Pinnacle Bankshares Corporation · OTC:PPBN
Pinnacle Bankshares — Merger or Acquisition (January 2020)
16 slides from Pinnacle Bankshares's merger presentation, Jan 21, 2020
Slide 1: Strategic Partnership Between Pinnacle Bankshares Corporation and Virginia Bank Bankshares, Inc.
Strategic Partnership Between Pinnacle Bankshares Corporation and Virginia Bank Bankshares, Inc. Investor Presentation January 21, 2020
Slide 2: Compliance Disclosures
Compliance Disclosures Important Information for Shareholders and Investors This presentation shall 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 Pinnacle Bankshares Corp
Slide 3: Legal Disclaimer
Legal Disclaimer Forward-Looking Statements Certain 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 of 1933 and Section 21E of the Securities E
Slide 4: Creating a Central Virginia Partnership
Creating a Central Virginia Partnership PPBN’s Strategic Rationale VABB’s Strategic Rationale Maximizing future growth potential as a pro forma Similar culture with a focus on the communities institution with over $700mm in total assets they serve and the relationships they foster Provides an enhanc
Slide 5: Transaction Rationale
Transaction Rationale Enhanced operating leverage across attractive markets in Central Virginia Strategically Increased geographical presence, scale and profitability Compelling Like-minded cultures with similar strategies, focused on serving customers and community Pro forma footprint with a presen
Slide 6: Transaction Terms
Transaction Terms 70% of VABB shares will receive 0.50 shares of PPBN common stock (fixed) Consideration per VABB share 30% of VABB shares will receive $16.00 per share in cash (fixed) Calculated deal price per share of $15.87 Announced Transaction Value(1) Aggregate transaction value of $29.1 milli
Slide 7: Key Transaction Assumptions
Key Transaction Assumptions (1) ~35.5% of VABB’s annual non-interest expense Expected Cost Savings 50% realized in 2020 100% realized thereafter Merger & Integration Costs Approximately $4.3 million in combined pre-tax merger expenses Total gross loan fair value mark of $2.1 million (1.4% of VABB to
Slide 8: Pro Forma Branch Presence and Highlights
Pro Forma Branch Presence and Highlights (1) Pro Forma Highlights (as of 09/30/2019) Pro Forma Branch Map Assets ($mm) 703.0 Loans ($mm) 536.9 Deposits ($mm) 624.5 Tangible Common Equity / Tangible Assets Ratio 8.5% Branches 17 Loans / Deposits 86.0% (2) Pro Forma Deposits by County (as of 06/30/201
Slide 9: Pro Forma Loan and Deposit Composition
Pro Forma Loan and Deposit Composition PPBN VABB Pro Forma Other Construction Construction Other Construction Other 3% 5% 4% 4% 5% 6% Consumer Consumer 13% Consumer 25% 1-4 Family 22% 1-4 Family 25% 27% 1-4 Family 33% C&I and Ag. 16% Owner-Occ. C&I and Ag. CRE 15% Owner-Occ. C&I and Ag. 15% CRE 14%
Slide 10: Balance Sheet Trends
Balance Sheet Trends Total Assets ($mm) Total Loans ($mm) $600 $500 $471 $482 $391 $500 $440 $444 $376 $400 $358 $341 $400 $371 $306 $300 $300 $221 $186 $186 $195 $193 $200 $200 $133 $134 $135 $142 $146 $100 $100 $0 $0 2015Y 2016Y 2017Y 2018Y 2019 Q3 2015Y 2016Y 2017Y 2018Y 2019 Q3 PPBN VABB PPBN VA
Slide 11: Performance Trends
Performance Trends Return on Average Assets Return on Average Tangible Common Equity 2.00% 12.00% 11.27% 10.48% 1.50% 9.00% 8.23% 8.51% (1) 7.92% 8.06% 7.40% 7.51% 7.35% 0.98% 1.04% 0.97% 0.94% 1.00% 0.90% 0.91% 6.00% 0.75% 0.76% (1) (1) 0.62% 3.67% (1) 0.44% 0.50% 3.00% 0.00% 0.00% 2015Y 2016Y 2017
Slide 12: Estimated Capital Ratios and Concentrations
Estimated Capital Ratios and Concentrations (1) (1) (2) Capital Ratios PPBN Standalone VABB Standalone Pro Forma at Close TCE / TA 9.5% 11.0% 8.5% Leverage Ratio 9.6% 11.6% 9.7% CET 1 Ratio 11.6% 17.9% 12.6% Tier 1 Ratio 11.6% 17.9% 12.6% Total Risk-Based Ratio 12.5% 18.7% 13.2% (3) (3) (2)(3) Conce
Slide 13: Appendix
I. Appendix 13
Slide 14: Non-GAAP Reconciliations – PPBN
Non-GAAP Reconciliations – PPBN 2015 2016 2017 2018 2019 YTD Net Income (GAAP) $2,740 $3,004 $2,748 $4,160 $3,712 Securities (gains) losses and other - 49 - - 2 Revaluation of deferred tax asset due to tax rate change - - 279 - - Non-recurring revenue 280 210 - - - Net Operating Income (Non-GAAP) $3
Slide 15: Non-GAAP Reconciliations – VABB
Non-GAAP Reconciliations – VABB 2015 2016 2017 2018 2019 YTD Net Income (GAAP) $1,773 $1,805 $858 $1,776 $1,441 Securities (gains) losses and other 100 158 - - - Revaluation of deferred tax asset due to tax rate change - - 413 - - Net Operating Income (Non-GAAP) $1,673 $1,647 $1,271 $1,776 $1,441 Di
Slide 16: Investor Contacts
Investor Contacts PPBN Contacts VABB Contacts Aubrey H. “Todd” Hall, III Donald W. Merricks President and CEO Chairman & CEO toddhall@1stnatbk.com dmerricks@vabanktr.com Phone: (434)-477-5882 Phone: (434)-793-6411 Source: PPBN Bankshares Corporation; Virginia Bank Bankshares, Inc. 16
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