Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - HOPFED BANCORP INC | d521391d8k.htm |
 Acquisition of Sumner Bank & Trust
Investor Presentation
April 2013
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
Exhibit 99.1 |
 |
 |
 |
 |
 |
 7
Significantly enhances our presence in the Nashville MSA with the addition of 3
branches and 3 loan production offices
Expansion into markets with attractive demographics and growth profiles
Local leadership has been retained and will lead our efforts in these new
markets
Utilizes our enhanced infrastructure allowing for significant cost savings
Improves our deposit mix and net interest margin
Includes attractive retail mortgage business
Strategic
Considerations
Financial
Considerations
Transaction Rationale
Cash transaction priced at 111% of tangible book value as of December 31,
2012 Significantly earnings accretive; $0.25 -
$0.30 per share with fully-implemented
cost savings
Moderate tangible book value dilution; $0.63 -
$0.70 per share with earn-out in
under 2.5 years
$2.1 million in cost savings; 20% of expenses (40% when excluding mortgage
business)
Pro forma capital ratios will be levered, but remain strong
|
 8
Sumner Bank & Trust is a $184 million asset-sized bank
headquartered in Gallatin, Tennessee, operating three
branches and three loan production offices in the
Nashville MSA
Branches are all located in Sumner County
Loan production offices located in Williamson,
Madison and Wilson counties
Sumner Bank & Trust was organized in 2005 to meet the
need in Sumner County for a true community bank
owned by local shareholders
Sumner is led by a strong, experienced management
team
Sumner currently has $4.3 million of SBLF Preferred
Stock outstanding, which HopFed will retain
Sumner has a growing and profitable retail mortgage
banking business
Overview of Sumner Bank & Trust
Overview of Sumner Bank & Trust
Corporate Overview
GAAP Balance Sheet (12/31/2012)
GAAP Performance Metrics (12/31/2012)
Headquarters:
Gallatin, TN
Chief Executive Officer:
Michael Wayne Cook
Employees (FTE):
64
Corporation Type:
C-Corporation
Assets:
$184.0 million
Cash & Securities:
$54.1 million
Gross Loans:
$121.6 million
Total Deposits:
$157.6 million
Tangible Common Equity:
$12.2 million
SBLF Preferred Equity:
$4.3 million
Efficiency Ratio (LTM):
85.9%
Return on Average Assets (LTM):
0.67%
Net Interest Margin (LTM):
3.38%
Pre-Tax Income (LTM):
$1.1 million
NPAs / Assets:
3.46%
TCE Ratio:
6.63%
Source: SNL Financial |
 9
Pro Forma Branch Map
Gallatin I
780 Browns Lane
Gallatin, TN 37066
2012 Deposits:
$55,306
2011 Deposits:
$46,531
Gallatin II
240 W Broadway
Gallatin, TN 37066
2012 Deposits:
$55,848
2011 Deposits:
$56,364
Hendersonville
255 Indian Lake Blvd
Hendersonville, TN 37075
2012 Deposits:
$28,083
2011 Deposits:
$16,039
HopFed Bancorp (18)
Sumner Bank & Trust Branch (3)
Sumner Loan Production Office (3)
For the period ended June 30, 2012
(Dollars in Thousands)
Branch Summary
Hendersonville
Gallatin I
Gallatin II
Jackson
Franklin
Lebanon
Source: SNL Financial |
 10
$10.04 per share or $14.3 million in cash
Subject to possible increase or reduction based on Sumner performance
Transaction Value
SBLF Preferred Stock
Transaction Overview
Anticipated Closing
Sumner SBLF Preferred Stock will be exchanged for shares of HopFed
Preferred Stock and will be subject to the same terms as Sumner agreed
to with the U.S. Department of the Treasury
Third Quarter 2013
Price to tangible book value of 111%
Core deposit premium of 1.2%
Price to LTM earnings per share of 14.6x
Valuation Multiples
(as of 12/31/12)
Credit Mark
Transaction Expenses
Estimated at $1.5 million
$3.0
million
or
approximately
47%
of
NPAs
($1.8
million
on
loans
and
$1.2 million on OREO) |
 11
June 2010 Equity Offering Use of Proceeds: Organic Growth; Opportunistic
Acquisitions; General Corporate Purposes; Repurchase of
TARP Existence of MOU until November 2012 prevented more timely
repurchase of TARP and related warrant and removed HopFed from M&A
arena; we repurchased TARP on December 19, 2012. HFBC Stock Price Since Common
Stock Offering Source: SNL Financial
Pricing as of April 11, 2013
6/16/10:
Closing
of
$32.3
M follow-on common stock
offering at $8.65 (split-
adjusted)
7/21/11:
OTS
transfers
authority to Federal
Reserve and OCC
10/10/12:
MOU
is
terminated between
the OCC and Heritage
Bank
11/21/12:
MOU
is
terminated between
Federal Reserve and
HopFed Bancorp, Inc.
1/16/13:
Repurchased
warrants relating to TARP
2/12/13:
Announce
acquisition of Sumner
Bank & Trust
5/21/12:
Initial
OCC
exam commences
8/6/12:
Signed
NDA
to
explore
Sumner
ac
quisition
12/19/12:
Repurchase
TARP at par
$5.00
$6.00
$7.00
$8.00
$9.00
$10.00
$11.00
$12.00
6/16/10
9/16/10
12/16/10
3/16/11
6/16/11
9/16/11
12/16/11
3/16/12
6/16/12
9/16/12
12/16/12
3/16/13 |
 12
Current Market Area
Attractive Market Demographics
HopFed’s Current Market Area
18 branches in Western Kentucky and
Middle Tennessee
Focus in the cities of:
•
Hopkinsville, KY (3 branches, $198M in
deposits, #3 market share)
•
Murray, KY (2 branches, $113M in deposits,
#3 market share)
•
Fulton, KY (2 branches, $146M in deposits,
#1 market share)
•
Clarksville, TN (3 branches, $64M in deposits,
#10 market share)
Transaction bolsters presence in attractive
Nashville MSA
3 bank branches located in two cities within
Sumner County
•
Gallatin, TN (2 branches, $111M in deposits,
#3 market share)
•
Hendersonville, TN (1 branch, $28M in
deposits, #13 market share)
Loan production offices in Wilson and
Williamson counties
Nashville, TN MSA
Source: SNL Financial
Note: Branch deposit and market share data as of June 30, 2012
Note: Acquired branches/LPO’s are located in the highlighted counties
2012
Population
2012 Median
Median Value
2012
Change
Household
Owner Occupied
County (Seat)
Population
2000-2012
Income
Housing Unit
Kentucky:
Christian (Hopkinsville)
75,855
5.0%
$36,568
$137,536
Marshall (Lewisburg)
31,778
5.5
37,915
141,622
Calloway (Murray)
38,066
11.4
35,859
97,429
Todd (Elkton)
12,571
5.0
33,039
82,288
Trigg (Cadiz)
14,586
15.8
40,026
105,937
Fulton (Hickman)
6,752
-12.9
30,749
59,111
Kentucky Total
179,608
6.3%
$36,471
$120,377
Tennessee:
Montgomery (Clarksville)
179,558
33.2%
$47,627
$145,102
Cheatham (Ashland City)
39,446
9.8
50,105
136,390
Houston (Erin)
8,438
4.3
36,908
85,864
Obion (Union City)
31,739
-2.2
36,299
87,182
Weakley (Dresden)
35,141
0.7
32,538
88,160
Tennessee Total
294,322
19.6%
$44,629
$129,191
Market Total
473,930
14.2%
$41,537
$125,851
2012
Population
2012 Median
Median Value
2012
Change
Household
Owner Occupied
County (Seat)
Population
2000-2012
Income
Housing Unit
Robertson (Springfield)
67,683
24.3%
$45,984
$146,778
Sumner (Gallatin)
165,950
27.2
52,233
178,732
Wilson (Lebanon)
118,990
34.0
56,555
175,577
Rutherford (Murfreesboro)
273,378
50.2
51,533
149,005
Williamson (Franklin)
191,532
51.2
78,845
321,900
Maury (Columbia)
83,089
19.6
45,787
124,137
Dickson (Dickson)
50,144
16.2
41,711
127,735
Davidson (Nashville)
640,154
12.3
42,642
164,240
Cheatham (Ashland City)
39,446
9.8
50,105
136,390
Nashville MSA Total
1,630,366
25.3%
$50,828
$177,944 |
 13
In April 2006 HopFed announced the acquisition of four branches with $65.5 million
in deposits and $34.5 million in loans in the Nashville MSA from AmSouth
Bancorporation Opened de novo branch offices in Clarksville, TN in December
2006, May 2007, and September 2007 HopFed Loan Composition by State
Kentucky and Tennessee Loan Mix Since 2005
Kentucky 6-Yr CAGR: -4.2%
Tennessee 6-Yr CAGR: 16.6%
Source: SNL Financial
KY Loans ($M)
$388.6
$414.2
$436.8
$432.3
$412.8
$385.4
$348.7
$321.0
$321.0
TN Loans ($M)
$12.7
$85.2
$144.3
$202.2
$238.4
$224.7
$218.9
$214.6
$336.3
Total Loans ($M)
$401.3
$499.4
$581.1
$634.5
$651.2
$610.0
$567.6
$535.6
$657.4
3%
17%
25%
32%
37%
37%
39%
40%
51%
97%
83%
75%
68%
63%
63%
61%
60%
49%
0%
25%
50%
75%
100%
2005
2006
2007
2008
2009
2010
2011
2012
Pro Forma w/
Sumner
Tennessee
Kentucky |
 14
Demand
Deps.
12%
NOW and
ATS
19%
MMDA and
Savings
11%
Retail Time
28%
Jumbo
Time
30%
Demand
Deps.
12%
NOW and
ATS
40%
MMDA and
Savings
14%
Retail Time
13%
Jumbo
Time
21%
Demand
Deps.
12%
NOW and
ATS
23%
MMDA and
Savings
11%
Retail Time
26%
Jumbo
Time
28%
Pro Forma Deposit Composition
Heritage Bank
Sumner Bank & Trust
Pro Forma
Dollars in Thousands
For the period ended December 31, 2012
Heritage Bank
Sumner Bank & Trust
Pro Forma
Demand Deposits
94,083
$
12.4%
18,787
$
11.9%
112,870
$
12.3%
NOW and ATS
147,047
19.4%
62,837
39.9%
209,884
22.9%
MMDA and Savings
81,643
10.7%
21,418
13.6%
103,061
11.2%
Retail Time Deposits ( < $100K)
213,216
28.1%
20,672
13.1%
233,888
25.5%
Jumbo Time Deposits ( > $100K)
223,876
29.5%
33,874
21.5%
257,750
28.1%
Total Deposits
759,865
$
100.0%
157,588
$
100.0%
917,453
$
100.0%
Source: SNL Financial
Note: Data reflects bank level regulatory financials
|
 15
Pro Forma Loan Composition
Heritage Bank
Sumner Bank & Trust
Pro Forma
Dollars in Thousands
For the period ended December 31, 2012
Heritage Bank
Sumner Bank & Trust
Pro Forma
Construction & Development
64,952
$
12.1%
9,699
$
8.0%
74,651
$
11.4%
Secured by Farmland
46,799
8.7%
327
0.3%
47,126
7.2%
1 - 4 Family Real Estate
203,764
38.0%
62,429
51.3%
266,193
40.5%
5+ Family Real Estate
33,056
6.2%
985
0.8%
34,041
5.2%
Commercial Real Estate
122,637
22.9%
34,695
28.5%
157,332
23.9%
Agricultural
17,448
3.3%
11
0.0%
17,459
2.7%
Commercial & Industrial
33,045
6.2%
11,734
9.6%
44,779
6.8%
Consumer
13,928
2.6%
1,835
1.5%
15,763
2.4%
Other
-
0.0%
10
0.0%
10
0.0%
Gross Loans and Leases
535,629
$
100.0%
121,725
$
100.0%
657,354
$
100.0%
(1) Includes $33.3 million in loans held for sale from the mortgage
business Source: SNL Financial; Note: Data reflects bank level
regulatory financials
(1)
C&D
12%
Farm
9%
1 -4
Family
38%
5+ Family
6%
Comm. RE
23%
Agriculture
3%
C&I
6%
Consumer
3%
C&D
8%
Farm
<1%
1 -
4
Family
51%
5+ Family
1%
Comm. RE
28%
Agriculture
<1%
C&I
10%
Consumer
2%
Other
<1%
C&D
11%
Farm
7%
1 -
4
Family
41%
5+ Family
5%
Comm. RE
24%
Agriculture
3%
C&I
7%
Consumer
2%
Other
<1% |
 John E. Peck
President & Chief Executive Officer
(270) 887-8401
john.peck@bankwithheritage.com
Billy C. Duvall
SVP & Chief Financial Officer
(270) 887-8404
billy.duvall@bankwithheritage.com |