The Changing Bank Landscape In the Pacific Northwest

Transcription

The Changing Bank Landscape
In the Pacific Northwest
September 11, 2014
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Private and Confidential | 2
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M&A advisor in the western
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 Branch / asset
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Davidson ranks among the
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nationally*
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Source: SNL Financial, as of 8/28/2014
D.A. Davidson’s Recent FIG M&A Advisory
June 2014
May 2014
Has Acquired the
Has
Agreed to
Operations
of Acquire
Both:
Has Agreed to Acquire
May 2014
Has Acquired
May 2014
May 2013
Has Agreed to Acquire
Has Acquired the
Operations of Both:
Has Acquired
$775.9M Assets
$50.7M Assets
$571.6M Assets
$166.7M Assets
$343.2M Assets
Sell-Side Advisor
Sell-Side Advisor
Sell-Side Advisor
Sell-Side Advisor
Sell-Side Advisor
February 2014
February 2014
January 2014
October 2013
October 2013
Has Acquired the
Operations of Both:
Has Acquired the
Operations of Both:
Has Acquired
Has Divested Three
Branches to
Has Acquired the
Operations of Both:
Has Acquired
Has Acquired the
Operations of Both:
Has Acquired
$1.6B Assets
$447.0M Assets
Buy-Side Advisor
Sell-Side Advisor
June 2013
Has Acquired Six
Branches from
and
$646.6M Assets
Sell-Side Advisor
Buy-Side Advisor
Sell-Side Advisor
September 2013
August 2013
July 2013
July 2013
Has Acquired the
Operations of Both:
Has Divested Two
Branches to
Has Acquired
Has Acquired the
Has Acquired
Operations
of Both:
Has Acquired the
Operations of Both:
Has Acquired Five
Branches From
$202.2M Assets
FDIC-Assisted Deal
$125.1M Assets
Buy-Side Advisor
Sell-Side Advisor
Sell-Side Advisor
Has Acquired
$252.1M Assets
Buy-Side Advisor
Buy-Side Advisor
Note: Assets of the target bank or deposits of branches acquired as of the most recent quarter prior to announcement
Table of Contents
I.
Pacific Northwest Banking Landscape
II.
Public Market Information
III.
Bank M&A Update
IV.
Merger-of-Equals Transactions
V.
Bank M&A Going Forward
Pacific Northwest Banking Landscape
Section I
Consolidating Industry
Total banks in West
State
Arizona
California
Colorado
Idaho
Montana
Nevada
New Mexico
Oregon
Utah
Washington
Wyoming
Total
# of Banks
23
216
98
14
62
18
44
28
53
60
33
649
60
62
28
14
33
98
18
Pending mergers in West
State
California
Colorado
Idaho
New Mexico
Oregon
Washington
Wyoming
Total
# of Pending Mergers
7
3
2
1
1
1
1
16
53
216
23
44
Source: SNL Financial as of 8/28/2014
Largest Banks in the Pacific Northwest
Largest 30 Banks in Washington, Oregon and Idaho
Total
Assets
Rank Company Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Washington Federal, Inc.
Umpqua Holdings Corporation
Columbia Banking System, Inc.*
Banner Corporation*
W.T.B. Financial Corporation
SKBHC Holdings LLC
HomeStreet, Inc.
Heritage Financial Corporation
Pacific Continental Corporation
Cascade Bancorp
Peoples Bancorp
Cashmere Valley Bank
D.L. Evans Bancorp
Bank of Commerce
Olympic Bancorp, Inc.
First Financial Northwest, Inc.
Riverview Bancorp, Inc.
Skagit Bancorp, Inc.
Timberland Bancorp, Inc.
Pacific Financial Corporation
Baker Boyer Bancorp
Citizens Bank
Coastal Community Bank
Idaho Independent Bank
Sound Community Bank
Farmers National Bank of Buhl
Northwest Bancorporation, Inc.
Anchor Bancorp
Foundation Bank
Pioneer Trust Bank, NA
Median
Average
Minimum
Maximum
State
WA
OR
WA
WA
WA
WA
WA
WA
OR
OR
WA
WA
ID
ID
WA
WA
WA
WA
WA
WA
WA
OR
WA
ID
WA
ID
WA
WA
WA
OR
Q2 2014 Q4 2007
$14,790
$22,042
$ 8,218
$ 5,105
$ 4,484
$ 4,054
$ 3,236
$ 3,392
$ 1,499
$ 2,288
$ 1,318
$ 1,305
$ 1,023
$ 957
$ 961
$ 899
$ 825
$ 782
$ 728
$ 719
$ 553
$ 548
$ 489
$ 487
$ 469
$ 413
$ 408
$ 389
$ 383
$ 374
$10,577
$ 8,340
$ 3,179
$ 4,493
$ 3,718
$ 2,120
$ 2,774
$ 886
$ 949
$ 2,394
$ 929
$ 893
$ 764
$ 742
$ 771
$ 1,141
$ 844
$ 593
$ 647
$ 566
$ 392
$ 361
$ 210
$ 626
$ 237
$ 388
$ 344
$ 629
$ 318
$ 250
$ 928 $ 768
$ 2,771 $ 1,702
$ 374 $ 210
$22,042 $10,577
∆ Assets Since 2007
Balance
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
% Growth
4,213
13,702
5,039
613
766
1,934
462
2,506
549
(106)
389
412
258
214
190
(242)
(19)
189
81
154
161
187
279
(139)
232
25
65
(240)
65
124
40%
164%
159%
14%
21%
91%
17%
283%
58%
-4%
42%
46%
34%
29%
25%
-21%
-2%
32%
13%
27%
41%
52%
133%
-22%
98%
6%
19%
-38%
20%
50%
$
202
$ 1,069
$
(242)
$ 13,702
30%
47%
-38%
283%
Market Disruption in Washington
 11 companies with $26.5 billion of deposits that had change-in-control in Washington as the result of mergers and bank
failures
Washington Market Share 6/2013
Washington Market Share 6/2007
Deposit Market Share in Washington (Top 30) - 2013
Deposit Market Share in Washington (Top 30) - 2007
Rank
PNW
Number of
Total
HQ
Institution (State)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Bank of America Corp. (NC)
Wells Fargo & Co. (CA)
U.S. Bancorp (MN)
JPMorgan Chase & Co. (NY)
KeyCorp (OH)
Washington Federal Inc. (WA)
Umpqua Holdings Corp. (OR)
Columbia Banking System Inc. (WA)
Mitsubishi UFJ Finl Grp Inc.
W.T.B. Financial Corp. (WA)
Heritage Financial Corp. (WA)
Banner Corp. (WA)
HomeStreet Inc. (WA)
Yakima FS&LA (WA)
Peoples Bancorp (WA)
Cashmere Valley Bank (WA)
SKBHC Holdings LLC (WA)
Opus Bank (CA)
East West Bancorp Inc. (CA)
Olympic Bancorp Inc. (WA)
Zions Bancorp. (UT)
HSBC
Skagit Bancorp Inc. (WA)
First Financial Northwest Inc (WA)
First FS&LA of Port Angeles (WA)
Timberland Bancorp Inc. (WA)
Riverview Bancorp Inc. (WA)
Pacific Financial Corp. (WA)
Olympia FS&LA (WA)
Baker Boyer Bancorp (WA)
Total For Institutions In Market
Deposits in
Branches
189
158
188
211
162
82
114
78
42
27
68
65
28
10
24
11
35
24
4
19
1
4
11
1
10
22
14
16
7
7
1,826
Market
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
24,532,682
13,550,440
12,841,179
11,122,022
8,556,094
5,040,962
4,486,124
3,542,818
3,078,558
3,062,066
2,819,236
2,661,099
1,734,645
1,402,048
1,119,301
1,094,353
1,082,053
968,148
924,708
807,112
720,176
711,769
666,659
642,130
598,820
596,187
591,822
558,316
464,913
422,896
117,713,190
Source: SNL Financial, deposit data as of 6/30/2013
Note: All dollars in thousands
Note: Banks highlighted blue have announced mergers or no longer exist as
independent entities as the result of mergers and bank failures
Rank
Market
Share
20.84%
11.51%
10.91%
9.45%
7.27%
4.28%
3.81%
3.01%
2.62%
2.60%
2.40%
2.26%
1.47%
1.19%
0.95%
0.93%
0.92%
0.82%
0.79%
0.69%
0.61%
0.60%
0.57%
0.55%
0.51%
0.51%
0.50%
0.47%
0.39%
0.36%
PNW
Total
HQ
Institution (State)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Bank of America Corporation (NC)
Washington Mutual, Inc. (WA)
U.S. Bancorp (MN)
KeyCorp (OH)
Wells Fargo & Company (CA)
Sterling Financial Corporation (WA)
Banner Corporation (WA)
Frontier Financial Corporation (WA)
Washington Federal, Inc. (WA)
W.T.B. Financial Corporation (WA)
Columbia Banking System, Inc. (WA)
HomeStreet, Inc. (WA)
Yakima FS&LA (WA)
Horizon Financial Corp. (WA)
AmericanWest Bancorporation (WA)
Cascade Financial Corporation (WA)
First Financial Northwest, Inc. (WA)
Venture Financial Group, Inc. (WA)
City Bank (WA)
First Indep. Invmt. Group, Inc. (WA)
Peoples Bancorp (WA)
Cashmere Valley Financial Corp. (WA)
Heritage Financial Corporation (WA)
First Mutual Bancshares, Inc. (WA)
Washington Banking Company (WA)
Olympic Bancorp, Inc. (WA)
Riverview Bancorp, Inc. (WA)
Seattle Financial Group, Inc. (WA)
Zions Bancorp. (UT)
First FS&LA of Port Angeles (WA)
Total Disruption (11 Companies)
Total Disruption, Excluding WaMu
Number of
Deposits in
Branches
Market
Market
Share
236
187
185
153
158
70
60
46
44
24
36
15
10
20
37
20
1
20
8
22
25
10
21
12
20
25
14
6
1
8
1,903
$ 23,628,875
$ 13,001,669
$ 8,224,688
$ 8,040,155
$ 7,412,044
$ 3,844,756
$ 2,862,795
$ 2,834,046
$ 2,600,418
$ 2,408,237
$ 1,955,114
$ 1,255,566
$ 1,052,405
$
987,836
$
955,714
$
901,659
$
874,354
$
838,925
$
809,984
$
800,157
$
797,063
$
785,246
$
774,494
$
764,925
$
732,940
$
623,773
$
608,459
$
607,404
$
557,179
$
483,323
$ 105,673,251
22.36%
12.30%
7.78%
7.61%
7.01%
3.64%
2.71%
2.68%
2.46%
2.28%
1.85%
1.19%
1.00%
0.93%
0.90%
0.85%
0.83%
0.79%
0.77%
0.76%
0.75%
0.74%
0.73%
0.72%
0.69%
0.59%
0.58%
0.57%
0.53%
0.46%
462
275
$ 26,472,611
$ 13,470,942
25.05%
12.75%
Market Disruption in Oregon
 10 companies with $12.5 billion of deposits that had change-in-control in Oregon as the result of mergers and bank
failures
Oregon Market Share 6/2013
Oregon Market Share 6/2007
Deposit Market Share in Oregon (Top 30) - 2013
Deposit Market Share in Oregon (Top 30) - 2007
Rank
Rank
PNW
Total
HQ
Institution (State)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
U.S. Bancorp (MN)
Wells Fargo & Co. (CA)
Bank of America Corp. (NC)
Umpqua Holdings Corp. (OR)
JPMorgan Chase & Co. (NY)
KeyCorp (OH)
Columbia Banking System Inc. (WA)
Washington Federal Inc. (WA)
Cascade Bancorp (OR)
BNP Paribas
Pacific Continental Corp. (OR)
Banner Corp. (WA)
SKBHC Holdings LLC (WA)
Citizens Bancorp (OR)
Mitsubishi UFJ Finl Grp Inc.
Evergreen FS&LA (OR)
Siuslaw Financial Group (OR)
First FS&LA of McMinnville (OR)
Community Bancshares Inc. (OR)
PTB Corp. (OR)
First Repub Bank (CA)
BEO Bancorp (OR)
Premier Commercial Bancorp (OR)
Capital Pacific Bancorp (OR)
Oregon Coast Bancshares Inc. (OR)
Merchants Bancorp (OR)
HomeStreet Inc. (WA)
People's Bank of Commerce (OR)
Oregon Pacific Bancorp (OR)
CCB Financial Corporation (OR)
Number of
Deposits in
Market
Branches
Market
Share
Total
HQ
Institution (State)
197
123
69
129
116
75
64
49
31
26
11
21
15
16
3
6
10
8
11
2
1
11
4
1
5
5
2
5
5
4
1,068
$ 12,071,085
$ 9,434,782
$ 8,844,892
$ 5,987,423
$ 4,516,040
$ 3,249,570
$ 2,374,167
$ 2,088,320
$ 1,264,972
$ 1,099,102
$
870,897
$
833,313
$
408,377
$
404,324
$
395,982
$
335,918
$
303,680
$
298,038
$
287,876
$
282,145
$
265,192
$
253,618
$
228,308
$
184,143
$
151,171
$
149,957
$
149,745
$
143,562
$
137,524
$
137,443
$ 58,598,884
20.60%
16.10%
15.09%
10.22%
7.71%
5.55%
4.05%
3.56%
2.16%
1.88%
1.49%
1.42%
0.70%
0.69%
0.68%
0.57%
0.52%
0.51%
0.49%
0.48%
0.45%
0.43%
0.39%
0.31%
0.26%
0.26%
0.26%
0.24%
0.23%
0.23%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
U.S. Bancorp (MN)
Wells Fargo & Company (CA)
Washington Mutual, Inc. (WA)
Bank of America Corporation (NC)
Umpqua Holdings Corporation (OR)
KeyCorp (OH)
Sterling Financial Corporation (WA)
West Coast Bancorp (OR)
Cascade Bancorp (OR)
Washington Federal, Inc. (WA)
Liberty Financial Group, Inc. (OR)
Columbia Bancorp (OR)
BNP Paribas SA
PremierWest Bancorp (OR)
Pacific Continental Corporation (OR)
South Valley Bancorp, Inc. (OR)
Banner Corporation (WA)
Community Bancshares, Inc. (OR)
Citizens Bancorp (OR)
First FS and LA of McMinnville (OR)
Evergreen FS and LA (OR)
Siuslaw Financial Group, Inc. (OR)
Premier Commercial Bancorp (OR)
PTB Corporation (OR)
Merchants Bancorp (OR)
Bank of Salem (OR)
Home Valley Bancorp, Inc. (OR)
BEO Bancorp (OR)
Columbia Banking System, Inc. (WA)
Prineville Bancorporation (OR)
Source: SNL Financial, deposit data as of 6/30/2013
Note: All dollars in thousands
Note: Banks highlighted blue have announced mergers or no longer exist as
independent entities as the result of mergers and bank failures
PNW
Total Disruption (10 Companies)
Number of
Deposits in
Branches
Market
Market
Share
190
127
105
89
70
64
68
51
21
26
15
20
32
23
11
14
13
12
11
7
7
10
4
2
5
3
4
11
5
6
1,088
$ 8,880,707
$ 5,946,346
$ 5,696,173
$ 5,552,890
$ 3,466,114
$ 3,209,002
$ 2,024,244
$ 1,607,396
$ 1,232,565
$ 1,051,773
$
771,145
$
764,893
$
747,486
$
618,471
$
611,177
$
494,810
$
493,940
$
297,524
$
271,144
$
253,735
$
251,511
$
229,404
$
219,487
$
209,168
$
207,767
$
178,168
$
170,103
$
168,945
$
164,313
$
151,044
$ 47,943,926
18.52%
12.40%
11.88%
11.58%
7.23%
6.69%
4.22%
3.35%
2.57%
2.19%
1.61%
1.60%
1.56%
1.29%
1.27%
1.03%
1.03%
0.62%
0.57%
0.53%
0.52%
0.48%
0.46%
0.44%
0.43%
0.37%
0.35%
0.35%
0.34%
0.32%
309
$ 12,476,447
26.02%
Pacific Northwest Bank Trends
 The total number of banks in the Pacific Northwest has declined by 59 since the end of 2007 (37%
decrease)
 De novo activity has ceased nationwide with only true de novo bank over the last 3 years
Total Number of Banks
Banks Sold/Failed vs. De Novo Banks
180
20
160
18
16
140
14
12
# of Banks
# of Banks
120
100
80
10
8
60
6
40
4
20
2
0
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014 YTD*
2004
2005
2006
2007
2008
Banks Sold
2009
2010
2011
Banks Failed
2012
2013
2014 YTD*
De Novo
* Includes pending mergers
Washington Bank Trends
 Washington trends match the Pacific NW trends overall
 Shrinking number of local banks provides growth opportunity for survivors
Total Number of Banks
Banks Sold/Failed vs. De Novo Banks
120
16
14
100
12
10
# of Banks
# of Banks
80
60
8
6
40
4
20
2
0
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014 YTD*
2004
2005
2006
2007
2008
Banks Sold
2009
2010
2011
Banks Failed
2012
2013
2014 YTD*
De Novo
* Includes pending mergers
Size Distribution of Regional Banks
Pacific Northwest
# of Banks
% of Assets
$500 - 1,000
10%
$500 - 1,000
13%
$0 - 250
6%
$250 - 500
7%
$250 - 500
19%
$0 - 250
54%
$10,000+
2%
$1,000 - 10,000
39%
$10,000+
38%
$1,000 - 10,000
12%
Washington
# of Banks
% of Assets
$500 - 1,000
12%
$500 - 1,000
17%
$0 - 250
5%
$250 - 500
6%
$250 - 500
17%
$0 - 250
49%
$10,000+
24%
$10,000+
2%
$1,000 - 10,000
53%
$1,000 - 10,000
15%
Public Market Information
Section II
Banking Industry Trends – Balance Sheet
Balance Sheet
 Limited quality loan demand/competition for good deals
 Importance of a focused approach to investment portfolio
 Growing as a % of total assets
 Regulators focus on interest rate risk
 Greatly improved asset quality/solid reserves
 Ready availability of low cost core deposits/more rational CD pricing
 Industry is building higher capital ratios in the face of uncertain regulations
Banking Industry Trends – Operating Statement
Operating Statement
 Declining loan and investment yields/declining Net Interest Margin (NIM)
 Temptation to stretch on credit or interest rate risk
 Lower problem asset and provision costs
 Banks running out of benefits on negative loan loss provisioning
 Increased attention to non-interest income/alternative business lines
 Many banks seeking opportunities to diversify away from entire reliance on spread
income
 Focus on offsetting revenue contraction with expense efficiencies
 Reduced market expectations for Return on Equity (ROE) / Return on Assets
(ROA)
Banking Industry Trends – Other
Other
 Changed market/investor focus from balance sheet (asset quality and capital) to
income statement (NIM trends, core earnings, return metrics, growth in
earnings)
 Increased regulatory costs/scrutiny
 Evolving technology/customer expectations
 Smaller banks treading water / experiencing business and regulatory fatigue
 Increasing signs of/need for consolidation
 Increased importance of diversification
Public Bank Landscape
Note: Excludes targets of announced mergers
Pac NW Publicly-Traded Landscape
Price / TBV
12/31/2007
Today
Assets ($000s)
12/31/2007
6/30/2014
Washington
Sterling Financial Corporation
Banner Corporation*
Frontier Financial Corporation
Columbia Banking System, Inc.*
HomeStreet, Inc.
AmericanWest Bancorporation
Cascade Financial Corporation
Horizon Financial Corp.
City Bank
Washington Banking Company
Rainier Pacific Financial Group
Anchor Bancorp
Cowlitz Bancorporation
WSB Financial Group
FS Bancorp, Inc.
Sound Financial Bancorp, Inc.
128.4%
152.4%
159.6%
229.1%
232.4%
Not Public
215.1%
174.7%
165.8%
162.2%
Not Public
189.7%
206.9%
109.6%
191.3%
125.1%
Not Public
107.4%
57.7%
Not Public
Not Public
Sold
128.2%
137.3%
Failed
187.9%
99.0%
Private
Sold
Failed
Failed
93.4%
154.7%
Sold
Failed
115.7%
99.2%
92.2%
Failed
Failed
89.4%
98.0%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
12,149,775
10,285,417
4,492,658
3,995,689
3,178,713
2,793,935
1,655,553
1,417,588
1,270,327
1,239,033
1,140,888
886,055
882,289
878,864
820,348
644,848
608,696
514,180
489,333
263,066
236,965
Oregon
West Coast Bancorp
Cascade Bancorp
PremierWest Bancorp
Columbia Bancorp
197.1%
142.0%
232.0%
209.1%
180.9%
182.9%
199.9%
Sold
164.6%
Sold
Failed
151.3%
$
$
$
$
$
$
8,340,053
2,646,614
2,394,492
1,157,961
1,042,708
949,271
Idaho
Intermountain Community Bancorp
Home Federal Bancorp, Inc.
167.9%
154.2%
Merger Target
Sold
Median
171.3%
122.0%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Sold
14,789,955
5,105,263
Failed
8,217,620
3,235,676
Private
Sold
Failed
Failed
898,831
3,391,579
Sold
Failed
824,642
727,631
389,128
Failed
Failed
436,021
468,940
22,042,229
Sold
2,288,373
Sold
Failed
1,498,763
$ 1,048,659
$
709,954
Merger Target
Sold
$
$
1,140,888
1,893,568
*Pro forma for pending acquisitions
Regional NASDAQ & NYSE Bank & Thrifts
Selection Criteria
 Select banks headquartered in Idaho, Oregon, Montana and Washington
 Includes companies listed on the NASDAQ/NYSE exchanges
 Excludes targets of announced mergers
 Includes 17 companies
 Sorted by total assets
Market Data
Mkt.
Company Name
Ticker State Price
Cap.
LTM
YTD
MRQ
LTM 2014E 2015E
Regional NASDAQ & NYSE Banks
Glacier Bancorp, Inc.
First Interstate BancSystem, Inc.
Columbia Banking System, Inc.
Banner Corporation
Cascade Bancorp
UMPQ
WAFD
GBCI
FIBK
COLB
BANR
HFWA
CACB
PCBK
SFBC
$ 3,772.4
$ 2,146.0
$ 1,992.0
$ 1,215.7
$ 1,359.5
$ 768.0
$ 496.5
$ 366.9
$ 238.5
$
46.7
5.2%
1.1%
12.6%
16.7%
9.6%
14.8%
7.8%
-14.2%
4.9%
23.7%
-9.3%
-7.4%
-10.2%
-6.1%
-6.1%
-12.4%
-4.3%
-2.9%
-15.7%
9.8%
NM
14.6x
17.6x
14.2x
16.1x
11.1x
NM
NM
14.6x
9.9x
NM
13.9x
18.4x
13.6x
18.4x
15.0x
NM
NM
15.6x
11.5x
OR
WA
MT
MT
WA
WA
WA
OR
OR
WA
$ 17.37
$ 21.57
$ 26.75
$ 26.64
$ 25.82
$ 39.24
$ 16.36
$ 5.08
$ 13.44
$ 18.55
Median
Average
Minimum
Maximum
Regional NASDAQ & NYSE Thrifts
HomeStreet, Inc.
Eagle Bancorp Montana, Inc.
FS Bancorp, Inc.
Anchor Bancorp
Median
Average
Minimum
Maximum
HMST
FFNW
RVSB
TSBK
EBMT
FSBW
ANCB
WA
WA
WA
WA
MT
WA
WA
$ 18.24
$ 10.84
$ 3.80
$ 10.65
$ 10.85
$ 17.35
$ 19.40
Price Change
Operating Data
Stock
Price / EPS
16.1x
14.1x
17.2x
14.9x
15.8x
14.8x
19.4x
NM
14.6x
NA
Price /
TBV
Div.
Avg. Daily
Yield Vol. (3 mo.)
Total
Loans / LLR / NPAs /
Texas
TCE
Assets
Deposits Loans Assets
Ratio*
Ratio
NIM
Effic.
Ratio ROATCE ROAA
13.4x
13.4x
15.5x
12.9x
14.2x
14.7x
12.3x
18.5x
13.3x
NA
199.9%
128.2%
228.4%
181.1%
187.9%
137.3%
154.7%
164.6%
151.3%
98.0%
3.46%
2.04%
2.54%
2.40%
2.17%
1.83%
2.20%
0.00%
2.98%
1.08%
1,521,356 $ 22,042.2
730,299 $ 14,790.0
214,051 $ 7,890.1
98,195 $ 7,651.4
217,753 $ 7,297.5
77,036 $ 4,745.3
65,597 $ 3,391.6
186,631 $ 2,288.4
36,588 $ 1,498.8
1,258 $
468.9
92.7%
77.0%
73.2%
72.0%
78.8%
95.8%
77.8%
71.7%
90.9%
108.0%
0.69%
1.40%
3.07%
1.74%
1.47%
1.97%
1.27%
1.46%
1.52%
1.03%
0.64%
3.54%
2.22%
1.56%
0.79%
1.22%
1.15%
1.77%
1.44%
1.54%
7.4%
29.1%
17.6%
16.5%
7.3%
9.7%
11.3%
16.9%
12.4%
14.2%
9.34%
11.64%
11.25%
8.72%
10.43%
11.79%
9.80%
10.11%
10.75%
10.17%
5.01%
3.05%
3.99%
3.54%
4.86%
4.06%
4.55%
3.98%
4.34%
4.40%
59.7%
46.9%
53.3%
63.1%
60.8%
65.6%
63.0%
95.8%
57.7%
63.6%
3.72%
9.17%
13.44%
13.27%
12.27%
12.54%
6.13%
-9.05%
10.55%
10.35%
0.34%
1.04%
1.47%
1.12%
1.17%
1.50%
0.59%
-1.04%
1.13%
1.09%
$ 991.9 8.7% -6.8% 14.6x 15.0x 15.4x 13.4x
$ 1,240.2 8.2% -6.5% 14.0x 15.2x 15.9x 14.2x
$
46.7 -14.2% -15.7% 9.9x 11.5x 14.1x 12.3x
$ 3,772.4 23.7% 9.8% 17.6x 18.4x 19.4x 18.5x
159.6%
163.1%
98.0%
228.4%
2.18%
2.07%
0.00%
3.46%
142,413 $ 6,021.4
314,876 $ 7,206.4
1,258 $
468.9
1,521,356 $ 22,042.2
78.3%
83.8%
71.7%
108.0%
1.47%
1.56%
0.69%
3.07%
1.49%
1.59%
0.64%
3.54%
13.3%
14.2%
7.3%
29.1%
10.30%
10.40%
8.72%
11.79%
4.20%
4.18%
3.05%
5.01%
61.9% 10.45%
62.9% 8.24%
46.9% -9.05%
95.8% 13.44%
1.10%
0.84%
-1.04%
1.50%
$ 270.9 -8.2% -8.8%
$ 170.5 2.0% 4.5%
$
85.4 41.8% 31.0%
$
75.0 21.2% 10.7%
$
42.5 -3.9% -0.9%
$
56.1 3.6% 1.2%
$
49.5 24.0% 6.1%
7.2x
16.9x
NM
13.3x
12.9x
13.1x
NM
22.0x 12.7x 6.8x
14.6x NA
NA
NM
NM 23.8x
16.1x 13.7x 11.8x
20.5x NM 18.1x
15.1x NA
NA
NM
NM
NM
99.0%
93.4%
115.7%
99.2%
96.7%
89.4%
92.2%
0.00%
1.85%
0.00%
1.88%
2.76%
1.38%
0.00%
46,795
47,913
25,756
6,592
5,438
3,383
4,431
$ 3,235.7
$
898.8
$
824.6
$
727.6
$
539.1
$
436.0
$
389.1
75.9%
119.7%
79.7%
94.7%
64.7%
94.1%
92.0%
0.92%
1.74%
2.24%
1.86%
0.72%
1.60%
1.62%
3.39%
7.70%
3.88%
5.63%
0.18%
0.27%
4.85%
37.1%
35.6%
37.2%
47.7%
2.1%
1.7%
32.4%
8.49%
20.30%
9.23%
10.48%
8.27%
14.40%
13.79%
3.48%
3.86%
3.46%
3.86%
3.32%
5.08%
3.93%
80.7% 13.87%
54.3% 5.08%
83.1% 3.97%
72.0% 7.75%
89.2% 8.69%
75.2% 6.27%
97.9% 2.24%
1.22%
1.05%
0.36%
0.79%
0.65%
0.91%
0.30%
$
75.0 3.6% 4.5%
$ 107.1 11.5% 6.3%
$
42.5 -8.2% -8.8%
$ 270.9 41.8% 31.0%
13.1x
12.7x
7.2x
16.9x
16.1x
17.7x
14.6x
22.0x
96.7%
98.0%
89.4%
115.7%
1.38%
1.12%
0.00%
2.76%
6,592
20,044
3,383
47,913
$
727.6
$ 1,007.3
$
389.1
$ 3,235.7
92.0%
88.7%
64.7%
119.7%
1.62%
1.53%
0.72%
2.24%
3.88%
3.70%
0.18%
7.70%
35.6%
27.7%
1.7%
47.7%
10.48%
12.14%
8.27%
20.30%
3.86%
3.86%
3.32%
5.08%
80.7% 6.27%
78.9% 6.84%
54.3% 2.24%
97.9% 13.87%
0.79%
0.76%
0.30%
1.22%
13.2x 15.0x
13.2x 15.1x
12.7x 6.8x
13.7x 23.8x
Source: SNL Financial for most recent quarter. Market data as of 8/28/2014. EPS estimates for based on Street average estimates
Note: All dollars in millions, except per share
*Texas ratio = (non-performing assets + loans 90 days or more past due) / (tangible common equity + loan loss reserves)
Regional OTC Banks
Selection Criteria
 Select banks headquartered in Idaho, Montana, Oregon and Washington
 Includes companies listed on the OTCQB exchanges
 Includes 30 companies
 Excludes targets of announced mergers
 Sorted by total assets
Market Data
Company Name
Ticker State
W.T.B. Financial Corporation
Cashmere Valley Bank
Baker Boyer Bancorp
Citizens Bancorp
Idaho Independent Bank
Northwest Bancorporation, Inc.
Foundation Bancorp, Inc.
Puget Sound Bank
Premier Commercial Bancorp
BEO Bancorp
Capital Pacific Bancorp
People's Bank of Commerce
Oregon Pacific Bancorp
Summit Bank
Merchants Bancorp
Lewis & Clark Bank
Prime Pacific Financial Services
Centerpointe Community Bank
Washington Bancorp, Inc.
Oregon Bancorp, Inc.
Willamette Community Bank
Idaho First Bank
First Sound Bank
Community 1st Bank
Plaza Bank
Clatsop Community Bank
Treasure State Bank
Pacific West Bank
Bank Reale
WTBFB
CSHX
PFLC
BBBK
CZBC
IIBK
NBCT
FDNB
PUGB
PRCB
BEOB
CPBO
PBCO
ORPB
SBKO
MBNC
LWCL
PPFS
CENP
WGTB
ORBN
WMCB
IDFB
FSWA
CMYF
PZBW
CLAT
TRSU
PWBO
BKRL
Median
Average
Minimum
Maximum
WA
WA
WA
WA
OR
ID
WA
WA
WA
OR
OR
OR
OR
OR
OR
OR
OR
WA
OR
WA
OR
OR
ID
WA
ID
WA
OR
MT
OR
WA
Stock
Mkt.
Price
Cap.
$ 175.00
$ 33.00
$ 6.10
$ 74.00
$ 11.26
$ 7.10
$ 8.00
$ 8.25
$ 13.95
$ 4.25
$ 23.00
$ 9.50
$ 9.50
$ 2.80
$ 10.40
$ 0.86
$ 16.15
$ 1.85
$ 7.49
$ 2.45
$ 10.55
$ 6.75
$ 1.00
$ 0.10
$ 11.35
$ 1.05
$ 7.50
$ 3.95
$ 0.94
$ 2.81
Price Change
LTM
YTD
$ 453.5 12.9% 4.8%
$ 133.7 13.0% 11.9%
$
62.4 -12.7% -4.7%
$
97.2 1.4% 0.0%
$
59.1 5.4% 12.1%
$
58.1 37.9% 1.3%
$
32.9 14.3% 7.4%
$
29.1 29.9% 4.4%
$
41.3 2.6% 3.3%
$
23.5 0.0% -8.6%
$
27.5 7.0% 0.0%
$
24.3 22.6% 24.0%
$
18.4 0.3% 4.9%
$
11.1 -13.8% -13.8%
$
22.4 60.0% 34.2%
$
8.2 160.6% 22.9%
$
12.7 7.7% 5.6%
$
9.1 362.5% 164.3%
$
9.1 9.2% 4.8%
$
10.0 -18.3% 45.8%
$
11.0 -11.7% -5.9%
$
6.5 -0.8% 6.1%
$
17.8 122.2% 122.2%
$
27.9 -42.9% -33.3%
$
11.9 3.2% 3.2%
$
7.7 -13.2% 8.2%
$
7.8 42.9% 36.4%
$
6.9 12.9% 27.4%
$
3.9 51.6% 51.6%
$
1.5 -31.6% -32.3%
Price / EPS
Operating Data
Price /
MRQ
LTM
TBV
9.4x
8.3x
10.9x
21.3x
13.1x
NM
11.1x
20.6x
16.9x
NM
9.1x
11.3x
14.8x
NM
8.4x
5.4x
12.9x
6.0x
13.8x
NA
NA
NA
9.6x
NA
NM
NM
NM
12.3x
NM
NM
11.8x
8.8x
14.9x
17.1x
15.6x
19.7x
12.1x
NM
17.4x
23.6x
9.3x
11.6x
14.7x
NM
10.6x
NM
13.7x
8.5x
19.3x
NA
NA
NA
9.1x
NA
NM
NM
NM
22.3x
NM
NM
107.8%
104.4%
108.6%
204.9%
98.3%
105.1%
89.8%
85.2%
120.8%
79.4%
110.4%
107.7%
85.6%
74.6%
144.3%
133.6%
82.5%
146.5%
88.4%
62.5%
76.9%
68.8%
166.2%
282.8%
119.8%
84.9%
106.9%
94.2%
118.7%
58.4%
Div.
Avg. Daily
Yield Vol. (3 mo.)
Total
Loans / LLR / NPAs /
Texas
TCE
Assets
Deposits Loans Assets
Ratio*
Ratio
NIM
Effic.
Ratio ROATCE ROAE
11.60%
12.93%
10.01%
9.49%
6.70%
2.23%
8.37%
4.15%
7.72%
3.40%
9.62%
9.82%
5.69%
-10.43%
18.02%
31.17%
6.46%
22.86%
6.46%
3.89%
5.04%
-1.77%
17.79%
1.72%
4.45%
-5.08%
4.47%
7.37%
2.17%
-54.98%
ROAA
1.37%
2.42%
3.28%
3.95%
3.23%
0.00%
0.00%
0.00%
0.00%
0.00%
2.39%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
39
1,292
2,080
8
179
5,027
873
399
1,876
2,382
63
490
111
1,164
1,128
2,283
30
70
767
368
528
219
118
9,308
42
715
7
3
9
19
$ 4,483.9
$ 1,305.0
$
719.5
$
553.0
$
548.2
$
486.6
$
408.5
$
383.3
$
357.3
$
335.7
$
307.4
$
237.6
$
202.9
$
177.8
$
169.2
$
167.3
$
130.4
$
126.0
$
124.7
$
122.5
$
120.6
$
101.5
$
100.9
$
97.8
$
87.1
$
81.5
$
71.5
$
69.2
$
49.7
$
41.3
85.4%
63.5%
88.4%
57.9%
74.3%
61.6%
94.8%
82.5%
98.4%
106.2%
97.4%
92.2%
76.7%
77.1%
89.5%
87.2%
95.7%
83.5%
61.6%
84.8%
92.7%
73.5%
93.3%
99.6%
71.5%
76.7%
69.6%
80.7%
86.7%
75.1%
2.56%
1.62%
1.50%
2.21%
1.08%
2.51%
1.85%
1.80%
1.27%
2.17%
1.22%
1.43%
1.22%
1.38%
1.56%
2.16%
1.71%
1.82%
1.08%
3.06%
1.39%
1.54%
1.28%
1.54%
1.95%
5.57%
1.22%
3.20%
2.20%
2.32%
1.16%
0.69%
1.39%
1.05%
1.08%
1.44%
2.00%
5.91%
0.29%
3.55%
1.55%
1.55%
2.84%
4.21%
1.00%
0.02%
3.00%
2.04%
0.00%
4.83%
3.37%
0.55%
2.01%
2.48%
0.15%
2.53%
0.83%
7.08%
1.53%
2.17%
10.8%
6.4%
15.3%
11.0%
9.2%
11.4%
19.2%
66.9%
2.7%
34.0%
17.0%
14.5%
24.8%
45.4%
9.6%
0.4%
22.7%
32.6%
0.0%
32.0%
25.6%
5.4%
17.3%
22.3%
1.2%
17.1%
7.3%
55.8%
18.5%
30.2%
9.26%
9.86%
8.11%
8.50%
11.08%
11.36%
8.98%
8.91%
9.63%
8.82%
8.09%
9.50%
10.60%
8.39%
9.16%
3.66%
11.81%
4.92%
8.24%
12.95%
12.06%
9.27%
10.58%
10.08%
11.42%
11.10%
10.54%
10.53%
6.57%
6.16%
3.69%
3.07%
4.28%
3.17%
3.79%
3.31%
4.11%
3.69%
4.19%
3.43%
5.31%
4.01%
4.10%
3.21%
5.21%
4.56%
4.77%
4.44%
3.80%
3.92%
4.25%
4.01%
4.36%
3.64%
3.41%
3.79%
4.07%
4.13%
4.32%
4.26%
64.3%
56.9%
75.9%
78.0%
69.9%
93.9%
75.2%
86.1%
63.8%
87.0%
67.7%
63.5%
82.0%
94.9%
53.0%
58.1%
73.5%
78.2%
76.1%
89.2%
91.0%
87.7%
82.9%
94.6%
90.9%
111.7%
82.0%
80.4%
107.0%
90.6%
10.55%
12.25%
8.02%
9.49%
6.49%
2.23%
8.37%
4.15%
5.82%
3.40%
12.02%
9.82%
5.65%
-10.43%
18.02%
31.17%
6.46%
22.86%
6.46%
3.89%
5.04%
-1.96%
17.79%
1.72%
4.45%
-5.08%
4.47%
7.37%
2.17%
-54.98%
1.07%
1.24%
0.78%
0.81%
0.75%
0.26%
0.75%
0.37%
0.78%
0.30%
0.95%
0.93%
0.61%
-0.88%
1.62%
1.06%
0.76%
1.10%
0.54%
0.44%
0.62%
-0.19%
1.80%
0.17%
0.51%
-0.45%
0.47%
0.79%
0.14%
-4.25%
$
18.1 7.3% 5.2% 11.2x 14.2x 104.8% 0.00%
$
41.5 27.8% 16.9% 12.0x 14.4x 110.6% 0.55%
$
1.5 -42.9% -33.3% 5.4x 8.5x
58.4% 0.00%
$ 453.5 362.5% 164.3% 21.3x 23.6x 282.8% 3.95%
384
1,053
3
9,308
$
168.3
$
405.6
$
41.3
$ 4,483.9
84.1%
82.6%
57.9%
106.2%
1.67%
1.91%
1.08%
5.57%
1.55%
2.08%
0.00%
7.08%
17.0%
19.5%
0.0%
66.9%
9.39%
9.34%
3.66%
12.95%
4.04%
4.01%
3.07%
5.31%
81.2% 6.46%
6.14%
80.2% 5.38%
5.26%
53.0% -54.98% -54.98%
111.7% 31.17% 31.17%
0.68%
0.46%
-4.25%
1.80%
Source: SNL Financial for most recent quarter. Market data as of 8/28/2014. EPS estimates for based on Street average estimates
Note: All dollars in millions, except per share
*Texas ratio = (non-performing assets + loans 90 days or more past due) / (tangible common equity + loan loss reserves)
General Update on Capital Markets
Capital Offering Mix (2010-Present)
Summary of Capital Offering Mix (in billions)
2010
$80.0
2011
% of
$ Amt.
$70.0
Common Stock
Common Stock (IPO)
Common Stock (MHC IPO)
Preferred Stock
Sub-Debt
TARP CPP
SBLF
Trust Preferred
Grand Total
$60.0
$50.0
$40.0
Total
$ 52.9 72.7%
$ 0.5 0.7%
$ 2.5 3.4%
$ 4.6 6.3%
$ 2.5 3.5%
$ 1.4 1.9%
$ 0.0%
$ 8.4 11.6%
$ 72.8 100.0%
2012
% of
$ Amt.
Total
$ 10.7 38.4%
$ 0.9 3.2%
$ 1.0 3.6%
$ 10.9 39.0%
$ 1.5 5.4%
$ 0.5 2.0%
$ 2.3 8.4%
$ 0.0%
$ 27.8 100.0%
2013
% of
$ Amt.
Total
$ 9.4 28.6%
$ 0.7 2.0%
$ 0.5 1.5%
$ 18.5 56.1%
$ 3.9 11.8%
$ 0.0%
$ 0.0 0.0%
$ 0.0%
$ 33.0 100.0%
2014 YTD
% of
$ Amt.
Total
$ 3.4 6.9%
$ 0.3 0.7%
$ 0.7 1.4%
$ 18.9 38.2%
$ 26.2 52.8%
$ 0.0 0.0%
$ 0.0 0.0%
$ 0.0%
$ 49.5 100.0%
% of
$ Amt.
Total
$ 4.9
$ 0.8
$ 3.3
$ 13.9
$ 10.7
$ $ 0.0
$ $ 33.7
14.5%
2.5%
9.9%
41.3%
31.7%
0.0%
0.1%
0.0%
100.0%
$30.0
2010 Capital Offering Mix
2014 YTD Capital Offering Mix
$20.0
TARP CPP
1.9%
$10.0
$2010
2011
2012
2013
2014 YTD
Common Equity
Common (IPO)
MHC IPO
Preferred
Sub-Debt
TARP
SBLF
TRUPS
Sub-Debt
3.5%
Preferred Stock
6.3%
Common Stock
(MHC IPO)
3.4%
Common Stock
(IPO)
0.7%
SBLF
0.1%
Trust Preferred
11.6%
Common Stock
14.5%
Common Stock
(IPO)
2.5%
Sub-Debt
31.7%
Common Stock
(MHC IPO)
9.9%
Common Stock
72.7%
Preferred Stock
41.3%
Source: SNL Financial, market data current as of 8/28/2014
Note: Includes offerings for all reporting companies (includes NASDAQ, NYSE, OTCBB, etc.)
Note: Excludes TARP auction preferred stock sales
Note: All dollars in billions
Bank M&A Update
Section III
Summary of Nationwide M&A Deal Activity
Number of Transactions
Aggregate Deal Value ($M)
Price / Tangible Book Value (Median)
Core Deposit Premium (Median)
Price / Earnings (Median)
Transaction
Volume
Number of Deals
2014 YTD
181
150
221
230
182
$ 9,987 $ 17,004 $ 12,825 $ 14,206 $ 10,795
119.6%
108.9%
114.0%
124.7%
135.0%
2.92%
1.00%
2.61%
3.62%
4.56%
NM
NM
32.2x
22.3x
27.6x
100
79
80
60
40
46
54
53
46
33
28
31
40
46
51
64
60
50
53
Q2
2013
Q1
2012
Q2
2011
Whole-Bank M&A
Q1
2010
Nationwide Trends on Whole-Bank M&A
Q4
62
65
58
45
20
2010
% Whole-Bank M&A
% Branch Acquisitions
% FDIC-Assisted Acquisitions
409
44.3%
19.8%
35.9%
322
46.6%
25.5%
28.0%
362
61.0%
26.0%
13.0%
330
69.7%
23.3%
7.0%
259
70.3%
24.3%
5.4%
Q3
Q2
Q1
Q4
Q3
Q4
Q3
2013
2014
122.7%
143.5%
133.3%
118.9%
139.6%
130.0%
116.5%
110.6%
120.1%
114.0%
120.1%
94.0%
119.1%
109.5%
Q2
120.1%
Q1
115.0%
111.3%
135.0%
126.4%
155.0%
119.4%
Total Transactions
2012
Price / Tangible Book Value
118.1%
147
90
47
23
14
85.7%
64.4%
42.6%
13.0%
0.0%
$ 91,867 $ 34,808 $ 10,865 $ 6,059 $ 1,934
$ 59,425 $ 28,864 $ 9,662 $ 4,933 $ 1,714
0.00%
0.00%
0.00%
0.00%
0.48%
10.6%
13.5%
12.8%
11.0%
6.9%
Q3
2011
FDIC-Assisted Acquisitions (1)
% of Transactions with Loss Share
Total Assets At Assumption ($M)
Total Deposits Transferred ($M)
Deposit Premium (Median)
Discount on Assets (Median)
Q2
Q1
Q4
Q3
81
82
94
77
63
197
413
385
288
348
$ 6,370 $ 20,182 $ 12,878 $ 8,686 $ 14,182
3.45%
2.90%
2.31%
2.30%
2.43%
Q2
Number of Branches
Q1
0
Branch Acquisitions
95.0%
75.0%
Q3
Q4
Q1
2010
Q2
Q3
Q4
Q1
2011
Q2
Q3
Q4
Q1
2012
Q2
Q3
Q4
Q1
2013
Q2
Q3
2014
Transaction Mix (2014 YTD)
Price / LTM Earnings
Whole Bank
M&A
70.3%
60.0x
50.3x
49.6x
50.0x
34.7x 37.3x
40.0x
Branch
24.3%
FDICAssisted
5.4%
30.0x
28.3x
21.4x 22.8x
25.0x
31.5x
27.7x
20.5x 21.1x
23.1x
20.0x
10.0x
NM NM NM NM
NM NM
0.0x
Q1
Q2
Q3
2010
Q4
Q1
Q2
Q3
2011
Q4
Q1
Q2
Q3
2012
Q4
Q1
Q2
Q3
2013
Q4
Q1
Q2
Q3
2014
(1) Multiple subsidiary bank holding companies sold to a single buyer are considered a single transaction. Does not include failed banks that did not have buyers when put into receivership
Source: SNL Financial, includes pending and completed deals (not all deals report complete deal information)
Note: Median data, current as of 8/28/2014
Summary of Western U.S. M&A Deal Activity
2010
2011
2012
2013
Nationwide Trends on Whole-Bank M&A
Aggregate Deal Value ($M)
Price / Tangible Book Value (Median)
Core Deposit Premium (Median)
Price / Earnings (Median)
Transaction
Volume
Number of Deals
2014 YTD
Whole-Bank M&A
25
33
33
32
22
$
480 $
402 $ 2,853 $ 5,429 $ 4,079
121.8%
95.4%
110.0%
133.4%
122.3%
3.85%
-0.32%
1.67%
5.03%
2.49%
17.3x
NM
NM
19.1x
25.7x
14
15
11
10
10
9
7
7
7
10
10
7
5
4
5
5
6
5
9
7
6
6
2010
31
71.0%
25.8%
3.2%
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
116.2%
Q4
98.4%
Q3
133.3%
129.3%
107.6%
Q3
110.9%
135.0%
Q2
88.8%
121.8%
126.4%
120.2%
Q1
95.0%
146.9%
49
65.3%
24.5%
10.2%
115.0%
140.8%
44
75.0%
22.7%
2.3%
2014
85.0%
61
54.1%
16.4%
29.5%
2013
79.6%
62
40.3%
6.5%
53.2%
135.0%
105.3%
% Whole-Bank M&A
% Branch Acquisitions
% FDIC-Assisted Acquisitions
155.0%
101.3%
Total Transactions
2012
Price / Tangible Book Value
149.6%
33
18
1
5
1
90.9%
50.0%
0.0%
20.0%
0.0%
$ 21,742 $ 10,031 $ 130 $ 401 $ 153
$ 16,547 $ 8,212 $ 109 $ 388 $ 146
0.50%
0.00%
0.00%
0.00%
0.75%
8.5%
16.0%
24.8%
13.1%
5.7%
Q3
2011
FDIC-Assisted Acquisitions (1)
% of Transactions with Loss Share
Total Assets At Assumption ($M)
Discount on Assets (Median)
Q2
Q1
Q4
Q3
10
10
12
8
16
30
31
38
508 $ 703 $ 1,048 $ 1,816
1.12%
2.50%
1.81%
3.10%
99.7%
$
4
8
365 $
4.45%
Q2
Number of Branches
Q1
0
Branch Acquisitions
75.0%
Q1
Q2
Q3
Q4
2010
Q4
Q1
2011
Q2
Q3
Q4
Q1
2012
Q2
Q1
2013
Q2
Q3
2014
Transaction Mix (2014 YTD)
Price / LTM Earnings
Whole Bank
M&A
71.0%
Branch
25.8%
FDICAssisted
3.2%
40.0x
35.0x
30.0x
25.0x
20.0x
15.0x
10.0x
5.0x
0.0x
34.7x
28.8x
18.4x
NM NM NM NM NM NM NM NM
Q1
Q2
Q3
2010
Q4
Q1
Q2
Q3
2011
Q4
23.2x 21.3x
17.0x
15.5x
NM NM NM
Q1
Q2
Q3
2012
Q4
NM
Q1
Q2
Q3
2013
Q4
Q1
Q2
Q3
2014
(1) Multiple subsidiary bank holding companies sold to a single buyer are considered a single transaction. Does not include failed banks that did not have buyers when put into receivership
Source: SNL Financial, includes pending and completed deals (not all deals report complete deal information)
Note: Median data, current as of 8/28/2014
Precedent Transactions in the Pacific Northwest
Selection Criteria
 Select banks and thrifts headquartered in Idaho, Oregon and Washington
 Transactions announced since beginning of 2012
 Includes 21 transactions
 Sorted by announce date
Target Information
Announce
Date
Name
8/07/2014*
7/23/2014*
7/11/2014*
6/27/2014*
10/23/2013
10/23/2013
9/11/2013
7/26/2013
7/26/2013
3/27/2013
3/22/2013
3/12/2013
1/30/2013
10/30/2012
10/23/2012
10/22/2012
9/26/2012
9/14/2012
8/09/2012
4/05/2012
4/04/2012
Median
Average
Minimum
Maximum
Siuslaw Financial Group, Inc.
Intermountain Community Bancorp
Regal Financial Bank
Idaho Banking Company
Washington Banking Company
Home Federal Bancorp, Inc.
Fortune Bank
YNB Financial Services Corp.
North Cascades Bancshares, Inc.
Core Business Bank
Valley Community Bancshares, Inc.
Albina Community Bank
PremierWest Bancorp
Century Bank
Pacific International Bancorp, Inc.
West Coast Bancorp
Northwest Commercial Bank
High Desert Bank
Northwest Bank
South Valley Bancorp, Inc.
Buyer Information
State Name
OR
ID
WA
ID
WA
ID
WA
WA
WA
WA
WA
WA
OR
OR
OR
WA
OR
WA
OR
OR
OR
Banner Corporation
GWY, LLC
D.L. Evans Bancorp
Cascade Bancorp
HomeStreet, Inc.
HomeStreet, Inc.
Glacier Bancorp, Inc.
Puget Sound Bank
One PacificCoast Foundation
SKBHC Holdings LLC
BBCN Bancorp, Inc.
Investor group
GWY, LLC
Deal Profile
State
Assets
($M)
Deal
Value
($M)
WA
WA
WA
ID
WA
OR
OR
WA
WA
MT
WA
WA
CA
WA
OR
CA
WA
WA
OR
WA
WA
$ 4,745.3
$ 7,297.5
$
258.0
$
997.4
$ 1,674.4
$ 1,365.9
$11,392.2
$ 2,508.3
$ 2,508.3
$ 7,747.4
$
268.4
$ 1,345.5
$
291.2
$ 2,763.4
$ 1,350.4
$ 5,332.0
$ 4,789.4
$ 1,338.1
NA
$
158.4
$13,649.7
$
58.1
$ 127.3
NA
$
10.0
$ 264.6
$ 265.8
$1,995.1
$
27.1
$
10.3
$
29.3
$
8.4
$
44.0
NA
$
20.1
$
13.4
$
8.2
$ 508.9
$
4.8
$
0.8
NA
$
72.7
$ 2,091.3
$ 3,589.1
$
158.4
$13,649.7
$
28.2
$ 192.7
$
0.8
$1,995.1
Valuation
Cash /
Stock
Mix
Price / Price /
TBV
EPS
Mix
Mix
Other
Cash
Mix
Mix
Stock
Cash
Cash
Mix
Mix
Mix
Other
Cash
Cash
Stock
Mix
Other
Cash
Other
Other
151.5%
123.4%
NA
297.7%
148.7%
153.7%
167.1%
142.0%
139.6%
126.9%
131.7%
146.1%
NA
64.5%
110.7%
52.2%
145.2%
75.4%
NA
NA
109.5%
17.1x
12.0x
NA
NM
16.0x
NM
19.6x
9.1x
NM
20.4x
NM
24.3x
NA
NM
14.7x
NM
14.2x
NM
NM
NA
NM
139.6% 16.0x
134.5% 16.4x
52.2%
9.1x
297.7% 24.3x
Operating Financials for Target Company
Assets
($M)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
360.0
920.2
98.6
102.1
1,648.2
1,007.7
9,939.6
141.5
125.1
346.0
64.0
242.2
128.2
1,140.0
87.1
208.6
2,408.4
72.2
30.6
104.4
868.7
$ 208.6
$ 954.4
$
30.6
$ 9,939.6
ROAA
ROAE
TCE
Ratio
Core
NIE / Effic.
Dep. % Assets Ratio
NPAs /
Assets
LLR /
NPLs
0.96%
1.15%
-2.71%
0.01%
1.00%
0.15%
1.08%
2.17%
0.40%
0.71%
0.20%
0.78%
0.56%
-0.96%
1.06%
-3.85%
1.48%
-0.49%
-2.36%
-0.57%
-0.50%
9.16%
10.32%
-23.07%
0.33%
9.15%
0.87%
8.23%
16.96%
4.35%
5.97%
1.93%
6.57%
12.51%
-13.87%
8.13%
-31.34%
11.67%
-4.34%
-37.31%
-6.96%
-5.85%
10.63%
10.76%
9.92%
3.29%
10.72%
16.72%
11.65%
13.62%
8.22%
10.55%
10.00%
11.72%
4.68%
2.73%
13.61%
10.61%
12.74%
8.76%
5.35%
8.43%
7.66%
96.8%
92.6%
54.6%
88.5%
89.8%
92.2%
89.8%
65.4%
71.8%
92.0%
78.9%
87.6%
86.5%
87.3%
80.8%
64.2%
97.5%
78.0%
79.9%
79.1%
80.3%
3.44%
3.53%
4.95%
5.26%
3.05%
3.89%
3.38%
5.62%
4.97%
3.20%
4.20%
2.91%
5.87%
3.70%
3.27%
4.23%
3.61%
3.14%
-0.52%
3.98%
4.33%
4.03%
1.65%
14.94%
14.43%
2.40%
1.39%
1.70%
4.17%
0.62%
1.96%
0.15%
1.00%
5.42%
5.13%
5.40%
12.00%
3.05%
7.75%
11.15%
5.13%
5.35%
66.9%
66.9%
14.9%
39.2%
91.8%
104.1%
99.5%
48.3%
160.0%
75.7%
849.5%
91.9%
52.4%
56.1%
30.2%
25.9%
69.5%
63.1%
23.9%
38.6%
43.1%
0.40% 4.35% 10.55%
0.01% -0.79% 9.64%
-3.85% -37.31% 2.73%
2.17% 16.96% 16.72%
86.5%
82.6%
54.6%
97.5%
3.70% 84.4% 4.17%
3.81% 82.5% 5.18%
-0.52% 0.0% 0.15%
5.87% 146.0% 14.94%
63.1%
100.5%
14.9%
849.5%
75.1%
84.4%
117.9%
99.7%
53.2%
97.1%
67.5%
89.7%
92.2%
77.1%
93.2%
69.8%
86.3%
82.4%
69.2%
97.8%
75.2%
73.7%
0.0%
146.0%
85.7%
Source: SNL Financial, as of 8/28/2014
Note: All dollars in thousands, unless noted otherwise
Note: Operating financials for target company based on quarter-end prior to announcement. Performance ratios measured over last twelve month period
*Indicates transaction is pending
Branch Divestiture Activity
Western U.S. transactions since 1/1/2009
National Summary Branch Data (All Deals)
Transaction Info.
Announce
Date
05/19/2014*
05/16/2014
04/23/2014*
04/09/2014
02/19/2014
01/23/2014
12/30/2013
10/09/2013
07/18/2013
07/09/2013
07/08/2013
06/21/2013
06/03/2013
05/01/2013
01/29/2013
12/17/2012
11/29/2012
10/01/2012
09/04/2012
07/09/2012
07/02/2012
03/27/2012
11/02/2011
11/01/2011
04/04/2011
11/15/2010
08/26/2010
08/17/2010
12/30/2009
12/15/2009
08/26/2009
06/25/2009
04/29/2009
03/26/2009
03/11/2009
03/02/2009
02/19/2009
02/06/2009
Seller Name
Crazy Woman Creek Bancorp Inc.
Popular, Inc.
Talmer Bancorp, Inc.
Bank of America Corporation
Silvergate Capital Corporation
SKBHC Holdings LLC
Bank of America Corporation
SKBHC Holdings LLC
SKBHC Holdings LLC
SKBHC Holdings LLC
First PacTrust Bancorp, Inc.
Zions Bancorporation
Boston Private Financial Holdings, Inc.
NCAL Bancorp
Coast Bancorp
Western Community Bancshares, Inc.
PacWest Bancorp
Village Bancorp
Zions Bancorporation
Universal Financial, Inc.
Boston Private Financial Holdings, Inc.
First Banks, Inc.
Palm Desert Investments
Capitol Bancorp Ltd.
Liberty Capital, Inc.
Liberty Capital, Inc.
Westamerica Bancorporation
1st Security Bancorp Inc.
1st Security Bancorp Inc.
Marquette Financial Companies
First State Bancorporation
Wells Fargo & Company
Wells Fargo & Company
Community Bankshares, Inc.
Buyer Name
Platte Valley Financial Service Co., Inc.
Banc of California, Inc.
First Bancorp of Durango, Inc.
Banner Corporation
Americas United Bank
Bank of Southern California, NA
HomeStreet, Inc.
Cascade Bancorp
Coeur d'Alene Bancorp
SKBHC Holdings LLC
Opus Bank
Sumitomo Mitsui Financial Group, Inc.
Heritage Oaks Bancorp
Sagebrush Partners LLLP
Opus Bank
Eagle Bancorp Montana, Inc.
Cache Valley Banking Company
Western Arizona Bancorp, Inc.
Security California Bancorp
City National Corporation
Grandpoint Capital, Inc.
First Commercial Bancshares, Inc.
Washington Investment Company
City National Corporation
Sound Financial, Inc. (MHC)
Sound Financial, Inc. (MHC)
Alerus Financial Corporation
National Australia Bank, Limited
1867 Western Financial Corporation
PremierWest Bancorp
Bay Commercial Bank
Buyer
Branch
State
States
NE
WA
CA
IL
WA
WA
CA
CA
WA
WA
OR
ID
WA
CA
WA
WA
CA
CO
CA
MT
UT
AZ
CA
WA
CA
CA
CA
OK
CO
CA
WA
WA
ND
CA
OR
CA
WY
WA
CA
NM
OR
AZ, NV
CA
CA
ID, NM, OR, WA
WA
OR
ID
CA
CA
OR, WA
WA
CA
CA
UT
CA
MT
UT
AZ
CA
WA
CA
CA
AZ
CO
CO
CA
WA
WA
AZ
CO
CA
CA
CA
# of
Deposits
Avg.
Branch
# of
Deposit
Branches Transferred Deposits Premium
1
3
20
1
6
23
1
1
51
2
3
1
8
4
3
3
1
1
1
10
7
3
1
1
1
1
2
1
2
2
1
1
1
1
20
1
2
1
$ 11,895
$ 25,000
$ 1,132,000
$ 37,500
$ 226,000
$ 609,859
$ 45,700
$ 18,839
$ 1,500,000
$ 40,000
$ 26,700
$ 25,000
$ 477,043
$ 138,300
$ 48,000
$ 189,000
$ 12,200
$ 32,500
$ 35,000
$ 143,000
$ 187,000
$ 69,622
$ 38,000
$ 29,200
$
7,000
$ 10,000
$ 52,700
$ 168,374
$ 34,464
$ 61,974
$ 40,055
$ 20,000
$ 21,000
$
8,187
$ 477,000
$ 86,271
$ 498,870
$ 52,721
$ 11,895
$ 8,333
$ 56,600
$ 37,500
$ 37,667
$ 26,516
$ 45,700
$ 18,839
$ 29,412
$ 20,000
$ 8,900
$ 25,000
$ 59,630
$ 34,575
$ 16,000
$ 63,000
$ 12,200
$ 32,500
$ 35,000
$ 14,300
$ 26,714
$ 23,207
$ 38,000
$ 29,200
$ 7,000
$ 10,000
$ 26,350
$ 168,374
$ 17,232
$ 30,987
$ 40,055
$ 20,000
$ 21,000
$ 8,187
$ 23,850
$ 86,271
$ 249,435
$ 52,721
3.85%
2.35%
0.50%
4.27%
NA
1.30%
0.50%
1.60%
2.60%
2.01%
1.04%
1.50%
2.30%
3.20%
2.50%
5.82%
2.22%
2.20%
2.00%
2.50%
3.88%
5.00%
3.05%
1.12%
0.00%
4.45%
1.32%
5.00%
2.09%
2.99%
1.25%
2.25%
2.50%
5.13%
6.00%
0.69%
0.90%
0.46%
Total / Wtd. Avg.
193
$ 6,635,974
$ 34,383
2.34%
Median
Average
Minimum
Maximum
2
5
1
51
$ 42,878
$ 174,631
$
7,000
$ 1,500,000
$ 26,615
$ 38,741
$ 7,000
$ 249,435
2.25%
2.50%
0.00%
6.00%
Period
Deposits
2014
2013
2012
2011
2010
$ 14,181,715
$ 8,686,330
$ 12,877,814
$ 20,182,465
$ 6,369,904
Deposit
# of
Branches Premium Deals
348
288
385
413
197
2.43%
2.30%
2.31%
2.90%
3.45%
63
77
94
82
81
4.00%
3.50%
3.45%
81
100
94
82
90
77
2.90%
3.00%
2.31%
2.50%
2.30%
63
2.43%
80
70
60
2.00%
50
1.50%
40
30
1.00%
20
0.50%
10
0
0.00%
2010
2011
2012
Deposit Premium
2013
2014
# of Deals
*Indicates transaction is pending
Note: Only transactions with disclosed pricing
Note: Western U.S. includes AZ, CA, CO, ID, MT, NM, NV, OR, UT, WA and WY
Merger-of-Equals Transactions
Section IV
Franchise Value
What creates real value for a banking franchise?

Strong, consistent earnings with high margins

Clean asset quality

Stable and diversified revenue stream

Sticky, low cost, core deposit base

Diversified loan portfolio

Organic income statement and balance sheet growth

Attractive markets with solid demographics

Commercial banking relationships

De novo branching and franchise expansion

Strong market share and diversity in markets
Merger-of-Equals Overview & Key Issues
Merger of Equals Overview

A Merger of Equals (“MOE”) occurs when two companies, usually of the same approximate size, agree to go
forward as a new company rather than remain separately owned and operated

Both companies stock are surrendered and new company stock is issued in its place

A premium is not paid in a MOE, as no one side is acquiring the other

Shareholders of the predecessors share equally in the prospective synergies

MOE’s always occur in a consensual setting and are always friendly; the two companies cooperation is required
Key Issues

Analysis of Value: value creation as a stand-alone bank vs. selling the bank vs. completing a MOE

If structured properly, a MOE has the ability to create more value due to cost savings and additional
business opportunities

Accounting: new purchase accounting rules make mergers of similar sized companies more difficult

Structure: name, surviving entity, board composition, management team, ownership blocks

Employees and Systems: who will stay, redundancies, system conversions

Regulatory Issues: any market concentration issues, regulatory hurdles

Ultimate Liquidity Event: large scale public offering or sale of the new combined company in the future
MOE Pros & Cons
There is a unique set of advantages and disadvantages associated with MOEs
Pros
Cons
 Size and scale for loan limits, attracting
personnel, technology investments, etc.
 Relative valuation and pro forma
ownership can be difficult to determine
 Increased liquidity increases market
value and shareholder value
 Culture differences at different banks can
create problems
 Roll forward equity ownership with higher
value possibilities
 Management structure
 Social issues
 Diversification of loans, deposits,
geography, etc.
 Control is given up by one party
 Ability to better serve customers – more
product offerings, etc.
 An ultimate liquidation event is required
to achieve maximum value
 Broader liquidity alternatives for
shareholders
Bank M&A Going Forward
Section V
Bank M&A Drivers and Roadblocks
• Bank M&A discussions and activity have picked up over the last year
What is driving current bank M&A
Roadblocks to bank M&A


Social issues – name, board composition,
management

Impact to local communities (employees,
customers)

Economic recovery from downturn is slow,
putting more pressure on earning asset
growth
Lack of core earnings at potential bank
sellers

Large change-in-control payments to
management, vendors, etc.

Benefit of diversifying loans, deposits,
geography, etc.

Regulatory approval issues for some
potential buyers

Buyer’s lack of organic growth opportunities
coupled with large amounts of unused
capital

Bank balance sheets are getting healthier,
moderating some of the pressure to sell

Demand for liquidity by shareholders

Management/Director succession issues


Increased costs of doing business
(regulatory, compliance, risk management)
pushing bank returns lower
Extended low interest rate environment
having a major impact on bank returns
Future of Community Banking
 Competition
 Large regionals looking for growth and scale – only getting bigger
 No de novo activity for the foreseeable future
 Increasing competition from non-banks and credit unions
 Scarcity value in certain markets in the Pacific Northwest
 Loan growth is imperative to generate earnings in order to cover the increasing
costs of running a bank
 Proactively address shareholder needs before they become an issue
 Management and board succession planning are crucial
 “Earn your independence” – solid returns keep shareholders happy and allow
the bank to remain independent

The Changing Bank Landscape In the Pacific Northwest

Transcription

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