Attached files
| file | filename |
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| 8-K - 8-K - FIRST CAPITAL BANCORP, INC. | d66221d8k.htm |
| EX-2.1 - EX-2.1 - FIRST CAPITAL BANCORP, INC. | d66221dex21.htm |
| EX-99.2 - EX-99.2 - FIRST CAPITAL BANCORP, INC. | d66221dex992.htm |
  Expanding in Richmond
Merger of First Capital Bancorp, Inc.
and Park Sterling Corporation
October 1, 2015 Exhibit 99.1 |
 Forward Looking Statements
2 This presentation contains, and Park Sterling and First Capital Bancorp, Inc. (“First Capital”) and their respective management
may make, certain statements that constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts and often use words such as “may,” “plan,” “contemplate,”
“anticipate,” “believe,” “intend,” “continue,” expect,” “project,” “predict,” “estimate,” “could,” “should,” “would,” “will,” “goal,”
“target” and similar expressions. These forward-looking statements express management's current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties and there are a number of factors
that could cause actual results to differ materially from those
in such statements. Factors that might cause such a difference include, but are not limited to: the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement with First Capital; the risk that a closing condition to
the merger may not be satisfied; synergies and other financial
benefits from the proposed merger may not be realized within the expected time frames; costs or difficulties related to closing and/or integration matters might be greater than expected; inability to obtain governmental approvals of the combination on the proposed terms
and schedule; failure of First Capital’s shareholders to
approve the merger; fluctuation in the trading price of Park Sterling’s stock prior to the closing of the proposed merger, which would affect the total value of the proposed merger transaction; failure of Park Sterling to raise the necessary funds to satisfy the cash component of the
merger consideration; changes in loan mix deposit mix, capital and
liquidity levels, emerging regulatory expectations and measures, net interest income, noninterest income, noninterest expense, credit trends and conditions, including loan losses, allowance for loan loss, charge-offs, delinquency trends and nonperforming asset levels,
deterioration in the value of collateral securing loans,
deterioration in the value of securities held for investment, the impacts of a potential increasing rate environment, and other similar matters with respect to Park Sterling or First Capital; inability to identify and successfully negotiate and complete additional combinations with other potential
merger partners or to successfully integrate such businesses into
Park Sterling, including the company’s ability to adequately estimate or to realize the benefits and cost savings from and limit any unexpected liabilities acquired as a result of any such business combinations; failure to generate an adequate return on investment related to new branches or
other hiring initiatives; inability to generate future organic
growth in loan balances, retail banking, wealth management, mortgage banking or capital markets results through the hiring of new personnel, development of new products, including new online and mobile banking platforms for treasury services, opening of de novo branches or otherwise; inability to capitalize on identified revenue enhancements or expense management opportunities, including the inability to achieve targeted adjusted noninterest
expense to adjusted operating revenue targets; inability to
generate future ATM and card income from marketing expenses; variability in the performance of covered loans and associated loss-share related expenses; the effects of negative or soft economic conditions, including stress in the commercial real estate markets or failure
of continued recovery in the residential real estate markets;
changes in consumer and investor confidence and the related impact on financial markets and institutions; changes in interest rates; the possibility of recognizing other than temporary impairments on holdings of collateralized loan obligation securities as a result of the Volcker Rule;
the potential impacts of any government shutdown or debt ceiling
impasse, including the risk of a U.S. credit rating downgrade or default, or continued global economic instability, which could cause disruptions in the financial markets, impact interest rates, and cause other potential unforeseen consequences; fluctuations in the market price of the
common stock, regulatory, legal and contractual requirements of
Park Sterling or First Capital, other uses of capital, either company’s financial performance, market conditions generally, and future actions by their respective boards of directors, in each case impacting repurchases of common stock or declaration of dividends; legal and
regulatory developments, including changes in the federal
risk-based capital rules; increased competition from both banks and nonbanks; changes in accounting standards, rules and interpretations, inaccurate estimates or assumptions in accounting, including acquisition accounting fair market value assumptions and accounting for purchased
credit-impaired loans, and the impact on Park Sterling’s
or First Capital’s financial statements; and either management’s ability to effectively manage credit risk, market risk, operational risk, legal risk, and regulatory and compliance risk. You should not place undue reliance on any forward-looking statement and should consider all of the following uncertainties and
risks, as well as those more fully discussed in any of Park
Sterling’s or First Capital’s filings with the SEC. Forward-looking statements speak only as of the date they are made, and Park Sterling and First Capital undertake no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the
date the forward-looking statement was made.
|
 Additional Information
3 ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
In connection with the proposed merger, Park Sterling will file with the Securities and Exchange Commission a Registration Statement on
Form S-4 that will include a proxy statement of First Capital
that also constitutes a prospectus of Park Sterling, as well as other relevant documents concerning the proposed merger. INVESTORS ARE STRONGLY URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER WHEN THEY
BECOME AVAILABLE AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC,
AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED MERGER. A free copy of the proxy statement/prospectus, as well as other
filings PARTICIPANTS IN SOLICITATION
Park Sterling and First Capital and their respective directors and executive officers may be deemed to be participants in the
solicitation of proxies in connection with the proposed merger.
Information about the directors and executive officers of Park Sterling and First Capital and other persons who may be deemed participants in this solicitation will be included in the proxy statement/prospectus. Information about Park Sterling’s executive officers and
directors can be found in Park Sterling’s definitive proxy
statement in connection with its 2015 Annual Meeting of Shareholders filed with the SEC on April 13, 2015. Information about First Capital’s executive officers and directors can be found in First Capital’s definitive proxy statement in connection with its 2015 Annual Meeting of
Shareholders filed with the SEC on April 15, 2015. Free
copies of these documents can be obtained from the sources indicated above. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any
offer, solicitation or sale of securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as
amended. containing information about Park Sterling and First Capital, may be obtained after their filing at the SEC's Internet site (http://www.sec.gov). In addition, free copies of documents filed with the SEC may be obtained on the respective websites of Park Sterling and First Capital at www.parksterlingbank.com and www.1capitalbank.com.
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 4 Attractive Strategically Attractive Strategically Attractive Financially Attractive Financially Partnership generates attractive returns and a compelling growth opportunity
Immediate earnings accretion, with expected double-digit earnings
accretion when fully integrated Accelerated loan growth driven by
additional bankers and larger balance sheet Revenue synergies
achieved by cross-selling customer base (not included in base case) Productive deployment of excess capital Attractive Risk Profile Attractive Risk Profile Transaction presents attractive risk profile and strong cultural fit Thorough due diligence conducted by experienced internal team Deep local and executive knowledge of Richmond market and familiarity with customers
Strong management with proven integration experience
Maintains strong balance sheet and attractive asset quality
Summary of Merger Benefits
Compelling Partnership:
Meaningful addition to already strong regional community bank in the Carolinas
and Virginia Strengthens position in attractive Richmond,
Virginia market Adds exceptional bankers and branch
network Leverages complementary product capabilities
Improves demographic profile
|
 Anticipated Closing:
Management and
Employees:
Local Advisory Board:
Board Representation:
First Quarter 2016
Conditions and Approvals:
Establish Richmond Advisory Board composed of existing non-employee First
Capital directors (and potentially other market leaders) to
support integration, business development and community engagement
5 Transaction Overview Compelling Partnership: Approximately $10.5 – 11.5 million (pre-tax) aggregate for both companies Park Sterling to appoint two independent, Richmond-based First Capital directors to join Park Sterling’s Board,
to include Grant Grayson, current chairman of First Capital
Retain all commercial bankers and most, if not all, customer-facing
personnel from both companies 1 –
Merger intended to be treated as a reorganization within meaning of Section
368(a) of the Internal Revenue Code except for any cash consideration received in the transaction. 2 – Actual Park Sterling closing stock price of $6.80 on September 30, 2015 utilized to calculate consideration amount.
3 – Warrants entitle the holder to purchase one-half of a share of common stock for $2.00 per whole share, or the equivalent of 3,833,643 whole shares. Actual Park Sterling closing stock price of $6.80 on September 30, 2015 utilized to calculate consideration amount. 4 – Total consideration includes value of 143,800 equity option awards with a weighted average exercise price of $4.02 per share.
Common Shareholders 2 $69.1 million - 12,923,392 shares - 70% stock (0.7748 PSTB shares for each FCVA share) - 30% cash ($5.54 per share) Customary closing conditions Requires First Capital shareholder approval Requires regulatory approvals Merger Consideration: 1 Warrant Holders 3 $13.1 million - 7,667,286 warrants - 70% stock (0.24755 PSTB shares per warrant) - 30% cash ($1.77 per warrant; $2.77 per warrant less $1.00 effective exercise price) Total Consideration 4 $82.5 million - 151% of diluted TBV - 17.3x twelve-month EPS Merger-Related Expenses: Advance vision of building a regional community bank in the Carolinas and Virginia
- Enhance Richmond franchise by combining branch networks and banking teams
- Deliver immediate earnings accretion, with expected double-digit earnings accretion when fully integrated
- Realize revenue synergies from leveraging broader product capabilities and larger balance sheet
Objectives: |
  6 Financial Highlights and Combined Footprint Compelling Partnership: Enhances Attractive Metro Market Franchise Enhances Attractive Metro Market Franchise Financial Highlights Financial Highlights Wilmington Charleston Richmond Raleigh Charlotte Rock Hill Greenwood Greenville GA SC NC VA Greensboro PSTB Branch (52) FCVA Branch (8) Park Sterling Corporation (NASDAQ: PSTB) First Capital Bancorp, Inc. (NASDAQ: FCVA) Headquarters Charlotte, NC Glen Allen, VA Year Subsidiary Bank Established 2006 1998 Market Price $6.80 $4.78 Market Capitalization $305.4 $61.8 Book Value Per Share $6.37 $4.01 Price/ Book Value Per Share 107% 119% Tangible Book Value Per Share (Diluted) $5.47 $3.56 Price/ Tangible Book Value (Diluted) 124% 134% Annualized Dividend Yield 1.76% 0.84% Total Number of Offices 52 8 States of Operation SC(27), NC(18), GA(5), VA(2) VA(8) Total Assets $2,443.9 $616.9 Total Deposits $1,874.9 $505.4 Total Loans (incl'd LHFS) $1,668.2 $500.7 Loans/ Deposits 89.0% 99.1% ROAA, annualized 0.71% 0.74% ROAE, annualized 6.10% 8.81% TCE / Tangible Assets 9.99% 8.40% Common Equity Tier 1 Ratio 13.30% 11.13% NPLs/ Loans 0.52% 0.58% NPAs/ Assets 0.75% 0.62% Net Interest Margin 3.78% 3.59% Full-time Equivalent Employees 503 95 Sources: SNL, Bloomberg and company information ($ in millions, except per share amounts). Financial data as of June 30,
2015. Market data as of September 30, 2015. |
 7 Park Sterling’s vision has focused on “Virginia and the Carolinas” since the Bank’s IPO in August 2010
Well known to company’s management team (see Appendix)
Well known to company’s board of directors (see Appendix)
Greater Richmond is an important market to the successful execution of Park
Sterling’s strategy Offers attractive balance between
economic stability and demographic growth Strong existing
commercial banking presence Base location for company’s
Wealth Management line of business Base location for
company’s Mortgage Banking line of business Two de novo branch locations
Partnership with First Capital provides critical catalyst to accelerate
Virginia ambitions Enhances local awareness of existing lines of
business -
Expands branch network
- Adds experienced bankers - Adds local leadership Combined company positioned as a strong market competitor Accelerates Important Virginia Strategy Compelling Partnership: |
 8 Exceptional consumer banking opportunity Attractive, well-located branch network Refreshed ATM fleet Experienced customer-facing employees Ability to leverage Park Sterling’s wealth management, mortgage banking and mobile product capabilities Exceptional business banking opportunity Attractive, well-located branch network Experienced lending team Ability to leverage Park Sterling’s specialty lending, treasury services and electronic banking capabilities Exceptional commercial banking opportunity Experienced lending team Gain local expertise in Builder Finance Ability to leverage Park Sterling’s capital markets, asset-based lending, treasury services and electronic banking capabilities, as well as larger balance sheet Establishing Richmond Advisory Board to support integration, business development and community leadership Strengthens Position in Attractive Richmond Market Compelling Partnership: PSTB Branch (2) FCVA Branch (8) • Park Sterling’s Virginia regional headquarters • 10 branches (pro forma) • 12 commercial bankers (pro forma) • MSA population 1.26 million • Projected 5-year growth 4.64% • State capital, headquarters of Fifth Federal Reserve District, home to ten Fortune 500 companies Sources: SNL and company information. |
 9 Ability to leverage complementary product capabilities Extends customer base to address all segments Increases number of customers in existing segments Improves distribution network Increases number of experienced bankers Ability to leverage complementary delivery capabilities Electronic banking Mobile banking Leverages Complementary Capabilities Compelling Partnership: |
    10 Improves Already Strong Market Demographics Compelling Partnership: Sources: SNL and company information. Deposit data as of June 30, 2015.
Combined Company Demographic Profile
Combined Company Demographic Profile
Combined company will have approximately 87% of its deposits in markets with
projected population growth above the national
average Presence in six of the top ten MSAs across the combined
North Carolina, South Carolina and Virginia markets Top 10 MSAs in
NC-SC-VA Top 10 MSAs in NC-SC-VA
Metropolitan Statistical Area (MSA) 2015 Population 2015-2020 Projected Change 1 Washington, D.C. 6,066,097 6.30 2 Charlotte, NC 2,380,045 6.59 3 Virginia Beach, VA 1,729,758 3.83 4 Richmond, VA 1,260,476 4.97 5 Raleigh, NC 1,242,956 8.07 6 Greenville, SC 863,792 5.04 7 Columbia, SC 806,579 5.31 8 Greensboro, NC 748,849 4.11 9 Charleston, SC 734,390 8.40 10 Winston-Salem, NC 655,390 3.30 Higher Growth Markets # Branches Company Deposits ($000) Percent of Franchise (%) 2015 (Actual) Projected Change 2015-2020 (%) Median 2015 ($) Projected Change 2015-2020 (%) Charlotte-Concord-Gastonia, NC-SC 19 895,085 37.5 2,380,045 6.59 52,846 7.44 Richmond, VA 10 510,246 21.4 1,260,476 4.64 59,762 4.97 Greenville-Anderson-Mauldin, SC 11 201,701 8.5 863,792 5.04 44,405 4.81 Towns, Georgia 2 134,431 5.6 11,014 6.00 37,289 5.73 Spartanburg, SC 4 116,659 4.9 321,880 3.71 41,246 1.98 Wilmington, NC 1 74,650 3.1 274,427 6.84 50,809 6.87 Columbia, SC 2 66,991 2.8 806,579 5.31 49,380 6.05 Gilmer, Georgia 1 42,238 1.8 28,880 3.57 39,219 4.44 Raleigh, NC 1 14,376 0.6 1,242,956 8.07 62,586 4.70 Charleston-North Charleston, SC 1 12,890 0.5 734,390 8.40 51,413 5.92 Higher Growth Sub-total 52 2,069,267 86.7 7,924,439 5.68 51,636 6.02 Lower Growth Markets Greenwood, SC 6 186,707 7.8 94,538 1.11 35,592 2.00 Newberry, SC 2 71,580 3.0 37,495 1.45 42,620 1.72 Union, Georgia 1 35,678 1.5 21,717 2.99 42,777 4.91 Fannin, Georgia 1 23,321 1.0 23,982 3.11 37,051 6.28 Lower Growth Sub-total 10 317,286 13.3 177,732 1.57 38,121 2.63 Total PSTB 62 2,386,553 100.0 8,102,171 5.12 49,795 5.55 Aggregate: National 319,459,991 3.52 53,706 6.68 Population Household Income |
   11 Well Positioned in Two Attractive Markets Compelling Partnership: Sources: SNL and company information. Deposit data as of June 30, 2015. * Pro Forma includes $50.0 million in deposits from Park Sterling’s Patterson Avenue Branch which opened July 1, 2015.
Charlotte-Concord-Gastonia, NC-SC
Charlotte-Concord-Gastonia, NC-SC
Top 10 market share in each of Charlotte-Concord-Gastonia MSA and
Richmond MSA Remain largest community bank in
Charlotte-Concord-Gastonia MSA Move to fourth largest
community bank in Richmond MSA Richmond, VA
Richmond, VA Rank Institution (ST) 2015 Number of Branches 2015 Total Deposits in Market ($000) 2015 Total Market Share (%) 1 Bank of America (NC) 61 159,393,784 73.72 2 Wells Fargo & Co. (CA) 91 37,008,238 17.12 3 BB&T Corp. (NC) 72 5,808,465 2.69 4 Fifth Third Bancorp (OH) 39 2,232,581 1.03 5 First Citizens BancShares Inc. (NC) 46 2,113,028 0.98 6 SunTrust Banks, Inc. (GA) 38 1,387,980 0.64 7 Park Sterling Corporation (NC) 19 895,085 0.41 8 Yadkin Financial Corporation (NC) 18 760,950 0.35 9 PNC Financial Services Group, Inc. (PA) 15 560,567 0.26 10 CommunityOne Bancorp (NC) 14 550,471 0.25 Rank Institution (ST) 2015 Number of Branches 2015 Total Deposits in Market ($000) 2015 Total Market Share (%) 1 Capital One Financial Corp (VA) 1 56,161,636 61.02 2 Bank of America (NC) 24 14,637,236 15.90 3 Wells Fargo & Co. (CA) 63 6,539,455 7.10 4 SunTrust Banks, Inc. (GA) 44 3,926,437 4.27 5 BB&T Corp. (NC) 43 3,344,823 3.63 6 Union Bankshares Corp (VA) 42 1,705,180 1.85 7 C&F Financial Corp. (VA) 17 753,600 0.82 8 TowneBank (VA) 8 655,163 0.71 PRO FORMA* 10 560,278 0.61 9 First Capital Bancshares, Inc. (VA) 8 507,178 0.55 10 Community Bankers Trust Corp (VA) 9 507,088 0.55 |
  12 Enhanced Operating Scale Pro Forma Company: First Capital First Capital Combined Combined Combined balance sheet improves scale for immediate profitability and preserves strength for continued growth
Total assets of $3.06 billion
Approximately
$661.5 million (22%) comprised of cash and investments Total deposits of $2.38 billion Comfortable 90.7% loan to deposit ratio Total equity of $331.6 million Park Sterling Park Sterling 84.3% 84.4% 78.8% 79.3% 79.8% 76.8% 86.5% 15.7% 15.6% 21.2% 20.7% 20.2% 23.2% 13.5% 0% 25% 50% 75% 100% Market Cap (%) Total equity Total deposits Demand deposits Total assets Loans (excld LHFS) Cash and Investments $362,088 $331,587 $2,380,362 $437,609 $3,060,732 $2,158,136 $661,478 0% 25% 50% 75% 100% Unaudited; $ in thousands; as of June 30, 2015. Does not include estimated acquisition accounting fair market value
adjustments. Combined market capitalization calculated using 44,910,447 outstanding Park Sterling common shares, plus 8,337,757 common shares issued to First Capital shareholders, multiplied by Park
Sterling’s closing stock price of $6.80 on September 30, 2015 |
 13 Delivers immediate earnings accretion through targeted cost savings Estimated 40% of expenses ($6.1 million of First Capital’s annualized 2015Q2 level) Enhances combined company’s operating efficiency Estimated 567 basis point improvement in Park Sterling’s annualized 2015Q2 level Opportunity for future revenue growth Build on already strong momentum with banking teams at both companies Expand fee income through effective cross- selling Leverage larger balance sheet with both new and existing customers Improved Earnings Profile Pro Forma Company: Increases Operating Scale Increases Operating Scale Improves Operating Efficiency Improves Operating Efficiency Sources: SNL and company information ($ in thousands). Financial data as of June 30, 2015. Combined balance sheet information
excludes preliminary estimated fair market value adjustments. * Operating revenues, operating expenses and related ratios annualized from actual 2015Q2 reported results. Combined
operating expenses calculated net of targeted 40% cost savings. |
 14 Unaudited; $ in thousands; as of June 30, 2015. Includes preliminary estimated acquisition accounting fair market value adjustments
utilizing Park Sterling’s closing stock price of $6.80 on
September 30, 2015 .
Strong Capital Position and Asset Quality
Pro Forma Company:
Tangible Common Equity to Tangible Assets - Consolidated Tangible Common Equity to Tangible Assets - Bank Nonperforming Loans to Total Loans - Consolidated Nonperforming Assets to Total Assets - Consolidated |
 15 Unaudited; $ in thousands Source: SNL Financial First Capital Loan Portfolio Trends And positioned the company to maximize loan growth within its annual capital plan Proactively addressed problem credits during downturn ... Which has led to greatly improved asset quality since 2010 … Positive Trends in First Capital Loan Portfolio Attractive Risk-Return Profile: Total Loans (including LHFS) 397,245 371,606 $ 432,317 $ 481,663 500,674 $ Period Growth (6,466) (25,639) 14,495 46,216 49,346 Annualized growth NPLs/ Total Loans NPAs/ Total Assets Net Chargeoffs/ Average Loans 2010 2011 2012 2013 2014 June 2015 YTD 386,101 $ $ $ 19,011 -1.6% -6.5% 3.9% 12.0% 11.4% 7.9% 4.75% 5.30% 2.58% 1.45% 1.73% 0.62% 0.92% 2.92% 2.97% -0.26% -0.01% -0.06% 5.75% 5.67% 2.65% 1.22% 1.77% 0.58% |
  16 Unaudited; $ in millions Thorough due diligence performed by Park Sterling personnel Experienced team with deep knowledge of Richmond market Familiarity with many of First Capital’s customers Reviewed over 400 files representing approximately 55% of total loan exposure Reviewed 92% of classified grades Reviewed all OREO Estimated credit mark approach consistent with prior partnerships Phase I (tape-based analysis): utilize internal loss rate, prior partner loss rate and SCAP-type loss rate estimations Phase II (file-based analysis): apply estimated risk grade migration and specific loss estimates; adjust tape-based loss estimates Due Diligence Approach Estimated Credit Mark by Segment Credit Due Diligence Attractive Risk-Return Profile: First Capital Loan Balances Preliminary Estimated Future Loss (%) Preliminary Estimated Future Loss ($) Commercial & Industrial 75.7 $
1.6% 1.2 $
CRE-OO
64.6 $
1.6% 1.1 $
CRE-NOO
143.4 $
1.7% 2.5 $
1-4 Family Rental
79.0 $
1.8% 1.4 $
A,C &D
104.4 $
2.3% 2.4 $
1-4 Fam Mortgage
7.3 $
0.7% 0.1 $
HELOC
20.8 $
1.8% 0.4 $
Other Consumer
1.9 $
2.8% 0.1 $
Total Preliminary Estimate
497.1 $
1.8% 9.0 $
|
 17 Select Preliminary Estimated Financial Adjustments Select Preliminary Estimated Financial Adjustments Select Preliminary Estimated Financial Benefits Select Preliminary Estimated Financial Benefits Achieves key internal criteria for merger transactions (with full targeted cost savings)
Fairly valued transaction at 17.3x LTM EPS and 151% of tangible book value*
Immediately accretive to earnings
Double-digit earnings accretion when fully integrated
Double-digit internal rate of return
Substantial opportunity for continued earnings acceleration
Available revenue synergies from cross-selling broader product
capabilities to new customers and leveraging loan growth through
larger balance sheet Preliminary estimated fair market value
adjustments Gross credit mark of approximately $9.0 million (or
3.44x nonaccrual loans) Reversal of $7.9 million allowance for
loan and lease losses CDI of approximately $2.7 million (or 1% of
transaction accounts) Goodwill of approximately $28
- 29 million*
Preliminary estimated earnings adjustments
Targeted cost savings of approximately 40% (60% in first full year; 100%
thereafter) Potential revenue synergies not included in base case
analysis Financial Expectations
Attractive Risk-Return Profile:
* Based on Park Sterling’s closing stock price of $6.80 on September 30,
2015. |
 18 Strategic considerations Shared vision and strategy Compatible cultures Ability to grow customer relationships Focus on leveraging best of both organizations Low integration risk Financial considerations Fair exchange of value for both shareholder groups Meaningful EPS accretion Strong IRR Achievable cost savings Conservative credit mark Maintain balance sheet strength for future growth Remain “well-capitalized” Maintain attractive asset quality Build franchise value Conclusions Summary: Local market focus, diversified business lines Leveraging proven regional/community banking model Enhanced balance sheet and product capabilities Leveraging key leadership and local market presence Good market knowledge, experienced internal staff, certainty of close Immediate value to First Capital’s shareholders, near- term and long-term value to both First Capital and Park Sterling shareholders Expected at closing given current balance sheets Clear enhancement for both companies |
 19 Q & A |
 20 Unaudited; $ in thousands; as of June 30, 2015. Does not include estimated acquisition accounting fair market value adjustments.
Combined Loan Portfolio
(including LHFS)
Appendix: First Capital First Capital Park Sterling Park Sterling Combined Combined Loan Type Amount % Loan Type Amount % Loan Type Amount % C&I 189,356 $ 11.4% C&I 71,535 $ 14.3% C&I 260,891 $ 12.1% Owner-Occupied 330,853 20.0% Owner-Occupied 63,986 12.8% Owner-Occupied 394,839 18.3% Commercial real estate 498,190 30.1% Commercial real estate 148,970 29.8% Commercial real estate 647,160 30.0% A,C&D 166,750 10.1% A,C&D - 1-4 family 64,018 12.8% A,C&D - 1-4 family 230,768 10.7% Other commercial 7,212 0.4% Other commercial 1,681 0.3% Other commercial 8,893 0.4% Total commercial 1,192,361 71.9% Total commercial 350,190 69.9% Total commercial 1,542,551 71.5% Resi mortgage 214,850 13.0% Residential mortgage 86,552 17.3% Residential mortgage 301,402 14.0% HELOC 156,960 9.5% HELOC 20,201 4.0% HELOC 177,161 8.2% Resi construction 62,973 3.8% Resi construction 41,897 8.4% Resi construction 104,870 4.9% Other loans 27,696 1.7% Other loans 2,025 0.4% Other loans 29,721 1.4% Total Consumer 462,479 27.9% Total Consumer 150,675 30.1% Total Consumer 613,154 28.4% Deferred costs (fees) 2,623 0.2% Deferred costs (fees) (192) 0.0% Deferred costs (fees) 2,431 0.1% Total loans 1,657,463 $ 100.0% Total loans 500,673 $ 100.0% Total loans 2,158,136 $ 100.0% |
 Deposit Type Amount % Deposit Type Amount % Deposit Type Amount % Non-interest bearing 347,162 $ 18.5% Non-interest bearing 90,447 $ 17.9% Non-interest bearing 437,609 $ 18.4% MMDA, NOW & Savings 926,448 49.4% MMDA, NOW & Savings 179,871 35.6% MMDA, NOW & Savings 1,106,319 46.5% Time <$250K 401,921 21.4% Time <$250K 111,855 22.1% Time <$250K 513,776 21.6% Time >$250K 63,067 3.4% Time >$250K 82,149 16.3% Time >$250K 145,216 6.1% Broker 136,343 7.3% Broker 41,099 8.1% Broker 177,442 7.5% Total deposits 1,874,941 $ 100.0% Total deposits 505,421 $ 100.0% Total deposits 2,380,362 $ 100.0% Core Deposits* 1,675,531 $ 89.4% Core Deposits* 382,173 $ 75.6% Core Deposits* 2,057,704 $ 86.4% * Core deposits exclude time deposits >$250K and brokered deposits.
21 Unaudited; $ in thousands; as of June 30, 2015. Does not include estimated acquisition accounting fair market value adjustments.
Combined Deposit Mix
Appendix: First Capital First Capital Park Sterling Park Sterling Combined Combined |
 22 James C. Cherry Chief Executive Officer Bryan F. Kennedy, III President David L. Gaines Chief Financial Officer Nancy J. Foster Chief Risk Officer Executive Officers Executive Officers Experienced Management with Strong Ties to Virginia Appendix: 40 years of banking experience including Chief Executive Officer of Mid-Atlantic Banking,
President of Virginia Banking, Head of Trust and Investment Management for Wachovia Bank. 34 years of banking experience including President North Carolina, Regions Bank and
Executive Vice President, Park Meridian Bank. Helped organize Park
Sterling in October 2006.
29 years of banking experience including Chief Risk Officer for Corporate and
Investment Banking, Senior VP and Comptroller, and
Co-Manager of integration office for Wachovia Corporation.
31 years of banking experience including Chief Risk Officer for
CIT Group and Chief Credit Officer of Community Banking Group at
LaSalle Bank. Current Chair of Risk Management Association
(RMA). B.A., Hampden-Sydney College
Executive Program, University of Virginia
(Virginia Native)
B.S. University of Virginia
M.B.A. University of North Carolina
B.A. University of Virginia
M.B.A. University of Virginia
(Virginia Native)
B.S. Illinois State University
M.B.A. University of Chicago |
 23 Non-Management Directors Non-Management Directors Leslie M. (Bud) Baker, Jr. Chairman Retired Chairman of Wachovia Corporation. Also served Wachovia as Chairman,
President, Chief Executive Officer, and Chief Credit Officer, as well as
President of the North Carolina Bank.
Walter C. Ayers
Director Retired President and Chief Executive Officer of the Virginia Bankers Association. Served as member of ABA’s Communication Counsel, Government Relations Counsel
and others. Larry W. Carroll Director President and Chief Executive Officer of Carroll Financial Associates, Inc, a registered
investment advisory firm. CPA background. Park Sterling organizer in
October 2006. Jean E. Davis
Director Retired Executive and Head of Operations, Information Technology and e-Commerce
at Wachovia Corporation. Also formerly Head of Human Resources, Head of
Retail Banking of Wachovia Corporation.
Thomas B. Henson
Director President of Henson-Tomlin Interests, LLC and Senior Managing Director of
Southeastern Private Investment Fund. Helped organize Park Sterling in
October 2006. M&A attorney by background.
Jeffrey S. Kane
Director Retired Senior Vice President in charge of Charlotte office of Federal Reserve Bank of
Richmond. Also served as head of Banking Supervision and
Regulation. Patricia C. Hartung
Director Executive Director of Upper Savannah Council of Governments. Founding member
and former Chair of Community Capital Corporation.
Kim S. Price Vice Chairman Former President and Chief Executive Officer of Citizens South Banking Corporation
and Citizens South Bank.
Ben R. Rudisill, II
Director President of Rudisill Enterprises, Inc.. Former Chairman of Citizens South Banking
Corporation and Citizens South Bank.
Experienced Directors with Strong Ties to Virginia
Appendix: B.S. University of Richmond M.B.A. University of Virginia (Virginia Native) B.S. William and Mary University (Virginia Native) B.S. Austin Peay M.B.A. University of Tennessee C.P.A., C.F.P. B.S. University of North Carolina M.B.A. Duke University B.A. Clemson University M.B.A. Clemson University B.S. Vanderbilt J.D. Washington and Lee University B.S., University of Virginia, Stonier Graduate School of Banking (Virginia Native) B.S. Appalachian State University L.S.U Graduate School of Banking B.S. Duke University M.B.A. Duke University Grant S. Grayson Director (Appointed) Partner in the law firm of LeClairRyan, A Professional Corporation. Current
Chairman of First Capital Bancorp, Inc. and First Capital Bank. B.A. Northwestern University J.D. University of Richmond TBD TBD TBD |