Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Union Bankshares — IPO Roadshow (January 2018)
31 slides from Atlantic Union Bankshares's IPO roadshow presentation, Jan 23, 2018
Slide 1: Investor Presentation
Investor Presentation Nasdaq: UBSH January 23, 2018 Free Writing Prospectus Dated January 23, 2018 Filed Pursuant to Rule 433 Registration Statement No. 333 - 220398
Slide 2: Forward-Looking Statements
Certain statements in this presentation which are not statements of historical fact constitute forward - looking statements within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, or the “Securities Act,” and Section 21E of the Exchange Act. F
Slide 3: Unaudited Pro Forma Financial Information; Non-GAAP Financial Measures
Unaudited Pro Forma Financial Information The unaudited pro forma financial information included herein is presented for informational purposes only and does not necessarily reflect the financial results of the combined company had the companies actually been combined during periods presented. The a
Slide 4: About Union Bankshares Corporation
ABOUT UNION BANKSHARES CORPORATION Headquartered in Richmond, Virginia, Union Bankshares Corporation (Nasdaq: UBSH) is the holding company for Union Bank & Trust. Union Bank & Trust has 150 banking offices, 39 of which are operated as Xenith Bank, a division of Union Bank & Trust of Richmond, Virgin
Slide 5: Offering Summary
Offering Summary Shares Offered Company • Union Bankshares Corporation • 7,931,926 Selling Shareholders (% of position) • ACMO - HR, L.L.C. (100%), Carlyle Financial Services Harbor, L.P. (100%) (2) Deal Value • $307.8 million (1) Lock - Up • 45 days for the Company, directors and certain officers E
Slide 6: Executive Management Team
Executive Management Team John C. Asbury President & CEO ▪ 1 year at Union ▪ 25+ years of experience in the banking industry, primarily at Bank of America and Regions Bank ▪ Former President and CEO of First National Bank of Santa Fe Robert M. Gorman Executive Vice President & CFO ▪ 5 years at Union
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Slide 8: Investment Highlights
Investment Highlights Source: SNL Financial and FDIC deposit data (1) Excludes branches with deposits greater than $1.0 billion (2) Under 2017 federal corporate tax rate of 35.0% The Right Scale The Right Markets The Right Team The Right Targets • Largest Virginia headquartered regional banking comp
Slide 9: Achieved Our 2017 Priorities
Diversification Core Funding Efficiency Ratio Crossing $10 Billion in Assets Xenith Acquisition Achieved Our 2017 Priorities Target Results • Loan portfolio • Revenue streams • Lowered CRE concentration and increased C&I portfolio • Added dedicated C&I team in Northern Virginia and Richmond with opp
Slide 10: Virginia's Bank
Virginia’s Bank Virginia: Banks Headquartered in VA Virginia: All Banks Source: SNL Financial and FDIC deposit data Deposit data as of 6/30/17; pro forma for announced transactions Note: Excludes branches with deposits greater than $1.0 billion Deposits Market Rank Institution ($mm) Share Branches 1
Slide 11: Diversity Supports Growth In Virginia
Diversity Supports Growth In Virginia Northern Virginia Richmond • State Capital, Fortune 500 headquarters (6), VCU & VCU Medical Center • $2.6 billion in - market deposits and total deposit market share of 11.4% • Nation’s capital, Defense and security contracts , Associations (lobbyists), High - T
Slide 12: Among The Most Attractive Markets in USA
Among The Most Attractive Markets in USA Source: SNL Financial; Bureau of Economic Analysis; Bureau of Labor Statistics, Statista.com, U.S. News & World Report; Forbes, U.S. Small Business Administration, USA Today U nemployment data as of 11/17/17, and GDP data as of 11/21/17 2018 Median HHI ($) 20
Slide 13: Fourth Quarter Financial Highlights
Fourth Quarter Financial Highlights Net Interest Margin (GAAP / FTE) Net Income (Loss) & EPS Efficiency Ratio (GAAP / FTE) Loan Growth (2) Deferred Tax Asset Writedown (3) ROA & ROE / ROTCE • 13.5% • $57.2 million 13 Data as of or for the three months ended 12/31/17 (1) Excludes merger - related cos
Slide 14: Diversified and Granular Loan Portfolio
Diversified and Granular Loan Portfolio Composition by Region Composition by Type Pro Forma Loan Composition at December 31, 2017 - $9.6 Billion Non - Owner Occupied CRE 28% C&D 13% Owner Occupied CRE 13% C&I 11% Residential 1 - 4 Family 14% Equity LOC 7% Second Mortgages <1% Personal 11% Other 3% R
Slide 15: Relationship-based Commercial Real Estate Lending
Relationship - based Commercial Real Estate Lending Pro Forma CRE Composition at December 31, 2017 - $4.0 Billion Unaudited balance sheet figures as of 12/31/17 shown on a pro forma basis, excluding purchase accounting adjustments, as if t he merger with Xenith Bankshares, Inc. had occurred on 12/31
Slide 16: Strong Credit Quality
Strong Credit Quality Dollars in thousands Data as of 12/31/17 16 UBSH XBKS Asset Quality Summary Nonaccrual Loans $21,743 $19,637 Other Real Estate 6,636 4,214 Renegotiated Loans 17,402 20,501 90+ Days Delinquent 3,532 -- Total Nonperforming Assets & 90+PD $49,313 $44,352 NPLs / Loans 0.30% 0.79% N
Slide 17: Attractive Core Deposit Base
Attractive Core Deposit Base x $9.4 billion in customer deposits (2) , with a total cost of 49 bps x 90% core deposits (3) x 45% transactional accounts x #1 in deposit market share for community banks in Richmond and Charlottesville MSAs and Fredericksburg x #2 in deposit market share for community
Slide 18: Solid Capital Position
(1) Unaudited balance sheet figures as of 12/31/17 shown on a pro forma basis, inclusive of preliminary estimated purchase accoun tin g adjustments, as if the merger with Xenith Bankshares, Inc. had occurred on 12/31/17, inclusive of DTA writedown (2) Unaudited balance sheet figures as of 9/30/17 sh
Slide 19: Strong Track Record of Performance (GAAP)
Strong Track Record of Performance (GAAP) NIM (%) ROA (%) Data as of or for the twelve months ended each respective year ROE (%) Efficiency Ratio (%) 19 0.85% 0.72% 0.90% 0.96% 0.83% 2013 2014 2015 2016 2017 4.08% 3.96% 3.75% 3.66% 3.49% 2013 2014 2015 2016 2017 7.89% 5.30% 6.76% 7.79% 7.07% 2013 20
Slide 20: Strong Track Record of Performance (Non-GAAP)
Strong Track Record of Performance (Non - GAAP) NIM (FTE) (2) (%) Operating ROA (1) (2) (%) Data as of or for the twelve months ended each respective year (1) Excludes merger - related costs and nonrecurring tax expenses unrelated to normal operations (2) Non - GAAP financial measure; See reconcilia
Slide 21: Delivering the Xenith Economics
Delivering the Xenith Economics x Closed January 1, 2018 x Focus on seamless transition with systems conversion targeted for May 2018 x Leveraging experience of successful conversions and integrations at both companies x Continued focus on customer experience, retention and growth 2018 Focus on Succ
Slide 22: Strategic Priorities
• Increase Commercial lending growth (Commercial & Industrial + Owner Occupied Real Estate) in order to better balance the total loan portfolio over time • Grow fee - based products and services • Achieve and sustain top tier financial performance • Invest in talent, develop a culture of coaching an
Slide 23: Value Proposition and Financial Targets
Pricing data as of 1/22/18 (1) Under 2017 federal corporate income tax rate of 35.0% (2) Unaudited balance sheet figures as of 12/31/17 shown on a pro forma basis, inclusive of preliminary estimated purchase accoun tin g adjustments, as if the merger with Xenith Bankshares, Inc. had occurred on 12/3
Slide 24: Investment Highlights
Investment Highlights The Right Scale The Right Markets The Right Team The Right Targets • Deep team with broad experience • Experience in M&A integration • Attractive destination for top tier talent • Targeting top tier performance under 2017 tax rates • ROA: 1.1% - 1.3% • ROTCE: 13% - 15% • $13 bi
Slide 25: Appendix
Appendix
Slide 26: Reconciliation of Non-GAAP Disclosures: Tangible Common Equity
Data as of 12/31/17 Reconciliation of Non - GAAP Disclosures 26 Tangible Common Equity (Dollars in thousands) Union (As Reported) Xenith (As Reported) Merger Pro Forma Adjustments Pro Forma Combined Actual shareholders’ equity (GAAP) $1,046,329 $429,741 $356,970 $1,833,040 Intangibles 313,331 30,192
Slide 27: Reconciliation of Non-GAAP Disclosures: Tangible Book Value Per Share
Reconciliation of Non - GAAP Disclosures 27 Tangible Book Value Per Share (Dollars in thousands) Union (As Reported) Union (Pro Forma) Actual shareholders’ equity (GAAP) $1,046,329 $1,833,040 Intangibles 313,331 751,345 Actual tangible shareholders’ equity (non-GAAP) $732,998 $1,081,695 Common Share
Slide 28: Reconciliation of Non-GAAP Disclosures: Net Operating Income ROA
Reconciliation of Non - GAAP Disclosures 28 Net Operating Income Return on Assets (ROA) Union Standalone Xenith Union For the Twelve Months Ended 12/31 (Dollars in thousands) 2013 2014 2015 2016 2017 Three Months Ended 12/31/17 Average assets (GAAP) $4,051,850 $7,250,494 $7,492,895 $8,046,305 $8,820
Slide 29: Reconciliation of Non-GAAP Disclosures: Net Interest Margin
Reconciliation of Non - GAAP Disclosures 29 Net Interest Margin Union Standalone Xenith Union For the Twelve Months Ended 12/31 (Dollars in thousands) 2013 2014 2015 2016 2017 Three Months Ended 12/31/17 Net interest income (GAAP) $151,626 $255,018 $251,834 $265,150 $280,157 $25,588 $73,392 FTE adju
Slide 30: Reconciliation of Non-GAAP Disclosures: ROTCE
Reconciliation of Non - GAAP Disclosures 30 Return on Tangible Common Equity (ROTCE) Union Standalone Xenith Union For the Twelve Months Ended 12/31 (Dollars in thousands) 2013 2014 2015 2016 2017 Three Months Ended 12/31/17 Average equity (GAAP) $435,635 $983,727 $991,977 $994,785 $1,030,847 $488,2
Slide 31: Reconciliation of Non-GAAP Disclosures: Efficiency Ratio
Reconciliation of Non - GAAP Disclosures 31 Efficiency Ratio Union Standalone Xenith Union For the Twelve Months Ended 12/31 (Dollars in thousands) 2013 2014 2015 2016 2017 Three Months Ended 12/31/17 Noninterest expense (GAAP) $137,047 $238,216 $216,882 $222,703 $234,765 $25,557 $59,944 Less: Merge