Access National — Investor Day (November 2018)
133 slides from Access National's investor day presentation, Nov 13, 2018
Slide 1: Bill Cimino, Director of Investor Relations
Exhibit 99.1 Bill Cimino VICE PRESIDENT DIRECTOR OF INVESTOR RELATIONS
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation may constitute forward-looking Please refer to the “Risk Factors” and “Management’s Discussion and statements within the meaning of the Private Securities Litigation Reform Act Analysis of Financial Condition and Results of Operation
Slide 3: Additional Information
Additional Information Unaudited Pro Forma Financial Information No Offer or Solicitation The unaudited pro forma financial information included herein is presented for This presentation does not constitute an offer to sell or a solicitation of an offer informational purposes only and does not neces
Slide 4: Balance Sheet (GAAP)
Balance Sheet (GAAP) Loans Deposits ($M) ($M) $9,412 $9,835 $7,142 $6,307 $5,671 $6,992 $5,964 $6,379 2015 2016 2017 Q3 18 2015 2016 2017 Q3 18 Assets Total Equity ($M) ($M) $13,372 $1,880 $9,315 $8,427 $7,694 $995 $1,001 $1,046 2015 2016 2017 Q3 18 2015 2016 2017 Q3 18 Data as of or for the twelve
Slide 5: Profitability Ratios (GAAP)
Profitability Ratios (GAAP) ROA Efficiency Ratio (%) (%) 1.05% 0.96% 0.90% 68.50% 66.30% 66.70% 66.08% 0.83% 2015 2016 2017 YTD 18 2015 2016 2017 YTD 18 ROE EPS (%) ($) $1.77 $1.67 7.79% 7.38% $1.49 $1.55 6.76% 7.07% 2015 2016 2017 YTD 18 2015 2016 2017 YTD 18 Data as of or for the twelve months end
Slide 6: Strategic Actions in 2Q 2018
Strategic Actions in 2Q 2018 2018 Strategic Actions Financial Impact to Second Quarter 2018: ($ in Thousands) Strategic ActionFor the Twelve Months Ended 12/31 Net Income Three Consumer Months LoansEnded C&I LoansNine Months Ended (DollarsSale in of thousands) Shore Premier Finance at a 5% premium20
Slide 7: Reconciliation of Non-GAAP Disclosures: Net Operating Income
Reconciliation of Non-GAAP Disclosures Net Operating Income For the Twelve Months Ended 12/31 Three Months Ended Nine Months Ended (Dollars in thousands) 2014 2015 2016 2017 3/31/2018 6/30/2018 9/30/2018 9/30/2018 Net income (GAAP) $52,164 $67,079 $77,476 $72,923 $16,639 $47,327 $38,197 $102,163 Plu
Slide 8: Reconciliation of Non-GAAP Disclosures: Tangible Common Equity
Reconciliation of Non-GAAP Disclosures Tangible Common Equity For the Twelve Months Ended 12/31As of September 30, Three 2018 Months Ended Nine Months Ended (Dollars in thousands) 2014Tangible Common 2015 Equity 2016 2017 3/31/2018 6/30/2018 9/30/2018 9/30/2018 Sale of Shore Premier Finance at a 5%
Slide 9: Reconciliation of Non-GAAP Disclosures: Return on Assets
Reconciliation of Non-GAAP Disclosures Return on Assets (ROA) ForFor the the Twelve TwelveTwelve Months Months Months Ended Ended Ended 12/31 12/31 12/31 Three Months Ended Three MonthsMonths Ended Ended Nine Months Ended (Dollars(Dollars(Dollars in inthousands) inthousands) thousands) 2013 20132014
Slide 10: Reconciliation of Non-GAAP Disclosures: ROTCE
Reconciliation of Non-GAAP Disclosures Return on Tangible Common Equity (ROTCE) ForFor the the TwelveFor Twelve the Months Twelve Months Ended Months Ended 12/31 Ended 12/31 12/31 Three Months Ended Three Three Months Months Ended EndedNine Months Ended (Dollars(Dollars(Dollars in inthousands) thous
Slide 11: Reconciliation of Non-GAAP Disclosures: Efficiency Ratio
Reconciliation of Non-GAAP Disclosures Efficiency Ratio ForFor the the TwelveFor Twelve the Months Twelve Months Ended Months Ended 12/31 Ended 12/31 12/31 Three Months Ended Three Three Months Months Ended EndedNine Months Ended (Dollars(Dollars(Dollars in inthousands) thousands)in thousands) 20132
Slide 12: Reconciliation of Non-GAAP Disclosures: Net Interest Margin
Reconciliation of Non-GAAP Disclosures Net Interest Margin ForFor theFor the Twelve the Twelve Twelve Months Months Months Ended Ended Ended 12/31 12/31 12/31 Three Months Ended Three Three Months Months Ended EndedNine Months Ended (Dollars(Dollars(Dollars in in inthousands) thousands) thousands) 2
Slide 13: John Asbury, President & CEO
John Asbury PRESIDENT & CEO, UNION BANKSHARES CEO, UNION BANK & TRUST
Slide 14: The New Union Story
The “New Union” Story: FROM VIRGINIA COMMUNITY BANK TO VIRGINIA’S BANK Virginia’s Bank The Union “Moat” • Franchise cannot be replicated • Virginia’s first statewide, independent bank in 20 years • “Crown jewel” deposit base - 46% transaction accounts* • The alternative to large competitors • Dense,
Slide 15: Union Bankshares Corporation: Pro Forma with Access Bank
Union Bankshares Corporation: (PRO FORMA WITH ACCESS BANK) Pro Forma Highlights ($bn)1 Pro Forma Branch Footprint UBSH (140) Maryland BaltimoreBaltimore ANCX (15) RestonReston Assets $16.5 Washington UBSH LPO (2) Loans $11.4 FredericksburgFredericksburg
Slide 16: A Unique Profile Operating in Attractive Markets
A Unique Profile Operating in 4/10 Most Attractive US Markets Opportunity in Fast-Growing, Affluent Markets Top 10 Counties in the US Top 10 Counties in Virginia MEDIAN HH INCOME ($000S)1 PROJECTED 5-YR POPULATION GROWTH 160.0 Crystal City, VA 10.0% $141 8.5% $128 $124 $123 $123 $123 $120 $119 $116
Slide 17: Virginia Banking Genealogy
Virginia Banking Genealogy All 6 of Virginia’s Regional Banks were Lost to Interstate Banking Signet Sovran Central Fidelity Crestar Dominion First Virginia 17
Slide 18: Our Acceleration Strategy
Our acceleration strategy Establish Focus Design for Success Drive-to-Scale • Set the vision • Put the right team on the field • Press for advantage • Recreate a Virginia regional bank • Position as alternative to large banks • Efficiently crossed $10B with Xenith acquisition • Take back what was lo
Slide 19: Differentiated Financial Performance
Differentiated Financial Performance TO TOP TIER Top Tier 2017 2018 Projected 2018 Metric YE Q3 Q4 RETURN ON ASSETS 0.95% 1.27% > 1.3% ROTCE 11.69% 14.94% > 15.0% EFFICIENCY RATIO 63.3% 57.2% <55% Data as of or for the twelve months ended each respective year, except for Q3 18 data which is as of or
Slide 20: Balancing Commitment to Key Stakeholders
Strategic Imperative: Balancing Commitment to 4 Key Stakeholders Teammates Customers Satisfied customers think of us first Rewarding teammate experiences for their banking needs, refer others enable and inspire us to enrich the to us, and reward us with their lives of the people and communities THIS
Slide 21: 2019 Strategic Priorities
2019 Strategic Priorities: THREE CHANGES Diversify Loan Portfolio Grow Manage to Higher Levels & Revenue Streams Core Funding of Performance • Increase commercial lending growth • Fund loan growth with deposit growth, • Achieve and sustain top tier financial (Commercial & Industrial + Owner maintain
Slide 22: Maria Tedesco, President Union Bank & Trust
Maria Tedesco PRESIDENT UNION BANK & TRUST
Slide 23: Three Strong Lines of Business
Three Strong, Integrated, and Growing Lines of Business Commercial Banking Retail Banking Wealth Management • 9,500 customers • 197,000 consumer household customers • 6,900 households • $7.5 billion in outstanding loan balances • 45,000 business customers • $3.7 billion in AUM • $11.8 billion in loa
Slide 24: A Winning Position
A Winning Position Community National Banks Banks Combining HIGH-TECH & HIGH-TOUCH Critical Mass of Nimble Enough to Big Bank Leadership Strong Technology Teammates Who Branches for Move With Changing and Expertise to Meet Striving to Parity Genuinely Care Convenience Expectations Changing Needs 24
Slide 25: Aligning Strategies & Objectives with Customer at the Core
Aligning Strategies & Objectives with Customer at the Core Diversify Loans Manage to Higher Grow Core Funding Strengthen Digital Make Banking Easier & Revenue Mix Level Performance Analytics to Drive Sales Stronger, Segmented and Marketing & Better Value Propositions TMS COMMERCIAL Sm. Bus RETAIL Ma
Slide 26: Enabling the Businesses to Achieve Corporate Objectives
Enabling the Businesses to Achieve Corporate Objectives Marketing Digital Strong, Differentiated Brand, Omni Channel Experience, Segmented Product Line, Competitive Parity, Best in Pricing Optimization, Breed Applications, Actionable Customer Analytics Improved Speed to Market COMMERCIAL RETAIL Huma
Slide 27: Opportunities for Growth
Opportunities for Growth Commercial Banking Retail Banking Wealth Management Segmented Portfolio Segmented Business Model Client Services Enhanced Solutions Simplification Full Suite of Advisory Services Market Expansion Targeted Growth Strategies Integrated & Customized Solutions 27
Slide 28: Ours is a Story of Growth
Ours is a Story of Growth Exciting Growth Opportunities ACROSS MARKETS AND BUSINESSES Our Markets are Broad Customer Franchise Attractive and Expanding Significant Relationship Potential Multiple Business Leveraging Ability Highly Engaged Teammates More Value to Customers and Prospects Ready to Cont
Slide 29: David Ring, Commercial Banking Group Executive
David Ring COMMERCIAL BANKING GROUP EXECUTIVE
Slide 30: Commercial Banking Group
Commercial Banking Group Commercial Real Estate Banking Commercial Banking Corporate Banking Real Estate experts focused on developing long Focus on small and medium sized business Focus on larger businesses with revenues term meaningful relationships with large and primarily with revenues between $
Slide 31: Commercial Segment Business Units
Commercial Segment Business Units Build on a Strong Foundation PRODUCE RESULTS Diversified Revenue Strategic Growth New Markets, New Customer Segments, New Products Disciplined Execution Local Market Delivery, Operating Leverage, Process and Product Improvement, Our Strong Foundation Superior Risk M
Slide 32: Our Value Proposition
Our Value Proposition Focused on the Customer Exceptional Expertise Teammates and Advice CUSTOMER Closely Manage Integrated Risk & Return Solutions Superior Service 32
Slide 33: Our Value Proposition: Expertise and Advice
Our Value Proposition: EXPERTISE AND ADVICE “We’ve come to rely deeply on Charlie’s advice regarding our acquisition strategy.” - Stuart Farrell, Managing Partner Tuckahoe Holdings 33
Slide 34: Our Value Proposition: Exceptional Teammates
Our Value Proposition: EXCEPTIONAL TEAMMATES 34
Slide 35: Our Value Proposition: Consistent Superior Service
Our Value Proposition: CONSISTENT SUPERIOR SERVICE “A rare combination of financial savvy, people skills, and wisdom.” - Adam Fried, Atlantic Builders CEO describing Commercial Banker Pete Humes 35
Slide 36: Our Value Proposition: Seamless Orchestration of Solutions
Our Value Proposition: SEAMLESS ORCHESTRATION OF SOLUTIONS With their Union banker’s help, Keswick Vineyards is producing more award-winning wine than ever. 36
Slide 37: Our Business Model's Evolution: Underway and Ongoing
Our Business Model’s Evolution: UNDERWAY AND ONGOING Diversified Loan Growth Across CRE Concentration Industries and Asset Classes Full Primary Bank Client Transactional Lending Relationships Staffing and Goals Aligned with Uniform Banker Model Market Characteristics and Opportunity Relationship Man
Slide 38: Our Business Model's Evolution: Well Underway
Our Business Model’s Evolution: WELL UNDERWAY Implemented new treasury management Defined and executed on a Moved business banking from retail platform; hired sales and product consistent commercial strategy banking to commercial banking management leadership Recruited 26 new bankers focused on Alig
Slide 39: Our Business Model's Evolution: Better-Balanced Pipeline Trend
Our Business Model’s Evolution: A BETTER-BALANCED PIPELINE TREND 1600000 1400000 1200000 1000000 % 800000 $ 600000 400000 Commitments 200000 0 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 3Q'18 CRE ($) C&I ($) CRE (%) C&I (%) 39
Slide 40: Focus on High Opportunity Markets
Our Business Model’s Evolution: FOCUS ON HIGH OPPORTUNITY MARKETS Adding C&I Talent TO EXPAND THE BUSINESS New Hires BY REGION BY QUARTER Region Q1 Q2 Q3 Q4 Other Total Baltimore 011 002 Central 001 001 Carolinas 033 006 Coastal 113 016 Eastern 002 002 NOVA 102 003 Western 012 003 Treasury 102 003 T
Slide 41: Integrated Teams Bring the Whole Bank
Our Business Model’s Evolution Integrated Teams Bring the Whole Bank TO HIGH PRIORITY SEGMENTS Proud to Support COLLEGES & UNIVERSITIES Brandermill Woods RICHMOND, VA Since 1986, Brandermill Woods has been a popular place to call home. When they wanted to expand in 2012, they reached out to a bank t
Slide 42: Leveraging the Model
Our Business Model’s Evolution: LEVERAGING THE MODEL Market Strategy & Performance DRIVEN BY REGIONAL MANAGERS Region President Line of Business Leader Provides local leadership and is Leverage “best athlete” leader to consistently provide visible in the community expert advise to clients and coachi
Slide 43: Our Three Year Focus Areas
Our Three Year Focus Areas Exciting Growth Opportunities ACROSS MARKETS AND BUSINESSES Diversify Loan Portfolio and Revenue Grow Core Deposits • Review New Commercial Business Line Opportunities • Focus on cash centric businesses • Explore Additional Industry Verticals & Markets (i.e. Homeowners Ass
Slide 44: Bob Martin, President of Wealth Management
Bob Martin PRESIDENT OF THE WEALTH MANAGEMENT DIVISION
Slide 45: Milestones
Milestones Union’s Wealth Management Division Began in 1993. In 2013, We Began to Accelerate Our Growth and Profit. 1993 2013 2016 -2018 Founded Formed Wealth Management Acquired Registered Investment Union Investment Services teams with strategic focus on Advisors (RIA), Old Dominion High Net Worth
Slide 46: Wealth Hierarchy
Wealth Hierarchy Wealth Management services are tailored to meet clients’ increasingly complex needs Channel Client Needs Service Model High-Touch How Can I Secure My Family’s Legacy? HNW • Complex Financial Planning Commercial • Customized Investment Management $1M-25M • Trust Am I On Track? Mass A
Slide 47: Industry Trends
Industry Trends Wealth Management continues to be reshaped by external forces, requiring new strategies for long-term, sustainable success Tailwinds Headwinds Demographic Changes Increasing Price Competition Digital Innovation Digital Disruption Planning and Customization Client Biases 47 Source: Ka
Slide 48: Organic Opportunity: Great Wealth Transfer
Organic Opportunity The great wealth transfer creates additional opportunity $36T will be transferred to heirs between 2007 and 2061 Boomer-to-Millennial Wealth Transfer, 2007-2061 $36T Bequests to heirs $27T $5.6T Bequests to charity Federal estate taxes (includes lifetime giving) 48 Source: Boston
Slide 49: Client Loyalty
Client Loyalty Our Clients Love Us 90% 75% 88% of clients express a high would recommend Union to believe their advisor degree of satisfaction a friend or family member considers their entire financial situation “I am very happy with the level of “I love, love, love, Union Bank! I feel they “Our adv
Slide 50: Comprehensive Services
Comprehensive Services Union offers comprehensive wealth management services, underpinned by financial planning, to individuals, families, professionals, and business owners Loans Risk Estate Management Planning Financial Planning Investments Trusts Deposits 50
Slide 51: Client Segments: 80/20 Rule
Client Segments: 80/20 RULE The vast majority of revenue and assets under advisement comes from High Net Worth clients Wealth Management Assets Under Relationships Advisement $2.9B 3,196 2,286 1,465 $539M $151M MassMass Emerging/High MassMass Emerging/High Affluent Net Worth Affluent Net Worth 51 As
Slide 52: Cross-Line-of-Business Synergy
Cross-Line-of-Business Synergy Teammates in Retail and Commercial are where most Wealth Management client relationships begin Retail Financial Advisor Client Advisor Commercial (Union Investment Services) (Private Banking) Affluent Households need financial Businesses and Owners also need organizati
Slide 53: Financial Snapshot
Financial Snapshot Our five-year Compound Annual Growth Rate (CAGR) is 40%+, moving Wealth Management to a more meaningful bottom-line contributor $20.1M Total Revenue 40%+ 5-year CAGR $6.2M Income Before Taxes $3.0M $0.1M 2012 2013 2014 2015 2016 2017 2018 $3.7B Assets Under Management $0.9B 2012 2
Slide 54: Organic Opportunity
Organic Opportunity There is tremendous opportunity to expand in footprint and capture additional share of wallet with existing Union banking customers $2B Held-Away Assets with Existing Union Wealth Clients 1.4M High-Opportunity* 36k Retail Households in our Footprint Union Commercial Clients 54 Ho
Slide 55: Value Proposition
Value Proposition We are making our holistic, team-based wealth model more accessible in our communities, so our clients can focus on what really matters in their lives • Full-spectrum wealth advisory services • Different solutions for different stages of and customized solutions your life • A team
Slide 56: Quarterback Model
Quarterback Model The Client Advisor is the client’s single point of contact who brings in Subject Matter Experts (SMEs) to deliver integrated solutions for clients Attorney Executive Banker Financial SME Planning Advanced SME Planning SME Wealth Client Client Advisor Insurance Trust SME Investments
Slide 57: Strategic Imperatives
Strategic Imperatives By unlocking the power of the franchise, investing in digital and brand, and acquiring additional RIAs, we can deliver outsized growth Unlock the Power of Invest in the Franchise to Grow through Acquisitions Digital Capabilities Drive Organic Growth • Add Advisors, source new a
Slide 58: Impact Stories: Retail and Wealth Partnership
Impact Stories Passionate Retail service + Wealth Management partnership creates a win-win A Branch Teammate helped a customer open a new estate account following the death of his father Branch connected the customer with Wealth for counsel on executor responsibilities Then the customer’s mother pas
Slide 59: Impact Stories: Commercial and Wealth
Impact Stories The right connections at the right time enables us to deepen relationships Commercial introduced Wealth to a Commercial client who was with a competitor The Client Advisor met with the prospect several times using a planning-based approach The Advisor helped the business owner realize
Slide 60: Maria Tedesco, President Union Bank & Trust
Maria Tedesco PRESIDENT UNION BANK & TRUST
Slide 61: Branch Coverage: June 30, 2017
Branch Coverage: JUNE 30, 2017 111 Branches 61
Slide 62: Branch Coverage: September 30, 2018
Branch Coverage: SEPTEMBER 30, 2018 103 Branches 37 Branches* * All former Xenith branches in VA & MD (30) operate as Union Bank & Trust 62
Slide 63: Branch Coverage: Early 2019 (Pro Forma)
Branch Coverage: EARLY 2019 (PRO FORMA) 103 Branches 37 Branches* 15 Branches * All former Xenith branches in VA & MD (30) operate as Union Bank & Trust 63
Slide 64: Growing Our Retail Banking Business
Growing Our Retail Banking Business Focus Simplify Grow • Creating differentiated value proposition • Make it easier for our customers to do • Evolve from maintaining market position and go-to-market strategies for business with us by integrating branch to growing market position high-opportunity ma
Slide 65: Retail Banking: Performance Improvement Across the Branch Network
Retail Banking: FOCUS ON PERFORMANCE IMPROVEMENT ACROSS THE BRANCH NETWORK Managing to Higher Levels of Performance Higher Trade Area Attractiveness Trade Lower Branch Performance Higher 65
Slide 66: Focus on Growth: Better Leverage Current Franchise
Focus on Growth: BETTER LEVERAGE CURRENT FRANCHISE Union Markets HIGH GROWTH; MORE AFFLUENT Projected 5-Yr HH Growth Current Median HH Income % Mass Affluent HH 5.3% $81k 45% 4.6% 36% $61k Union Union Union USA USA USA Markets Markets Markets Source: S&P Global Market Intelligence, 2018. 66
Slide 67: Former Xenith Branches Contain High Growth Opportunities
Focus on Growth: BETTER LEVERAGE CURRENT FRANCHISE Former Xenith Branches Contain High Growth Opportunities ALL BRANCHES HAVE RELATIONSHIP EXPANSION OPPORTUNITIES Consumer Checking Accounts Business Checking Accounts DDA New Accounts Opened Opened/Branch/Month Opened/Branch/Month Opened/Closed Ratio
Slide 68: Focus On: Relationship Building
Focus On: RELATIONSHIP BUILDING Strong Customer Acquisition but Low X-Sell Today OPPORTUNITY FOR GROWTH BY EXPANDING CUSTOMER RELATIONSHIPS Consumer Households Business Households 196,643 45,334 High Number SINGLE SERVICE HOUSEHOLDS Strong Metrics in Significant Opportunity CUSTOMER SATISFACTION FOR
Slide 69: Retail Banking: Imperatives for Success
Retail Banking: IMPERATIVES FOR SUCCESS Differentiated Integrated Simplified & Integrated Superior Value Propositions Management Efficient Distribution Customer for High-Opportunity Structure, Team Processes, Network Experience Target Segments and Approach Procedures & Practices Move team from one s
Slide 70: Dean Brown, Chief Information Officer
Dean Brown CHIEF INFORMATION OFFICER & HEAD OF BANK OPERATIONS
Slide 71: Recent History: Leading to an Inflection Point
Recent History: LEADING TO AN INFLECTION POINT Steady Conservative Growth 2014 StellarOne Acquisition Nearly Doubled Assets 1990 IPO to 2017 Putting Pressure on Existing Support Structures 73% 65% $300MM TO $4B $4B TO $7B Assets Deposits Loans Systems, Processes, People Inflection As Catalyst Able t
Slide 72: Technology & Operations: Assessment Areas
Technology & Operations: ASSESSMENT AREAS Talent & Organizational Change Execution DESIGN AND DELIVERY • Senior / Mid-level Management Competency • Project/Portfolio Management and Project Methodology • Organization’s Capabilities and Capacities • Change Management / Operational Readiness • Organiza
Slide 73: Set A New Tone: Mission and Vision
Set A New Tone Mission Vision Provide secure, high quality technology services As a valued business partner of choice, we and solutions that drive the highest value for our leverage our business knowledge & technical / customers, teammates and shareholders operational expertise to offer and enable o
Slide 74: Declared Imperatives to Achieve Our Goals
Declared Imperatives: TO ACHIEVE OUR GOALS Executional Growth Engaged Protect Data & Excellence Enablement Teammates Infrastructure • Establish a Controlled • Deliver on Aggressive • A Scalable / Service Oriented • Document Information & Reliable Operating Business Priorities Organizational Design S
Slide 75: Hired an Experienced Management Team
Hired an Experienced Management Team: TO ESTABLISH CENTERS OF EXCELLENCE Enterprise Operations & Technology Dean Brown Enterprise DW Portfolio Management Bank Operations IT Operations Cyber / Data Security & Analytics Corporate Assets Office (EPMO) • Loan Services • Computer Operations • Security Po
Slide 76: We Met Our Execution, Growth, and Teammate Goals
We Met Our Execution, Growth, and Teammate Goals Executional Growth Engaged Excellence Enablement Teammates • Implemented branch network and enterprise • Project Management Office established and • Recruited new talent to achieve strategic objectives resiliency integrated with strategic project deli
Slide 77: We Achieved Target Level 3: FFIEC Cyber Security Status
We Achieved Target Level 3: FFIEC CYBER SECURITY STATUS Teammates Network Workstations & Data Servers • Background checks • Firewalls • Host intrusion sensors • Access controls & reviews • Policy, procedures, • Intrusion prevention with 24x7 monitoring • Encryption and standards • Network segregatio
Slide 78: Case Study: Xenith Acquisition & Integration
Case Study Proof Point: XENITH’S SUCCESSFUL ACQUISITION & INTEGRATION Integrate the two companies in an appropriate time frame that allows us to quickly realize Goal: the synergies, maximize shareholder value and minimize customer and teammate disruption Conditions of Satisfaction for Xenith Merger
Slide 79: New Imperatives & Goals
New Imperatives & Goals: ESTABLISHED Growth Executional Data/Analytics & Enablement Excellence Digital Capabilities • Leverage Portfolio Management • Continue to meet and evolve our • Position Union as a data driven practices to drive timely and efficient established Key Performance Indicators organ
Slide 80: PMO & IMO: Growth Through Program Delivery
PMO & IMO: GROWTH THROUGH PROGRAM DELIVERY Project Management Office M&A and Integration Management Office PMO IMO • Deliver on line of business and enterprise support function initiatives in a • Deliver on acquisition growth opportunities through a structured and timely, efficient and high quality
Slide 81: Proactively Protecting Our Assets: Cyber Risks
Proactively Protecting Our Assets: CONTINUALLY ASSESSING OUR CYBER RISKS • Understand adversaries • Learn from attacks • Collaborate with industry & law Threat intelligence program enforcement • Orient resources • Correlate threat data • Data theft • Financial fraud What are the key business • Reput
Slide 82: The Data Imperative
The Data Imperative Empowers: OUR BUSINESS & CUSTOMERS Empower Business Leaders with Timely and Valuable Information Integrate Our Platforms Through A Shared Data Platform Develop Data Analytics Core Competencies & Roadmap Consolidate and Organize Data for “One Version of the Truth” Establish “Data
Slide 83: Consolidated & Organized Data Enables Analytics
Consolidated & Organized Data Enables: ANALYTICS Horizon Core Centralize & Organize Enterprise Data Warehouse FINANCE Internal Data DIGITAL Sources DEPOSITS, LOANS, ACCOUNTS Integrate PRODUCTS, CUSTOMERS DIGITAL Reports ONLINE BANKING Dashboards Data CREDIT & CUSTOMER INTERACTIONS Consumers WEALTH C
Slide 84: Analytical Maturity Enhances Identification of Growth Opportunities
Analytical Maturity Enhances Identification of Growth Opportunities By taking xxx Actions now, New Customers = +100 in SW VA Deposits = +$5M Within 90 Days DD Balances Will increase Inertia $5M Next Year, if we Acquire Foresight 100 new customers… How can we make it happen? Deposit Balance Increased
Slide 85: Integrated Data (CRM) Empowers Business Leaders & Customers
Integrated Data (CRM) Empowers Business Leaders & Customers Micro-Segmentation & Targeted Offers Customer Experience and Retention Integrate bank data from multiple channels with external data to tailor offerings to customer lifestyle preferences Technology can turn all servicing touchpoints into da
Slide 86: Takeaways
Takeaways Union’s Enterprise Operations and Technology is Data Consolidation & Integration will Drive • Led by an experienced (been there, done that) • A greater understanding of our customers, group of leaders resulting in powerful product offerings • Able to scale with expected growth strategies •
Slide 87: Sara Rountree, Head of Digital Strategy
Sara Rountree HEAD OF DIGITAL STRATEGY
Slide 88: Digital is More Than Online Banking
Digital is More Than Online Banking What it Was What it is Now What it Will Be Five years ago, having a mobile app was “innovative.” The Digital Environment is Ever-changing Now, it’s table stakes. 88
Slide 89: Digital is No Longer A Thing
Digital is No Longer “A Thing” Digital is a way of doing things. A way of interacting with our customers. 89
Slide 90: Focus on Digital Positions Us for Future Growth
Focus on Digital Positions Us Well for Future Growth 58% Prefer to Bank with a Local/Regional Field Institution 42% Choose Larger Institutions for the Digital Banking Experience Regional Institution Exceptional Digital Banking 90 Harris Poll on behalf of D3 Banking, September 2018
Slide 91: Union has an Extensive Array of Digital Offerings
Union has an Extensive Array of Digital Offerings Treasury Integrated Apple Pay Biometrics Commercial Account Online Platform Aggregation Account Opening 91
Slide 92: Continuously Strong Customer Marks
Continuously Strong Customer Marks: CONSISTENTLY HIGHER THAN BENCHMARKS CX/Customer Satisfaction Trends BY CHANNEL 100% Consumer Mobile 80% Consumer OLB 60% 40% 20% 0% Sep 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 92
Slide 93: On the Horizon: Catching Up
On the Horizon: WE HAVE SOME CATCHING UP TO DO Zelle Additional Pays Online Appointment Scheduling Card Controls New Account Opening Platform Robo Advisor 93
Slide 94: Our Approach
Our Approach IS NOT IS to strive to be first to market to ensure each interaction through with digital capabilities any channel is easy and exceeds our customers’ expectations 94
Slide 95: Our Plan: Thoughtful Digital Architecture
Our Plan: THOUGHTFUL DIGITAL ARCHITECTURE In order to enable digital progressions, we need to focus on a foundation of infrastructure that can quickly respond to continually changing digital needs. Fintech & Bank Vendor Flexibility / Agility Platform Partners CUSTOMER Data Integration Integration Pl
Slide 96: Our Plan: Focus on Customer Experience
Our Plan: FOCUS ON CUSTOMER EXPERIENCE Increased Optimize / Modernize Integrate Digital into DIGITAL OFFERINGS DIGITAL EXPERIENCES ASSISTED CHANNELS 96
Slide 97: Our Plan: Focus on Our Teammates
Our Plan: FOCUS ON OUR TEAMMATES The Right The Right The Right The Right INFORMATION TOOLS SUPPORT PEOPLE 97
Slide 98: Immediate Focus Areas
Immediate Focus Areas Catch Up Platform Evolutions TABLE STAKES ROLLOUTS Prepare Our Teammates Prepare for the Future 98
Slide 99: The Future of Banking Depends on Digital Inclusion
The Future of Banking Depends on DIGITAL INCLUSION
Slide 100: Duane Smith, Chief Marketing Officer
Duane Smith CHIEF MARKETING OFFICER
Slide 101: Marketing Vision
Marketing Vision Be the engine that drives our business growth. Corporate Brand & Reputation Retail Commercial Wealth 101
Slide 102: The Corporate Priorities Are Marketing's Priorities
The Corporate Priorities Are Marketing’s Priorities Diversify Loan Portfolio & Revenue Streams Strengthen Digital Capabilities Develop programs and strategies that enable business line objectives Advanced targeting and optimization within digital marketing, along and increase our non-interest revenu
Slide 103: Evolving Our Marketing Function
Evolving Our Marketing Function Bringing Advanced Marketing Approaches to Traditional Banking. Deliberate in • Business line marketing plans mapped to their goals and objectives • Different by market, based on potential and competitive pressures Design • A strategy for every dollar. A measure for ev
Slide 104: Marketing Team Expertise
Marketing Team Expertise More Than Half of Our Marketing Team is New and They Bring Big Bank and Brand Experience. 104
Slide 105: Agency Partner Expansion
Agency Partner Expansion Deeper Capabilities Are Coming From Expanding Our Agency and Partner Pool. Pre-2017 Current 105
Slide 106: Our Marketing Agenda Starts with the Union Brand
Our Marketing Agenda Starts with the Union Brand “A brand is a promise that when kept creates preference.” - Peter Sealey, Ph.D. author, Consultant and former CMO, Coca-Cola We make banking easy. 106
Slide 107: Our Advertising Approach & Investments Vary by Market
Our Advertising Approach & Investments Vary by Market Variation Based on Market Share, Competitive Pressures, & Opportunity Digital & Television Newspaper Radio Billboards Events Sponsorships Social Media Invest For Growth ($$$) UBSH (140) Maryland BaltimoreBaltimore RestonReston Tier 1
Slide 108: Brand Health: Awareness and Consideration
Brand Health What We Lack in Awareness We Make Up For In Brand Consideration Brand Measure in Union’s Top 5 Retail Regions OCTOBER 2018 BRAND TRACKING Union Bank of America Wells Fargo BB&T SunTrust Unaided Brand Recall (Top of Mind) 7% 13% 25% 15% 8% Unaided Brand Recall (Total Mentions) 23% 44% 64
Slide 109: Brand Health: Those That Know Us Think Highly of Our Brand
Brand Health Those That Know Us Think Highly of Our Brand AMONG NON-CUSTOMERS WHO ARE AT LEAST SOMEWHAT FAMILIAR W/ BANK* Union Bank of America Wells Fargo BB&T SunTrust Brand Health Tracking 2018 n=611 n=1413 n=1410 n=1257 n=1285 Removes barriers to make banking easier 7.0 6.1 5.5 6.6 6.5 Offers on
Slide 110: Commercial & Wealth Marketing
Commercial & Wealth Marketing Today, These Two Businesses Need Very Similar Things From Marketing Expand Our Sell Our Team Event Prospect Reach & Capabilities Marketing • Continuity print and digital advertising • Promote regional leadership and new • Client appreciation events to cement across all
Slide 111: Business Marketing
Business Marketing Promoting Our Team & Capabilities is Priority Business Digital & Events Sponsorships Publications Social Media 111
Slide 112: Wealth Marketing
Wealth Marketing Promoting Our Team & Capabilities is Priority Business Digital & Events Sponsorships Publications Social Media 112
Slide 113: Retail Marketing
Retail Marketing Differentiated Drive Awareness Direct-To-Consumer Value Propositions & Consideration Marketing • Free Checking (for consumers and • Continuity, multi-channel advertising • Ongoing targeted cross-sell businesses) as an easy entry product across geographies campaigns, with modeled pro
Slide 114: Differentiated Advertising 2017/2018
Differentiated Advertising 2017/2018 Insert video of two TV ads – one from each year. Use animation feature to hold video until I can set it up. 114
Slide 115: Hampton Roads Launch Results
Hampton Roads We Saw Great Results From Our Initial Launch into Hampton Roads Digital & Television Newspaper Radio Billboards Events Sponsorships Social Media Oct. 2017 July 2018 Key Measure (n=263) (n=476) Heard of (Bank) 43% 61% Percent Extremely/Quite Familiar with Bank 8% 13% Percent Definitely/
Slide 116: Big Plans For Differentiated Advertising In 2019
Big Plans For Differentiated Advertising In 2019 New Products and Services 3rd Party Accolades Virginia Collegiate Sports 116
Slide 117: Our Customer Promise
Our Customer Promise We make banking easy. Ready to Bank Better? Bank at 117
Slide 118: Rob Gorman, Chief Financial Officer
Rob Gorman CHIEF FINANCIAL OFFICER
Slide 119: Union is Well Positioned Today
Union is Well Positioned Today Union is financially strong, boasting strong capital levels, good loan growth, excellent asset quality, and profitable operations. The acquisition of Xenith Bankshares enabled us to The Bank’s statewide franchise offers greater efficiently cross the $10 Billion thresho
Slide 120: Union Bankshares Corporation (Pro Forma)
Union Bankshares Corporation: (PRO FORMA) The Virginia Franchise Can’t be Replicated Pro Forma Branch Footprint1 Maryland Baltimore RestonReston Washington 1 Assets $16.5B FredericksburgFredericksburg 1 StauntonStaunton
Slide 121: Our Value Proposition to Shareholders
Our Value Proposition Shareholder Scale SOLID DIVIDEND YIELD & PAYOUT RATIO W/EARNINGS UPSIDE LARGEST VA REGIONAL BANK UNIQUE VALUE IN BRANCH FOOTPRINT Opportunity COMMITTED TO TOP-TIER PERFORMANCE Strength BALANCE SHEET & CAPITAL LEVELS Growth ORGANIC & ACQUISITION OPPORTUNITIES 121
Slide 122: Balance Sheet Strength
Balance Sheet Strength Union Has the Scale to Compete WITH LARGE NATIONAL BANKS, SUPER REGIONALS, AND SMALLER COMMUNITY BANKS As of 9/30/2018 ($B) Proforma 9/30/2018 with Access ($B) Total Assets $13.4 Total Assets $16.5 Total Loans $9.4 Total Loans $11.4 Total Deposits $9.8 Total Deposits $12.1 Reg
Slide 123: Balance Sheet and Earnings Growth
Balance Sheet and Earnings Growth Loans Deposits ($M) ($M) $11,484 $12,130 20% CAGR $9,412 20% CAGR $7,142 $6,992 $9,835 $6,307 $6,379 $5,671 $5,964 2015 2016 2017 Q3 18 ProForma 2015 2016 2017 Q3 18 ProForma Access Access Earnings Per Share1,2 ($M) 18% CAGR $2.44* $1.91 $1.77 $1.49 2015 2016 2017 Y
Slide 124: Improving Financial Performance Metrics (Non-GAAP)
Improving Financial Performance Metrics (Non-GAAP) Operating ROTCE 1,2 Operating ROA 1,2 (%) (%) 16.44% 1.35% 11.45% 11.69% 15.02%* 1.24%* 10.00% 0.90% 0.96% 0.95% 2015 2016 2017 2018 YTD 2015 2016 2017 2018 YTD Operating Efficiency Ratio (FTE)1,2 66.5% 64.3% 63.3% 58.3%* 55.9% 2015 2016 2017 2018 Y
Slide 125: Financial Targets
Financial Targets Committed to Achieving Top-tier Financial Performance PROVIDING OUR SHAREHOLDERS WITH ABOVE AVERAGE RETURNS ON THEIR INVESTMENT Current Financial Targets Post Access Financial Targets Return on Tangible Common Equity 15%–17% Return on Tangible Common Equity 16%–18% Return on Assets
Slide 126: Shareholder Value Driven
Shareholder Value Driven Union is Focused on Generating Shareholder Value AND PROVIDING ABOVE AVERAGE RETURNS ON THEIR INVESTMENT 1 Year Relative TSR1 3 Year Relative TSR1 5 Year Relative TSR1 44.7% 5.8% 60.8% 24.0% 54.5% 1.7% Union KRX Union KRX Union KRX Dividends Paid 10.3% CAGR $0.88 $0.77 $0.81
Slide 127: Solid Capital Position Pre-and-Post Access Acquisition
Solid Capital Position Pre-and-Post Access Acquisition Capital Position at Post Access ProForma Capital Position 9/30/2018 at 9/30/2018 TCE/TA 8.7% TCE/TA 8.7% CET1 Ratio 9.9% CET1 Ratio 10.1% Tier 1 Capital Ratio 11.1% Tier 1 Capital Ratio 10.1% Total Capital Ratio 13.0% Total Capital Ratio 12.7% L
Slide 128: Capital Management
Capital Management Capital Targets Capital Management Priorities 1. Support Organic Growth • Union’s establishes capital targets based on the 2. Dividend payout ratio targeted at 35-40% following objectives: 3. Common Stock Repurchases • Maintain designation as a “well capitalized” 4. Merger & acqui
Slide 129: 2019 Financial Outlook
2019 Financial Outlook Economy Loan & Deposit Core Net GROWTH RATES INTEREST MARGIN • Expect stable economy in • Upper Single Digits - pace loan • Stable core NIM with modest Virginia footprint growth with deposit growth expansion potential from Q3’18 • Real GDP of 2.5-3.0% • 95% loan/deposit ratio
Slide 130: John Asbury: Final Message Before Questions
John Asbury WITH A FINAL MESSAGE BEFORE QUESTIONS
Slide 131: Moving Forward
Moving Forward Organic Growth is FIRST PRIORITY Execute the Strategy M&A as a MAINTAIN ORGANIC PERFORMANCE SECONDARY STRATEGY What we won’t do: • Build Union one customer at a time • There are no “must haves” • Violate our M&A financial parameters: • Consistently achieve top-tier • Negotiated deals
Slide 132: Thoughts on Future M&A
Thoughts on Future M&A We’re Busy Now, but 3 OPTIONS FOR LATER Do Consolidate Complete the Nothing Virginia “Golden Crescent”1 • We have all we need to meet our • Consider smaller infills in • Extend into Maryland toward Baltimore objectives organically attractive markets • Gain density and scale th
Slide 133: Future State In 3-5 Years
Future State In 3-5 Years WE ENVISION Mid-Atlantic Specialized A Unified Bank Consistent Top-Tier Regional Bank Commercial Lines Brand in All Markets Financial Performer A SOUND, PROFITABLE, AND GROWING BANK...THAT MAKES BANKING EASIER! 133