Exhibit 99.1
Exhibit 99.1
UNION
Union First Market Bankshares
Investor Presentation
February 2013
UNION
Union First Market Bankshares
Overview
Financial Performance
Near-Term Outlook
Q&A
2
Forward-Looking Statement
UNION
Union First Market Bankshares
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.
3
Company Overview
UNION
Union First Market Bankshares
One of the largest financial services organizations headquartered in Virginia Holding company formed in 1993 – Banking history in our communities goes back more than 100 years
Assets of $4.1 Billion
Comprehensive financial services provider offering commercial and retail banking, mortgage, investment, trust and insurance products and services
4
Union First Market’s Strengths
UNION
Union First Market Bankshares
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, building depth Successful acquirer and integrator Proven financial performance in both good and bad economic climates
5
Union First Market Footprint
UNION
Union First Market Bankshares
90 branch offices across Virginia
Added 8 new branches in 2011 Closed 8 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
6
Quality Franchise
UNION
Union First Market Bankshares
Company Ticker State Branches Assets
Cullen/Frost Bankers, Inc. CFR TX 134 $20.9
Pinnacle Financial Partners, Inc PNFP TN 32 $4.9
Union First Market Bankshares Corp. UBSH VA 94 $4.0
Dollars in billions
Franchise
Scale
Richmond, VA MSA
Deposits
Number in Market
of Market Share
Rank Institution (ST) Branches ($000) (%)
1 Bank of America Corp. (NC) 31 11,558,929 38.10
2 Wells Fargo & Co. (CA) 65 5,930,257 19.54
3 SunTrust Banks Inc. (GA) 46 3,315,135 10.93
4 BB&T Corp. (NC) 46 2,724,154 8.98
5 Union First Market Bkshs Corp. (VA) 42 1,550,994 5.11
6 Franklin Financial Corp. (VA) 8 652,586 2.15
7 Village Bank & Trust Finl Corp (VA) 14 452,544 1.49
8 First Capital Bancorp Inc. (VA) 7 442,090 1.46
9 C&F Financial Corp. (VA) 11 430,596 1.42
10 Community Bankers Trust Corp (VA) 9 359,623 1.19
Totals (1-10) 279 27,416,908 90.37
Totals (1-34) 375 30,341,696 100
Proj.
’11-’16 pop. growth >5%: 3
Top 5 DMS in top 50 MSA: 6
franchise >40% based of franchise in based in 1 MSA: 36
Concentrated footprint in one state: 54
Banks and thrifts greater than $3.0B in assets: 224
Source: SNL Financial as of 6/30/12
7
2012 Highlights
UNION
Union First Market Bankshares
2012 Net Income of $35.4 million, an increase of 16.3% over 2011
Loan balances grew by 5.3% in 2012 and 8% on an annualized basis
in Q4’12
New households grew by 2.5% and deposit balances increased by
3.9% in 2012
The addition of new mortgage originators and a low rate environment
drove a 58% increase in Union Mortgage Group’s net income
contribution in 2012
Asset Quality trends continued to improve as nonperforming assets
declined to a three year low
Implemented several efficiency ratio improvement initiatives in 2012
including the closure of 8 branches
Repurchased and retired approximately 970,000 shares (~3.5%) in
2012
Raised the quarterly dividend in each of last 4 quarters – from $.07 to
$.13 cents a share – an 86% increase
8
Balance Sheet Performance
UNION
Union First Market Bankshares
$3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000
2008 2009 2010 2011 2012
$1,874
$1,874
$2,837 $2,819
$2,967
Loans ($M)
$4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000
2008 2009 2010 2011 2012
$2,552 $2,587
$3,907 $3,837
$4,096
Assets ($M)
$3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000
2008 2009 2010 2011 2012
$1,927 $1,916
$3,175 $3,070
$3,298
Deposits ($M)
9
Investment Portfolio
UNION
Union First Market Bankshares
Total Portfolio is $606 MM or 14.8% of assets
4Q12 yield on total securities of 3.35% Less than 0.5% of MBS are non-GSE
Municipal Securities:
90% Investment Grade
75% AA rated or better
75% General Obligations TX and VA only states > 10%
Investment Portfolio % of Portfolio $ in thousands
Mortgage-backed securities 56.5% 342,174
Obligations of states and political subdivisions 37.9% 229,778
Federal Home Loan Bank stock – restricted 2.3% 13,933
Corporate and other bonds 1.2% 7,212
Federal Reserve Bank stock – restricted 1.1% 6,754
Other securities 0.6% 3,368
U.S. government and agency securities 0.5% 2,850
Total securities 100.0% 606,069
Data as of Q4 2012
10
Loan Portfolio
UNION
Union First Market Bankshares
Construction,
Land
Credit Cards , Development,
0.7% Other, and Other
Personal, 2.0% Land, 15.9%
7.5%
Commercial,
6.3%
Second
Mortgages,
1.3%
Equity Lines of
Credit, 10.4%
Residential 1-4
Family, 15.9%
Commercial
Real Estate,
39.9%
12/31/2012
Construction, Land Development, and Other Land $470.6 15.9%
Commercial Real Estate $1,184.4 39.9%
Residential 1-4 Family $473.0 15.9%
Equity Lines of Credit $307.7 10.4%
Second Mortgages $39.9 1.3%
Commercial $186.5 6.3%
Personal $222.8 7.5%
Credit Cards $22.0 0.7%
Other $59.9 2.0%
Gross Loans $2,966.8 100.0%
Change 12/11 to 12/12
% of
$ Portfolio % of Type
Construction, Land Development, and Other
Land $25.9 0.1% 5.8%
Commercial Real Estate $90.2 1.1% 8.2%
Residential 1-4 Family $25.5 0.1% 5.7%
Equity Lines of Credit $3.4 -0.4% 1.1%
Second Mortgages -$15.7 -0.6% -28.2%
Commercial $16.8 0.3% 9.9%
Personal -$19.0 -1.1% -7.9%
Credit Cards $3.0 0.1% 15.8%
Other $18.1 0.5% 43.3%
Gross Loans $148.2 5.3%
Based on call report filings ($ in millions)
11
Construction & Development Loans
UNION
Union First Market Bankshares
Other (including
Consumer loan settlement),
Construction, 7.2% 1.2%
Commercial Raw Land, 18.1%
Construction,
13.6%
Land Development
/ Commercial Lots,
26.9%
Residential Builder
Lots, 9.3%
Residential Non
Builder Lots, 8.9%
Construction
Loans to Builders,
14.7%
12/31/2012
Raw Land $85.4 18.1%
Land Development / Commercial Lots $126.8 26.9%
Construction Loans to Builders $69.3 14.7%
Residential Non Builder Lots $41.8 8.9%
Residential Builder Lots $43.8 9.3%
Commercial Construction $64.0 13.6%
Consumer Construction $33.7 7.2%
Other (including loan settlement) $5.8 1.2%
$470.6 100.0%
Change 12/11 to 12/12
% of
$ Portfolio % of Type
Raw Land -$7.4 -2.7% -8.0%
Land Development / Commercial
Lots $0.4 -1.5% 0.3%
Construction Loans to Builders $7.1 0.7% 11.4%
Residential Non Builder Lots $0.8 -0.3% 2.0%
Residential Builder Lots -$6.2 -1.9% -12.4%
Commercial Construction $15.8 2.8% 32.8%
Consumer Construction $13.7 2.7% 68.5%
Other (including loan settlement) $1.7 0.3% 41.5%
$25.9 5.8%
Based on call report filings ($ in millions)
12
Commercial Real Estate Loans
UNION
Union First Market Bankshares
Small Mixed Use
Building, 3.6% Other,
0.1%
Special Use, 6.6%
Hotel, Motel, B&B,
4.7%
Owner Occupied
Commercial RE,
43.4%
Multi Family, 11.8%
Office Warehouse,
8.2%
Office, 9.2%
Retail, 12.5%
12/31/2012
Owner Occupied Commercial RE $513.5 43.4%
Retail $147.9 12.5%
Office $108.9 9.2%
Office Warehouse $97.4 8.2%
Multi Family $140.0 11.8%
Hotel, Motel, B&B $55.2 4.7%
Special Use $78.0 6.6%
Small Mixed Use Building $42.2 3.6%
Other $1.3 0.1%
$1,184.4 100.0%
Change 12/11 to 12/12
% of
$ Portfolio % of Type
Owner Occupied Commercial
RE $59.9 1.9% 13.2%
Retail $5.5 -0.5% 3.9%
Office -$18.4 -2.4% -14.5%
Office Warehouse -$1.3 -0.8% -1.3%
Multi Family $31.7 1.9% 29.3%
Hotel, Motel, B&B -$1.1 -0.5% -2.0%
Special Use $9.7 0.3% 14.2%
Small Mixed Use Building $9.1 0.5% 27.5%
Other -$4.9 -0.5% -79.0%
$90.2 8.2%
Based on call report filings ($ in millions)
13
Deposit Composition
UNION
Union First Market Bankshares
CDs<
100k Demand
16% Deposits
20%
CDs> 100k
15%
NOW accounts
14%
Savings
6%
Money market
29%
12/31/12
Demand Deposits $645,901 20%
NOW accounts $454,150 14%
Money market $957,130 29%
Savings $207,846 6%
CDs > 100k $508,630 15%
CDs < 100k $524,110 16%
$3,297,767 100%
Change 12/11 to 12/12
Composition
$ % Swing
Demand Deposits $111,366 21% 3%
NOW accounts 41,545 10% 1%
Money market 52,237 6% 1%
Savings 28,689 16% 1%
CDs > 100k (42,925) -8% -2%
CDs < 100k (68,250) -12% -3%
$122,662 3.9%
$ in millions
14
Asset Quality Trends
UNION
Union First Market Bankshares
2.00% 1.80% 1.60% 1.40% 1.20% 1.00%
2008
2009
2010
2011
2012
ALLL Adjusted for Acquired Loans
Allowance to Loans (ALLL)
ALLL to Nonaccrual Loans
190% 170% 150% 130% 110% 90% 70% 50%
2.50% 2.00% 1.50% 1.00% 0.50% 0.00%
2008 2009 2010 2011 2012
Charge-offs to Average Loans
Provision for Loan Losses to Average Loans
NPLs to Loans
15
Nonperforming Loans by Type
UNION
Union First Market Bankshares
Other, 1.5%
Consumer, 10.3%
Commercial Construction and
Owner Occupied, Land
8.4% Development,
Commercial 56.9%
Non-Owner
Occupied,
2.3%
Commercial,
20.6%
12/31/2012
Construction and Land Development $14.9 56.9%
Commercial $5.4 20.6%
Commercial Non-Owner Occupied $0.6 2.3%
Commercial Owner Occupied $2.2 8.4%
Consumer $2.7 10.3%
Other $0.4 1.5%
$26.2 100.0%
Change 12/11 to 12/12
% of
$ Portfolio % of Type
Construction and Land
Development -$8.9 3.7% -37.4%
Commercial -$4.9 -2.4% -47.6%
Commercial Non-Owner
Occupied -$1.4 -2.2% -70.0%
Commercial Owner Occupied -$3.3 -3.9% -60.0%
Consumer -$0.1 4.1% -3.6%
Other $0.0 0.6% 0.0%
-$18.6 -41.5%
Based on call report filings ($ in millions)
16
OREO by Type
UNION
Union First Market Bankshares
Real Estate
Consumer, 8.5% Investment, 1.2%
Commercial Owner Other, 0.0%
Occupied, 0.0%
Commercial Non-
Owner Occupied,
17.4%
Construction and Land
Development, 43.0%
Commercial, 1.8%
King Carter Golf
Community, 28.0%
12/31/2012
Construction and Land Development $14.1 43.0%
King Carter Golf Community $9.2 28.0%
Commercial $0.6 1.8%
Commercial Non-Owner Occupied $5.7 17.4%
Commercial Owner Occupied $0.0 0.0%
Consumer $2.8 8.5%
Real Estate Investment $0.4 1.2%
Other $0.0 0.0%
$32.8 100.0%
Change 12/11 to 12/12
% of
$ Portfolio % of Type
Construction and Land
Development -$1.8 -6.2% -11.3%
King Carter Golf Community $0.4 0.8% 4.5%
Commercial $0.6 1.8% 0.0%
Commercial Non-Owner
Occupied $3.1 9.3% 119.2%
Commercial Owner Occupied $0.0 0.0% 0.0%
Consumer -$0.7 -2.3% -20.0%
Real Estate Investment -$1.1 -3.4% -73.3%
Other $0.0 0.0% 0.0%
$0.5 1.5%
Based on call report filings ($ in millions)
17
Capital Ratios
UNION
Union First Market Bankshares
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2009 2010 2011 2012
14.70% 14.68%
14.51% 14.57%
8.64%
8.22%
8.91%
8.97%
Total risk-based capital
Tangible Equity/Tangible Assets
18
Net Income Trends
UNION
Union First Market Bankshares
$40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0
2004 2005 2006 2007 2008 2009 2010 2011 2012
$17,925
$25,992 $24,822
$19,756
$14,514
$8,360
$22,922
$30,445
$35,411
19
ROA, ROE and Efficiency Ratio Trends
UNION
Union First Market Bankshares
Return on Average Assets (ROA)
1.00% 0.90% 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00%
2008 2009 2010 2011 1Q12 2Q12 3Q12 4Q12
0.96% 0.93%
0.82% 0.86%
0.79%
0.61%
0.44% 0.46%
Return on Equity (ROE)
9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00%
2008 2009 2010 2011 1Q12 2Q12 3Q12 4Q12
7.84% 8.70% 8.41%
7.51%
6.70% 6.90%
4.07%
3.61%
Efficiency Ratio
72.00% 71.00% 70.00% 69.00% 68.00% 67.00% 66.00% 65.00% 64.00% 63.00%
FY08 FY09 FY10 FY11 1Q12 2Q12 3Q12 4Q12
70.81%
68.75%
68.19% 67.55% 67.41% 68.07%
66.12%
65.92%
20
Core Net Interest Margin
UNION
Union First Market Bankshares
5.00%
4.50%
4.00%
3.50%
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
FY08 FY09 FY10* FY11* 1Q12* 2Q12* 3Q12* 4Q128
3.79% 3.55% 4.24% 4.37% 4.28% 4.25% 4.23% 4.22%
* Excludes acquisition accounting impact
21
Mortgage Segment
UNION
Union First Market Bankshares
Union Mortgage Group generated Net Income of
$2.5 million, an increase of 58% in 2012 vs.
2011
$1.1 billion in mortgage loans were originated in 2012, a 66% increase over 2011 levels
Union Mortgage hired 28 originators as well as additional loan processors in Q1’2012
Hired Rob Eastep as President of Union Mortgage Group in October, 2012
22
Top-Tier Financial Performance Focus
UNION
Union First Market Bankshares
Union is committed to achieving top tier financial performance and providing our shareholders with above average returns on their investment In 2012, Union developed key financial performance metrics benchmarked against top quartile peers and set internal targets designed to measure progress towards achievement of top tier financial results
Minimum targets were set for ROA (>1%), ROE (>10%) and efficiency ratio (<65%)
Several initiatives were implemented that will result in increased non-interest income and expense savings in 2013—including the closure of 8 branches in 2012
23
2013 Outlook
UNION
Union First Market Bankshares
Stable to growing economy in footprint Mid-single digit loan growth Modest margin compression Continued asset quality improvement as commercial and residential real estate markets stabilize further
Increasing profitability and contribution from Union Mortgage Group Improving ROA, ROE and Efficiency Ratio
24
Value Proposition
UNION
Union First Market Bankshares
Branch footprint is a competitive advantage and brings a unique franchise value Strong balance sheet and capital base
Best in class net interest margin
Experienced management team
Successful acquirer and integrator
Proven financial performance in all market environments Commitment to top tier financial performance Focused on shareholder returns
Attractive valuation vs. peer group
25
UNION
Union First Market Bankshares
THANK YOU!