Truist Financial Corporation · NYSE:TFC
Truist Financial — BB&T — Merger or Acquisition (December 2005)
27 slides from Truist Financial's merger presentation, Dec 15, 2005
Slide 1: BB&T and Main Street Banks, Inc.: Expanding a Great Franchise
Exhibit 99.2 BB&T and Main Street Banks, Inc. Atlanta, Georgia Expanding a Great Franchise Analyst Presentation December 15, 2005 1 Forward-Looking Information BB&T has made forward-looking statements in the accompanying analyst presentation materials that are subject to risks and uncertainties. The
Slide 2: Outline
may be greater than expected; (5) changes in the interest rate environment may reduce margins; (6) general economic or business conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality, or a reduced demand f
Slide 3: BB&T Corporation and Main Street Banks, Inc. profiles
· $107.1 billion financial holding company · 1,403 branch locations in NC, SC, VA, GA, MD, WV, KY, TN, FL, AL, IN, and the District of Columbia For 3 Months Ended 9/30/05 · Operating ROA 1.64% · Cash Basis ROA 1.81% · Operating ROE 15.65% · Cash Basis ROE 28.56% · Cash Basis Efficiency Ratio 49.66%
Slide 4: Company History / Pro Forma Company Profile
Company History · Founded as the Bank of Covington in 1901 · In 1996, the bank changed its name to Main Street Banks, Inc. in order to position itself for entrance into new counties · Main Street Banks, Inc., in its present form, was created through a merger of equals (“MOE”) between Main Street Ban
Slide 5: Terms of the Transaction
WV 80 TN 47 DC 9 AL 2 IN 1 TOTAL 1,427 *Based on closing prices as of 12/14/05 7 Terms of the Transaction 8 Terms of the Transaction · Purchase price: $28.50* · Aggregate value: $622.7 million*
Slide 6: Pricing
· Consideration: A fixed exchange ratio of .6602 of a share of BB&T stock for each share of MSBK stock · Structure: Tax-free exchange · Termination fee: $20 million · Expected closing: Second quarter 2006 *Based on BB&T’s closing stock price of $43.17 as of 12/14/2005. 9 Pricing · Purchase price $28
Slide 7: Acquisition Comparables
Acquisition Comparables* Comparable Acquisitions Announced in the Southeast since January 1, 2004 with Seller Assets over $50 Million Deal Pr/ Deal Pr/ Deal LTM Date Seller Value/ Deal Pr/ Deal Deal Pr/ LTM Core Total Deal Buyer Seller Announced Assets Value Assets Stock Pr Pr/Bk Tg Bk EPS EPS ($M)
Slide 8: Acquisition Comparables
Deal Price: $28.50 BB&T Corporation Main Street Banks, Inc. 2,473.6 622.7 25.2 (0.8) 209.6 322.4 20.1 18.8 Over/(Under) Average 3.7 (18.8) (39.4) 68.9 (5.0) (10.9) Comparables *Source for Acquisition Comparables: SNL Financial 11 Acquisition Comparables* Comparable Acquisitions Announced since Janua
Slide 9: All Georgia Acquisitions Announced since January 1, 2004
Colonial BancGroup, Inc. FFLC Bancorp, Inc. 1/14/2005 1,065.3 225.0 21.1 15.9 259.9 259.9 22.2 22.2 Willow Grove Bancorp, Chester Valley Inc. Bancorp Inc. 1/20/2005 644.7 151.9 23.6 28.1 265.2 274.3 23.4 26.3 Capital One Financial Corporation Hibernia Corporation 3/7/2005 22,084.6 4,977.4 22.5 0.8 2
Slide 10: Georgia Acquisition Comparables (continued)
Crescent Banking Futurus Financial Company Services, Inc. 8/19/2004 69.9 10.0 14.3 NA 173.2 173.2 NA NA United Community Banks, Liberty National Inc. Bancshares, Inc. 8/24/2004 179.1 36.7 20.5 NA 299.9 299.9 21.6 NA GB&T Bancshares, Inc. FNBG Bancshares, Inc. 10/1/2004 103.3 26.5 25.6 NA 345.0 345.0
Slide 11: Financial Summary
Financial Data 14 Financial Summary BB&T MSBK For The Quarter Ended: 9/30/05 9/30/05 ROA* 1.64% 1.42% Cash Basis ROA 1.81 1.44 ROE* 15.65 11.79 Cash Basis ROE 28.56 11.96 Net interest margin (FTE) 3.88 4.26 Cash Basis Efficiency ratio 49.66 56.21 Net charge-offs 0.30 0.21 Reserve/NPLs 353.87 227.00
Slide 12: Capital Strength / Rationale for Acquisition
BB&T MSBK 9/30/05 9/30/05 Equity/assets 10.5% 11.8% Leverage capital ratio 7.3% 10.6% Total risk-based capital 14.9% 13.5% 16 Rationale for Acquisition · BB&T has announced a strategy to pursue in-market (Carolinas/Virginia/West Virginia/DC/Maryland/Georgia/Kentucky/Tennessee/Florida) acquisitions o
Slide 13: Efficiency Improvement
Efficiency Improvement Targeted Annual Cost Savings $24.6 million or approximately 35% of Main Street’s expense base 18 Branch Locations
Slide 14: 2005 Economic Vitality Map
19 2005 Economic Vitality Map
Slide 15: Market Characteristics
20 Market Characteristics · The Atlanta MSA is:
Slide 16: Market Characteristics
- the 2nd largest MSA in the Southeast with approximately 51% of Georgia’s residents according to the 2000 census - home to over 4.8 million people · The population of Metropolitan Atlanta has risen 34.1% between 1994-2004; bank deposits have grown 119.3% · Atlanta is ranked 2nd wealthiest MSA in th
Slide 17: Market Characteristics / BB&T Investment Criteria
22 Market Characteristics · The number of households in the Athens MSA is expected to grow 5.3% over the next five years · Athens is the home of the University of Georgia with enrollment of approximately 33,660 · The Worldwide Employee Relocation Council named Athens the top small U.S. metro area in
Slide 18: Assumptions
· Cash Basis EPS (accretive by year 2) · GAAP EPS (accretive by year 3) · Internal rate of return (15% or better) · Cash Basis ROE (accretive by year 3) · Cash Basis ROA (accretive by year 3) · Tangible book value per share (accretive by year 5) · Must not cause combined leverage capital ratio to go
Slide 19: Results of the Transaction: Earnings Per Share Impact
- Noninterest income is grown to achieve a fee income ratio of 30% in year 5, and is grown at 10% thereafter. - Noninterest expense is grown 5% in years 1 and 2, 12% in years 3-5, and 10% thereafter. · Margin: Main Street’s non-FTE margin is projected to be 4.24% in 2006 and all years modeled. · One
Slide 20: ROE Impact
2013 6.50 0.07 6.65 0.07 2014 7.15 0.08 7.30 0.08 2015 7.87 0.09 8.02 0.09 2016 8.66 0.10 8.81 0.10 Internal rate of return 19.36% *2006 results are based on an assumed April 1, 2006 closing. 27 ROE Impact1 Pro Forma Pro Forma Cash Basis Year ROE (%) Change ROE (%) Change 2006 14.95 (0.42 ) 28.26 0.
Slide 21: ROA Impact / Book Value and Capital Impact
ROA Impact Pro Forma Pro Forma Cash Basis Year ROA (%) Change ROA (%) Change 2006 1.60 (0.01 ) 1.76 (0.00 ) 2007 1.64 (0.00 ) 1.78 0.01 2008 1.65 0.00 1.78 0.01 2009 1.66 0.01 1.77 0.01 2010 1.66 0.01 1.77 0.01 2011 1.67 0.01 1.77 0.01 2012 1.67 0.01 1.76 0.02 2013 1.68 0.01 1.76 0.02 2014 1.68 0.01
Slide 22: Summary
* BB&T’s goal is to manage its leverage ratio between 7% and 8%. BB&T may choose to maintain its target leverage ratio through future repurchases of BB&T’s common stock. 30 Summary · The acquisition of Main Street Banks, Inc. is a strong strategic fit: - It helps accomplish our goal of expanding our
Slide 23: Appendix
Appendix · Historical financial data · Glossary · Where to go for additional information about BB&T, Main Street Banks, Inc., and the merger 32 Main Street Banks, Inc. Financial Summary Nine months Nine months 9/30/05 ended ended vs. % % % September 30,September 30, 9/30/04 2002 Change 2003 Change 2
Slide 24: Main Street Banks, Inc. Financial Summary
Occupancy & equipment 4,710 -3.5 % 6,661 41.4 % 8,239 23.7 % 6,159 6,255 1.6 % 102.8 Intangible amortization 180 -24.9 % 365 % 508 39.2 % 385 390 1.3 % Other operating expenses 11,825 -19.0 % 15,594 31.9 % 16,407 5.2 % 13,748 14,664 6.7 % Total noninterest expense 39,873 1.3 % 52,943 32.8 % 62,618 1
Slide 25: Main Street Banks, Inc. Balance Sheet
Money Market & NOW $ 254,927 14.5 % $ 424,579 66.5 % $ 540,690 27.3 % $ 507,816 $ 633,954 24.8 % Savings 46,618 6.8 % 47,905 2.8 % 49,035 2.4 % 49,130 44,983 -8.4 % CD's and other time 490,746 2.7 % 640,246 30.5 % 749,430 17.1 % 739,128 783,401 6.0 % Total interest-bearing deposits 792,291 6.5 % 1,1
Slide 26: Glossary
Total assets $ 1,381,990 $ 1,971,765 $ 2,326,442 $ 2,258,393 $ 2,473,567 35 Glossary Return on Assets - Earnings (excluding merger-related and nonrecurring charges or credits) for the period as a percentage of average assets for the period. Return on Equity - Earnings (excluding merger-related and n
Slide 27: Offering materials and additional information notice
The foregoing may be deemed to be offering materials of BB&T Corporation (“BB&T”) in connection with BB&T’s proposed acquisition of Main Street Banks, Inc. (“Main Street”) on the terms and subject to the conditions in the Agreement and Plan of Reorganization, dated December 14, 2005, between BB&T an