Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Union First Market Bankshares — KBW Carolina & Virginia Bank Conference September 2012
33 slides from Atlantic Union Bankshares's conference presentation, Sep 18, 2012
Slide 1: Union First Market Bankshares KBW Carolina & Virginia Bank Conference
Exhibit 99.1 Union First Market Bankshares KBW Carolina & Virginia Bank Conference September 2012
Slide 2: Overview
Overview Financial Performance Near-Term Outlook Q&A
Slide 3: Forward-Looking Statement
Forward-Looking Statement Certain statements in this report may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future ev
Slide 4: Company Overview
Company Overview One of the largest financial services organizations headquartered in Virginia Holding company formed in 1993 – Banking history in some of our communities goes back more than 100 years Assets of $4.0 Billion Comprehensive financial services provider offering commercial and retail ban
Slide 5: Union First Market's Strengths
Union First Market’s Strengths Excellent branch network, competitive banking products and services and a loyal client base Well positioned for organic growth given commercial activity, household income levels and population growth in its footprint Strong balance sheet and solid capital base Conserva
Slide 6: Virginia Population Expansion
Virginia Population Expansion Population Change, 2000 to 2010 Lost Population Gained 0—5,000 Gained 5,001-10,000 Gained 10,001-25,000 Gained 25,001-50,000 Gained more than 50,000 Source: Weldon Cooper Center, UVA
Slide 7: Union First Market Footprint
Union First Market Footprint Added 8 new branches in 2011 Closed 4 branches in 2012 Only community bank with a presence in top 7 Virginia banking markets Banking market ranking includes deposits, economic and population growth Along major corridors (I-95, I-64, I-81) Stable/Growing population market
Slide 8: Quality Franchise
Quality Franchise Company Ticker State Branches Assets Cullen/Frost Bankers, Inc. CFR TX 128 $18.5 Pinnacle Financial Partners, Inc. PNFP TN 34 4.8 Union First Market Bankshares Corp. UBSH VA 100 3.9 Dollars in billions Richmond, VA MSA Deposits Market Branch in Market Share Rank Institution (ST) Co
Slide 9: First Half Highlights
First Half Highlights More than 2,200 new households in the first half Continued deposit and loan growth Closed 4 branches in May as part of branch rationalization analysis New mortgage originators and low rate environment driving strong growth in non-interest income Asset quality continues to impro
Slide 10: Financial Performance
Financial Performance $ 3,000,000 $ 2,837 $2,819 $2,842 $2,888 $ 2,500,000 $ 2,000,000 $1,874 $1,874 $ 1,500,000 $ 1,000,000 2008 2009 2010 2011 1Q 2012 2Q 2012 $ 3,500,000 $3,175 $3,216 $3,219 $ 3,070 $ 3,000,000 $ 2,500,000 $ 1,927 $ 1,916 $ 2,000,000 $ 1,500,000 $ 1,000,000 2008 2009 2010 2011 1Q
Slide 11: Investment Portfolio
Investment Portfolio Total Portfolio is $647 MM Did not invest in or 16.2% of assets Pooled TRUPs 2Q12 yield on total securities of 3.68% Investment Portfolio % of Portfolio $ in thousands U.S. government and agency securities 0.6% 3,576 Obligations of states and political subdivisions 32.1% 207,783
Slide 12: Loan Portfolio
Loan Portfolio Construction, Land Development, Credit Cards , 0.7% Other, and Other Land, 1.4% 15.5% Personal , 8.0% Commercial , Second 5.9% Mortgages, 1.7% Equity Lines of Credit , 10.5% Residential 1-4 Family, 15.9% Commercial Real Estate, 40.3% 6/30/2012 Construction, Land Development, and Other
Slide 13: Construction & Development
Construction & Development Change 6/11 to 6/12 % of $ Portfolio % of Type Raw Land -$23.1 -3.9% -21.9% Land Development / Commercial Lots $3.6 2.3% 2.9% Construction Loans to Builders $1.9 1.2% 3.0% Residential Non Builder Lots -$2.7 -0.1% -6.4% Residential Builder Lots -$7.6 -1.0% -13.9% Commercial
Slide 14: Commercial Real Estate
Commercial Real Estate Small Mixed Use Other, Building, 2.7% 0.4% Special Use, 6.1% Hotel, Motel, B&B, 4.8% Owner Occupied Commercial RE, 41.2% Multi Family, 11.8% Office Warehouse, 8.2% Owner Office, 11.9% Retail Office Change 6/11 to 6/12 % of $ Portfolio % of Type Owner Occupied Commercial RE $17
Slide 15: Asset Quality Trends
Asset Quality Trends 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2008 2009 2010 2011 1Q 2012 2Q 2012 ALLL Adjusted for Acquired Loans Allowance to Loans (ALLL) Charge-offs to Average Loans Provision for Loan Losses to Average Loans NPLs to Loans
Slide 16: NPAs by Type
NPAs by Type OREO / Real Estate Investment, 2.0% Other, 0.5% Construction and Land Development, 29.6% OREO, 45.7% Commercial, 11.1% Commercial Non- Owner Occupied, Consumer, 4.1% 0.4% Commercial Owner Occupied, 6.5% 6/30/2012 Construction and Land Development $22.2 29.6% Commercial $8.3 11.1% Commer
Slide 17: NPAs by Market
NPAs by Market Rappahannock, Northern Virginia, 3.5% Other, 2.1% 0.0% Charlottesville, Hampton Roads, 9.1% 4.1% Northern Neck, 13.7% Fredericksburg, 33.6% Richmond, 33.9%
Slide 18: NPAs by Market
NPAs by Market 6/30/2012 $ % of Portfolio Charlottesville $6.8 9.1% Richmond $25.4 33.9% Fredericksburg $25.2 33.6% Northern Neck $10.3 13.7% Hampton Roads $3.1 4.1% Rappahannock $2.6 3.5% Northern Virginia $0.0 0.0% Other $1.6 2.1% $75.0 100.0% Change 6/11 to 6/12 $ % of % of Portfolio Market Charl
Slide 19: OREO by Type
OREO by Type King Real Estate Investment, 4.2% Other, 0.0% Consumer, 11.7% Commercial Owner Real Occupied, 0.0% Construction and Land Development, 39.4% Commercial Non- Owner Occupied, 17.9% Commercial, 1.7% King Carter Golf Community, 25.1% Change 6/11 to 6/12 % of $ Portfolio % of Type Constructio
Slide 20: Deposit Composition
Deposit Composition Change 6/11 to 6/12 Composition $ % Swing Demand Deposits $71.2 14% 2% NOW accounts $46.7 12% 1% Money market $63.6 8% 1% Savings $23.0 13% 0% CDs > 100k $28.6 6% 0% CDs < 100k $-97.3 -15% -4% $136.9 4% Demand CDs < 100k Deposits 18% 18% CDs > 100k 17% NOW accounts 13% Savings 6%
Slide 21: Capital Ratios
Capital Ratios 16.00% 14.70% 14.68% 14.51% 14.64% 14.55% 14.00% 12.00% 10.00% 8.64% 8.91% 8.97% 9.11% 8.22% 8.00% 6.00% 4.00% 2.00% 0.00% 2009 2010 2011 1Q 2012 2Q 2012 Total risk-based capital Tangible Equity/Tangible Assets
Slide 22: Net Income
Net Income $35,000 $30,445 $30,000 $25,992 $24,822 $25,000 $22,922 $19,756 $20,000 $17,925 $16,343 $14,514 $15,000 $10,000 $8,360 $5,000 $0 2004 2005 2006 2007 2008 2009 2010 2011 1H 2012
Slide 23: Net Interest Margin
Net Interest Margin 3.92% 3.89% 3.52% 3.22% 3.30% 3.69% 3.97% 4.22% 4.23% 4.23%* 4.28%* 4.47%* 4.47%* 4.34%* 4.20% 4.28%* 4.25%* 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% * Excludes acquisiti
Slide 24: ROA/ROE Peer Comparison
ROA/ROE Peer Comparison ROA 0.86 0.86 0.90 0.85 0.80 0.75 0.69 0.70 0.65 0.60 0.55 0.50 National Virginia Union ROE 8.56 7.84 9.00 8.00 6.17 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 National Virginia Union Median as of June 30, 2012 National banks includes all $2—$8 Billion banks
Slide 25: ROA/ROE Quarterly Trends
ROA/ROE Quarterly Trends 1.00% 0.91% 0.93% 0.90% 0.83% 0.84% 0.82% 0.86% 0.80% 0.71% 0.70% 0.66% 0.60% 0.50% 0.46% 0.40% 0.30% 0.20% 0.10% 0.00% 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 ROE 9.00% 8.41% 8.02% 7.84% 8.00% 7.46% 7.49% 7.51% 7.00% 5.81% 6.21% 6.00% 5.00% 4.07% 4.00% 3.00% 2.00% 1.00
Slide 26: Top-Tier Financial Performance
Top-Tier Financial Performance Focus has primarily been on merger integration, products and asset quality over the past few years Strong results from that effort Customer surveys show satisfaction at all-time high and teammate surveys show similar high marks Now time to turn to fee income and non-in
Slide 27: Mortgage Update
Mortgage Update A large national insurance company decided to exit the mortgage business in late 2011 Union Mortgage hired 28 originators as well as additional processors and leaders Contribution from mortgage company doubled in second quarter to $470,000 April was not profitable as we finished addi
Slide 28: 2012 Outlook
2012 Outlook Stable to growing economy in footprint – impact of Federal budget cuts (including defense) not known Positive asset quality trends continue as commercial and residential real estate market stabilize further Expect continued loan growth Project increasing contribution from Union Mortgage
Slide 29: Value Proposition
Value Proposition Branch footprint is a competitive advantage and brings a unique franchise value Strong balance sheet and capital base Experienced management team Successful acquirer and integrator Proven financial performance in all market environments Higher ROA and ROE than Virginia peers Increa
Slide 30: APPENDIX
APPENDIX
Slide 31: Risk Management
Risk Management Lending Philosophy Control Environment In-market lender Strong internal policies Granular portfolio analysis Active compliance, audit teams Full guarantees of commercial Positive regulatory relations credits Acted Early In The Current Cycle Best In Class Risk Mitigation Reappraised l
Slide 32: Positioned Well to Succeed
Positioned Well to Succeed Key Findings from our Fall 2011 surveys: 94% of our customers gave us either an “A” (66%) or “B” (28%) Higher than either Union Bank & Trust or First Market Bank scored prior to the merger Only 85% of prospects gave their Bank “A” or “B” Net promoter score of 49% compared
Slide 33: THANK YOU!
THANK YOU!
Union First Market Bankshares — KBW Carolina & Virginia Bank Conference September 2012 on 6ix