Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Investor Presentation (January 2020)
30 slides from Atlantic Union Bankshares's investor presentation, Jan 29, 2020
Slide 1: Investor Presentation January – March 2020
Investor Presentation Nasdaq: AUB January – March 2020
Slide 2: Forward Looking Statements
Forward Looking Statements 2 Certain statements in this presentation may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements include, without limitation, projections, predictions, expectations or beliefs abou
Slide 3: Additional Information
Additional Information 3 Unaudited Pro Forma Financial Information Any unaudited pro forma financial information included herein, or discussed in connection with, is presented for informational purposes only and does not necessarily reflect the financial results of the combined company had the compa
Slide 4: The Atlantic Union Story: From Virginia Community Bank to Virginia's Bank
The “Atlantic Union” Story: FROM VIRGINIA COMMUNITY BANK TO VIRGINIA’S BANK 4 Virginia’s Bank The Atlantic Union “Moat” Larger Bank Executive Leadership Talent Magnet • Virginia’s first statewide, independent bank in 20 years • The alternative to large competitors • Organic growth model + effective
Slide 5: Our Value Proposition
Shareholder SOLID DIVIDEND YIELD & PAYOUT RATIO WITH EARNINGS UPSIDE Scale LARGEST VA REGIONAL BANK UNIQUE VALUE IN BRANCH FOOTPRINT Strength BALANCE SHEET & CAPITAL LEVELS Opportunity COMMITTED TO TOP-TIER PERFORMANCE Our Value Proposition 5 Growth ORGANIC & ACQUISITION OPPORTUNITIES
Slide 6: Our Company
Our Company 6 Branch Footprint Data as of 12/31/19, market capitalization as of 1/21/2020 (1) Regional bank defined as having less than $50 billion in assets; rank determined by asset size Assets Loans Deposits Market Capitalization $17.6 $12.6 $13.3 $2.8 • Largest regional banking company headquart
Slide 7: Investment Highlights
Investment Highlights 7 The Right Scale The Right Markets The Right Team The Right Targets • Largest Virginia headquartered regional banking company ($17.6 billion in assets) •#1 deposit market share ranking in Virginia among Virginia-based banks(1) • Operating with a statewide Virginia footprint of
Slide 8: Virginia's Bank
Virginia’s Bank 8 Virginia: All Banks Virginia: Banks Headquartered in VA Rank Institution Deposits ($mm) Market Share Branches 1 Truist Financial Corp $43,724 25.1% 445 2 Wells Fargo & Co 28,636 16.4 254 3 Bank of America Corp. 18,276 10.5 120 4 Atlantic Union Bankshares Corp 12,169 7.0 140 5 Towne
Slide 9: Our Presence in Key Markets
Our Presence in Key Markets 9 Source: S&P Global Market Intelligence Note: Deposit data excludes branches with deposits greater than $5 billion Deposit data as of 6/30/19; pro forma for announced transactions and AUB branch closings (1) Northern Virginia includes only the Virginia branches of the Wa
Slide 10: Our Acceleration Strategy
Our Acceleration Strategy 10 Establish Focus Design for Success Drive-to-Scale • Set the vision • Recreate a Virginia regional bank • Take back what was lost • Establish strategic priorities • Align goals & compensation to priorities • Make tough decisions • Divest non-strategic businesses • Union M
Slide 11: Richmond Diversity Supports Growth In Virginia
Richmond Diversity Supports Growth In Virginia 11 Source: SNL Financial; excludes branches greater than $5 billion Deposit data as of 6/30/19; Fredericksburg market defined as Caroline, Fredericksburg City, King George, Spotsylvania and Stafford counties; all other markets per MSA definitions in SNL
Slide 12: Among The Most Attractive Markets in USA
Among The Most Attractive Markets in USA 12 Fortune 500 Companies # State # Companies 1 New York 56 2 California 54 3 Texas 49 4 Illinois 36 5 Ohio 24 6 Virginia 21 7 New Jersey 20 8 Pennsylvania 20 9 Florida 19 10 Georgia 18 11 Minnesota 17 12 Michigan 16 13 Massachusetts 16 14 Connecticut 14 15 Te
Slide 13: Virginia Market Highlights
7.9% 7.2% 6.9% 6.9% 6.7% 6.3% 6.2% 6.0% 6.0% 5.7% 0.0% 2.5% 5.0% 7.5% 10.0% Loudoun, VA New Kent, VA Manassas Park, VA (City) Falls Church, VA (City) Fredericksburg, VA (City) Stafford, VA Prince William, VA Arlington, VA Alexandria, VA (City) James City, VA $145 $131 $127 $124 $124 $123 $123 $123 $
Slide 14: Atlantic Union's Strategic Priorities
Atlantic Union’s Strategic Priorities 14 • Increase Commercial lending growth (Commercial & Industrial + Owner Occupied Real Estate) in order to better balance the total loan portfolio over time • Grow fee-based products and services Diversify Loan Portfolio and Revenue Streams • Fund loan growth wi
Slide 15: Balance Sheet Trends (GAAP)
$7,359 $7,694 $8,427 $9,315 $13,766 $17,563 2014 2015 2016 2017 2018 2019 Balance Sheet Trends (GAAP) 15 Loans ($M) Deposits ($M) Assets ($M) Data as of or for the twelve months ended each respective year 19% CAGR 19% CAGR 19% CAGR $5,346 $5,671 $6,307 $7,142 $9,716 $12,611 2014 2015 2016 2017 2018
Slide 16: Strong Track Record of Performance (GAAP)
Strong Track Record of Performance (GAAP) 16 Data as of or for the twelve months ended each respective year Return on Assets (ROA) (%) Return on Equity (ROE) (%) Efficiency Ratio (%) Earnings Per Share ($) $1.13 $1.49 $1.77 $1.67 $2.22 $2.41 2014 2015 2016 2017 2018 2019 5.30% 6.76% 7.79% 7.07% 7.85
Slide 17: Strong Track Record of Performance (Non-GAAP)
$1.43 $1.49 $1.77 $1.91 $2.71 $2.75 2014 2015 2016 2017 2018 2019 Strong Track Record of Performance (Non-GAAP) 17 Data as of or for the twelve months ended each respective year (1) Non-GAAP financial measure; See reconciliation to most directly comparable GAAP measure in "Appendix -- Reconciliation
Slide 18: Financial Targets
Financial Targets 18 ROTCE ROA Efficiency Ratio (FTE) 1.2% - 1.4% 15% - 17% < 53% Atlantic Union is committed to achieving top tier financial performance and providing our shareholders with above average returns on their investment Key financial performance operating metrics benchmarked against top
Slide 19: Solid Capital Position
Solid Capital Position 19 Capital information presented herein is based on estimates and subject to change pending the Company’s filing of its FR Y-9C (1) Non-GAAP financial measure; See reconciliation to most directly comparable GAAP measure in "Appendix -- Reconciliation of Non-GAAP Disclosures“ T
Slide 20: Capital Management
Capital Management 20 Capital Management Priorities • Atlantic Union establishes capital targets based on the following objectives: • Maintain designation as a “well capitalized” institution under fully phased-in Basel III regulatory definitions • Ensure capital levels are commensurate with the comp
Slide 21: Diversified and Granular Loan Portfolio
Diversified and Granular Loan Portfolio 21 Note: Figures may not total to 100% due to rounding Total Loan Portfolio $ 12.6 billion at December 31, 2019 Non-Owner Occupied CRE Composition - $3.9 Billion Total Portfolio Characteristics Duration Q4 19 Weighted Average Yield (Tax Equivalent) 1.5 years 4
Slide 22: Attractive Core Deposit Base
Attractive Core Deposit Base 22 (1) Core deposits defined as total deposits less jumbo time deposits Regional bank defined as having less than $50 billion in assets; rank determined by asset size. Community bank defined as having less than $10 billion in assets Deposit Base Characteristics Deposit C
Slide 23: Investment Thesis
Investment Thesis 23 The Right Scale The Right Markets The Right Team The Right Targets • $17.6 billion in assets • Strong market share • Extensive product mix, enhanced C&I focus • Growing, economically diversified • Presence across Virginia • Scale in the sizable Northern Virginia, Richmond and Ha
Slide 24: Appendix
Appendix 7) Atlantic /4 Union Bankshares
Slide 25: Reconciliation of Non-GAAP Disclosures: Tangible Common Equity
Reconciliation of Non-GAAP Disclosures 25 Tangible Common Equity As of December 31, 2019 $ in Thousands Common equity (GAAP) $2,513,102 Less: Goodwill and Amortizable Intangibles $1,009,229 Tangible Common equity (non-GAAP) $1,503,873 Assets (GAAP) $17,562,990 Less: Goodwill and Amortizable Intangib
Slide 26: Reconciliation of Non-GAAP Disclosures: Operating Earnings Per Share
Reconciliation of Non-GAAP Disclosures 26 ($ IN THOUSANDS) Operating Earnings Per Share For the 12 Months Ended 2016 2017 2018 Net income (GAAP) $52,164 $67,079 $77,476 $72,923 $146,24 8 $193,52 8 Plus: Merger-relat e d and rebranding costs( 1), net of tax $13,724 -- $4,405 $32,065 $27,395 Plus: Non
Slide 27: Reconciliation of Non-GAAP Disclosures: Return on Assets
Reconciliation of Non-GAAP Disclosures 27 ($ IN THOUSANDS) Average assets (GAAP) $7,250,4 9 4 $7,492,8 9 5 $8,046,3 0 5 $8,820,1 4 2 $13,181,609 $16,840,310 Net incom e (GAAP) $52,164 $67,079 $77,476 $72,923 $146,24 8 $193,52 8 Net operating earnings (non-GAAP) $65,888 $67,079 $77,476 $83,578 $178,3
Slide 28: Reconciliation of Non-GAAP Disclosures: Return on Tangible Common Equity
Reconciliation of Non-GAAP Disclosures 28 ($ IN THOUSANDS) Average equity (GAAP) $983,72 7 $991,97 7 $994,78 5 $1,030,8 4 7 $1,863,2 1 6 $2,451,4 3 5 Less: Avg Goodwill and Amortizable Intangibles $333,49 5 $320,906 $318,131 $315,722 $776,944 $991,926 Avg tangible common equity (non-GAAP) $650,23 2
Slide 29: Reconciliation of Non-GAAP Disclosures: Efficiency Ratio
Reconciliation of Non-GAAP Disclosures 29 ($ IN THOUSANDS) Noninterest expense (GAAP) $222,41 9 $206,31 0 $213,09 0 $225,66 8 $337,76 7 $418,34 0 Less: Merger-rel at ed costs $20,345 -- $5,393 $39,728 $27,824 Less: Rebranding Costs $6,455 Less: Amortization of intangible assets $9,795 $8,445 $7,210
Slide 30: Reconciliation of Non-GAAP Disclosures: Net Interest Margin
Reconciliation of Non-GAAP Disclosures 30 ($ IN THOUSANDS) Net interest income (GAAP) $253,21 3 $250,45 0 $263,96 6 $279,00 7 $426,69 1 $537,87 2 FTE adjustment $9,932 $10,463 $11,428 $11,767 $8,193 $11,121 Net interest income (FTE) (non-GAAP) $263,14 5 $260,91 3 $275,39 4 $290,77 4 $434,88 4 $548,9
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