Access National — Merger or Acquisition (December 2016)
38 slides from Access National's merger presentation, Dec 1, 2016
Slide 1: 2016 Investor Briefing: Results through September 30, 2016
2016 INVESTOR BRIEFING Results through SEPTEMBER 30, 2016
Slide 2: Forward Looking Statements
2 FORWARD LOOKING STATEMENTS The information presented herein contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding Access National Corporation’s (“Access”) and Middleburg Financial Corporation’s (“Middleburg”) expectations or pred
Slide 3: Additional Information
3 ADDITIONAL INFORMATION Additional Information About the Proposed Transaction and Where to Find It Investors are urged to review carefully and consider all public filings by Access and Middleburg with the Securities and Exchange Commission (the “SEC”), including but not limited to their Annual Repo
Slide 4: Access National Bank: Investment Case Summary
ACCESS NATIONAL BANK: INVESTMENT CASE SUMMARY Business bank 16 years — $1.4B assets — focused planBest banking market in the countryInvested and stable leadershipExceptional financial performance recordDiversified earnings streamAttractive dividend yieldConsistent growth in Tangible Book ValueCapita
Slide 5: Strategic Plan: Mission and Values
5 STRATEGIC PLAN: MISSION AND VALUES MISSION STATEMENT:Our mission is to provide on-target and superior financial solutions to the clients that we serve. All of our endeavors must enrich the interests of our clients, shareholders, associates and communities. CORE VALUES: Innovation Integrity Efficie
Slide 6: Strategic Plan: Vision
STRATEGIC PLAN: VISION We are “The CEO’s Best Friend”We provide: Capital — Debt and/or EquityA Trusted AdvisorPersonalized ServicePrivate Banking (Wealth Management, Mortgage Banking)Cash Flow/Funds ManagementRisk ManagementAccess to Financial InformationEmployee BenefitsCommunity Involvement and Aw
Slide 7: Business Banking: Priority Industry Segments
Priority Industry Segments Target $1-100MM Revenue Operating Cos• Accounting Services• Community Associations• Financial Planning Services• Government Contracting• Healthcare IndustriesDental PracticesMedical PracticesVeterinary Practices• Legal Services• Nonprofits/Trade Associations• PACs & Politi
Slide 8: Experienced Leadership: Aligned and Stable
EXPERIENCED LEADERSHIP: ALIGNED AND STABLE Core energetic leadership team since 1990Among the most experienced management in our marketSignificant insider banking relationshipsBoard and Executive Officers are alignedMajority of insiders purchase stock regularlyExecutive Officers & Directors hold ~ 2
Slide 9: Board of Directors Tenure & Ownership
Director Director Position/ Occupation Business/Industry Since SharesMichael G. Anzilotti Retired Bank CEO VA Commerce, 1st VA 2014 25,000J. Randolph Babbitt SVP, Labor Relations Southwest Airlines 2012 130,000Michael W. Clarke CEO Access National Bank 1999 787,000 John (Skip) Edgemond Owner Greenwo
Slide 10: Management Equity Market Experience & Ownership
Years Ownership Banking/Market This Team SharesMichael Clarke Chief Executive Officer 30 23 787,000Robert Shoemaker Chief Banking Officer 30 23 419,000Mark Moore President 30 < 1 5,000 Meg Taylor, CPA EVP, Chief Financial Officer 28 4 4,000Dean Hackemer President, Mortgage Division 25 21 276,000Stev
Slide 11: Best Banking Market in U.S. Serving Vibrant Markets
BEST BANKING MARKET IN U.S. SERVING VIBRANT MARKETSHighly Affluent — 2016 median household income est $110,178 — 198% of national avgHighly Educated — Most highly educated MSA in USAGrowth — 2010-2016 population growth +10.50% vs. 4.43% nationallyStrong Employment Base — NoVa unemployment rate = 3.4
Slide 12: Best Banking Market: Growing Relevance
BEST BANKING MARKET: GROWING RELEVANCE 12 Deposit Market Share - Fairfax County, Virginia Rank Institution Offices Total Deposit Market Share ($000) Total Market Share (%) Parent Deposits (%) 1 Wells Fargo & Co. (CA) 36 14,094,415 29.50 1.30 2 Capital One Financial Corp. (VA) 34 8,027,053 16.80 4.10
Slide 13: ANCX Delivers Against Strategic Goals
ANCX DELIVERS AGAINST STRATEGIC GOALS Strategic Financial TargetsROE 12%+ROA 1.20%+Tangible Equity/Asset Ratio 8.0% - 10.50%5%+ Basic Earnings Growth$100MM/year Loan/Deposit Growth80% Earnings from Core BankBank-only Efficiency Ratio <60%$1.5B Total Assets 3-years 13 Financial targets to be recast p
Slide 14: Financial Performance: Return on Equity & Assets
14 FINANCIAL PERFORMANCE: RETURN ON EQUITY & ASSETS Target ROA: 1.20% / Average ROA: 1.57% Target ROE: 12.0% / Average ROE: 15.52% PTPP = Pre-Tax, Pre-Provision EarningsQ3 2016 data annualized
Slide 15: Financial Performance: Loan/Deposit Growth
People & technology drive deposit growth, 5 offices support the effort. Production leadership possess extensive in-market experience * Loans Held for Investment Excludes Loans Held for Sale 15 FINANCIAL PERFORMANCE: LOAN/DEPOSIT GROWTH
Slide 16: Financial Performance: Loan Profile Held for Investment
Relationships with operating businesses / related professionals drive our business. C&I loans dominate post-recession loan growth. *Chart reflects loans held for investment only. FINANCIAL PERFORMANCE: LOAN PROFILE HELD FOR INVESTMENT 16
Slide 17: Financial Performance: Deposit Profile
Core deposit funding has climbed consistently since the recession due to focus on operating companies Wholesale CDs fluctuate with loans held for sale and securities. See table in supplement.. FINANCIAL PERFORMANCE: DEPOSIT PROFILE 17
Slide 18: Fee Income Strategy: Mortgage Volume
Focus is on quality loans with liquid and reliable markets.Skilled management focuses on profit and risk management. FEE INCOME STRATEGY: MORTGAGE VOLUME 18 *Q3 2016 data is annualized.
Slide 19: Mortgage Banking: Adept at Execution
MORTGAGE BANKING: ADEPT AT EXECUTION Expert management at evaluating and adapting for risk and opportunityExperienced and tenured managementBest in class operational expertisePurchase loans 65% of YTD volumeExperienced at making tough decisions for long-term successRep/warranty reserve = $1.029 mill
Slide 20: Fee Income Strategy: Access Capital Management
FEE INCOME STRATEGY: ACCESS CAPITAL MANAGEMENT Emerging line of business for ANCX — 2 componentsCompletes client “Value Proposition” for life cycleEnhances current fee income, mitigates volatilityImmaterial P+L now, $655MM assets under management (AUM)AIS — Access Investment ServicesRetail advisor p
Slide 21: Segment Earnings: Pre-Tax Contribution
C&I focused commercial bank drives core earnings.Fee income provides meaningful up-side.Fee income provides meaningful up-side. SEGMENT EARNINGS: PRE-TAX CONTRIBUTION 21 *Q3 2016 data is annualized.
Slide 22: Financial Performance: Earnings Per Share
Profitable and steady dividends paid throughout the financial crisis. $0.35 Special Dividend paid Q1 2015 Regular Dividend Q1 2015 = $0.14 / share FINANCIAL PERFORMANCE: EARNINGS PER SHARE 22 - All EPS are primary *Q3 2016 data is annualized.
Slide 23: Year Over Year Results: 2016 vs. 2015
YEAR OVER YEAR RESULTS: 2016 VS. 2015 23 ($ in thousands, except per share data) YTD 9/30/16 YTD 9/30/15 Change Total Assets $1,362,838 $1,118,229 21.87% Total Loans Held for Investment 966,545 849,037 13.84% Total Deposits 1,115,053 931,435 19.71% Mortgage Originations 429,418 379,752 13.08% Net In
Slide 24: Strategy Outlook
STRATEGY OUTLOOK Quality and profitability take precedence over growthFavor quality relationships over “deal flow”Priority focus on operating businesses with core depositsMaintain and diversify fee income through cross sellingAvoid commodity sales — non-relationship, price sensitive Favor C&I relati
Slide 25: The "Haves" and "Have Nots"
The “haves” and “have nots” Management’s job is to ensure ANCX is a “have” by continued focus on quality clients and sound financial performanceAs market perception/awareness of ANCX as a “have” spreads, new account acquisition acceleratesMega banks are becoming “have nots” in their performance and
Slide 26: Capital Management Strategy
CAPITAL MANAGEMENT STRATEGY Tangible Capital to Asset Ratio target range 8.0% - 10.50%At Q3 2016 ratio stood at 8.78%, cushion for growthUpdate - Preservation of capital a priority with M&A pendingSpecial dividends likely when capital exceeds 10.50% Share repurchase program in effect for value buysM
Slide 27: Careful Execution Drives Book Value and Income
Steady book value protects downside risks, YOY Growth 14.6% (Left Axis). CAREFUL EXECUTION DRIVES BOOK VALUE AND INCOME 27 *Interim Q Dividend Data is Annualized.
Slide 28: Why Invest in ANCX? Building Shareholder Value
Why Invest in ANCX? BUILDING SHAREHOLDER VALUEReturns Independent of “Market Value”$11.26…………………………Tangible Book Value Q3 2016$10.09…………………………Tangible Book Value Q3 2015$ 1.17…………………………TBV Increase- YOYAdd:$ 0.60…………………………Dividends Paid last 12 months$ 1.77…………………………Tangible Value Delivered 17.54%……
Slide 29: Capital to Leverage as of September 30, 2016: Regulatory Ratios
CAPITAL TO LEVERAGE 29 AS OF SEPTEMBER 30, 2016 REGULATORY RATIOS
Slide 30: Investing in ANCX
INVESTING IN ANCX Investing in a “have” brings better returns Business bank 16 years — $1.4B assets — focused planBest banking market in the countryInvested and stable leadershipExceptional financial performance recordDiversified earnings streamAttractive dividend yield, ~ 2.50%Consistent growth in
Slide 31: Select Investor Detail
SELECT INVESTOR DETAIL 31
Slide 32: Loan Portfolio Profile
LOAN PORTFOLIO PROFILE 32 September 30, 2016 December 31, 2015 (Dollars In Thousands) Amount % Total Amount % Total CRE Owner occupied $ 238,224 57.74% $ 219,877 59.84% CRE Non-owner occupied 174,342 42.26% 147,580 40.16% 100.00% 100.00% Commercial real estate — all $ 412,566 42.68% $ 367,457 41.40%
Slide 33: Credit Metrics: Trends
CREDIT METRICS: TRENDS $ In Thousands YE 2013 YE 2014 YE 2015 YTD 2016 Loans Past Due 30-89 Days $0 $217 $0 $ 12 Nonperforming Loans (NPLs) $2,535 $1,622 $7,417 $5,845 Real Estate Owned $0 $0 $0 $0 Total Nonperforming Assets $2,535 $1,622 $7,417 $5,845 Net Charge Offs (recoveries) ($39) ($263) ($14)
Slide 34: Deposit Portfolio Profile
DEPOSIT PORTFOLIO PROFILE 34 September 30, 2016 December 31, 2015 (Dollars In Thousands) Amount % Total Amount % Total Core Deposits: Demand deposits $ 409,558 42.51 $ 307,797 42.64 Interest-bearing demand deposits 124,856 12.96 127,980 17.73 Savings and money market 265,308 27.54 150,021 20.78 Time
Slide 35: Valuable Depositor Base
VALUABLE DEPOSITOR BASE Significant Corporate Customer BaseDDAs/Total Deposits: 36.7%DDA + Repo Sweep Balances/Total Deposit + Repo Sweep Balances = 37.6% ($426MM)Average Money Market Acct: $369,215Average NOW Account: $142,220E-deposit Volume/Cash Letter: ~76%Internet Banking Penetration of Core Bu
Slide 36: Mortgage Contribution: Key Performance Measure
MORTGAGE CONTRIBUTION: KEY PERFORMANCE MEASURE 36 (Dollars in thousands)
Slide 37: ANCX Operating Performance
Holding company and “other” account for the negative difference in consolidation. ANCX OPERATING PERFORMANCE 37 Pre-Tax Segment Contribution FY 2005 Forward Period Bank Mortgage Cons Pre-Tax Bank ROAA ROAE 2005 5,878,000 3,324,000 9,202,000 64% 1.26% 20.63% 2006 10,587,000 2,064,000 12,651,000 84% 1
Slide 38: Visitors are Welcome! Contacts
Visitors are welcome! Michael W. ClarkePresident and CEO, Access National CorporationCEO, Access National Bankmclarke@AccessNationalBank.comRobert C. ShoemakerChief Banking Officerbshoemaker@AccessNationalBank.comMark D. MoorePresident, Access National Bankmmoore@AccessNationalBank.com Meg M. Taylor
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