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A STRATEGIC PARTNERSHIP

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Forward Looking Statements

This presentation contains certain forward-looking information about the little bank, Inc. (“LTLB”) and/or UnionBanc Corp. (“Union”), the holding company for Union Bank & Trust Company. In general, forward-lookingstatements usually use words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,”“estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology,including statements related to the expected timing of the closing of the merger, the expected returns and otherbenefits of the merger, to shareholders, expected improvement in operating efficiency resulting from the merger,estimated expense reductions resulting from the transactions and the timing of achievement of such reductions, theimpact on diluted earnings per share and tangible book value, and the effect of the merger on LTLB’s capital ratios.Forward-looking statements represent management’s beliefs, based upon information available at the time thestatements are made, with regard to the matters addressed; they are not guarantees of future performance.Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over timeand could cause actual results or financial condition to differ materially from those expressed in or implied by suchstatements.

Factors that could cause or contribute to such differences include, but are not limited to, the possibility thatexpected benefits may not materialize in the time frames expected or at all, or may be more costly to achieve; thatthe merger may not be timely completed, if at all; that prior to completion of the merger or thereafter, the parties’respective businesses may not perform as expected due to transaction-related uncertainties or other factors; that theparties are unable to implement successful integration strategies; that the required regulatory, shareholder, or otherclosing conditions are not satisfied in a timely manner, or at all; reputational risks and the reaction of the parties’customers to the merger; diversion of management time to merger-related issues; and other factors and riskinfluences. Consequently, no forward-looking statement can be guaranteed. Neither LTLB nor Union undertakesany obligation to update or revise any forward-looking statements, whether as a result of new information, futureevents or otherwise.

Combines two of North Carolina’s top-performing community banks

Expands service in high growth markets (Research Triangle, Greenville, Wilmington)while maintaining small-town banking roots

Pro forma assets of approximately $665 million enhances ability to serve current andlarger customers

Estimated EPS accretion > 20% with full cost savings realized

Maintains “well-capitalized” status and optimizes capital levels

Combined banks uniting under Union Bank brand to reflect regional scope offranchise

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Transaction Overview

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Transaction Rationale

Logical market expansion combines adjacent franchise footprintsaround key Research Triangle and Greenville markets

Pro forma branch network will cover 3 of the top markets inNorth Carolina

Familiar markets and client bases will allow for successfulintegration of compatible cultures

Market Expansion

Immediately accretive to EPS Estimated EPS accretion > 20% with full cost savings realized LTLB TBV earn back period just over 3 years

FinanciallyAttractive

Increases legal lending limit and enhances combined bank’sability to serve larger customers

Reduces impact of fixed regulatory costs on profitability Better positions combined bank for potential future acquisitions

of smaller institutions in current and neighboring markets

Efficiencies from Size and

Scale

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Transaction Terms

Transaction Value1 $30.7 million

Transaction Value per Share $11.94

Exchange Ratio2 0.8843

Consideration mix 100% Stock

Union Pro-Forma Ownership 40.3%

Price/TBV1 126%

Price/Annualized YTD ‘16 EPS1 20.1x

Required Approvals Customary regulatory and shareholder approvals

Expected Closing Q2 2017

Board 11 LTLB /7 Union (reflects pro forma ownership)

LTLB share price of $13.50 used for transaction value and pricing ratios1) Includes the cash out of options2) 0.8843 share of LTLB common stock for each share of Union Banc Corp. common stock

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Transaction Assumptions

Cost Savings $2.3 million with full cost saves realized

Revenue Synergies None assumed

One-Time Costs $4.0 million, pretax

Core Deposit Intangible $1.9 million

Fair Value Marks $4.9 million pre-tax credit mark gross of loan loss reserve$1.7 million mark on carrying value of bank premises

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Pro Forma Bank Overview

15 branches across the Research Triangle and eastern North Carolina

Balance Sheet (Pro forma as of 9/30/16*)

Assets: $665 million

Loans: $480 million

Deposits: $550 million

the little bank, Inc.

Union Bank & Trust Company

* Excludes merger accounting adjustmentsCircle denotes pending branch location

Source: S&P Global Market Intelligence

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Pro Forma Deposit & Loan Portfolios

Const.$33,344

13%

1-4$69,869

28%

Owner CRE$48,906

20%

Other CRE$48,151

19%

C&I$21,069

8%

Other$28,769

12%

Const.$35,437

15%

1-4$85,798

37%Owner CRE

$36,562 16%

Other CRE$27,203

12%

C&I$28,295

12%

Other$19,362

8%

Const.$68,781

14%

1-4$155,667

32%Owner CRE

$85,468 18%

Other CRE$75,354

16%

C&I$49,364

10%

Other$48,131

10%

Dollars in ThousandsSource: S&P Global Market Intelligence

Union Bank & Trust Companythe little bank, Inc. Combined

Demand$80,106

27%

Transaction$45,780

15%MMDA & Savings$63,442

21%

Retail CD$97,238

33%

Jumbo CD$12,679

4%

Demand$52,016

21%

Transaction$47,776


25%

Retail CD$78,526

31%

Jumbo CD$10,584

4%

Demand$132,122

24%

Transaction$93,556


23%

Retail CD$175,764

32%

Jumbo CD$23,263

4%

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Key Metrics

Union Bank & Trust Company founded in Oxford, NC in 2006

7 branches and an LPO (Raleigh)

Bank-level Leverage Ratio above 10%

Loans/Deposits above 90%

Cost of Funds below 50bps

LTLB founded in Kinston, NC in 1998

7 branches

Leverage Ratio and TCE Ratio both above 10%

Q3 2016 ROAA of 1.00%

NPAs/Assets below 0.45%


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Union Bank & Trust Company – Overview

NPAs/Assets

NPAs ex. TDRs/Assets

2.39%2.26%

1.73%

1.55%

1.35%

0.97%

1.31%

1.42%

1.18% 1.16%

0.50%

0.70%

0.90%

1.10%

1.30%

1.50%

1.70%

1.90%

2.10%

2.30%

2.50%

2012Y 2013Y 2014Y 2015Y LTM

Asset Quality Trends


(Dollars in Thousands)

Balance Sheet Highlights 2012Y 2013Y 2014Y 2015Y 9/30/16

Total Assets 203,296 232,736 241,105 265,340 299,480

Net Loans 167,915 186,184 197,316 210,616 229,980

Total Deposits (Incl. Dom. & For.) 172,290 202,289 202,792 222,072 251,745

Tangible Common Equity 18,137 19,559 21,444 22,780 24,219

Performance Measures 2012Y 2013Y 2014Y 2015Y LTM

Net Income 1,764 1,776 1,620 1,261 1,463

ROAA (%) 0.89 0.82 0.69 0.49 0.52

ROAE (%) 7.52 7.12 5.97 4.39 4.90

Net Interest Margin (%) 4.60 5.02 5.14 4.91 4.70

Efficiency Ratio (FTE) (%) 68.80 70.59 73.72 77.47 74.77

Capitalization (%) 2012Y 2013Y 2014Y 2015Y 9/30/16

TCE Ratio 8.92 8.42 8.91 8.60 8.10

Leverage Ratio 11.79 11.29 11.41 10.95 10.26

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the little bank, Inc. – Overview

0.60%

0.36%0.39%

0.31%0.29%

0.60%

0.36%0.39%

0.31%0.29%

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

2012Y 2013Y 2014Y 2015Y LTM

Asset Quality Trends

NPAs/Assets

NPAs ex. TDRs/Assets


(Dollars in Thousands)

Balance Sheet Highlights 2012Y 2013Y 2014Y 2015Y 9/30/16

Total Assets 306,045 311,952 339,215 362,331 366,543

Net Loans 210,655 218,980 242,459 239,020 246,601

Total Deposits (Incl. Dom. & For.) 250,225 261,462 277,467 297,754 299,245

Tangible Common Equity 28,963 29,728 32,534 34,655 37,317

Performance Measures 2012Y 2013Y 2014Y 2015Y LTM

Net Income 2,468 2,788 2,925 3,122 3,267

ROAA (%) 0.80 0.91 0.88 0.89 0.90

ROAE (%) 6.98 9.19 9.37 9.25 9.16

Net Interest Margin (%) 3.58 3.50 3.61 3.48 3.45

Efficiency Ratio (FTE) (%) 61.20 64.08 63.34 64.69 64.58

Capitalization (%) 2012Y 2013Y 2014Y 2015Y 9/30/16

TCE Ratio 9.46 9.53 9.59 9.56 10.18

Leverage Ratio 10.11 9.71 9.58 9.48 10.03

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Market Highlights – Research Triangle

Overview Demographic Highlights

The Research Triangle is the second largest metro area in the state behind Charlotte

Home to 2.1 million residents and 15 universities

The region attracts more than $2.5 billion of federal R&D funding each year

RDU airport services 400 daily flights to 40 nonstop destinations

In 2016, US News ranked the Research Triangle as the fourth best place to live in the United States

Sources: S&P Global Market Intelligence, researchtriangle.org, workinthetriangle.com

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

Raleigh MSA Charlotte MSA Greensboro-HP MSA

2022 Proj. Median HH Income ($)

Projected 5-Year Population Growth (%)

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Market Highlights – Greenville, NC


2nd largest city east of I-95 in North Carolina

Home to East Carolina University; the 3rd

largest university in the state

Leading retail center in eastern North Carolina and one of only a dozen billion dollar retail markets in the state

Sources: S&P Global Market Intelligence, greenvillenc.org

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

6.00%

6.50%

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Greenville, NC High Point, NC Asheville, NC State of NC

Projected 5-Year Housing Unit Growth (%)



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Market Highlights – Wilmington, NC


Largest city east of I-95 in North Carolina

High concentration of small to mid-size businesses

Home to UNC-Wilmington and location of large offices for General Electric, Verizon Wireless and Duke Energy

Sources: S&P Global Market Intelligence, wilmingtonchamber.org

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

6.00%

6.50%

7.00%

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Wilmington, NC High Point, NC Asheville, NC State of NC

Projected 5-Year Housing Unit Growth (%)



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Investor Contacts

Vincent Robert “Rob” JonesPresident & Chief Executive Officer

Doyle M. ThigpenExecutive Vice President & Chief Financial Officer

the little bank, Inc.804 Carey Road

Kinston, NC 28501(252) 317-2804

www.thelittlebank.com

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Additional Information

This presentation is being made with respect of the proposed merger involving LTLB and Union. Thispresentation is not a solicitation of any vote or approval of the LTLB or Union shareholders and is not asubstitute for the joint proxy statement/offering circular or any other documents which LTLB and Unionmay send to their respective shareholders in connection with the proposed merger. This presentation doesnot constitute an offer to sell or the solicitation of an offer to buy any securities to be issued in connectionwith the proposed merger. Offers to buy such securities will be solicited only by and pursuant to the terms,conditions and disclosures contained in the joint proxy statement/offering circular. The securities to beissued in the proposed merger are not savings or deposit accounts and are not insured or otherwiseapproved by the Federal Deposit Insurance Corporation or any other federal or state governmental agency.

In connection with the proposed merger, LTLB and Union will send a joint proxy statement of LTLB andUnion and an offering circular of LTLB, as well as other relevant documents concerning the proposedmerger to their respective shareholders. BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS,INVESTORS AND SHAREHOLDERS OF LTLB AND UNION ARE URGED TO CAREFULLY READ THEENTIRE JOINT PROXY STATEMENT/OFFERING CIRCULAR REGARDING THE PROPOSED MERGERWHEN IT BECOMES AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSEDOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THEPROPOSED MERGER. Investors and security holders may obtain a free copy of the joint proxystatement/offering circular (when available) at LTLB’s website at www.thelittlebank.com, or at Union’swebsite at www.unionbanknc.com.

a strategic partnership - union bank › wp-content › uploads › 2016 › 11 › ...2016/11/14...

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