Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Q2 2022 Earnings Presentation
18 slides from Beacon Financial's earnings presentation, Jul 20, 2022
Slide 1: Berkshire Hills Bancorp 2Q 2022 Earnings Presentation
BERKSHIRE HILLS BANCORP 2 Q 2 0 2 2 E AR N I N G S P R E S E N TAT I O N July 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: 2Q22 – Highlights of the Quarter
2Q22 – HIGHLIGHTS OF THE QUARTER Significant improvement in EPS and ROTCE QoQ and YoY1 • Adj Revenue of $98.7 (+9% QoQ and +1% YoY, respectively) Financial • Adj PPNR of $30.2M (+38% QoQ and +4% YoY, respectively) Performance • Adj EPS $0.51 (+19% and +17% QoQ and YoY, respectively) • Adj ROTCE 8.48
Slide 4: Loan Growth Momentum Continues
LOAN GROWTH MOMENTUM CONTINUES AVG. LOAN BALANCES 1 ($M) +1% +7% 7,416 7,492 HIGHLIGHTS 6,991 6,974 6,766 2,186 2,214 2,044 1,919 1,950 • Loan Balances growth momentum continues o Avg and EOP balances up +7% QoQ 5,230 4,947 4,847 5,024 5,278 o Avg and EOP balances up +1% and +8% respectively YoY • L
Slide 5: 2Q 2022 Financial Highlights – Income Statement
2 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) 2Q21 1Q22 2Q22 QoQ % YoY % HIGHLIGHTS Net interest income, non FTE $75.4 $69.1 $81.4 18% 8% Non-interest income 22.0 20.7 16.4 -21% -26% • Strong 2Q22 results driven by Revenue 97.4 89.7 97.7 9% 0% robust
Slide 6: 2Q 2022 Financial Highlights – Average Assets
2 Q 2 0 2 2 F I N A N C I A L H I G H L I G H T S – AV E R A G E A S S E T S ($M) -7% -2% HIGHLIGHTS 11,425 10,825 10,589 1,750 1,202 476 • Robust loan growth across all business lines, on an average basis, drove 7% QoQ and 1% 2,259 2,621 2,649 YoY growth 3.84% o Both CRE and C&I loans grew 3.99% 5%
Slide 7: 2Q 2022 Financial Highlights – Average Liabilities
2 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 -5% ($M) -2% HIGHLIGHTS 10,386 0.36% 10,158 9,915 • Total deposits -3% QoQ and -2% 2,787 YoY 2,968 2,903 0.25% 0.24% 0.23% • Non-interest bearing deposits -2% QoQ and +4% YoY 0.17% 0.17% o Non-interest bearing dep
Slide 8: 2Q 2022 Financial Highlights – NII and NIM
2Q 2022 FINANCIAL HIGHLIGHTS – NII AND NIM +8% +18% ($M) 81.4 HIGHLIGHTS 75.4 71.4 69.3 69.1 • Robust NII growth driven by loan balance growth, rate environment, increased asset yields and stable funding costs NII o NII +18% QoQ and +8% YoY • Significant NIM improvements driven by rate environment,
Slide 9: 2Q 2022 Financial Highlights – Fee Revenue
2Q 2022 FINANCIAL HIGHLIGHTS – FEE REVENUE ($M) -23% -19% HIGHLIGHTS 22.5 21.4 2.3 17.3 • Adjusted non-interest income -19% QoQ and -23% YoY o Excluding the impact of Insurance, non-interest income 20.2 -14% YoY o QoQ decrease in loan fees and revenues driven primarily by lower swap and Commercial s
Slide 10: 2Q 2022 Financial Highlights – Expenses
2Q 2022 FINANCIAL HIGHLIGHTS – EXPENSES -1% 0% ($M) 68.9 68.0 68.5 68.5 68.4 HIGHLIGHTS • Continue to self-fund investments to drive growth and transformation • Strong expense discipline resulting in flat expenses QoQ and -1% YoY o Expense trajectory flat over the last five quarters • Modest increas
Slide 11: 2Q 2022 Financial Highlights – Asset Quality
2Q 2022 FINANCIAL HIGHLIGHTS – ASSET QUALITY ($M) DELINQUENCY TRENDS HIGHLIGHTS 78 1.15% 67 70 • Credit quality remains strong 0.92% 59 19 0.87% 43 0.89% o NPLs down 9% and 44% QoQ and YoY, respectively 50 22 43 20 0.69% o Historically low NCOs / Avg. Loans of 0.02%; down 13 bps and 24 bps QoQ and Y
Slide 12: 2Q 2022 – Capital and Liquidity Levels
2 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 CAPITAL LEVELS1 (%) CET 1 Tier 1 Leverage HIGHLIGHTS 15.3 15.0 14.3 13.9 12.9 • Continue to deploy capital to 10.5 10.3 10.2 support balance sheet growth, 9.5 9.9 share repurchases, and dividends o Repurchased 2.15 million shares (~$55 m
Slide 13: 2022 Outlook – Updated Guidance
2 0 2 2 O U T L O O K – U P D AT E D G U I D A N C E 2021 Actuals 2022 Outlook (January) 2022 Outlook (July) Average • Loans: $7.3Bn • Loan Growth: low to mid-single digits • Loan Growth: +5% to +7% Balance • Deposits: $9.9Bn • Deposit Growth: low-single digits • Deposit Growth: 0% to -2% Sheet • GA
Slide 14: 2Q 2022 – BEST Progress vs. Goal
2Q 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 15: Empowering Community Comeback
EMPOWERING COMMUNITY COMEBACK Community • Leadership team visited nine markets across five states, including ~80 different cities Comeback Tour • Connected with ~80% of employees and over 100 customers Center for Women, • Launch of CWWW to provide women with tools to help create a future enriched wi
Slide 16: Appendix
APPENDIX 16 >< BerkshireHillsBancorp
Slide 17: 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 ) June 30, Sept. 30, Dec. 31, March 31, June 30, (in thousands) 2021 2021 2021 2022 2022 Total revenue (A) $ 97,404 $ 145,003 $ 90,721 $ 89,744 $ 97,709 Adj: Net securities losses (1) 484 166 106 745 973 Adj: Net (gains) on sale of busin
Slide 18: 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 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 is computed b
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