Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Q1 2022 Earnings Presentation
18 slides from Beacon Financial's earnings presentation, Apr 20, 2022
Slide 1: Berkshire Hills Bancorp 1Q2022 Earnings Presentation
BERKSHIRE HILLS BANCORP 1 Q 2 0 2 2 E AR N I N G S P R E S E N TAT I O N April 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: 1Q22 – Highlights of the Quarter
1Q22 – HIGHLIGHTS OF THE QUARTER Solid improvement in EPS and ROTCE QoQ and YoY1 • Adj EPS $0.43 (+4% and +37% QoQ and YoY respectively) Financial • Adj Non-Interest Expenses of $68.5m (flat QoQ and -8% YoY respectively) Performance • Adj ROTCE 7.49% (+15bps and +145bps QoQ and YoY respectively) • P
Slide 4: Loan Growth "Inflection Point"
LOAN GROWTH “INFLECTION POINT” AVG. LOAN BALANCES 1 ($M) 7,869 +3% 7,416 HIGHLIGHTS 6,991 6,766 6,974 2,374 2,186 2,044 1,919 1,950 • Loan Growth Inflection Point reached after 7 quarters o Avg balances up +3.1% QoQ 5,495 5,230 4,947 4,847 5,024 o EOP balances up +6.5% QoQ 1Q21 2Q21 3Q21 4Q21 1Q22 •
Slide 5: 1Q 2022 Financial Highlights – Income Statement
1 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) 1Q21 4Q21 1Q22 QoQ % YoY % HIGHLIGHTS Net interest income, non FTE $75.1 $69.3 $69.1 0% -8% Non-interest income 26.2 21.4 20.7 -3% -21% • On an adjusted basis: Revenue 101.3 90.7 89.7 -1% -11% Non-interes
Slide 6: 1Q 2022 Financial Highlights – Average Assets
1 Q 2 0 2 2 F I N A N C I A L H I G H L I G H T S – AV E R A G E A S S E T S -5% ($M) +1% 3.73% 3.76% HIGHLIGHTS 11,415 10,825 10,742 3.61% 1,351 1,202 • 3.1% growth in loan portfolios 1,609 QoQ driven by growth of C&I 2,195 and CRE portfolios 2,649 2,367 o C&I and CRE portfolios +7% and +2% respect
Slide 7: 1Q 2022 Financial Highlights – Average Liabilities
1 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% ($M) 1% HIGHLIGHTS 10,445 0.48% 10,158 10,071 • 1% growth in total deposits both 2,537 QoQ and YoY 3,038 2,968 0.36% • Continuing to drive lower cost of funds 0.26% 0.23% o 1Q22 cost of funds at 23 bps, 0.19%
Slide 8: 1Q 2022 Financial Highlights – Fee Revenue
1Q 2022 FINANCIAL HIGHLIGHTS – FEE REVENUE ($M) HIGHLIGHTS -18% 26.2 5% 21.4 • Adjusted non-interest income 20.5 +5% QoQ and -18% YoY o QoQ growth driven primarily by higher Wealth Management, swap fees and lower tax credit impairments offset by lower SBA lending revenues o YoY decrease largely driv
Slide 9: 1Q 2022 Financial Highlights – Expenses
1Q 2022 FINANCIAL HIGHLIGHTS – EXPENSES ($M) -8% 0% HIGHLIGHTS 74.7 68.5 68.5 • Continued expense discipline resulting in flat expenses QoQ and -8% YoY o Expenses have remained flat/in range of ~$68M per quarter since 2Q21 o Continuing to manage headwinds from wage inflation 1Q21 4Q21 1Q22 • Self-fu
Slide 10: 1Q 2022 Financial Highlights – Asset Quality
1Q 2022 FINANCIAL HIGHLIGHTS – ASSET QUALITY ($M) DELINQUENCY TRENDS HIGHLIGHTS 1.18% 1.15% 91 0.92% • Credit quality continues to significantly improve over 0.87% 78 the last several quarters 35 67 59 0.69% 19 43 50 • Provision benefit of $4M driven by improved credit 22 performance and continued e
Slide 11: 1Q 2022 – Capital and Liquidity Levels
1 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 AND LIQUIDITY HIGHLIGHTS LOAN/DEPOSIT RATIO 79% 75% 73% • Strategically allocating capital for balance sheet 66% 68% 68% growth and enhancing shareholder value o Berkshire has reduced shares outstanding by ~6% YoY1 • Maintain suf
Slide 12: 1Q 2022 – "BEST" Progress vs. Goal
1Q 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: Tech Stack Modernization Enabling BEST Plan Growth
T E C H S TA C K M O D E R N I Z AT I O N E N A B L I N G B E S T P L A N G R O W T H 1. Build New Core System Berkshire’s Technology Modernization New o Low-code and easy-to-use integration Core Core software that allows Berkshire Bank to System System seamlessly connect various applications, data
Slide 14: Expanded Narmi Relationship
E X PA N D E D N A R M I R E L AT I O N S H I P 1 Narmi Add-Ons Berkshire Services Narmi Platforms Delightful Digital Experience Automatic Savings Credit Cards Digital Account Opening Refer a Friend Consumer Loans Personal Financial Check Re-Order Management Consumer Digital Banking Instant ACH Bran
Slide 15: New Independent Director – Dr. Mihir A. Desai
NEW INDEPENDENT DIRECTOR – DR. MIHIR A. DESAI Dr. Desai, 53, is the Mizuho Financial Group Professor of Finance at Harvard Business School, and Professor of Law at Harvard Law School. Dr. Desai is an accomplished author and expert in finance and tax policy. His books include the Wisdom of Finance: D
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 ) March 31, June 30, Sept. 30, Dec. 31, March 31, (in thousands) 2021 2021 2021 2021 2022 Total revenue (A) $ 101,286 $ 97,404 $ 145,003 $ 90,721 $ 89,744 Adj: Net securities losses (1) 31 484 166 106 745 Adj: Net (gains) on sale of busi
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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