EXHIBIT 99.2
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UNITED BANKSHARES, INC.
Acquisition of:
[LOGO OF SEQUOIABANK]
April 2003
Forward Looking Statements
This presentation contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, statements about (i) the benefits of
a merger (the "Merger") between Sequoia Bancshares, Inc. ("Sequoia") and United
Bankshares, Inc. ("United"), including future financial and operating results,
cost savings enhancements to revenue and accretion to reported earnings that may
be realized from the Merger; (ii) United's and Sequoia's plans, objectives,
expectations and intentions and other statements contained in this presentation
that are not historical facts; and (iii) other statements identified by words
such as "expects" "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," "targets," "projects," or words of similar meaning generally
intended to identify forward-looking statements. These forward-looking
statements are based upon the current beliefs and expectations of the respective
managements of United and Sequoia and are inherently subject to significant
business, economic and competitive uncertainties and contingencies, many of
which are beyond the control of United and Sequoia. In addition, these
forward-looking statements are subject to assumptions with respect to future
business strategies and decisions that are subject to change. Actual results may
differ materially from the anticipated results discussed in these
forward-looking statements because of numerous possible uncertainties.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements: (1) the businesses of United and Sequoia may not be
combined successfully, or such combination may take longer, be more difficult,
time-consuming or costly to accomplish than expected; (2) the expected growth
opportunities or cost savings from the Merger may not be fully realized or may
take longer to realize than expected; (3) deposit attrition, operating costs,
customer losses and business disruption following the Merger, including adverse
effects on relationships with employees, may be greater than expected; (4) the
regulatory approvals required for the Merger may not be obtained on the proposed
terms or on the anticipated schedule; (5) the stockholders of Sequoia may fail
to approve the Merger; (6) legislative or regulatory changes, including changes
in accounting standards, may adversely affect the businesses in which United and
Sequoia are engaged; (7) the interest rate environment may further compress
margins and adversely affect net interest income; (8) results may be adversely
affected by continued diversification of assets and adverse changes to credit
quality; (9) competition from other financial services companies in United's and
Sequoia's markets could adversely affect operations; (10) an economic slowdown
could adversely affect credit quality and loan originations; and (11) the
involvement of the United States and its allies in the war in southwest Asia
could have unpredictable negative affects on United's and Sequoia's businesses
and the economy. Additional factors, that could cause actual results to differ
materially from those expressed in the forward-looking statements are discussed
in Sequoia's reports that are made available to the public from time to time and
United's reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange
Commission and available on the SEC's Internet site (http://www.sec.gov).
United and Sequoia caution that the foregoing list of factors is not exclusive.
All subsequent written and oral forward-looking statements concerning the
proposed transaction or other matters attributable to United or Sequoia or any
person acting on their behalf are expressly qualified in their entirety by the
cautionary statements above. United and Sequoia do not undertake any obligation
to update any forward-looking statement to reflect circumstances or events that
occur after the date the forward-looking statements are made.
Transaction Highlights
. Further expands United into the rapidly growing markets of Northern
Virginia, Washington, DC and Maryland
. Accretive to GAAP and Cash EPS in the first full year of combined
operations
. In-market merger with conservative cost save projections
. Significant revenue enhancement opportunities
Table of Contents
- Transaction Summary
- Strategic Benefits
- Pro Forma Financial Impact
- Overview of Sequoia
Transaction Summary
Transaction Summary
Transaction: United Bankshares, Inc. acquisition of Sequoia
Bancshares
Purchase Price: $39.40 per share /(1)/
Transaction Value: $109 million
Structure: 75% Stock / 25% Cash (election merger)
Exchange Ratio: 1.05 plus $10.00
Cash Price: $39.40
Tax Status: Non-taxable at the corporate level; stock portion
deferred at shareholder level
Due Diligence: Completed
Board Representation: Two Sequoia directors to be added to the United
Bankshares, Inc. holding company board and United
Bank Virginia Board; Sequoia President to be Vice
Chairman of United Bank-Virginia
(1) Based on $28.00 stock price.
Transaction Summary
Walk-Away: Double Trigger:
(1) Greater than 20% fall in United price
from starting price as of announcement,
and
(2) Greater than 15% underperformance of
the NASDAQ Bank Index
Required Approvals: Sequoia shareholders and customary
regulatory approvals
Timing: Fourth Quarter 2003
Consolidation completed prior to year end
2003
Transaction Summary
[GRAPHIC]
United Bank-VA 30 offices
Sequoia 12 offices
Transaction Summary
Multiples in line with comparable transactions
Transaction Mid-Atlantic Multiples (1)
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Multiples Mean Median
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Transaction Price as a Multiple of: 20.2x
Last Twelve Months EPS as of March 31, 2003 20.2x 22.5x 20.5x
Budgeted 2003 Earnings 18.8x (2)
Book Value 380.00%
Tangible Book Value 380.00%
Notes:
1) Mid-Atlantic region includes DC, DE, MD, NJ, NY, PA, VA, and is based on
commercial bank transactions exceeding $15 million in value from 1/1/02 to
present.
2) Mercantile Bankshares Corporation's recent announced transaction
represented 19.2x F&M Bancorp's I/B/E/S 2003 estimated EPS.
Strategic Benefits
Strategic Benefits
. Unique opportunity to achieve significant cost savings and strong
growth
. Excellent geographic fit; enhances existing position in Northern
Virginia, in addition to the high-growth areas of Washington, D.C.
metropolitan area and Montgomery County, Maryland
. $3 billion in assets in Northern Virginia, Maryland, and Washington,
D.C. metro area
. United Bank-VA is the 3/rd/ largest Virginia headquartered commercial
bank
. Shared philosophy of customer-oriented, community focus; strong credit
quality
. Enhances commercial lending capabilities of Virginia Bank
Strategic Benefits
.. Strengthen positions in the affluent and fast growing markets of Arlington,
Washington and Montgomery counties
.. Montgomery County is home to approximately 20 major federal and private
sector research and development regulatory agencies
.. The Washington Metro area is an attractive market; the presence of the
Federal Government has attracted a large number of ancillary businesses
such as trade associations, lobbying groups, law firms, and other
businesses
Median 5-Yr 5-Yr
Household Projected Per Capita Projected
Branches Income($) Growth Income($) Growth
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Virginia
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Fairfax, VA 20 103,160 24.77% 45,138 24.49%
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Arlington, VA 6 84,415 27.79% 48,653 26.89%
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Loudon, VA 4 82,823 17.96% 34,718 20.09%
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Maryland
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Montgomery, MD 12 84,144 16.40% 40,798 18.06%
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Washington, DC 9 50,627 21.63% 32,752 22.22%
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Pro Forma Financial Impact
Pro Forma Financial Impact
. Significant in-market acquisition opportunity
. Branch overlap allows for easy expansion of United's
expanding bank network, with the core of the Sequoia
branches in Maryland
. Provides attractive financial returns:
- GAAP and cash earnings accretion
- 25% Cost Savings
. Capital ratios, reserves and asset quality remain
strong
. Transaction assumed to close fourth quarter 2003
. Cost savings estimated at $3.4 million pre-tax to be
fully phased in by 2004
. Revenue enhancements identified through expanded wealth
management and mortgage banking opportunities
. Core deposit intangible estimated at 2.87% of core
deposits amortized on a straight-line basis over 7
years
Pro Forma Financial Impact: Earnings Projections
.. Accretive to GAAP and Cash EPS by the fourth quarter of combined
operations for the first full year
Projections for
Fiscal Year 2004
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United Bankshares' Earnings $ 100,815
Sequoia's Earnings 7,069
Anticipated After-tax Cost Savings 2,345
Anticipated After-tax Opportunity Cost of Cash (777)
Estimated Core Deposit Amortization (750)
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Pro Forma Net Income $ 108,702
Estimated Intangible Amortization Expense 1,309
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Pro Forma Cash Net Income $ 110,011
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Pro Forma GAAP EPS $ 2.39
Pro Forma Cash EPS $ 2.42
Pro Forma Financial Impact: GAAP and EPS Accretion
Projections for
Fiscal Year 2004
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Stand Alone GAAP EPS $2.37
Pro Forma GAAP EPS $2.39
GAAP Accretion to UBSI ($) $0.02
GAAP Accretion to UBSI (%) 1.0%
Stand Alone GAAP EPS $2.39
Pro Forma GAAP EPS $2.42
Cash Accretion to UBSI ($) $0.03
Cash Accretion to UBSI (%) 1.3%
Pro Forma Financial Impact: Cost Saves
Branch Consolidation (1) $1,012
Technology and Operations 572
Business Line Consolidation 1,036
Corporate Overhead 730
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Pre-tax Cost Savings $3,350
Taxes 1,005
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After-tax Cost Savings $2,345
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Savings Percent 25.0%
(1) Assumes consolidation of 6 United and Sequoia branches
Pro Forma Financial Impact: Capital Ratios and Asset Quality
United Sequoia Pro Forma
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Tangible Equity/Tangible Assets 7.82% 4.92% 6.29%
Tier I Ratio 10.45% 9.10% 9.70%
Total Capital Ratio 11.76% 10.50% 11.00%
United Sequoia Pro Forma
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Nonperforming Assets/(Loans + OREO) 0.55% 0.09% 0.51%
Reserves/Loans 1.33% 1.16% 1.31%
Reserves/Nonperforming Assets 241.55% 1303.462% 256.96%
Net Chargeoffs/Average Loans 0.23% NM (1) 0.20%
(1) Net recoveries of $181 thousand.
Summary Conclusions
. This transaction represents United's 26/th/ merger/acquisition
. In market merger creates strong deposit franchise in Maryland, with
leading share in affluent, high-growth markets
. Significantly enhances commercial lending capabilities of the Virginia
Bank.
. Accretive to GAAP and Cash EPS in the first full year of combined
operations
. Identified, achievable cost savings
. Significant revenue enhancement opportunities
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
Shareholders of Sequoia and other investors are urged to read the
proxy statement/prospectus that will be included in the registration
statement on Form S-4 that United will file with the Securities and
Exchange Commission in connection with the proposed merger because it will
contain important information about United, Sequoia, the merger, the
persons soliciting proxies in the merger and their interests in the merger
related matters. Investors will be able to obtain all documents filed with
the SEC by United free of charge at the SEC's Internet site
(http://www.sec.gov). In addition, documents filed with the SEC by United
will be available free of charge from the Corporate Secretary of United
Bankshares, Inc., 514 Market Street, Parkersburg, West Virginia 26101,
telephone: (304) 424-8800. Read the proxy statement/prospectus carefully
before making a decision concerning the merger.
Overview of Sequoia Bancshares
Franchise Summary: Sequoia Bancshares
. Sequoia has a strong presence in the high-growth communities it serves
. Shares United's culture of customer-oriented focus and strong credit
quality
. Montgomery County, the Bank's primary Maryland market area, has
evolved into a commercial center
[GRAPHIC]
. Assets: $523.8 million
. Loans: $324.3 million
. Deposits: $405.0 million
. Equity $ 25.7 million
. Income: $ 4.6 million
. ROE: 20.94%
. ROA: 1.03%
. NPAs/
(Loans + OREO) 0.09%
. 12 branches
Franchise Summary: Balance Sheet Composition
Loan Mix Liability Mix
Real estate construction 8% Money market accounts 23%
Commercial 27% Certificates of deposit 37%
Consumer 1% Other 40%
Other 1%
Residential real estate 16%
Commercial real estate 47%
[GRAPHIC] [GRAPHIC]
Nonperforming Assets / (Loans + OREO) 0.09%
Reserves / Loans 1.16%
Reserves / Nonperforming Assets 1303.46%
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UNITED BANKSHARES, INC.