Attached files

file filename
8-K - TOWER BANCORP, INC. - TOWER BANCORP INCd8k.htm
Tower Bancorp, Inc.
Investor Presentation
Third Quarter 2009
Exhibit 99.1


1
FORWARD-LOOKING STATEMENTS / SAFE HARBOR
This
presentation
contains
forward-looking
statements
that
are
intended
to
be
covered
by
the
safe
harbor
for
forward-looking
statements
provided
by
the
Private
Securities
Litigation
Reform
Act
of
1995.
Forward-looking
statements
are
not
statements
of
historical
fact,
and
can
be
identified
by
the
use
of
forward-looking
terminology
such
as
“believe,”
“expect,”
“may,”
“will,”
“should,”
“project,”
“plan,”
“seek,”
“target,”
“intend”
or
“anticipate”
or
the
negative
thereof
or
comparable
terminology.
Forward-looking
statements
include
discussions
of
strategy,
financial
projections
and
estimates
and
their
underlying
assumptions,
statements
regarding
plans,
objectives,
expectations
or
consequences
of
various
transactions,
and
statements
about
the
future
performance,
operations,
products
and
services
of
Tower
and
our
subsidiaries.
These
forward-
looking
statements
are
subject
to
various
assumptions,
risks,
uncertainties
and
other
factors
.
These
risks
are
detailed
in
documents
filed
by
Tower
Bancorp,
Inc.
with
the
Securities
and
Exchange
Commission,
including
Tower’s
Quarterly
Report
on
Form
10-Q,
Annual
Report
on
Form
10-K
and
other
required
filings.
Because
of
these
uncertainties,
risks
and
the
possibility
of
changes
in
these
assumptions,
actual
results
could
differ
materially
from
those
expressed
in
any
forward-looking
statements.
Investors
are
cautioned
not
to
place
undue
reliance
on
these
statements.
Tower
Bancorp,
Inc.
assumes
no
duty
or
obligation
to
update
any
forward-looking
statements
made
in
this presentation.


2
COMPANY PROFILE
A Pennsylvania-chartered bank holding company
organized in 1983, with roots dating back to 1864
High-growth community bank headquartered in Harrisburg, Pennsylvania
Completed a merger of equals transaction on March 31, 2009, with
Graystone
Financial Corp.
The roles of Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
Chief Credit Officer, and General Counsel were assumed by executives of Graystone
The resultant Board of Directors presently consists of 17 members, of which 7 were
members of the historical Tower Board with the remaining 10 directors being appointed
from Graystone
Currently operates 26 offices in nine counties of central Pennsylvania and Maryland
Strong corporate culture with clear strategic vision


3
GRAYSTONE KEY ACCOMPLISHMENTS


4
CORPORATE IDENTITY
Mission Statement
Tower Bancorp will positively impact lives by helping people
achieve their dreams.
Value Statement
Tower Bancorp is committed to attracting and retaining employees
who are
passionate about providing uncompromising service to our customers with a
sense of warmth, integrity, friendliness, and company spirit.  We value and
respect each other because we truly believe that our success only comes from
working together for our team’s success.
Making a Positive Impact
Vision Statement
Tower Bancorp will be a high performing regional financial services company
that creates financial success for consumer, business, and not for profit
customers in the markets we choose to serve.


5
COMPANY PROFILE
Nasdaq
GM:
TOBC
As of September 30, 2009:
Total Assets:
$ 1.4 billion
Gross Loans:
$ 1.0 billion
Deposits:
$ 1.1 billion
Shareholders’
Equity:
$ 164.6 million
Book Value Per Share:
$ 23.14
Tangible Book Value Per Share:
$ 20.89
Tangible Common Equity Ratio:
10.90%
Total Regulatory Capital Ratio:
15.93%
Market Capitalization:
$ 167.3 million
(as of October 29, 2009 as reported by SNL Financial)
On September 2, 2009 the company successfully completed an underwritten public offering of
common stock. The total net proceeds of the offering were approximately $51.7 million.


6
LEADERSHIP TEAM
ANDREW SAMUEL
JEFF RENNINGER
MARK MERRILL
CARL LUNDBLAD
President, CEO
24 years banking
experience (24 years in-
market)
Prior experience: Fulton
Bank, and Waypoint
Bank
Chief Operating Officer
31 years banking
experience (22 years in-
market)
Prior experience: PNC
Bank, Meridian Bank,
and Waypoint Bank
Chief Financial Officer
11 years financial
experience
Prior experience:
Pricewaterhouse-
Coopers, and Waypoint
Bank
General Counsel
12 years bank
regulatory, securities and
general corporate law
experience (12 years in-
market)
Prior experience:
Rhoads & Sinon
JANE TOMPKINS
JANAK AMIN
JEFF SHANK
JOE BERTOTTO
Chief Credit Officer
33 years experience in
the financial services
industry with over 12
years in credit policy
formation
Prior experience: 5 C’s
Consulting, Legacy
Bank, Waypoint Bank,
and PNC Bank
President, Graystone
Bank Division
20 years banking
experience (18 years in-
market)
Prior experience: Fulton
Bank, and Waypoint
Bank
President, Tower
Bank Division
32 years banking
experience (all in-
market) at Tower Bank
(previously The First
National Bank of
Greencastle)
Chief Culture Officer
28 years experience
Prior experience: PNC
Bank and Waypoint
Bank
Deep
and
experienced
management
team
with
extensive
local
market
knowledge


7
Potentially attractive growth and expansion opportunities
FOOTPRINT AND GROWTH POTENTIAL
Note: Tower believes that a growth opportunity exists for the counties appropriately marked above based on Tower’s close proximity to those counties, management’s
familiarity with the demographics and businesses and business leaders in those counties and Tower’s reputation in those counties.


8
CURRENT FRANCHISE MARKET DEMOGRAPHICS
Source: SNL Financial
County
Total       
Population  
2009       
(Actual)
Population 
Change    
2000-2009  
(%)
Projected   
Population  
Change    
2009-2014  
(%)
Median     
HH        
Income    
2009       
($)
HH        
Income    
Change    
2000-2009  
(%)
Projected   
HH Income 
Change    
2009-2014  
(%)
Pennsylvania
Franklin
145,306
        
12.37
            
5.92
              
51,788
          
27.94
            
4.29
              
Lancaster
507,066
        
7.74
              
3.46
              
59,484
          
30.77
            
5.61
              
Dauphin
258,263
        
2.57
              
1.06
              
55,105
          
32.28
            
5.01
              
Fulton
15,068
          
5.66
              
2.08
              
41,947
          
20.23
            
2.42
              
Cumberland
232,724
        
8.92
              
4.06
              
61,622
          
31.77
            
6.42
              
York
431,670
        
13.08
            
6.36
              
59,123
          
30.63
            
3.89
              
Centre
146,233
        
7.72
              
1.98
              
47,641
          
31.85
            
7.25
              
Lebanon
130,496
        
8.45
              
3.78
              
52,153
          
27.77
            
4.17
              
Weighted Average Pennsylvania  Franchise
8.37
              
3.83
              
54,126
          
28.97
            
4.70
              
State of Pennsylvania
12,598,860
   
2.59
              
0.80
              
53,225
          
32.70
            
4.87
              
National
309,731,508
 
10.06
            
4.63
              
54,719
          
29.78
            
4.06
              
Maryland
Washington
148,968
        
12.92
            
5.80
              
49,559
          
21.98
            
7.89
              
Weighted Average Maryland  Franchise
12.92
            
5.80
              
49,559
          
21.98
            
7.89
              
State of Maryland
5,733,229
     
8.25
              
3.14
              
67,267
          
26.91
            
4.19
              
National
309,731,508
 
10.06
            
4.63
              
54,719
          
29.78
            
4.06
              
Favorable and attractive market demographics


9
CURRENT FRANCHISE MARKET DEMOGRAPHICS
Source: SNL Financial / US Department of Labor as of
September 30, 2009
*Weighted Average Based on County Deposit Base as of September 30,
2009
PA Unemployment: 8.7%


10
DEPOSIT MARKET SHARE
Tower Ranks:
9
th
overall
in
the
markets
served
Excluding
companies
with
greater
than
$20
billion
in
assets,
4
th
in
total
deposit
market
share
Source: SNL Financial as of June 30, 2009
Significant
opportunities
exist
to
gain
share
within
our
current
deposit
markets
2009   
Rank
2008    
Rank
Institution (ST)
2009     
Number of
Branches 
2009       
Total      
Deposits in  
Market     
($000)
2009   
Total   
Market  
Share  
(%)
2008     
Total     
Deposits in
Market    
($000)
2008   
Total  
Market 
Share  
(%)
Deposit
Growth
(%)
1
3
Fulton Financial Corp. (PA)
76
4,002,652
16.3%
3,501,815
15.0%
14.3%
2
4
M&T Bank Corp. (NY)
96
3,676,118
15.0%
3,472,399
14.8%
5.9%
3
1
Susquehanna Bancshares Inc. (PA)
93
3,616,968
14.7%
3,805,840
16.3%
-5.0%
4
2
PNC Financial Services Group (PA)
85
3,495,852
14.3%
3,723,647
15.9%
-6.1%
5
5
Wells Fargo & Co. (CA)
41
2,993,980
12.2%
2,692,499
11.5%
11.2%
6
6
Banco Santander S.A.
57
2,072,503
8.4%
2,088,904
8.9%
-0.8%
7
7
Metro Bancorp Inc. (PA)
26
1,485,460
6.1%
1,340,695
5.7%
10.8%
8
8
Royal Bank of Scotland Group
32
1,425,824
5.8%
1,330,309
5.7%
7.2%
9
9
Tower Bancorp Inc. (PA)
25
1,063,247
4.3%
867,379
3.7%
22.6%
10
10
Franklin Financial Services (PA)
26
698,401
2.8%
592,708
2.5%
17.8%
Total
557
24,531,005
23,416,195
7.8%


11
BUSINESS FOCUS
Tower
Bancorp
will
strive
to
be
in
the
top
20%
of
our
Peer
Group
as
defined by the Board of Directors in the following:


12
BUSINESS STRATEGIES
We will cross sell a minimum of 5 services to every customer


13
Total Assets ($000)
(1) (2)
$1,378,936
$1,272,867
$1,212,871
$641,318
$446,412
$245,095
$65,091
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
9/30/2009
6/30/2009
3/31/2009
2008
2007
2006
2005
Quarter Ended
Year Ended
Acquisitive Asset Growth
ASSET GROWTH
(1)
All
financial
information
for
periods
prior
to
March
31,
2009
represents
historical
financials
for
Graystone
Financial
Corp.,
as
the
accounting
acquirer in the reverse merger
(2)
2005
financial
data
reflects
the
period
from
September
2,
2005
(inception
date)
to
December
31,
2005


14
Total Net Loans ($000)
(1) (2)
$1,004,757
$1,014,072
$1,000,089
$569,575
$390,274
$172,519
$25,638
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
9/30/2009
6/30/2009
3/31/2009
2008
2007
2006
2005
Quarter Ended
Year Ended
Acquisitive Loan Growth 
LOAN GROWTH
(1)
All
financial
information
for
periods
prior
to
March
31,
2009
represents
historical
financials
for
Graystone
Financial
Corp.,
as
the
accounting
acquirer in the reverse merger
(2)
2005
financial
data
reflects
the
period
from
September
2,
2005
(inception
date)
to
December
31,
2005
Note: All loans are with in-market customer relationships


15
LOAN PORTFOLIO -
CONCENTRATION BY TYPE
Note: Classifications based on management designation of loan’s primary use of proceeds
Gross Loan Concentration by Portfolio
As of September 30, 2009
Residential Mortgages
19.0%
Owner Occupied
12.0%
Apartments/Single Family
11.0%
C&I -
Other
10.0%
Consumer
9.0%
Individual Commercial
5.0%
Land Development
5.0%
Tourism/Lodging
4.0%
Income Producing Office
4.0%
Income Producing Retail
4.0%
Residential Construction
4.0%
Manufacturing
3.0%
Agriculture
2.0%
Contractors
2.0%
Professional Services
2.0%
Income Producing -
Other
2.0%
Health Care Related
1.0%
Construction Commercial
1.0%
Total Loans: $1.0 Billion
As of September 30, 2009


16
CREDIT QUALITY
(1)
All
financial
information
for
periods
prior
to
March
31,
2009
represents
historical
financials
for
Graystone
Financial
Corp.,
as
the
accounting
acquirer in the reverse merger
(2)
2005
financial
data
reflects
the
period
from
September
2,
2005
(inception
date)
to
December
31,
2005
NPAs
/ Assets and NPLs
/ Loans (%)
(1) (2)
0.00%
0.00%
0.24%
0.21%
0.43%
0.53%
0.55%
0.00%
0.00%
0.28%
0.26%
0.46%
0.62%
0.66%
0.00%
0.50%
1.00%
1.50%
2.00%
2005
2006
2007
2008
3/31/2009
6/30/2009
9/30/2009
Year Ended
Quarter Ended
NPAs/Assets
NPLs/Loans


17
CREDIT QUALITY
(1) All financial information for periods prior to March 31, 2009 represents historical financials for Graystone Financial Corp., as the accounting
acquirer in the reverse merger
(2) 2005 financial data reflects the period from September 2, 2005 (inception date) to December 31, 2005
(3) Allowance for credit losses is inclusive of credit quality adjustments on loans purchased related to the merger of equals
Loss Reserves / Gross Loans (%)
(1) (2) (3)
1.56%
1.25%
1.06%
1.06%
1.66%
1.58%
1.61%
1.56%
1.25%
1.06%
1.06%
0.77%
0.77%
0.84%
0.00%
0.40%
0.80%
1.20%
1.60%
2.00%
2005
2006
2007
2008
3/31/2009
6/30/2009
9/30/2009
Year Ended
Quarter Ended
Credit Loss Reserves/Gross Loans
Loan Loss Reserves/Gross Loans


18
CREDIT QUALITY
(1) All financial information for periods prior to March 31, 2009 represents historical financials for Graystone
Financial Corp., as the accounting
acquirer in the reverse merger
(2) 2005 financial data reflects the period from September 2, 2005 (inception date) to December 31, 2005
(3) Allowance for credit losses is inclusive of credit quality adjustments on loans purchased related to the merger of equals
Loss Reserves / Nonperforming Loans (%)
(1) (2) (3)
0.0%
0.0%
NM
409.3%
362.0%
256.2%
245.3%
0.0%
0.0%
NM
409.3%
168.9%
125.0%
127.4%
0.0%
75.0%
150.0%
225.0%
300.0%
375.0%
450.0%
2005
2006
2007
2008
3/31/2009
6/30/2009
9/30/2009
Year Ended
Quarter Ended
Credit Loss Reserves/NPLs
Loan Loss Reserves/NPLs


19
CREDIT QUALITY
(1)
All
financial
information
for
periods
prior
to
March
31,
2009
represents
historical
financials
for
Graystone
Financial
Corp.,
as
the
accounting
acquirer in the reverse merger
(2)
2005
financial
data
reflects
the
period
from
September
2,
2005
(inception
date)
to
December
31,
2005
(3) Quarter End NCO/Average Loans have been annualized
(Annualized)
NCOs / Average Loans (%)
(1) (2) (3)
0.00%
0.00%
0.00%
0.14%
0.44%
0.23%
0.20%
0.00%
0.50%
1.00%
1.50%
2.00%
2005
2006
2007
2008
3/31/2009
6/30/2009
9/30/2009
Year Ended
Quarter Ended


20
Total Deposits ($000)
(1) (2)
$1,126,284
$1,063,034
$1,008,252
$525,470
$359,051
$195,712
$37,542
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
9/30/2009
6/30/2009
3/31/2009
2008
2007
2006
2005
Quarter Ended
Year Ended
Acquisitive Deposit Growth
DEPOSIT GROWTH
(1)
All
financial
information
for
periods
prior
to
March
31,
2009
represents
historical
financials
for
Graystone
Financial
Corp.,
as
the
accounting
acquirer in the reverse merger
(2)
2005
financial
data
reflects
the
period
from
September
2,
2005
(inception
date)
to
December
31,
2005


21
DEPOSIT PORTFOLIO


22
Capital Structure
(1) All financial information for periods prior to March 31, 2009
represents historical financials for Graystone
Financial Corp., as
the accounting acquirer in the reverse merger
Regulatory Requirement Levels: Well Capitalized
(2) Tangible Common Equity is total equity less intangible assets and
goodwill. Tangible assets are calculated as total assets less goodwill
and other intangible assets.


23
NET INCOME
(1)
All
financial
information
for
periods
prior
to
March
31,
2009
represents
historical
financials
for
Graystone
Financial
Corp.,
as
the
accounting
acquirer in the reverse merger
(2)
2005
financial
data
reflects
the
period
from
September
2,
2005
(inception
date)
to
December
31,
2005
* Merger Quarter


24
NET INTEREST INCOME
(1)
All
financial
information
for
periods
prior
to
March
31,
2009
represents
historical
financials
for
Graystone
Financial
Corp.,
as
the
accounting
acquirer in the reverse merger
(2)
2005
financial
data
reflects
the
period
from
September
2,
2005
(inception
date)
to
December
31,
2005


25
NET INTEREST MARGIN
(1)
All
financial
information
for
periods
prior
to
March
31,
2009
represents
historical
financials
for
Graystone
Financial
Corp.,
as
the
accounting
acquirer in the reverse merger
(2)
2005
financial
data
reflects
the
period
from
September
2,
2005
(inception
date)
to
December
31,
2005


26
NONINTEREST INCOME AND EXPENSE
(1)
All
financial
information
for
periods
prior
to
March
31,
2009
represents
historical
financials
for
Graystone
Financial
Corp.,
as
the
accounting
acquirer in the reverse merger
(2)
2005
financial
data
reflects
the
period
from
September
2,
2005
(inception
date)
to
December
31,
2005
*System Conversion


27
EFFICIENCY RATIO
(1)
All
financial
information
for
periods
prior
to
March
31,
2009
represents
historical
financials
for
Graystone
Financial
Corp.,
as
the
accounting
acquirer in the reverse merger
(2)
2005
financial
data
reflects
the
period
from
September
2,
2005
(inception
date)
to
December
31,
2005
(3)
Efficiency
ratio
is
calculated
as
total
non-interest
expense
(less
merger-related
expenses
and
FDIC
special
assessments)
divided
by
the
total
of net interest income and non-interest income.


28
INVESTMENT MERITS
Deep and broad management team with extensive in-market experience
Successful and proven growth strategy
Diversified
credit
portfolio
with
a
conservative
focus
on
credit
quality
Strong credit quality ratios
Attractive near-team growth opportunities for deployment of capital
Significant franchise value
Attractive dividend yield


29
29
QUESTIONS
Thank you!