Access National — Merger or Acquisition (October 2018)
21 slides from Access National's merger presentation, Oct 5, 2018
Slide 1: Merger Investor Presentation
Merger Investor Presentation October 5, 2018
Slide 2: Forward-Looking Statements
Certain statements in this presentation may constitute “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward - looking statements include, without limitation, projections, predictions, expectations, or beliefs about future events or result
Slide 3: Important Additional Information will be Filed with the SEC
Important Additional Information will be Filed with the SEC This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed acquisition by Union of Access. No offer of securities shall
Slide 4: Strategic Fit
Strategic Fit Diversify Loan Portfolio and Revenue Streams Grow Core Funding Improve Efficiency Manage to Higher Performance Levels • Target 95% loan - to - deposit ratio over time • Grow core deposits with focus on commercial and small business operating accounts • Leverage technology to lower cost
Slide 5: Transaction Highlights
Transaction Highlights x Meaningful EPS accretion x Minimal initial tangible book value dilution, which is earned back in 2.8 years (2) x Improves profitability metrics x IRR in excess of 20% x In - market transaction x Comprehensive due diligence and integration planning process completed x Strong
Slide 6: Overview of Access National Corporation
Overview of Access National Corporation Standalone Access Footprint ▪ Headquartered in Reston, Virginia with 15 branches across Northern Virginia and Richmond ▪ Completed merger with Middleburg Financial Corporation (“Middleburg”) in April 2017 ▪ Wealth and Trust assets under management of approxima
Slide 7: ; ; ; ; ; ; ; ; ; ; ; ; ; ;
; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l
Slide 8: Enhancing Our Presence in Key Markets
Northern Virginia (1) Enhancing Our Presence in Key Markets Washington - Arlington - Alexandria, DC - VA - MD - WV MSA 7 Source : S&P Global Market Intelligence Note: Deposit data excludes branches with deposits greater than $1 billion Deposit data as of 6/30/18; pro forma for announced transactions
Slide 9: Northern Virginia Market Highlights
Northern Virginia Market Highlights ▪ Most populated region in Virginia with more than 2 million residents ▪ Among the most highly educated regions of the country, supported by world - class school systems and higher education institutions ▪ Home to premier healthcare facilities with more than 5,000
Slide 10: Northern Virginia Demographics
8.5% 7.4% 7.4% 6.8% 6.7% 6.6% 6.6% 6.4% 6.4% 6.0% 0.0% 2.5% 5.0% 7.5% 10.0% Loudoun, VA Falls Church, VA (City) New Kent, VA Manassas Park, VA (City) Fredericksburg, VA (City) Alexandria, VA (City) Prince William, VA Stafford, VA Arlington, VA James City, VA Northern Virginia Demographics Opportunit
Slide 11: Access Loan and Deposit Portfolios
Multifamily 2% 1 - 4 Family 25% C&D 5% Non Owner - Occupied CRE 20% Owner - Occupied CRE 24% C&I 23% Consumer & Other 1% Commercial Loans 47% Access’s Loans 6/30/18 Access Loan and Deposit Portfolios Access’s Deposits 6/30/18 10 Source: S&P Global Market Intelligence Dollars in millions Demand Depos
Slide 12: Pro Forma Loan & Deposit Portfolio
Demand Deposits 22% NOW Accounts 22% Money Market & Savings 34% Retail Time Deposits 18% Jumbo Time Deposits 3% Transaction Accounts 44% C&D 12% 1 - 4 Family 22% Multifamily 5% Non Owner - Occupied CRE 24% Owner - Occupied CRE 16% C&I 14% Consumer & Other 7% Commercial Loans 30% Demand Deposits 24%
Slide 13: Transaction Structure and Key Terms
▪ $29.19 per share, or approximately $610.0 million in aggregate (3) (4) – 8.8% market premium (5) – 243% of TBV – 15.7x 2019 EPS (6) Transaction Structure and Key Terms ▪ 0.75 shares of UBSH for each share of ANCX ▪ Outstanding options to be converted to UBSH options ▪ Michael Clarke to join UBSH’s
Slide 14: Comprehensive Due Diligence
Comprehensive Due Diligence x Engaged third party resources for Credit, Tax and Legal diligence of Access x Credit diligence of Access ‒ Reviewed 51% of all outstanding commercial loan balances ‒ Reviewed 95% of all commercial loans risk - graded special mention or worse ‒ Reviewed 98% of all commer
Slide 15: Key Assumptions
Key Assumptions Expense Savings Credit Mark ▪ Gross loan credit mark of ($24.5) million, or 1.2% ▪ Expected to be approximately $25 million pre - tax (fully phased - in) − ~30% of ANCX’s consensus 2019 non - interest expense − 60% realized in 2019 and 100% thereafter Merger & Integration Costs ▪ App
Slide 16: Union M&A Financial Criteria
x Union M&A Financial Criteria EPS Impact Tangible Book Value Earnback IRR Immediate earnings accretion < 3 years >18% UBSH Criteria Transaction with ANCX Financial Impact 15 x x
Slide 17: Estimated Pro Forma Financial Metrics
Estimated Pro Forma Financial Metrics Key Transaction Impacts to UBSH (1) 2019E / 2020E EPS Accretion IRR (2) Initial Tangible Book Value Impact (2) Tangible Book Value Earnback Period (2) (3) ~3% / ~5% >20% ~(3.6%) 2.8 years (1) Estimated financial impact is presented solely for illustrative purpos
Slide 18: Summary
Summary x Solidifies Union’s position as Virginia’s preeminent regional bank x Enhances presence in key Northern Virginia market x Delivers improvements to top tier financial performance x Financially attractive transaction for shareholders x Proven track record of successful conversions and integra
Slide 19: Appendix
\ ACCESS NATIONAL CORPORATION AN Banking || Morigage | Wealth Services: Appendix t
Slide 20: Access Fee Income: Mortgage and Wealth Management
Access Fee Income: Mortgage and Wealth Management ▪ Originate s ~ $4 00 million of loans annually for resale, not loan portfolio ▪ Stable, experienced and tenured leadership ▪ All production is sold service - released ▪ Mandatory + best efforts delivery drives margins ▪ Purchase d loans are 72 % of
Slide 21: Non-GAAP Reconciliation
Source : S&P Global Market Intelligence Data as of the three months ended 6/30/18 Non - GAAP Reconciliation 20 Access ROTCE Reconciliation ($000) Q2 ’18 Net Income $8,962 Amortization of Intangibles & Goodwill Impairment 802 Less: Effect of Taxes on Amortization & Impairment (168) Adjusted Net Incom
Access National — Merger or Acquisition (October 2018) on 6ix