Investor Presentation September 2017 Richard Beard, President & - - PowerPoint PPT Presentation

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Investor Presentation

September 2017 Richard Beard, President & CEO Wolf Muelleck, EVP & CFO

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This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of

• 1995. These forward-looking statements are subject to risks and uncertainties, including, but not limited to:
• The credit and concentration risks of our lending activities;
• Changes in general economic conditions, either nationally or in our market areas;
• Competitive market pricing factors and interest rate risks;
• Market interest rate volatility;
• Investments in new branches and new business opportunities;
• Balance sheet (for example, loans) concentrations;
• Fluctuations in demand for loans and other financial services in our market areas;
• Changes in legislative or regulatory requirements or the results of regulatory examinations;
• The ability to recruit and retain key management and staff;
• Risks associated with our ability to implement our expansion strategy and merger integration;
• Stability of funding sources and continued availability of borrowings;
• Adverse changes in the securities markets;
• The inability of key third-party providers to perform their obligations to us;
• Changes in accounting policies and practices and the use of estimates in determining fair value of certain of our

assets, which estimates may prove to be incorrect and result in significant declines in valuation; and

• These and other risks as may be detailed from time to time in our filings with the Securities and Exchange

Commission. The Company cautions readers not to place undue reliance on any forward-looking statements. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the

• Company. The Company does not undertake and specifically disclaims any obligation to revise any forward-looking

statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such

• statements. These risks could cause our actual results in 2016 and beyond to differ materially from those expressed in any

forward-looking statements by, or on behalf of, us, and could negatively affect the Company’s operating results, financial condition and stock price performance.

Safe Harbor

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• NASDAQ Ticker symbol:

PUB

• Russell 2000 Index

Included since 2015

• Total Assets

$1.72 billion

• Loans held for investment

$1.20 billion

• Deposits

$1.46 billion

• Tangible BV per share

$13.34

• IPO share price – June 2015 $14.50
• Closing share price **

$27.00

• Market cap **

$485 million

** Based on closing stock price @ August 22, 2017 Financial information as of and for the quarter ended June 30, 2017. Additional information is available at www.peoplesutah.com

People’s Utah Bancorp Overview

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• People’s Utah Bancorp (“PUB”) is largest community bank

holding company in Utah with its wholly-owned subsidiary, People’s Intermountain Bank (“PIB”) which has four divisions

Franchise Overview

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BAF and LSB have over 100 years of operating history. Town & Country Bank is a pending merger, subject to customary approvals.

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• PUB – only public community bank holding company in Utah
• 20 full-service branch locations
• 18 in Utah and 2 in Idaho
• 410 full-time equivalent associates (6/30/17)
• Pending acquisitions:
• 7 branches from Banner Bank (2 branches consolidated with PUB branches)
• 1 branch from Town & Country Bank (consolidated with PUB branch)
• 5-year CAGRs(1)
• Assets – 13.4%
• Loans – 13.7%
• Deposits – 12.8%

Franchise Overview - Continued

(1) For the five years ended December 31, 2016. Includes the merger with Lewiston State Bank in 2013

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Our Target Markets

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• CNBC
• Utah ranked #1 among “America's Top States for

Business 2016”

• Population Growth
• Utah’s population growth was the fastest in the

nation with 1.9% growth from 2015 to 2016.

• Job Growth
• Year-over year job growth of 3.3% as of February

2017 vs. the national estimate of 1.5%

• Utah unemployment rate of 3.1% vs. national

rate of 4.7% - December 2016

• Income Growth
• Personal income grew at 5% in 3rd Quarter 2016

compared to same quarter in 2015.

• Utah ranked 1st in nation in personal income

growth

Strong Dynamics in Utah

Sources: 2016 Economic Report to the Governor, Forbes, Bureau of Economic and Business Research Utah Department of Workforce Services – Unemployment rates

Utah Ranked The #1 State for Business in the U.S. by Forbes 6 out of the last 7 years most recently in 2016

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• Gross State Product
• 2.7% annual growth rate between 2000 - 2014
• Employers
• Corporate employers and startup technology

companies drawn to the Utah market

• Liveability.com: Provo & Salt Lake City, Utah

among the top 50 states for entrepreneurs

• Major shipping/ transportation hub
• Housing Activity
• Forecast for residential housing units constructed

at 20,500 in 2017 vs.19,000 estimated for 2016.

• Forecast for permit authorized construction is

$7.4 billion in 2017 vs. $7.5 billion estimated for 2016.

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• Utah is one of the fastest growing states in the U.S. in terms of

population, ranking 1st with 1.9% in 2016 vs. 2015 percentage growth

• Projected population change of 12.4% from 2014-2020, vs. U.S. growth

projected at 6.5%

• Over 75% of Utah’s population is concentrated along the I-15 Corridor

Strong Dynamics in Utah (Cont.)

Source: Utah Governor’s Office of Economic Development, U.S. Census Bureau

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8.2% 8.3% 17.6%19.2% 29.5% 6.5% 10.9% 12.4% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

'14-'20 Projected Population Growth

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• Key Statistics
• 25 miles
• 17 cities in Salt Lake & Utah

Counties

• 57,755 new jobs since 2010
• 235,497 total jobs
• 40% of increase in jobs

statewide

Utah’s High Growth Corridor

: Source: Kem C. Gardner Policy Institute – University of Utah

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Companies with Utah Operations

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Proforma Balance Sheet with Banner Branches & Town & Country Bank Acquisitions

Peopleʹs Utah Bancorp Pro Forma Consolidated Balance Sheet June 30, 2017 (Dollars in thousands) Current Proforma Combined ASSETS Cash and investments 460,158 $ 361,734 $ Total gross loans 1,209,046 1,576,559 Other assets 49,171 89,382 TOTAL ASSETS 1,718,375 $ 2,027,675 $ LIABILITIES Deposits: Noninterest bearing 465,988 $ 575,963 $ Interest bearing 995,064 1,171,286 Total deposits 1,461,052 1,747,249 Other liabilities 17,421 26,549 TOTAL LIABILITIES 1,478,473 1,773,798 SHAREHOLDERSʹ EQUITY Shareholdersʹ equity 239,902 253,877 TOTAL LIABILITIES AND SHAREHOLDERSʹ EQUITY 1,718,375 $ 2,027,675 $

Note: Proforma Balance Sheet is subject final fair market valuations

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Current & Pro Forma Deposit Market Share after Banner & Town & Country Bank Acquisitions

Utah County Deposit Market Share

Source: SNL Financial, 6/30/2016 deposit data. Excluding industrial banks.

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Davis County Deposit Market Share Utah State Deposit Market Share Salt Lake County Deposit Market Share

Rank Institution (State) Branches Deposits in Market Market Share 1 Wells Fargo & Co. (CA) 116 18,830,956 $ 30.67% 2 Zions Bancorp. (UT) 99 15,446,611 $ 25.16% 3 JPMorgan Chase & Co. (NY) 53 12,709,215 $ 20.70% 4 KeyCorp (OH) 34 4,193,821 $ 6.83% 5 U.S. Bancorp (MN) 72 2,215,063 $ 3.61% 6 Pro Forma 26 1,569,452 $ 2.56% 6 People's Utah Bancorp (UT) 18 1,305,216 $ 2.13% 7 Cache Valley Banking Co. (UT) 14 925,788 $ 1.51% 8 BOU Bancorp Inc. (UT) 13 803,618 $ 1.31% 20 Banner Corp. (WA) 7 167,741 $ 0.27% 25 Town & Country Bank Inc. (UT) 1 96,495 $ 0.16% Total For Institutions In Market 515 $61,390,159 Out of 30 Institutions Rank Institution (State) Branches Deposits in Market Market Share 1 Wells Fargo & Co. (CA) 15 1,834,913 $ 26.50% 2 Zions Bancorp. (UT) 13 1,458,387 $ 21.06% 3 Pro Forma 13 1,005,747 $ 14.52% 3 People's Utah Bancorp (UT) 9 887,303 $ 12.81% 4 Central Bancorp. (UT) 10 704,300 $ 10.17% 5 JPMorgan Chase & Co. (NY) 7 675,699 $ 9.76% 6 Green Dot Corp. (CA) 1 571,430 $ 8.25% 7 Community Bancorp. (UT) 4 246,462 $ 3.56% 8 Capital Community Bancorp. Inc 4 200,386 $ 2.89% 9 Banner Corp. (WA) 4 118,444 $ 1.71% 10 U.S. Bancorp (MN) 8 96,083 $ 1.39% Total For Institutions In Market 81 $ 6,924,897 Out of 13 Institutions Rank Institution (State) Number of Branches Deposits in Market Market Share 1 JPMorgan Chase & Co. (NY) 29 11,172,432 $ 31.60% 2 Zions Bancorp. (UT) 34 10,216,580 $ 28.90% 3 Wells Fargo & Co. (CA) 41 6,811,813 $ 19.27% 4 KeyCorp (OH) 17 3,772,779 $ 10.67% 5 U.S. Bancorp (MN) 39 1,733,969 $ 4.90% 6 First Utah Bancorp. (UT) 7 270,572 $ 0.77% 7 Pro Forma 6 205,305 $ 0.58% 7 Washington Federal Inc. (WA) 8 201,170 $ 0.57% 8 BOU Bancorp Inc. (UT) 3 191,507 $ 0.54% 9 Brighton Bancorp (UT) 4 164,317 $ 0.46% 10 People's Utah Bancorp (UT) 4 162,853 $ 0.46% 16 Banner Corp. (WA) 2 42,452 $ 0.12% Total For Institutions In Market 201 $35,356,012 Out of 20 Institutions Rank Institution (State) Number of Branches Deposits in Market Market Share 1 Wells Fargo & Co. (CA) 13 704,470 $ 29.82% 2 Zions Bancorp. (UT) 8 672,791 $ 28.48% 3 FNB Bancorp (UT) 5 228,826 $ 9.69% 4 JPMorgan Chase & Co. (NY) 4 206,931 $ 8.76% 5 Prime Alliance Bank (UT) 1 205,193 $ 8.69% 6 U.S. Bancorp (MN) 8 104,679 $ 4.43% 7 KeyCorp (OH) 3 70,336 $ 2.98% 8 Cache Valley Banking Co. (UT) 1 68,360 $ 2.89% 9 BOU Bancorp Inc. (UT) 2 44,750 $ 1.89% 10 Pro Forma 3 32,497 $ 1.38% 10 People's Utah Bancorp (UT) 2 25,652 $ 1.09% 13 Banner Corp. (WA) 1 6,845 $ 0.29% Total For Institutions In Market 50 $ 2,362,437 Out of 13 Institutions

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Banner Branch Transaction Highlights

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Premium Paid

• $15.3 million based on approximately $180 million in average deposits
• Premium to be calculated based on the average daily closing balances of the branch deposits

for the 30-day period ending two business days prior to closing

Loans / Deposits

• Approximately $260 million loan portfolio with 4.39% average yield, excluding fair value adjustments.

No non-performing loans or OREO.

• Approximately $180 million in deposits at an average cost, excluding fair value adjustments, of

0.10%. Over 50% of deposits are non-interest bearing

• Conservative amount of deposit run-off factored into projections

Fixed Assets

• Fixed assets transferred at book value or fair market value ($4.01 million in aggregate)

Transaction Costs

• Pre-tax one-time transaction costs of approximately $850k

Loan Mark / CDI

• Fair value discount of approximately 1.30% of gross loans, or $3.4 million
• Core deposit intangibles of 1.7%, or $3.1 million

Pro Forma Financial Impact to PUB

• Expected to be immediately accretive to EPS with above 20% internal rate of return
• Anticipated Year 1 net income impact of $3.0 to $3.5 million

Pro Forma Capital

• Ability to further leverage capital raised in the IPO
• Company will remain well capitalized with pro forma TCE/TA ratio above 11%

Approvals and Closing

• Closing expected in early Q4 2017
• Subject to customary regulatory approval

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Banner Branches Strategic Expansion

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• Founded in 2008 and headquartered in St. George, Utah
• Well respected community bank with strong customer

relationships in St. George Market

• ROAA has ranged between 0.45% and 1.94% over the last

three years

• 20% loan growth over the last-twelve-months ended March

31, 2017

• Experienced SBA lender
• Strong deposit base with 25.7% non-interest bearing deposits

Overview of Town & Country Bank

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Franchise Highlights Branch Footprint

T&C St. George Branch

Source: SNL financial, call report data as of 3/31/2017 (1) Excluding restructured loans T&C Branch T&C LPO

Financial Highlights - Town & Country Bank Year Established 2008 Employees 31 Balance Sheet: Total Assets 135,081 $ Gross Loans (Excl. HFS) 97,342 $ Total Deposits 119,675 $ Loan / Deposit Ratio 81.3% Performance: Return on Average Assets (LTM Q1'17) 0.73% Return on Average Assets (MRQ Q1'17) 1.39% Yield on Loans (LTM Q1'17) 5.92% Asset Quality: Non-Performing Assets/ Total Assets(1) 1.28% Loan Loss Reserve / Gross Loans 1.61%

($000s)

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Town & Country Bank Highlights

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Transaction Value

• Total aggregate consideration of $20.9 million(1)
• $11.89 per fully diluted T&C common share(2)

Transaction Multiples

• Price / tangible book value of 146.2%(3)
• Price / LTM earnings (3/31/17) of 24.2x
• Price / MRQ earnings (3/31/17) of 11.8x
• Price / forecasted 2017 earnings of 17.4x(4)

Consideration Structure

• Consideration mix of 65.0% in PUB common stock and 35.0% in cash
• Town & Country Bank shareholders will receive 0.2978 shares of PUB common stock and $4.28 per

share in cash

• Town & Country shareholders to own approximately 2.9% of PUB post-transaction
• Fixed exchange ratio with collars set between $21.36 and $32.04 and double trigger below $22.70

and above $30.71

Adjustments to Consideration

• Aggregate purchase price calculation is subject to certain adjustments and/or reductions:
• Base deal value between $19.0 and $21.5 million, subject to annualized earnings levels
• Escrow holdback equal to $1.5 million of the cash consideration to be held for 18 months post

closing

• T&C delivering the minimum required tangible common equity at close of $14.3 million
• T&C delivering $107.5 million in gross loans at closing
• Asset quality protections until close

(1) Based on the closing price of $25.55 for PUB shares on May 30, 2017 (2) Includes preferred shares conversion and all options and warrants exercised prior to closing (3) Based on minimum capital to be delivered of $14.3 million (4) Based on forecasted 2017 earnings provided by T&C management

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Town & Country Pro Forma Impact

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Pro Forma Financial Impact to PUB

• Immediately accretive to EPS with $0.09 accretion or 5.9% in 2018
• Tangible book value dilution of 1.85% with payback in less than 3 years
• Above 18% internal rate of return

Loan Mark / CDI

• Fair value discount of approximately 4% of gross loans, or $4.0 million
• Core deposit intangibles of 1.5% amortized over 10 years

Transaction Costs

• Pre-tax one-time transaction costs of $2.8 million
• T&C receives an expense basket of $1.985 million to cover deal related expenses including vendor

termination and de-conversion costs, professional fees, change-in-control payments to management and the board of directors and D&O tail coverage

Cost Savings

• Estimated cost savings of 30.0% ($1.7 million in 2018) of Town & Country’s non-interest expense

with savings 100% realized in 2018

Approvals and Closing

• Closing expected in Q4 2017
• Subject to regulatory approval and T&C Bank shareholder approval

Source: Merger agreement

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PUB’s Strategy is to preserve the community banking model with legacy bank names and people while consolidating regulatory and back-office functions to gain efficiencies.

• Continue to Grow Organically
• Increase share in current markets and enter new markets
• Two new branches opened in 2017– one branch in Bountiful and the
• ther branch in Preston, Idaho
• Grow and Diversify our Loan Portfolio
• Expand C&I lending and SBA lending
• Grow the Leasing Division

Strategy / Model - Moving Forward

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• Manage Operating Efficiencies
• Balancing organic growth with cost structure to further enhance earnings
• Invest in future growth opportunities
• Operation model is scalable
• Up-to-date technology and experienced team
• Hire Additional Motivated and Service-Oriented

Personnel

• Seek talented individuals living in our current and prospective market

areas

• Strong Risk Management and Capital Levels
• Identify and evaluate risks and trends and adopt strategies to manage

such risks

Strategy / Model – Moving Forward (Cont.)

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• Growth through Mergers and Acquisitions
• Community banking & financial services environment provides
• pportunities in the long-run
• No non-FDIC-assisted M & A activity in Utah since 2008 other than our

LSB merger and pending Town & Country Bank merger.

• PUB is successful acquirer as evidenced by successful LSB merger &

Banner branches and Town & Country Bank transactions.

• PIB has satisfactory CRA rating
• Good working relationships with our regulators

Strategy / Model - Moving Forward (Cont.)

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Growth Opportunities

• Hiring people / teams
• Opening new branches in our market
• Branch acquisition opportunities
• Whole bank opportunities in Utah
• Whole bank opportunities in surrounding states
• Non-bank acquisition opportunities

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Financial / Operating Highlights

Note: Financial information as of and for the quarters are unaudited.

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Net Income

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Diluted Earnings per Share

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Return on Average Assets

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Return on Average Equity

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Net Interest Margin

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Efficiency Ratio (1)

(1) Non‐interest income less merger‐related costs divided by sum of net interest income and non‐interest income.

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Dividends per Share (1)

(1) Prior to 2015, we declared dividends prior to the end of the year. We began declaring quarterly dividends in 2015 after the quarter‐end.

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Asset Quality

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Asset Quality

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Loan Composition & Growth Trend

Year-over-year to June 2017 loans held for investment grew 9.6% to $1.2 billion

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Real Estate T erm, 53.4%

• Constr. &

Land Development, 20.9% Commercial & Industrial, 18.4% Residential & Home Equity, 6.1% Consumer & Other, 1.2%

$- $110 $220 $330 $440 $550 $660 $770 $880 $990 $1,100 $1,210 $1,320 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Loans held for investment ($ millions)

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Deposit Composition & Growth Trend

$1.46 billion in deposits - $1.40 billion in core deposits

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Non-Interest Bearing 31.9% Other Demand and Savings 36.5% Demand - My-Rate Checking (1) 9.9% Money Market 11.4% CDs <100k 5.5% CDs >100k 4.8% $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Deposits ($ millions) Core Deposits Jumbo CDs

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