Vantagesouth Bancshares — Merger or Acquisition (March 2014)
23 slides from Vantagesouth Bancshares's merger presentation, Mar 4, 2014
Slide 1: Q1 2014 Investor Presentation
NYSE: VSB NASDAQ: YDKN Q1 2014 Investor Presentation March 2014
Slide 2: Cautionary statement regarding forward-looking statements
Cautionary statement regarding forward-looking statements 2 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,
Slide 3: VantageSouth financial performance
VantageSouth financial performance 3 Source: SNL Financial *Efficiency ratio calculation excludes impact of acquisition gains and merger and conversion costs Core Pre-Tax, Pre-Provision Net Income Q / Q Loan Growth (Annualized) Efficiency Ratio* Net Interest Margin $1,465 $1,248 $5,981 $6,238 $6,840
Slide 4: VantageSouth Q4 earnings
VantageSouth Q4 earnings 4 Core pre-tax, pre-provision earnings approximately $6.8 million in Q4; up from $6.2 million in Q3 Net income in Q4 was $3.3 million, which was an improvement from $1.5 million in Q3 Government-guaranteed, small business lending income increased to $1.9 million in Q4
Slide 5: VantageSouth balance sheet
VantageSouth balance sheet 5 Q4 loan growth of $36 million or 10.7% annualized • Loan originations and commitments totaled $164.6 million in Q4 • SBA loan originations totaled $21.5 million in Q4, and $18.5 million of SBA loans were sold in Q4 Non-interest bearing deposits increased $11.9 millio
Slide 6: Yadkin Financial financial performance
Yadkin Financial financial performance 6 Source: SNL Financial *Efficiency ratio is calculated by taking noninterest expense less the amortization of intangibles and gains on sale of OREO, as a percentage of total taxable equivalent net interest income and noninterest income less gains on sale of se
Slide 7: Yadkin Financial Q4 earnings
Yadkin Financial Q4 earnings 7 Net income available to common shareholders for the fourth quarter of 2013 was $4.2 million, • Consistent financial performance over last four quarters at $0.30 per diluted share Mortgage income of $1.2 million in Q4 2013, and $8.7 million for 2013 Average net in
Slide 8: Yadkin Financial balance sheet
Yadkin Financial balance sheet 8 Q4 loan growth of $25.3 million or 7.6% annualized • Third consecutive quarter of loan growth Total deposits increased $27.1 million in Q4, or 7.3% annualized • Core deposits represent 63.3% of total deposits Nonperforming assets decreased for the fifth consecu
Slide 9: Strategic rationale
Strategic rationale 9 Largest community bank in North Carolina with $4 billion in assets and a statewide presence, based in one of the strongest U.S. growth markets Significant presence in Raleigh and Charlotte Complementary business lines drive diversified revenue stream Leading North Carol
Slide 10: Overview of transaction terms
Overview of transaction terms 10 Transaction: VantageSouth Bancshares, Inc. merger with and into Yadkin Financial Corporation Legal Acquiror: Yadkin Financial Corporation Accounting Acquiror: VantageSouth Bancshares, Inc. Consideration: 0.3125x shares of YDKN common stock for each share of VSB commo
Slide 11: Strong proposed combined management team
Strong proposed combined management team 11 Selected Management From Yadkin Selected Management From VantageSouth Scott M. Custer Chief Executive Officer Terry S. Earley Chief Financial Officer William Mark DeMarcus Sr. Chief Operating Officer Steven W. Jones President Edwin H. Shuford Chief Credit
Slide 12: Largest community bank in North Carolina
Largest community bank in North Carolina 12 Source: SNL Financial, Forbes, and Site Selection Magazine * Deposit data as of 6/30/2013; pro forma for pending transactions; excludes money center deposits; money center deposits assumed to be branches with greater than $1.0 billion in deposits Transac
Slide 13: Combined branch footprint map
Stanly Cabarrus Vance Richmond Anson Florence Marion Darlington Marlboro Barnwell Greenwood Dillon Chesterfield Lancaster Columbus Lenoir Wayne Cleveland Rutherford Sampson Richland Greenville Halifax Alleghany Mitchell Avery McDowell McCormick Transylvania Martin Jackson Cherokee Graham Swain Haywo
Slide 14: Deep presence in attractive North Carolina markets
Deep presence in attractive North Carolina markets 14 SNL Financial, Bloomberg, MSN Real Estate, Forbes, Site Selection Magazine. Deposit data as of 6/30/2013; pro forma for pending transactions, includes all US banks and thrifts. *Community banks defined as US banks and thrifts less than $10 billio
Slide 15: Top demographics among North Carolina community banks
Top demographics among North Carolina community banks 15 Source: SNL Financial; deposit data as of 6/30/2013 (1) Pro forma population change, projected population change, median household income, and projected median household income are deposit weighted Deposit-Weighted Market Demographics 2010-201
Slide 16: Business line strengths and expansion opportunities
Business line strengths and expansion opportunities 16 SBA Lending Complementary business lines VSB is #1 SBA lender in North Carolina; #2 in Virginia Opportunity to leverage across YDKN’s footprint Mortgage Origination Complementary business lines Strong cross-selling opportunities and fee income B
Slide 17: Comprehensive due diligence process
Comprehensive due diligence process 17 Source: SNL Financial Due Diligence Highlights Credit Mark – YDKN Loan Portfolio 9/30/13 Balance Gross Mark ($mm) (%) ($mm) Total Loans $1,333.4 3.7% $50.0 OREO 3.0 20.1% 0.6 Total Loans & OREO $1,336.4 3.8% $50.6 Net Charge-Offs Since 12/31/07 $140.5 Disclosed
Slide 18: Pro forma financial impact
Pro forma financial impact 18 Assumptions Earnings estimates based on First Call consensus Gross credit mark of 3.8%, $50.6 million One-time merger related expenses of $23.2 million (pre-tax) Cost savings expected to be 8% of combined non-interest expense base after realization of standalone
Slide 19: Comparable group trading analysis
Comparable group trading analysis 19 Price / 2015 Estimated EPS* Comparable Bank Average Price / 2015 EPS* = 14.3x Price / Tangible Book Value Comparable Bank Average Price / Tang. Book = 2.50x Pro Forma Profitability: 2015 ROAA: > 1% 2015 ROAE: > 9% Source: SNL Financial Peers includes Southeast in
Slide 20: Pro forma loans & deposits
Pro forma loans & deposits 20 VantageSouth Bancshares Yadkin Financial Corporation (1) Pro Forma (1) Source: Company documents; 12/31/2013 data is preliminary (1) Does not include purchase accounting adjustments Strong Core Deposit Base – 12/31/2013 Diversified Loan Portfolio – 12/31/2013 VantageSou
Slide 21: Provides benefits to our stakeholders
Provides benefits to our stakeholders 21 Pro forma company joins attractive peer group with strong trading multiples Increases shareholder liquidity substantially Reduces downside risk and increases long-term growth potential Diversifies revenue stream and geographic footprint Significantl
Slide 22: Recent developments
Recent developments 22 February 19th – Completed VSB TARP repayment • Negotiating with US Treasury on warrant repurchase March 4th – Integration team kick-off with project management framework and executive management and Board oversight March 5th – Completion of employee Town Hall meetings to
Slide 23: Additional information about the merger and where to find it
Additional information about the merger and where to find it 23 In connection with the proposed merger, Yadkin Financial Corporation (“Yadkin”) will file with the Securities and Exchange Commission (“SEC”) a Registration Statement on Form S-4 that will include a joint proxy statement of Yadkin and V
VantageSouth Bancshares — Merger or Acquisition (March 2014) on 6ix