Provident Bankshares — Merger or Acquisition (December 2008)
32 slides from Provident Bankshares's merger presentation, Dec 19, 2008
Slide 1: Acquisition of Provident Bankshares
Exhibit 99.2 Acquisition of Provident Bankshares December 19, 2008
Slide 2: Disclaimer
Disclaimer This presentation contains forward looking statements within the meaning of the Private Securities Litigation Reform Act giving the Company's expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typically identified by words
Slide 3: Agenda
• Transaction Highlights • Commitment to Communities and Employees • Leading Mid-Atlantic Franchise • Financial Highlights • Summary 3
Slide 4: Transaction Highlights
Transaction Highlights • Partnership between community-focused institutions • Strong cultural fit with common values • Shared commitment to customers, employees, and the communities that we serve • Combination establishes leading Mid-Atlantic commercial bank • Significant operating scale with greate
Slide 5: Summary of Key Terms
Summary of Key Terms 1 Purchase Price: $10.50 per Provident share 37% premium to Provident’s 20-day average share price Fixed at 0.171625 M&T shares per Provident share Exchange Ratio: - Exchange ratio based on M&T’s closing price per share of $61.18 as of December 16, 2008 $401 million total Transa
Slide 6: Summary of Key Terms (cont'd.)
Summary of Key Terms (cont’d.) Expected Closing: Second quarter of 2009 45% of Provident’s annual operating expenses Cost Savings: Run-rate fully realized by late 2010 Merger-Related Charges: $99 million Revenue Synergies: None assumed Asset Marks: Loans: $383 million (pre-tax) Securities: $264 mill
Slide 7: Attractive Valuation
Attractive Valuation 1 Comparable Multiples MTB/PBKS Transactions Average 2 Price to Book Value 0.7x 2.5x 2 Price to Tangible Book Value 1.4x 2.7x 3 Tangible Core Deposit Premium 3.7% 23.9% 1. Source : SNL Financial. Comparable Mid-Atlantic bank acquisitions with asset size between $3 billion and $1
Slide 8: Agenda
• Transaction Highlights • Commitment to Communities and Employees • Leading Mid-Atlantic Franchise • Financial Highlights • Summary 8
Slide 9: The Provident Way
The Provident Way Gary Geisel, Chairman and CEO, Provident Bankshares Corp. • Established in 1882 by John Marshall, who started a savings system for sailors at a mission on Light Street in Baltimore. Provident Bankshares Corporation is the largest bank headquartered in Maryland today. • For more tha
Slide 10: Choosing a Partner
Choosing a Partner Gary Geisel, Chairman and CEO, Provident Bankshares Corp. • When we started looking for an alternative, we wanted someone who would keep the legacy of the Provident Way alive. • Fortunately, we did not have to look very far. • M&T Bank has similar roots as Provident – both began i
Slide 11: A "Valuable" Match
A “Valuable” Match Gary Geisel, Chairman and CEO, Provident Bankshares Corp. • We are pleased to join a company that shares our long-standing focus, culture and values. • We are combining two institutions that share a common commitment to the customers, employees, shareholders, and communities we se
Slide 12: Commitment to Customers
Commitment to Customers Michael Pinto, Chairman and CEO, M&T Bank’s Mid-Atlantic Division. • Merger enhances M&T’s already strong Mid-Atlantic presence. • Offers Provident customers an expanded array of products / services • Access to a more extensive network of branches and ATMs • Builds upon M&T’s
Slide 13: Commitment to Employees
Commitment to Employees Michael Pinto, Chairman and CEO, M&T Bank’s Mid-Atlantic Division. • M&T offers Provident employees long-term career potential with a stable and successful company • Will offer comparable positions to Provident’s customer facing employees • No jobs will be discontinued until
Slide 14: Commitment to the Community
Commitment to the Community Michael Pinto, Chairman and CEO, M&T Bank’s Mid-Atlantic Division. • M&T’s operating philosophy includes the belief that the well-being of the bank and the well-being of the community are inseparable • M&T’s expanded presence in the Mid-Atlantic means an expanded commitme
Slide 15: Agenda
• Transaction Highlights • Commitment to Communities and Employees • Leading Mid-Atlantic Franchise • Financial Highlights • Summary 15
Slide 16: Franchise Comparison
Franchise Comparison M&T Mid- As of 9/30/2008 M&T Provident Atlantic¹ Assets $65.2 B $6.4 B $6.2 B Loans 48.7 B 4.3 B 6.1 B Domestic Deposits 36.7 B 4.6 B 6.5 B 2 Branches 686 143 177 ATMs 2 1,638 198 545 Employees 13,636 1,660 3,892 1. Includes M&T’s Greater Baltimore, Greater Washington, DC, and C
Slide 17: Market Leadership in Mid-Atlantic
Market Leadership in Mid-Atlantic Maryland - Deposits ($ millions) Market RankInstitution Deposits Share (%) Branches (#) 1 Bank of America 18,536 19.2 195 Pro Forma M&T Bank 11,233 11.6 253 2 PNC 9,565 9.9 203 3 Capital One 8,221 8.5 141 4 Wells Fargo 7,464 7.7 82 5 M&T Bank 7,418 7.7 153 6 SunTrus
Slide 18: Provident Sustains M&T's Growth Momentum
Provident Sustains M&T’s Growth Momentum • M&T has increased its Mid-Atlantic market and product penetration • Strategy includes both organic growth and targeted acquisitions • Investments in products, distribution, and people have supported M&T’s momentum within Provident’s footprint • Annual net i
Slide 19: Agenda
• Transaction Highlights • Commitment to Communities and Employees • Leading Mid-Atlantic Franchise • Financial Highlights • Summary 19
Slide 20: Comprehensive Loan Diligence Review
Comprehensive Loan Diligence Review Provident Loan Composition – 9/30/08 Diligence Review Process Residential • M&T completed an extensive review of Residential Marine and Mortgage Construction Provident’s loan portfolio Other 6% 12% Consumer • Reviewed underwriting standards 9% • Analyzed loan-leve
Slide 21: Estimated Lifetime Loan Credit Losses
Estimated Lifetime Loan Credit Losses ($ in millions) 9/30/08 Lifetime Credit Losses Loan Category Balance % $ Residential Construction $529 34% $182 Commercial Real Estate 990 3% 31 Commercial & Industrial 971 6% 56 Home Equity 1,135 5% 53 Marine and Other Consumer 382 12% 46 Residential Mortgage 2
Slide 22: Comprehensive Securities Diligence Review
Comprehensive Securities Diligence Review Provident Securities Composition – 9/30/08 Pooled Trust Preferred CDOs FHLB Stock • Pooled trust preferred CDOs (“TRUPs CDOs”) Municipal 2% were a primary diligence focus Securities Pooled 9% TRUPs CDOs • Conducted credit analysis of over 1,000 36% individua
Slide 23: Pro Forma Financial Impact
Pro Forma Financial Impact • Accretive to both M&T’s GAAP and operating EPS in 2010 • Annual operating EPS accretion of 4% -6% • IRR in excess of 16% • M&T maintains capital in excess of well-capitalized regulatory minimums M&T M&T Standalone Pro Forma 9/30/08 at closing ¹ Tier 1 Capital / Risk-Weig
Slide 24: Agenda
• Transaction Highlights • Commitment to Communities and Employees • Leading Mid-Atlantic Franchise • Financial Highlights • Summary 24
Slide 25: Summary
Summary • Shared commitment to our customers and employees • Complementary community-focused business models • Enhanced scale in desirable Mid-Atlantic region • Sound franchise with “de-risked” earnings • Comprehensive asset diligence completed • Attractive transaction economics 25
Slide 26: Appendix
26 Appendix I Mat Bank
Slide 27: Attractive Market Demographics
Attractive Market Demographics Unemployment Rate • Federal government presence mitigates 7% regional impact of national recession 6% • Baltimore / Washington unemployment Washington, DC rate remains well below national average 5% Baltimore, MD US Average • High-income markets with household 4% earni
Slide 28: Improved Efficiency with Growth Opportunities
Improved Efficiency with Growth Opportunities • In-market transaction offers significant cost savings opportunities in technology, corporate overhead, and facilities consolidation • M&T continues to invest within its Mid-Atlantic footprint • Focus on increasing market and product penetration by inve
Slide 29: Potential Revenue Enhancements
Potential Revenue Enhancements • No revenue enhancements assumed, although M&T has a long-standing track record of improving performance and revenue • Identified potential revenue growth opportunities include: • Leverage increased scale and market presence in Maryland to drive Business Banking and M
Slide 30: Stable, Low-Cost Funding Base
Stable, Low-Cost Funding Base Provident Average Customer Deposits Composition – Q3 2008 Cost of Deposits Savings Deposits MM Deposits 4.0% 17% 18% 3.75% 3.5% 3.21% 3.0% 2.56% 2.5% 2.64% 2.35% 2.0% 2.06% Demand 1.68% Time Deposits Deposits/NOW 33% 1.5% 1.19% 1.49% 32% 1.38% 1.0% 1.13% 0.95% Total Dep
Slide 31: Loan Portfolio
Loan Portfolio • Lending focus within core markets mitigates credit risk Residential Construction Home Equity • 96% of developments in-footprint • Primarily in-footprint • Single-family residential focus with no – < 1% in troubled markets of FL, CA, NV, AZ large condominium projects • 85% branch-ori
Slide 32: Additional Information
Additional Information: In connection with the proposed merger, M&T Bank Corporation (“M&T”) will file with the U.S. Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 that will include a Proxy Statement of Provident Bankshares Corporation (“Provident”) and a Prospec
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