S&t Bancorp, Inc. · NASDAQ:STBA
S&t Bancorp — Merger or Acquisition (June 2019)
20 slides from S&t Bancorp's merger presentation, Jun 5, 2019
Slide 1: Acquisition of DNB Financial Corporation
Acquisition of DNB Financial Corporation June 5, 2019 MEMBER FDIC
Slide 2: Forward Looking Statement and Risk Factors
Forward Looking Statement and Risk Factors This presentation contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. In general, forward-looking statements usually use words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,
Slide 3: Participants In The Solicitation; Non-GAAP Financial Measures
Participants In The Solicitation S&T Bancorp, DNB Financial Corporation and certain of their respective directors, executive officers and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding S&T Bancorp’s directors an
Slide 4: Strategic Expansion into SE Pennsylvania
Strategic Expansion into SE Pennsylvania . Expansion into premier markets of Southeastern Pennsylvania through a strategic acquisition Strengthens of DNB Financial Corporation with approximately $0.9 billion of loans and $1.0 billion of deposits 10 52 140 Market Position in . Logical market expansio
Slide 5: Overview of DNB Financial Corporation
Overview of DNB Financial Corporation Q1 2019 Financials Standalone DNB Footprint General Information 10 52 140 Headquarters Downingtown, PA Year Established 1860 Branches 14 13 76 143 Balance Sheet ($000) Total Assets $1,166,694 Total Net Loans $927,427 224 233 248 Deposits $980,257 Balance Sheet R
Slide 6: Our Combined Company Pro Forma Highlights
Our Combined Company Pro Forma Highlights ($ in billions)(1) Pro Forma Branch Footprint Assets $8.4 10 52 140 Loans $6.9 DNBF 13 76 143 STBA Branch Deposits $6.8 STBA LPO 224 233 248 Branches 74 146 208 80 . $2.0 billion in pro forma loans and $1.7 billion in pro forma deposits in our combined South
Slide 7: Strong Market Position in Premier PA County
Strong Market Position in Premier PA County Deposit Market Share Demographics Comparison Top 15 Chester County Banks Median Household Income ($) Comm. Deposits in Market 10 52 140 $97,646 Bank Number of Market Share $86,055 Rank Rank Institution (ST) Branches ($mm) (%) $71,482 $63,174 1 Wells Fargo
Slide 8: Diversified Loan Portfolio
Diversified Loan Portfolio . Adds geographic diversification through a high-quality commercial focused loan portfolio in attractive Southeastern Pennsylvania markets 10 52 140 . Combined loan portfolio is approximately 37% C&I and owner-occupied commercial real estate and 38% non-owner occupied comm
Slide 9: Combined Deposit Base
Combined Deposit Base . 23% noninterest bearing demand deposits on a combined basis . $1.7 billion of combined deposits in Southeastern and Central Pennsylvania markets 10 52 140 . DNB enjoys significant long-term relationships with commercial and retail customers, particularly in its legacy Chester
Slide 10: Comprehensive Due Diligence Efforts
Comprehensive Due Diligence Efforts . Engaged third party resources to assist with credit due diligence efforts 10 52 140 13 76 143 . Credit diligence coverage: • Reviewed 63% of total commercial loan exposure 224 233 248 • Reviewed 89% of total criticized loan exposure • Reviewed 86% of total class
Slide 11: Transaction Structure
Transaction Structure (1) 10 52 140 Pro Forma Total Assets $7,229 $1,167 $8,396 Total Gross Loans $5,938 $934 $6,872 13 76 143 Total Deposits $5,833 $980 $6,813 Branches 60 14 74 224 233 248 Consideration ▪ 100% Stock 146 208 80 Fixed Exchange Ratio ▪ 1.22 shares of STBA for each share of DNBF (2) T
Slide 12: Key Assumptions
Key Assumptions . Gross loan credit write-down of ($10.1) million, or approximately 1.1%, accreted sum-of- years’-digits over 8 years Credit 10 52 140 . Loan interest rate write-down of ($14.5) million, accreted sum-of-years’-digits over 8 years . OREO write-down of ($1.1) million 13 76 143 . Expect
Slide 13: Estimated Pro Forma Financial Metrics
Estimated Pro Forma Financial Metrics 10 52 140 Key Transaction Impacts to STBA (1) Pro Forma at Close Capital Ratios (2) Est. 12/31/19 13 76 143 2020E / 2021E ~2.8% / ~5.2% TCE Ratio 9.3% EPS Accretion 224 233 248 Leverage Ratio 9.8% 146 208 80 IRR (1) >20% Common Equity 11.3% 141 13 58 Tier 1 Rati
Slide 14: Conclusions
Conclusions 10 52 140 . Logical, strategic market expansion in Southeastern Pennsylvania only 30 miles from our existing Lancaster presence 13 76 143 . Demographically attractive Southeastern Pennsylvania growth markets of 224 233 248 Chester County and broader Philadelphia MSA 146 208 80 . Nearly 1
Slide 15: Appendix
10 52 140 13 76 143 224 233 248 146 208 80 Appendix 141 13 58 13 32 160 47 110 171 72 130 124 15
Slide 16: Attractive Philadelphia MSA
Attractive Philadelphia MSA 8th largest MSA in the U.S. and 2nd in the Mid-Atlantic based on population 2010 – 2019 Population Growth 2019 – 2024 Proj. Pop. Growth Major Philadelphia Employers 10 52 140 2.6% 1.5% 13 76 143 224 233 248 (0.5%) (2.3%) 146 208 80 Mid-Atlantic Median Philadelphia Mid-Atl
Slide 17: Pro Forma Loan & Deposit Compositions
Pro Forma Loan & Deposit Compositions STBA Stand Alone DNBF Stand Alone Pro Forma Total: $5,935mm Total: $934mm Total: $6,869mm Construction Consumer & Consumer & 10 52 140 Consumer & Other Construction Other 4% Residential Other Construction 8% 5% 9% Real Estate 6% 8% Residential 12% Commercial & R
Slide 18: Track Record of Organic & Acquisitive Growth
Track Record of Organic & Acquisitive Growth Northeast OH Southeast PA Central OH Central PA Western PA Branch opens in Cuyahoga Acquisition of DNB Financial LPO opens in Dublin, OH Integrity Bank acquired LPO opens in Pittsburgh, PA 10 52 140 Falls, OH Corp. announced March 24, 2014 March 4, 2015 O
Slide 19: Tangible Book Value Per Share Dilution
Tangible Book Value Per Share Dilution Tangible Book Value Dilution Intangibles Created Shares $ Per ($M) 10 52 140 ($M) (M) Share Deal Value (2) $206 STBA Standalone STBA Tangible Book Value at 3/31/19 (1) $654 34 $19.04 DNBF TCE at Close $107 13 76 143 (+) Three Quarters of Consensus Mean Earnings
Slide 20: Acquisition of DNB Financial Corporation
Acquisition of DNB Financial Corporation June 5, 2019 MEMBER FDIC