Northwest Bancshares, Inc. · NASDAQ:NWBI
Northwest Bancshares — Merger or Acquisition (June 2018)
16 slides from Northwest Bancshares's merger presentation, Jun 12, 2018
Slide 1: Acquisition of Donegal Financial Services Corporation
June 12, 2018 NASDAQ GS:NWBI Acquisition of Donegal Financial Services Corporation (parent of Union Community Bank )
Slide 2: Presented By
William J. Wagner – Chairman & CEO Ronald J. Seiffert – President & COO William W. Harvey, Jr. – Senior EVP & CFO Presented By
Slide 3: Disclosures: Forward-Looking Statement
Disclosures Forward - Looking Statement This presentation contains forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 . These forward - looking statements include, but are not limited to, statements about (1) the benefits of the merger between Nor
Slide 4: Initial Transaction Appeal
4 Initial Transaction Appeal First opportunity we have seen in our footprint in 2 ½ years. ▪ Best opportunity for a whole - bank acquisition in our Eastern Region in over 20 years. Market dynamics – Lancaster County is one of the fastest growing counties in Pennsylvania. With the $10 billion thresho
Slide 5: DFSC Highlights
DFSC Highlights 5 *Financial data as of or for the three months ended March 31, 2018. Company Overview (1Q18)* ($000s) Year Founded 2000 Headquarters Marietta, PA Branches 14 Total Assets 577,379 Loans 429,593 Deposits 490,204 Tang. Common Equity 79,365 NPLs / Total Loans 0.42% Net Charge - Offs / A
Slide 6: Transaction Summary
Transaction Summary 6 100% of shares owned by Donegal Group Inc. (NASDAQ:DGICA) and Donegal Mutual Insurance Company. Consideration: Fixed exchange of 50% stock/50% cash. 137.84 shares of NWBI stock and $2,379.09 in cash for each share of DFSC stock. Deal value = $4,758.21 per DFSC share, or $85 mil
Slide 7: Transaction Summary: Key Terms
Transaction Summary 7 Transaction anticipated to close in the 1st quarter of 2019, subject to regulatory approval and other customary closing conditions. (Required approvals: FDIC, PA Department of Banking, Federal Reserve Bank of Cleveland) Pro forma ownership: [97.7% NWBI / 2.3% Donegal Group] No
Slide 8: Transaction Pricing
8 Transaction Pricing Strategic Financial Bottom Collar $80.75 million Base Case $ 85 million Upper Collar $89.25 million All Cash $80.75 million Cash % / Stock % 53% / 47% 50% / 50% 48% / 52% 100% / 0% Price to tangible book value 164% 172% 181% 164% Price to current earnings* 15.4x 16.2x 17.0x 15.
Slide 9: Pricing Collar
$76.50 $80.75 $85.00 $89.25 $93.50 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 $22.00 $24.00 Deal Value (millions) NWBI Stock Price Pricing Collar 9 Deal Value Range Scenario NWBI Stock Price Deal Value (millions) A $15.53 $80.75 B $17.26 $85.00 C $18.99 $89.25 A B C Northwest can alter the exchange r
Slide 10: Attractively Priced Relative to Comparable Transactions
Attractively Priced Relative to Comparable Transactions 10 *Median is comprised of deals announced since 2012 in Pennsylvania and Maryland with $250 - $800 million in total assets. **Includes impact of pre - close dividend of approximately $30 million. ***Prior to pre - close dividend of approximate
Slide 11: Overview of Companies
Overview of Companies DFSC Branches NWBI Branches Financial information as of March 31, 2018. Stock prices as of June 8, 2018. 11 ($000s) Northwest DFSC Assets $9,520,979 $577,379 Loans $7,827,056 $429,593 Deposits $7,985,489 $490,204 Common Equity $1,215,254 $80,452 Intangibles $331,569 $1,087 Mark
Slide 12: A Diversified Loan Mix
A Diversified Loan Mix • A diverse, high - quality loan portfolio provides additional balance to Northwest’s current portfolio mix. • Northwest’s size and capital strength will allow DFSC’s existing customers to gain access to expanded borrowing capabilities. • DFSC’s loan to deposit ratio is 87.6%.
Slide 13: An Attractive Deposit Mix
An Attractive Deposit Mix • Northwest’s and DFSC’s deposit mixes are similar with a solid base of checking accounts and strong core deposits. • The core deposit premium being paid, based on deal pricing, is 7.4%. 13 ($millions) Northwest % ($millions) DFSC % ($millions) Combined % Non - Int. & Int.
Slide 14: Lancaster Market Dynamics
Lancaster Market Dynamics Pennsylvania’s fifth most populous county. ▪ Total residents of 542,000 ▪ Projected 2.16% annual population growth rate for 2018 - 2023 Median household income of $64,287 with projected 9.7% growth rate for 2018 - 2023. Diverse economy near several large metropolitan areas.
Slide 15: Excellent Banking Opportunity
Excellent Banking Opportunity 15 Source: S&P Global Market Intelligence *June 30, 2017 vs. June 30, 2016 **Not included in totals Lancaster County Deposit Market Share as of June 30, 2017 Rank Institution Ticker Branches Deposits ($000s) Market Share (%) LTM* Deposit Growth (%) Deposits per Branch 1
Slide 16: Crossing $10 Billion Asset Threshold
Crossing $10 Billion Asset Threshold Northwest’s assets are expected to exceed $10 billion in 2019 after the transaction closes. At March 31, 2018, total assets were $9.5 billion and were expected to cross the $10 billion threshold organically in 2019. With Durbin becoming effective July 1, 2020, th
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