Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Q3 2022 Earnings Presentation
16 slides from Beacon Financial's earnings presentation, Oct 20, 2022
Slide 1: Berkshire Hills Bancorp 3Q 2022 Earnings Presentation
BERKSHIRE HILLS BANCORP 3 Q 2 0 2 2 E AR N I N G S P R E S E N TAT I O N October 20, 2022
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: 3Q22 – Highlights of the Quarter
3Q22 – HIGHLIGHTS OF THE QUARTER Strong improvement across all key financial metrics1 • Adj Revenue of $108.8M (+10% QoQ and +17% YoY) Financial • Adj PPNR of $38.6M (+28% QoQ and +53% YoY) Performance • Adj EPS of $0.62 (+21% QoQ and +18% YoY) • Adj ROTCE of 9.92% (+144 bps QoQ and +39 bps YoY) • E
Slide 4: 3Q 2022 Financial Highlights – Income Statement
3 Q 2 0 2 2 F I N A N C I A L H I G H L I G H T S – I N C O M E S TAT E M E N T GAAP Basis ($M) 3Q21 2Q22 3Q22 QoQ % YoY % HIGHLIGHTS Net interest income, non FTE $71.4 $81.4 $92.1 13% 29% Non-interest income 73.6 16.4 16.3 -1% -78% • Strong 3Q22 results driven by Revenue 145.0 97.7 108.3 11% -25% r
Slide 5: 3Q 2022 Financial Highlights – Average Assets
3 Q 2 0 2 2 F I N A N C I A L H I G H L I G H T S – AV E R A G E A S S E T S ($M) -4% +0% HIGHLIGHTS 11,065 10,589 10,630 1,762 476 342 • Average Loan growth continued across all business lines; +5% & 2,621 2,400 +13% QoQ & YoY, respectively 2,312 o On an end of period basis, loans grew 2% and 16% Q
Slide 6: 3Q 2022 Financial Highlights – Average Liabilities
3 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 -3% ($M) 0% HIGHLIGHTS 10,201 9,919 9,915 0.46% • Total deposits -1% QoQ and -3% 2,901 YoY 2,903 2,913 0.31% 0.24% 0.33% • Non-interest-bearing deposits flat QoQ and YoY 0.22% 0.17% o Non-interest-bearing deposits
Slide 7: 3Q 2022 Financial Highlights – NII and NIM
3Q 2022 FINANCIAL HIGHLIGHTS – NII AND NIM +29% +13% ($M) 92.1 HIGHLIGHTS 81.4 71.4 69.3 69.1 • Robust NII growth driven by loan balance growth, rate environment, and increased asset yields NII o NII +13% QoQ and +29% YoY • Significant NIM improvements driven by rate environment, increased asset yie
Slide 8: 3Q 2022 Financial Highlights – Fee Revenue
3Q 2022 FINANCIAL HIGHLIGHTS – FEE REVENUE -24% ($M) 21.9 HIGHLIGHTS 1.6 -3% 17.3 16.7 • Adjusted non-interest income -3% QoQ and -24% YoY o Excluding the impact of 20.3 Insurance, non-interest income -18% YoY o QoQ decrease in loan fees and revenues driven primarily by lower swap and Commercial ser
Slide 9: 3Q 2022 Financial Highlights – Expenses
3Q 2022 FINANCIAL HIGHLIGHTS – EXPENSES ($M) +3% +3% HIGHLIGHTS 68.0 68.5 68.5 68.4 70.2 • Continue to self-fund investments to drive growth and transformation • Expenses increased 3% both QoQ and YoY o Expenses have been in the $68M to $70M range over last five quarters, in-line with guidance • Inc
Slide 10: 3Q 2022 Financial Highlights – Asset Quality
3Q 2022 FINANCIAL HIGHLIGHTS – ASSET QUALITY ($M) DELINQUENCY TRENDS HIGHLIGHTS 78 1.15% -16% • Credit quality remains strong 70 59 0.89% 59 o Total delinquencies & NPL to Total Loans down 16% 0.87% 43 50 QoQ and flat YoY 22 43 21 0.74% 20 0.69% o Charge-offs for the quarter increased and is now in-
Slide 11: 3Q 2022 – Capital and Liquidity Levels
3 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% 77% • Capital levels remain strong to support balance sheet 66% 68% 68% growth, share repurchases, and dividends • Liquidity position continues to support loan growth • 3Q22 TCE / TA of 8.1% (decre
Slide 12: 3Q 2022 – BEST Progress vs. Goal
3Q 2022 – “BEST” PROGRESS VS. GOAL BEST 3 YEAR TARGET for 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 index
Slide 13: BEST Investments – People and Technology
“BEST” INVESTMENTS – PEOPLE AND TECHNOLOGY FRONTLINE HIRES SINCE BEST LAUNCH D I G I T O U C H SM Enhanced Customer Omni-Channel Customer 360O Jeffrey Klaus – SVP, Regional President Southern CT Support Delivery Engagement To Improve NPS Scott Vickery – SVP, Business Banking Real-Time Customer Custo
Slide 14: Appendix
APPENDIX 14 »BerkshireHillsBancorp
Slide 15: 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 ) Sept. 30, Dec. 31, March 31, June 30, Sept. 30, (in thousands) 2021 2021 2022 2022 2022 Total revenue (A) $ 145,003 $ 90,721 $ 89,744 $ 97,709 $ 108,335 Adj: Net securities losses (1) 166 106 745 973 476 Adj: Net (gains) on sale of bus
Slide 16: 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 — Q3 2022 Earnings Presentation on 6ix