Exhibit 99.1
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Exhibit 99.1
Union First Market Bankshares KBW Carolina & Virginia
Bank Conference
September 2012
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Overview
Financial Performance
Near-Term Outlook
Q&A
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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 events or results or otherwise and are not statements of historical fact. Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate” or other statements concerning opinions or judgment of the Company and its management about future events. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of and changes in: general economic and bank industry conditions, the interest rate environment, legislative and regulatory requirements, competitive pressures, new products and delivery systems, inflation, changes in the stock and bond markets, accounting standards or interpretations of existing standards, mergers and acquisitions, technology, and consumer spending and savings habits. The Company does not update any forward-looking statements that may be made from time to time by or on behalf of the Company.
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Company Overview
One of the largest financial services organizations headquartered in Virginia Holding company formed in 1993 – Banking history in some of our communities goes back more than 100 years
Assets of $4.0 Billion
Comprehensive financial services provider offering commercial and retail banking, mortgage, investment, trust and insurance products and services
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Union First Market’s Strengths
Excellent branch network, competitive banking products and services and a loyal client base Well positioned for organic growth given commercial activity, household income levels and population growth in its footprint Strong balance sheet and solid capital base Conservative lender with improving asset quality metrics Experienced management team Successful acquirer and integrator Proven financial performance in both good and bad economic climates
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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
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Union First Market Footprint
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 population growth
Along major corridors (I-95, I-64, I-81) Stable/Growing population markets Economically diverse markets
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Quality Franchise
Company Ticker State Branches Assets
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Cullen/Frost Bankers, Inc. CFR TX 128 $18.5 |
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Pinnacle Financial Partners, Inc. PNFP TN 34 4.8 |
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Union First Market Bankshares Corp. UBSH VA 100 3.9 |
Dollars in billions
Richmond, VA MSA
Deposits Market
Branch in Market Share
Rank Institution (ST) Count($M)(%)
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Bank of America Corp. (NC) 31 10,621 35.8 |
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Wells Fargo & Co. (CA) 65 6,322 21.3 |
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SunTrust Banks Inc. (GA) 47 2,930 9.9 |
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BB&T Corp. (NC) 48 2,580 8.7 |
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Union First Market Bkshs Corp. (VA) 45 1,567 5.3 |
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Franklin Financial Corp. (VA) 8 662 2.2 |
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Village Bank & Trust Finl Corp (VA) 15 506 1.7 |
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First Capital Bancorp Inc. (VA) 7 439 1.5 |
9 C&F Financial Corp. (VA) 11 409 1.4
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Community Bankers Trust Corp (VA) 9 377 1.3 |
Totals (1-10) 286 26,413 89.0
Totals (1-35) 384 29,683 100.0
Proj.
‘10-’15 pop. growth >5%: 3
Top 5 DMS in top 50 MSA: 6
>40% based of franchise in based in 1 MSA:35
Concentrated footprint in one state:47
Banks and thrifts greater than $3.0B in assets:220
Franchise
Scale
Source: SNL Financial as of 6/30/11
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First Half Highlights
More than 2,200 new households in the first half
Continued deposit and loan growth
Closed 4 branches in May as part of branch rationalization analysis
New mortgage originators and low rate environment driving strong growth in non-interest income
Asset quality continues to improve Capital levels remain strong
Raised Quarterly Dividend twice in 2012 – now at 10 cents a share
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Financial Performance
$ 3,000,000 $ 2,837 $2,819 $2,842 $2,888
$ 2,500,000
$ 2,000,000 $1,874 $1,874
$ 1,500,000
$ 1,000,000
2008 2009 2010 2011 1Q 2012 2Q 2012
$ 3,500,000
$3,175 $3,216 $3,219
$ 3,070
$ 3,000,000
$ 2,500,000
$ 1,927 $ 1,916
$ 2,000,000
$ 1,500,000
$ 1,000,000
2008 2009 2010 2011 1Q 2012 2Q 2012
Deposits ($M)
$3,907 $3,948 $3,982
$3,837
$ 4,000,000
$ 3,500,000
$ 3,000,000
$2,552 $2,587
$ 2,500,000
$ 2,000,000
$ 1,500,000
$ 1,000,000
2008 2009 2010 2011 1Q 2012 2Q 2012
Loans ($M)
Assets ($M)
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Investment Portfolio
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% 207,783
Corporate and other bonds 1.5% 9,391
Mortgage-backed securities 62.4% 403,510
Federal Reserve Bank stock – restricted 1.0% 6,754
Federal Home Loan Bank stock – restricted 1.9% 12,537
Other securities 0.5% 3,283
Total securities 100.0% 646,834
Data as of Q2 2012
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Loan Portfolio
Construction,
Land
Development,
Credit Cards
, 0.7% Other, and Other Land,
1.4% 15.5%
Personal , 8.0%
Commercial ,
Second 5.9%
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 Land $447.7 15.5%
Commercial Real Estate $1,164.7 40.3%
Residential 1-4 Family $458.7 15.9%
Equity Lines of Credit $304.6 10.5%
Second Mortgages $49.5 1.7%
Commercial $170.6 5.9%
Personal $231.3 8.0%
Credit Cards $19.7 0.7%
Other $41.0 1.4%
Gross Loans $2,887.8 100.0%
Change 6/11 to 6/12
% of
$ Portfolio % of Type
Construction, Land Development, and Other Land -$25.9 -1.1% -5.5%
Commercial Real Estate $77.8 2.3% 7.2%
Residential 1-4 Family $10.4 0.2% 2.3%
Equity Lines of Credit $2.9 0.0% 1.0%
Second Mortgages -$13.0 -0.5% -20.8%
Commercial $5.0 0.1% 3.0%
Personal -$25.9 -1.0% -10.1%
Credit Cards $2.4 0.1% 13.9%
Other -$5.5 -0.2% -11.8%
Gross Loans $28.2 1.0%
Based on call report filings ($ in millions)
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Construction & Development
Change 6/11 to 6/12
% of
$ Portfolio % of Type
Raw Land -$23.1 -3.9% -21.9%
Land Development / Commercial Lots $3.6 2.3% 2.9%
Construction Loans to Builders $1.9 1.2% 3.0%
Residential Non Builder Lots -$2.7 -0.1% -6.4%
Residential Builder Lots -$7.6 -1.0% -13.9%
Commercial Construction -$9.3 -1.3% -14.8%
Consumer Construction $8.3 2.1% 48.3%
Other (including loan settlement) $3.0 0.7% 272.7%
-$25.9 -5.5%
Consumer Other (including
Construction, loan settlement),
5.7% 0.9%
Commercial
Construction,
12.0% Raw Land, 18.4%
Residential
Builder Lots,
10.5%
Residential Non
Builder Lots,
8.9%
Land
Development /
Construction Commercial Lots,
Loans to Builders, 28.9%
6/30/2012
Raw Land $82.5 18.4%
Land Development / Commercial Lots $129.5 28.9%
Construction Loans to Builders $65.7 14.7%
Residential Non Builder Lots $39.8 8.9%
Residential Builder Lots $47.0 10.5%
Commercial Construction $53.6 12.0%
Consumer Construction $25.5 5.7%
Other (including loan settlement) $4.1 0.9%
$447.7 100.0%
Based on call report filings ($ in millions)
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Commercial Real Estate
Small Mixed Use Other,
Building, 2.7% 0.4%
Special Use, 6.1%
Hotel, Motel,
B&B, 4.8% Owner Occupied
Commercial RE,
41.2%
Multi Family, 11.8%
Office Warehouse,
8.2%
Owner
Office, 11.9% Retail
Office
Change 6/11 to 6/12
% of
$ Portfolio % of Type
Owner Occupied Commercial RE $17.4 -1.4% 3.8%
Retail $16.2 0.6% 12.2%
Office $13.0 0.3% 10.3%
Office Warehouse -$4.8 -1.0% -4.8%
Multi Family $33.6 2.2% 32.3%
Hotel, Motel, B&B -$3.2 -0.6% -5.4%
Special Use $11.0 0.6% 18.4%
Small Mixed Use Building -$2.5 -0.4% -7.4%
Other -$2.8 -0.3% -35.0%
$77.9 7.2%
6/30/2012
Owner Occupied Commercial RE $480.2 41.2%
Retail $148.8 12.8%
Office $139.1 11.9%
Office Warehouse $95.9 8.2%
Multi Family $137.5 11.8%
Hotel, Motel, B&B $55.7 4.8%
Special Use $70.8 6.1%
Small Mixed Use Building $31.5 2.7%
Other $5.2 0.4%
$1,164.7 100.0%
Based on call report filings ($ in millions)
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Asset Quality Trends
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
2008 2009 2010 2011 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
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NPAs by Type
OREO / Real Estate
Investment, 2.0%
Other, 0.5%
Construction and
Land Development,
29.6%
OREO, 45.7%
Commercial, 11.1%
Commercial Non-
Owner Occupied,
Consumer, 4.1% 0.4%
Commercial Owner
Occupied, 6.5%
6/30/2012
Construction and Land Development $22.2 29.6%
Commercial $8.3 11.1%
Commercial Non-Owner Occupied $0.3 0.4%
Commercial Owner Occupied $4.9 6.5%
Consumer $3.1 4.1%
OREO $34.3 45.7%
OREO / Real Estate Investment $1.5 2.0%
Other $0.4 0.5%
$75.0 100.0%
11.1% Change 6/11 to 6/12
% of
$ Portfolio % of Type
Construction and Land Development -$ 5.2 -0.6% -19.0%
Commercial -$ 4.5 -3.1% -35.2%
Commercial Non-Owner Occupied -$ 1.4 -1.5% -82.4%
Commercial Owner Occupied -$ 1.7 -0.8% -25.8%
Consumer -$ 1.5 -0.9% -32.6%
OREO -$ 1.3 6.4% -3.7%
OREO / Real Estate Investment $ 0.0 0.3% 0.0%
Other $ 0.0 0.1% 0.0%
-$15.6 -17.2%
Based on call report filings ($ in millions)
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NPAs by Market
Rappahannock, Northern Virginia,
3.5% Other, 2.1% 0.0%
Charlottesville,
Hampton Roads, 9.1%
4.1%
Northern Neck,
13.7%
Fredericksburg,
33.6%
Richmond, 33.9%
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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
Charlottesville
$4.0 6.0% 142.9%
Richmond
-$4.7 0.6% -15.6%
Fredericksburg -$4.0 1.4% -13.7%
Northern Neck -$0.8 1.5% -7.2%
Hampton Roads
-$1.8 -1.3% -36.7%
Rappahannock
-$3.0 -2.7% -53.6%
Northern Virginia -$1.9 -2.1% -100.0%
Other
-$3.4 -3.4% -68.0%
-$15.6 -17.2%
Based on call report filings (S in millions)
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OREO by Type
King
Real Estate
Investment, 4.2% Other, 0.0%
Consumer, 11.7%
Commercial Owner Real
Occupied, 0.0% Construction and
Land Development,
39.4%
Commercial Non-
Owner Occupied,
17.9%
Commercial, 1.7%
King Carter Golf
Community, 25.1%
Change 6/11 to 6/12
% of
$ Portfolio % of Type
Construction and Land Development -$ 4.2 -9.9% -23.0%
King Carter Golf Community $ 0.3 1.7% 3.4%
Commercial $ 0.6 1.7% 0.0%
Commercial Non-Owner Occupied $ 2.0 6.0% 45.5%
Commercial Owner Occupied $ 0.0 0.0% 0.0%
Consumer $ 0.0 0.4% 0.0%
Real Estate Investment $ 0.0 0.1% 0.0%
Other $ 0.0 0.0% 0.0%
-$ 1.3 -3.5%
6/30/2012
Construction and Land Development $14.1 39.4%
King Carter Golf Community $9.0 25.1%
Commercial $0.6 1.7%
Commercial Non-Owner Occupied $6.4 17.9%
Commercial Owner Occupied $0.0 0.0%
Consumer $4.2 11.7%
Real Estate Investment $1.5 4.2%
Other $0.0 0.0%
$35.8 100.0%
Based on call report filings ($ in millions)
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Deposit Composition
Change 6/11 to 6/12
Composition
$ % Swing
Demand Deposits $71.2 14% 2%
NOW accounts $46.7 12% 1%
Money market $63.6 8% 1%
Savings $23.0 13% 0%
CDs > 100k $28.6 6% 0%
CDs < 100k $-97.3 -15% -4%
$136.9 4%
Demand
CDs < 100k Deposits
18% 18%
CDs > 100k
17%
NOW accounts
13%
Savings
6%
Money market
28%
06/30/12
Demand Deposits $591.8 18%
NOW accounts $425.2 13%
Money market $905.7 28%
Savings $198.7 6%
CDs > 100k $534.7 17%
CDs < 100k $562.9 17%
$3,218.9 100%
$ in millions
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Capital Ratios
| 16.00% |
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14.70% 14.68% 14.51% 14.64% 14.55% |
14.00%
12.00%
| 10.00% |
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8.64% 8.91% 8.97% 9.11% |
8.22%
8.00%
6.00%
4.00%
2.00%
0.00%
2009 2010 2011 1Q 2012 2Q 2012
Total risk-based capital Tangible Equity/Tangible Assets
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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
2004 2005 2006 2007 2008 2009 2010 2011 1H 2012
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Net Interest Margin
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
5.00%
4.50%
4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00%
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Excludes acquisition accounting impact |
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ROA/ROE Peer Comparison
ROA
0.86 0.86
0.90
0.85
0.80
0.75 0.69
0.70
0.65
0.60
0.55
0.50
National Virginia Union
ROE
8.56 7.84
9.00
8.00 6.17
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
National Virginia Union
Median as of June 30, 2012
National banks includes all $2—$8 Billion banks
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ROA/ROE Quarterly Trends
1.00% 0.91% 0.93%
0.90% 0.83% 0.84% 0.82% 0.86%
0.80% 0.71%
0.70% 0.66%
0.60%
0.50% 0.46%
0.40%
0.30%
0.20%
0.10%
0.00%
2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
ROE
9.00% 8.41% 8.02% 7.84%
8.00% 7.46% 7.49% 7.51%
7.00% 5.81% 6.21%
6.00%
5.00% 4.07%
4.00%
3.00%
2.00%
1.00%
0.00%
2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
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Top-Tier Financial Performance
Focus has primarily been on merger integration, products and asset quality over the past few years
Strong results from that effort
Customer surveys show satisfaction at all-time high and teammate surveys show similar high marks
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, increase revenue and reduce expenses
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Mortgage Update
A large national insurance company decided to exit the mortgage business in late 2011
Union Mortgage hired 28 originators as well as additional processors and leaders Contribution from mortgage company doubled in second quarter to $470,000
April was not profitable as we finished adding support staff
Expect originators to reach full capacity as the year progresses
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2012 Outlook
Stable to growing economy in footprint – impact of Federal budget cuts (including defense) not known Positive asset quality trends continue as commercial and residential real estate market stabilize further
Expect continued loan growth
Project increasing contribution from Union Mortgage Group Still plenty of expansion opportunities in Virginia
Organic Acquisition
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Value Proposition
Branch footprint is a competitive advantage and brings a unique franchise value
Strong balance sheet and capital base
Experienced management team Successful acquirer and integrator
Proven financial performance in all market environments
Higher ROA and ROE than Virginia peers Increased quarterly dividend twice in 2012
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APPENDIX
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Risk Management
Lending Philosophy Control Environment
In-market lender Strong internal policies
Granular portfolio analysis Active compliance, audit teams Full guarantees of commercial Positive regulatory relations credits
Acted Early In The Current Cycle
Best In Class Risk Mitigation Reappraised loans starting in late
Practices 2007
Our standard practice for years Received additional collateral where Forward looking necessary Move early to protect Working with clients wherever Special Assets Committee possible Better results than Virginia peers
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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 to competitors’ score of 21% Teammates rate us high as an employer and as a bank
83% gave Union “A” (28%) or “B” (55%) as an employer 93% rated Union “A” (50%) or “B” (43%) as a bank
68% of Teammates are likely to recommend us as a bank
Customers rate Teammates higher than Teammates rate themselves
96% of customers gave Teammates an “A” (79%) or “B” (17%)
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THANK YOU!