Michael P. Daly
President and Chief Executive Officer
Berkshire Bank – “America’s Most Exciting Bank”
P. O. Box 1308
Pittsfield, MA 01202-1308
Phone: (413) 236-3194
Email: mdaly@berkshirebank.com
Kevin P. Riley
Chief Financial Officer
Berkshire Bank – “America’s Most Exciting Bank”
P. O. Box 1308
Pittsfield, MA 01202-1308
Phone: (413) 236-3195
Email: kriley@berkshirebank.com
1
Experienced Management Team
30 (First Agricultural Bank)
55
SVP/Human Resources
Linda Johnston
14 (Fleet Investment Services, Bank of
Boston’s Private Bank)
54
SVP/Wealth management
Tom Barney
2 (Former owner MassOne)
57
President, Berkshire Insurance
Ross Gorman
2 (Bank of America)
55
EVP/Chief Risk Officer
Shep Rainie
2 (TD Banknorth)
49
EVP/Commercial Head
Mike Oleksak
2 (Bank of America, Citizens)
31
SVP/Retail Head
Sean Gray
1 (former CFO KeyBank)
48
EVP/CFO
Kevin Riley
22 (Bank of Boston)
46
President/CEO
Mike Daly
6 (retired Chairman & CEO of Honeywell
and Allied Signal; Former Vice chair of GE)
72
Non-Executive Chairman
Larry Bossidy
Years with Company
(previous company)
Age
Position
Name
2
Creating Value
Veteran management team
Diverse revenue sources
Performance driven
Strong commercial orientation
Differentiated brand and culture
Leader in core markets
Opportunity for growth in new markets
3
Building a Distinctive Culture
Vision
To be a world-class
financial services
company through an
engaging and exciting
environment where
customers want to do
business and
employees want to
work.
Core Values
4
Solid First Quarter 2008 Results
65.5%
60.1%
Efficiency ratio
16.1%
33.5%
Fees/Net interest income + fees
3.33%
3.41%
NIM
5.62%
7.4%
ROE
0.87%
0.97%
ROA
(2%)
4%
Change in EPS (year-to-year)
Regional Peer
BHLB
Performance Measure
Note: Institutions considered for regional peer comparison are WBS, PBCT, NAL, WASH, INDB, FNFG and NBTB
Peer measures are based on median average per SNL
5
2008 Plan for Earnings Growth
EPS of $2.16 (14% growth from core 2007)
Fee income growth of 20%
Higher NIM – from liability sensitive to
neutral/asset sensitive
Modest loan growth: 6% - 8%
Commercial real estate, C & I and residential
Look for expansion opportunities
Return excess capital to shareholders
6
Record Revenues and Earnings per Share in 2008
Revenue growth
from acquisitions
and organic
growth
Core EPS
benefiting from
higher margins
and efficiencies
Note: Core and GAAP EPS the same in last five quarters except for 3Q07 (core $0.49 and GAAP $0.10) and 4Q07 (core $0.36
and GAAP $0.29). Difference in 3Q07 was due to balance sheet restructuring and Factory Point merger integration costs.
Difference in 4Q07 was due to merger integration and other nonrecurring expense restructuring costs.
7
Efficiency Ratio Now Improving
Bank ratio 58% - 60%
Insurance co. ratio is low
60% in Q1 & Q2 and low 70%
in Q3 & Q4 – contingency
revenue
Bank ratio will improve as
synergies from Factory Point
are realized and de novo
branches grow
Note: Efficiency ratio is computed by dividing total tangible core non-interest expense by the sum of total net
interest income on a fully taxable equivalent basis and total core non-interest income.
8
Net Interest Margin Highest in Three Years
Benefited from Factory Point acquisition and balance sheet
restructuring in Q3 2007
Utilize interest rate swaps to manage interest rate risk
Diligent pricing on deposit and loan products
9
Fee Income Growing Strongly
Fees provide 30% of revenue
Fee growth of 20% estimated for 2008
10
Loan Mix Managed for Quality Growth
17% CAGR, 10% CAGR without acquisitions
Higher growth in commercial real estate and C & I
Limited emphasis on indirect lending
Residential and home equity focus on retail side
Strong credit disciplines – no high LTV or sub-prime and Alt A loan programs
Modest growth planned in 2008: 6% - 8%
11
Diversified Construction and Development Loans
$176 MM
portfolio was 9%
of total loans at
3/31/08
0.23% C&D non-
accruing ($400M)
at 3/31/08
A/O 3/31/08
(millions)
12
Solid Credit Quality
* Excludes $4 million (0.23%) charge
for one fraud related commercial loan
Nonperforming Loans to Total Loans
Net Charge-offs to Average Loans
Annualized
13
Favorable Deposit Growth
Strong growth in MMA, DDA/NOW
Growing deposit base in New York and Pioneer Valley
Cash management and electronic banking – commercial growth
14
Well Capitalized
Bank continues to exceed
well capitalized standards
Ample liquidity at holding
company – unsecured
borrowing facilities
Cash contributions from
insurance group fund
holding company
obligations
15
Opportunistic Expansion
Jun 05
$850 MM in
assets
Extended franchise to
Springfield/Hartford corridor
Pioneer Valley, MA
(Springfield area)
Woronoco Bancorp,
Inc.
2005 to
2007
$136 MM in
Deposits as
of 3/31/08
Capital Region de novo
expansion – opened 9 branches
since 2005
Capital Region, NY
(Albany area)
De novo expansion
Oct 06
$9 MM in
insurance
revenues
Foundation for Berkshire
Insurance Group
Western MA
5 Western MA
insurance agencies
Sep 07
$391 MM in
assets
Extended franchise to Southern
Vermont
Manchester, VT
Factory Point
Bancorp, Inc
Jan 08
$50 MM
assets under
management
Established wealth management
presence in NY
Albany, NY
The Center for
Financial Planning
Date
Assets/
Value
Strategic Accomplishment
Location
Acquired
Business
16
Acquisition Strategy
Open to flexible partnering structures
Utilize strong management for growth of
combined institution
Strengthen tangible book value
Identify specific and desired targets
Fill in or new market expansion
Strong market opportunity
Non-bank acquisitions
Focus on established businesses
Insurance and wealth management
Goal to be accretive in one year
Open to other types of financial services firms
Remain flexible in regards to deal terms
17
Why Invest in Berkshire Hills
Strong and experienced management team
Distinctive culture and core values
Strong credit culture and asset quality discipline
Above average growth in loans, deposits and fee income
Earnings performance at record levels and growing
Stock valuation metrics are attractive for long term return
250%
180%
Price/Tangible book
140%
80%
Price/Book
13.9X
11.6X
Price/EPS (forward 4Q for BHLB)
SNL Bank
and Thrift
Berkshire
a/o 5/28/08
18
