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Section 1: 8-K (FORM 8-K)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K  

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 13, 2016

 

Eastern Virginia Bankshares, Inc.

(Exact name of registrant as specified in its charter)  

 

 

Virginia   000-23565   54-1866052

(State or other jurisdiction

of incorporation) 

 

(Commission

File Number)

 

(IRS Employer

Identification No.) 

 

 

10900 Nuckols Road, Suite 325, Glen Allen, Virginia   23060
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (804) 443-8400

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  
xSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
  
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 

Item 8.01Other Events.

 

On December 13, 2016, Eastern Virginia Bankshares, Inc. (“EVBS”) and Southern National Bancorp of Virginia, Inc. (“SONA”) issued a joint press release announcing the execution of an Agreement and Plan of Merger, dated as of December 13, 2016, pursuant to which SONA and EVBS will merge, subject to the terms and conditions set forth therein.  A copy of the joint press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

 

EVBS and SONA will host a conference call regarding the merger at 10:00 a.m. EDT on December 14, 2016.  Instructions for participating in the conference call are included in the attached joint press release.  A copy of the investor presentation that EVBS and SONA will use during this call to provide supplemental information about the proposed transaction is attached hereto as Exhibit 99.2 and incorporated by reference herein.  This investor presentation is also accessible online at www.evb.org under News & Market Data / Presentations.

 

Forward-Looking Statements

 

The information presented herein contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding EVBS’s and SONA’s expectations or predictions of future financial or business performance or conditions. These forward-looking statements are based on the current beliefs and expectations of the management of EVBS or SONA and are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond their control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed or implied in these forward-looking statements.  Forward-looking statements may be identified by words such as “may,” “could,” “will,” “expect,” “believe,” “anticipate,” “forecast,” “intend,” “plan,” “prospects,” “estimate,” “potential,” or by variations of such words or by similar expressions.  Forward-looking statements in this report (including in the exhibits hereto) may include, but are not limited to, statements about projected impacts of and financial results generated by the transaction.  Forward-looking statements speak only as of the date they are made and EVBS and SONA assume no duty to update forward-looking statements, except as required by law.

 

In addition to factors previously disclosed in EVBS’s and SONA’s reports filed with the Securities and Exchange Commission (the “SEC”) and those identified elsewhere in this report, the following factors, among others, could cause actual results to differ materially from the results expressed in or implied by forward-looking statements and historical performance: the possibility that any of the anticipated benefits of the proposed transactions between SONA and EVBS will not be realized or will not be realized within the expected time period; the risk that integration of the operations of SONA and EVBS will be materially delayed or will be more costly or difficult than expected; the inability to complete the proposed transactions due to the failure to obtain the required stockholder approvals; the failure to satisfy other conditions to completion of the proposed transactions, including receipt of required regulatory and other approvals; the failure of the proposed transactions to close for any other reason; the effect of the announcement of the transaction on customer relationships and operating results; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; changes in interest rates; general economic conditions and those in the market areas of SONA and EVBS; legislative and regulatory changes; monetary and fiscal policies of the U.S. government, including policies of the U.S. Department of the Treasury and the Federal Reserve; the quality or composition of SONA’s or EVBS’s loan or investment portfolios and the valuation of those portfolios; success in raising capital by SONA or EVBS; and accounting principles, policies and guidelines.  Annualized, pro forma, projected, and estimated numbers are used for illustrative purposes only, may not reflect actual results and may not be relied upon.

 

 

 

 

Additional Information About the Proposed Transaction and Where to Find It

 

Investors are urged to review carefully and consider all public filings by EVBS and SONA with the SEC, including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Quarterly Reports on Form 10-Q, and their Current Reports on Form 8-K.  The documents filed with the SEC may be obtained free of charge at the SEC’s website at www.sec.gov.  The documents filed by EVBS with the SEC may also be obtained free of charge at EVBS’s website at www.evb.org or by requesting them in writing to EVBS, 10900 Nuckols Road, Suite 325, Glen Allen, Virginia, 23060, Attention: Investor Relations.  The documents filed by SONA with the SEC may also be obtained free of charge at SONA’s website at www.sonabank.com or by requesting them in writing to Southern National Bancorp of Virginia, Inc., 6830 Old Dominion Drive, McLean, Virginia 22101, Attention: Investor Relations.

 

In connection with the proposed transaction, SONA intends to file a registration statement on Form S-4 with the SEC which will include a joint proxy statement of SONA and EVBS and a prospectus of SONA.  A definitive joint proxy statement/prospectus will be sent to the shareholders of each company seeking the required shareholder approvals. This report does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.  Before making any voting or investment decision, investors and security holders of SONA and EVBS are urged to read carefully the entire registration statement and joint proxy statement/prospectus when they become available, including any amendments thereto, because they will contain important information about the proposed transaction.  Free copies of these documents may be obtained as described above.

 

EVBS, SONA and certain of their directors and executive officers may be deemed participants in the solicitation of proxies from EVBS and SONA shareholders in connection with the proposed transaction.  Information about the directors and officers of EVBS and their ownership of EVBS common stock is set forth in the definitive proxy statement for EVBS’s 2016 annual meeting of shareholders, as previously filed with the SEC on April 21, 2016.  Information about the directors and officers of SONA and their ownership of SONA common stock is set forth in the definitive proxy statement for SONA’s 2016 annual meeting of stockholders, as previously filed with the SEC on March 21, 2016.  Investors may obtain additional information regarding the interests of such participants by reading the registration statement and the joint proxy statement/prospectus when they become available.  Free copies of these documents may be obtained as described above.

 

 

 

 

Item 9.01.Financial Statements and Exhibits.

 

(d)Exhibits.

 

Exhibit No. Description
   
99.1 Joint press release of Southern National Bancorp of Virginia, Inc. and Eastern Virginia Bankshares, Inc., dated December 13, 2016
   
99.2 Investor Presentation

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  EASTERN VIRGINIA BANKSHARES, INC.  
  (Registrant)  
       
       
Date: December 13, 2016 By: /s/ Joe A. Shearin  
  Name: Joe A. Shearin  
  Title:  President & Chief Executive Officer  

 

 

 

 

Exhibit Index

 

Exhibit No. Description
   
99.1 Joint press release of Southern National Bancorp of Virginia, Inc. and Eastern Virginia Bankshares, Inc., dated December 13, 2016
   
99.2 Investor Presentation

 

 

 

 

 

 

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1

Southern National Bancorp of Virginia, Inc. and Eastern Virginia Bankshares, Inc. Announce Transformational Merger of Equals



Transaction Expected to be Materially Accretive to Earnings per Share

Combines Strong Commercial Lending Business with a 100 Year Old Deposit Franchise

Combined Franchise Will Operate in Virginia's and Maryland's Most Attractive Markets

MCLEAN, Va. and RICHMOND, Va., Dec. 13, 2016 /PRNewswire/ -- Southern National Bancorp of Virginia, Inc. (NASDAQ: SONA) ("Southern National"), the holding company of Sonabank, and Eastern Virginia Bankshares, Inc. (NASDAQ: EVBS) ("Eastern Virginia"), the holding company of EVB, jointly announced today the signing of a definitive agreement to merge. The combination brings together two banking companies with complementary business lines creating one of the premier banking institutions headquartered in the Commonwealth of Virginia.

Upon completion of the transaction, the combined company will have approximately $2.4 billion in total assets, $2.0 billion in total deposits, and $1.8 billion in total loans. The company, which will assume the Southern National Bancorp of Virginia, Inc. name for the holding company and the Sonabank name for all banking operations, will maintain its corporate headquarters in McLean, Virginia and the headquarters of the bank in Richmond, Virginia. The company will have 47 branch locations covering markets in both Maryland and Virginia, including the Washington, D.C. and Richmond, Virginia MSAs. These attractive markets are often cited as having some of the best demographic and income profiles in the country characterized by low unemployment, strong population growth, new business starts and consistent capital expenditure.

Pursuant to the merger agreement, which was unanimously approved by the Board of Directors of both companies, Eastern Virginia common and preferred shareholders will receive a fixed exchange ratio equal to 0.6313 shares of Southern National common stock for each share of Eastern Virginia common stock or preferred stock owned. Based on the average closing price of Southern National's common stock for the ten trading days ended December 12, 2016, the transaction is valued at approximately $178.3 million, or $9.72 per share of Eastern Virginia common and preferred stock. Southern National shareholders will own approximately 51.4 percent of the combined company and Eastern Virginia shareholders will own approximately 48.6 percent.

Southern National and Eastern Virginia jointly project 16 percent cost savings of their combined noninterest expense base as a result of operational synergies and the consolidation of some locations. The transaction is expected to be materially accretive to earnings per share with minimal dilution to tangible book value, all of which is projected to be earned back within two years. Additionally, the combined company will be well-capitalized by all regulatory standards at the time of closing.

The management team of the combined company will be comprised of Joe A. Shearin, currently President and CEO of Eastern Virginia, as President and CEO, Georgia S. Derrico, currently Chairman and CEO of Southern National, as Executive Chairman, and R. Roderick Porter, currently Vice Chairman and President of Southern National, as Executive Vice Chairman. All three executives will enter into new employment agreements upon the closing of the transaction and will work together towards a seamless integration while continuing the operational success each organization has enjoyed in recent years. The board of directors of the combined company will be fixed at eleven directors, consisting of six members of the current Southern National board of directors, including Ms. Derrico and Mr. Porter, and five members of the current Eastern Virginia board of directors, including Mr. Shearin.

Georgia S. Derrico, Chairman and CEO of Southern National, said, "We believe this is a unique opportunity to combine two very different organizations in order to become an even stronger Virginia based organization with a diverse retail franchise and a dynamic lending based platform. We have known Joe Shearin for over nine years. Through our mutual investment in Southern Trust Mortgage, which has been a tremendous success, we have developed a strong confidence in one another's judgement and banking capabilities. We look forward to operating a much larger organization in a cost effective way to increase profitability and shareholder value."

Joe A. Shearin, President and CEO of Eastern Virginia added, "The combined company offers a unique and highly attractive branch franchise. With locations stretching from Frederick, Maryland down through the greater Washington, D.C. and Richmond areas, Interstate I-81 in the Shenandoah Valley, Charlottesville, Northern Neck, Middle Peninsula and on towards Hampton Roads, we will be the only Virginia based bank that provides this geographic diversification. We will have a presence in Virginia's most attractive markets. We are truly excited to lead this new company together with our respective teams and look forward to maximizing the potential of this combined franchise."

R. Roderick Porter, Vice Chairman and President of Southern National, stated, "This is the opportunity of a career to combine the best elements of two successful, distinctive but complementary banks into a single strong institution. In the coming months, we will continue to put together the best processes and the best people of the two institutions to create a streamlined bank with the strongest risk controls which adds to efficiency without sacrificing customer service."

The transaction is expected to close during the second quarter of 2017 and is subject to the approval of both companies' shareholders along with regulatory approvals and other customary closing conditions. Pursuant to the terms of the merger agreement, EVB will merge with and into Sonabank immediately after the merger of Eastern Virginia with and into Southern National.

Southern National was advised in the transaction by FIG Partners LLC as financial advisor, and Alston & Bird LLP, as legal counsel. Eastern Virginia was advised by Sandler O'Neill + Partners, L.P. as financial advisor, and Troutman Sanders LLP, as legal counsel.

CONFERENCE CALL INFORMATION

Southern National and Eastern Virginia will host an investor conference call and webcast on December 14, 2016, at 10:00 AM EDT.

The conference may be accessed via telephone by dialing 1-844-234-9195 in the United States. No code is needed to participate in the conference call. An investor presentation related to this transaction is available on Southern National's website at: www.sonabank.com, or Eastern Virginia's website at: www.evb.org. A replay of the conference call will be available by dialing 1-855-859-2056 and entering access code 37455183.

ABOUT SOUTHERN NATIONAL

Southern National Bancorp of Virginia, Inc. is a bank holding company with assets of $1.1 billion at September 30, 2016. Sonabank provides a range of financial services to individuals and small and medium sized businesses. Sonabank has fifteen branches in Virginia, located in Fairfax County (Reston, McLean and Fairfax), in Charlottesville, Warrenton (2), Middleburg, Leesburg (2), South Riding, Front Royal, New Market, Haymarket, Richmond and Clifton Forge, and eight branches in Maryland, in Rockville, Shady Grove, Frederick, Bethesda, Upper Marlboro, Brandywine, Owings and Huntingtown.

ABOUT EASTERN VIRGINIA

Eastern Virginia Bankshares, Inc. is a one bank holding company with total assets of $1.3 billion at September 30, 2016. Through its wholly-owned bank subsidiary, EVB, Eastern Virginia operates twenty-four full service branches, two drive-in facilities and one loan production office located in the following cities and counties in eastern Virginia: Chesterfield, Colonial Heights, Essex, Gloucester, Hampton, Hanover, Henrico, King William, Lancaster, Middlesex, Newport News, New Kent, Northumberland, Southampton, Surry, Sussex and Williamsburg. EVB's range of financial services includes traditional banking services along with investments, mortgages, and insurance.

EVB traces its history to the combination of its three predecessor banks in 2006 – Southside Bank and Bank of Northumberland, Inc., both established in 1910, and Hanover Bank, established in 2000. Today, EVB is a community bank targeting small to medium-sized businesses and consumers. EVB is a state leader in SBA lending and is the only bank in the Commonwealth of Virginia offering a fully integrated program called P.O.W.E.R. that focuses on women entrepreneurs and women in business.

For more information about EVB, please visit www.bankevb.com. Eastern Virginia's stock trades on the NASDAQ Global Select Market under the symbol EVBS. Member FDIC. Equal Housing Lender.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 regarding Southern National's and Eastern Virginia's expectations or predictions of future financial or business performance or conditions. These forward-looking statements are based on the current beliefs and expectations of the management of Southern National or Eastern Virginia and are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond their control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Forward-looking statements may be identified by words such as "may," "could," "will," "expect," "believe," "anticipate," "forecast," "intend," "plan," "prospects," "estimate," "potential," or by variations of such words or by similar expressions. Forward-looking statements in this report (including in the exhibits hereto) may include, but are not limited to, statements about projected impacts of and financial results generated by the transaction. Forward-looking statements speak only as of the date they are made and Southern National and Eastern Virginia assume no duty to update forward-looking statements, except as required by law.

In addition to factors previously disclosed in Southern National's and Eastern Virginia's reports filed with the SEC and those identified elsewhere in this report, the following factors, among others, could cause actual results to differ materially from the results expressed in or implied by forward-looking statements and historical performance: ability to obtain regulatory approvals and meet other closing conditions to the transaction; delays in closing the transaction; changes in asset quality and credit risk; changes in interest rates and capital markets; the introduction, timing and success of business initiatives; competitive conditions; and the inability to recognize cost savings or revenues or to implement integration plans associated with the transaction. Annualized, pro forma, projected, and estimated numbers are used for illustrative purposes only, may not reflect actual results and may not be relied upon.

Additional Information About the Proposed Transaction and Where to Find It

Investors are urged to review carefully and consider all public filings by Southern National and Eastern Virginia with the SEC, including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Quarterly Reports on Form 10-Q, and their Current Reports on Form 8-K. The documents filed with the SEC may be obtained free of charge at the SEC's website at www.sec.gov. The documents filed by Southern National with the SEC may also be obtained free of charge at Southern National's website at www.sonabank.com or by requesting them in writing to Southern National Bancorp of Virginia, Inc., 6830 Old Dominion Drive, McLean, VA 22101, Attention: Investor Relations. The documents filed by Eastern Virginia with the SEC may also be obtained free of charge at Eastern Virginia's website at www.evb.org or by requesting them in writing to Eastern Virginia Bankshares, Inc., 10900 Nuckols Road, Suite 325, Glen Allen, Virginia 23060, Attention: Investor Relations.

In connection with the proposed transaction, Southern National intends to file a registration statement on Form S-4 with the SEC which will include a joint proxy statement of Southern National and Eastern Virginia and a prospectus of Southern National. A definitive joint proxy statement/prospectus will be sent to the shareholders of each company seeking the required shareholder approvals. This report does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Before making any voting or investment decision, investors and security holders of Southern National and Eastern Virginia are urged to read carefully the entire registration statement and joint proxy statement/prospectus when they become available, including any amendments thereto, because they will contain important information about the proposed transaction. Free copies of these documents may be obtained as described above.

Southern National, Eastern Virginia, and certain of their directors and executive officers may be deemed participants in the solicitation of proxies from Southern National and Eastern Virginia shareholders in connection with the proposed transaction. Information about the directors and officers of Southern National and their ownership of Southern National common stock is set forth in the definitive proxy statement for Southern National's 2016 annual meeting of shareholders, as previously filed with the SEC on March 21, 2016. Information about the directors and officers of Eastern Virginia and their ownership of Eastern Virginia common stock is set forth in the definitive proxy statement for Eastern Virginia's 2016 annual meeting of shareholders, as previously filed with the SEC on April 21, 2016. Investors may obtain additional information regarding the interests of such participants by reading the registration statement and the joint proxy statement/prospectus when they become available. Free copies of these documents may be obtained as described above.

Contact: R. Roderick Porter, President

Contact: Joe A. Shearin, President & CEO

Phone: 202-464-1130 ext. 2406

Phone: 804-528-4752

Southern National Bancorp of Virginia Inc.

Eastern Virginia Bankshares, Inc.

NASDAQ Symbol SONA

NASDAQ Symbol EVBS

Website: www.sonabank.com

Website: www.evb.org



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Section 3: EX-99.2 (EXHIBIT 99.2)

 

Exhibit 99.2

Southern National Bancorp of Virginia, Inc. and Eastern Virginia Bankshares , Inc. Announce Transformational Merger of Equals

 
 

2 This investor presentation contains “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding Southern National Bancorp of Virginia, Inc . ’s (“Southern National” or “SONA”) and Eastern Virginia Bankshares , Inc . ’s (“Eastern Virginia” or “EVBS”) expectations or predictions of future financial or business performance or conditions . These forward - looking statements are based on the current beliefs and expectations of the management of SONA or EVBS and are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond their control . In addition, these forward - looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change . Forward - looking statements may be identified by words such as “may,” “could,” “will,” “expect,” “believe,” “anticipate,” “forecast,” “intend,” “plan,” “prospects,” “estimate,” “potential,” or by variations of such words or by similar expressions . Forward - looking statements in this report (including in the exhibits hereto) may include, but are not limited to, statements about projected impacts of and financial results generated by the transaction . Forward - looking statements speak only as of the date they are made and SONA and EVBS assume no duty to update forward - looking statements, except as required by law . In addition to factors previously disclosed in SONA’s and EVBS’ reports filed with the SEC and those identified elsewhere in this report, the following factors, among others, could cause actual results to differ materially from the results expressed in or implied by forward - looking statements and historical performance : ability to obtain regulatory approvals and meet other closing conditions to the transaction ; delays in closing the transaction ; changes in asset quality and credit risk ; changes in interest rates and capital markets ; the introduction, timing and success of business initiatives ; competitive conditions ; and the inability to recognize cost savings or revenues or to implement integration plans associated with the transaction . Annualized, pro forma, projected, and estimated numbers are used for illustrative purposes only, may not reflect actual results and may not be relied upon . Forward - Looking Statements

 
 

3 Investors are urged to review carefully and consider all public filings by SONA and EVBS with the SEC, including but not limited to their Annual Reports on Form 10 - K, their proxy statements, their Quarterly Reports on Form 10 - Q, and their Current Reports on Form 8 - K . The documents filed with the SEC may be obtained free of charge at the SEC’s website at www . sec . gov . The documents filed by SONA with the SEC may also be obtained free of charge at SONA’s website at www . sonabank . com or by requesting them in writing to Southern National Bancorp of Virginia, Inc . , 6830 Old Dominion Drive, McLean, VA 22101 , Attention : Investor Relations . The documents filed by EVBS with the SEC may also be obtained free of charge at EVBS’ website at www . evb . org or by requesting them in writing to Eastern Virginia Bankshares , Inc . , 10900 Nuckols Road , Suite 325 , Glen Allen, Virginia 23060 , Attention : Investor Relations . In connection with the proposed transaction, SONA intends to file a registration statement on Form S - 4 with the SEC which will include a joint proxy statement of SONA and EVBS and a prospectus of SONA . A definitive joint proxy statement/prospectus will be sent to the shareholders of each company seeking the required shareholder approvals . This report does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval . Before making any voting or investment decision, investors and security holders of SONA and EVBS are urged to read carefully the entire registration statement and joint proxy statement/prospectus when they become available, including any amendments thereto, because they will contain important information about the proposed transaction . Free copies of these documents may be obtained as described above . SONA, EVBS, and certain of their directors and executive officers may be deemed participants in the solicitation of proxies from SONA and EVBS shareholders in connection with the proposed transaction . Information about the directors and officers of SONA and their ownership of SONA common stock is set forth in the definitive proxy statement for SONA’s 2016 annual meeting of shareholders, as previously filed with the SEC on March 21 , 2016 . Information about the directors and officers of EVBS and their ownership of EVBS common stock is set forth in the definitive proxy statement for EVBS’ 2016 annual meeting of shareholders, as previously filed with the SEC on April 21 , 2016 . Investors may obtain additional information regarding the interests of such participants by reading the registration statement and the joint proxy statement/prospectus when they become available . Free copies of these documents may be obtained as described above . Additional Information

 
 

4 Buyer Southern National Bancorp of Virginia, Inc. Seller Eastern Virginia Bankshares, Inc. Headquarters Southern National Bancorp of Virginia, Inc.; Sonabank Exchange Ratio Holding Company: McLean, Virginia ; Bank: Richmond, Virginia Transaction Value 0.6313 shares of SONA common stock for each share of EVBS common stock and preferred stock Consideration $178.3 million Shares Issued 100% Stock of SONA (NASDAQ) Pro F orma Ownership 51.4% SONA / 48.6% EVBS Executive Management Joe Shearin (EVBS) – President & CEO, Georgia Derrico (SONA) – Executive Chairman, Rod Porter (SONA) – Executive Vice Chairman Board Representation 6 SONA / 5 EVBS with 1 additional observer seat for EVBS Required Approvals Customary regulatory and shareholder approvals Expected Closing Second quarter of 2017 Buyer Transaction Terms Seller Company Branding Headquarters Exchange Ratio Transaction Value 1 Consideration Pro Forma Ownership Executive Management Board Representation Required Approvals Expected Closing 1 Based on SONA’s ten day trailing weighted average price of $15.39, as of market close on December 12, 2016

 
 

5 Transaction Rationale • Significantly accretive to EPS in the first year • Accretive to tangible book value within 2 years • Operating synergies anticipated to result in readily achievable cost savings • Pro forma company will be well - capitalized • Pricing multiples in line with other recent mergers of equals Financially Attractive • Retaining leadership from both banks will help facilitate a successful integration process • Significantly increases future growth opportunities, both organic and acquisitive • Additional size and earnings should create shareholder value through stronger pricing metrics from both a trading and control perspective Well – Positioned Pro Forma Franchise Strategic Rationale • Creates the 7 th largest Virginia based community bank 1 • Combines SONA’s robust loan growth with EVBS’ strong core deposit base • Complementary footprints create a more diversified franchise • Both companies bring consistent earnings with the ability to enhance future EPS through efficiencies • Pro forma market capitalization broadens investor base and share liquidity 1 Community bank defined as banks with < $10.0 billion in assets as of September 30, 2016

 
 

6 Transaction Assumptions Estimated Cost Saves • $9.9 million pre - tax savings • 16% of combined 2016 estimated noninterest expense Transaction Expenses • $16.0 million in pre - tax expenses • 9.0% of transaction value Loan Mark • $23.0 million pretax mark • 2.5% of EVBS’ total loans OREO Mark • $460,000 pretax mark • 30% of EVBS’ total OREO Core Deposit Intangible • $8.9 million amortized straight - line over 10 years • 1.0% of EVBS’ core deposits Estimated Cost Savings Transaction Expenses Loan Mark OREO Mark Core Deposit Intangible

 
 

7 Transaction Impacts 1 Please refer to the Non - GAAP reconciliation and footnotes in the appendix on page 17 - 19 Note: Payback period calculated using the crossover method Source: SNL Financial Key Transaction Impacts Capital Impact 9/30/2016 Capital Ratios SONA Pro Forma TCE / TA 1 10.1% ≈8.7% Leverage Ratio 10.6% ≈9.1% CET1 Ratio 12.6% ≈11.1% Tier 1 Ratio 12.6% ≈11.4% RBC Ratio 13.5% ≈12.9% SONA 2017 EPS Accretion Greater than 15% SONA 2018 EPS Accretion Greater than 20% Tangible Book Value Accretion/(Dilution) Less than 5% Tangible Book Payback Period Within 2 Years Ownership Split SONA 51.4% / EVBS 48.6% EVBS Dividend Pickup ≈ 70% ▪ EVBS preferred equity is converted into 5,240,192 shares of common stock ▪ Pro forma company remains above well - capitalized minimums at close ▪ The combined company’s earnings are expected to support a regular dividend while maintaining healthy capital levels ▪ Both management teams exercise a disciplined approach to capital management and recognize its importance to the future growth of the combined company ▪ Allows the combined company to consider various organic and acquisitive growth opportunities going forward

 
 

8 Low Risk Transaction 1 Includes $23 million loan mark and $0.5 million OREO mark Source: SNL Financial □ Established working relationship between the SONA and EVBS management teams ▪ Both teams worked together on their mutual investment in Southern Trust Mortgage ▪ Increases the probability of a smooth integration process for employees and customers □ Extensive credit review ▪ Over 50% of EVBS’ loan portfolio was reviewed by SONA’s internal team ▪ EVBS conducted reciprocal due diligence with approximately 50% of total loans reviewed ▪ Estimated credit mark 1 of approximately $23.5 million, compared to EVBS’ total NPAs of $20.9 million □ Comprehensive reciprocal operational due diligence performed ▪ Detailed review of business plans, budgets, credit processes, among other aspects of the businesses ▪ In depth evaluation of personnel at both companies to build the most efficient team for the combined company □ Pro forma bank CRE concentration ratios will be well within regulatory guidelines ▪ Estimated pro forma CRE concentration of 274%

 
 

9 Headquarters: 6830 Old Dominion Drive Suite 100 McLean, VA 22101 Executive Management: Georgia S. Derrico – Chairman & CEO Assets ($000): 1,135,436 Market Cap ($M): 188.7 TCE / TA 1 (%): 10.11 Tangible Book Value 1 ($): 9.27 LTM ROAA (%) : 0.99 LTM ROAE (%): 8.60 LTM Efficiency Ratio (%): 55.54 LTM Net Interest Margin (%): 4.05 NPAs / Assets (%): 1.08 NCOs / Loans (%): 0.49 Reserves / Loans (%): 0.93 Headquarters: 10900 Nuckols Road Suite 325 Glen Allen, VA 23060 Executive Management: Joe A Shearin - President & CEO Assets ($000): 1,314,896 Market Cap ($M): 172.6 TCE / TA 1,2 (%): 9.02 Tangible Book Value 1,2 ($): 6.37 LTM ROAA (%) : 0.65 LTM ROAE (%): 6.37 LTM Efficiency Ratio (%): 76.72 LTM Net Interest Margin (%): 3.72 NPAs / Assets (%): 1.59 NCOs / Loans (%): 0.17 Reserves / Loans (%): 1.12 Company Overviews 1 Please refer to the Non - GAAP reconciliation and footnotes in the appendix on page 17 - 19 2 Assumes EVBS’ preferred equity is converted into 5,240,192 shares of common stock Source: SNL Financial

 
 

10 Established Roots in the Mid - Atlantic’s Best Markets EVBS SONA 1 Community Bank defined as banks with total assets <$10.0 billion as of September 30, 2016 Source: SNL Financial Virginia Deposit Market Share - Community Banks 1 Number of Branches Total Deposits In Market ($000) Total Market Share (%) 1 Union Bkshs Corp (VA) 115 6,101,710 11.7 2 TowneBank (VA) 33 5,704,362 11.0 3 Carter Bank & Trust (VA) 88 3,948,043 7.6 4 Burke & Herbert Bank & Trust (VA) 25 2,262,071 4.3 5 Access National Corp. (VA) 19 2,113,820 4.1 6 Xenith Bankshares Inc. (VA) 32 2,002,794 3.8 Pro Forma Entity 39 1,600,414 3.1 7 First Bancorp Inc. (VA) 21 1,163,717 2.2 8 C&F Financial Corp. (VA) 26 1,078,580 2.1 9 WashingtonFirst Bankshares Inc (VA) 12 1,053,412 2.0 10 National Bankshares Inc. (VA) 26 1,021,880 2.0 11 Eastern Virginia Bankshares (VA) 24 1,011,817 1.9 12 American National Bankshares (VA) 17 899,577 1.7 13 Community Bankers Trust Corp (VA) 17 760,685 1.5 14 First Community Bancshares Inc (VA) 24 748,659 1.4 15 Old Point Financial Corp. (VA) 20 729,103 1.4 16 FVCBankcorp Inc. (VA) 6 678,504 1.3 17 John Marshall Bank (VA) 4 667,965 1.3 18 First National Corp. (VA) 14 634,297 1.2 19 Bay Banks of Virginia Inc. (VA) 19 625,859 1.2 20 Eagle Bancorp Inc (MD) 9 616,230 1.2 21 Chesapeake Financial Shares (VA) 16 591,953 1.1 22 Southern National Bncp of VA (VA) 15 588,597 1.1 23 Eagle Financial Services Inc. (VA) 13 572,059 1.1 24 BNC Bancorp (NC) 9 559,902 1.1 25 Park Sterling Corporation (NC) 9 542,049 1.0 Total For Institutions In Market 1,130 52,046,852 100.0 2016 RankInstitution (ST) 2016

 
 

11 Attractive Markets with Potential for Growth Source: SNL Financial Core Markets Other Key Markets □ Charlottesville ▪ 1 location with $120 million deposits ▪ Home to the University of Virginia and its 22,000 students □ Northern Neck and Middle Peninsula Region ▪ 10 locations with $439 million deposits ▪ Stable, low cost deposit base □ Shenandoah Valley ▪ 3 locations with $136 million deposits ▪ Significant manufacturing presence for large companies along Interstate 81 □ Washington D.C. MSA ▪ 19 locations with $657 million deposits ▪ Population: 6.1 million ▪ M etropolitan area with an economy based on science, engineering, and the Federal Government ▪ Access to the nation’s most affluent market - 14.3 % of households earn more than $ 200,000 annually □ Richmond MSA ▪ 10 locations with $416 million deposits ▪ Population: 1.3 million ▪ Economic hub that is home to 8 Fortune 500 companies ▪ University of Richmond and Virginia Commonwealth are located in the area □ Virginia Beach - Norfolk - Newport News MSA ▪ 5 locations with $142 million deposits ▪ Population: 1.7 million ▪ Economy is driven primarily by port - related commerce including shipbuilding, cargo storage and manufacturing ▪ Large military presence with 150,000 active duty and civilian personnel 4.7% 13.0% 7.5% 8.0% 11.0% 6.5% 5.5% 4.0% 4.9% 4.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Washington DC MSA Richmond, VA MSA VA Beach, Norfolk, Newport News MSA VA USA Projected Growth Proj. HHI Growth (2016-2022) Proj. Population Growth (2016-2022) $91,346 $59,885 $59,454 $66,140 $55,551 $- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 Washington DC MSA Richmond, VA MSA VA Beach, Norfolk, Newport News MSA VA USA 2016 Household Income

 
 

12 Contribution Analysis 1 Assumes EVBS’ preferred equity is converted into 5,240,192 shares of common stock 2 Please refer to the Non - GAAP reconciliation and footnotes in the appendix on page 17 - 19 Dollars in thousands, except per share data; Data as of September 30, 2016 Percentage Contribution SONA EVBS SONA EVBS Total assets 1,135,436$ 1,314,896$ 46.3% 53.7% Total loans 912,831$ 936,624$ 49.4% 50.6% Total deposits 915,271$ 1,010,290$ 47.5% 52.5% Tangible common equity 1,2 113,606$ 116,990$ 49.3% 50.7% LTM stand-alone net income 10,457$ 8,304$ 55.7% 44.3% Market capitalization 1 188,707$ 172,554$ 52.2% 47.8% Shares Oustanding in Pro Forma Institution 1 12,261,643 11,588,643 51.4% 48.6% Fully Diluted Shares in Pro Forma Institution 13,117,343 11,630,167 53.0% 47.0% 46.3% 49.4% 47.5% 49.3% 55.7% 52.2% 51.4% 53.0% 53.7% 50.6% 52.5% 50.7% 44.3% 47.8% 48.6% 47.0% 0.0% 25.0% 50.0% 75.0% 100.0% Total assets Total loans Total deposits Tang. common equity LTM net income Market Cap Shares Outstanding Pro Forma Ownership Diluted - Pro Forma Ownership EVBS Contribution SONA Contribution

 
 

13 SONA Pro Forma EVBS Note: GAAP data shown, does not include purchase accounting adjustments Source: SNL Financial C&D 8.6% 1 - 4 Fam 23.4% HELOC 3.2% OwnOcc CRE 15.5% Other CRE 33.0% Multifam 3.6% C&I 12.6% Consr & Other 0.2% C&D 9.9% 1 - 4 Fam 23.2% HELOC 12.8% OwnOcc CRE 20.3% Other CRE 11.3% Multifam 3.7% C&I 11.1% Consr & Other 7.7% C&D 9.2% 1 - 4 Fam 23.3% HELOC 8.0% OwnOcc CRE 18.0% Other CRE 22.0% Multifam 3.6% C&I 11.9% Consr & Other 4.0% Pro Forma Loans: September 30, 2016 “Combines SONA’s strong lending platform …. Composition Composition Composition Loan Type ($000) % of Total Loan Type ($000) % of Total Loan Type ($000) % of Total Constr & Dev 78,352 8.6% Constr & Dev 92,672 9.9% Constr & Dev 171,024 9.2% 1-4 Family Residential 213,947 23.4% 1-4 Family Residential 217,733 23.2% 1-4 Family Residential 431,680 23.3% Home Equity 28,822 3.2% Home Equity 119,578 12.8% Home Equity 148,400 8.0% Owner - Occ CRE 141,969 15.5% Owner - Occ CRE 190,502 20.3% Owner - Occ CRE 332,471 18.0% Other CRE 301,688 33.0% Other CRE 106,205 11.3% Other CRE 407,893 22.0% Multifamily 32,979 3.6% Multifamily 34,302 3.7% Multifamily 67,281 3.6% Commercial & Industrial 115,586 12.6% Commercial & Industrial 103,964 11.1% Commercial & Industrial 219,550 11.9% Consr & Other 1,472 0.2% Consr & Other 71,668 7.7% Consr & Other 73,140 4.0% Total Loans $912,831 100.0% Total Loans $936,624 100.0% Total Loans $1,851,438 100.0% MRQ Yield on Loans: 5.20% MRQ Yield on Loans: 4.86% MRQ Yield on Loans: 5.03%

 
 

14 SONA Pro Forma EVBS Composition Composition Composition Deposit Type ($000) % of Total Deposit Type ($000) % of Total Deposit Type ($000) % of Total Non Interest Bearing 91,567 10.0% Non Interest Bearing 200,544 19.9% Non Interest Bearing 292,111 15.2% NOW & Other Trans 40,857 4.5% NOW & Other Trans 309,242 30.6% NOW & Other Trans 350,099 18.2% MMDA & Sav 180,778 19.8% MMDA & Sav 264,171 26.1% MMDA & Sav 444,949 23.1% Time Deposits < $100k 152,169 16.6% Time Deposits < $100k 112,627 11.1% Time Deposits < $100k 264,796 13.8% Time Deposits > $100k 449,900 49.2% Time Deposits > $100k 123,706 12.2% Time Deposits > $100k 573,606 29.8% Total Deposits $915,271 100.0% Total Deposits $1,010,290 100.0% Total Deposits $1,925,561 100.0% MRQ Cost of Deposits: 0.93% MRQ Cost of Deposits: 0.43% MRQ Cost of Deposits: 0.67% Loans / Deposits 99.5% Loans / Deposits 92.6% Loans / Deposits 96.2% Non Int. Bearing 10.0% NOW Accts 4.5% MMDA & Sav 19.8% Time Deposits < $100k 16.6% Time Deposits > $100k 49.2% Non Int. Bearing 19.9% NOW Accts 30.6% MMDA & Sav 26.1% Time Deposits < $100k 11.1% Time Deposits > $100k 12.2% Non Int. Bearing 15.2% NOW Accts 18.2% MMDA & Sav 23.1% Time Deposits < $100k 13.8% Time Deposits > $100k 29.8% Pro Forma Deposits: September 30, 2016 .… with EVBS’ attractive retail franchise” Note: GAAP data shown, does not include purchase accounting adjustments Source: SNL Financial

 
 

15 Transaction Summary Southern National Bancorp of Virginia and Eastern Virginia Bankshares are joining forces to create a premier Virginia - based community bank x Combination of complementary markets to create a more diversified franchise x Fusion of SONA’s dynamic lending platform with EVBS’ strong core deposit base x Significantly accretive to EPS in the first year x Pro forma institution remains well - capitalized with the ability to support future growth x Highly experienced management team with an established working relationship x Higher capital base will increase lending limit to better serve customers x Realistic assumptions minimize risk x Continued focus on maximizing shareholder value

 
 

16 Appendix

 
 

17 Non - GAAP Reconciliation – SONA Southern National Bancorp of Virginia, Inc. GAAP Reconciliation (Unaudited) (Dollars in thousands, except per share data) As of September 30, 2016 As of September 30, 2015 Common Shareholders' Equity 125,045$ 120,305$ Less: Intangible Assets (11,439) (11,672) Tangible Common Equity 113,606$ 108,633$ Book Value Per Common Share 10.20$ 9.86$ Less: Intangible Book Value Per Common Share (0.93) (0.96) Tangible Book Value Per Common Share 9.27$ 8.90$ Total Assets 1,135,436$ 1,017,887$ Less: Intangible Assets (11,439) (11,672) Tangible Assets 1,123,997$ 1,006,215$ Tangible Common Equity Ratio 10.11% 10.80%

 
 

18 Non - GAAP Reconciliation – EVBS Eastern Virginia Bankshares, Inc. GAAP Reconciliation (Unaudited) (Dollars in thousands, except per share data) As of September 30, 2016 As of September 30, 2015 Common Shareholders' Equity 134,645$ 124,943$ Less: Intangible Assets (17,655) (17,882) Tangible Common Equity 116,990$ 107,061$ Book Value Per Common Share 7.33$ 6.84$ Less: Intangible Book Value Per Common Share (0.96) (0.98) Tangible Book Value Per Common Share 6.37$ 5.86$ Total Assets 1,314,896$ 1,242,387$ Less: Intangible Assets (17,655) (17,882) Tangible Assets 1,297,241$ 1,224,505$ Tangible Common Equity Ratio 9.02% 8.74% Note: Assumes EVBS ’ preferred equity is converted into 5,240,192 shares of common stock

 
 

19 Non - GAAP Reconciliation Footnotes 1 Tangible common equity to tangible assets (“the tangible common equity ratio”) and tangible book value per common share are non - GAAP financial measures derived from GAAP - based amounts . The Company calculates the tangible common equity ratio by excluding the balance of intangible assets from common shareholders’ equity and dividing by total assets . The Company calculates tangible book value per common share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which the Company calculates by dividing common shareholders’ equity by common shares outstanding . The Company considers this information important to shareholders’ as tangible equity is a measure that is consistent with the calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk based ratios and as such is useful for investors, regulators, management, and others to evaluate capital adequacy and to compare against other financial institutions .

 

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