Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — KBW's 13th Annual Community Bank Investor Conference 2012
24 slides from Beacon Financial's conference presentation, Jul 31, 2012
Slide 1: KBW's 13th Annual Community Bank Investor Conference
KBW's 13th Annual Community Bank Investor Conference July 31 – August 1, 2012
Slide 2: David H. Gonci Investor Relations Officer Dgonci@berkshirebank.com 413-281-1973 Richard M. Marotta Executive Vice Pre…
David H. Gonci Investor Relations Officer Dgonci@berkshirebank.com 413-281-1973 Richard M. Marotta Executive Vice President rmarotta@berkshirebank.com 413-236-3753 1 Kevin P. Riley Executive Vice President, CFO Kriley@berkshirebank.com 413-236-3195 Patrick J. Sullivan Executive Vice President psulli
Slide 3: Experienced Leadership Team
2 Experienced Leadership Team Michael P. Daly President and CEO Kevin Riley EVP, CFO Sean Gray EVP, Retail Background Bank of America Consumer Market Executive Background Sovereign EVP Corporate Banking Background KeyBank EVP Group Head Background KeyBank EVP CFO Lawrence A. Bossidy Chairman Backgro
Slide 4: Second Quarter Results
Second Quarter Results $0.47 core EPS; 14% annualized growth 9% annualized organic commercial loan growth 5% annualized organic growth in non-maturity deposits 16% revenue growth compared to linked quarter 3.70% net interest margin (3.64% ex items) 0.94% core ROA; 7.1% core ROE 59% efficiency ratio
Slide 5: Third Quarter Guidance
Third Quarter Guidance $0.49 core EPS; 14% annualized growth 7-9% annualized organic loan growth 4-6% annualized organic deposit growth 9% annualized revenue growth 3.60 – 3.65% net interest margin Flat core non-interest expense Positive operating leverage Improving profitability Note: Guidance is m
Slide 6: Revenue Growth: 20%+ Total Annual Growth From Multiple Strategies
Revenue Growth 20%+ Total Annual Growth From Multiple Strategies 5 Quarterly Revenue ($ million) Quarter Note: Revenue in 11Q3 excludes $2 million non-core gain on Legacy stock.
Slide 7: Performance Improvement: Reducing Operating Cost Metrics
Performance Improvement Reducing Operating Cost Metrics Greater Efficiency Quarter Core Non-Interest Expense to Assets (Percent) Quarter Efficiency Ratio (Percent) 6 59.3%
Slide 8: Core EPS Growth: 20%+ Total Annual Growth
Core EPS Growth 20%+ Total Annual Growth Positive Operating Leverage 7 Core EPS (cents) Quarter 47 ¢
Slide 9: Performance Improvement: Core ROA and Core ROE
Performance Improvement Core Return on Assets Core Return on Equity Quarter Core ROE (Percent) Quarter Core ROA (Basis Points) 8
Slide 10: Berkshire Hills Bancorp
Berkshire Hills Bancorp Regional bank with over $4.5 billion in assets 68 full service branches in four states: MA, NY, CT and VT Ten commercial and residential lending offices in central/eastern Massachusetts Five additional branches planned with pending Beacon merger Retail and commercial banking,
Slide 11: Regional Presence
Regional Presence 10 Berkshire County, New York, Connecticut, Pioneer Valley and Vermont New lending offices in central and eastern Massachusetts Pending Beacon merger in red; Berkshire branches in green; Berkshire lending offices in blue
Slide 12: Recent Initiatives
11 Recent Initiatives Team recruitment drives commercial growth Asset Based Lending Central/Eastern Mass. Commercial Team Consumer Lending – Greenpark Mortgage De novo branching in strong Albany market Five in 2011/2012; bringing Albany area total to 15 M & A Rome and Legacy in 2011 CBT – Connecticu
Slide 13: Market Strengths – New England and Central/Eastern NY
12 Market Strengths – New England and Central/Eastern NY Held up better than most regions during recession Less of a bubble developed prior to recession Diversified economy with strong services and technology drivers Continues to be stronger than many regions – latest Fed Beige Book Market positioni
Slide 14: Balance Sheet Strength: Favorable Asset Quality
Balance Sheet Strength Favorable Asset Quality Net Loan Charge-Offs Net Charge-Offs/ Average Loans (Percent) Quarter NPAs/ Assets (Basis Points) Quarter 13
Slide 15: Capital Strength
Capital Strength Core Return on Tangible Equity Tangible Common Equity / Assets Tangible Common Equity/Assets (Percent) Quarter Percent 14 Quarter Note: Core return on tangible equity is core income before intangible amortization divided by tangible equity.
Slide 16: Capital Metrics
15 Capital Metrics Tangible equity/tangible assets 8.0% Total equity/assets 12.9% Well Capitalized with most regulatory capital consisting of common equity $15.49 tangible equity per share Tangible equity capital generation $2.12 per share based on current run rate 36% dividend payout ratio; 3.1% di
Slide 17: Risk Management Disciplines
16 Risk Management Disciplines Credit team and culture Portfolio management Underwriting M&A due diligence Workout Project management Merger integration Core systems conversion Risk Committee, Capital Committee
Slide 18: M & A Disciplines
M & A Disciplines Earnings accretion goals Manage tangible book value dilution ROE Targets Reasonable cost save objectives Modest reliance on revenue synergies Understanding purchase accounting impact Balancing cash/stock mix for capital impact Improving financial and demographic metrics 17 Note: Se
Slide 19: Recent M & A History
Recent M & A History 18 PRO FORMA FINANCIAL DATA WITH MERGERS Actual Pro Forma pre mergers w/mergers ($ millions except per share data) 12/31/10 3/31/12 Assets $ 2,881 $ 5,315 Loans 2,142 3,870 Allowance for loan losses (32) (33) Intangible assets 173 287 Deposits 2,204 4,023 Stockholders' equity 38
Slide 20: Why Invest In Us
19 Why Invest In Us Experienced executive management team Proven track record for results Strong financial condition Solid strategies for growth and performance Focused on shareholder return Higher market capitalization and stock liquidity due to merger share issuance 100% buy ratings from the equit
Slide 21: Forward Looking Statements
FORWARD LOOKING STATEMENTS. This document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about the proposed merger of Berkshire and Beacon. These statements include statements about anticipated financial results and regarding th
Slide 22: Financial Performance and Goals
Note: Core results exclude merger, divestiture and restructuring charges after tax totaling $0.4 million in 2010, $10.4 million in 2011, and $5.8 million in H1 2012. GAAP EPS for those periods was $1.00, $0.98, and $0.65 respectively. Core ROTE includes amortization of intangible assets in core retu
Slide 23: Balanced Portfolios
Balanced Portfolios Note: Balances are as of June 30, 2012. Deposits $3.4 Billion Loans $3.4 Billion Exhibit B 22
Slide 24: If you have any questions, please contact
If you have any questions, please contact: David Gonci P.O. Box 1308 Pittsfield, MA 01202 Investor Relations Officer (413) 281-1973 dgonci@berkshirebank.com Committed to the RIGHT core values: Respect Integrity Guts Having Fun Teamwork
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