciting environment where customers want to do business and employees want to work. Core Values
Slide 7: Solid First Quarter 2008 Results
Solid First Quarter 2008 Results 65.5% 60.1% Efficiency ratio 16.1% 33.5% Fees/Net interest income + fees 3.33% 3.41% NIM 5.62% 7.4% ROE 0.87% 0.97% ROA (2%) 4% Change in EPS (year-to-year) Regional Peer BHLB Performance Measure Note: Institutions considered for regional peer comparison are WBS, PBC
Slide 8: 2008 Plan for Earnings Growth
2008 Plan for Earnings Growth EPS of $2.16 (14% growth from core 2007) Fee income growth of 20% Higher NIM – from liability sensitive to neutral/asset sensitive Modest loan growth: 6% - 8% Commercial real estate, C & I and residential Look for expansion opportunities Return excess capital to shareho
Slide 9: Record Revenues and Earnings per Share in 2008
Record Revenues and Earnings per Share in 2008 Revenue growth from acquisitions and organic growth Core EPS benefiting from higher margins and efficiencies Note: Core and GAAP EPS the same in last five quarters except for 3Q07 (core $0.49 and GAAP $0.10) and 4Q07 (core $0.36 and GAAP $0.29). Differe
Slide 10: Efficiency Ratio Now Improving
Efficiency Ratio Now Improving Bank ratio 58% - 60% Insurance co. ratio is low 60% in Q1 & Q2 and low 70% in Q3 & Q4 – contingency revenue Bank ratio will improve as synergies from Factory Point are realized and de novo branches grow Note: Efficiency ratio is computed by dividing total tangible core
Slide 11: Net Interest Margin Highest in Three Years
Net Interest Margin Highest in Three Years Benefited from Factory Point acquisition and balance sheet restructuring in Q3 2007 Utilize interest rate swaps to manage interest rate risk Diligent pricing on deposit and loan products
Slide 12: Fee Income Growing Strongly
Fee Income Growing Strongly Fees provide 30% of revenue Fee growth of 20% estimated for 2008
Slide 13: Loan Mix Managed for Quality Growth
Loan Mix Managed for Quality Growth 17% CAGR, 10% CAGR without acquisitions Higher growth in commercial real estate and C & I Limited emphasis on indirect lending Residential and home equity focus on retail side Strong credit disciplines – no high LTV or sub-prime and Alt A loan programs Modest grow
Slide 14: Diversified Construction and Development Loans
Diversified Construction and Development Loans $176 MM portfolio was 9% of total loans at 3/31/08 0.23% C&D non- accruing ($400M) at 3/31/08 A/O 3/31/08 (millions)
Slide 15: Solid Credit Quality
Solid Credit Quality * Excludes $4 million (0.23%) charge for one fraud related commercial loan Nonperforming Loans to Total Loans Net Charge-offs to Average Loans Annualized
Slide 16: Favorable Deposit Growth
Favorable Deposit Growth Strong growth in MMA, DDA/NOW Growing deposit base in New York and Pioneer Valley Cash management and electronic banking – commercial growth
Slide 17: Well Capitalized
Well Capitalized Bank continues to exceed well capitalized standards Ample liquidity at holding company – unsecured borrowing facilities Cash contributions from insurance group fund holding company obligations
Slide 18: Opportunistic Expansion
Opportunistic Expansion Jun 05 $850 MM in assets Extended franchise to Springfield/Hartford corridor Pioneer Valley, MA (Springfield area) Woronoco Bancorp, Inc. 2005 to $136 MM in Deposits as of 3/31/08 Capital Region de novo expansion – opened 9 branches since 2005 Capital Region, NY (Albany area)
Slide 19: Acquisition Strategy
Acquisition Strategy Open to flexible partnering structures Utilize strong management for growth of combined institution Strengthen tangible book value Identify specific and desired targets Fill in or new market expansion Strong market opportunity Non-bank acquisitions Focus on established businesse
Slide 20: Why Invest in Berkshire Hills
Why Invest in Berkshire Hills Strong and experienced management team Distinctive culture and core values Strong credit culture and asset quality discipline Above average growth in loans, deposits and fee income Earnings performance at record levels and growing Stock valuation metrics are attractive
Slide 21: Forward Looking Statements
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