Smartfinancial, Inc. · NYSE:SMBK
Smartfinancial — Merger or Acquisition (February 2019)
21 slides from Smartfinancial's merger presentation, Feb 6, 2019
Slide 1: Roadshow Investor Presentation February 2019
Roadshow Investor Presentation February 2019
Slide 2: Compliance Disclosures
2 Compliance Disclosures Important Information for Shareholders and InvestorsThis presentation does not constitute an offer to sell, the solicitation of an offer to sell, or the solicitation of an offer to buy any securities or the solicitation of any vote or approval of the shareholders of SmartFin
Slide 3: Legal Disclaimer: Forward-Looking Statements
Legal Disclaimer Forward-Looking StatementsCertain of the statements made in this investor presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Exchange A
Slide 4: Enhancing Value for Both Shareholder Bases
4 Enhancing Value for Both Shareholder Bases $2.3 billion asset bank holding companyHeadquartered in Knoxville, TNFounded in 2007NASDAQ traded under ticker “SMBK”Double digit annual organic growth complemented by track record of strategic partnerships6 multi-state strategic partnerships since2012Exp
Slide 5: Combined Franchise Builds Significant Scarcity Value
5 Combined Franchise Builds Significant Scarcity Value Defined as Alabama, Florida, Georgia, North Carolina, South Carolina and TennesseeMost recent quarter (MRQ) pro forma for acquisitions (whole-bank and branch) and branch divestitures that are pending or were completed after MRQ; does not reflect
Slide 6: Pro Forma Deposit Footprint and Market Share
6 Pro Forma Deposit Footprint and Market Share Alabama Florida Georgia Tennessee BirminghamTuscaloosa Montgomery Tallahassee Panama City Pensacola Mobile Huntsville Atlanta Gainesville Greenville North CarolinaAsheville Chattanooga Nashville Murfreesboro Knoxville (1) Deposits as of June 30, 2018 FD
Slide 7: Combined Presence Across Several Key Growth Markets
7 Atlanta Columbia Montgomery Gainesville NashvilleMurfreesboro Spartanburg Greenville Asheville ChattanoogaHuntsville Knoxville Baldwin CountyPensacola Raleigh Combined Presence Across Several Key Growth Markets Note: Deposit data as of June 30, 2018 Source: S&P Global Market Intelligence, FDIC $5.
Slide 8: Key Markets to Successfully Execute Growth Strategy
8 Key Markets to Successfully Execute Growth Strategy Note: Deposit data as of June 30, 2018; projected populated change reflects projected 5-year CAGR Source: S&P Global Market Intelligence, FDIC, Claritas Greenville, SC Huntsville, AL Murfreesboro, TN Asheville, NC Current Population 69,570 Curren
Slide 9: Sum of the Two Parts is Greater than Stand-Alone
9 Sum of the Two Parts is Greater than Stand-Alone Note: ENFC and SMBK stand-alone data for the year ended December 31, 2018Pro forma balance sheet totals estimated as of transaction closing, assuming a June 30, 2019 closing; profitability metrics reflect estimated values for the first full year of
Slide 10: Extensive Due Diligence Completed
10 Extensive Due Diligence Completed Comprehensive, reciprocal reviews of culture, processes, core systems and business plansExperienced management teams with proven transaction integration expertiseIn-depth credit due diligence, utilizing experienced in-house and third-party specialists→ Like-minde
Slide 11: Executing on the Estimated Earnings Accretion
Executing on the Estimated Earnings Accretion uivalent pro forma EPS; for this calculation, projected ENFC- Aggregate Per Share ($mm) 2020 Median Consensus Estimated Earnings¹ SMBK $27 $1.90 ENFC $17 $2.36 Pro Forma Before Adjustments $44 Pre-Tax Adjustments Cost Savings $10 25% of ENFC Annual Nonin
Slide 12: Entrance into a New Set of Peers in the Southeast
Entrance into a New Set of Peers in the Southeast Note: Peers include banks and thrifts headquartered in the Southeast that are publicly traded on the NASDAQ, NYSE or NYSEAM with total assets between $3.3 billion and $6.8 billion; excludes targets of announced mergers and Live Oak Bancshares, Inc.;
Slide 13: Summary of Transaction Terms
13 Based on SMBK’s closing price of $18.40 as of January 14, 2019:Calculated deal price per share of $22.36; Aggregate transaction value of $158.2 million¹ Summary of Transaction Terms SMBK to make $1 million contribution to be allocated within 3-year period to qualifying charitiesserving legacy ENF
Slide 14: Reasonable Expected Cost Savings and Transaction Costs
14 Advisory Fees 24% Severance & Retention 20% Employment Contracts & Change in Control 20% DP Contract Termination 12% Foundation Donation 7% Other17% Compensation, Benefits & Director Fees 51% IT Efficiencies 19% Professional & Advisory Contracts 11% Other10% Transaction- Related7% Marketing / Adv
Slide 15: Pro Forma Loan and Deposit Composition
15 Demand 16% Transaction 17% MMDA &Savings 33% Retail CD 26% Jumbo CD 8% Demand 17% Transaction 16% MMDA &Savings 33% Retail CD 26% Jumbo CD 8% Demand 15% Transaction 17% MMDA &Savings 34% Retail CD 24% Jumbo CD 10% ADC 7% 1-427% Owner CRE 21% Other CRE22% C&I 16% Other 7% ADC 11% 1-438% Owner CRE
Slide 16: Appendix
Mn Z ra SmartFinancial, Inc. Entegra FINANCIAL Appendix
Slide 17: Our Combined Leadership Team
17 Our Combined Leadership Team 5 ENFC Directors Billy Carroll, Jr. President & CEO Greg Chief Lend Bill YoderChief Banking Officer Ryan Scaggs Chief Operations Officer Pettyk Officer Ron Gorczynski Chief Administrative Officer Diane ShortChief HR Officer 12 SMBK Directors Miller WelbornChairman Rog
Slide 18: Non-GAAP Reconciliations - SMBK
18 Non-GAAP Reconciliations - SMBK (1) “Tax benefit” refers to tax benefit from director options previously exercised Source: Company documents Dollars in thousands, except per share data Operating diluted earnings per share (Non-GAAP) Shareholders' equity (GAAP) $ 0.43 $ 0.39 $ 0.39 $ 0.34 $ 1.54 $
Slide 19: Non-GAAP Reconciliations - ENFC
19 Non-GAAP Reconciliations - ENFC Source: Company documents Diluted earnings per share (GAAP) $ 0.54 $ 0.50 $ 0.44 $ 0.51 $ 1.99 $ 0.39 Securities (gains) losses and other 0.06 - 0.06 - 0.10 0.18 Merger-related expenses - 0.01 0.03 0.02 0.06 0.30 Revaluation of deferred tax asset due to tax rate ch
Slide 20: Investor Contacts
20 Investor Contacts Miller WelbornChairman Miller.Welborn@SmartBank.comBilly CarrollPresident and CEO Billy.Carroll@SmartBank.comPhone: (865) 437-5700 Roger PlemensPresident and CEO RPlemens@EntegraBank.comDavid BrightChief Financial Officer and Treasurer DBright@EntegraBank.comPhone: (828) 524-700
Slide 21: Mn Z
Mn Z ra SmartFinancial, Inc. Entegra FINANCIAL
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