Bank Directors Seminar, Coeur d'Alene, ID

Stock vs. Cash Consideration in M&A

ƒ Over 70%+ of M&A deals in the few years include stock as a form of consideration

M&A Consideration Mix – Since 1990

100%

9.4%

10.5%

90%

11.4%

12.1%

13.0%

14.9%

15.3%

16.7%

16.7%

17.1%

17.6%

17.9%

18.4%

22.6%

23.5%

25.0%

26.4%

26.8%

27.5%

80%

34.8%

39.3%

21.5%

16.1%

46.4%

46.6%

47.1%

48.5%

49.5%

70%

33.1%

54.0%

5.5%

34.2%

2.4%

11.8%

35.0%

9.6%

35.8%

62.3%

32.5%

30.1%

34.5%

67.9%

33.2%

60%

42.9%

41.4%

42.5%

1.4%

39.0%

50%

2.2%

41.5%

3.7%

0.9%

5.8%

3.4%

1.7%

40%

42.1%

2.7%

70.1%

69.5%

30%

68.9%

67.1%

64.7%

1.0%

64.0%

59.3%

57.5%

55.3%

52.8%

52.0%

51.2%

50.8%

50.7%

50.6%

49.7%

20%

48.8%

48.5%

47.8%

47.1%

44.4%

41.8%

41.4%

39.9%

38.4%

35.0%

31.7%

31.1%

10%

23.2%

0%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Cash

Mix

Stock

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Source: S&P Global Market Intelligence,market data as of 6/30/2018 Note: Excludes deals with no information on consideration mix

Nationwide M&A by Asset Size

ƒ Substantial valuation premium for larger bank M&A, although majority of deal activity is from banks with assets less than $250.0 million

Number of Deals – by Asset Size

100 150 200 250 300

0% 10% 20% 30% 40% 50% 60% 70%

254

58%

86

20%

42

25

27

0 50

6%

10%

4

6%

1%

Above $10.0B

$2.0B - $10.0B

$1.0B - $2.0B $500MM - $1.0B

$250MM - $500MM

Below $250MM

# of Deals % of Deals

Price / Tangible Book Value – by Asset Size

Price / LTM Earnings – by Asset Size

100.0% 120.0% 140.0% 160.0% 180.0% 200.0% 220.0% 240.0%

20.0x 21.0x 22.0x 23.0x 24.0x 25.0x 26.0x 27.0x 28.0x

216.7% 226.5%

209.5%

25.2x

24.9x 24.6x

186.2%

24.5x

165.6%

23.3x

138.5%

22.4x

Above $10.0B

$2.0B - $10.0B

$1.0B - $2.0B

$500MM - $1.0B

$250MM - $500MM

Below $250MM

Above $10.0B

$2.0B - $10.0B

$1.0B - $2.0B

$500MM - $1.0B

$250MM - $500MM

Below $250MM

Source: S&P Global Market Intelligence,as of 8/31/2018 Note: Average data; all dollars in thousands Note: Announced M&A transactions since the beginning of 2017 Note: Data sorted by total asset size of acquired banks

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