ChoiceOne Financial Services, Inc. · NASDAQ:COFS
ChoiceOne Financial Services — Merger or Acquisition (March 2019)
14 slides from ChoiceOne Financial Services's merger presentation, Mar 25, 2019
Slide 1: Strategic Merger of Equals
STRATEGIC MERGER OF EQUALS Sparta, Michigan Lapeer, Michigan Announced March 25, 2019
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “is likely,” “plans,” “predicts,” “projects,” “may,” “could,” “look forward,” “continue”, “future” and variations of such words a
Slide 3: Additional Information
ADDITIONAL INFORMATION This communication is being made in respect of the proposed merger transaction between ChoiceOne and County. In connection with the proposed merger, ChoiceOne will file with the SEC a Registration Statement on Form S-4 that will include the Joint Proxy Statement of ChoiceOne a
Slide 4: Participants in Solicitation
PARTICIPANTS IN SOLICITATION ChoiceOne and County and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from ChoiceOne and County shareholders in respect of the transaction described in the Joint Proxy Statement/Prospectus. A
Slide 5: Strategic Merger Overview
STRATEGIC MERGER OVERVIEW ChoiceOne Financial Services, Inc. and County Bank Corp ChoiceOne Financial Services (“ChoiceOne”) and County Bank Corp (“County”) will merge to form the 12th largest bank holding company headquartered in Michigan based on asset size. (1) ChoiceOne is the parent company
Slide 6: Strategic Merger Overview: Profiles and Merger Rationale
STRATEGIC MERGER OVERVIEW ChoiceOne and County: Profiles and Merger Rationale ● Consistent and strong underlying core profitability for each (bank-level) with pre-tax pre- Financial Strength provision earnings (“PTPP”) to average assets of approximately 1.30% to 1.40% in 2018 & ● Strong capital rati
Slide 7: Pro Forma Branch Map
PRO FORMA BRANCH MAP Combined ChoiceOne and County ChoiceOne Bank Lakestone Bank & Trust 7
Slide 8: Market Comparison
MARKET COMPARISON ChoiceOne and County ChoiceOne Financial County Bank Services, Inc. Corp Market Area Market Area State of POPULATION DATA Total (1) Total (2) Michigan 2019 Estimated 1,171,985 1,124,510 9,988,842 2024 Projected 1,209,856 1,141,767 10,074,369 % Change 2019 - 2024 3.2% 1.5% 0.9% MARK
Slide 9: Diversified Loan Portfolio
DIVERSIFIED LOAN PORTFOLIO Combined ChoiceOne and County ChoiceOne Bank Lakestone Bank & Trust Pro Forma Combined Other Agric. 5.0% Agric. Agric. Other Constr. Constr. Constr. 0.4% Other 4.7% 2.9% 2.7% 5.1% 7.5% Farm 5.0% 5.4% Farm Consumer 2.5% Farm 2.9% Consumer 4.2% Consumer 5.6% 4.4% 5.6% C&I 15
Slide 10: Strong Core Deposit Bases
STRONG CORE DEPOSIT BASES Combined ChoiceOne and County ChoiceOne Bank Lakestone Bank & Trust Pro Forma Combined Jumbo Jumbo Jumbo Time Time Time Deposits Retail Deposits Deposits 6.8% Time 1.4% Retail 4.2% Deposits Time Retail 8.4% Deposits 11.8% Time Deposits 14.9% Noninterest Noninterest Noninter
Slide 11: Contribution Analysis
CONTRIBUTION ANALYSIS Combined ChoiceOne and County as of Year-End 2018 Pro Forma SELECT BALANCE SHEET CONTRIBUTIONS COFS Contribution CBNC Contribution Combined (1) Total Assets $670,173 52.1% $616,564 47.9% $1,286,737 Total Loans $430,549 54.2% $363,861 45.8% $794,410 Total Deposits $577,015 51.5%
Slide 12: Key Modeling Assumptions
KEY MODELING ASSUMPTIONS Strategic Merger: ChoiceOne and County ● ChoiceOne outstanding common shares 3,618,652 Ownership/Share Count ● Shares Issued to County 3,604,206 (1,746,884 shares x 2.0632) (1) ● Pro forma shares 7,222,858 ● 100% in ChoiceOne Stock Consideration Mix ● County shareholders wil
Slide 13: Pro Forma Impact
PRO FORMA IMPACT Strategic Merger: ChoiceOne and County Pro Forma Combined Ownership Split (1) 50.1% / 49.9% (ChoiceOne/County) Pro Forma Shares Outstanding (1) 7,222,858 EPS Accretion Year 1 (2) $0.15 / 7.2% EPS Accretion Year 2 $0.32 / 14.5% TBV Payback Period (3) 3.1 years Implied IRR (4) > 25% (
Slide 14: Publicly-Traded Banks in Michigan
PUBLICLY-TRADED BANKS IN MICHIGAN Top 15 Publicly-Traded Banks Based on Assets (Excludes M&A Targets) FINANCIAL PERFORMANCE STOCK PERFORMANCE Tang. LTM LTM Price/ LTM Total Equity/ PTPP2 / LTM LTM Effic. 4 NPAs5 / 03/21/19 Market Price/ LTM Dividend Monthly Assets Assets AA ROAA3 ROAE3 Ratio Assets
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