-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B+yRV8uCz0Doeh8Dgp5Oze4G5HhAMc+NxJTL9UHws32T+hdkOPtjdaPCmCHbFNp3 rgD7E+X8dJuB3Iu59pRILg== 0000898822-05-000100.txt : 20050302 0000898822-05-000100.hdr.sgml : 20050302 20050302095138 ACCESSION NUMBER: 0000898822-05-000100 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050301 ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050302 DATE AS OF CHANGE: 20050302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERKSHIRE HILLS BANCORP INC CENTRAL INDEX KEY: 0001108134 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 043510455 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15781 FILM NUMBER: 05652505 BUSINESS ADDRESS: STREET 1: 24 NORTH ST. CITY: PITTSFIELD STATE: MA ZIP: 01201 BUSINESS PHONE: 4134435601 MAIL ADDRESS: STREET 1: 24 NORTH ST CITY: PITTSFIELD STATE: MA ZIP: 01201 8-K 1 mark28k.txt FORM 8-K DATED AS OF MARCH 2, 2005 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): March 2, 2005 Berkshire Hills Bancorp, Inc. (Exact name of registrant as specified in its charter) DELAWARE 1-15781 04-3510455 (State or other (Commission File Number) (IRS Employer jurisdiction Identification No.) of incorporation) 24 North Street, Pittsfield, Massachusetts 01201 ------------------------------------------ ------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (413) 443-5601 -------------- Not Applicable -------------- (Former name or former address, if changed since last report) ------------------------------ Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [x] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 7.01 REGULATION FD DISCLOSURE On March 2, 2005, Berkshire Hills Bancorp, Inc., a Delaware corporation (the "Company"), made a presentation at the Keefe, Bruyette & Woods Regional Bank Conference, a copy of which is attached as Exhibit 99.1 hereto and incorporated herein by reference. The information in this report is being furnished, not filed, pursuant to Item 7.01 of Form 8-K. Accordingly, the information in this report, including the presentation, will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 99.1 Presentation at Keefe, Bruyette & Woods Regional Bank Conference by the Company SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BERKSHIRE HILLS BANCORP, INC. Date: March 2, 2005 By: /s/ GERALD A. DENMARK ------------------------------- Name: Gerald A. Denmark Title: Senior Vice President and General Counsel EX-99 2 mar1ppp.txt EXHIBIT 99.1 [BERKSHIRE HILLS BANCORP LOGO] Keefe, Bruyette & Woods Regional Bank Conference Michael P. Daly, President & Chief Executive Officer Boston, Massachusetts March 2-3, 2005 [GRAPHIC] CAUTIONARY STATEMENT Statements contained in this presentation contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and expectations of management as well as the assumptions made using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions. These risks and uncertainties include among others, changes in market interest rates and general and regional economic conditions, changes in government regulations, changes in accounting principles and the quality or composition of the loan and investment portfolios and other factors that may be described in Berkshire Hills Bancorp, Inc.'s quarterly reports on Form 10-Q for the quarters ended March 31, June 30 and September 30 and in its annual report on Form 10-K, each filed with the Securities and Exchange Commission, which are available at the Securities and Exchange Commission's internet website (www.sec.gov) and to which reference is hereby made. Therefore, actual future results may differ significantly from results discussed in the forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of March 2 and March 3, 2005. Except as required by applicable law or regulation, Berkshire Hills Bancorp, Inc. undertakes no obligation to update any forward-looking statements, to reflect events or circumstances that occur after March 2 and March 3, 2005. [GRAPHIC] BERKSHIRE HILLS BANCORP - ---------------------------- >> Profile >> Strategic Actions >> Financial Report >> Expansion Strategy >> Creating Value >> Questions and Discussion [BERKSHIRE HILLS BANCORP LOGO] PROFILE - ---------------------------- >> State chartered savings bank with commercial bank balance sheet >> Market capitalization - approximately $218.2 million >> Ownership structure as of December 31, 2004 - Insiders (not including options) 20.63% - Berkshire Bank Foundation 9.70% - Institutional holders 45.00% [BERKSHIRE HILLS BANCORP LOGO] PROFILE - ---------------------------- At December 31, 2004 >> Assets $1.3 billion >> Loans $828 million >> Deposits $846 million >> Operations 12 full-service branches; 1 loan production office 6 free standing ATM's [BERKSHIRE HILLS BANCORP LOGO] ORIGINAL BHL FRANCHISE - ---------------------------- [MAP] [BERKSHIRE HILLS BANCORP LOGO] EXISTING BHL FRANCHISE - ---------------------------- [MAP] [BERKSHIRE HILLS BANCORP LOGO] STRATEGIC ACTIONS - ---------------------------- Proven ability to execute >> October 2002 Management changes >> December 2002 Sale of $69.7 mm in sub-prime auto loans >> March 2003 Performance benchmarks announced >> December 2003 Sale of $9.9 mm in sub-prime auto loans [BERKSHIRE HILLS BANCORP LOGO] Strategic Actions - ---------------------------- Proven ability to execute >> January 2004 Six Sigma initiative implemented >> June 2004 Sale of 60% ownership of EastPoint Technologies, LLC >> July 2004 Opened representative (LPO) office in Albany, NY >> October 2004 Purchased branch in Oriskany Falls, NY - Allowing de novo branching in NY >> December 2004 Purchased Berkshire Financial Planning >> December 2004 Signed a definitive merger agreement to acquire Woronoco Bancorp, Inc. [BERKSHIRE HILLS BANCORP LOGO] PERFORMANCE - ---------------------------- >> Every business line experienced organic double-digit growth - $134 mm in new commercial loans; net growth of 10% - 23% growth in adjustable rate mortgages - 19% growth in installment loans - 18% growth in equity lines - 18% asset growth in Wealth Management - 17% growth in core non-interest income - 9,000 new accounts opened at the branches - 38% increase in municipal deposits; $70 mm in deposits [BERKSHIRE HILLS BANCORP LOGO] PERFORMANCE - ---------------------------- 30% Increase in earnings for 2004 --- Met or exceeded consensus earnings estimates over last 8 quarters [BERKSHIRE HILLS BANCORP LOGO] DIFFERENTIATING FACTORS - ---------------------------- >> No silos - keep it simple >> Strong board of directors >> Culture of enthusiasm, teamwork, energy and cross-selling >> Ability to attract and maintain the best >> Implemented Six Sigma [BERKSHIRE HILLS BANCORP LOGO] EFFICIENCY RATIO & NON-INTEREST EXPENSE TO AVERAGE ASSETS - ------------------------------------- [BAR GRAPH] 2002 2003 2004 Efficiency Ratio excl. EastPoint 70.25% 66.24% 60.80% Efficiency Ratio 7.07% 4.72% --- Non-Interest Expense 4.31% 3.21% 2.22% - -------------------------------------------- *2002-2003 Includes income/expense from 60% ownership of EastPoint Technologies, LLC, which was sold in June 2004 [BERKSHIRE HILLS BANCORP LOGO] QUALITY LOAN GROWTH - ---------------------------- |X| Compound growth rate since 2002 = 7% |X| Sold high risk/high yielding sub-prime auto loans [BAR GRAPH] - ---------------------- ------------ ---------- ---------- ---------- --------- 2000 2001 2002 2003 2004 - ---------------------- ------------ ---------- ---------- ---------- --------- - ---------------------- ------------ ---------- ---------- ---------- --------- Total Loans $794 $803 $723 $792 $828 - ---------------------- ------------ ---------- ---------- ---------- --------- - ---------------------- ------------ ---------- ---------- ---------- --------- AVG Yield 8.53% 8.38% 7.19% 5.96% 5.61% - ---------------------- ------------ ---------- ---------- ---------- --------- (1) Sold $69.7 mm in sub-prime auto loans in Dec 2002 (2) Sold $9.9 mm in sub-prime auto loans in Dec 2003 [BERKSHIRE HILLS BANCORP] LOAN PORTFOLIO COMPOSITION - ---------------------------- At December 31, 2004 [PIE GRAPH] Residential 1-4, 28% Commercial, 18% Commercial RE, 31% Consumer, 23% Fixed 29.00% Adjustable 71.00% Loan to Deposit Ratio 97.92% [BERKSHIRE HILLS BANCORP LOGO] LOAN PORTFOLIO COMPOSITION - ---------------------------- |X| Commercial bank focused |X| Better positioned for rising rates December 31, 2004 December 31, 2002 ----------------- ----------------- Amount Amount ($Millions) % of Loans ($Millions) % of Loans ---------- ---------- ----------- --------- Commercial loans 150,879 18% 165,274 23% Commercial RE 260,574 31% 157,101 22% --------- ---- -------- ---- COMMERCIAL 411,453 49% 322,375 45% Automobile 123,027 15% 113,321 16% Other Consumer 4,292 1% 5,017 1% Hone Equity 54,157 7% 40,713 5% --------- ---- -------- ---- CONSUMER 181,476 23% 159,051 22% Residential 1-4 235,250 28% 241,596 33% --------- ---- -------- ---- TOTAL 828,179 100% 723,022 100% Fixed 32.08% 37.81% Adjustable 67.92% 62.19% Loan to Deposit Ratio 95.87% 92.42% [BERKSHIRE HILLS BANCORP LOGO] COMMERCIAL LOANS - ---------------------------- [X] Compound growth rate since 2000 = 11% [BAR GRAPH] 2000 2001 2002 2003 2004 Total Commercial Loans $266 $299 $322 $372 $411 AVG Yield 9.19% 8.51% 6.70% 6.03% 5.84% [BERKSHIRE HILLS BANCORP LOGO] COMMERCIAL LOANS - ---------------------------- At December 31, 2004 Other Commercial RE 50% Commercial 37% Commercial 1-4 4% Commercial LDC 5% Multi-Family 4% [BERKSHIRE HILLS BANCORP LOGO] CONSUMER LOANS - ---------------------------- |X| Compound growth rate since 2002 = 7% |X| Portfolio's average FICO at 705 at 12/31/04 [BAR GRAPH] - ---------------------------- ---------- --------- --------- --------- --------- 2000* 2001 2002 2003 2004 - ---------------------------- ---------- --------- --------- --------- --------- - ---------------------------- ---------- --------- --------- --------- --------- Subprime Loans n/a $116 $20 $1 n/a - ---------------------------- ---------- --------- --------- --------- --------- - ---------------------------- ---------- --------- --------- --------- --------- AVG Yield 9.10% 9.15% 8.25% 6.68% 5.65% - ---------------------------- ---------- --------- --------- --------- --------- - ---------------------------- ---------- --------- --------- --------- --------- Total Consumer Loans $283 $271 $159(1) $154(2) $181 - ---------------------------- ---------- --------- --------- --------- --------- *Sub-prime loans not specifically identified (1) Sold $69.7 mm in sub-prime auto loans in Dec 2002 (2) Sold $9.9 mm in sub-prime auto loans in Dec 2003 [BERKSHIRE HILLS BANCORP LOGO] CONSUMER LOANS - ---------------------------- At December 31, 2004 [PIE GRAPH] Home Equity 30% Other Consumer 1% Automobile 68% [BERKSHIRE HILLS BANCORP LOGO] RESIDENTIAL MORTGAGE PORTFOLIO MIX - ---------------------------- [BAR GRAPH] 12/31/02 3/31/2003 6/30/2003 9/30/2003 12/31/2003 '01/31/04 03/31/04 06/30/04 9/30/04 12/31/04 Fixed 49% 52% 58% 59% 51% 59% 42% 39% 37% 35% Variable 51% 49% 42% 43% 49% 42% 58% 61% 63% 65%
[BERKSHIRE HILLS BANCORP LOGO] ASSET QUALITY - ---------------------------- Trends since management changes [TABLE] - -------------------------------------------------------------------------------- Percent except NPA and NPL totals 4Q04 4Q03 4Q02 - -------------------------------------------------------------------------------- NPA's ($thousands) 1,152 3,199 5,241 NPA/total loans and REO 0.14% 0.40% 0.70% Allowance/total loans 1.13% 1.13% 1.43% Allowance/NPL's 810.50% 280.37% 275.54% Loan delinquency/total loans 000% 0.67% 1.40% Net loan charge-offs/average loans 0.06% 0.11% 0.37% - -------------------------------------------------------------------------------- [BERKSHIRE HILLS BANCORP LOGO] TOTAL DEPOSITS - ---------------------------- [X] Core deposit compound growth rate = 7% [BAR GRAPH] - ------------------ ----------- ------------ ----------- ------------ ----------- 2000 2001 2002 2003 2004 - ------------------ ----------- ------------ ----------- ------------ ----------- - ------------------ ----------- ------------ ----------- ------------ ----------- Core Deposits $410 $425 $452 $509 $531 - ------------------ ----------- ------------ ----------- ------------ ----------- - ------------------ ----------- ------------ ----------- ------------ ----------- Certificates of $320 $318 $330 $321 $315 Deposit - ------------------ ----------- ------------ ----------- ------------ ----------- Total $730 $743 $782 $830 $846 Core deposits consist of demand, NOW, savings and money market accounts [BERKSHIRE HILLS BANCORP LOGO] DEPOSIT MIX - ---------------------------- |X| Focused on core deposit growth December 31, 2004 December 31, 2002 ----------------- ----------------- Amount Amount ($Millions) % of Deposits ($Millions) % of Deposits ---------- ------------ --------- ------------ Demand deposits $ 110,129 13% $ 87,149 11% NOW accounts 100,709 12% 92,245 12% Savings accounts 163,264 19% 158,468 20% Money market accounts 156,412 19% 114,309 15% -------- ---- -------- ---- Total core accounts 530,514 63% 452,171 58% Certificates of deposit 315,275 37% 330,189 42% -------- ---- -------- ---- Total deposits $ 845,789 100% $ 782.360 100% --------- ---- -------- ---- --------- ---- -------- ---- Cost of Deposits 1.48% 2.14% [BERKSHIRE HILLS BANCORP LOGO] WEALTH MANAGEMENT - ---------------------------- >> 18.4% asset growth >> $358 mm under management >> 89% new money to Berkshire Bank >> 97% retention ratio >> 20.7% revenue growth [BERKSHIRE HILLS BANCORP LOGO] EPS/NET INTEREST MARGIN - ----------------------- |X| Lower margin more than offset by strong credit quality & expense control |X| Better positioned for rising rate environment [BAR GRAPH] 2001 2002 2003 2004 ---- ---- ---- ---- Diluted EPS 1.35 0.36 1.57 2.01 Net Interest Margin 4.35% 4.12% 3.57% 3.29% (1) Management changes and sale of sub- prime auto loans occurred in 4th qtr 2002 [BERKSHIRE HILLS BANCORP LOGO] BERKSHIRE COUNTY DEPOSIT MARKET SHARE - ------------------------------------- (Market size $00 billion as of 09/30/04) [X] #1 in Berkshire County with 00.0% of market share [BAR GRAPH] Berkshire Bank Legacy Bank Greylock FCU Banknorth 2000 22.4 13.7 11.1 8.9 2001 23.5 14.9 12.1 8.7 2002 24.3 14.3 15.1 8.4 2003 25.9 13.7 18.3 8.4 2004 26.4 13.2 19.3 9.1 [BERKSHIRE HILLS BANCORP LOGO] SIX SIGMA INITIATIVE (B6s) - ---------------------------- >> Why? Increase productivity, reduce error rates, cost savings potential >> Pilot program in May 2003 >> Trained 13 employees at "Green Belt" level >> Hired "Black Belt" level training officer >> Currently - 17 Six Sigma projects at various stages of completion >> Beginning in 2005 - Additional 10-12 employees will attend "Green Belt" training "Berkshire Six Sigma...is the new way to think about how we work... It's going to enable growth in everything that we do." [BERKSHIRE HILLS BANCORP LOGO] CAPITAL RATIOS AT DECEMBER 31, 2004 - ------------------------------------- |X| Well capitalized with flexibility to execute expansion strategy [BAR GRAPH] Tangible Equity Ratio 9.37% Tier 1 Leverage 9.14% Capital Ratio Tier 1 Capital Ratio 12.86% Total Capital Ratio 14.22% [BERKSHIRE HILLS BANCORP LOGO] CREATING VALUE - ---------------------------- WORONOCO BRINGS... BERKSHIRE BRINGS... o Quality institution with strong o Quality institution with CONSUMER base strong COMMERCIAL base o Strong business and wealth o Trust and wealth management management demographics o Government banking o Platform agency to offer insurance o High asset quality o Low risk profile COMBINED COMPANY... o Attractive commercial and community banking franchise o Non-interest income potential o Management synergies o Solid asset quality o Satisfies stated acquisition criteria o Capital-friendly disciplined pricing o Accretive to earnings o Contiguous market COMPELLING STRATEGIC FIT [BERKSHIRE HILLS BANCORP LOGO] EXPANDED FRANCHISE - ---------------------------- [MAP] [BERKSHIRE HILLS BANCORP LOGO] COMBINED PROFILE - ---------------------------- >> Assets Initially $2.1 billion >> Loans $1.5 billion >> Deposits $1.3 billion >> Operations 23 full-service branches; 1 loan production office 10 free standing ATMs [BERKSHIRE HILLS BANCORP LOGO] WORONOCO ACQUISITION - ---------------------------- >> Accretive to earnings in 2005 >> Expected to be 6% accretive in 1st full year >> 30% cost saves achieved within 2005 >> $250 million deleverage >> No revenue enhancements built into the assumptions [BERKSHIRE HILLS BANCORP LOGO] PRO FORMA MARKET SHARE >> 1st in Pittsfield and Westfield, MA and Berkshire County >> 14th in Massachusetts >> 4th Largest publicly traded bank headquartered in MA MAJOR PLAYER IN THE MARKETS WE SERVE [BERKSHIRE HILLS BANCORP LOGO] MARKET SHARE OPPORTUNITY - ---------------------------- >> 8th in Hampden County, 10th in Hampshire County BHL WRO Berkshire County Hampden County ---------------- -------------- Total Businesses 6,525 14,506 Total Sales ($M) 7,561 21,928 C&I and Comm. RE Loans ($M) 377 80 C&I and Comm. RE Loans /Sales 4.98% 0.37% COMMERCIAL LENDING OPPORTUNITY [BERKSHIRE HILLS BANCORP LOGO] COMBINED LOAN PORTFOLIO - ---------------------------- [PIE CHART] 1-4 Family, 41% Comm. RE, 28% Commercial, 12% Consumer, 19% BALANCED ASSET MIX [BERKSHIRE HILLS BANCORP LOGO] COMBINED DEPOSIT ANALYSIS - ---------------------------- [PIE CHART] Jumbo, 16% Brokered, 6% Transaction, 22% MM & Sav., 37% Time < 100k, 19% DIVERSIFIED COMBINED DEPOSIT MIX [BERKSHIRE HILLS BANCORP LOGO] EPS IMPACT - ---------------------------- PRO FORMA INCOME BREAKDOWN 2005(1) 2006 ---------------------------- Berkshire Net Income (Consensus Estimates) 12,232 13,413 Woronoco Net Income (Revised Estimates) 2,794 5,916 ------ ------ Pro Forma Net Income 15.026 19.329 -------- -------- After Tax Acquisition Adjustments: - ------------------------------------------------------ Cost Savings (30.00%) 1,846 4,356 Amortization of Core Deposit Intangible (457) (914) Amortization of Purchase Accounting Adjustments (194) (387) Lost Income from Cash Used (763) (1,455) -------- -------- Spread Gain from Balance Sheet Restructuring ADJUSTED NET INCOME 15,813 21,636 Pro Forma EPS $2.27 $2.52 Berkshire's Stand Alone EPS $2.26 $2.44 Accretion/ (Dilution) 0.44% 3.28% Pro Forma EPS (ex security gains) $2.13 $2.41 Berkshire's Stand Alone EPS (ex security gains) $2.10 $2.28 Accretion/ (Dilution) 1.43% 5.70% Pro Forma Return on Average Assets 0.97% 1.02% Pro Forma Return on Average Equity 8.75% 8.78% Pro Forma Tier 1 Leverage 7.18% 7.14% 1 Assumes the transaction closes on 6/30/2005. [BERKSHIRE HILLS BANCORP LOGO] CREATING VALUE - ---------------------------- >> Motivate and retain the best quality people >> Drive organic loan & deposit growth; relationship building >> Continue to expand fee based income o Consumer & commercial fee based business o Wealth management o Private banking o Insurance >> De novo expansion >> Cross-selling initiatives >> Develop Six Sigma culture >> Flawless execution on Woronoco transaction [BERKSHIRE HILLS BANCORP LOGO] PERFORMANCE BENCHMARKS - ---------------------------- Benchmarks announced in March 2003 Within 3 years: |X| Double digit ROE |X| 1.0% ROA |X| Efficiency ratio below 60% - -------------------------------------------------------------------------------- Actual Results 4Q04 Annualized 2003 2002 - -------------------------------------------------------------------------------- ROE 9.72% 7.28% 1.54% ROA 0.97% 0.80% 0.20% Efficiency Ratio 60.80% 66.00% 70.06% - -------------------------------------------------------------------------------- [BERKSHIRE HILLS BANCORP LOGO] [BERKSHIRE HILLS BANCORP LOGO] INVESTOR PRESENTATION MARCH 2-3, 2005 If you have any questions, please contact: Wayne F. Patenaude, CFA Senior Vice President and CFO (413) 236-3195 wpatenaude@berkshirebank.com OR L. Alexandra Dest, Investor Relations Vice President and Senior Investment Officer (413) 236-3163 adest@berkshirebank.com Company website: www.berkshirebank.com [GRAPHIC] -----END PRIVACY-ENHANCED MESSAGE-----