A Strategic Merger of Equals

Transcription

1 Investor Presentation August 2016 A Strategic Merger of Equals

2 Transaction Overview Merger of Equals Combination of storied Pittsburgh banking franchises with complementary visions and missions True merger of equals partnership leverages the best of both companies Increased scale will enable a more efficient operation and broaden customer base Similar community banking cultures will benefit customers, communities, and employees Poised to create significant value for shareholders 2

3 Pro Forma Footprint Pro Forma Branch Map Deposit Market Share Pittsburgh, PA MSA Standard Counties Allegheny / Pro Forma Counties Rank Institution (ST) Number of Branches Deposits in Market ($mm) Market Share (%) 1 PNC Financial Services Group (PA) , Bank of New York Mellon Corp. (NY) 4 18, OH Standard MD WV (9 total, 6 in Pittsburgh, PA MSA) PA VA 3 Citizens Financial Group Inc. (RI) 126 9, F.N.B. Corp. (PA) 96 5, Dollar Bank FSB (PA) 37 3, KeyCorp (OH) 58 2, Huntington Bancshares Inc. (OH) 38 2, TriState Capital Holdings Inc. (PA) 2 2, First Commonwealth Financial (PA) 59 2, S&T Bancorp Inc. (PA) 27 1, WesBanco Inc. (WV) 34 1, Northwest Bancshares, Inc. (PA) 26 1, NexTier Inc. (PA) WFSB Mutual Holding Company (PA) Pro Forma CF Financial Corp. (PA) CB Financial Services Inc. (PA) MHC of Western Pennsylvania (PA) First FS&LA of Greene County (PA) Wells Fargo & Co. (CA) Allegheny Valley Bancorp Inc. (PA) United Bankshares Inc. (WV) National Financial (PA) Mars National Bancorp Inc. (PA) Slovenian S&L Assn. Canonsburg (PA) Standard Financial Corp (PA) Allegheny (9 total, 9 in Pittsburgh, PA MSA) Totals (1-25) , Totals (1-47) , Source: SNL Financial; Standard Financial Corp. branches adjusted for duplicate entries Note: Deposit data as of 6/30/2015 3

4 Strategic Rationale and Financial Benefits Strategic Rationale Financial Benefits Increases scale and visibility in attractive Pittsburgh markets Substantial earnings accretion Consistent business philosophies Significant cost savings identified Combines experienced and proven leadership teams Culturally compatible and high caliber banking teams Broadens and deepens lending platform Enhanced operating leverage Reasonable tangible book value earn back period Top tier financial performance post integration Expands product set Leverages excess capital Increased convenience for customers Well-capitalized position will allow the pro forma company to pursue additional growth and/or acquisition opportunities Supports regulatory and compliance focus 4

5 Leadership Senior Management Team Timothy K. Tim Zimmerman Andrew W. Andy Hasley Susan Sue Parente Jason W. Ross Christian Chris Chelli Sheila D. Crystaloski Susan DeLuca Chief Executive Officer President Executive Vice President and Chief Financial Officer Executive Vice President and Chief Business Development Officer Senior Vice President and Chief Credit Officer Senior Vice President and Chief Technology Officer Senior Vice President and Chief Risk Officer Board of s Terence L. Graft Chairman Gregory J. Saxon Vice Chairman Horace G. Cofer William T. Ferri Andrew W. Hasley Paul A. Iurlano John M. Lally David C. Mathews Ronald J. Mock Thomas J. Rennie R. Craig Thomasmeyer Dale A. Walker Timothy K. Zimmerman 5

6 Loan Composition Standard Bank, PaSB Allegheny Valley Bank of Pittsburgh Pro Forma Standard Bank R.E. (Non-OO) 12% R.E. (OO) 9% Consumer & & Other Industrial 5% 3% Construction 3% Residential R.E. 68% R.E. (Non-OO) 33% R.E. (OO) 8% & Industrial 9% Consumer & Other 6% Construction 2% Residential R.E. 42% & Industrial 6% R.E. (Non-OO) 21% R.E. (OO) 8% Consumer & Other 6% Construction 2% Residential R.E. 57% NPAS / Loans + OREO: 0.28% NPAS / Loans + OREO: 1.90% Source: SNL Financial Note: Reflects bank level call report data 6

7 Deposit Composition Standard Bank, PaSB Allegheny Valley Bank of Pittsburgh Pro Forma Standard Bank CDs $100K- $250K 12% CDs <$100K 23% CDs >$250K 4% Demand Deposits 5% NOW & Other Trans. Accts 15% MMDA & Other Savings 41% CDs <$100K 12% MMDA & Other Savings 39% CDs $100K- $250K 4% CDs >$250K 4% Demand Deposits 33% NOW & Other Trans. Accounts 8% CDs <$100K 18% CDs $100K- $250K 8% MMDA & Other Savings 40% CDs >$250K 4% Demand Deposits 18% NOW & Other Trans. Accts 12% Source: SNL Financial Note: Reflects bank level call report data 7

8 Transaction Terms Transaction: Merger of Equals between Standard Financial Corp. and Allegheny Valley Bancorp, Inc. Standard Financial Corp. will be the surviving corporation Form of Consideration: 100% Standard Financial Corp. ( STND ) common stock Fixed Exchange Ratio: 2.083x shares of STND common stock for each share of Allegheny Valley Bancorp, Inc. Transaction Value: $53.85 per share based on STND closing price of $25.85 on August 29, 2016 $56.5 million aggregate deal value including dilutive shares Ownership Split: 54% Standard Financial Corp. / 46% Allegheny Valley Bancorp, Inc. Employees: Company Name: The companies have identified key executives and managers who will remain with the surviving corporation Parties to honor any contracts for and make severance payments to any employees who are terminated as a result of the transaction Employees with change-in-control benefits that remain employed will not receive a termination payout from their current contract Upon closing, the pro forma holding company will be renamed Standard AVB Financial Corp. The company s ticker symbol will remain STND The Bank name will remain Standard Bank Dividend: Upon closing, Standard AVB Financial Corp. will raise its quarterly cash dividend to $0.221 per share Expected Closing: 1 st Quarter of 2017 Please see the merger agreement for comprehensive transaction terms 8

9 Assumptions and Financial Impact Assumptions Allegheny Valley Bancorp, Inc. options will be exchanged for Standard Financial Corp. options Allegheny Valley Bancorp, Inc. restricted stock will be exchanged for shares of Standard Financial Corp. in accordance with the fixed exchange ratio Cost savings estimated at ~16% of the combined company s projected noninterest expense Gross loan accounting credit mark of ~1.7%, or approximately $4.9 million Core deposit intangible equal to 1.5% of Allegheny Valley Bancorp, Inc. non-time deposits Estimated after-tax restructuring charge of ~$3.7 million Financial Impact Double-digit earnings accretion for both shareholder bases Tangible book value dilution for Standard Financial Corp. shareholders earned back within a reasonable time frame Tangible book value accretion for Allegheny Valley Bancorp, Inc. shareholders Pro forma company remains in excess of well-capitalized regulatory standards 9

10 Pro Forma Financials ($ in thousands, unless otherwise noted) 6/30/2016 6/30/2016 3/31/2017 Assets 484, , ,107 Net Loans 367, , ,478 Deposits 352, , ,006 Total Equity 73,035 51, ,503 Branches Market Capitalization 66,908 43, ,436 TCE / TA 13.50% 10.08% 11.25% Total Risk-Based Capital Ratio 23.07% 13.88% 17.26% Loans / Deposit Ratio 105.3% 91.5% 99.3% (1) (2) Note: Balance sheet reflects GAAP financial data (1) Pro forma Standard AVB Financial Corp. financials represent the combined company and are inclusive of purchase accounting adjustments (2) Based on the pro forma share count and STND closing market price as of 8/29/