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This presentation contains forward-looking statements (within the meaning of the Private Securities Litigation Reform Forward Looking Statements Follow-on |
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Statements in the presentation regarding Berkshire Hills Bancorp that are not historical Safe Harbor Statement |
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P.O. Box 1308, Pittsfield, MA 01202 — Executive Offices — 66 West Street, Pittsfield, MA 01201 Follow-on Common Stock Offering Michael P. Daly Kevin P. Riley Shepard D. Rainie |
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Offering Terms Issuer: Berkshire Hills Bancorp, Inc. (NASDAQ: BHLB) |
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Capital Raising Rationale Increase Berkshire Hill's ability to be opportunistic in a unique |
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Our Growing Regional Franchise $2.7 billion in assets as of March 31, 2009 48 financial centers Three-state franchise Massachusetts, New York and Vermont Largest locally headquartered regional financial services company in primary market $640 million in managed assets - wealth management and investments Insurance agency with 100 professionals Strong growth from organic, de novo and acquisition strategies Distinctive culture as America's Most Exciting Bank SM |
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Experienced Leadership Team Michael P. Daly Kevin Riley Sean Gray Background Background Background Background Lawrence A. Bossidy David Farrell Background Michael Oleksak Shepard Rainie |
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Investment Opportunity Experienced and proven management team |
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Positioned to Increase Market Share Note: The Company has a pending agreement to acquire CNB Financial Corp. in Worcester, Massachusetts, parent of Commonwealth National Bank. Market Deposits Share Region ($mm) (%) Branches Rank Berkshire County 881 30.7 12 1 Pioneer Valley (Springfield) 513 4.4 10 11 Southern Vermont 277 6.3 7 5 New York Capital Region (Albany) 153 0.7 10 19 |
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Record Revenues and Earnings per Share in 2008 Revenue growth from acquisitions and organic growth Revenue Per Share Earnings per Share $8.28 $9.45 $9.95 $2.00 $4.00 $6.00 $8.00 $10.00 2006 2007 2008 $1.29 $1.44 $2.06 $0.50 $0.75 $1.00 $1.25 $1.50 $1.75 $2.00 2006 2007 2008 |
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Solid 2008 Results Meeting or beating industry performance on all measures Note: Industry data is based on median SNL data for exchange traded banks and thrifts for institutions with FYE 2008 data in the SNL database as |
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Overview of 1st Quarter 2009 Results Earnings per share of $0.27 Net interest margin of 3.11% Record levels of deposits, growing 6% in Q1 as customers sought safety in Berkshire's 100% insured deposit accounts Fee income of $8.4 million or 32% of total revenues Nonperforming assets decreased to 0.47% of total assets from 0.48% at December 31, 2008 Tangible common equity to tangible assets of 7.8% |
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Recent Announcements Agreement to acquire CNB Financial, parent of $300 |
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Strong Capital Ratios Assumes a gross offering price of $24.11 based on Berkshire Hills' closing stock price on May 8, 2009, adjusted 7% for fees and expenses to a As of March 31, 2009 Tangible Common Equity / Tangible Assets 7.75% Proforma With Stock Offering (1) 8.75% Tangible Common Book Value Per Share $16.03 Proforma With Stock Offering $16.62 Total Equity / Total Assets 15.15% Proforma With Stock Offering 16.01% Common Book Value Per Share $30.54 Proforma With Stock Offering $29.80 Berkshire Bank Risk-Based Capital Ratio 12.2% |
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Solid Loan Performance Note: Delinquent loans include all accruing loans delinquent 30 days or more. Charge-offs are based on quarterly net charge-offs, annualized. 0.00% 0.50% 1.00% 1.50% 2.00% Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Non-performing Assets / Assets Delinquent Loans / Loans Net Charge Offs / Loans |
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Low Net Charge-Offs Annualized Net Charge First Quarter 2009 Quarter End Offs / Avg. Loans (Dollar Values in Thousands) Loan Balance (%) Residential $651,507 0.07% Home Equity 217,313 0.08% Auto & Other Consumer 123,430 1.84% Commercial Business 179,765 0.35% Commercial Real Estate- Other 665,001 0.38% Commercial Construction 132,362 2.45% Total $1,969,378 0.51% |
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Loan Mix Managed for Quality Growth 8% organic growth in 2008 Indirect lending running off at 49% annual rate Strong credit disciplines - no high LTV or sub-prime or Alt A loan programs All lending is to relationships in Berkshire's New England and New York lending areas Note: 2008 organic growth excludes indirect auto loans which are in run-off. $1,969 $2,007 $1,944 $1,699 $0 $400 $800 $1,200 $1,600 $2,000 $2,400 2006 2007 2008 1Q09 (Millions) Commercial Mtg C&I Residential Consumer |
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Diversified Commercial Loan Industry Exposure No loans to out of area relationships TOTAL COMMERCIAL LOANS = $977 MILLION As of March 31, 2009 Misc. Commercial 9% Other Services 11% Human Services 8% Apartments 8% Other CRE 8% Retailers 10% RE Development 9% Lodging 14% CRE Rental 23% |
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Modest and Diversified Commercial Construction Portfolio TOTAL $132 MILLION = 7% OF TOTAL LOANS As of March 31, 2009 RESIDENTIAL C&D: $82 MILLION OTHER C&D: $50 MILLION Single Home Const. 5% Subdiv. Single Fam 16% Subdiv. Condo 25% Retail 10% Land Improved 3% Land Unimproved 8% Office 10% Other 6% Hotel 12% Multifamily 5% |
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Overview of Acquisition of CNB Financial Purchase Price: $8.91 per share; $20.3 million in aggregate(1) Based on a Berkshire Hills stock price of $24.11 as of May 8, 2009 |
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Transaction Highlights and Rationale Through the acquisition of CNB Financial, Berkshire Hills will gain a (1) By population; Based on U.S. Census Bureau Data |
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Overview of CNB Financial Corp. Map excludes the Berkshire Hills branch at 212 Main Street in Oriskany Falls, New York. Map includes offices of Berkshire Insurance Group CNB 2008 Financial Highlights: Berkshire Hills' Expanded Branch Network(1) Berkshire Hills Joins the Worcester Market Boston Worcester Springfield Albany |
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CNB Financial's Loan Portfolio Low historic charge-off rate (Dollar Values in Millions) December 31, 2008 Percent of Total Commercial and Industrial $53 22% Construction Loans $30 12% Other Commercial Real Estate $122 51% Residential Real Estate $24 10% Consumer $13 5% Total Loans $242 100% Loan Loss Allowance ($3) Net Loans $239 |
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Key Financial Estimates In the course of its due diligence, Berkshire Hills along with |
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Attractive Stock Metrics Compared to Peers Pricing data as of May 8, 2009 Source: SNL Financial Price / Loans LTM Price TBV EPS Company City, State Ticker ($) (%) (x) Independent Bank Corp. Rockland, MA INDB 21.74 235 15.5 Washington Trust Bancorp, Inc. Westerly, RI WASH 18.49 173 13.9 First Niagara Financial Group, Inc. Lockport, NY FNFG 13.21 253 17.2 NBT Bancorp Inc. Norwich, NY NBTB 25.11 269 14.3 Community Bank System, Inc. De Witt, NY CBU 18.00 267 12.5 Tompkins Financial Corporation Ithaca, NY INDB 49.48 267 16.1 MEDIAN 267 15.2 Berkshire Hills Bancorp, Inc. Pittsfield, MA BHLB 24.11 150 13.6 |
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Why Invest in Berkshire Hills? Strong and experienced management team |