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| 8-K - FORM 8-K - Xenith Bankshares, Inc. | d437950d8k.htm |
 November 13,
2012 Ticker: XBKS
www.XenithBank.com
Exhibit 99.1 |
 2
Forward Looking Statements
Certain statements included in this presentation are “forward-looking
statements.” All
statements other than statements of historical facts contained in this presentation, including
statements regarding our plans, objectives and goals, future events or results, our
competitive strengths and business strategies, and the trends in our industry are
forward-looking statements. The words “believe,”
“will,”
“may,”
“could,”
“estimate,”
“project,”
“predict,”
“continue,”
“anticipate,”
“intend,”
“should,”
“plan,”
“expect,”
“appear,”
“future,”
“likely,”
“probably,”
“suggest,”
“goal,”
“potential”
and similar expressions, as they relate to us, are
intended to identify forward-looking statements. Forward-looking statements made in
this presentation reflect beliefs, assumptions and expectations of future events or
results, taking into account the information currently available to us. These beliefs,
assumptions and expectations may change as a result of many possible events,
circumstances or factors, not all of which are currently known to us. If a change
occurs, our business, financial condition, liquidity, results of operations and
prospects may vary materially from those expressed in, or implied by, our
forward-looking statements. Accordingly, you should not place undue reliance on
these forward-looking statements. Factors that may cause actual results to differ
materially from those contemplated by our forward-looking statements include the
risks discussed in our public filings with the Securities and Exchange Commission,
including those outlined in Part 1, Item 1A, “Risk Factors”
section of our Annual Report on Form 10-K for the year ended
December 31, 2011. Except as required by applicable law or regulations, we do not
undertake, and specifically disclaim any obligation, to update or revise any
forward-looking statement. |
 3
Corporate Overview
•
Xenith Bankshares, Inc. is the holding company for Xenith Bank, a rapidly
growing commercial bank
•
Business Focus: Xenith targets the banking needs of middle-market and
small businesses, local real estate developers and investors, private
banking clients, and select retail banking clients
•
Market Focus: Virginia markets with the greatest economic activity and
growth, including the MSAs of Washington, D.C., Richmond and Hampton
Roads, which are part of what we refer to as the ‘Golden Crescent’
•
Experienced, highly capable team of seasoned executives and bankers
•
Skilled team of Relationship Managers (‘RM’) with successful track record
in our target markets |
 4
Growth Story
•
Xenith is fueled by organic growth and growth through acquisitions
•
Since 12/31/09, Xenith’s assets, loans and deposits have increased 177%, 303% and
293%, respectively
•
Loan increases have come from 65% organic growth and 35% growth through
acquisitions
•
Deposit increases have come from 80% organic growth and 20% growth through
acquisitions
$50
$150
$250
$350
$450
$550
$650
Dec. 2009
Dec. 2010
Dec. 2011
Sept. 2012
Xenith Bankshares, Inc.
(In Millions)
Loans (net)
Deposits
Assets |
 5
History
•
March 2008 –
Signed agreement with BankCap Partners to create a de novo Virginia
bank
•
May
2009
–
Signed
definitive
merger
agreement
with
First
Bankshares,
Inc.,
in
Suffolk, Virginia (Hampton Roads)
•
June 2009 –
Closed Reg. D common stock offering for $47.5 million
•
December 2009 –
Merger with First Bankshares, Inc., name changed to Xenith
Bankshares, Inc.
•
April 2011 –
Raised $17.7 million (net) in S-1 registered common stock offering
•
July
2011
–
Acquired
Richmond
branch
operations
of
Paragon
Commercial
Bank,
and
acquired assets and deposits of Virginia Business Bank in an FDIC failed bank
transaction without loss-share
•
September 2011 –
Received $8.4 million from U.S. Treasury in SBLF preferred stock
investment; current dividend rate is 1%
•
September 2012 –
Reversed valuation allowance on deferred tax asset, adding $5.0
million in income and $4.4 million in equity.
|
 6
Summary Financial Data at Sept. 30, 2012
•
Total Assets
$558 million
•
Total Held for Sale Loans
$75 million
•
Total Held for Investment Loans (net)
$336 million
•
Total Deposits
$448 million
•
Total Equity
$87 million
•
Total Common Equity
$79 million
•
Tangible Common Equity
$63 million
•
Shares Outstanding
10.4 million
•
Market Capitalization
$51 million
1
•
SBLF
$8.4 million
•
Headquarters
Richmond, Virginia
•
Insider Ownership
37%
1
(includes BankCap Partners)
•
Institutional Ownership
24%
1
1
Yahoo Finance, November 8, 2012 |
 We Operate in
the Golden Crescent of Virginia: Golden Crescent Highlights
•
The “Golden Crescent”
is made
up of the following MSAs:
-
Washington, DC-MD-VA-WV
-
Richmond-Petersburg, VA
-
Norfolk-Virginia Beach-
Newport News, VA-NC
•
~ 81%
1
of the state’s deposits are
located in Golden Crescent
•
Virginia’s median household
income, $58,234
2
, is higher than
national median household
income of $50,227
2
•
The Golden Crescent represents
an even more attractive market
with an average median
household income of the
$63,979
2
1
SNL Financial, June 30, 2012
2
SNL Financial, 2011
7 |
 Business
Results - Organic Growth
•
In 2010, 50% organic loan growth and 53% organic deposit growth
•
In 2011, 37% organic loan growth and 63% organic deposit growth
•
Through nine months ending September 30, 2012;
-
28% organic loan growth (37% annualized)
-
38% organic deposit growth (50% annualized)
•
Organic loan growth balanced between C&I and CRE
•
Organic deposit growth has been focused on building transaction
accounts
•
While the underlying strength of the Virginia economy sustains long
term growth, most recent organic growth is the result of moving
market share from the large banks.
8
8 |
 9
Acquisitions
9
Acquired First Bankshares in
Suffolk, Virginia, December
2009
Acquired the Richmond
branch of Paragon
Commercial Bank, July 2011
Acquired Virginia Business Bank
in an FDIC-assisted transaction
without FDIC loss-share, July
2011
Xenith has made three acquisitions:
•
Acquired $110 million in
loans, $7.6 million discount
•
Loan portfolio –
43% in C&I
•
Credit problems almost
exclusively related to an
out-of-market
participations portfolio;
resolved the majority of
these loans
•
Acquired $114 million in
deposits
•
Acquired $58.3 million in
performing loans at a $1.8
million discount
•
Acquired $76.6 million of
deposits, comprised
primarily of transaction
accounts at a deposit
premium of $2.5 million
•
Retained the team
•
Acquired $93 million in assets
at a $23.8 million discount
•
Acquired $78 million in
deposits (mainly internet
deposits) at no deposit
premium
•
Recorded a pre-tax bargain
purchase gain of $8.7 million
in Q3 2011 |
 10
•
Our loan mix reflects our business strategy
•
We are focused on lending to
middle-market and small businesses, local
real estate developers and investors
Loan Portfolio
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
Dec -
2009
Dec -
2010
Dec -
2011
Sept -
2012
Gross Loan Composition ($)
Consumer
RRE
CRE
C&I
Held for sale
$102 million
$153 million
$326 million
$416 million
0%
10%
20%
30%
40%
50%
60%
Dec -
2009
Dec -
2010
Dec -
2011
Sept -
2012
Gross Loan Composition (%)
Consumer
RRE
CRE
C&I
Held for sale |
 11
11
Loan Portfolio
•
Over the last 11 quarters, we have steadily built Loan Interest & Fee Income
•
In Q3 2012, we increased Loan Interest & Fee Income more than 25% over Q3
2011, reflecting our organic growth and held for sale portfolio
•
Loan Interest Income and Gross Loan Yields reflect the impact of
the accretion of
discount |
 12
12
Deposit Portfolio
•
From the outset, we placed a significant emphasis on core deposits; deposit
gathering is a key factor in calculating our RM incentive pay
•
From 12/31/2009 to 9/30/2012, we increased transaction account balances
(interest & non-interest checking and money market accounts) over 1300%
•
From 12/31/2009 to 9/30/2012, we reduced time deposit account balances (core
plus brokered) as a percentage of total deposits from nearly 78%
to 29% |
 Criticized
Loans / Non-Performing Assets 13
13
•
All of our non-performing assets were acquired
in the First Bankshares and Virginia Business
Bank acquisitions
•
Criticized loans and non-performing assets are
reviewed monthly
•
As of 9/30/2012, ALLL totaled $4.7 million
•
ALLL / Gross Loans ratio is 1.37%
•
ALLL calculation does not include the remaining
loan discounts on our acquired loans
•
The remaining discount totaled $9.0 million as
of 9/30/2012
•
Our ALLL + Discount totaled $13.7 million as of
9/30/2012 or nearly 4.0%* of gross loans
* ALLL + Discount/Gross Loans = $13.7
million/$350 million Special mention loans
7,905
$
Substandard
12,368
Doubtful
-
Total criticized loans
20,273
$
Nonaccrual loans (included above)
4,855
$
Other real estate owned
321
Total nonperforming assets
5,176
$
Nonperforming assets / Gross loans
1.52%
Nonperforming assets / Total assets
0.93%
ALLL / Gross loans
1.37%
ALLL / Nonaccrual loans
95.94%
Net charge-offs / Average loans
0.28%
Net charge-offs / Average loans (annualized)
0.37%
Sept. 30, 2012 |
 14
14
Financial Highlights -
Balance Sheet
33-month
Dec 2009
Dec 2010
Dec 2011
Sept 2012
Growth
Assets
Cash & cash equivalents
35,203
$
12,201
$
55,795
$
50,804
$
44%
Investments
36,847
58,889
68,466
62,574
70%
Loans held for sale
-
-
-
74,632
100%
Loans for investment (net)
102,050
151,380
321,859
336,495
230%
Intangible assets
14,229
14,109
16,354
16,080
13%
Deferred tax asset
-
-
-
4,363
100%
Other assets
13,262
14,622
14,991
13,063
-2%
Total assets
201,591
$
251,201
$
477,465
$
558,011
$
177%
Liabilities
Demand & money market
22,317
$
70,030
$
228,031
$
313,708
$
1306%
Savings
3,296
3,461
3,517
4,050
23%
Time deposits
88,535
101,648
143,459
130,386
47%
Total deposits
114,148
175,139
375,007
448,144
293%
Borrowed funds
31,260
25,000
20,000
20,000
-36%
Other liabilities
2,111
2,273
2,154
2,695
28%
Total liabilities
147,519
202,412
397,161
470,839
219%
Equity
54,072
48,789
80,304
87,172
61%
Total liabilities & equity
201,591
$
251,201
$
477,465
$
558,011
$
177%
In thousands |
 15
15
Net Interest Margin
•
GAAP NIM reflects the purchase accounting impact of accretion
Net Interest Margin is defined as the percentage of net interest
income to average-earning assets.
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
GAAP NIM
3.38%
4.51%
4.41%
4.78%
4.92%
4.35%
5.01%
5.18%
4.44%
4.75%
4.54%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
GAAP NIM |
 16
16
Financial Highlights -
Income Statement
2009
2010
2011
Sept 2012
YTD
Interest income
8,640
$
10,760
$
18,891
$
19,483
$
Interest expense
4,195
2,167
2,646
3,013
Net interest income
4,445
8,593
16,245
16,470
Provision for loan loss
5,501
1,990
4,005
1,383
Net interest income after provision
(1,056)
6,603
12,240
15,087
Noninterest income
552
483
8,995
596
Noninterest expense
6,022
13,002
16,713
13,586
Net income before taxes
(6,526)
(5,916)
4,522
2,097
Income tax benefit (expense)
2,219
-
(75)
4,950
Net income
(4,307)
$
(5,916)
$
4,447
$
7,047
$
In thousands |
 17
17
Net Interest Margin
•
Since Q1 2010, the growth in Net Interest Income is over 1.5X the growth in Non-
Interest Expense (385% vs. 144%).
$-
$1
$2
$3
$4
$5
$6
$7
Q1'10
Q2'10
Q3 '10
Q4'10
Q1'11
Q2'11
Q3'11
Q4'11
Q1'12
Q2'12
Q3'12
Quarterly Net Interest Income &
Non-Interest Expense
(in Millions)
Net Interest
Income
Non-Interest
Expense |
 18
Xenith is well capitalized: Proceeds from our S-1 registered public offering, SBLF
preferred stock issuance and the bargain purchase gain from the Virginia Business
Bank acquisition have strengthened our capital position in 2011
18
Capital
Includes proceeds of
$47.5 million related
to initial Xenith Reg D
offering
$54.1
$48.8
$17.7
$8.4
$5.3
$80.3
$6.7
$87.2
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
Dec 2009
Dec 2010
Supplemental
Offering
(April 2011)
SBLF
(Sept 2011)
2011
Comprehensive
Income
Dec 2011
YTD
Comprehensive
Income
Sept 2012
Sept 2012
Xenith Equity |
 19
19
Capital Ratios
Dec 2009
Dec 2010
Dec 2011
Sept 2012
Leverage Ratio
26.8%
14.8%
13.2%
12.9%
Tier 1 RBC Ratio
36.7%
20.3%
17.5%
16.8%
Total RBC Ratio
36.7%
21.4%
18.8%
18.1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Xenith Bank Capital Ratios |
 •
We are focused primarily on organic growth in our target markets
–
Disciplined marketing and sales strategies
–
Hire the best of the best bankers who can gain profitable market
share
–
Metrics, reporting and incentives to support objectives
•
We continue to evaluate the competitive landscape for opportunities
–
Virginia is a fragmented banking market
•
Our infrastructure can support significant growth
–
Management team and Board capable of managing a larger institution
20
Looking Forward |
 Skilled
Management Team
and
Demonstrated
Model
Significant Capital
Selective In-Market
Consolidation
(Whole bank & select asset
opportunities)
Strong,
Strong,
Substantial &
Substantial &
Independent
Independent
Virginia Bank
Virginia Bank
Organic Growth
(Attractive demographics;
proven market competitor)
•
Focus on the Virginia markets with the greatest economic activity and growth
•
Team of experienced professionals
•
Significant capital
•
Local management and decision-making processes
21
+
+
Investment Considerations |