Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Union First Market Bankshares — Q2 2012 Earnings Presentation
31 slides from Atlantic Union Bankshares's earnings presentation, Jul 31, 2012
Slide 1: Investor Presentation July 2012
Investor Presentation July 2012
Slide 2: Overview, Financial Performance, Near-Term Outlook, Q&A
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 communities goes back more than 100 years Assets of $4.0 Billion Comprehensive financial services provider offering: banking, mortgage, investment, tr
Slide 5: Investment Highlights
Investment Highlights Uniquely positioned in Virginia – locations, products and services Branch footprint provides a competitive advantage and unique franchise value Experienced management team Successful acquirer and integrator Proven financial performance in good and bad economic climates
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 Branch Location Map UNION FIRST MARKET BANK UNION INVESTMENT SERVICES UNION MORTGAGE GROUP 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
Slide 8: Quality Franchise
Quality Franchise Company Ticker State Branches Assets Cullen/Frost Bankers, Inc. CFR TX 128 $18.5 2 Pinnacle Financial Partners, Inc. PNFP TN 34 4.8 3 Union First Market Bankshares Corp. UBSH VA 100 3.9 Dollars in billions Franchise Scale Source: SNL Financial as of 6/30/11 Proj. ’10-’15 pop. growt
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 as part of branch rationalization analysis New mortgage originators and low rate environment driving growth Asset quality continues to improve Capital levels are strong Raised Q
Slide 10: Financial Performance
Financial Performance $3,000,000 $3,500,000 $3,000,000 $2,500,000 $2,500,000 $2,000,000 $2,000,000 $1,500,000 $1,500,000 $1,000,000 $1,000,000 1Q 2012 2Q 2012 2011 1Q 2012 2Q 2012 Loans ($M) Deposits ($M) $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 1Q 2012 2Q 2012 As
Slide 11: Financial Performance: Investment Portfolio
Financial Performance 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% 207,78
Slide 12: Loan Portfolio
Loan Portfolio Construction, Land Development, and Other Land, 15.5% Credit Cards , 0.7% Other, 1.4% Personal , 8.0% Commercial , 5.9% Second 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 6/30/2012 Raw Land, 18.4% Other (including loan settlement), 0.9% Consumer Construction, 5.7% Commercial Construction, 12.0% Residential Builder Lots, 10.5% Residential Non Builder Lots, 8.9% Construction Loans to Builders, 14.7% Land Development / Commercial Lots, 28.9% R
Slide 14: Commercial Real Estate
Commercial Real Estate Owner Occupied Commercial RE, 41.2% Other, 0.4% Small Mixed Use Building, 2.7% Special Use, 6.1% Hotel, Motel, B&B, 4.8% Multi Family, 11.8% Office Warehouse, 8.2% Office, 11.9% 6/30/2012 Owner Occupied Commercial RE $480.2 41.2% Retail $148.8 12.8% Office $139.1 11.9% Office
Slide 15: Risk Management
Risk Management Lending Philosophy In-market lender Granular portfolio analysis Full guarantees of commercial credits Best In Class Risk Mitigation Practices Our standard practice for years Forward looking Move early to protect Special Assets Committee Control Environment Strong internal policies Ac
Slide 16: Asset Quality Trends
Asset Quality Trends 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 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 17: NPAs by Type
NPAs by Type OREO / Real Estate Investment, 2.0% Other, 0.5% OREO, 45.7% Construction and Land Development, 29.6% Commercial, 11.1% Commercial Non-Owner Occupied, 0.4% Consumer, 4.1% Commercial Owner Occupied, 6.5% 6/30/2012 Construction and Land Development $22.2 29.6% Commercial $8.3 11.1% Commerc
Slide 18: NPAs by Market
NPAs by Market Richmond, 33.9% Charlottesville, 9.1% Northern Virginia, 0.0% Other, 2.1% Rappahannock, 3.5% Hampton Roads, 4.1% Northern Neck, 13.7% Fredericksburg, 33.6%
Slide 19: 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 20: OREO by Type
OREO by Type 6/30/2012 Construction and Land Development, $14.1 39.4% Other, 0.0% Real Estate Investment, 4.2% Consumer, 11.7% Commercial Owner Occupied, 0.0% Commercial Non-Owner Occupied, 17.9% Commercial, 1.7% King Carter Golf Community, 25.1% Construction and Land Development 39.4% King Carter G
Slide 21: Deposit Composition
Deposit Composition Demand Deposits 18% CDs < 100k 18% CDs > 100k 17% Savings 6% Money market 28% NOW accounts 13% 06/30/12 Demand Deposits $591,757 18% NOW accounts $425,188 13% Money market $905,739 28% Savings $198,728 6% CDs > 100k $534,682 17% CDs < 100k $562,892 17% $3,218,986 100% Change 6/11
Slide 22: 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% 1Q 2012 2Q 2012 Total risk-based capital Tangible Equity/Tangible Assets
Slide 23: 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 1H 2012
Slide 24: Net Interest Margin
Net Interest Margin 5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 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 * Excludes acquisi
Slide 25: ROA/ROE Peer Comparison
ROA/ROE Peer Comparison ROA 0.81 0.9 0.76 0.8 0.66 0.7 0.6 0.5 0.4 0.3 0.2 0.1 National/Regional Virginia ROE 7.04 7.51 8.00 7.00 5.48 6.00 5.00 4.00 3.00 2.00 1.00 0.00 National/Regional Virginia Average as of March 31, 2012 National/Regional: Bank of America, Wells Fargo, Sun Trust and BB&T
Slide 26: Financial Performance
Financial Performance ROA 1.00% 0.90% 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 ROE 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
Slide 27: Top-Tier Financial Performance
Top-Tier Financial Performance Focus has primarily been on merger integration, products and asset quality over the past few years Now time to turn to fee income and non-interest expense levels to improve profitability and increase returns We are working to create a roadmap to improve efficiency, inc
Slide 28: 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 29: 2012 Outlook
2012 Outlook Modest economic recovery in footprint – impact of Federal budget cuts (including defense) not known Continued improved in asset quality as commercial and residential real estate market stabilize further Expect loan growth in a challenging loan market and as consumer continues to delever
Slide 30: Value Proposition
Value Proposition Branch footprint is a competitive advantage and brings a unique franchise value Experienced management team Successful acquirer and integrator Strong balance sheet Proven financial performance in all market environments Higher ROA and ROE than Virginia peers Increased quarterly div
Slide 31: Thank You!
THANK YOU!
Union First Market Bankshares — Q2 2012 Earnings Presentation on 6ix