“a strategic merger of equals”€¦ · 30/06/2015 · combination of storied pittsburgh...

Investor Presentation – August 2016 –

“A Strategic Merger of Equals”

Transaction Overview

Merger of Equals

Combination of storied Pittsburgh banking franchises with complementary visions and missions

True merger of equals partnership leverages the best of both companies

Increased scale will enable a more efficient operation and broaden customer base

Similar community banking cultures will benefit customers, communities, and employees

Poised to create significant value for shareholders

2

Rank Institution (ST)

Number

of

Branches

Deposits in

Market

($mm)

Market

Share

(%)

1 PNC Financial Services Group (PA) 144 56,002 48.5

2 Bank of New York Mellon Corp. (NY) 4 18,179 15.8

3 Citizens Financial Group Inc. (RI) 126 9,375 8.1

4 F.N.B. Corp. (PA) 96 5,351 4.6

5 Dollar Bank FSB (PA) 37 3,851 3.3

6 KeyCorp (OH) 58 2,819 2.4

7 Huntington Bancshares Inc. (OH) 38 2,782 2.4

8 TriState Capital Holdings Inc. (PA) 2 2,557 2.2

9 First Commonwealth Financial (PA) 59 2,382 2.1

10 S&T Bancorp Inc. (PA) 27 1,846 1.6

11 WesBanco Inc. (WV) 34 1,367 1.2

12 Northwest Bancshares, Inc. (PA) 26 1,029 0.9

13 NexTier Inc. (PA) 26 993 0.9

14 WFSB Mutual Holding Company (PA) 8 899 0.8

Pro Forma 15 581 0.5

15 CF Financial Corp. (PA) 9 451 0.4

16 CB Financial Services Inc. (PA) 13 431 0.4

17 MHC of Western Pennsylvania (PA) 9 405 0.4

18 First FS&LA of Greene County (PA) 4 362 0.3

19 Wells Fargo & Co. (CA) 1 329 0.3

20 Allegheny Valley Bancorp Inc. (PA) 9 324 0.3

21 United Bankshares Inc. (WV) 4 318 0.3

22 Commercial National Financial (PA) 10 313 0.3

23 Mars National Bancorp Inc. (PA) 5 303 0.3

24 Slovenian S&L Assn. Canonsburg (PA) 1 293 0.3

25 Standard Financial Corp (PA) 6 256 0.2

Totals (1-25) 756 113,217 98.1

Totals (1-47) 821 115,390 100.0

Pro Forma Footprint

3

Deposit Market Share – Pittsburgh, PA MSA Pro Forma Branch Map

WV

OH

MD

VA

PA

Standard (9 total, 6 in Pittsburgh, PA MSA)

Allegheny (9 total, 9 in Pittsburgh, PA MSA)

Standard Counties Allegheny / Pro Forma Counties

Source: SNL Financial; Standard Financial Corp. branches adjusted for duplicate entries Note: Deposit data as of 6/30/2015

Strategic Rationale and Financial Benefits

4

Strategic Rationale

Increases scale and visibility in attractive Pittsburgh markets

Consistent business philosophies

Combines experienced and proven leadership teams

Culturally compatible and high caliber banking teams

Broadens and deepens lending platform

Expands product set

Increased convenience for customers

Supports regulatory and compliance focus

Financial Benefits

Substantial earnings accretion

Significant cost savings identified

Enhanced operating leverage

Reasonable tangible book value earn back period

Top tier financial performance post integration

Leverages excess capital

Well-capitalized position will allow the pro forma company to pursue additional growth and/or acquisition opportunities

Leadership

5

Timothy K. “Tim” Zimmerman Chief Executive Officer

Andrew W. “Andy” Hasley President

Susan “Sue” Parente Executive Vice President and Chief Financial Officer

Jason W. Ross Executive Vice President and Chief Business Development Officer

Christian “Chris” Chelli Senior Vice President and Chief Credit Officer

Sheila D. Crystaloski Senior Vice President and Chief Technology Officer

Susan DeLuca Senior Vice President and Chief Risk Officer

Terence L. Graft Chairman

Dale A. Walker Director

Andrew W. Hasley Director

Gregory J. Saxon Vice Chairman

Horace G. Cofer Director

William T. Ferri Director

David C. Mathews Director

Thomas J. Rennie Director

Timothy K. Zimmerman Director

Paul A. Iurlano Director

John M. Lally Director

Ronald J. Mock

Director

R. Craig Thomasmeyer Director

Senior Management Team

Board of Directors

Construction2%

Residential R.E.42%

Commercial R.E. (OO)

8%

Commercial R.E. (Non-OO)

33%

Commercial & Industrial

9%Consumer &

Other6%

Construction2%

Residential R.E.57%


8%


21%


6%

Consumer & Other6%Construction

3%

Residential R.E.68%


9%


12%


3%

Consumer & Other5%

Loan Composition

6

Standard Bank, PaSB Allegheny Valley Bank of Pittsburgh Pro Forma Standard Bank

NPAS / Loans + OREO: 0.28% NPAS / Loans + OREO: 1.90%

Source: SNL Financial Note: Reflects bank level call report data

Demand Deposits

33%

NOW & Other Trans.

Accounts8%

MMDA & Other Savings

39%

CDs <$100K12%

CDs $100K-$250K

4%

CDs >$250K4%

Deposit Composition

7

Demand Deposits

18%

NOW & Other Trans. Accts

12%


40%

CDs <$100K18%

CDs $100K-$250K

8%

CDs >$250K4%

Source: SNL Financial Note: Reflects bank level call report data

Demand Deposits

5%

NOW & Other Trans. Accts

15%


41%

CDs <$100K23%

CDs $100K-$250K12%

CDs >$250K4%

Standard Bank, PaSB Allegheny Valley Bank of Pittsburgh Pro Forma Standard Bank

Transaction Terms

8

Transaction: • Merger of Equals between Standard Financial Corp. and Allegheny Valley Bancorp, Inc.

• Standard Financial Corp. will be the surviving corporation

Form of Consideration: • 100% Standard Financial Corp. (“STND”) common stock

Fixed Exchange Ratio: • 2.083x shares of STND common stock for each share of Allegheny Valley Bancorp, Inc.

Transaction Value: • $53.85 per share based on STND closing price of $25.85 on August 29, 2016

• $56.5 million aggregate deal value including dilutive shares

Ownership Split: • 54% Standard Financial Corp. / 46% Allegheny Valley Bancorp, Inc.

Employees:

• The companies have identified key executives and managers who will remain with the surviving corporation

• Parties to honor any contracts for and make severance payments to any employees who are terminated as a result of the transaction

• Employees with change-in-control benefits that remain employed will not receive a termination payout from their current contract

Company Name:

• Upon closing, the pro forma holding company will be renamed Standard AVB Financial Corp.

• The company’s ticker symbol will remain STND

• The Bank name will remain Standard Bank

Dividend: • Upon closing, Standard AVB Financial Corp. will raise its quarterly cash dividend to $0.221 per share

Expected Closing: • 1st Quarter of 2017

Please see the merger agreement for comprehensive transaction terms

Assumptions and Financial Impact

9

Assumptions

Allegheny Valley Bancorp, Inc. options will be exchanged for Standard Financial Corp. options

Allegheny Valley Bancorp, Inc. restricted stock will be exchanged for shares of Standard Financial Corp. in accordance with the fixed exchange ratio

Cost savings estimated at ~16% of the combined company’s projected noninterest expense

Gross loan accounting credit mark of ~1.7%, or approximately $4.9 million

Core deposit intangible equal to 1.5% of Allegheny Valley Bancorp, Inc. non-time deposits

Estimated after-tax restructuring charge of ~$3.7 million

Financial Impact

Double-digit earnings accretion for both shareholder bases

Tangible book value dilution for Standard Financial Corp. shareholders earned back within a reasonable time frame

Tangible book value accretion for Allegheny Valley Bancorp, Inc. shareholders

Pro forma company remains in excess of “well-capitalized” regulatory standards

($ in thousands, unless otherwise noted) 6/30/2016 6/30/2016 3/31/2017

Assets 484,732 434,990 945,107

Net Loans 367,303 290,907 690,478

Deposits 352,351 321,904 699,006

Total Equity 73,035 51,151 128,503

Branches 9 9 18

Market Capitalization 66,908 43,233 123,436

TCE / TA 13.50% 10.08% 11.25%

Total Risk-Based Capital Ratio 23.07% 13.88% 17.26%

Loans / Deposit Ratio 105.3% 91.5% 99.3%

Pro Forma Financials

10

Note: Balance sheet reflects GAAP financial data (1) Pro forma Standard AVB Financial Corp. financials represent the combined company and are inclusive of purchase accounting adjustments (2) Based on the pro forma share count and STND closing market price as of 8/29/2016

(1)

(2)

“a strategic merger of equals”€¦ · 30/06/2015 · combination of storied pittsburgh...

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