 acquisition
of Growing “America’s Most Exciting
Bank” sm May 16, 2007 BHLB www.berkshirebank.com Filed by Berkshire Hills Bancorp, Inc. pursuant to Rule 425 under the Securities Act of 1933 Subject Company Factory Point Bancorp, Inc. Commission File Number 0-51584 |
 2 BHLB www.berkshirebank.com A Beneficial Partnership Strong geographic, business and cultural fit Achieves longstanding strategic objective to enter attractive Southern Vermont market with residential, recreational and commercial ties to existing Berkshire and New York regions Factory Point is a quality franchise with strong asset quality and performance metrics Acquisition deal value is approximately $82 million funded with 80/20 mix of stock and cash P/E metrics are favorable with 17.9x price to earnings and 13.4x price to earnings after 25% targeted cost saves Transaction is expected to be accretive to EPS in 2008, with anticipated double digit medium term cash return on equity from planned revenue enhancements Acquired earnings will provide surplus capital available for potential stock repurchases or other capital uses |
 3 BHLB www.berkshirebank.com Total 1-4 Family Loans 38.8% Commercial R/E Loans 41.1% Commercial Loans 12.7% Consumer Loans 3.1% Other 4.3% Demand deposits 5.2% Borrowings 10.7% NOW & Oth Trans Accts 5.2% CD's > $100k 19.2% CD's < $100k 8.4% MMDA & Savings 51.3% Factory Point Bancorp A Solid Franchise Financial Profile Loan Composition Funding Mix Notes: Data Source: Company filings and SNL Financial Dollars in millions except per share data Loan and funding data as of March 31, 2007 LTM OPERATING PERFORMANCE 2004 2005 2006 3/31/07 Total Assets $304 $319 $340 $339 Net Loans 191 207 226 224 Deposits 259 270 270 275 Tangible Equity 22 25 27 27 Tangible Equity / Tangible Assets 7.2% 7.8% 7.9% 8.1% Net Income $3.8 $4.4 $4.5 $4.5 Earnings per Share $0.93 $1.08 $1.10 $1.09 ROAA 1.24% 1.41% 1.35% 1.34% ROAE 16.1% 16.9% 16.3% 16.0% Net Interest Margin 3.88% 4.46% 4.32% 4.12% Efficiency Ratio 63.7% 59.9% 60.9% 62.1% |
 4 BHLB www.berkshirebank.com Southern Vermont Attractive Location and Demographics Notes: Data Source: Company filings and SNL Financial Projected County Per Capita Income Growth BHLB FAPB Factory Point Bancorp, Inc. 2000 2006 2011 Actual Current Projected Population Aggregate Change (%)
3.24 1.17 National Change (%) 7.87 6.66 Income Per Capita Income ($) 20,817 27,251 33,769 National Median Per Capita ($) 21,587 27,084 32,982 Aggregate Change (%)
30.91 23.92 National Change (%) 25.46 21.78 Median Household Income ($) 39,296 49,336 59,380 National Median Household ($) 42,164 51,546 60,704 Aggregate Change (%)
25.55 20.36 National Change (%) 22.25 17.77 Percent of total (%) Less than $25K 31.0 23.4 18.3 $25K to $50K 32.4 27.4 24.3 $50K than $100K 27.9 33.8 34.2 Greater than $100K 8.6 15.4 23.1 Berkshire Hills Bancorp, Inc. 2000 2006 2011 Actual Current Projected Population Aggregate Change (%)
0.65 0.61 National Change (%)
7.87 6.66 Income Per Capita Income ($) 21,213 26,815 32,769 National Median Per Capita ($) 21,587 27,084 32,982 Aggregate Change (%)
26.41 22.20 National Change (%)
25.46 21.78 Median Household Income ($) 39,681 48,291 56,309 National Median Household ($) 42,164 51,546 60,704 Aggregate Change (%)
21.70 16.60 National Change (%)
22.25 17.76 Percent of total (%) Less than $25K 31.4 25.2 21.2 $25K to $50K 29.5 26.2 23.8 $50K than $100K 29.5 31.7 31.0 Greater than $100K 9.6 16.9 24.0 |
 5 BHLB www.berkshirebank.com Many Strategic Benefits Expansion of branch network into area of higher per capita income growth than national median; aligns with long term targeted expansion into Southern Vermont Generate revenue enhancements from acquisition coupled with product expansion in insurance, trust, and investment services, organic growth and de novo branching in the area Gain market share from national and community bank competitors by taking advantage of position as only locally headquartered regional bank. Berkshire has a proven record of sustained diversified double-digit annual growth in similar markets. Bring higher legal lending limit and larger suite of products and services to a high performing institution Accretive to earnings through cost savings realization and contribution of existing strong banking team in Vermont |
 6 BHLB www.berkshirebank.com 38 Total 7 Vermont 10 21 Branches New York Massachusetts State Combined Map 23% increase in total branches Berkshire Bank (31 branches) Factory Point (7 branches) |
 7 BHLB www.berkshirebank.com Deal Terms Notes: ¹ Based on BHLB’s stock price of $33.37, the 30-day average as of April 30, 2007 ² Based on 4,096,273 FAPB shares outstanding and 318,909 FAPB options outstanding with
a weighted average strike price of $11.59 per option based on $33.14 5-day average BHLB stock price as 5/11/07. Pricing: 80% stock; 20% cash 0.5844x fixed exchange ratio¹; $19.50 in cash $81.9 million² Converted into BHLB’s options $3.6 million or 4.4% of deal value Estimated after tax direct costs $7 million; indirect costs $1 million Form of Consideration: Indicated Aggregate Deal Value: Option Treatment: Termination Fee: Direct & Indirect Costs: |
 8 BHLB www.berkshirebank.com Attractive Multiples Driven by Strong Earnings 21.9% 20.9% Tang Book Premium/Core Deposits 1 255% 291% Price/Tangible Book 23.1x 17.9x Price/LTM earnings Median Nationwide Bank M&A Multiples 2 ¹ Does not include CDs > $100,000 as of March 31, 2007 (approximately 9.4% of total
deposits). This definition specific to this ratio only, for
comparative purposes. ² Includes all nationwide bank transactions since January 1, 2006 with deal value between $15 million and $250 million Source: SNL |
 9 BHLB www.berkshirebank.com Combined Assets Increase by 18% As of March 31, 2007 $13.03 $16.13 Tangible book value per share $30.90 $29.87 Book value per share 10,722 1,915 8,807 Common shares outstanding $ 2,575,580 $ 61,629
$ 339,378
$ 2,174,573 Total liabilities and equity 331,270 38,629 29,554 263,087 Stockholders’ equity 2,244,310 23,000 309,824 1,911,486 Total liabilities 11,476 - 2,704 8,772 Other liabilities 38,464 23,000 - 15,464 Subordinated debentures 384,191 - 32,553 351,638 Borrowings $ 1,810,179 $
- $ 274,567 $ 1,535,612 Deposits Liabilities and equity $ 2,575,580 $ 61,629
$ 339,378
$ 2,174,573 Total assets 98,771 (1,300) 14,144 85,927 Other assets 24,542 8,400 - 16,142 Other intangibles 167,051 59,829 2,299 104,923 Goodwill 1,929,009 (5,300) 223,901 1,710,408 Net loans $ 356,207 $
- $
99,034 $
257,173 Cash and securities Assets Pro forma Combined Pro forma Adjustments Factory Point Berkshire (in thousands except per share data) Note: Adjustments subject to change based on future information.
|
 10 BHLB www.berkshirebank.com Attractive Combined Loan and Deposit Mix As of March 31, 2007 100% $1,810,179 100% $274,567 100% $1,535,612 Total deposits 44% 787,827 31% 83,408 46% 704,419 Time deposits 12% 215,666 6% 17,404 13% 198,262 Savings deposits 20% 370,876 22% 59,511 20% 311,365 Money market deposits 12% 216,273 25% 69,594 10% 146,679 NOW deposits 12% 219,537 16% 44,650 11% 174,887 Demand deposits Deposits $1,934,309 $223,901 $1,710,408 Net loans (23,774) (4,122) (19,652) Loan Loss Allowance 100% 1,958,083 100% 228,023 100% 1,730,060 Total loans 19% 372,689 13% 29,251 20% 343,438 Consumer loans 46% 907,070 56% 128,452 45% 778,618 Commercial loans 35% $678,324 31% $70,320 35% $608,004 Residential mortgages Loans Percent Balance $ Percent Balance $ Percent Balance $ ($000s) Pro forma Combined Factory Point Berkshire |
 11 BHLB www.berkshirebank.com High Quality Combined Loan Portfolio As of March 31, 2007 1.21% 1.81% 1.14% Allowance/ Total loans 0.10% 0.02% 0.11% Q1 Net charge-offs annualized/ Average loans 0.37% 0.31% 0.39% Non-performers/ Total assets 0.39% 0.40% 0.38% Accruing delinquents/ Total loans Pro forma Combined Factory Point Berkshire |
 12 BHLB www.berkshirebank.com EPS Accretion Target at Four Cents in First Full Year (in thousands, except per share data) 1.83% EPS accretion % $0.04 EPS accretion $2.15 Berkshire’s standalone EPS (guidance midpoint) $2.19 Pro forma combined EPS 10,878 Pro forma 2007 fully diluted shares outstanding 63 Additional diluted shares from Factory Point options 1,915 New shares issued for Factory Point acquisition 8,900 Berkshire Pro forma 2007 diluted shares $23,772 Adjusted net income (100) Income tax adjustment (1,700) Interest cost of debt to finance cash costs 600 Accretion of purchase accounting adjustments 2,500 Cost savings (25%) (1,100) Amortization of core deposit intangible/non-competes Acquisition adjustments: 23,572 Pro forma net income 4,472 Factory Point net income (LTM 3/31/07) $19,100 Berkshire net income (2007 guidance midpoint) |
 13 BHLB www.berkshirebank.com Growing Regional Bank Competitive Advantages Only locally headquartered regional bank in primary market Four state targeted footprint (MA, NY, CT, VT). Largest bank in Western MA Strong growth based on organic, de novo and acquisition strategies Diversified revenue sources with strong commercial components Strong board and management team Community leadership 5.86% 6.92% Tangible equity/assets (03/31/07) 12.86% 12.10% Equity/assets (03/31/07) 7.10% 7.24% First year ROE 0.88% 0.85% First year ROA 38 31 Branches $355 million $292 million Market capitalization $732 million $500 million Assets under management $23.8 million $19.1 million First year income $2.6 billion $2.2 billion Total assets Combined Current Size |
 14 BHLB www.berkshirebank.com Goals Create nationally recognized brand and business style Expand strong, high quality franchise through motivated teamwork and relationship building Take market share as a regional bank from national and community competitors Continue to generate strong top line growth from organic, de novo, acquisition and product expansion Achieve high performance profitability metrics Produce attractive earnings growth and shareholder return Vision To establish the institution as a world-class financial services company through an engaging and exciting environment where customers want do business and employees want to work. |
 15 BHLB www.berkshirebank.com Forward Looking Information This presentation contains certain forward-looking statements about the
proposed merger of Berkshire Hills Bancorp and Factory Point.
These statements include statements regarding the anticipated closing date of the transaction and anticipated future results. Forward-looking statements
can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Certain factors that could cause actual results to differ materially from
expected results include delays in completing the merger,
difficulties in achieving cost savings from the merger or in achieving such cost savings within the expected time frame, difficulties in integrating Berkshire Hills
Bancorp and Factory Point, increased competitive
pressures, changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the business in
which Berkshire Hills Bancorp and Factory Point are engaged, changes in the securities markets and other risks and uncertainties disclosed from time to time in documents that Berkshire Hills Bancorp files with the
Securities and Exchange Commission. |
 16 BHLB www.berkshirebank.com Additional Information And Where to Find It The proposed transaction will be submitted to Berkshire Hills' and Factory
Point's stockholders for their consideration. Berkshire Hills
will file with the SEC a registration statement on Form S-4 that will include a joint proxy statement/prospectus and other relevant documents concerning Berkshire Hills Bancorp, Factory Point, the
proposed transaction, the persons soliciting proxies in the merger and their interests in the merger and related matters. Stockholders
of Berkshire Hills and Factory Point are urged to read the registration statement, including the joint proxy statement/prospectus, when
it becomes available and any other relevant documents filed with
the SEC because they contain important information. You will be able to obtain a free copy of all documents filed with the SEC by Berkshire Hills on the SEC's Web site (http://www.sec.gov). In addition, documents filed with the SEC by Berkshire Hills will be available, without charge, by directing a request to Ann Racine, Investor Relations, Berkshire Hills Bancorp, Inc., 24 North Street, Pittsfield, MA 01201 (413) 236-3239. Berkshire Hills and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from its stockholders in connection with the merger. Information about the directors
and executive officers of Berkshire Hills and their ownership of
Berkshire Hills common stock is set forth in the proxy statement, dated April 2, 2007, for Berkshire Hills' 2007 annual meeting of stockholders, which is available on Berkshire’s website at www.berkshirebank.com and on the SEC’s website. Berkshire Hills Bancorp, Inc. is the holding company for Berkshire Bank - America's Most Exciting Bank SM . Established in 1846, Berkshire Bank is one of Massachusetts' oldest and largest independent banks
and the largest banking institution based in Western Massachusetts. The Bank is headquartered in Pittsfield, Massachusetts with
branches serving communities throughout Western Massachusetts
and Northeastern New York. The Bank is transitioning into a regional bank, delivering exceptional customer service and a broad array of competitively priced deposit, loan, insurance, wealth
management and trust services and investment products. For
more information on Berkshire Hills Bancorp, Inc. or Berkshire Bank, visit www.berkshirebank.com or call 800-773-5601. Factory Point Bancorp, Inc. is a publicly held, one-bank holding company
whose wholly-owned subsidiary, The Factory Point National
Bank of Manchester Center (“Factory Point National Bank”), maintains its corporate offices in Manchester Center, Vermont. Factory Point is incorporated in the state of Delaware. Factory Point National Bank, regulated by the Office of the Comptroller of the Currency, operates seven full-service community
banking offices in Arlington, Dorset, Ludlow, Manchester, and Rutland Vermont. Factory Point’s primary lines of business include
residential real estate lending (for portfolio and sale on the secondary market), small business loan and deposit services, as well as a variety of consumer loan and deposit services. Factory Point National Bank is chartered with trust powers and offers trust and investment
services in the markets it serves. |
 Berkshire Hills Bancorp, Inc. Acquisition of Factory Point Bancorp, Inc. May 16, 2007 For questions, please contact: David Gonci Corporate Finance Officer (413) 281-1973 dgonci@berkshirebank.com |