EX-99.2 3 tm1921678d1_ex99-2.htm EXHIBIT 99.2

 

Exhibit 99.2

 

November 4, 2019 Continued Expansion into Colorado Grand Mountain Bancshares, Inc. Holding Company for

 

 

2 Forward Looking Statements When used in this presentation and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public shareholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases "may," "believe," "will," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "plans," "potential," or similar expressions are intended to identify "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 . You are cautioned not to place undue reliance on any forward - looking statement, which speak only as of the date made . These statements may relate to future financial performance, strategic plans or objectives, revenues or earnings projections, or other financial information . By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements . Statements about the expected timing, completion and effects of the proposed merger and all other statements in this presentation other than historical facts constitute forward - looking statements . Important factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following : expected revenues, cost savings, synergies and other benefits from the proposed merger of BayCom Corp (“BayCom” or “BCML”) and Grand Mountain Bancshares, Inc . (“GMB”) and BayCom’s recent acquisitions of TIG Bancorp and Uniti Financial Corporation might not be realized within the expected time frames or at all and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected ; the requisite shareholder and regulatory approvals and other closing conditions for the proposed merger may be delayed or may not be obtained or the merger agreement may be terminated ; business disruption may occur following or in connection with the proposed merger ; BayCom’s or GMB's businesses may experience disruptions due to transaction - related uncertainty or other factors making it more difficult to maintain relationships with employees, customers, other business partners or governmental entities ; the possibility that the proposed merger is more expensive to complete than anticipated, including as a result of unexpected factors or events ; the diversion of managements' attention from ongoing business operations and opportunities as a result of the proposed merger or otherwise ; and future acquisitions by the Company of other depository institutions or lines of business . Additional factors which could affect the forward - looking statements can be found in the cautionary language included under the headings “Risk Factors” and “Cautionary Note Regarding Forward - Looking Statements” in BayCom’s Annual Report Form 10 - K filed with the SEC for the year ended December 31 , 2018 and other documents subsequently filed by BayCom with the SEC . Consequently, no forward - looking statement can be guaranteed . Neither BayCom nor GMB undertakes any obligation to update or revise any forward - looking statements, whether as a result of new information, future events or otherwise . Annualized , pro forma, projected and estimated numbers are used for illustrative purposes only, are not forecasts and may not reflect actual results .

 

 

3 Transaction Rationale Strategically Compelling Financially Attractive Low Risk □ Comprehensive due diligence process completed □ BCML has a successful track record completing and integrating mergers and acquisitions, including most recently, Uniti Financial Corporation and TIG Bancorp □ Attractive addition to Colorado market following the completion of TIG Bancorp acquisition □ Grand Mountain Bank is the market leading community bank in Grand County, CO with 26.4% deposit market share □ Desirable, low cost, core deposit base - $117M at a cost of 39 bps for 3Q 2019 with 24.2% in non - interest bearing accounts □ Complimentary business mix with healthy loan yields – 5.10% for 3Q 2019 □ Immediate and meaningful accretion to earnings – 6%, excluding merger costs, in 2020 and 7.4% in 2021 □ Low tangible book value dilution; earn back approximately 2.7 years □ Pricing multiples compare favorably with other recent transactions □ Robust internal rate of return – greater than 25% □ Accretive to BCML’s low costs deposit base

 

 

4 □ Balance Sheet: ▪ Assets: $ 130.6 million ▪ Loans: $85.6 million ▪ Deposits: $117.4 million □ Capital Ratios: ▪ TE/TA: 8.42% ▪ Leverage Ratio - Bank: 8.99% ▪ Total Capital Ratio - Bank: 17.09% □ Asset Quality: ▪ NPAs/Assets (ex. TDRs): 0.25% ▪ Reserves/Loans: 1.36% □ Profitability - Bank: ▪ ROAA: 0.60% ▪ ROAE: 6.18% ▪ Net interest margin: 3.95% 1) Financial data for last twelve months ended September 30, 2019 Source: S&P Global Market Intelligence Corporate Overview – Grand Mountain Bancshares, Inc. Overview Branch Map Financial Highlights 1 Grand Mountain Bancshares, Inc . is the holding company for Grand Mountain Bank, FSB – a community bank committed to providing quality, personal service to individuals and businesses in its community . Grand Mountain Bank, FSB has four convenient full service locations across Grand County, Colorado and a loan production office in Summit County, Colorado . Branch Locations LPO Locations

 

 

5 Transaction Terms Aggregate Deal Value 1 Termination Fee Anticipated Closing □ Q1 2020 □ $13.9 million □ Price/LTM EPS: 23.3x □ Price/2019 Est. EPS : 23.8x Purchase Price Consideration Mix P/TBV Required Approvals □ $3.40 per share □ 100% Cash □ $500 thousand □ Customary regulatory approvals and GMB shareholder approval 1) Based on 4,084,186 common shares of GMB outstanding P/E □ 126.2%

 

 

6 Key Transaction Assumptions Estimated Cost Savings Capital Contingency: □ 3 5 % □ None modeled Purchase Accounting Marks Core Deposit Intangible Revenue Synergies: □ $1.2 million loan mark, approximately 1.4% □ $1.5 million, 1.50% on non - maturity deposits □ None

 

 

7 Pro Forma Loan Portfolio 1 ) Includes combination with First State Bank of Colorado, which was acquired on October 21, 2019 Bank level regulatory data shown; does not include purchase accounting adjustments; as of September 30, 2019 Source : Regulatory call reports, S&P Global Market Intelligence United Business Bank¹ Grand Mountain Bank, FSB Pro Forma Composition Composition Composition Loan Type ($000) % of Total Loan Type ($000) % of Total Loan Type ($000) % of Total Constr & Dev 47,869 3.5% Constr & Dev 8,622 10.1% Constr & Dev 56,491 3.9% 1-4 Family Residential 146,322 10.6% 1-4 Family Residential 44,497 52.0% 1-4 Family Residential 190,819 13.0% Home Equity 22,393 1.6% Home Equity 1,927 2.3% Home Equity 24,320 1.7% Owner - Occ CRE 378,527 27.5% Owner - Occ CRE 14,115 16.5% Owner - Occ CRE 392,642 26.8% Other CRE 445,366 32.3% Other CRE 7,287 8.5% Other CRE 452,653 31.0% Multifamily 126,452 9.2% Multifamily - 0.0% Multifamily 126,452 8.6% Commercial & Industrial 160,477 11.7% Commercial & Industrial 4,849 5.7% Commercial & Industrial 165,326 11.3% Consr & Other 49,379 3.6% Consr & Other 4,302 5.0% Consr & Other 53,681 3.7% Total Loans $1,376,785 100.0% Total Loans $85,599 100.0% Total Loans $1,462,384 100.0% MRQ Yield on Loans: 5.90% MRQ Yield on Loans: 5.10% MRQ Yield on Loans: 5.85% C&D 3.5% 1 - 4 Fam 10.6% HELOC 1.6% OwnOcc CRE 27.5% Other CRE 32.3% Multifam 9.2% C&I 11.7% Consr & Other 3.6% C&D 10.1% 1 - 4 Fam 52.0% HELOC 2.3% OwnOcc CRE 16.5% Other CRE 8.5% C&I 5.7% Consr & Other 5.0% C&D 3.9% 1 - 4 Fam 13.0% HELOC 1.7% OwnOcc CRE 26.8% Other CRE 31.0% Multifam 8.6% C&I 11.3% Consr & Other 3.7%

 

 

8 Pro Forma Deposit Composition United Business Bank¹ Grand Mountain Bank, FSB Pro Forma 1 ) Includes combination with First State Bank of Colorado, which was acquired on October 21, 2019 Bank level regulatory data shown; does not include purchase accounting adjustments; as of September 30, 2019 Source : Regulatory call reports, S&P Global Market Intelligence Composition Composition Composition Deposit Type ($000) % of Total Deposit Type ($000) % of Total Deposit Type ($000) % of Total Non Interest Bearing 603,166 35.3% Non Interest Bearing 28,611 24.2% Non Interest Bearing 631,777 34.6% NOW & Other Trans 231,860 13.6% NOW & Other Trans 43,608 36.9% NOW & Other Trans 275,468 15.1% MMDA & Sav 523,235 30.7% MMDA & Sav 36,417 30.8% MMDA & Sav 559,652 30.7% Time Deposits < $100k 58,177 3.4% Time Deposits < $100k 5,399 4.6% Time Deposits < $100k 63,576 3.5% Time Deposits > $100k 290,654 17.0% Time Deposits > $100k 4,037 3.4% Time Deposits > $100k 294,691 16.1% Total Deposits $1,707,092 100.0% Total Deposits $118,072 100.0% Total Deposits $1,825,164 100.0% MRQ Cost of Deposits: 0.46% MRQ Cost of Deposits: 0.39% MRQ Cost of Deposits: 0.46% Loans / Deposits: 80.65% Loans / Deposits: 72.50% Loans / Deposits: 80.12% Non Int. Bearing 35.3% NOW Accts 13.6% MMDA & Sav 30.7% Time Deposits < $100k 3.4% Time Deposits > $100k 17.0% Non Int. Bearing 24.2% NOW Accts 36.9% MMDA & Sav 30.8% Time Deposits < $100k 4.6% Time Deposits > $100k 3.4% Non Int. Bearing 34.6% NOW Accts 15.1% MMDA & Sav 30.7% Time Deposits < $100k 3.5% Time Deposits > $100k 16.1%

 

 

9 Grand Mountain Bank, FSB Financial Overview Source : S&P Global Market Intelligence In $000s except for per share data 12/31/16 12/31/17 12/31/18 12/31/18 3/31/19 6/30/19 9/30/19 Balance Sheet Total Assets $100,948 $109,083 $113,938 $113,938 $117,878 $122,258 $130,591 Total Loans $61,338 $66,120 $76,715 $76,715 $80,786 $85,060 $85,599 Total Deposits $92,816 $93,524 $100,449 $100,449 $105,896 $110,028 $118,073 Loans/Deposits 66.09% 70.70% 76.37% 76.37% 76.29% 77.31% 72.50% Capital Common Equity $7,861 $10,223 $11,427 $11,427 $11,698 $11,930 $12,182 Tangible Equity $7,861 $10,223 $11,427 $11,427 $11,698 $11,930 $12,182 Total Equity/Assets 7.79% 9.37% 10.03% 10.03% 9.92% 9.76% 9.33% Tang. Common Equity/ Tang. Assets 7.79% 9.37% 10.03% 10.03% 9.92% 9.76% 9.33% Risked Based Capital 16.73% 19.66% 18.21% 18.21% 17.32% 17.08% 17.09% Tier 1 Capital 15.48% 18.40% 16.95% 16.95% 16.07% 15.82% 15.84% Leverage Ratio 7.92% 9.56% 9.33% 9.33% 9.55% 9.40% 8.99% Profitability Measures Net Interest Margin 3.80% 3.63% 3.77% 3.80% 4.01% 3.99% 3.98% Non Interest Income/Avg. Assets 0.48% 0.48% 0.39% 0.40% 0.35% 0.49% 0.52% Non Interest Expense/Avg. Assets 3.89% 3.42% 3.42% 3.44% 3.45% 3.41% 3.27% Efficiency Ratio 98.23% 87.97% 85.84% 84.69% 83.64% 79.75% 76.45% ROAA 0.72% 0.91% 1.32% 0.45% 0.51% 0.68% 0.76% ROAE 9.31% 10.73% 13.43% 4.60% 5.05% 6.84% 8.10% Net Income $701 $945 $1,468 $131 $146 $202 $244 Asset Quality NPAs/Assets 1.42% 0.84% 0.69% 0.69% 0.49% 0.47% 0.43% NPAs (excl TDRs)/Assets 0.75% 0.48% 0.47% 0.47% 0.28% 0.27% 0.25% NCOs/Avg Loans -0.61% -0.15% -0.12% -0.04% -0.04% -0.04% -0.06% Reserves/Loans 1.55% 1.58% 1.48% 1.48% 1.41% 1.35% 1.36% Reserves/NPAs 66.27% 113.26% 144.76% 144.76% 198.09% 201.23% 205.67% For the Twelve Months Ended Quarters Ended