Gateway Financial Holdings Inc
Gateway Financial — Southeast 2008 Super Community Bank Conference
29 slides from Gateway Financial's conference presentation, Feb 12, 2008
Slide 1: Southeast 2008 Super Community Bank Conference
Southeast 2008 Super Community Bank Conference February 11, 2008 Gatedlay Financial Holdings, Inc.
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results o
Slide 3: Gateway Corporate Profile
Gateway Corporate Profile © NC bank charter with holding company headquarters in Virginia Beach, VA ° Assets of $1.87 billion © Opened for business in December 1998 © 33 financial centers in Virginia, Central and Eastern North Carolina + 4 LPOs © Focused on small- and medium-sized businesses, profes
Slide 4: Strategic Expansion for Growth and Profitability
Strategic Expansion for Growth and Profitability Establish infrastructure to achieve & maintain strong asset quality Identify attractive markets and establish a presence through: = De nova branching = Branch acquisitions — Acquisition of well-run financial institutions Build management team to suppo
Slide 5: Gateway's Sphere of Influence
Gateway’s Sphere of Influence Current Branches + Elizabeth City,NC @) Current Branches (co! + Richmond, VA: Acquisition of The Bark of Richmond, + Edenton, NC + Kitty Hak, NC) (May 2007) — 6 offices + Plymouth, NC Virginio Current LPOs + Raleigh, NC @) + Greemille, NC + Roper, NC * Raleigh @) + Moyo
Slide 6: Shifting Demographics of Gateway Franchise
Shifting Demographics of Gateway Franchise Median HH| Proj. & MSA | Income | ‘07-12 $58,600 17.0% $48,300 16.7% $53,700 16.4% $38,700 14.6% $45,234 16.0% Avg, OB 1000 4,402,000 «8.6% © $49,100 18.9% Avg, NC 50.4 9,088,000 «8.9% © $49,700 17.6% z 49.6 7,862,000 7.8% $59,800 18.6% 308.3 MM 6.3% $63,20
Slide 7: Gateway's Initial Core Markets
Gateway’s Initial Core Markets: - Albemarle * Outer Banks (Dare-Currituck) * Hampton Roads MSA 2003 ©2004 «= 2005-2006 §= 2007 “Deposits exclude brokered CDs
Slide 8: Reaching for Higher-Growth Markets
Reaching for Higher-Growth Markets © Raleigh - Durham - Chapel Hill Consists of Raleigh.Cary MSA and Durtiam MSA, with combined population > 1.5 million = Raleigh is state capital and 2" most populous city in NC - MSAis 9" strongest economy in the US; anchored by leading technology firms * Richmond,
Slide 9: Deposits excluding brokered deposits
2003 = 2004 «2005-2008 «2007 * Excludes brokered deposits
Slide 10: Deposits
Deposits (millions) 1003 2004 2005 2006 2007 Bank of Richmond: Acquired June 2007 * Excludes brokered deposits
Slide 11: (millions)
(millions) banking office: opened Nov. 2007 mos 2004 200520062007
Slide 12: Deposit Market Share by Region
Deposit Market Share by Region Albemarle Outer Banks Virginia Raleigh Richmond Beach “Deposit market share consists of weighted average of deposits by county in each region Source: SNL Financial June 2007
Slide 13: Deposits and total branches
(Smiltions) $829 BeeT_ 5696 | 2003 2004 2005 2006 (2007 Total branches: 10 16 18 24 33 “Excludes brokered deposits Gateway Financial Holdings, Inc.
Slide 14: Deposit Composition at December 31, 2007
Deposit Composition at december 31, 2007 © Core deposits contribute approximately 64.7% of total deposits ° Lower-cost transaction & MM accounts are 37.4% of deposits * YTD 2007 average cost of transaction & MM accounts: 3.47% * YTD 2007 average cost of interest-bearing deposits: 4.58% Total Deposit
Slide 15: n Vibrant Mé
n Vibrant Mé 2003 2004 2005 2006 2007
Slide 16: Breakout of Loan Portfolio: $1.52 B at 12/31/07
Breakout of Loan Portfolio: $1.52 B at 12/31/07 Consumer, Const. A &D, © Approximately 80% of portfolio 39.7% is secured by real estate ° Variable rate loans account for approximately 63% of the portfolio * YTD 2007 portfolio yield: i Pp 8.08% Residential Mortgage, 13.1% Commercial RE, 21.1%
Slide 17: Breakout of Construction and A&D Portfolio
Breakout of Construction and A&D Portfolio: $604.3 Million at 12/31/07 (Balances as % of Total Loans) * Lot loans totaling ~$26MM are 1-4 Family covered by a “PMI” insurance Construction product Developed 10.4% Lot 7.8% * All loans are secured by the subject real estate and have personal guarantees
Slide 18: Asset quality trends
D 100% 75% 50% aia 0.15% aah a 7 0.09% 0.01% 0.05% 0.92% 0.04% 1. =e 2004 2005 2006 2007 © Reflects conservative underwriting, experienced loan officers, and strength of lacal economies * Internal loan review is supplemented with annual third party review Gateway Financial Holdings, Inc.
Slide 19: Non-Performing Loans As of Dec 31, 2007
Non-Performing Loans As of Dec 31, 2007 $3.4 Million or 0.22% of Total $1.5 B Portfolio $ NPLs by Loan Category (NPLs as % of Total Loans) CRE $4.16 MM. $1.26 MM Const. & Dev. 0.08% © Only 2 non-performing relationships > $500M © Largest NPL is a group of 3 loans (CRE) to one borrower; totaling $1.3
Slide 20: High Performance Goals Remain in Place
High Performance Goals Remain in Place Vision is successful due to exceptional execution ® Initial growth strategy — Remains in place ° Highest credit standards — In place ¢ Expansion in best markets — Continuing as opportunities arise — Hire the best people — Provide highest quality customer servic
Slide 21: Comparison of Financial Highlights 2007
Comparison of Financial Highlights 2007 Net interest income $23,303, $36,998 $49,085, 32.796 Non-interest income 8,087 9.270 17,785 91.6% Net Income 3,939 6,289 11,019 109.2% Diluted EPS 0.48 a7 0.89 89.496 Total assets 883,373 4,207,477 1,868,186 54.796 Gross loans 666,652 994,592 4,522,401 93.196
Slide 22: Expansion of Non-Bank Activities to Enhance Revenue Stream
Expansion of Non-Bank Activities to Enhance Revenue Stream is a Strategic Priority © Insurance: — Revenues increased 81.9% for 2007 vs. 2006, up $2.4 million — Plan to acquire additional agencies * Mortgage Banking: — Gateway Mortgage began operations in 2Q 2006 — Mortgage revenues up $1.45 million
Slide 23: Noninterest income by source
$15,000 = Other $12,000 = BOLI $9,000 = Service Charges $6,000 Brokerage Mortgage Ops $3,000 Insurance 2003 2004 2005 2006 2007 “Excludes impact of economic hedge
Slide 24: Net Income
$12,000 $9,000 Net Incorre ($000) $6,000 2002 © 2003 «2004 «= 2005 += 2008-2007
Slide 25: Efficiency ratio
81.00% 77.95% 74.17% 75.80%
Slide 26: Returns: ROAA and ROAE
urns ROAA -» ROAE 2003 2004 2005 2006 2007
Slide 27: Strong Net Income and EPS
trong Net In EPS Net Income 2003 2004 2005 2006 2007 2008F** Note: Exhausted net operating loss and began paying taxes in the first quarter of 2004 “Average of two analyst estimates
Slide 28: 2007 and Beyond
2007 and Beyond ° Continue to expand banking offices in high growth markets — Wilmington —- Raleigh — Richmond — Infill in other areas © Receptive to opportunistic acquisitions of well-run banks in growth markets © Non-bank subs becoming increasing important as buffer against margin compression — Pr
Slide 29: Any Questions?
Any Questions? STIFEL NICOLAUS & CO. Gatedlay Financial Holdings, Inc.
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