Investor Presentation
August/September 2016
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,” “intend,” “will,” or words of
similar meaning 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. More information is available on the
Company’s website, http://investors.bankatunion.com and on the Securities and Exchange Commission’s
website, www.sec.gov. The information on the Company’s website is not a part of this presentation. The
Company does not intend or assume any obligation to update or revise 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
• The largest community banking organization
headquartered in Virginia
• Holding company formed in 1993 – Banking
history goes back more than 100 years
• 7 whole bank and 16 branch acquisitions since
1993
• Assets of $8.1 Billion
• Comprehensive financial services provider offering
• Commercial and retail banking through Union Bank &
Trust
• Investment, wealth management and trust services
• Mortgages primarily through Union Mortgage Group, Inc.
3
Union’s Strengths
• Unique branch network across Virginia, competitive
banking products and services and a loyal customer
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
• Experienced management team
• Successful acquirer and integrator
• Proven financial performance in both good and bad
economic climates
4
Source: SNL Financial – June 2015
Hampton Northern Northern
Roads Richmond Virginia Southwest Charlottesville Rappahannock Fredericksburg Neck Total
Region Region Region Region Region Region Region Region UBSH Regions
Total Households 451,124 391,588 420,049 258,821 220,068 198,251 134,666 26,024 2,100,591
Projected Five-Year
Household CAGR
4.3% 5.0% 6.1% 3.2% 4.3% 7.7% 5.9% 2.3% 5.0%
Median Household
Income
$60,104 $58,675 $109,705 $48,136 $53,791 $105,080 $82,502 $50,185 $73,178
Total Business 54,355 53,653 51,873 32,260 29,631 25,304 14,983 3,415 265,474
Total Active Market
Branches
239 299 358 234 196 193 101 39 1,659
5-Yr Market Deposit
CAGR, '09 - '14
2.0% 2.6% 3.5% 2.7% 1.6% 3.8% 2.5% 0.2% 2.7%
Attractive market demographics support strong
organic growth opportunities within our footprint
5
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
College
• High-tech and professional
businesses
• Real Estate development
Northern Virginia
• Nation’s Capital
• Defense and security
contractors
• Associations (lobbyists)
• High tech
Virginia Beach - Norfolk
• Military
• Shipbuilding
• Fortune 500 headquarters (3)
• Tourism
Roanoke - Blacksburg
• Virginia Tech
• Health care
• Retail
• Fortune 500 headquarters (1)
6
Union Bank & Trust
• 120 branches
• Consolidated 3 in-store branches in Winchester into a new stand-alone
branch in April. Closed 2 other branches in second quarter.
• Will close 5 in-store branches in September
• Only Virginia based bank with a statewide footprint
• 1,251 FTEs
• 58 Commercial Lenders
• $5.9 Billion Loans
• $6.1 Billion Deposits
• 176,000+ Core Consumer Households
7
MSA
Market Share Rank
Company Deposits
Total Market Deposits
Market Share
Roanoke
Deposits: $351 mm
Market Tot.: $7.3 bn
Mkt. Share: 4.8%
Rank: #6
Branches: 8
Staunton /
Harrisonburg
Rank: #2
Deposits: $496 mm
Market Tot.: $3.6 bn
Mkt. Share: 13.9%
Branches: 13
Blacksburg
Rank: #1
Deposits: $690 mm
Market Tot.: $2.9 bn
Mkt. Share: 23.5%
Branches: 9
Charlottesville
Rank: #4
Deposits: $411 mm
Market Tot.: $4.3 bn
Mkt. Share: 9.6%
Branches: 8
Richmond
Rank: #5
Deposits: $1.7 bn
Market Tot.: $35.9 bn
Mkt. Share: 4.8%
Branches: 40
Culpeper
Rank: #1
Deposits: $432 mm
Market Tot.: $1.3 bn
Mkt. Share: 34.4%
Branches: 8
Fredericksburg
Rank: #1
Deposits: $845mm
Market Tot.: $3.8 bn
Mkt. Share: 22.1%
Branches: 14
Statewide
Rank: #6
Deposits: $5.8bn
Market Tot.: $183bn
Mkt. Share: 3.2%
Branches: 124
Strong Presence Across All Major Virginia Markets
Northern Neck
Rank: #1
Deposits: $310mm
Market Tot.: $1.5 bn
Mkt. Share: 21.0%
Branches: 9
Virginia Beach
Rank: #15
Deposits: $158mm
Market Tot.: $22.8 bn
Mkt. Share: 0.7%
Branches: 5
Source: SNL Financial; Deposit data as of 6/30/2015
8
Source: SNL Financial; Deposit data as of 6/30/2015; Pro forma for recent acquisitions
Largest Community Bank in Virginia
Rank Institution (ST)
Number of
Branches
Deposits in
Market
($mm)
Market
Share
(%)
1 Wells Fargo & Co. (CA) 290 36,737 20.1
2 Bank of America Corp. (NC) 142 27,609 15.1
3 BB&T Corp. (NC) 358 22,794 12.5
4 SunTrust Banks Inc. (GA) 209 18,786 10.3
5 Capital One Financial Corp. (VA) 80 10,649 5.8
6 Union Bkshs Corp (VA) 124 5,795 3.2
7 TowneBank (VA) 43 5,208 2.8
8 United Bankshares Inc. (WV) 61 4,325 2.4
9 Carter Bank & Trust (VA) 88 3,885 2.1
10 PNC Financial Services Group (PA) 100 3,360 1.8
Totals (1-10) 1,495 139,147 76.0
Totals (1-128) 2,503 183,103 100.0
Deposit Market Share – Virginia
9
Union Wealth Management
• Trust, Asset Management, Private Banking, Brokerage and Financial
Planning services
• $2.3B in AUM and AUA, the majority of which is managed assets
• $2.3 million fiduciary and asset management fees generated in
2Q16
• Organic and Acquisitive growth opportunities
• Expand services to existing customers utilizing targeted
segmentation and marketing strategies
• Opportunities to serve retail and commercial customers of bank
• Leveraging bank brand/reputation in wealth management space
• Target advisors, teams and firms that complement our wealth
model and client service culture
• Closed on Old Dominion Capital Management ($300 million
AUM) acquisition in 2Q
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Union Mortgage Group
• 22 offices: 20 in Virginia, 1 each in Maryland and North
Carolina
• 105 FTEs – 42 loan officers
• $140.1 million in 2Q16 (34% refinance)
• $539,000 net income in 2Q16
• Up from $54,000 in 1Q
• Opportunities:
• Salesforce expansion in growth markets
• Improved pipeline management and fulfillment allowing for
improved leverage
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2Q 2016 Highlights
• Net Income was $19.3 million; earnings per share of
$0.44 – up ~$4 million or 10 cents from 2Q 2015
• Loan growth was 11.1% annualized in the quarter
• Deposit balances grew 10.1% annualized in the
quarter
• Closed on acquisition of Old Dominion Capital
Management – registered investment advisory with
$300 million in assets under management
• Opened LPO in Charlotte, North Carolina
• Asset Quality remained strong as combined past
due and nonperforming loans declined $11.9 million,
or 24.8% from prior quarter
12
Balance Sheet Trends
13
$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 1Q 2016 2Q 2016
$2,967 $3,039
$5,346
$5,671
$5,781
$5,941
Loans ($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 1Q 2016 2Q 2016
$3,298 $3,237
$5,639
$5,964 $5,946
$6,096
Deposits ($M)
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
2012 2013 2014 2015 1Q 2016 2Q 2016
$4,096 $4,177
$7,359
$7,694 $7,833
$8,101
Assets ($M)
Repurchased 1.1
million shares in
2012
Capital Ratios
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• Since 2011, increased quarterly dividend from $0.07/share to $0.19/share;
• Repurchased 5.7 million shares since 2012
• In 2016, repurchased $30.7 million of stock (~1.3 million shares) as of June 30, 2016.
• In February, Board approved a $25 million stock buyback authorization – expires on December 31, 2016
- ~$15.5 million remaining
Repurchased
500,000 shares
In 2013
Repurchased 2.1
million shares in 2014
Repurchased 0.7
million shares in
2015
Repurchased ~1.3
million shares in
2016
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
2012 2013 2014 2015 2Q 2016
14.57%
14.16%
13.38%
12.46% 11.79%
8.96% 8.93%
9.27% 9.20%
8.59%
Total capital ratio Tangible Equity/Tangible Assets
Profitability Ratios and Income Trends
* excludes after-tax acquisition expenses and acquisition accounting impact
15
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
2012* 2013* 2014* 2015* 2Q 2016*
0.89% 0.90% 0.91% 0.90%
0.98%
Return on Average Assets (ROA)
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
11.00%
12.00%
2012* 2013* 2014* 2015* 2Q 2016*
9.89% 10.05% 10.13% 10.00%
11.60%
ROTCE
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
2012 2013* 2014* 2015* 1H 2016
$35,262 $36,408
$65,888 $67,079
$36,298
Net Income ($)
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
2012* 2013* 2014* 2015* 1Q
2016*
2Q
2016*
4.24% 4.18%
3.93% 3.79% 3.76% 3.76%
Net Interest Margin
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:
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Financial Performance Metric Union Targets
Return on Assets 1.1% - 1.3%
Return on Tangible Common Equity 13% - 15%
Efficiency Ratio < 60%
Path to Top Tier Return on Tangible Common Equity
Revenue Expense Profit Improvement
This path also delivers Return on Assets of above 1.1%
17
7.00
8.00
9.00
10.00
11.00
12.00
13.00
14.00
ROTCE - June
YTD 2016
ROTCE Target
1.0-1.4%
0.3%
0.3-0.5%
0.1-0.2% 0.1-0.2%
13+%
10.9%
Loan Growth
with
Stabilized NIM
Rate Rise
of 25 bps
Expense
Management Mortgage Wealth /ODCM
2016 Outlook
• Stable to growing economy in footprint
• High single digit loan growth
• Modest net interest margin compression for 3Q
and 4Q – assumes no rate increase by Fed
• Continued asset quality improvement – reduction
of OREO expenses
• Improving ROA, ROTCE and Efficiency Ratio
• Closing 5 branches in 3Q (reduction of 9 in total
for year)
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Value Proposition
• Statewide Virginia branch footprint is a
competitive advantage and brings a unique
franchise value
• Strong balance sheet and capital base
• Organic growth and acquisition opportunities
• Experienced management team
• Committed to top tier financial performance
• Shareholder Value Driven
• Solid dividend yield and payout ratio with earnings
upside
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THANK YOU!
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