Xenith Bankshares — Hampton Roads Bankshares — IPO Roadshow (August 2009)
29 slides from Xenith Bankshares's IPO roadshow presentation, Aug 3, 2009
Slide 1: Follow-On Common Stock Offering 32,500,000 Shares
Filed Pursuant to Rule 433 Registration No 333-160337 Dated August 3, 2009 Follow-On Common Stock Offering 32,500,000 Shares August 2009
Slide 2: Disclaimer
Disclaimer This presentation may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect,
Slide 3: Offering Terms
Offering Terms Issuer: Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) Type of Offering: Follow-on Public Offering Type of Security: Common Stock Transaction Size: 32,500,000 Common Shares Over-Allotment Option: 15% Use of Proceeds: General corporate purposes Book-Running Manager: Sandler O'Neill + Pa
Slide 4: Offering Objectives
Offering Objectives • Significantly strengthens capital position • Enables HMPR to actively pursue our business strategy to enhance earnings in the short-term and then leverage our Company’s Mid-Atlantic/Southeast platform to pursue attractive growth opportunities in robust markets during the econom
Slide 5: Company Overview
Company Overview • Hampton Roads Bankshares, Inc. is one of the largest community banking franchises in the Mid-Atlantic/Southeast – $3.1 B asset banking franchise with over 700 employees – 4th largest VA-domiciled banking franchise by assets – 62 financial centers across Virginia, North Carolina an
Slide 6: Investment Highlights
Investment Highlights • Premier footprint in attractive banking markets – 62 financial centers in Virginia, North Carolina and Maryland – Projected population growth of 5.4% versus 4.6% nationwide – Projected household income growth of 6.3% versus 4.1% nationwide – Unemployment of 8.4% versus 9.5% n
Slide 7: Experienced Management Team
Experienced Management Team • Disciplined executive management team hired to maximize value of the franchise • New Chief Executive Officer, Chief Financial Officer and Chief Credit Officer – Announced Neal Petrovich as Chief Financial Officer in February 2009 – Announced Andy Davies as Chief Executi
Slide 8: Premier Footprint in Attractive Markets
Premier Footprint in Attractive Markets Deposit Composition by Market (62 Financial Centers) Raleigh Eastern Shore 5.8% 11.6% Northeast NC 14.9% Richmond 19.5% Virginia Beach 16.7% Wilmington 1.3% Outer Banks 4.8% Norfolk Chesapeake 9.8% 15.6% As of June 30, 2009 8
Slide 9: Market Demographics and Position
Market Demographics and Position • Well positioned and growing in attractive Mid-Atlantic and Southeastern markets • Diversified economy including military, federal and state governments, research and development, technology, education, port, healthcare, and professional services • Strong projected
Slide 10: Leading Position in Large Markets
Leading Position in Large Markets • Positioned as an alternative solution between small community banks and regional / money center banks; opportunity to increase market share from large bank competitors • Largest regionally-headquartered bank providing differentiated service from national and inter
Slide 11: Leading Position in Anchor Market
Leading Position in Anchor Market • With 30 financial centers, Hampton Roads Bankshares has more locations in the Hampton Roads MSA than any other Virginia-based bank • The Hampton th Roads MSA has a population of approximately 1.7 million people and is the 5 largest MSA in the Southeastern U.S.¹ •
Slide 12: Deposit Franchise Overview
Deposit Franchise Overview • $1.0B of non-interest bearing and low cost deposits (weighted average rate of 0.73% in 2Q2009) • Average cost of deposits of 1.59%, down from 1.85% in 1Q2009 • Transitioning from growth phase to profitability stage will reduce reliance on wholesale funding and CDs – Capi
Slide 13: Second Quarter 2009 Results & Developments
Second Quarter 2009 Results & Developments • Pre-tax pre-provision net revenue of $9.2 million¹ – NIM of 3.71% – Annualized non-interest expense to average assets of 2.90% (excluding goodwill impairment) • Net loss of $46.2 million including – Goodwill impairment of $28.0 million – Provision of $33.
Slide 14: Financial Highlights
Financial Highlights YTD Pre-Tax Pre-Provision ROAA 1.8% 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% NBBC CARE FNBN UBSH STEL SASR TOWN HMPR¹ VCBI FCBC FBNC SCBT YTD Net Interest Margin YTD Non-Interest Expense / Avg. Assets 4.0% 4.0% 3.0% 3.0% 2.0% 2.0% 1.0% 1.0% 0.0% 0.0% NBBC CARE FNBN TOWN VCBI
Slide 15: Managing Credit Portfolio
Managing Credit Portfolio • We have recognized our credit challenges and taken aggressive steps to manage our asset quality • Our loan 1 loss reserve / gross loans is 3.25% (3.93% including acquisition credit marks ) 1Q2009 2Q – To Date • Chief Banking Officer implemented • 3rd party loan review Cre
Slide 16: Loan Portfolio & Asset Quality
Loan Portfolio & Asset Quality Dollar values in Thousands 90+ Days Delinquent % of Nonaccrual/ and still Total Non- Outstanding Outstanding Nonaccrual Outstanding Accruing Performing 30-89 Days Loan Type Balance Balance Loans Balance Interest OREO Assets Delinquent Construction & Development $884,21
Slide 17: Asset Quality Migration
Asset Quality Migration Dollar Values in Thousands 30-89 90 Delinquent Non-Accrual Total Loan Type Days Past Due Days Past Due(1) Loans Loans OREO NPAs December 31, 2008 $68,598 $3,219 $71,817 $32,885 $5,092 $41,196 March 31, 2009 $46,700 $6,110 $52,810 $86,502 $5,982 $98,594 June 30, 2009 $63,963 $
Slide 18: Non-Performing Assets by Geography
Non-Performing Assets by Geography 40.0% 34.6% 30.0% 19.9% 20.3% 20.0% 10.1% 10.0% 8.4% 5.4% 1.3% 0.0% Hampton Roads, VA Northeast NC Outer Banks, NC Richmond Eastern Shore Raleigh Wilmington, NC Unemployment Rate Median Home Price Appreciation (YoY) 1 2 Nationwide 9.5% Case/Shiller Index (17.1%) Ra
Slide 19: Acquisition Loan Marks and Loan Impairment Reserves
Acquisition Loan Marks and Loan Impairment Reserves Dollar Values in Millions Acquisition Loan Marks Acquisition Loan Marks % of and Loan Impairment Reserves and Loan Impairment Reserves Total Loans ($mm) (%) Current Loans 90.4% $0.4 0.0% Acquisition Marked Loans 1.6% $8.1 19.6% Total Loans <30 Days
Slide 20: Loan Portfolio
Loan Portfolio • Focus on quality and reduction of C&D composition Loan Portfolio Concentration Loan Portfolio by Location Eastern Shore Loans Held for Consumer 9.1% Northeast NC Sale 1.5% Southern VA 9.0% 0.9% C&I 1.1% VA Beach 17.1% 13.0% 1-4 Family 19.5% Chesapeake 21.9% Outer Banks 9.0% Richmond
Slide 21: C&D Loan Portfolio
C&D Loan Portfolio Loan Portfolio by Type Loan Portfolio by Location Eastern Shore Northeast NC Raw Land Farm Land 4.45% 7.87% 6.80% 1.49% Residential Land Southern Virginia Development Virginia Beach 0.40% Developed 29.00% 9.95% Comm. Lots 4.95% Chesapeake Commercial Land 22.63% Outer Banks Develop
Slide 22: CRE Loan Portfolio
CRE Loan Portfolio Loan Portfolio by Type Loan Portfolio by Location Eastern Shore Northeast NC Medical Building Gas Station 6.05% 6.15% 4.26% 1.12% Multifamily Virginia Beach Southern Virginia 11.86% 8.91% Office 1.12% 21.01% Office 3.72% Churches Outer Banks 6.04% 11.18% Chesapeake Daycare 30.29%
Slide 23: SCAP Test: Application to HMPR
SCAP Test: Application to HMPR • The SCAP test estimates below are based on 2-year cumulative loss assumptions and represent a hypothetical “what-if” scenario that involves an economic outcome that is more adverse than expected; these estimates are not forecasts or projections of expected losses or
Slide 24: Pro Forma Capital Under Loss Scenarios
Pro Forma Capital Under Loss Scenarios Dollar values in thousands Assumptions Assumes Capital Raise of $110 million $110,000 Risk-Weighting for Use of New Capital 20.0% Current Reserves(1) $102,078 SCAP Test Baseline Losses $170,434 Baseline Projected Loss Net of Reserves $68,356 2 Year Cumulative P
Slide 25: Investment Highlights
Investment Highlights • Premier footprint in attractive banking markets • Strong core earnings stream relative to peers • New, disciplined and experienced management team • Actively addressing and managing legacy credit issues • Significant potential for profitability improvements 25
Slide 26: Appendix: Balance Sheet
Appendix: Balance Sheet Dollar Values in Thousands 12/31/06 12/31/07 12/31/08 03/31/09 06/30/09 Assets Cash and Due from Banks $17,113 $19,758 $42,827 $51,408 $67,495 Interest Bearing Deposits 161 5,623 4,975 7,736 17,023 Overnight Funds Sold 9,524 183 510 174 350 Investment Securities 59,544 42,377
Slide 27: Appendix: Income and Performance
Appendix: Income and Performance Dollar Values in Thousands FY 2006 FY 2007 FY 2008 1Q2009 2Q2009 YTD2009 Interest Income $30,021 $38,203 $45,177 $39,531 $37,728 $77,259 Interest Expense 9,123 14,016 17,917 13,457 11,829 25,286 Net Interest Income 20,898 24,187 27,260 26,074 25,899 51,973 Provision
Slide 28: Appendix: Non-GAAP Reconciliation
Appendix: Non-GAAP Reconciliation Dollar Values in Thousands Six Months Ended Three Months Ended June 30, 2009 June 30, 2009 Income (loss) $ (35,862) $ (43,229) Less: Income tax (5,143) (9,253) Add: Provsion for loan losses 34,895 33,706 Add: Impairment of goodwill 27,976 27,976 Pre-tax, pre-provisi
Slide 29: Follow-On Common Stock Offering 32,500,000 Shares
Follow-On Common Stock Offering 32,500,000 Shares August 2009
Hampton Roads Bankshares — IPO Roadshow (August 2009) on 6ix