Beacon Financial Corporation · NYSE:BBT
Beacon Financial — Berkshire Hills Bancorp — Sandler O'Neill + Partners 2007 East Coast Financial Services Conference
25 slides from Beacon Financial's conference presentation, Nov 13, 2007
Slide 1: America's Most Exciting Bank
Michael P. Daly President and Chief Executive Officer Sandler O’Neill + Partners 2007 East Coast Financial Services Conference NASDAQ : BHLB www.berkshirebank.com November 13, 2007 Berkshire Bank - America’s Most Exciting Bank SM Exhibit 99.1
Slide 2: Accomplishments since 2004
Accomplishments since 2004 Grown from 11 stores to 48 stores Expanded from Berkshire County into three states in our four state target market Became one of the top dozen banks in country in insurance revenue as percentage of operating revenue Consistently grown basic business lines at double digit a
Slide 3: A Growing Regional Franchise 9/30/07 Size
A Growing Regional Franchise 9/30/07 Size $148 million Tangible stockholder’s equity $331 million Stockholder’s equity $102 million Annualized operating revenue $780 million Assets under management $2.5 billion Total assets Manchester Springfield Albany Hartford New York Vermont New Hampshire Massac
Slide 4: Key Steps in Our Growth
Key Steps in Our Growth Woronoco Bancorp – branches - $850 million in assets Greater Springfield Massachusetts Region $495 million in deposits at 9/30/07; 10% CAGR since 2005 $196 million in commercial loans at 9/30/07; 17% CAGR since 2005 New York de Novo Program – branches in 2005 – 2007 New York
Slide 5: New England Market Strengths
New England Market Strengths Map Source: Moody’s/Economy.com 5/24/07 – Map of Expansion New England Economic Partnership Compared to US average: • Higher per capita income • Lower unemployment • Higher economic growth Primary market strengths: • Quality of life • Low, stable cost of living • Access
Slide 6: Expanded Leadership for a Regional Company
Expanded Leadership for a Regional Company Lawrence A. Bossidy Non-Executive Chairman of the Board Michael P. Daly President & Chief Executive Officer Retired Chairman & CEO of Honeywell International and Allied Signal, Former Vice Chair of General Electric Thomas W. Barney, CFP Senior Vice Presiden
Slide 7: Our Goals for Creating Value
Our Goals for Creating Value Brand - Create nationally recognized brand and business style Culture/Relationships - Expand strong, high quality franchise through motivated teamwork and relationship building Market Share – Build leading market share as only locally headquartered regional bank in prima
Slide 8: How We Differentiate Ourselves
How We Differentiate Ourselves Enthusiastic and focused teamwork Culture Create exciting brand experience Brand
Slide 9: YoSeLicinil!”
YoSeLicinil!” Baresrit.
Slide 10: Creating a Culture of Excitement
Creating a Culture of Excitement “I’m So Excited!” – Pointer Sisters’ music and lyrics “America’s Most Exciting Bank” – service mark An exciting, memorable customer experience Employees “live” the brand everyday
Slide 11: Ongoing Growth in Core Earnings
Ongoing Growth in Core Earnings $19.4 $0 $3 $6 $9 $12 $15 $18 $21 2002 2003 2004 2005 2006 2007 Guidance CAGR = 20% Note: De novo branch costs totaled $1.8 million in 2006 and $3.7 million pro forma in 2007. CAGR before de novo costs is 22%. ($ Millions)
Slide 12: Diversified Loan Growth Based on Commercial Loans
Diversified Loan Growth Based on Commercial Loans $900 $659 $380 $0 $400 $800 $1,200 $1,600 $2,000 2002 2003 2004 2005 2006 9/30/2007 Commercial Residential Consumer CAGR = 22% ($ Millions) $1,939 20% 34% 46%
Slide 13: Deposit Growth Built on Core Accounts
Deposit Growth Built on Core Accounts $1,036 $424 $336 $0 $400 $800 $1,200 $1,600 $2,000 2002 2003 2004 2005 2006 9/30/2007 Non-maturity Time < $100M Time > $100M CAGR = 18% $1,796 ($ Millions) 18% 24% 58%
Slide 14: Net Interest Income Driven by Balance Sheet Growth
Net Interest Income Driven by Balance Sheet Growth $64 $0 $10 $20 $30 $40 $50 $60 $70 2002 2003 2004 2005 2006 2007 Guidance CAGR = 9% ($ Millions)
Slide 15: Improving the Net Interest Margin
Improving the Net Interest Margin -1 2002 Q4 2006 Q4 2007 Q4 Net Interest Margin 3.35–3.40 Guidance Yield Curve 3.15 Note: The yield curve is the difference between the five year treasury yield and the overnight fed funds rate.
Slide 16: Emphasis on Fee Income Growth
Emphasis on Fee Income Growth $9 $4 $14 $0 $4 $8 $12 $16 $20 $24 $28 $32 2002 2003 2004 2005 2006 2007 Guidance Deposit & loan fees Wealth management Insurance CAGR = 42% ($ Millions) $27
Slide 17: Careful Attention to Operating Efficiencies
Careful Attention to Operating Efficiencies 58.5% 52% 54% 56% 58% 60% 62% 64% 66% 2002 2003 2004 2005 2006 2007 Q4 Guidance Before de novo branch costs 60 - 61% Efficiency ratio impacted by insurance and de novo branches Before de novo branch costs and excluding insurance
Slide 18: Long Run Core EPS Growth
Long Run Core EPS Growth $1.32 $1.55 $1.92 $2.11 $2.00 $2.07 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 2002 2003 2004 2005 2006 2007 Guidance CAGR = 9% (12% before de novo costs) Note: De novo branch expenses (after tax) total $0.14 per share in 2006 and $0.26 per share (guidance) in 2007. GAAP EPS: 2002
Slide 19: Effective Capital Utilization
Effective Capital Utilization 0% 5% 10% 15% 2002 2003 2004 2005 2006 9/30/2007 Ratio of Tangible Equity/Tangible Assets (Period End) 6.5% Note: GAAP equity assets: 2002 – 11.5%, 2003 – 10.1%, 2004 – 10.1%, 2005 – 12.1%, 2006 – 12.1%, 9/30/07 – 13.4%
Slide 20: Conservative Asset Quality
Conservative Asset Quality 0.48% 0.23% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 2002 2003 2004 2005 2006 9/30/2007 Nonperforming Assets/Total Assets (period end) Annualized Net Charge-offs/Average Loans
Slide 21: Slide 21
Slide 22: Questions
Questions __________________________________________ __________________________________________ __________________________________________ __________________________________________ __________________________________________
Slide 23: For questions, please contact
November 13, 2007 For questions, please contact: David Gonci Corporate Finance Officer (413) 281-1973 dgonci@berkshirebank.com Ann-Marie Racine Investor Relations Contact (413) 236-3239 aracine@berkshirebank.com
Slide 24: Forward Looking Information
Forward Looking Information Statements contained in this presentation contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current fact
Slide 25: Reconciliation of Non-GAAP Financial Measures
Berkshire Hills Bancorp, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Measures (Dollars in thousands, except share data) 2002 2003 2004 2005 2006 Net income (A) 2,097 $ 8,965 $ 11,509 $ 8,226 $ 11,263 $ Less: Gain on sale of securities, net (15,143) (3,077) (1,402) (3,532) 3,130 Plus: