Current Trends in Bank Valuation and M&A The State of the M&A Environment Applied Mergers & Acquisitions Valuation Implications

Transcription

1 Current Trends in Bank Valuation and M&A The State of the M&A Environment Applied Mergers & Acquisitions Valuation Implications July 29, 2016 Analyst Training in the Banking Sector

2 Table of Contents I. The Bank M&A Environment: The Current State of Play and Key Deal Drivers 3 II. Applied Bank Mergers & Acquisitions: Overview and Key Considerations 14 III. Appendix: Olsen Palmer LLC Overview and M&A Advisory Credentials 21 2

3 I. The Bank M&A Environment: The Current State of Play and Key Deal Drivers 3

4 Key Trends Overview of the current M&A landscape The Value of Scale Banks face 3 key challenges: 1) aggressive competition, 2) flat margins, and 3) rising regulatory costs The primary if not only solution for growing earnings is realizing greater operating scale Achieving larger asset base, whether organically or via M&A, is key to creating shareholder value Transaction Volume Deal activity has recovered to pre-recession levels 2015 was a record year for bank consolidation Transaction Pricing Valuation multiples have risen at a deliberate, measured pace Improvements in credit quality and a pickup in acquirer demand are likely driving better pricing Pricing remains the strongest in large, high-growth, metropolitan markets Supply and Demand Acquisition demand remains stable, though the overall pool of potential buyers continues to shrink The supply of sellers is increasing notably, driven in part by regulatory burden and lack of scale Increasing supply of sellers and decreasing number of buyers may affect pricing going forward Transaction Timeline Deals are generally taking much longer from initial discussions through to closing Unlike in years past, many transactions are facilitated on a one-off /negotiated basis Whether a seller or buyer, banks are well-served to identify and potentially initiate friendly relationships (e.g., participations) well-before any potential transaction 4

5 M&A Transaction Volume Community bank M&A activity has picked up sharply in recent years Community Bank M&A Volume No. of Announced Transactions by Year Since vs. 2009: + 141% H Source: SNL Financial. 5

6 Consolidation Trends Over Time The share of banks being acquired is on the upswing Completed Bank & Thrift Acquisitions % of Total U.S. Institutions 5.0% Median: 3.3% 4.5% 4.0% 3.5% 3.0% 3.3% 3.6% 4.3% 3.5% 3.8% 4.0% 4.4% 3.3% 2.8% 3.0% 3.0% 3.4% 3.3% 2.7% 4.1% 3.1% 3.6% 3.5% 4.4% 4.5% 4.2% 2.5% 2.5% 2.6% 2.3% 2.0% 2.0% 1.5% 1.0% 0.5% 0.0% E Sources: FDIC, SNL Financial. 6

7 M&A Activity by State M&A activity by state is binary: those states with high-growth or notably slow-growth are the most active Heat Map: 2016 Transactions by Location of Seller Whole-bank Transactions Announced in H Most Active States Whole-bank Transactions Announced in H IL WI MN CA TX MO IN MI VA NE TN IA Location of Buyer Relative to Seller Whole-bank Transactions Announced in H Key: No. of Deals (# of States) In- State 73.4% Out-of- State 26.6% > 5 (6) 4-5 (10) 2-3 (12) 1 Deal (5) 0 Deals (17) Source: SNL Financial. 7

8 M&A Transaction Volume by Seller Size The majority of sellers are below $250mm; the ratio of seller size to buyer size has been steadily increasing Number of Transactions by Seller Asset Size Whole-bank Transactions Announced in H Typical Target Size: Seller Assets as a Percent of Buyer Assets Over Various Recent Time Periods Median Seller Size: $139 million 20% Median Since 1990 (7,741 deals): 12.66% 19.0% 13.8% % 9.7% < $50mm $50mm- $100mm $100mm- $250mm $250mm- $500mm $500mm- $1Bn $1Bn- $5Bn > $5Bn 0% 1990-' ' '16 1H Seller Asset Size Source: SNL Financial. 8

9 The Importance of Scale There is an observable correlation between size and profitability, efficiency Efficiency Ratio All U.S. Institutions Median 2015 Return on Average Assets All U.S. Institutions Median % 1.25% 70.8% 1.05% 70% 67.9% 67.4% 1.00% 0.85% 0.86% 0.88% 0.94% 65% 65.2% 63.0% 0.75% 0.76% 60.5% 60% 0.50% 55% 0.25% 50% $50M- $200M $200M- $500M $500M-$1B $1B-$3B $3B-$5B $5B-$10B 0.00% $50M- $200M $200M- $500M $500M-$1B $1B-$3B $3B-$5B $5B-$10B Note: ROAA is adjusted to account for Subchapter-S elections. Source: SNL Financial. 9

10 The Value of Scale A clear correlation exists between scale and valuation, both as a going concern and in M&A Valuation by Size M&A Seller Whole-bank Transactions Announced in H 2016 Valuation by Size Publicly-Traded Banks All publicly-traded U.S. banks 200% 150% Median Price/Tangible Book Value: 1.36x 179.0% 138.5% 175% 125% Price / Tangible Book Value 150% 125% 119.0% 141.0% 158.0% Price / Tangible Book Value 100% 75% 93.9% Median Price/LTM Earnings: 13.3x 14.7x 100% $0-250mm $ mm $500mm - 1Bn $1-5Bn Seller Asset Size 50% < $1Bn > $1Bn Bank Asset Size Source: SNL Financial. 10

11 M&A Valuation Multiples Over Time Price-to-earnings multiples are back to pre-crisis peak levels, well-above the long-term median Community Bank M&A Valuation Multiples Median M&A transaction valuation multiples by year since x Median Deal Value/ Tangible Book Value (%) - left axis Median Price/Earnings (x) - right axis 30.0x 13.9x 1.37x 12.5x 1.32x 12.2x 1.41x 13.7x 1.67x 13.7x 1.66x 15.7x 1.69x 16.5x 1.78x 19.2x 2.09x 22.6x 2.56x 21.2x 2.12x 18.3x 1.83x 18.8x 1.74x 19.2x 1.68x 21.3x 2.04x 25.3x Transaction Price / Tangible Book Value (x) 2.5x 2.0x 1.5x 1.0x 0.5x 27-Year Median: 19.3x 22.5x 2.14x 22.6x 2.18x 22.6x 2.25x 22.6x 2.10x 22.7x 1.60x 18.3x 1.17x 22.2x 1.20x 1.10x 18.6x 1.15x 18.9x 2015 vs. 2011: + 28% 1.22x 21.4x 1.35x 22.8x 1.41x 22.6x 1.34x 25.0x 20.0x 15.0x 10.0x 5.0x Transaction Price / Earnings (x) 0.0x YTD 0.0x Note: Data as of June 30, Source: SNL Financial. 11

12 Value Deconstructed: What Factors Drive Value? Regression analysis suggests that a seller s return on equity is the primary driver of value Percentage of Deal Value / Tangible Book Value Explained by Select Factors (R Square) Deals announced since January % 16% 14% 17.1% Seller profitability influenced pricing more than the other factors examined 14.8% 13.3% Key Takeaway: 17.1% of the transaction valuation (as % of the seller s tangible book value) was explained by the seller s Return on Average Equity (ROAE) More broadly, a seller s ability to generate a high return on equity appears to play the strongest role in driving transaction valuations 12% 11.6% 10% Seller size alone had relatively small influence on price / tangible book value 8% 6% 6.3% 4% 2% 1.2% 1.1% 0.7% 0.4% 0.1% 0% Seller ROAE (%) Seller ROAA (%) Seller NPAs/ Assets (%) Seller Nonint. Income/ Avg Assets (%) Seller Asset Change (%)* Seller Assets/ Buyer Assets Seller Efficiency Ratio Seller Core Deposits/ Total Deposits Seller Number of Branches Seller Total Assets *Change in assets measured over a two-year time period. Source: SNL Financial and Olsen Palmer analysis. 12

13 Value Deconstructed: Growth vs. Earnings Both profitability and growth factor heavily into valuation Profitability vs. Growth Present Value of Future Cash Flows ($ millions) $80 $70 $60 $50 $40 $30 $50.0 $ % More Valuable Than Scenario 1 Key Takeaway: The Bank in Scenario 2 is the most valuable Achieving a healthy combination of growth and profitability is the critical path toward maximizing value $50.0 Equally Valuable as Scenario 1 $20 $10 $0 1% ROAA / No Growth 0.75% ROAA / 5% Annual Growth 0.5% ROAA / 5% Annual Growth Assumptions: Scenario 1: Stable w/ 1.0% ROAA Scenario 2: Growth w/ 0.75% ROAA Scenario 3: Growth w/ 0.50% ROAA Assets $500 million $500 million $500 million ROAA 1.00% 0.75% 0.50% Perpetuity Growth 0.0% 5.0% 5.0% Note: Analysis assumes a discount rate of 10.0%. 13

14 II. Applied Bank Mergers & Acquisitions: Overview and Key Considerations 14

15 Acquisition Rationale Any acquisition should satisfy previously-established financial and strategic criteria Strategic Considerations Strategic Rationale for an Acquisition Financial Considerations Financial Rationale for an Acquisition Operating Scale Deposit Funding and/or Loan Growth Market Share Criteria: Description: Earnings per Share ( EPS ) Accretion Internal Rate of Return ( IRR ) Tangible Book Value Dilution Earnback (in Years) Regulatory Capital (Leverage Ratio) Diversification Customary > 0-5% 10-15% 3-5 years > 9-10% Enhanced Fee Income Cultural Compatibility Maintain Brand / Identity Exceptional > 5-10% > 15-20% < 3 years > 10% Minimize Ownership Dilution Human Capital Sub-Optimal < 0% < 10% > 6 years < 9% Enhance Overall Franchise Value 15

16 Sample Transaction Modeling Transaction Summary Transaction Value Total ($000) $140,000 Consideration Consideration - Cash ($000) $56,000 Consideration - Stock ($000) $84,000 Consideration - Cash Used to Purchase Target's Options ($000) $0 Target s pro forma ownership = 12% Market expectation is immediate EPS accretion Market expectation is tangible book value per share accretion by or before year 5-6 Minimum acceptable IRR is typically > 10-12% Buyer Institution Share Count Impact: Buyer Institution Shares Issued to Target Institution 3,360,000 Target Institution Ownership % of Pro Forma Company 11.8% Transaction Multiples Price / Target Institution Book Value 123.7% Price / Target Institution Net Income 17.9x Accretion / (Dilution) of Earnings per Fully Diluted Share (Excl. Trans. Charges) 0.2% 5.1% 5.1% 8.2% 8.1% Accretion / (Dilution) of Tangible Book Value per Share -2.1% -1.5% -1.0% -0.4% 0.2% Pro Forma Capital Ratios Tier 1 Leverage Ratio 9.6% Tier 1 Risk Based Capital Ratio 12.6% Total Risk Based Capital Ratio 13.6% Shareholder Return Internal Rate of Return 13.9% 16

17 Key Deal Issues On any given deal, certain critical issues will require appropriate attention Equity Fair Value Accounting Social Issues and Governance Cost Savings Human Capital Form of Consideration Price Delineation between total equity vs. common equity vs. tangible common equity Appropriate treatment of any preferred or hybrid equity: Trust Preferred Securities (i.e., TruPS) TARP Small Business Lending Fund (i.e., SBLF) Accounting equity at closing, as adjusted for requisite fair value adjustments (see next item) Appropriate identification, treatment, and structuring of relevant items affected by FASB 141r (fair value accounting in merger transactions): Loan portfolio: credit and interest rate mark -to-market Real estate: Fair value estimates Securities Portfolio (inclusive of AOCI): Fair value estimates Deposits: Interest rate mark-to-market Other borrowings: Interest rate mark-to-market Impact of transaction terms and structure on goodwill, intangibles, and pro forma equity Integration approach, treatment of target s name and brand, role of target s management in combined firm Number of board seats, if any, offered to target Accurately estimating amount and timing of cost savings opportunities Remaining duration and convenience fee (i.e., termination) of any data processing agreement Contractual payments or obligations triggered upon a change-of-control Requisite employment agreements and non-compete terms to be executed upon closing Any retention pools to incentive key employees to remain with company post-deal Treatment of any severed employees Implications of cash vs. stock Implications of using privately-held, non-traded currency as consideration Valuation of stock consideration Target s consideration preferences based on tax implications, liquidity, dividends, upside potential, etc. Target s price expectations / requirements Comparison to pro forma value as would-be shareholder of acquirer 17

18 Target Valuation Methodology A number of valuation methodologies are utilized to arrive at a valuation range Implied Equity Value Reference Range $27 $25.9 $25.8 Implied Equity Value ($ millions) $25 $23 $21 $19 $21.9 $23.3 $19.8 $24.2 $21.2 $22.0 $18.5 $23.0 Implied Value: $20MM to $25MM $17 $15 Public - U.S. Comps Public - State Comps Transactions - U.S. Transactions - State DCF Public Trading Comparables M&A Transaction Comparables Discounted Cash Flow (DCF) Multiples are applied to the target company s operating data that are derived from similar (comparable) companies / M&A transactions. A company s future free cash flows are projected and then converted to a present value 18

19 Options for Exploring a Sale There are generally 3 options for conducting a sale, each with implications on confidentiality and valuation 1. Unilateral Discussions 2. Discreet Marketing Process 3. Broad Auction Description Discreet negotiations w / only one party Simultaneous discussions w/ several parties Formal auction among multiple parties No. of Parties Involved > 10 Benefits Maximizes discretion Greater diligence on prospective acquirer Enhanced relationship with acquirer may correlate to higher value Avoids all eggs in one basket approach of unilateral discussions Allows for leveraging multiple parties against each other Utilizes proprietary market intelligence to exclude irrelevant parties Typically maximizes value Maximizes negotiating leverage Minimizes the duration to closing Limitations Value may be lower than broad auction Longer duration to closing Less discreet than unilateral discussions Value may be lower than broad auction Least discreet options Arms-length process may dissuade certain buyers Summary: Discretion Value Maximization Low High Low High Low High Speed to Closing 19

20 Hypothetical Term Sheet This blueprint sketches out the key terms typically negotiated in a combination Transaction Structure Acquirer Bancorp ( AB ) acquires Target Bank ( TB ) Purchase Price $[#.##] per TB share Total value of $[# million] Form of Consideration 50% stock / 50% cash Election TB shareholders can elect to receive all cash, all stock, or 50% stock and 50% cash subject proration so that overall consideration paid is 50% stock / 50% cash Structured as a tax-free reorganization for IRS purposes Exchange Ratio Each TB share will be converted into the sum of: o [0.0000x] AB shares, plus o $[#].00 in cash Pro Rata Ownership of Combined Company Management and Employees 90% AB / 10% TB Role of TB management: [TBD] Role of TB employees: Retention pool for key employees Customary severance for any displaced employees Other Key Issues: Consideration form: o Cash vs. Stock o Tax implications o Liquidity implications Fair value accounting adjustments o Loans o OREO o Real Estate o Bond Portfolio Credit Issues / OREO Minimum equity / Minimum net worth Synergies Human Capital matters o Contracts o Retention / Severance o Non-Compete o Change-of-Control Payments Governance [#] of AB board seat(s) given to TB Exact number of seats to-be-negotiated, typically based on TB s pro rata ownership percentage of combined company Required Approvals Standard regulatory and shareholder approvals Expected Signing Q Expected Closing Q1 / Q

21 III. Appendix: Olsen Palmer LLC Firm Overview and Bank M&A Advisory Expertise 21

22 Expertise and Credentials Christopher Olsen Managing Partner, Olsen Palmer LLC PROFESSIONAL EXPERIENCE PROFESSIONAL RECOGNITION QUOTES AND PUBLICATIONS SPEAKING ENGAGEMENTS Mr. Olsen is the co-founder and managing partner of Olsen Palmer LLC where he advises Banks & Thrifts across the full spectrum of Mergers & Acquisitions Before founding Olsen Palmer, Mr. Olsen served with Milestone Advisors (acquired by Houlihan Lokey) as well as with Hovde Financial, in both cases as a Managing Director and head of Southeast U.S. Bank & Thrift M&A Mr. Olsen has previously worked in the Financial Institutions Group of Morgan Stanley s Investment Banking Division as well as for First Annapolis Consulting Mr. Olsen began his career working for Norwest (now Wells Fargo) and then for a 3-branch community bank Over his career, Mr. Olsen has advised on over 60 completed M&A transactions among financial services companies with deal values as large as $4 billion Christopher Olsen named to Leading Investment Banker Rankings S&P Capital IQ (February 2016) Olsen Palmer LLC named Top 10 M&A Advisor to Banks & Thrifts SNL Financial (July 2015) Bank M&A Deal Drivers, Mergermarket, July 2016 Community Banks Size Up Consolidation, Baltimore Business Journal, April 24, 2015 Bank M&A in 2014 the Strongest in Nearly a Decade, What's Ahead for 2015, Nashville Business Journal, February 18, 2015 Trend Lines: Renewed Hopes for M&A Activity, SNL Financial, January 7, 2015 Why Tennessee's banking M&A scene is among the country's most active, Nashville Business Journal, June 25, 2014 Olsen Palmer Ready to Explore Strategic Options for Banks, SNL Financial, September 18, 2013 The Pipeline: Will Banks Seek a Special Combination?, SNL Financial, September 12, 2011 M&A Pro to Focus on Southeast Banks, SNL Financial, July 14, 2011 Despite Losses, First Tennessee Marches Ahead, Nashville Business Journal, July 13, 2008 Ante raised for banks buying into Nashville, Nashville Business Journal, February 25, 2007 M&A: Bank buying buzz in Georgia s Big Peach, SNL Financial, August 28, 2006 Banks See Nashville as Growth Machine, The Tennessean, November 4, 2005 Banks Paying High Dollar to be in Nashville Market, The Tennessean, September 30, 2004 Building an M&A Blueprint, Bank Director Magazine (2016) Executive Management Conference, Mississippi and Tennessee Bankers Association (2016, 2013) CEO Forum, Maryland, Virginia, and West Virginia Bankers Association (2016) Maryland Banker s Association, Annual Meeting, The M&A Landscape: Valuation Trends, Deal Drivers, and Strategic Alternatives (2016) SNL Financial, Advanced Topics in Bank Valuation (2016, 2015, 2014, 2013, 2012, 2008) Building a Successful M&A Strategy, Webinar, in conjunction with HORNE LLP (2015) Tennessee Banker s Association, Annual Meeting, The State of the Bank M&A Landscape (2015) Waller Law s Southeastern Banking Seminar, Bank M&A, Deployment of Capital, and Regulatory Hurdles (2014) Society of CPAs, Bankers Night The Bank M&A Landscape: Trends, Themes, and Deal Drivers (2012) TBA Independent Banker s Division, Annual Meeting, The Community Banking Landscape (2012, 2007) Tennessee Banker s Association, Annual Meeting, Measuring, Maximizing, and Protecting the Value of Your Institution (2006) EDUCATION MBA Columbia University BBA George Washington University Additional Professional Studies Columbia University Law School; American Bankers Association CERTIFICATIONS Licensed with Financial Industry Regulatory Authority (FINRA) as o General Securities Principal (series 24) o Investment Banking Representative (series 79) o General Securities Representative (series 7) o Uniform Securities Agent (series 63) o Limited Representative Private Securities Offering (series 82) 22

23 Olsen Palmer LLC: Specialized Expertise We are exclusively focused on community bank M&A advisory Olsen Palmer is a nationallyrecognized independent investment banking firm that specializes in advising community banks across the full spectrum of Mergers & Acquisitions. By design, we take a community banking approach: nimble, hightouch, and conflict-free Community Bank-Specific Expertise Our Firm Our Services Our Expertise Our Advantage Independent, Client-Centric Advice We advise community banks across the spectrum of M&A, including: Whole-bank sales Whole bank acquisitions Mergers / Mergers-of-Equals Branch sales and purchases FDIC-assisted transactions Fairness opinions Valuations Strategic planning Localized Market Intelligence The principals of Olsen Palmer have been advising financial institutions for three decades. Our experience includes prominent boutique firms including Houlihan Lokey, Milestone Advisors, and Hovde Financial as well as national full service firms including Morgan Stanley and Bank of America. We have advised financial institutions on transactions with values as small as $4 million and as large as $4 billion. Olsen Palmer has been ranked a Top 10 M&A Advisor and Managing Partner Christopher Olsen was named a Leading Dealmaker based on the number of transactions advised, according to SNL Financial and S&P Capital IQ. We have intentionally formed our firm to be a boutique in every sense. We bring to every client engagement our extensive expertise and unmatched market intelligence while maintaining the flexibility to dedicate our full, senior-level attention to each and every transaction. By specializing on advising true community banks, we provide a deeper-level of expertise and client service than many of our competitors who focus on larger institutions. By design, we solely provide advisory services and intentionally do not offer sales and trading, equity research, institutions services, or secondary capital markets. Our model allows us to remain free from any real or potential conflicts that inherently reside in the business models of larger, diversified firms. Top 10 M&A Advisory Firm SNL Financial Leading Bank M&A Advisor S&P Capital IQ 23

24 Recent Transactions Olsen Palmer is a leading advisor to banks across the M&A spectrum Advised Acquirer Advised Acquirer Advised Seller Advised Acquirer Advised Seller Advised Acquirer Advised Acquirer Has acquired 3 Branches from Has acquired 4 Branches from Has been acquired by Has Acquired Has been acquired by Has Acquired Has acquired F&M Bancorp, Inc. May 13, 2016 April 1, 2016 November 6, 2015 September 25, 2015 September 11, 2015 August 31, 2015 April 30, 2015 Advised Seller Advised Acquirer Advised Seller Advised Acquirer Advised Acquirer Advised Seller Has been acquired by Has acquired Has been acquired by Has acquired 1 branch from Has acquired 4 branches from Has been acquired by March 6, 2015 October 1, 2014 December 14, 2012 December 7, 2012 November 9, 2012 June 30, 2012 Advised Seller Advised Seller Advised Acquirer Advised Merger-of-Equals Advised Seller Advised Seller Advised Seller Premier Bank of Brentwood Has been acquired by Has been acquired by Has acquired Has merged with Has been acquired by Has been acquired by Has been acquired by November 30, 2007 July 1, 2007 December 13, 2006 September 1, 2006 August 1, 2006 March 15, 2006 December 31, 2004 *Includes transactions executed by Olsen Palmer professionals while at other firms. 24

25 Advisory Services in Detail We offer comprehensive community bank M&A advisory support Acquisition Advisory Whole-bank, branch, or FDIC acquisitions Comprehensive buy-side transaction advisory services: Planning: Pre-transaction strategic planning and analysis Preparation: Develop M&A blueprint and acquisition criteria Target Identification: Identify potential targets using key filters and proprietary market intelligence Valuation: Calculate valuation levels based on cash flow analysis, comparable transactions, and publicmarket characteristics Modeling: Detailed modeling of contemplated transaction(s), including impact on book value, EPS, earnback, IRR and capital ratios Discussions: Initiate and facilitate discussions with potential target(s) Structure: Advise on the optimal transaction structure based on transaction-specific circumstances Negotiations: Lead the efforts to successfully negotiate key business terms Documentation: Facilitate the drafting of merger agreement and other applicable documents Announcement: Support the transaction-related notices and announcements Board Presentation: Present and discuss transaction rationale to board members Sell-side Advisory Whole-bank sale or branch divestitures Comprehensive transaction advisory services: Planning: Pre-transaction strategic planning and analysis Preparation: Develop M&A sale process including blueprint and timeline Buyer Identification: Identify potential acquirers using key filters and proprietary market intelligence Valuation: Calculate valuation levels based on cash flow analysis, comparable transactions, and publicmarket characteristics Modeling: Detailed modeling of contemplated transaction(s), including impact on book value, EPS, earnback, IRR and capital ratios Process: Determine optimal sell-side process (e.g., one-off discussions, full auction, limited auction, etc.) Discussions: Initiate and facilitate discussions with potential acquirers Structure: Advise on the optimal transaction structure based on transaction-specific circumstances Negotiations: Lead the efforts to successfully negotiate key business terms Documentation: Facilitate the drafting of merger agreement and other applicable documents Announcement: Support the transaction-related notices and announcements Board Presentation: Present and discuss transaction rationale to board members Valuations Stand-alone and transaction-related bank and branch valuations based on cash flow projections, comparable transactions, publicmarket characteristics, and capital adequacy Fairness Opinions Transaction-related buy-side and sell-side Fairness Opinion letters and supporting presentations Board Planning and Education Presenting up-to-date outlook on M&A market characteristics Support drafting of Board-level M&A blueprint 25

26 General Information and Limitations This presentation, and any oral or video presentation that supplements it, have been developed by and are proprietary to Olsen Palmer LLC ( Olsen Palmer ) and were prepared exclusively for the benefit and internal use of the recipient. Neither this printed presentation, nor any oral or video presentation that supplements it, nor any of their contents, may be used, reproduced, disseminated, quoted or referred to for any other purpose without the prior written consent of Olsen Palmer. The analyses contained herein rely upon information obtained from public sources, the accuracy of which has not been independently verified, and cannot be assured by, Olsen Palmer. Neither Olsen Palmer nor any other party makes any representation or warranty regarding the information contained herein and no party may rely on such information. The information contained herein will not be updated or corrected based on any additional information. This information should not be construed as, and Olsen Palmer is not undertaking to provide any legal, regulatory, accounting, insurance, tax, investment or similar professional advice. This presentation is protected under applicable copyright laws and does not carry any rights of publication or disclosure. 26

27 2020 K Street, NW Suite 450 Washington, DC Christopher Olsen Managing Partner O: M colsen@olsenpalmer.com