Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - UNITED BANKSHARES INC/WV | d8k.htm |
| EX-2.1 - AGREEMENT AND PLAN OF MERGER - UNITED BANKSHARES INC/WV | dex21.htm |
| EX-99.1 - PRESS RELEASE - UNITED BANKSHARES INC/WV | dex991.htm |
EXHIBIT 99.2
Merger Between
United Bankshares, Inc.
Centra Financial Holdings, Inc.
Investor Presentation
December 16, 2010
 BANKSHARES, INC. |
 2
This presentation may contain forward-looking statements about United
Bankshares, Inc., which we believe are within the meaning of the
Private Securities Litigation Reform Act of 1995. This presentation may
contain certain forward-looking statements with respect to the
financial condition, results of operations, plans, objectives,
future performance and business of United including statements preceded by, followed by
or that include the words “believes,” “expects,”
“anticipates” or similar expressions. These forward-looking
statements involve certain risks and uncertainties. There are a number of
important factors that could cause future results to differ
materially from historical performance and these forward-looking statements.
Factors that might cause such a difference include, but are not limited
to: (1) competitive pressures among depository institutions
increase significantly; (2) changes in interest rate
environment reduce interest margins; (3) prepayment speeds,
loan sale volumes, charge-offs and loan loss provisions;
(4) general economic conditions, either national or in the states in
which United does business, are less favorable than
expected; (5) legislative or regulatory changes adversely
affect the businesses in which United is engaged; (6)
changes in the securities markets. Further information on other factors, which could affect the financial
results of United, are included in United’s filings with the
Securities and Exchange Commission. These documents are available free of charge
at the Commission’s website at www.sec.gov and/or from
United. |
 3
Transaction Summary
A strategic acquisition of a high performance, in-market community
bank in West Virginia
$1.4B in assets, 15 offices and one loan origination office
Historically strong operator with better than peer credit
metrics -
MRQ ROAA of 0.75% and NPAs/Assets of 2.04%
-
Maintained profitability throughout the credit cycle
Enhances footprint in MD and WV, and provides entry to PA
#1 Pro Forma market share in Morgantown, WV
#5 Pro Forma market share in Hagerstown/Martinsburg, MD/WV
Entry into Pittsburgh, PA MSA
Financially attractive
UBSI to remain substantially above well-capitalized levels
Meaningfully accretive to first full year EPS
Provides IRR in excess of UBSI cost of capital (mid-teens)
Accretive to TBV at closing
Market
Share
Data
as
of
June
30,
2010
Source:
SNL
Financial |
 4
100% stock transaction for the common shares
of Centra with a fixed exchange ratio of 0.7676x
(~6.5 mm shares issued) –
Centra options to be
cashed out at $21.00
Transaction Overview
Transaction
Value:¹
Price Per Share¹:
Board Composition:
Due Diligence:
Required Approval:
Termination Fee:
Anticipated Closing:
$186.9 mm
$21.00
Two seats offered to Centra at Holding Company;
Three Centra members to be appointed to United
Bank’s Board of Directors
Completed
Centra shareholders and customary regulatory
$7.5 mm
Early Q3 2011
Consideration:
¹Based on 8,446,290 Centra common shares outstanding, 1,215,566
Centra options outstanding and UBSI stock price of $27.36 on December 10, 2010 (the day the
exchange ratio was agreed upon). |
  5
Enhances UBSI’s Mid-Atlantic Franchise
UBSI
Centra
WV
VA
MD
PA
OH
Source: SNL Financial; deposit figures as of June 30, 2010
Centra Stand Alone
Deposits
Mkt. Share
MSA
Rank
Branches
($000)
(%)
Morgantown, WV
2
5
506,360
22.6
Pittsburgh, PA
21
4
340,991
0.5
Hagerstown-Martinsburg, MD-WV
5
7
328,521
10.2
Charleston
Columbus
Morgantown
Pittsburgh
Washington DC
Martinsburg
Hagerstown |
 6
Enhanced Position as a Market Leader
Source: SNL Financial
Deposit data as of June 30, 2010
Morgantown, WV
June 30, 2010
Deposits
Dep. Mkt. Shr.
Rank
Name
Branches
($000)
(%)
Pro Forma
9
690,654
30.8
1
BB&T Corp. (NC)
8
509,377
22.7
2
Centra Financial Holdings Inc. (WV)
5
506,360
22.6
3
Huntington Bancshares Inc. (OH)
5
390,355
17.4
4
State Bancorp Inc. (WV)
10
323,130
14.4
5
WesBanco Inc. (WV)
8
205,825
9.2
6
United Bankshares Inc. (WV)
4
184,294
8.2
7
First United Corp. (MD)
3
71,549
3.2
8
Heritage Bancshares Inc. (WV)
2
27,002
1.2
9
Morgantown Bancshares Inc. (WV)
1
20,326
0.9
10
PNC Financial Services Group (PA)
1
2,515
0.1
Hagerstown-Martinsburg, MD-WV
June 30, 2010
Deposits
Dep. Mkt. Shr.
Rank
Name
Branches
($000)
(%)
1
Susquehanna Bancshares Inc. (PA)
13
594,665
18.4
2
Fulton Financial Corp. (PA)
11
433,430
13.4
3
M&T Bank Corp. (NY)
11
353,729
11.0
4
BB&T Corp. (NC)
6
353,284
11.0
Pro Forma
8
334,852
10.4
5
Centra Financial Holdings Inc. (WV)
7
328,521
10.2
6
CNB Financial Services Inc. (WV)
6
248,484
7.7
7
First United Corp. (MD)
8
222,860
6.9
8
PNC Financial Services Group (PA)
5
143,648
4.5
9
City Holding Co. (WV)
5
135,268
4.2
10
Banco Santander SA
4
105,618
3.3
19
United Bankshares Inc. (WV)
1
6,331
0.2
Fayette
County,
PA
June 30, 2010
Deposits
Dep. Mkt. Shr.
Rank
Name
Branches
($000)
(%)
1
PNC Financial Services Group (PA)
14
680,428
35.4
2
Centra Financial Holdings Inc. (WV)
4
340,991
17.7
3
First FS&LA of Greene County (PA)
1
248,850
12.9
4
F.N.B. Corp. (PA)
5
191,405
10.0
5
Parkvale Financial Corp. (PA)
5
169,587
8.8
6
First Niagara Finl Group (NY)
3
153,056
8.0
7
Scottdale Bank & Trust Company (PA)
2
74,643
3.9
8
FedFirst Financial Corp. (PA)
2
36,582
1.9
9
CF Financial Corp. (MHC) (PA)
1
27,745
1.4
10
Woodforest Financial Group (TX)
1
1,208
0.1
Pro Forma
4
340,991
17.7 |
 7
Market Overviews
Morgantown
Strong and sustainable economic growth driven by West Virginia
University, one of the largest employers in the state
Stable education and healthcare industries contribute to one of the
lowest unemployment rates in the country, and the lowest in WV
(5.7% as of
September 2010, SNL Financial)
Positive demographic trends, including a well-educated
workforce Economic growth projected to remain well ahead of both
state and national
growth (Moody’s Analytics, July 2010)
Ranked as #10 in “Best Small Cities for Business and
Careers” (Forbes,
September 2010)
Hagerstown/Martinsburg
Growth prospects of Hagerstown-Martinsburg, MD-WV MSA (8.40%
projected population growth rate from 2010 -
2015 more than double the U.S.
projection of 3.41%¹)
Strategically positioned as a meeting point in the Mid-Atlantic,
this area intersects major highways I-70, I-68 and
I-81, making it a center for transportation, manufacturing
and distribution industries Fayette County, PA (Pittsburgh
MSA) Stable low-cost funding base
¹Source: SNL Financial; ESRI |
 8
Centra Historical Financial Performance
Centra’s proven track record of growth and profitability will
complement UBSI’s existing operation
Source: SNL Financial, company documents
For the Fiscal Year Ended
YTD
2007
2008
2009
9/30/2010
Balance Sheet
Total Assets
1,085,187
1,213,557
1,292,557
1,410,801
Net Loans (Incl. HFS)
864,505
1,010,806
1,007,435
1,018,858
Deposits
943,934
1,012,393
1,114,346
1,207,838
Gross Loans Held for Inv. / Deposits
93%
101%
92%
85%
Capital
Total Equity
87,920
95,242
105,144
135,071
Tangible Equity
71,185
78,945
89,587
120,069
TCE/TA
6.66%
6.59%
7.02%
8.60%
Tier 1 Capital Ratio
11.00%
10.10%
10.92%
13.58%
Total Capital Ratio
12.24%
11.36%
12.17%
14.84%
Profitability
Net Income
5,327
6,570
7,094
7,001
ROAA
0.54%
0.57%
0.65%
0.69%
ROAE
8.2%
7.2%
7.7%
7.3%
Net Interest Margin
3.77%
3.81%
3.82%
3.58%
Efficiency Ratio
68.7%
67.1%
63.2%
65.9%
Asset Quality
Reserves / Gross Loans Held for Inv.
1.54%
1.60%
1.76%
1.77%
NPAs / Assets
0.41%
0.57%
1.10%
2.04%
NCOs / Average Loans
(0.01%)
0.24%
0.39%
0.34% |
 9
Centra Historical Financial Performance
In addition to growth and profitability, Centra has a history of
strong credit quality
NPAs / Assets
Loan & Deposit Composition²
Loans
Deposits
1
Mean
value
for
nationwide
publicly-traded
commercial
banks
with
assets
between
$1bn
-
$2bn
²
Data sourced from regulatory documents
Source: SNL Financial, company documents
1.10%
0.57%
0.41%
0.15%
0.05%
1.50%
2.04%
2.20%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
2005
2006
2007
2008
2009
Q1
2010
Q2
2010
Q3
2010
Centra
Nationwide¹
C&D
16%
1-4 Family
30%
Multi -fam.
6%
CRE
31%
C&I
13%
Cons.
2%
Other
2%
NOW
4%
MMDAs
&
Sav.
50%
Retail CDs
19%
Jumbo CDs
20%
Demand
7% |
 10
Detailed Due Diligence Process
Comprehensive review of all operations and business lines
Cost savings of 25%
–
Additional cost savings and revenue synergies identified but not
assumed
Extensive credit review
Top 100 largest relationships and total credit exposure
80% of criticized loans
80% of all substandard loans
All nonperforming assets and OREO greater than $250,000
Assumes a $40 million credit mark, more than double Centra’s
current reserve
Source: SNL Financial |
 11
Pricing Metrics
$21.00
Deal Price Per Share¹:
$186.9 million
Aggregate Transaction Value¹:
131%
Price/Book Value
147%
Price/Tangible Book Value
6.9%
Core Deposit Premium
17.5x
Price/MRQ Net Income Annualized
¹Based on 8,446,290 Centra common shares outstanding, 1,215,566
Centra options outstanding and UBSI stock price of $27.36 on December 10, 2010 (the day the
exchange ratio was agreed upon). |
 12
UBSI -
Efficient Integration History
UBSI is an experienced acquirer and integrator of banking
franchises
14 transactions completed since 1990 representing more than $900
million in aggregate purchase value
27 transactions completed since 1982
Proven ability to extract cost savings
Source: SNL Financial
Deal
Deal
Annc.
Value
Annc.
Value
Seller
ST
Date
($mm)
Seller
ST
Date
($mm)
Premier Community Bankshares, Inc.
VA
1/29/2007
200.1
First Commercial Bank
VA
3/7/1995
10.9
Sequoia Bancshares, Inc.
MD
4/7/2003
112.2
CB&T Westover Bank
WV
4/2/1993
8.3
Century Bancshares Incorporated
DC
6/14/2001
70.2
Financial Future Corporation
WV
10/29/1992
17.5
Fed One Bancorp, Inc.
WV
2/18/1998
92.2
Summit Holding Corporation
WV
10/21/1991
22.0
George Mason Bankshares, Inc.
VA
9/11/1997
208.4
Liberty Bancshares, Inc.
WV
10/10/1991
12.0
First Patriot Bankshares Corporation
VA
2/19/1997
39.1
First National Bank of Weirton
WV
1/30/1990
4.0
Eagle Bancorp, Inc.
WV
8/21/1995
93.4
Bank First, NA
VA
12/8/1989
10.0 |
 13
Pro Forma Financial Impact of Transaction¹
¹Projections are based on managements internal projections
Assumptions:
Cost
savings
of
25%,
phased
in
25%
in
2011
and
100%
in
2012
-
no
revenue synergies assumed
One-time merger expenses of approximately $15 mm
CDI of approximately $24 mm, amortized sum-of-the years digits
over 8 years; goodwill of approximately $80 mm
Earnings Impact:
Accretive to 2012 EPS
Capital Position:
Accretive to TBV
Pro Forma capital position will remain substantially above regulatory
well-capitalized guidelines |
 14
UBSI Continues to be a Compelling Investment
2010 will mark the 37
consecutive year of dividend increases
to shareholders -
one of only two major banking companies in
the US to achieve this record
Ranked 50
largest bank holding company based on market
capitalization
Ranked the 30
top performing banking company in the
nation by the ABA Banking Journal based on return on
average total equity
Ranked 31
out of the 150 largest U.S. bank holding
companies by Bank Director Magazine based on profitability,
capital adequacy and asset quality
Member of the S&P Small Cap 600, Russell 2000 and Dow
Jones Dividend Select Indexes
th
th
th
st |
 15
Acquisition of a high performing, in-market competitor
Enhances footprint in MD and WV, and provides entry to PA
Financially attractive
Meaningfully accretive to first full year EPS (excluding transaction
costs)
Provides IRR in excess of UBSI cost of capital
Accretive to TBV
Thorough due diligence and achievable cost savings
assumptions
Opportunity to enhance profitability by bringing UBSI’s proven
track record of operating efficiency to Centra and by bringing
additional business lines to Centra’s existing product
mix Ability to leverage existing UBSI infrastructure
Summary |