Successful Acquirers, Sellers &
Independents
SCBA Annual Convention
Charleston Place
June 7-9, 2015
Belief
Strength
Purpose
Disclosure Statements
This presentation was prepared exclusively for the South Carolina Bankers Association Annual Convention (“SCBA Annual Convention”) and
for the benefit and internal use of the SCBA Annual Convention attendees to whom it is directly addressed and delivered (including such
attendee’s subsidiaries and affiliates, the “Attendees”) as an informational presentation and does not carry any right of publication or disclosure,
in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be
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The information in this presentation is based upon public information and industry research and reflects prevailing conditions and our views as
of this date, all of which are accordingly subject to change. BSP’s opinions and estimates constitute BSP’s judgment and should be regarded as
indicative, preliminary and for illustrative purposes only. In preparing this presentation, we have relied upon and assumed, without
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2
Banks Street Partners Professionals
Seasoned professionals with more than 140 years of combined experience and more than 500
transactions in the financial services industry
ATLANTA
CHARLOTTE
Lee Burrows
Joe Maloney
Gary McNorrill
Chief Executive Officer
Senior Vice President/Analyst
COO & Managing Director
lburrows@banksstreetpartners.com
404.848.8480
jmaloney@banksstreetpartners.com
404.848.2662
gmcnorrill@banksstreetpartners.com
704.228.0556
Mark Saunders
William Izlar
Matt Kennedy
Managing Director
Analyst
Associate
msaunders@banksstreetpartners.com
404.848.2686
wizlar@banksstreetpartners.com
404.848.2665
mkennedy@banksstreetpartners.com
704.228.0557
Jeff Adams
Berkeley McKeown
Managing Director
Analyst
jadams@banksstreetpartners.com
404.848.1571
bmckeown@banksstreetpartners.com
404.891.6821
Will Brackett
Nicole Mansfield
Senior Vice President
Chief Marketing Officer
wbrackett@banksstreetpartners.com
404.848.0890
nmansfield@banksstreetpartners.com
404.848.1571
3
Banks Street Partners Recent M&A Deals
Highland Financial Services, Inc.
Bank Holding Company of:
Has Agreed to Merge With
Has Agreed to Merge With
Has Agreed to Merge With
Georgia Commerce Bancshares, Inc.
Has Agreed to be Acquired By
Valley Financial Corporation
Bank Holding Company of:
Bank Holding Company of:
Pending
Pending
Pending
June 2015
Harbor Bank Group, Inc.
Alarion Financial Services Inc.
Bank Holding Company of:
Bank Holding Company of:
Has Merged With
Has Merged With
Has Merged With
December 2014
September 2014
July 2014
Has Been Acquired By
Community & Southern
Holdings, Inc.
Bank Holding Company of:
May 2015
4
Southeast M&A League Table
Rank
1
2
3
4
5
6
Firm
Number
of Deals
Sandler O'Neill & Partners, L.P.
Banks Street Partners, LLC
FIG Partners, LLC
Keefe, Bruyette & Woods
Hovde Group, LLC
Raymond James & Associates, Inc.
41
20
19
18
15
12
37 Firms with Nine or Fewer Deals
Whole Bank, Branch and FDIC-assisted transactions announced between Jan. 1, 2013
and June, 1 2015 with the target located in either AL, FL, GA, NC, SC or TN
Source: SNL Financial
5
Table of Contents
TOPIC
M&A Market Update
PAGE
7
Successful Bank Acquirers
12
Successful Sellers
25
Remaining Independent
31
6
M&A Market Update
Southeast Bank M&A Multiple Trends
P/E transaction multiples in Southeast M&A deals fluctuated greatly from 2006-YTD2015
driven by unstable earnings, elevated NPAs and an uncertain economic recovery
P/TBV multiples are slowly trending upward but remain well below 2006 levels
300
250
30
26
66
58
56
29
30
25
24
51
20
30
30
150
15
100
10
50
5
-
-
2006
2007
2008
2009
2010
Median Deal Value/TCE (%)
Source: SNL Financial
P/E (x)
P/TBV (%)
200
2011
2012
2013
2014
Median Deal Value/Earnings (x)
2015
# of M&A Deals
8
M&A Activity by Region and State
LTM Transaction Multiples by Region
LTM Transaction Multiples by State
160
35
140
30
120
25
100
20
25
100
20
80
15
10
60
40
40
45
40
35
30
15
80
60
40
10
NM
120
180
NM
140
45
NM
160
5
-
5
National
Southeast
Mid-Atlantic
Northeast
P/TBV
Midwest
P/E
Southwest
West
-
P/TBV
P/E
When compared to other regions, Southeast M&A deals completed in the last
twelve months rank 4th in P/TBV and 3rd in P/E (of six)
South Carolina’s median P/TBV multiple of 137% is in line with the Southeast
(136%) and National (138%) medians
South Carolina’s median P/E multiple of 24x is slightly above the Southeast (23x)
and National (22x) medians
Source: SNL Financial
9
M&A Pricing (Population & Asset Size)
Urban designation assigned to selling banks headquartered in MSAs with a
population of greater than 150,000
Deal Value/TBV (%)
Deal Value/TBV (%)
140.0
180.0
135.4
160.0
120.0
167.0
140.0
100.0
101.0
120.0
100.0
80.0
117.7
80.0
60.0
60.0
Urban
Rural
<500mm
>1B
Figures represent medians for all publicly disclosed transactions announced since Jan. 1, 2013 with the target based in the Southeast
Source: SNL Financial
10
Current Pricing Guidance
Historically, over various economic cycles, banks have:
Traded at 13x-15x P/E and sold in the 17x-20x P/E range
Sold at a 25-35% premium to market price
In 2014 and 2015 YTD:
A typical, healthy, Southeast bank could attract a change in control premium
in a range of 110%-135% of P/TBV and 16x-20x P/E
Southeast Banks in urban markets are selling in a range of 130%-200% of
P/TBV and 20x-30x P/E
Southeast Banks in rural markets are selling in a range of 90%-120% of P/TBV
and 14x-18x P/E
Source: BSP
11
Successful Bank Acquirers
Is There a Difference?
Source: The New Yorker
13
BNC Bancorp Overview & Acquisitions
Overview
Acquisitions
Ticker: BNCN
11 acquisitions since 2010
Headquarters: High Point, NC
Average size of acquired banks was $317mm and on
average, represented 12% of BNCN’s total assets at the
time of announcement
Bank Established: 1991
Total Assets: $5.0 bn (PF with most recent acquisition)
Geography: 66 branches in North Carolina, South
Carolina and Virginia
Bank Brands: Bank of North Carolina and BNC Bank in
South Carolina and Virginia
Majority have been market expansions or only partially
overlapped with existing branch network
Average price change in BNCN
announcement to closing is 7.01%
stock
from
Price Change from Day Before
Announcement to:
Seller Name
Seller
Headquarters
Valley Financial Corp. *
Harbor Bank Group, Inc.
Community First Financial Group, Inc.
South Street Financial Corp.
Randolph Bank & Trust Company
Carolina Federal Savings Bank
First Trust Bank
KeySource Financial, Inc.
Blue Ridge Savings Bank, Inc.
Regent Bank
Beach First National Bank
Roanoke, VA
Charleston, SC
Chapel Hill, NC
Albemarle, NC
Asheboro, NC
Charleston, SC
Charlotte, NC
Durham, NC
Asheville, NC
Greenville, SC
Myrtle Beach, SC
AVERAGE
Seller Assets
% of Buyer's
Size/Total Assets Announce
at Announce
Date
Deal Type
Geographic
Expansion?
$857,345
$305,866
$228,492
$273,828
$302,201
$54,373
$436,682
$205,794
$161,430
$51,865
$613,604
22.9%
9.5%
7.7%
9.2%
10.3%
2.3%
18.1%
9.4%
7.3%
2.4%
37.7%
Whole Bank
Whole Bank
Whole Bank
Whole Bank
Whole Bank
FDIC
Whole Bank
Whole Bank
FDIC
Whole Bank
FDIC
Market Expansion
In Market
Partial Overlap
Market Expansion
Partial Overlap
Market Expansion
In Market
Market Expansion
Market Expansion
Market Expansion
Market Expansion
$317,407
12.4%
11/17/2014
6/5/2014
12/18/2013
12/18/2013
5/31/2013
6/8/2012
6/4/2012
12/21/2011
10/14/2011
9/8/2011
4/9/2010
P/TBV at
Announcement (%)
Week After
Announcement
Closing
173
153
99
101
62
NA
72
60
NA
124
NA
4.65%
4.24%
9.25%
9.25%
0.56%
20.34%
-6.53%
3.86%
17.70%
0.59%
21.21%
-3.12%
9.70%
12.23%
24.23%
0.29%
8.45%
12.17%
0.00%
6.15%
0.00%
106
7.74%
7.01%
* Valley Financial Corp. acquisition has not yet closed.
Source: SNL Financial
14
BNC Bancorp Acquisition Map
•
Legacy BNCN
•
Beach First
•
Regent Bank
•
Blue Ridge Savings Bank
•
KeySource
•
First Trust
•
Carolina Federal
•
Randolph Bank & Trust
•
South Street
•
Community First
•
Harbor
•
Valley Financial
•
Hampton Roads*
•
Certus*
*Branch Acquisition
Sources: SNL Financial, ESRI
15
BNCN Stock Price Trend, 2009 - Today
$20.00
$18.00
$16.00
$14.00
$12.00
Harbor National Bank
Blue Ridge
Savings Bank
Beach First
National Bank
Carolina Federal Savings Bank
Valley Bank
$10.00
Harrington Bank &
Home Savings Bank
$8.00
$6.00
Randolph Bank & Trust
First Trust Bank
$4.00
Regent Bank
Whole Bank Acquisitions
Source: SNL Financial
Mar-15
Dec-14
Sep-14
Jun-14
Mar-14
Dec-13
Sep-13
Jun-13
Mar-13
Dec-12
Sep-12
Jun-12
Mar-12
Sep-11
Jun-11
Mar-11
Dec-10
Sep-10
Jun-10
Mar-10
Dec-09
Sep-09
Jun-09
Mar-09
Dec-08
$0.00
Dec-11
KeySource Bank
$2.00
FDIC-Assisted Acquisitions
16
BNC Bancorp Key Strengths
Took advantage of the financial upside associated with FDICassisted deals
Able to acquire even when their stock was trading at a
discount to book value
All but 3 whole bank transactions were priced at or below
book value at time of announcement
Strong corporate culture
Take care of management teams
Currency caught up to culture and M&A expertise
All but two transactions negotiated without auction process
Source: BSP
17
South State Overview & Acquisitions
Overview
Acquisitions
Ticker: SSB
6 acquisitions since 2010
Headquarters: Columbia, SC
Average size of acquired banks was $1.1B and on
average, represented 25% of SSB’s total assets at the time
of announcement
Bank Established: 1934
Total Assets: $8.0 bn
All acquisitions have been market expansions or only
partially overlapped with existing branch network
Geography: 134 branches in South Carolina, North
Carolina and Georgia
Average price change in SSB stock from announcement
to closing is 8.83%
Bank Brand: South State Bank
Price Change from Day Before
Announcement to:
Seller Name
Seller
Headquarters
First Financial Holdings, Inc.
Savannah Bancorp, Inc.
Peoples Bancorporation, Inc.
BankMeridian, National Association
Habersham Bank
Community Bank & Trust
Charleston, SC
Savannah, GA
Easley, SC
Columbia, SC
Clarkesville, GA
Cornelia, GA
AVERAGE
Source: SNL Financial
Seller Assets
% of Buyer's
Size/Total Assets Announce
at Announce
Date
Deal Type
Geographic
Expansion?
$3,215,558
$952,221
$545,856
$234,514
$359,850
$1,017,369
62.6%
21.8%
13.9%
6.1%
10.0%
37.6%
Whole Bank
Whole Bank
Whole Bank
FDIC
FDIC
FDIC
Partial Overlap
Partial Overlap
Partial Overlap
Partial Overlap
Market Expansion
Market Expansion
$1,054,228
25.3%
2/20/2013
8/8/2012
12/20/2011
7/29/2011
2/18/2011
1/29/2010
P/TBV at
Week After
Announcement (%) Announcement
Closing
132
83
61
NA
NA
NA
9.06%
4.08%
7.19%
8.78%
8.32%
13.03%
25.06%
4.30%
16.29%
5.36%
5.21%
-3.23%
92
8.41%
8.83%
18
South State Acquisition Map
•
Legacy SSB
•
Habersham
•
Peoples Bancorp
•
Community Bank & Trust
•
BankMeridian
•
Savannah Bancorp
Sources: SNL Financial, ESRI
•
First Financial
19
SSB Stock Price Trend, 2009 - Today
$80.00
$70.00
$60.00
Habersham Bank
$50.00
Community
Bank & Trust
$40.00
BankMeridian
First Financial Holdings
$30.00
Savannah Bancorp
$20.00
Whole Bank Acquisitions
Sources: SNL Financial, BSP
Mar-15
Dec-14
Sep-14
Jun-14
Mar-14
Dec-13
Sep-13
Jun-13
Mar-13
Dec-12
Sep-12
Jun-12
Dec-11
Sep-11
Jun-11
Mar-11
Dec-10
Sep-10
Jun-10
Mar-10
Dec-09
Sep-09
Jun-09
Mar-09
$0.00
Dec-08
$10.00
Mar-12
Peoples Bancorporation
FDIC-Assisted Acquisitions
20
South State Key Strengths
Focused on distressed or underperforming banks
Acquired larger targets ($1B average size) who had
substantial or dominant market share
All whole bank transactions but 1 were priced at a discount
to book value
Largest community bank in South Carolina and adjoining
states
Strong currency
Source: BSP
21
Seven Cs of a Successful Acquirer
Most, and sometimes all, of the Seven Cs below are key to successful
transactions:
Currency
Culture and leadership
Communication
Creativity
Command of the analytics
Consistency with an established M&A policy
Committee for M&A
Source: BSP
22
Who Will be Successful in the New Cycle?
Buying on the cheap or with FDIC assistance is less likely than at any time in the
recent cycle
FDIC-Assisted transactions have run their course
FDIC-Assisted Transactions
160
147
140
120
90
100
80
60
47
40
20
23
18
4
3
2
0
1
2010
2011
2012
2013
2014
National
SC
0
5
0
YTD 2015
Banks willing to sell at a discount to book will be rare in the future
End of Trust Preferred Securities deferment periods may drive some distressed sales but
likely very distressed and may involve a bankruptcy process
Sources: SNL Financial, BSP
23
Who Will be Successful in the New Cycle? (cont.)
Successful acquirers in the new cycle will:
Have to pay attractive premiums for targets as multiples expand
Average P/TBV
2012
119%
2013
127%
2014
YTD 2015
144%
157%
Need to maintain a strong stock valuation to compete against other acquirers
2012
2013
2014
2015 YTD
Buyer Average at Announcement
P/TBV (%)
P/E (x)
111.6%
14.9
129.1%
15.3
134.8%
18.0
135.5%
16.8
Focus more on EPS accretion than TBV dilution
Allow for more risk now that markets have stabilized and growth is improving
Actively but appropriately pursue targets
Sources: SNL Financial, BSP
24
Successful Sellers
Finding the Right Partner is Key
Source: The New Yorker
26
Motivations for Selling Typically Point to Ideal Acquirers
SHAREHOLDER LIQUIDITY DEMANDS – Cash Buyer or Larger Bank
with liquid stock
FINANCIAL – Larger Bank with strong earnings and ability to improve
target earnings through cost saves or efficiencies and scale
STRATEGIC – Merger of Equals or Larger Bank that offers more products
and services and moves target up market
SUCCESSION/MANAGEMENT CONCERNS – Merger of Equals or
Larger, In-market Bank
REGULATORY – Larger, In-market Bank but cast wide net for other
Potential Buyers
Source: BSP
27
Success After Announcement
The BNCN/KeySource & SSB/Peoples deals were both announced in December 2011
Total Return Since Announcement
200
180
Total Return (%)
160
140
177.8%
164.2%
120
100
80
60
40
20
0
Market data as of 5/28/15
Peoples Bancorporation stockholders have seen a 164.2% return on SSB stock
received as a result of their merger
Likewise, KeySource Financial stockholders have seen a 177.8% return on BNCN
stock received as a result of their merger
Over the same time period, the SNL U.S. Bank Index rose 114%
Source: SNL Financial
28
Tips for a Successful Sale
Management and Board have clear objectives
Implications of a change of control and social issues
Acceptable pricing based in reality
Ideal partners and nonstarters
Executive Committee with authority to negotiate preliminary terms
Third-party consultants – Investment Banker, Legal Counsel and Accountants
Defined process – Negotiated or Auction
Management and consultants are prepared for initial discussions and due diligence
Financials
Credit
Executive Compensation
Warrants and Options, Preferred Stock
Potential Cost Saves
1x Transaction Costs
Know the potential acquirers
Currency – trading multiples, consensus analyst price targets, daily liquidity, dividend yield
Management, Culture, Strategic Vision
M&A Experience
Pricing Today vs. Tomorrow
Cash – all about pricing at announcement
Stock – equal weight on today’s price and tomorrow’s potential
Source: BSP
29
Stock for Stock Analysis Slide
Stock
Exchange
Company Name Ratio *
A
B
C
D
E
F
G
0.5333
0.6711
0.2804
0.1389
0.4864
0.523
0.5003
May 28
Closing
Price
20-Day
Avg.
Close
$18.75
$14.90
$35.66
$72.00
$20.56
$19.12
$19.99
$18.58
$14.51
$35.44
$69.97
$20.04
$18.82
$19.92
52-Week 52-Week
High
Low
$18.96
$14.92
$36.86
$73.76
$21.27
$19.53
$20.98
$15.51
$11.09
$27.52
$53.87
$15.80
$15.06
$17.50
Offer Value Per Common Share Based On:
FactSet
Median
Price
Target
FactSet
High
Price
Target
FactSet
Low
Price
Target
May 20-Day 5252- Median High
Low
28
Avg. Week Week Price Price Price
Close Close High Low Target Target Target
$21.25
$14.75
$38.00
$75.00
$23.50
$21.00
$23.00
$22.00
$16.50
$39.00
$77.00
$24.00
$22.00
$23.00
$20.00
$13.00
$37.00
$66.00
$18.00
$21.00
$21.75
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$9.91
$9.74
$9.94
$9.72
$9.75
$9.84
$9.96
$10.11
$10.01
$10.34
$10.25
$10.35
$10.21
$10.49
$8.27
$7.44
$7.72
$7.48
$7.69
$7.88
$8.76
$11.33
$9.90
$10.66
$10.42
$11.43
$10.98
$11.51
$11.73
$11.07
$10.94
$10.70
$11.67
$11.51
$11.51
$10.67
$8.72
$10.37
$9.17
$8.76
$10.98
$10.88
*Based on May 28th closing price
Offer Value per Common Share
$12.00
$11.50
$11.00
$10.50
$10.00
$9.50
$9.00
$8.50
$8.00
A
B
C
20-Day Avg. Close
Sources: SNL Financial, BSP
D
E
F
G
Median Price Target
30
Remaining Independent
Southeast Banks – Recent Performance
Cost of
Deposits
(%)
Financial Performance
For the 12 Months Ended March 31, 2015
Non-Int.
Inc./
Eff.
Leverage Loans/
Avg Assets
Ratio
TCE Ratio
Ratio
Deposits
(%)
(%)
(%)
(%)
(%)
ADJ.
NPAs/
Assets
(%)
ROAA
(%)
ROAE
(%)
NIM
(%)
Yield on
Loans
(%)
NCO/
LLR/
Avg. Loans Loans
(%)
(%)
Alabama
Florida
Georgia
Mississippi
North Carolina
South Carolina
Tennessee
Virginia
W. Virginia
0.79
0.54
0.80
0.80
0.62
0.73
0.79
0.82
0.74
6.61
4.68
6.86
7.49
4.92
6.87
7.71
7.13
6.79
3.88
3.62
3.98
3.93
3.65
3.73
3.99
3.83
3.73
5.71
5.07
5.79
5.56
4.98
5.27
5.55
5.15
5.25
0.61
0.56
0.55
0.50
0.57
0.40
0.60
0.65
0.60
0.64
0.50
0.65
0.81
0.50
0.66
0.59
0.56
0.60
70.9
80.9
73.1
70.6
77.9
77.9
70.0
71.8
73.0
11.21
10.24
10.52
10.39
10.60
10.54
10.21
10.79
10.18
11.15
10.10
10.56
10.37
10.59
10.33
10.26
10.97
10.55
65.4
79.9
72.3
68.4
84.3
76.6
75.2
85.3
75.8
1.37
1.74
2.33
1.45
1.68
2.24
1.60
1.35
1.28
0.17
0.07
0.18
0.17
0.12
0.23
0.18
0.14
0.13
1.44
1.47
1.66
1.38
1.43
1.44
1.44
1.33
1.26
Southeast
National
0.80
0.80
6.83
7.23
3.85
3.71
5.42
5.21
0.56
0.51
0.61
0.55
73.0
69.9
10.55
10.41
10.53
10.33
75.5
75.8
1.65
0.96
0.16
0.08
1.45
1.34
ROAA and ROAE are S-Corp. adjusted.
Pre-Tax, Pre-Prov ROAA = net income before taxes plus provision expense less securities gains plus any goodwill impairment, divided by average assets.
Source: SNL Financial
32
Southeast Banks – Recent Performance
Last 12 Months
Growth in
Loan Portfolio
Composition
Median Asset
Size
($000)
Assets
(%)
Loans
(%)
Deposits
(%)
Net
Income
(%)
1-4
Family
(%)
Alabama
Florida
Georgia
Mississippi
North Carolina
South Carolina
Tennessee
Virginia
W. Virginia
173,482
265,933
149,082
239,071
310,068
277,315
209,744
367,535
194,729
1.5
6.1
2.7
1.9
2.5
2.4
2.1
3.6
1.9
3.5
9.2
3.7
4.9
4.1
3.4
3.4
7.4
2.9
0.6
5.4
1.9
0.8
2.6
1.7
1.3
3.0
1.6
6.3
24.3
16.2
1.8
17.4
11.8
9.9
11.0
5.4
28.9
26.2
27.3
31.6
38.6
34.4
34.8
34.6
51.2
15.1
16.8
17.3
13.7
17.2
18.1
14.3
15.4
10.8
Southeast
National
210,157
180,402
2.8
3.5
4.9
6.4
2.2
2.6
10.6
8.7
31.3
27.2
15.0
11.3
Source: SNL Financial
Own.-Occ. Investor
CRE
CRE
(%)
(%)
Deposit
Composition
Trans.
MMDA/
Accounts Savings
(%)
(%)
Total
CDs
(%)
C&I
(%)
C&D
(%)
10.4
20.1
13.8
9.1
12.7
12.6
12.0
13.7
9.5
13.3
8.3
8.8
11.7
7.4
7.7
10.3
9.0
7.9
7.1
5.8
7.8
8.0
8.7
9.3
8.0
7.0
3.4
33.9
28.0
36.4
34.8
16.4
30.0
30.2
23.8
34.4
22.5
36.8
23.9
22.6
36.0
27.4
24.7
32.4
32.0
38.1
27.3
36.9
36.9
39.2
36.5
42.4
36.7
34.2
13.0
9.9
9.7
11.0
7.1
3.8
31.1
31.2
27.7
31.8
36.8
32.1
33
The Status Quo Can Reduce Long-Term Value
Staying independent can be risky to long-term shareholder value even at a 85 bps
ROAA clip, assuming historical equity discount rates
12/31/14
12/31/15
12/31/16
12/31/17
250,000
262,500
275,625
289,406
5.0%
5.0%
5.0%
0.70%
0.75%
0.80%
0.85%
Net Income ($000)
Common Equity ($000)
TCE Ratio
1,750
18,750
7.50%
1,922
20,672
7.88%
2,153
22,824
8.28%
2,401
25,226
8.72%
Sale Value Today
18x P/E ($000)
Implied P/TBV
31,500
168%
Total Assets ($000)
Asset Growth Rate
ROAA
Sale Value In Three Years
18x Terminal P/E ($000)
Implied P/TBV
NPV of Sale @ 15% Equity
Discount Rate ($000)
Lost Value ($000)
Source: BSP
43,225
171%
28,410
(3,090)
34
Growth Alone Cannot Confirm Independence
The same bank example but with 9.5% annual asset growth, if ROAA does not
improve, barely breaks even for shareholders
12/31/14
12/31/15
12/31/16
12/31/17
250,000
273,750
299,756
328,233
9.5%
9.5%
9.5%
0.70%
0.75%
0.80%
0.85%
Net Income ($000)
Common Equity ($000)
TCE Ratio
1,750
18,750
7.50%
1,964
20,714
7.57%
2,294
23,008
7.68%
2,669
25,677
7.82%
Sale Value Today
18x P/E ($000)
Implied P/TBV
31,500
168%
Total Assets ($000)
Asset Growth Rate
ROAA
Sale Value In Three Years
18x Terminal P/E ($000)
Implied P/TBV
NPV of Sale @ 15% Equity
Discount Rate ($000)
Gain in Value ($000)
Source: BSP
48,041
187%
31,576
76
35
Returns + Growth = Increased Shareholder Value
Add higher ROAA growth to the higher asset growth trend and you start to see real
value creation for shareholders in the independence case
12/31/14
12/31/15
12/31/16
12/31/17
250,000
273,750
299,756
328,233
9.5%
9.5%
9.5%
0.70%
0.75%
0.85%
0.95%
Net Income ($000)
Common Equity ($000)
TCE Ratio
1,750
18,750
7.50%
1,964
20,714
7.57%
2,437
23,151
7.72%
2,983
26,134
7.96%
Sale Value Today
18x P/E ($000)
Implied P/TBV
31,500
168%
Total Assets ($000)
Asset Growth Rate
ROAA
Sale Value In Three Years
18x Terminal P/E ($000)
Implied P/TBV
NPV of Sale @ 15% Equity
Discount Rate ($000)
Gain in Value ($000)
Source: BSP
53,693
205%
35,291
3,791
36
Successful Independent Bank Profiles
Date Established:
4/17/1995
Date Established:
7/1/1939
Total Assets:
$377mm
Total Assets:
$230mm
Mkts/Region:
Charleston, SC
Mkts/Region:
Manning, SC
Loans/Deposits:
72.51%
Loans/Deposits:
70.44%
Cost of Funds:
0.12%
Cost of Funds:
0.21%
Demand Deposits %:
33.24%
Demand Deposits %:
18.09%
Average Loan Yield:
5.52%
Average Loan Yield:
5.27%
NIM:
4.15%
NIM:
3.98%
Efficiency Ratio:
57.02%
Efficiency Ratio:
61.06%
ROA:
1.33%
ROA:
1.01%
ROE:
13.43%
ROE:
7.14%
Non-II % of Revenue:
11.06%
Non-II % of Revenue:
Source: SNL Financial
22.86%
37
1380 West Paces Ferry Rd. NW, Suite 2060
Atlanta, GA 30327
(404) 848-1571
200 Providence Rd., Suite 207
Charlotte, NC 28207