![]() Excellence. Partnership. Service Welcome! 2010 Annual Meeting of Shareholders April 27, 2010 Exhibit 99.1 |
![]() Ed Barham Corporate President & CEO |
![]() Forward Looking Statements • In addition to historical information, this presentation contains forward-looking statements. The forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from historical results, or those anticipated. When we use words such as “believes”, “expects”, “anticipates” or similar expressions, we are making forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date thereof. StellarOne wishes to caution the reader that factors, such as those listed below, in some cases have affected and could affect StellarOne’s actual results, causing actual results to differ materially from those in any forward looking statement. These factors include: (i) expected cost savings from StellarOne’s acquisitions and dispositions, (ii) competitive pressure in the banking industry or in StellarOne’s markets may increase significantly, (iii) changes in the interest rate environment may reduce margins, (iv) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, credit quality deterioration, (v) changes may occur in banking legislation and regulation (vi) changes may occur in general business conditions and (vii) changes may occur in the securities markets. Please refer to StellarOne’s filings with the Securities and Exchange Commission for additional information, which may be accessed at www.stellarone.com. |
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![]() A&D/Construction: SML A&D/Construction (Net of SML) R/E Mortgage Consumer Commercial R/E Commercial 10.52% 10.15% 38.73% 25.78% 12.93% 1.90% Total Portfolio $2,181,196,000 As of 12/31/09 |
![]() Total Non Performing Loans = $66,254,000 Total Non Performing Loans as a Percentage of the Total Loan Portfolio = 2.79% A&D/Construction: SML A&D/Construction (Net of SML) R/E Mortgage Consumer Commercial R/E Commercial 2.85% 30.72% 17.88% 23.23% 13.47% 11.84% As of 12/31/09 |
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![]() Line of Business Overview Mr. Greg Feldmann Bank President & CEO |
![]() Retail Snapshot Households > 112,000 Deposits $2.35 billion Loans $610 million Annual Fee Income $16.1 million Financial Centers 56 Alternative Channels CCC, Internet, Phone, Mobile Employees 365 |
![]() Retail 2009 Accomplishments Production results ~ 2009 vs 2008 Loans: Total Consumer Loans á 10.43% Monthly Average Book Applications á 8.93 % Monthly Applications Taken á 5.47% Monthly Average Loan Applications á 1.46% Deposits: Total Interest Bearing Deposits á 5.74% Total Deposits á 3.88% Implemented New Account Follow Up (NAFU) process to ensure new client satisfaction and optimize cross selling opportunities |
![]() Retail 2009 Accomplishments Bonanza Deposit Campaign Total Deposits $96.3MM Accounts opened 5,431 Wealth Management referral program Retail referrals up 30% from previous year Retail revenue up nearly 20% |
![]() Retail 2009 Accomplishments Improved branch efficiency through strategic realignment Closed/Consolidated 5 Financial Centers Overall deposit retention rate 95% Sold Woodstock to 1 st Bank Annualized operating cost savings ~ $1.8 million Relocated Market St. to Franklin Plaza Opened Plank Rd. facility |
![]() 2010 Key Initiatives Retail Focus: Build Relationships, Revenue and Retention Refinement of Retail Executive Management Intensify focus on Sales and Service and improvement in Operations, Compliance and Project Management Grow noninterest income Example: Improve check card penetration Focus on organic growth Integrate Client Contact Center into Retail Developing sales campaigns for clients utilizing Next Best Product Strategy developed through Marketing StellarOne@Work being promoted to Business and Commercial Banking clients |
![]() 2010 Key Initiatives Continue to improve operating efficiency More sales per square foot Manage to staffing model Driving “store owner” mentality using MPC Relocate Seminole Trail Financial Center to new Northtowne location Lease or sell excess space |
![]() Plank Road |
![]() Commercial Snapshot Market Segments Served Commercial: $3 to $25 million Middle Market: >$25 million Commercial Real Estate: A&D, Housing, Income producing properties, Hospitality Treasury Management Services for companies and municipalities Loans $1.3 billion Deposits $93 million non-interest $62 million in sweep balances Employees 67 |
![]() 2009 Highlights • Loan production - $378 million commitments closed • Treasury Management: – Sweep balances - $62 million average – Account analysis income up 36% to ~$700k annually • Established RM staffing metric - $40MM/150-200 notes • Implemented Segmentation Strategy – Core Commercial – Middle Market – Greater focus and refinement of Commercial Real Estate Group • Transferred $150mm+ in loans and reassigned 5 officers to Business Banking to improve relationship coverage and risk management |
![]() 2010 Initiatives & Goals • Grow & diversify loans in C&I – Growth goal of 5% on loans and 4% on deposits – Evaluate potential markets for LPO – Opportunity in government contracting sector – Leverage SBA – Cross sell treasury management, insurance, wealth management • Refine Commercial management structure – Regional Portfolio Manager Positions – Regional Commercial Banking Manager Positions • Commercial Real Estate – Remain vigilant on working down problems • A&D exposure reduced by $89 million in 2009 – Be opportunistic in our markets • Further enhance products and services – Treasury Management capabilities (international, F/X, etc.) – Interest Rate hedging alternatives |
![]() Business Banking Market Served Business and professional groups with revenues $3 million or less Market Opportunity > 300,000 opportunities in VA Loans $235 million Deposits Drive to Retail centers to leverage investment in facilities Business Model 60% business/40% retail (bank the owners and employees) Employees 16.5 |
![]() 2009 Highlights • Completed “right sizing” to ensure effective coverage in prime BB markets • Successfully integrated $150MM loan portfolio and 5 RMs • Developed scorecard system to track effectiveness of RMs • Structured Specialized Lending area with a focus on SBA lending |
![]() 2010 Initiatives • $67 million in new loans/$20 million in core deposits/Cross sell fee services – Rolled out “Premier Profiling Program” to expand existing relationships – Generating additional fees through investments, insurance and mortgage – Double SBA loan book – Developing a new tiered deposit product embedding treasury management features – Partnering with Retail to cross sell StellarOne@Work • Utilizing Synapsys (CRM system) to ensure all calling and selling activity is captured |
![]() Mortgage Snapshot Markets Served Retail: customers and prospects in or near our Virginia markets Wholesale: Smaller banks and brokers principally in VA, NC, SC 2009 Customers Served 3,422 2009 Loan Volume $618 million 2009 Revenues $5.6 million |
![]() 2009 Accomplishments • Implemented Optimal Blue system • Made process improvements for underwriting, closing, and post closing functions • Expanded into Richmond market • Wholesale developed mini-correspondent program • Website improvements |
![]() 2010 Initiatives • Cross sell Bank and affiliate services (e.g., insurance) – Achieving 15% or greater cross sell penetration rate • Continue to build strong ties to our builders in order to help them close more business while increasing our “purchase” business • Better utilize Customer Contact Center • Continual improvement in Risk Management • Enhance Freddie Mac relationship of delivery channel to enhance funding and delivery of loans for greater profitability |
![]() Wealth Management Overview Securities Asset Management Total Employees 11 24 35 Assets $212MM $462MM $674MM Accounts 4,277 868 5,145 2009 Revenues $1.2MM $2.96MM $4.16MM |
![]() 2009 Accomplishments • Securities Division assets grew by $39 million or 23% • Asset Management booked 79 new accounts with initial funding of $28 million • Retained 99.5% of Asset Management accounts in a volatile market year • Hired experienced Relationship Managers in Roanoke, Fredericksburg and Staunton • Implemented Investor’s View |
![]() 2010 Initiatives • Business Development / Marketing – Holding “Will Workshop” seminars – Planning seminars for centers of influence (attorneys, CPA’s, etc.) that would include continuing education credits – Expansion of number of staff members making business development calls to better cover the footprint of Wealth Management • Account Retention Focus – Implementation of a call tracking system based on client tiers – Goals established for number of proactive client contacts per year • Portfolio Management – Implementation of a new performance measurement system – Creation of collateral materials documenting investment performance |
![]() Financial Report Mr. Jeffrey W. Farrar Executive Vice President and Chief Financial Officer |
![]() • Discussion Topics: – Profitability – Asset Quality – Balance Sheet, Capital and Liquidity – Overhead and Efficiency Efforts – Stock Ownership and Performance |
![]() First Quarter Preview • Earnings improvement that will exceed the consensus estimate. • Decrease in total non-performing assets for the second consecutive quarter. • Higher charge-offs and related provisioning sequentially. • Continued improvement in net interest margin for second consecutive quarter. • Improved contribution from mortgage and wealth management. • Official earnings release on Thursday. |
![]() Peer Comparisons • Sandy Spring Bancorp • City Holding Company • Capital City Group • Townebank • Cardinal Financial • Pinnacle Financial • SCBT Financial • S&T Bancorp • Seacoast Banking • Harleysville National • Sun Corporation • Virginia Commerce |
![]() Profitability StellarOne 2009 Actual 2009 Peer Average Return on Average Assets -.28% -.18% Return on Average Equity -1.99% -3.02% |
![]() Revenue Growth and Composition $15,000 $40,000 $65,000 $90,000 $115,000 2006 2007 2008 2009 Non - interest Income Net Interest Income |
![]() 3.52% 3.34% 3.30% 3.45% 3.64% 3.25% 3.35% 3.45% 3.55% 3.65% 3.75% 3.85% 1Q 2009 2Q 2009 3Q 2009 4Q2009 Peer YE 2009 Net Interest Margin |
![]() Earnings and Dividends (in thousands) -$10,000 -$7,500 -$5,000 -$2,500 $0 $2,500 $5,000 $7,500 $10,000 $12,500 $15,000 $17,500 $20,000 2008 2009 4Q - 2009 $9,411 ($8,530) $546 $12,614 $6,350 $908 Earnings (Loss) Dividends |
![]() 2006 2007 2008 2009 Peer Non-performing Assets / Total Assets 0.19% 0.44% 1.66% 2.13% 2.60% Net Charge-offs / Average Loans (0.01)% 0.12% 0.80% 1.24% 1.09% Allowance / Loans 1.19% 1.23% 1.35% 1.84% 1.69% Asset Quality |
![]() $400 $1,400 $2,400 $3,400 Loans Deposits Assets 2007 2008 2009 $400 $1,400 $2,400 $3,400 Loans Deposits Assets 2007 2008 2009 Balance Sheet 2009 vs. 2008 Loans (3.4)% Deposits 4.9% Assets 1.3% |
![]() Deposit Base Time Deposits, 40% Savings deposits, 8% Demand deposits, 39% Non- interest bearing, 12% Non- interest bearing 13% Savings deposits 8% Demand deposits, 32% Time Deposits, 47% 2009 - $2.44 Billion 2008 – $2.32 Billion |
![]() $12.66 $13.97 $15.08 $17.90 $17.30 $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 2005 2006 2007 2008 2009 Book Value per Common Share |
![]() Capital Ratios StellarOne 2009 Actual 2009 Peer Median Tier 1 Capital to Risk Adjusted Assets 13.21% 12.35% Tangible Equity to Tangible Assets 10.26% 8.84% Total Equity to Total Assets 14.46% 14.48% |
![]() • Liquid assets (cash and securities) of $551 million or 18% of balance sheet. • Securities portfolio is of a high quality with no embedded credit risk and short duration. • Untapped lines of credit exceed $85 million which are available if the need warrants for use as standby sources of liquidity. Liquidity |
![]() $22,224 $24,057 $22,748 $24,875 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 1Q - 2009 2Q - 2009 3Q - 2009 4Q - 2009 Overhead by Quarter (Dollars in thousands) |
![]() 1,013 846 827 815 0 500 1,000 1,500 Jul-07 Dec-08 Dec-09 FTE History |
![]() Valuation StellarOne 2009 Actual 2009 Peer Average YTD Stock Performance 44.6% 17.5% Percentage of Book Value 85% 118% Market Capitalization $343 M $372 M |
![]() YTD % 1yr. % 5yr. % StellarOne (STEL) 46.62% 5.73% (24.30)% Peers 32.70% 3.47% (22.50)% Total Return Performance |
![]() Coverage and Ownership • StellarOne now covered by ten buy side analysts. • Institutional ownership is now almost 30% of total ownership. • Top four holders: – BlackRock Global 4.88% – Vanguard Group 3.99% – Dimensional Fund 3.74% – Heartland Advisors 2.74% |
![]() Questions and Discussion Thank You! |