Newalliance Bancshares — Merger or Acquisition (August 2010)
25 slides from Newalliance Bancshares's merger presentation, Aug 25, 2010
Slide 1: Merger of First Niagara Financial Group and NewAlliance Bancshares
1 Merger of First Niagara Financial GroupandNewAlliance Bancshares August 19, 2010
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement This presentation contains forward-looking information for First Niagara Financial Group, Inc. Such information constitutes forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) which involve significant risks and uncertaintie
Slide 3: Again, Seizing The Window of Opportunity
3 Again, Seizing The Window of Opportunity Advances strategy of building premier Northeast regional banking franchiseUnites two strong, growing companiesAccelerates growth potential of each company in attractive marketsFortress balance sheet supports continuation of offensive game planLow risk trans
Slide 4: Benefiting Both Main Street and Wall Street
4 Benefiting Both Main Street and Wall Street Superior long-term earnings growthGrowing franchise valueIncreased dividend returnEven better positioned for future opportunities Expanded service offeringsReady source of credit to spur growthMajor employerStrong community support Wall Street Main Stree
Slide 5: Building a Regional Powerhouse
Building a Regional Powerhouse 5 Four state footprint$30 billion in assets$20 billion in deposits$15 billion in loansTRB Capital: 14.3%340 branches5,000 employees Premier banking franchise in the Northeast Information is pro forma at transaction close FNFG NAL Pittsburgh Albany Buffalo Syracuse Roch
Slide 6: Building a Regional Powerhouse
6 Building a Regional Powerhouse Billion Rank Rank Billion United States Northeast Assets $29.2 25 11 Market Cap $3.9 22 11 This combination moves FNFG further up the top tier of US banks Financial data as of June 30, 2010; Market data as of August 18, 2010Source: SNL Financial
Slide 7: NewAlliance Profile
8 Top-notch New England branch franchiseStrong earnings momentum- record revenues in first half of 2010Solid loan and core deposit growthPositive operating leverageVery well-managed credit qualityExceptional capital levels NewAlliance Profile
Slide 8: First Niagara & NewAlliance Performing Well in Current Environment
9 First Niagara & NewAlliance....Performing Well in Current Environment NCOs / Average Loans Return on Average Assets (1) TCE/TA Operating Net Income (1) (1) Non-GAAP/operating results excludes certain non-recurring items. The Company believes that these measures are useful to management and investo
Slide 9: Building a Regional Powerhouse
10 Building a Regional Powerhouse Solid foothold to drive profitable growth Significant market share opportunity within major Northeast markets Access to nearly 15 million customers in very attractive markets $ Billions Central Connecticut(1) Philadelphia MSA Pittsburgh MSA Upstate New York(2) Depos
Slide 10: Outstanding Commercial Market Potential
11 Outstanding Commercial Market Potential Source: SBA firms and employment by MSA 2006 (CHART) (CHART) Leveraging FNFG's successful strategy and execution - double digit commercial loan growth over 5 consecutive quarters
Slide 11: Strong Strategic Fit
Strong Strategic Fit Committed to shareholder value Customer-centric and relationship focused Local decision-making Flexible model to meet the growing needs of customers Strong brand alignment Deep community relationships 12 We believe our respective organizations share many traits that indicate a s
Slide 12: Key Acquisition Terms
13 Key Acquisition Terms (1) Price determined using the 10-day average prior to signing definitive agreement
Slide 13: Pro Forma Financial Impact
14 Pro Forma Financial Impact Immediately accretive in 20114-5% GAAP accretion in 2012Better than street consensusLeveraging the strengths of combined entityNo capital management assumed in modelingIRR in excess of 15%7% tangible book dilution and short earnback periodStrong pro forma capital levels
Slide 14: Profitable Opportunities for the New Franchise
Profitable Opportunities for the New Franchise Accelerate redeployment of excess liquidity into higher yielding assetsExport FNFG's highly successful commercial modelImport NAL's Asset Based Lending expertiseAdd NAL's strong residential mortgage origination capabilitiesAchieve synergies in wealth ma
Slide 15: Proven Acquisition Track Record
16 Harleysville National CorporationApril 2010 National City BranchesSeptember 2009 Assets $5.6 $4.2 Deposits $4.1 $4.2 Loans $3.6 $0.8 Branches 83 57 Employees 1,100 500 Core deposit retention of 95%Loan demand;$325 MM in originations $110 MM in commercial line commitmentsSale of $300 MM in distres
Slide 16: Pricing Valuation Consistent With Longer Term Norms
17 Pricing Valuation Consistent With Longer Term Norms Deal Value Deal Price Deal Price Core DepositPremium (%) Market Premium(%) Deal Value EarningsMultiple TBV(%) Core DepositPremium (%) Market Premium(%) NAL Transaction Pro forma $1.5B 20x 163 14 24 M&A Transactions since 1/2006(1) (mean values)
Slide 17: First Niagara: A Winning Franchise
18 First Niagara: A Winning Franchise Stable markets with solid demographics and significant growth potentialStrong earnings and business momentumDeep talent pools in place to drive further growthMore than ample capital to keep playing offenseOpportunistic, action-oriented strategic planBigger, bett
Slide 18: Appendix
19 Appendix Merger of First Niagara Financial Group andNewAlliance Bancshares August 19, 2010
Slide 19: Adding Franchise Value Through Acquisitions
20 Adding Franchise Value Through Acquisitions .....Both companies have a similar history First Niagara Bank Acquisitions Albion Banc Corp. (Albion Federal Savings and Loan), CNY Financial Corporation (Cortland Savings Bank)Iroquois Bancorp, Inc. (Cayuga Bank) Finger Lakes Bancorp Troy Financial Cor
Slide 20: Loan Portfolio Diversification
Loan Portfolio Diversification Balances include loans Held for Investment and exclude Net Deferred and Allowance for Loan Loss.Other category includes Specialized Lending for FNFG and Other Consumer for NALSource: SNL Financial 21 (CHART) FNFG NAL Combined Pro-Forma (CHART) (CHART) (CHART)
Slide 21: Deposit Mix Opportunity
22 Deposit Mix Opportunity Source: SNL Financial (CHART) (CHART) (CHART)
Slide 22: Diversified Non Interest Income Sources
23 (CHART) Diversified Non Interest Income Sources (CHART) (CHART) (CHART) Represents YTD June 30, 2010(1) Other income includes gain on securities and limited partnershipsSource: SNL Financial
Slide 23: Balance Sheet Strength
Balance Sheet Strength (1) Total loan and deposit data as of June 30, 2010Source: SNL Financial 24
Slide 24: Non-GAAP measures and nonrecurring items
25 The Company believes that these measures are useful to management and investors because they permit a more effective evaluation and comparison of the Company's results and performance in relation to its ongoing operations. First NiagaraBeginning in Q2 2010, the impact of income taxes on these non
Slide 25: Merger consideration terms
26 • Under the terms of the merger agreement, the aggregate consideration payable to NewAlliance stockholders in the merger as of the signing date is allocated 14% in cash and 86% in First Niagara common stock. The cash consideration pool is equal to $210,070,888 (subject to certain adjustments), an
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