Poage Bankshares — Merger or Acquisition (July 2018)
20 slides from Poage Bankshares's merger presentation, Jul 12, 2018
Slide 1: Acquisitions of Poage Bankshares, Inc. & Farmers Deposit Bancorp, Inc.
Exhibit 99.2 Acquisitions of Poage Bankshares, Inc. & Farmers Deposit Bancorp, Inc. July 11, 2018
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such information involves risks and uncertainties that could result in the Company's actual resul
Slide 3: Additional Information
Additional Information This presentation does not constitute an offer to sell or the solicitation of an offer to buy securities of City or a solicitation of any vote or approval. City will file a registration statement on Form S-4 and other documents regarding the proposed transaction referenced in
Slide 4: Overview of Pro Forma Company
Overview of Pro Forma Company Pro Forma Highlights (1) CHCO PBSK Total Assets $4.8 billion PBSK LPO Total Loans $3.5 billion Farmers Deposit Total Deposits $3.9 billion Branch Locations 98 • Creates a $4.8 billion in assets bank with presence across West Virginia, Kentucky, Virginia, and Ohio • Oppo
Slide 5: Combined Transaction Rationale
Combined Transaction Rationale • In-market acquisition of an Ashland, Kentucky-based community bank – Further increases dominant share in the Huntington-Ashland MSA Strategic – Natural extension of branch network in the Lexington, Kentucky MSA Rationale • Opportunities to fill in growth markets • Co
Slide 6: Pro Forma Market Demographics
Pro Forma Market Demographics ’18-’23 Projected Median HHI Growth (%) Combined Counties Deposit Market Share (1) 10.0% Deposits Market Rank Institution ($mm) Share Branches 8.0% 1 BB&T Corp. $6,496 15.69 % 78 7.5% Pro Forma 3,799 9.18 97 2 City Holding Co. 3,320 8.02 85 3 JPMorgan Chase & Co. 2,961
Slide 7: Diversifying Our Markets
Diversifying Our Markets Deposits by State ($mm) CHCO Standalone CHCO – Farmers Deposit – PBSK OH OH KY $86 $86 $350 3% 2% 11% KY $829 22% VA $444 13% VA $444 WV 12% $2,440 64% WV $2,440 73% 7 Source: S&P Global Deposit data as of 6/30/17
Slide 8: Overview of Transaction Terms: Poage Bankshares, Inc.
Overview of Transaction Terms Poage Bankshares, Inc. Acquirer City Holding Company (Nasdaq: CHCO) Seller Poage Bankshares, Inc. (Nasdaq: PBSK) Consideration 100% Stock Fixed Exchange Ratio 0.335 shares of CHCO for each common share of PBSK Indicative Price per Share (1) $26.27 Implied Market Premium
Slide 9: Overview of Poage Bankshares, Inc.
Overview of Poage Bankshares, Inc. Franchise Highlights Branch Footprint • Founded as a savings and loan association in 1889 • Long-standing ties to local communities • Strong market share in counties of operation • 4 PBSK branches within 1 mile of an existing CHCO branch; 5 within 2 miles • No esti
Slide 10: Transaction Assumptions: PBSK
Transaction Assumptions: PBSK Key Transaction Assumptions Expense Savings • 45% Purchase • Gross Loan Credit Mark: $16.3 million Accounting • OREO Mark: $0.1 million Marks • Fixed Asset Mark: $2.0 million Revenue • Opportunities recognized but not modeled Synergies Core Deposit • 2.0% of transaction
Slide 11: Overview of Transaction Terms: Farmers Deposit Bancorp, Inc.
Overview of Transaction Terms Farmers Deposit Bancorp, Inc. Acquiror City Holding Company (Nasdaq: CHCO) Seller Farmers Deposit Bancorp, Inc. (Private) Consideration 100% Cash Fixed Offer Price $24.9 million Implied Price / Tangible 140% Book Value (1) Board Representation None Customary regulatory
Slide 12: Overview of Farmers Deposit Bancorp, Inc.
Overview of Farmers Deposit Bancorp, Inc. Franchise Highlights Branch Footprint • Founded in 1866 as a full service bank Update • Operates 3 branches around the Lexington, KY market • Solid core funding base – MRQ cost of deposits: 0.25% Farmers UpdateDeposit Branch (3) Headquarters Cynthiana, KY Ma
Slide 13: Transaction Assumptions: Farmers Deposit
Transaction Assumptions: Farmers Deposit Key Transaction Assumptions Expense Savings • 50% Purchase • Gross Loan Credit Mark: $2.0 million Accounting • OREO Mark: $0.4 million Marks • Fixed Asset Mark: $0.6 million Revenue • Opportunities recognized but not modeled Synergies Core Deposit • 2.0% of t
Slide 14: Combined Financial Impact
Combined Financial Impact Pro Forma Impact • Immediate mid single digit EPS accretion • Minimal tangible book dilution, earned back in less than 3 years • IRR in excess of 20% Capital Ratios Standalone Today Pro Forma at Close TCE/ TA 10.0% 9.7% Leverage Ratio 10.9% 10.5% Total Risk-Based Ratio 16.3
Slide 15: Deal Metrics
Deal Metrics Regional National Comparables Comparables Median (1) Median (2) Deal Metrics Deal Value ($mm) $93.5 $24.9 -- $101.4 $89.8 Price / TBV 157 % 140 % 293 % 177 % 183 % Core Deposit Premium (3) 9.8 7.5 -- 12.3 12.1 Target Financials ($mm) Total Assets $450 $122 $4,200 $566 $541 Total Deposit
Slide 16: Summary
Summary • Solid accretion for City which already has top of peer group earnings • Further positions the Huntington – Ashland MSA as City’s largest market by deposits • Source of stable, low cost funding • Improves demographic position • Strong market share in established markets • Proven regional ba
Slide 17: Appendix
Appendix
Slide 18: Pro Forma Loan Portfolio
Pro Forma Loan Portfolio CHCO PBSK Farmers Deposit Pro Forma (1) Consumer Consumer Consumer Consumer C&I & Othe r & Other C&I & Othe r C&I & Othe r 7% 5% C&D C&D 7% C&D Non 2% C&D Non 16% Non 2% 11% 3% 2% 2% Ow ne r- 2% Owner- Ow ne r- Occupied Occupied Occupied CRE CRE CRE 24% 12% 1-4 Family 23% 36
Slide 19: Pro Forma Deposit Composition
Pro Forma Deposit Composition CHCO PBSK Farmers Deposit Pro Forma Demand Deposits Time Demand Demand 16% Deposits Time Deposits 24% Time Deposits 24% Deposits Deposits 24% 33% Time 32% Deposits 42% NOW Accounts 14% Demand Deposits 57% NOW Money NOW Accounts Market & Accounts 20% Savings 19% Money Mo
Slide 20: Branch Overlap Detail
Branch Overlap Detail Huntington-Ashland and Lexington MSAs 0.13 miles 0.77 miles 0.74 miles 0.46 miles 1.41 miles 0.44 miles CHCO PBSK Farmers Deposit 20