UNITED BANKSHARES, INC.
MERGER WITH
FED ONE BANCORP, INC.
This presentation contains certain forward looking statements with respect to
the financial condition, results of operations and business of United
Bankshares, Inc. and Fed One Bancorp, Inc. on a combined basis after the
proposed merger. These forward looking statements involve certain risks and
uncertainties. Factors that may cause actual results to differ materially from
those contemplated by such forward looking statements include, among others, the
following possibilities: (1) expected cost savings from the proposed merger
cannot be fully realized or realized within the expected time frame; (2) costs
or difficulties related to the integration of the businesses of United
Bankshares, Inc. and Fed One Bancorp, Inc. are greater than expected; (3)
revenues following the proposed merger are lower than expected: (4) competitive
pressure among depository institutions increases significantly ; (5) changes in
the interest rate environment reduce interest margins; (6) general economic
conditions, either nationally or in the states in which the combined company
will be doing business, are less favorable than expected; or (7) legislation or
regulatory changes adversely affect the businesses in which the combined company
would be engaged.
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PRESENTATION OVERVIEW:
|X| STRATEGIC IMPACT
|X| FRANCHISE OVERVIEW
|X| MARKET SHARE ANALYSIS
|X| FED ONE OVERVIEW
|X| COMBINED OPERATIONS
|X| TRANSACTION STRUCTURE
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STRATEGIC IMPACT
|X| INCREASES UNITED'S ASSETS TO OVER $4.0 BILLION
|X| REPRESENTS AN IN-MARKET TRANSACTION
|X| INCREASES UNITED'S MARKET SHARE IN NORTHERN WEST VIRGINIA
|X| REPRESENTS UNITED'S FIRST ENTRY INTO THE STATE OF OHIO
|X| ADDS TO SHAREHOLDER VALUE
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FRANCHISE OVERVIEW
[Map showing 12 offices of Fed One Bancorp in West Virginia
(9 offices) and Ohio (3 offices).]
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MARKET SHARE ANALYSIS
|X| COMBINATION OF FED ONE AND UNITED BANKSHARES RESULTS IN A 22% DEPOSIT
MARKET SHARE IN THE NORTHERN PANHANDLE AND A 14% DEPOSIT MARKET SHARE
IN THE MORGANTOWN MARKET.
|X| MERGING WITH FED ONE WILL GIVE UNITED BANKSHARES A FOOTHOLD IN
EASTERN OHIO.
|X| POST-MERGER, UNITED BANKSHARES WILL BE OVER $4 BILLION IN TOTAL
ASSETS.
|X| AS AN IN-MARKET TRANSACTION, 73% OF FED ONE'S BRANCHES AND 75% OF
FED ONE'S DEPOSITS ARE IN CURRENT UNITED MARKETS.
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FED ONE OVERVIEW:
|X| TOTAL ASSETS -- $367 MILLION
|X| 12 FULL SERVICE OFFICES -- 9 IN WEST VIRGINIA; 3 IN OHIO
|X| NPA'S/ASSETS = 0.36%
|X| RESERVES/NPA'S(%)= 111.94%
|X| RETURN ON AVERAGE ASSETS(%)= 0.92%
|X| RETURN ON AVERAGE EQUITY(%) = 8.18%
DATA AS OF/OR FOR THE 12 MONTHS ENDED 12/31/97
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COMBINED OPERATIONS:
UNITED COMBINED
DOLLARS IN MILLIONS BANKSHARES(1) FED ONE COMPANY
---------- ------- -------
ASSETS $3,726 $367 $4,093
LOANS 2,607 166 2,773
DEPOSITS 2,925 259 3,184
SHAREHOLDERS' EQUITY 356 41 397
FULL SERVICE OFFICES 70 12 82
Data as of 12/31/97
(1) includes pro forma George Mason Bankshares, Inc.
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TRANSACTION SUMMARY
|X| CONSIDERATION: 0.75 UNITED SHARES FOR EACH FED ONE SHARE
|X| TERMS: FIXED EXCHANGE RATIO
TAX-FREE EXCHANGE
19.9% STOCK OPTION
WALKAWAY - 20% BELOW INDEX
|X| ACCOUNTING TREATMENT: POOLING OF INTERESTS
|X| SHARES ISSUED: 1,892,386
|X| EXPECTED CLOSING: FOURTH QUARTER 1998
|X| IMPLIED MULTIPLES:
12/31/97 BOOK VALUE: 206%
1998 ESTIMATED EARNINGS: 24.31X
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Transaction Structure
|X| Financial Impact:
- Total Assets to over $4 billion
- Nondilutive on earnings per share in 1999
- Accretive to earnings in following years
|X| Strategies for Earnings Enhancement:
o Expense Saving:
- Audit & legal fees - Insurance
- Data Processing - Corporate overhead
- Back room operations - Marketing
- Director fees - Close duplicate offices
- Regulatory fees
o Revenue Enhancements:
- Establish trust services
- Redeploy earning assets at higher rates
- Evaluate service charge structure
- Expand cash management services
|X| Fed One adds:
o Strong branch network in good locations in northern West Virginia
o First entry into the state of Ohio
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EXPECTED COST SAVINGS
Estimated
Savings
-----------
Personnel Expense $1,915,438
Professional Fees 337,489
Occuoancy Expense 706,665
Structural Expense 487,234
Other Expenses 583,356
-----------
Total Expense Savings $4,030,182
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