Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Investor Presentation (May 2023)
37 slides from Atlantic Union Bankshares's investor presentation, May 11, 2023
Slide 1: Investor Presentation May – June 2023
Investor Presentation NYSE: AUB May – June 2023
Slide 2: Forward Looking Statements
2 Forward Looking Statements This presentation and statements by our management may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include, without limitation, expectations with respec
Slide 3: Additional Information
3 Additional Information Non-GAAP Financial Measures This presentation contains certain financial information determined by methods other than in accordance with generally accepted accounting principles in the United States (“GAAP”). These non-GAAP financial measures are a supplement to GAAP, which
Slide 4: Largest Regional Banking Company Headquartered in Virginia
4 Largest Regional Banking Company Headquartered in Virginia Our Company Soundness | Profitability | Growth Data as of 3/31/2023, market capitalization as of 5/10/2023 1) Regional bank defined as having less than $100 billion in assets; rank determined by asset size; data per S&P Global Market Intel
Slide 5: A Transformation Story From Virginia Community Bank to Virginia’s Bank and More
5 A Transformation Story From Virginia Community Bank to Virginia’s Bank and More (1) As of Mach 31, 2023 Virginia’s Bank The Atlantic Union “Moat” – Stronger than Ever • Virginia’s first and only statewide, independent bank in over 20 years • The alternative to large competitors • Organic growth mo
Slide 6: Our Shareholder Value Proposition
6 Our Shareholder Value Proposition Leading Regional Presence Dense, uniquely valuable presence across attractive markets Financial Strength Solid balance sheet & capital levels Attractive Financial Profile Solid dividend yield & payout ratio with earnings upside Strong Growth Potential Organic & ac
Slide 7: Strong Presence in Prime Virginia Markets
7 Strong Presence in Prime Virginia Markets (1) Among midsized and community banks less than $100 billion in assets Source: SNL Financial, FDIC deposit data; excludes branches greater than $5 billion Deposit data as of 6/30/2022; Fredericksburg market defined as Caroline, Fredericksburg City, King G
Slide 8: Virginia’s Bank and Sizeable Opportunity to Take Market Share from the Big Three
8 Virginia’s Bank and Sizeable Opportunity to Take Market Share from the Big Three Source: SNL Financial and FDIC deposit data Deposit and branch data as of 6/30/22; pro forma for announced transactions Atlantic Union Bank closed 5 Virginia branches on March 1, 2023 Note: Excludes branches with depo
Slide 9: Virginia Is Among the Most Attractive Markets in USA
9 Virginia Is Among the Most Attractive Markets in USA Source: SNL Financial; Bureau of Economic Analysis; Bureau of Labor Statistics, Fortune.com, U.S. News & World Report; Forbes, CNBC, U.S. Small Business Administration, USA Today; Business Facilities; data for 2022 unless otherwise noted ranked
Slide 10: Q1 2023 Highlights and 2023 Outlook
10 Q1 2023 Highlights and 2023 Outlook Loan and Deposit Growth • Funded loan growth with core deposit growth. Total deposit growth of 13.3% quarter over quarter annualized. • 3.8% annualized loan growth in Q1 2023 • Line of Credit Utilization of 33% for Q1 2023 and relatively flat with Q4 2022 • Exp
Slide 11: Our Core Values
11 Caring Working together toward common goals, acting with kindness, respect and a genuine concern for others. Courageous Speaking openly, honestly and accepting our challenges and mistakes as opportunities to learn and grow. Committed Driven to help our clients, Teammates and company succeed, doin
Slide 12: Authentically Human - Fostering a People-First Culture
12 81% Authentically Human - Fostering a People-First Culture Engagement Growth & Development ~2/3 Female Workforce Exceeded Benchmark Internal Hires 80% +3 Above Industry Benchmark +3 Above Industry Benchmark +9 Above Industry Benchmark An Employer of Choice Voted Top Workplaces in 2023 Investment
Slide 13: We are focused on three Strategic Priorities
13 We are focused on three Strategic Priorities Organic Deliver Organic Growth • Overweighting opportunities in Wholesale Banking Group • Directing consumer efforts to market segments and delivery channels with the strongest value proposition • Prioritizing fee income growth • Maintaining a reliable
Slide 14: Balance Sheet Trends (GAAP)
14 $9,971 $13,305 $15,723 $16,611 $15,932 $16,456 2018 2019 2020 2021 2022 1Q 2023 13% CAGR Balance Sheet Trends (GAAP) Data as of or for the twelve months ended each respective year, except for 1Q 2023, which is as of or for the three months ended March 31, 2023 Loans ($mm) Deposits ($mm) Assets ($
Slide 15: Strong Track Record of Performance (GAAP)
15 Strong Track Record of Performance (GAAP) Earnings Per Share Available to Common Shareholders ($) Return on Equity (ROE) (%) Return on Assets (ROA) (%) Efficiency Ratio (%) $2.22 $2.41 $1.93 $3.26 $2.97 $0.44 2018 2019 2020 2021 2022 1Q 2023 7.85% 7.89% 6.14% 9.68% 9.51% 5.97% 2018 2019 2020 2021
Slide 16: Strong Track Record of Performance (Non-GAAP)
16 Strong Track Record of Performance (Non-GAAP) Data as of or for the twelve months ended each respective year, except for 1Q 2023, which is as of or for the three months ended March 31, 2023 (1) Non-GAAP financial measure; See reconciliation to most directly comparable GAAP measure in "Appendix --
Slide 17: Strong Capital Position at March 31, 2023
17 Capital Ratio Regulatory Well Capitalized Minimums Atlantic Union Bankshares Atlantic Union Bank Atlantic Union Bankshares Atlantic Union Bank Common Equity Tier 1 Ratio (CET1) 6.5% 9.9% 12.8% 7.8% 10.8% Tier 1 Capital Ratio 8.0% 10.9% 12.8% 8.8% 10.8% Total Risk Based Capital Ratio 10.0% 13.8% 1
Slide 18: Financial Outlook
18 Financial Outlook1 1Key Economic Assumptions • Stabilizing Interest Rate environment • The Federal Reserve Bank fed funds rate increases to 5.25% • Mild recession in 2023 • Expect relatively stable economy in AUB’s Virginia footprint in 2023 • Expect Virginia unemployment rate to remain low in 20
Slide 19: Appendix
Appendix Atlanti h Gnion Bankshares
Slide 20: Market Highlights Opportunity in Affluent Markets
20 Market Highlights Opportunity in Affluent Markets Source: S&P Global Market Intelligence Boxes denote county/city of operation (1) Median HH Income projected for 2022 Top Counties in the U.S. — Projected Median HH Income ($000s)(1) $162 $149 $147 $142 $137 $137 $136 $133 $132 $129 $129 $126 Loudo
Slide 21: Q1 2023 Allowance For Credit Loss (ACL) and Provision for Credit Losses
21 Q1 2023 Allowance For Credit Loss (ACL) and Provision for Credit Losses Q1 Macroeconomic Forecast Moody’s March 2023 Baseline Forecast: • US GDP expected to average ~1.9% growth in 2023 and ~1.9% in 2024. • The national unemployment rate expected to average ~3.5% in 2023 and ~3.9% in 2024, from ~
Slide 22: Attractive Core Deposit Base
22 Attractive Core Deposit Base Deposit Base Characteristics Deposit Composition at March 31, 2023 — $16.5 billion Cost of deposit data is as of or for the three months ended March 31, 2023 (1) Core deposits defined as total deposits less jumbo time deposits and brokered deposits • Q1 2023 cost of d
Slide 23: Stable Deposit Balances
23 5,370 5,362 5,291 4,883 4,578 4,121 3,943 4,354 4,187 4,714 4,151 3,956 3,962 3,923 3,548 1,167 1,166 1,174 1,131 1,048 1,675 1,644 1,744 1,801 2,190 0 58 21 7 378 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Demand Deposits Interest Checking Money Markets Savings Time Deposits Brokered Deposits Stabl
Slide 24: Deposit Trends
24 Deposit Trends 33% 31% 28% 67% 69% 72% Q1 2022 Q4 2022 Q1 2023 Deposit Mix Shift Non-Interest Bearing Deposits Interest Bearing Deposits 0% 5% 12% 17% 28% 0.11% 0.15% 0.37% 0.72% 1.28% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Total Deposit Beta Cumulative Deposit Beta Cost of Deposits 0% 8% 18% 25
Slide 25: Granular Deposit Base
25 Granular Deposit Base 34% 33% 35% 33% 28% $5,527 $5,351 $5,821 $5,299 $4,591 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Period End Uninsured and Uncollateralized Deposits as a Percentage of Total Deposits ($ in Millions) Top 15 Commercial Deposits by NAICS as of 3/31/2023 NAICS Code/Title % of Total
Slide 26: Diversified and Granular Loan Portfolio
26 Diversified and Granular Loan Portfolio Total Loan Portfolio $14.6 billion at March 31, 2023 Non-Owner Occupied CRE Composition — $4.8 billion Total Portfolio Characteristics Duration Q1 2023 Weighted Average Yield (Tax Equivalent) 1.2 years 5.35% Figures may not total to 100% due to rounding Dur
Slide 27: Non-Owner-Occupied CRE Portfolio as of March 31, 2023
27 Non-Owner-Occupied CRE Portfolio as of March 31, 2023 $ in millions Total Outstandings % of Portfolio Multi Family $822 5.6% Retail $847 5.8% Hotel/Motel B&B $745 5.1% Office $729 5.0% Industrial/Warehouse $641 4.4% Senior Living $367 2.5% Self Storage $341 2.3% Other $299 2.0% Total Non-Owner Oc
Slide 28: Non-Owner-Occupied Office CRE Portfolio as of March 31, 2023
28 Office 75% Medical Office 25% By Market ($ millions) Key Portfolio Metrics Carolinas $165 Fredericksburg Area $134 Central VA $105 Northern VA/Maryland $115 Western VA $98 Eastern VA $94 Other $18 Total $729 Avg. Office Loan ($ millions) $1.7 Loan Loss Reserve / Office Loans 2.3% NCOs / Office Lo
Slide 29: Liquidity Position at March 31, 2023
29 Cash and Cash Equivalents (unrestricted) $409.9 Unencumbered Securities $891.8 FHLB Borrowing Capacity $1,557.6 Fed Funds Lines $897.0 Discount Window (ex-BTFP) $332.5 Discount Window - BTFP $548.6 Secondary Sources* $1,430.0 ($ in millions) Liquidity Position at March 31, 2023 Total Liquidity So
Slide 30: Securities Portfolio at March 31, 2023
30 Securities Portfolio at March 31, 2023 • Total securities portfolio of $3.1 billion with a total unrealized loss of $440.2 million • 72% of total portfolio in available-for-sale at an unrealized loss of $407.9 million • 28% of total portfolio designated as held-to-maturity with an unrealized loss
Slide 31: Reconciliation of Non-GAAP Disclosures
31 Reconciliation of Non-GAAP Disclosures The Company has provided supplemental performance measures on a tax-equivalent, tangible, operating, adjusted, or pre-tax pre-provision basis. These non-GAAP financial measures are a supplement to GAAP, which is used to prepare the Company’s financial statem
Slide 32: Reconciliation of Non-GAAP Disclosures
32 Reconciliation of Non -GAAP Disclosures Adjusted operating measures exclude, as applicable, losses on sale of securities, a legal reserve associated with an ongoing regulatory matter previously disclosed, as well as strategic branch closure initiatives and related facility consolidation costs (pr
Slide 33: Reconciliation of Non-GAAP Disclosures
33 Reconciliation of Non-GAAP Disclosures Pre-tax pre-provision adjusted earnings excludes, as applicable, the provision for credit losses, which can fluctuate significantly from period-to-period under the CECL methodology, income tax expense, losses on sale of securities, a legal reserve associated
Slide 34: Reconciliation of Non-GAAP Disclosures
34 Reconciliation of Non -GAAP Disclosures Adjusted operating measures exclude, as applicable, merger and rebranding -related costs, nonrecurring tax expenses, the gains or losses related to balance sheet repositioning (principally composed of gains and losses on debt extinguishment), gains or losse
Slide 35: Reconciliation of Non-GAAP Disclosures
35 Reconciliation of Non-GAAP Disclosures The adjusted operating efficiency ratio (FTE) excludes, as applicable, merger-related costs, rebranding costs, the amortization of intangible assets, gains or losses on sale of securities, gains on the sale of Visa, Inc. Class B common stock, gain on sale of
Slide 36: Reconciliation of Non-GAAP Disclosures
36 Reconciliation of Non-GAAP Disclosures Tangible assets and tangible common equity are used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible assets, tangible common equity and the related ratios are meaningful measures of capital adequacy be
Slide 37: Reconciliation of Non-GAAP Disclosures
37 Reconciliation of Non-GAAP Disclosures In addition to these regulatory capital ratios, the Company adjusts certain regulatory capital ratios to include the impacts of AOCI, which the Company has elected to exclude from regulatory capital ratios under applicable regulations, and net unrealized los
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