Attached files
| file | filename |
|---|---|
| 8-K - 8-K - AMERICAN NATIONAL BANKSHARES INC. | d779170d8k.htm |
| EX-99.2 - EX-99.2 - AMERICAN NATIONAL BANKSHARES INC. | d779170dex992.htm |
  relationship
experience
solutions
Acquisition of
MainStreet BankShares, Inc.
Exhibit 99.1 |
  2
Statements
made
in
this
presentation,
other
than
those
concerning
historical
financial
information,
may
be
considered
forward-looking
statements,
which
speak
only
as
of
the
date
of
this
presentation
and
are
based
on
current
expectations
and
involve
a
number
of
assumptions.
These
include
statements
as
to
the
anticipated
benefits
of
the
merger,
including
future
financial
and
operating
results,
cost
savings
and
enhanced
revenues
that
may
be
realized
from
the
merger
as
well
as
other
statements
of
expectations
regarding
the
merger
and
any
other
statements
regarding
future
results
or
expectations.
Each
of
American
National
and
MainStreet
intends
such
forward-looking
statements
to
be
covered
by
the
safe
harbor
provisions
for
forward-looking
statements
contained
in
the
Private
Securities
Litigation
Reform
Act
of
1995
and
is
including
this
statement
for
purposes
of
these
safe
harbor
provisions.
The
companies’
respective
abilities
to
predict
results,
or
the
actual
effect
of
future
plans
or
strategies,
is
inherently
uncertain.
Factors
that
could
have
a
material
effect
on
the
operations
and
future
prospects
of
each
of
American
National
and
MainStreet
and
the
resulting
company,
include
but
are
not
limited
to:
(1)
the
businesses
of
American
National
and/or
MainStreet
may
not
be
integrated
successfully
or
such
integration
may
be
more
difficult,
time-consuming
or
costly
than
expected;
(2)
expected
revenue
synergies
and
cost
savings
from
the
merger
may
not
be
fully
realized
or
realized
within
the
expected
timeframe;
(3)
revenues
following
the
merger
may
be
lower
than
expected;
(4)
customer
and
employee
relationships
and
business
operations
may
be
disrupted
by
the
merger;
(5)
the
ability
to
obtain
required
regulatory
and
shareholder
approvals,
and
the
ability
to
complete
the
merger
on
the
expected
timeframe
may
be
more
difficult,
time-
consuming
or
costly
than
expected;
(6)
changes
in
interest
rates,
general
economic
conditions,
legislation
and
regulation,
and
monetary
and
fiscal
policies
of
the
U.S.
government,
including
policies
of
the
U.S.
Treasury,
Office
of
the
Comptroller
of
the
Currency
and
the
Board
of
Governors
of
the
Federal
Reserve
System;
(7)
the
quality
and
composition
of
the
loan
and
securities
portfolios,
demand
for
loan
products,
deposit
flows,
competition,
and
demand
for
financial
services
in
the
companies’
respective
market
areas;
(8)
the
implementation
of
new
technologies,
and
the
ability
to
develop
and
maintain
secure
and
reliable
electronic
systems;
(9)
accounting
principles,
policies,
and
guidelines;
and
(10)
other
risk
factors
detailed
from
time
to
time
in
filings
made
by
American
National
with
the
SEC.
American
National
and
MainStreet
undertake
no
obligation
to
update
or
clarify
these
forward-looking
statements,
whether
as
a
result
of
new
information,
future
events
or
otherwise.
FORWARD-LOOKING STATEMENTS |
 3
ACQUISITION
HIGHLIGHTS Franchise fill-in
opportunity –
Expands franchise to edge of Roanoke MSA
–
Entry into Franklin County
–
Top 3 deposit market share
Creates more scale with $1.5 billion in pro
forma assets
Low risk transaction given relative size and
familiarity with market
MainStreet has improving asset quality trends
with strong core capital
Thorough due diligence review with a
conservative credit approach
Accretive to EPS in year 1
Accretive to tangible book value in ~3.4 years
Double digit IRR
Strategic
Merit
Low
Risk
Financially
Attractive
ACQUISITION OF MAINSTREET BANKSHARES, INC. |
  4
AMNB (25)
MREE (3)
Source: SNL Financial
Note: Deposit data as of 6/30/2013; Pro forma for pending and recently
completed transactions Pro Forma Branch Franchise
Deposit Market Share –
Franklin County
Rank
Institution (ST)
Number of
Branches
Deposits in
Market
($mm)
Market
Share
(%)
1
Carter Bank & Trust (VA)
4
257
29.2
2
BB&T Corp. (NC)
5
236
26.8
3
MainStreet BankShares Inc (VA)
3
155
17.5
4
SunTrust Banks Inc. (GA)
2
142
16.1
5
Union Bkshs Corp (VA)
1
37
4.2
6
HomeTown Bankshares Corp. (VA)
1
25
2.8
7
Bank of America Corp. (NC)
0
13
1.5
8
Fidelity BancShares (N.C.) Inc (NC)
1
10
1.2
9
Bank of Botetourt (VA)
1
7
0.8
Totals (1-9)
18
883
100.0
Pro Forma Snapshot
Assets ($mm):
1,457
Loans ($mm):
932
Deposits ($mm):
1,176
Market Cap ($mm):
182
Branches:
28
PRO FORMA FRANCHISE OVERVIEW |
 5
Source: SNL Financial
Financial Snapshot
MainStreet
BankShares, Inc.
6/30/2014
Balance Sheet ($mm)
Assets
166.28
Gross Loans HFI
126.53
Deposits
139.48
Common Equity
24.80
Capital Ratios (%)
TCE / TA
14.91
Leverage Ratio
14.36
Tier 1 Ratio
19.50
Total Capital Ratio
20.75
Profitabilty (%)
YTD ROAA
0.73
Net Interest Margin
3.96
Efficiency Ratio
70.87
Asset Quality (%)
Reserves / Loans
1.77
NPAs / Loans + OREO
3.13
Improving Asset Quality
OVERVIEW OF MAINSTREET BANKSHARES, INC. |
 6
(1) Based on AMNB stock price of $21.97 as of
8/22/2014 Acquiror:
American National Bankshares Inc.
Target:
MainStreet BankShares, Inc.
Transaction Value
(1)
:
$14.05 per share or $24.2 million
Consideration:
75.0% stock / 25% cash
Per Share Consideration:
0.482 shares of AMNB common stock and $3.46 in cash per share
Board Composition:
MREE Chairman, Joel Shepherd, to join AMNB holding company Board
Required Approval:
Customary regulatory and shareholder approvals
Expected Close:
Q4 2014 / Q1 2015
TRANSACTION
SUMMARY |
 7
MULTIPLES
Price / Tangible Book Value:
0.97x
(1)
Implied Price per Share:
$14.05
Core Deposit Premium:
(0.6%)
Pro Forma Ownership:
AMNB –
90.4%
MREE –
9.6%
AMNB / MREE vs. Comparable Transactions
(2)
TRANSACTION
MULTIPLES
(1) Based
on
MREE
tangible
book
value
of
$14.47
as
of
6/30/2014
(2) Median
price
/
tangible
book
value
for
bank
and
thrift
transactions
in
the
Mid
Atlantic
and
Southeast
announced
after
1/1/2013
with
target
assets
between
$100
-
$300
million
and
deal values greater than $10 million |
 8
ASSUMPTIONS
Cost savings of approximately 27%
100% realized in 2015
Cost
Savings
Credit
Mark
Credit mark equal to 6.0% of MainStreet’s loan portfolio
–
Current reserve / loans HFI of 1.8%
One-time
Merger
Expenses
One-time merger related expenses of approximately
$4.8 million (pre-tax)
TRANSACTION
ASSUMPTIONS |
 9
Source: SNL Financial
(1) Represents cumulative net charge-offs
and OREO expenses through 6/30/2014 (2)
12/31/2007 gross loans held for investment of $173 million DUE DILIGENCE SUMMARY
Experienced credit review team
Reviewed individual loan files for $85.5 million or 67% of
outstanding loans
Reviewed underwriting policies and procedures
Modeled a conservative credit mark of $7.6 million or 6.0% of the
loan portfolio
Cumulative Losses and Estimated Credit Mark
Cumulative Losses Since 12/31/2007
(1)
:
9.6mm
Estimated Credit Mark:
7.6mm
Total Estimated Losses Through the Cycle:
17.2mm
As a % of 12/31/2007 Gross Loans
(2)
:
9.9%
COMPREHENSIVE DUE DILIGENCE |
     10
(1) As of 6/30/2014
(2) Estimated pro forma capital ratios at
close IMPACT
Minimal dilution to tangible book value ~(1.4%)
–
Accretive to tangible book value in ~3.4 years
Book
Value
EPS
Single digit EPS accretion in year 1
IRR
Double digit internal rate of return
Capital
Strong pro forma capital
Pro Forma Capital Ratios
Pro
"Well
AMNB
(1)
Forma
(2)
Capitalized"
TCE / TA:
10.4%
10.1%
-
Leverage:
12.2%
11.7%
5.0%
Tier 1 Risk-Based:
16.8%
16.0%
6.0%
Total Risk-Based:
18.0%
17.2%
10.0%
SUMMARY OF FINANCIAL IMPACT |
 11
In
connection
with
the
proposed
merger,
American
National
will
file
with
the
Securities
and
Exchange
Commission
(the
“SEC”)
a
registration
statement
on
Form
S-4
to
register
the
shares
of
American
National
common
stock
to
be
issued
to
the
shareholders
of
MainStreet.
The
registration
statement
will
include
a
proxy
statement/prospectus,
which
will
be
sent
to
the
shareholders
of
MainStreet
seeking
their
approval
of
the
merger.
In
addition,
each
of
American
National
and
MainStreet
may
file
other
relevant
documents
concerning
the
proposed
merger
with
the
SEC.
We
urge
investors
and
security
holders
to
read
the
registration
statement
on
Form
S-4
and
the
proxy
statement/prospectus
included
within
the
registration
statement
and
any
other
relevant
documents
to
be
filed
with
the
SEC
in
connection
with
the
proposed
merger
because
they
will
contain
important
information
about
American
National,
MainStreet
and
the
proposed
transaction.
Investors
and
security
holders
may
obtain
free
copies
of
these
documents,
when
they
become
available,
through
the
website
maintained
by
the
SEC
at
www.sec.gov.
Free
copies
of
the
proxy
statement/prospectus,
when
they
become
available,
also
may
be
obtained
by
directing
a
request
by
telephone
or
mail
to
American
National
Bankshares
Inc.,
628
Main
Street,
Danville,
Virginia
24541,
Attention:
Investor
Relations
(telephone:
(434)
792-5111)
or
MainStreet
Bankshares,
Inc.,
1075
Spruce
Street,
Martinsville,
Virginia
24112,
Attention:
Investor
Relations
(telephone:
(276)
632-8054)
or
by
accessing
American
National’s
website
at
www.amnb.com
under
“Investments”
or
MainStreet’s
website
at
www.msbsinc.com
under
“SEC
Filings.”
The
information
on
American
National’s
and
MainStreet’s
websites
is
not,
and
shall
not
be
deemed
to
be,
a
part
of
this
presentation
or
incorporated
into
other
filings
either
company
makes with the SEC.
ADDITIONAL
INFORMATION |