Monarch Financial Holdings Inc
Monarch Financial — Merger or Acquisition (December 2015)
13 slides from Monarch Financial's merger presentation, Dec 17, 2015
Slide 1: Monarch / TowneBank
6 F ¥ MONARCH "TOWNE BANK RANK 8€
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements made in this presentation, other than those conceming historical financial information, may be considered forward-looking statements, which speak only as of the date of this presentation and ate based on current expectations and involve a number of assumptions.
Slide 3: Overview of Transaction Terms
Overview of Transaction Terms » TovmneBank to acquire Monarch Financial Holdings, Inc. » 0.8830x shares of TOWN common stock for each share of MNRK common stock, 100% stack = $18.57 per share or $220.6 milion = 17.4xLTMEPS = 192% of TRV = 83% / 17% "G, Robert Aston(?), Chairman andCEO (TOWN) = Willi
Slide 4: Strategic Rationale
Strategic Rationale * Combined Company is the 2nd largest community bank in Virginia with approximately $7.7 billion in assets, $6.1 billion in deposits and $5.6 billion in loans * Combined Company is the only community hank with a#1 deposit market share in one of the 50 largest MSAs in the U.S.) #1
Slide 5: Combined Company to be 2nd Largest Community Bank in Virginia
Combined Company to be 2nd Largest Community Bank in Virginia * Combined Company is firmly established as the largest bank by depositsin the Virginia Beach-Norfolk- Newport News, VA-NC MSA and the second largest independent community bank in Virginia, which is one of the most attractive markets in t
Slide 6: MNRK — Company Overview
MNRK — Company Overview «Headquartered in Chesapeake, VA. + 13-banking offices serving the Hampton Roads area of Southeastem VA and the Outer Banks region of Northeastern NC 1. + éthranked community bank in the Virginia Beach MSA by deposit as A market share Ve | Se Oh Sr © Monarch Bank operates at
Slide 7: Mortgage Operations
Mortgage Operations © Founded in May 2007 and headquartered in Virginia Beach * Founded in 1999 and headquartered in Virginia Beach * — TowneBank Mortgage YTD Production as of September 30, 2015 * Monarch Mortgage YTD Production as of September 30, 2015 1 * Core banking markets - $775 million 1 * Co
Slide 8: Pro Forma Loans & Deposits
Pro Forma Loans & Deposits TOWN MNRK Pro Forma! cree games hot OTT m2 comune gums ants mas 4 ee attary ee eld on Loans: 457% Veld on Loan TOWN MNRK Pro Forma? "BBs. Janie Tanaaton Cost of Deposits: 0.41% Cost of Deposits: 0.30% Cost of Deposits: 0.39% Noninterest-Bearing Deposits: 30.2” Noninterest-
Slide 9: Branch Location Proximity
Branch Location Proximity ighlights Significant branch overlap enables substantial cost savings = 100% of Monarch Bank branches are within 3 miles of a TowneBank branch = 69% are within 1 mile ofa TowneBank branch = 46% are within half a mile of a TowneBank branch = Plan to consolidate 13 locations
Slide 10: Credit Due Diligence
Credit Due Diligence Estimated = Comprehensive credit review performed by TowneBank internal team = Experienced senior team with deep knowledge of the Hampton Roads market «Extensive familiarity with many of Monarch’s significant relationships "Reviewed over 500 loan files representing approximately
Slide 11: Pro Forma Financial Impact
Pro Forma Financial Impact © Gross credit mark of 1.5%, $11.9 million © Core Deposit Intangible of $10.9 million amortized over 10 years on a sum-of-the-years’ digits basis © One-time merger related expenses of approximately $21 million (pre-tax) * Cost savings expected to be 20% of Monarch’s total
Slide 12: Transaction Multiples & Contribution Analysis
Transaction Multiples & Contribution Analysis Transaction Multiples TransactionPriceper Share? 1-Day Market Premium ($12.16) hs.8% Price /Current Yr. EPS ($1.10) i22.2x Price /Next Yr. EPS ($1.14) 122.9% Price / Stated TangibleBoak Value ($9.63) 176% Contribution Analysis D TOWNE BANK LIM Net Income
Slide 13: Benefits to Stakeholders
Benefits to Stakeholders eD High-touch, exquisite service €D Enhanced product and services offering cB) Monarch employees will join the TOWN family that has been recognized as one of the “Best Places to Work” by Inside Business €D Companies familiarity should ensure smooth integration ef TOWNis an e
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