Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Union Bankshares — 6th Annual KBW US Regional Leaders Bank Conference in London 2017
39 slides from Atlantic Union Bankshares's conference presentation, Jun 9, 2017
Slide 1: Investor Presentation – 6th Annual KBW US Regional Leaders Bank Conference
Investor Presentation 6th Annual KBW US Regional Leaders Bank Conference in London June 12, 2017 Exhibit 99.1
Slide 2: Forward Looking Statements
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 are statements that include projections, predictions, expectations, or beliefs about
Slide 3: Company Snapshot
Company Snapshot 3 Overview Branch Map • Shares listed under “UBSH” on NASDAQ • Headquartered in Richmond, VA • 100+ years of banking history • 113 branches across more than 50 counties and 10 MSAs throughout Virginia - Only Virginia-based bank with a statewide footprint - Largest community banking
Slide 4: Diversity Supports Growth in Virginia
Diversity Supports Growth in Virginia Richmond • State Capital • Fortune 500 headquarters (6) • Finance and insurance • VCU & VCU Medical Center Fredericksburg • Defense and security contractors • Health care • Retail • Real Estate development Charlottesville • University of Virginia & Medical Colle
Slide 5: Union Bank & Trust Key Statistics
Union Bank & Trust Key Statistics • 113 (-10 in 2016; -1 YTD 2017) Branches • 1,309 Full Time Equivalent • 58 Commercial Bankers • $6.55 billion Loans • $6.61 billion Deposits • 178+ thousand Consumer Households 5 Union is the only Virginia-based bank with a statewide footprint
Slide 6: Strong Presence Across All Major Virginia Markets
MSA Market Share Rank Company Deposits Total Market Deposits Market Share Roanoke Deposits: $378 mm Market Tot.: $7.3 bn Mkt. Share: 5.2% Rank: #6 Branches: 8 Staunton / Harrisonburg Rank: #2 Deposits: $516 mm Market Tot.: $4.0 bn Mkt. Share: 12.9% Branches: 11 Blacksburg Rank: #2 Deposits: $614 mm
Slide 7: Financial Highlights
Financial Highlights 7 Full Year 2016 • Net Income was $77.5 million; earnings per share of $1.77 – up ~$10.4 million, 15.5%, or 28 cents, 18.8%, from FY 2015 • ROA of 96 basis points was up 6 basis points from the prior year • ROTCE of 11.5% was up 145 basis points over 2015 levels • The efficiency
Slide 8: Balance Sheet Trends
Balance Sheet Trends 8 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 2012 2013 2014 2015 2016 1Q2017 $3,298 $3,237 $5,639 $5,964 $6,379 $6,614 Deposits ($M) $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 2012 2013 2014 2015 2016 1Q20
Slide 9: Capital Management
0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 2012 2013 2014 2015 2016 1Q2017 14.57% 14.16% 13.38% 12.46% 13.56% 13.30% 8.96% 8.93% 9.27% 9.20% 8.41% 8.36% Total capital ratio Tangible Equity/Tangible Assets Repurchased 1.1 million shares in 2012 Capital Management 9 Repurchased 500,000
Slide 10: Profitability Ratios and Income Trends
Profitability Ratios and Income Trends * excludes after-tax acquisition expenses and acquisition accounting impact 10 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 2012* 2013* 2014* 2015* 2016* 1Q17* 0.89% 0.90% 0.91% 0.90% 0.96% 0.92% Return on Average Assets (ROA) 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% 12.00
Slide 11: Top-Tier Financial Performance
Top-Tier Financial Performance Focus • Union is committed to achieving top tier financial performance and providing our shareholders with above average returns on their investment • Key financial performance metrics benchmarked against top quartile peers • Top Tier Financial Performance targets: 11
Slide 12: Path to Top Tier Return on Tangible Common Equity
Path to Top Tier Return on Tangible Common Equity Revenue Expense This path also delivers Return on Assets of above 1.1% 12 2.00 4.00 6.00 8.00 10.00 12.00 14.00 ROTCE - 2016 ROTCE Target 11.5% 1.0% - 1.3% 0.3% 0.1% - 0.2% 0.3% - 0.5% Loan Growth with Stabilized Spread FF Rate Rise of 25 bps Wealth
Slide 13: 2017 Outlook
2017 Outlook • Expect stable economy in Virginia footprint Economy • Low double digit Loan Growth • Stabilizing in 2Q • Modest expansion in second half of 2017 Net Interest Margin • Expect improvement in return on assets, return on tangible common equity and efficiency ratio vs. 2016 Key Financial M
Slide 14: 2017 Priorities
2017 Priorities 14 • Loan portfolio • Revenue streams Diversification • Pace loan growth with deposit growth • Target 95% loan to deposit ratio over time Core Funding • Drive efficiency ratio <60% • More revenue + lower cost structure Efficiency • Finalize preparations in 2017 $10 billion asset cros
Slide 15: Value Proposition
Value Proposition • Statewide branch footprint is a competitive advantage and brings a unique franchise value Scale • Balance sheet and Capital levels Strength • Organic and acquisition opportunities Growth • Committed to top-tier financial performance Opportunity • Solid dividend yield and payout r
Slide 16: Merger Details
BANKSHARES Merger Details
Slide 17: Additional Merger Information
17 Additional Merger Information Additional Information and Where to Find It In connection with the proposed merger, Union will file with the SEC a registration statement on Form S-4 to register the shares of Union common stock to be issued to the shareholders of Xenith. The registration statement w
Slide 18: Transaction Highlights
Solidifies position as Virginia’s preeminent community bank with ~$12 billion in pro forma assets Provides breadth and depth across Virginia, including significant expansion in the attractive Hampton Roads market Leverages Xenith’s C&I expertise throughout the combined footprint Transaction Hi
Slide 19: Overview of Xenith Bankshares, Inc.
FINANCIAL HIGHLIGHTS Headquarters Richmond, VA Year Established 1987 Branches 42 CEO (Age) T. Gaylon Layfield III (65) Total Assets $3,199 Total Loans 2,357 Deposits 2,620 Loans / Deposits 90.0 % ROAA 0.70 % Net Interest Margin 3.45 Efficiency Ratio 67.8 NPAs / Assets 1.82 % Reserves / NPLs 34.4 Res
Slide 20: Our Combined Company
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Slide 21: Enhanced Presence in Key Markets
Deposits Market Rank Institution ($mm) Share Branches 1 Wells Fargo & Co. $38,613 20.32 % 284 2 Bank of America Corp. 26,154 13.76 130 3 BB&T Corp. 22,631 11.91 344 4 SunTrust Banks Inc. 19,015 10.01 193 5 Capital One Financial Corp. 14,812 7.79 59 Pro Forma 8,105 4.26 143 6 United Bankshares Inc. 7
Slide 22: Market Demographics
Market Demographics Deposits (1) UBSH XBKS Pro Forma '17-'22 2022 Proj. Gross Population Household Domestic Number Market 2017 Growth Income Product (2) of Deposits Deposits Deposits Share Market UBSH XBKS Population (%) ($) ($bn) Businesses ($mm) ($mm) ($mm) (%) Washington, D.C. 6,203,724 5.5% $95,
Slide 23: Hampton Roads Market Highlights
Hampton Roads Market Highlights Source: SNL Financial; Hampton Roads Chamber of Commerce; Hampton Roads Economic Development Alliance (1) Includes companies in the Virginia Beach MSA with NAICs as Healthcare and Social Assistance, Wholesale Trade, Manufacturing or Transportation and Warehousing. Dem
Slide 24: Achieves 2017 Priorities for Union
Achieves 2017 Priorities for Union • Lowers CRE concentration and increases C&I portfolio • Adds dedicated C&I team in Northern Virginia and significant C&I opportunity in Hampton Roads and Raleigh • Lowers loan to deposit ratio to 97% • Adds meaningful retail presence in Hampton Roads • Expands com
Slide 25: Transaction Structure and Key Terms
Consideration(2) Pro Forma Ownership Executive Management Board of Directors Anticipated Close Transaction Structure and Key Terms Note: Financial data as of 3/31/2017, unless otherwise noted Dollars in millions (1) Combined represents the sum of UBSH and XBKS data and excludes any purchase accounti
Slide 26: Key Assumptions
Key Assumptions Cost Savings Credit Mark Gross loan credit mark of approximately 1.5%, or $37 million Expected to be approximately $28 million pre-tax (fully phased-in) − ~40% of XBKS’ 2018 estimated noninterest expense − 80% realized in 2018, 100% annually thereafter Merger & Integration Costs
Slide 27: Estimated Pro Forma Financial Metrics
Estimated Pro Forma Financial Metrics (1) Estimated financial impact is presented solely for illustrative purposes using mean analyst estimates. Includes purchase accounting marks and deal related expenses (2) Projected bank level total capital Key Transaction Impacts to UBSH (1) 2018E & 2019E EPS A
Slide 28: Comprehensive Due Diligence and Preparation
Comprehensive Due Diligence and Preparation Deferred Tax Asset Tax advisors completed thorough analysis on Xenith’s $154.9 million deferred tax asset ‒ Expect no impairment of Xenith’s deferred tax asset due to Section 382 ‒ Anticipate up to $42 million write-off under an assumed federal tax rate
Slide 29: Crossing $10 Billion
Crossing $10 Billion Union has been preparing to grow through $10 billion in assets since 2014 − Union has invested approximately $5 million pre-tax annual run rate in people, systems and infrastructure in IT, Enterprise Risk and DFAST (Dodd Frank Stress Test) − Accelerates Union’s growth over $10
Slide 30: Deal Summary
Creates Virginia’s preeminent community bank with more than $12 billion in pro forma assets at closing Enhances presence in key markets and provides a platform for future growth Financially attractive transaction for all shareholders with conservative assumptions Proven track record of successfu
Slide 31: Value Proposition
Value Proposition • Statewide branch footprint is a competitive advantage and brings a unique franchise value Scale • Balance sheet and Capital levels Strength • Organic and acquisition opportunities Growth • Committed to top-tier financial performance Opportunity • Solid dividend yield and payout r
Slide 32: Appendix
APPENDIX \ _——
Slide 33: CEO Succession Plan
CEO Succession Plan • John Asbury became President & CEO of Union Bank & Trust and President of Union Bankshares Corporation on October 1; CEO of Holding company on January 2, 2017 – succeeding Billy Beale. • Asbury was most recently President and CEO of First National Bank of Santa Fe, a multi-stat
Slide 34: Diversified Loan Portfolio (Union)
Diversified Loan Portfolio (Union) 34 Source: SNL Financial, Company documents Loan Composition at March 31, 2017 – $6.554 Billion Portfolio Characteristics Average loan size $143,000 Weighted average maturity 83 months Yield YTD (Tax Equivalent) 4.35% Composition By Type Composition By Region NOO C
Slide 35: Commercial Real Estate Portfolio (Union)
Commercial Real Estate Portfolio (Union) 35 Source: SNL Financial, Company documents CRE Composition at March 31, 2017 - $2.856 Billion Portfolio Characteristics 10 largest loans 7.0% of CRE portfolio 10 largest loans 2.6% of total loan portfolio Weighted average maturity 61 months Weighted average
Slide 36: Construction and Development Loans (Union)
Construction and Development Loans (Union) 36 Source: Company documents C&D Composition at March 31, 2017 - $770 million Portfolio Characteristics 10 largest loans 17.0% of C&D portfolio 10 largest loans 2.6% of total loan portfolio Weighted average maturity 20 months Weighted average coupon 4.21% C
Slide 37: Core Deposit Base (Union)
Core Deposit Base (Union) 37 (1) Time deposits greater than $100,000 Note: Minimal exposure to CDARS/ICS deposits Source: SNL Financial, Company documents Deposit Composition at March 31, 2017 - $6.614 Billion Deposit Base Characteristics Average cost of interest bearing deposits 41 basis points Ave
Slide 38: Pro Forma Loan Portfolio
C&D 12% 1-4 Family 24% Multifamily 5% Ow ner- Occupied CRE 13% Non Ow ner- Occupied CRE 25% C&I 9% Consumer & Other 11% Pro Forma Loan Portfolio Source: SNL Financial Dollars in millions Data as of or for the three months ended 3/31/2017 (1) Excludes purchase accounting adjustments UBSH XBKS Pro For
Slide 39: Pro Forma Deposit Composition
Pro Forma Deposit Composition Source: SNL Financial Dollars in millions Data as of or for the three months ended 3/31/2017 Note: Jumbo time deposits defined as time deposits greater than $250,000 (1) Excludes purchase accounting adjustments UBSH XBKS Pro Forma (1) Demand Deposits 23% NOW Accounts 27
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