Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Sandler O'Neill East Coast Financial Services Conference 2012
24 slides from Beacon Financial's conference presentation, Nov 15, 2012
Slide 1: Sandler O'Neill East Coast Financial Services Conference
Sandler O’Neill East Coast Financial Services Conference November 14 – 16, 2012
Slide 2: Presenters and contact details
David H. Gonci Investor Relations Officer dgonci@berkshirebank.com 413-281-1973 Michael P. Daly President and CEO mdaly@berkshirebank.com 413-236-3194 1
Slide 3: Berkshire Hills Bancorp
Berkshire Hills Bancorp Regional bank with nearly $5.5 billion in assets 73 full service branches in four states: MA, NY, CT and VT Ten commercial and residential lending offices in central/eastern Massachusetts Retail and commercial banking, insurance, and wealth management 2 Presence in high value
Slide 4: Creating Shareholder Value
Creating Shareholder Value Financial Drivers Organic Revenue Growth Core Return on Equity Core EPS Growth Human Capital Team and Culture Process and Infrastructure 3 Market Dynamics Regional Presence Competitive Positioning Fee Businesses Mortgage Banking Insurance Wealth Management Disciplined M&A
Slide 5: Organic Growth Positioning
Organic Growth Positioning Western New England (Berkshire County/Vermont) – Top market share; stable markets; higher margins New York (Albany and Central NY) – Solid regional share; growing markets; strong de novo growth Hartford/Springfield – Solid regional share; central location; market opportuni
Slide 6: Revenue Growth
Revenue Growth 20%+ Total Annual Growth From Multiple Strategies 5 Quarterly Revenue ($ million) Note: Revenue in 11Q3 excludes $2 million non-core gain on Legacy stock. Growth includes organic, de novo, product, and M&A strategies Growth results from spread income and fee income 12% increase in rev
Slide 7: Increased Return on Equity
Increased Return on Equity Core Return on Equity Core ROE (Percent) 6 Key metric for performance goals Target of 10% plus Nearing 9% when Beacon integrated 15% investment benchmark Component of management compensation
Slide 8: Managing Equity for Strength and Return
Managing Equity for Strength and Return Core Return on Tangible Equity Tangible Common Equity / Assets Tangible Common Equity/Assets (Percent) Percent 7 Note: Core return on tangible equity is core income before intangible amortization divided by tangible equity.
Slide 9: Performance Improvement
Performance Improvement Greater Efficiency Efficiency Ratio (Percent) 8 57% Core Return on Assets Core ROA (Basis Points)
Slide 10: Core EPS Growth
Core EPS Growth 20%+ Total Annual Growth, Positive Operating Leverage 9 Core EPS (cents) 52¢ 24 cent (85%) increase in quarterly core EPS over two years 7 cents was projected due to M&A quarterly benefit (before Beacon) Benefits from revenue growth, efficiencies, multiple earnings levers Component o
Slide 11: Human Capital – Team and Culture
Human Capital – Team and Culture Team recruitment Building senior and middle management Brand and culture AMEBU (America’s Most Exciting Bank University) Performance management – results and behaviors Scorecards and stack ranking Compensation – rewarding performers Predictive Index and 360s 10 “If y
Slide 12: Process & Infrastructure
Process & Infrastructure Core systems conversion Benefits - efficiency, product capabilities, service delivery, integration, and scalability Six Sigma process improvement Leveraging core systems conversion Business line best practices Lean Six Sigma Fee business integration Acquisition integration R
Slide 13: Regional Presence
Regional Presence 12 Berkshire County/Vermont, New York, Hartford/Springfield New lending offices in central and eastern Massachusetts Berkshire branches in green; Berkshire lending offices in blue
Slide 14: Market Strengths – New England and Central/Eastern NY
13 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 Ongoing economic growth – latest Fed Beige Book Market positioning opportunity for
Slide 15: Fee Business – Mortgage Banking
Fee Business – Mortgage Banking 14 Eight lending offices in Eastern Massachusetts Current annualized originations run rate over $1 billion Exclusive endorsement – Massachusetts Teachers Association Integration and insurance cross sales Strong margins in current environment Spreading best practices a
Slide 16: Fee Business - Insurance
Fee Business - Insurance Personal and commercial full service, with increasing commercial share Enhancing commercial financial services products Taking advantage of firming conditions Opportunities for expansion in regions Leveraging across distribution networks Acquisition opportunities in regional
Slide 17: Fee Business - Wealth Management
Fee Business - Wealth Management Over $1 billion in assets under management Emphasizing financial planning services Focus on pricing strategy and value proposition Uniform product and service delivery Leveraging across distribution networks Acquisition opportunities in regional markets 16
Slide 18: M & A Disciplines
M & A Disciplines Earnings accretion goals Manage tangible book value dilution ROE Targets Reasonable cost save objectives Modest reliance on revenue synergies Understanding purchase accounting impact Balancing cash/stock mix for capital impact Improving financial and demographic metrics 17 Note: Se
Slide 19: Recent M & A History
Recent M & A History 18 PRO FORMA FINANCIAL DATA WITH MERGERS Pre Mergers With Mergers ($ millions except per share and branch data) 12/31/10 9/30/12 Assets $ 2,881 $ 5,486 Loans 2,142 3,983 Intangible assets 173 286 Deposits 2,204 4,031 Stockholders' equity 389 652 Shares outstanding (thousands) 14
Slide 20: Navigating the Business Landscape
Navigating the Business Landscape 19 Many moving pieces in the business landscape and increasing uncertainties: Interest rates and margins Economic outlook Regulatory expectations Political environment Maintaining focus on revenue and earnings momentum Speed of reaction Flexibility Multiple earnings
Slide 21: Why Invest In Us
20 Why Invest In Us Focused on shareholder return Solid strategies for growth and performance Proven track record for results Experienced executive team Strong financial condition Higher market capitalization approaching $600 million - increasing stock profile 100% buy ratings from the equity analys
Slide 22: Forward Looking Statements
FORWARD LOOKING STATEMENTS. This document contains certain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements include statements about anticipated financial results. Forward-looking statements can be identified by the fact that they do not
Slide 23: Financial Performance and Goals
Note: Core results exclude merger, divestiture, and systems conversion charges after tax totaling $0.4 million in 2010, $10.4 million in 2011, and $7.2 million in 9 mo. 2012. GAAP EPS for those periods was $1.00, $0.98, and $1.10 respectively. Core ROTE includes amortization of intangible assets in
Slide 24: Questions and 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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