Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Q1 2023 Earnings Presentation
28 slides from Atlantic Union Bankshares's earnings presentation, Apr 25, 2023
Slide 1: 1st Quarter 2023 Earnings Presentation
1st Quarter 2023 Earnings Presentation NYSE: AUB April 25, 2023
Slide 2: Forward Looking Statements
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, statements on slides entit
Slide 3: Additional Information
Additional Information Non-GAAP Financial Measures No Offer or Solicitation This presentation contains certain financial information determined by methods other This presentation does not constitute an offer to sell or a solicitation of an offer to buy than in accordance with generally accepted acco
Slide 4: Our Company
Our Company Soundness | Profitability | Growth Highlights ($bn) Branch/Office Footprint AUB (109) • Statewide Virginia footprint of 104 AUB LPO (3) $ 20.1 $ 14.6 branches in all major markets AUB Equipment Finance Headquarters (1) Assets Loans • #1 regional bank1 deposit market share in Virginia • S
Slide 5: Our Shareholder Value Proposition
Leading Regional Presence Dense, uniquely valuable presence across attractive markets Our Shareholder Value Proposition Attractive Financial Profile Financial Strength Solid dividend yield Solid balance sheet & payout ratio with & capital levels earnings upside Peer-Leading Strong Growth Performance
Slide 6: Q1 2023 Highlights and 2023 Outlook
Q1 2023 Highlights and 2023 Outlook Loan and Deposit Growth Operating Leverage Focus Positioning for Long Term • Funded loan growth with core deposit • ~9.6% adjusted revenue growth1 year • Lending pipelines remain resilient growth. Total deposit growth of 13.3% over year quarter over quarter annual
Slide 7: Stable Deposit Balances
Stable Deposit Balances $ in millions $16,484 $16,129 $16,546 $15,932 $16,456 1Q23 Deposit Highlights 0 21 378 58 7 • Total deposits up 13% annualized from Q4 2022 1,675 1,744 1,644 1,801 2,190 1,167 1,174 • Customer deposits up ~4% annualized from Q4 1,166 1,131 1,048 2022 • Mix shift into higher c
Slide 8: Deposit Trends
Deposit Trends Total Deposits - $ in Millions Deposit Mix Shift $16,484 $16,456 $15,932 0 378 7 67% 69% 72% 8,792 8,479 8,291 1.28% 0.72% 33% 31% 7,692 28% 7,446 7,787 0.11% Q1 2022 Q4 2022 Q1 2023 Q1 2022 Q4 2022 Q1 2023 Non-Interest Bearing Deposits Interest Bearing Deposits Retail Deposits Busine
Slide 9: Granular Deposit Base
Granular Deposit Base Customer Deposit Granularity Top 15 Commercial Deposits by NAICS as of 3/31/2023 NAICS Code/Title % of Total Deposits $108,000 $101,000 $99,000 52 - Finance and Insurance 7.8% 54 - Professional, Scientific, and Technical Services 6.6% 53 - Real Estate and Rental and Leasing 6.4
Slide 10: Non-Owner-Occupied CRE Portfolio as of March 31, 2023
Non-Owner-Occupied CRE Portfolio as of March 31, 2023 Non-Owner Occupied Office CRE 5.0% Non-Owner- Occupied Non-Office CRE 27.8% Non-Owner-Occupied CRE By Type $ in millions Total Outstandings % of Portfolio Multi Family $822 5.6% $14.6B Retail $847 5.8% Hotel/Motel B&B $745 5.1% Total Office $729
Slide 11: Non-Owner-Occupied Office CRE Portfolio as of March 31, 2023
Non-Owner-Occupied Office CRE Portfolio as of March 31, 2023 Geographically Diverse Non-Owner Non Owner-Occupied Office Occupied Office Portfolio Portfolio Credit Quality Medical Office 25% By Market ($ millions) Key Portfolio Metrics Carolinas $165 Avg. Office Loan ($ millions) $1.7 Fredericksburg
Slide 12: Q1 2023 Financial Performance At-a-Glance
Q1 2023 Financial Performance At-a-Glance • Net income available to common shareholders for the first quarter of 2023 was $32.7 million or $0.44 per share, down $34.9 million or $0.46 per share compared to the prior quarter. The results were driven by: • A decrease in noninterest income, primarily d
Slide 13: Q1 2023 Allowance For Credit Loss and Provision for Credit Losses
Q1 2023 Allowance For Credit Loss (ACL) and Provision for Credit Losses Q1 Macroeconomic Forecast Allowance for Loan Reserve for Unfunded Allowance for Moody’s March 2023 Baseline Forecast: & Lease Losses Commitments Credit Losses • US GDP expected to average ~1.9% growth in 09/30/2022 $108MM $11MM
Slide 14: Q1 2023 Net Interest Margin
Q1 2023 Net Interest Margin Margin Overview Market Rates 1Q2023 4Q2022 1Q2023 4Q2022 Net interest margin (FTE)1 3.50% 3.70% EOP Avg EOP Avg Loan yield 5.35% 4.90% Fed funds 5.00% 4.69% 4.50% 3.84% Investment yield 3.34% 3.28% Prime 8.00% 7.69% 7.50% 6.82% Earning asset yield 4.92% 4.54% 1-month LIBO
Slide 15: Q1 2023 Noninterest Income and Noninterest Expense
Q1 2023 Noninterest Income and Noninterest Expense Noninterest Income Noninterest Expense ($ thousands) 1Q2023 4Q2022 ($ thousands) 1Q2023 4Q2022 Salaries and benefits $ 60,529 $ 58,723 Service charges on deposit accounts $ 7,902 $ 7,631 Occupancy expenses 6,356 6,328 Other service charges, commissi
Slide 16: Q1 2023 Loan and Deposit Growth
Q1 2023 Loan and Deposit Growth Loan Growth ($ thousands) 1Q2023 4Q2022 QTD Annualized Growth Commercial & Industrial $ 3,082,478 $ 2,983,349 13.5% Commercial real estate - owner occupied 1,956,585 1,982,608 (5.3%) Other Commercial 742,444 773,829 (16.4%) • At March 31, 2023, loans held for investme
Slide 17: Strong Capital Position at March 31, 2023
Strong Capital Position at March 31, 2023 Proforma including AOCI and Reported Regulatory HTM unrealized losses Capital Management Strategy Well Capitalized Atlantic Union Atlantic Atlantic Union Atlantic Union Atlantic Union capital management Capital Ratio Minimums Bankshares Union Bank Bankshares
Slide 18: Liquidity Position at March 31, 2023
Liquidity Position at March 31, 2023 Total Liquidity Sources of $ 6 billion ~140% liquidity coverage ratio of uninsured/uncollateralized deposits ($ in millions) Discount Window (ex-BTFP) $332.5 Fed Funds Lines $897.0 Discount Window - BTFP $548.6 FHLB Borrowing Capacity $1,557.6 Liquidity Sources T
Slide 19: Securities Portfolio at March 31, 2023
Securities Portfolio at March 31, 2023 • Total securities portfolio of $3.1 billion with a total unrealized loss of $440.2 million Investment Securities Balances • 72% of total portfolio in available-for-sale at (in millions) an unrealized loss of $407.9 million Total AFS (fair value) and HTM (carry
Slide 20: Financial Outlook
Financial Outlook1 Full Year 2023 Outlook versus FY 2022 1Key Economic Assumptions Loan Growth ~4% - 6% • Stabilizing Interest Rate environment Net Interest Income (FTE) Growth Mid-single digits growth • The Federal Reserve Bank fed funds rate increases to 5.25% Net Interest Margin (FTE) ~3.35% – 3.
Slide 21: Appendix
Appendix d Atlantic Union Bankshares
Slide 22: Reconciliation of Non-GAAP Disclosures
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 statement
Slide 23: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures ADJUSTED OPERATING EARNINGS, OPERATING LEVERAGE, AND EFFICIENCY RATIO Adjusted operating measures exclude losses on sale of For the three months ended 1Q23% Change securities, a legal reserve associated with an ongoing (Dollars in thousands, except per share am
Slide 24: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures The Company believes net interest income (FTE), NET INTEREST MARGIN total revenue (FTE), and total adjusted revenue For the three months ended (FTE), which are used in computing net interest margin (FTE), efficiency ratio (FTE) and adjusted (Dollars in thousand
Slide 25: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures TANGIBLE ASSETS, TANGIBLE COMMON EQUITY, AND LEVERAGE RATIO As of March 31, 2023 Atlantic Union (Dollars in thousands, except share data) Bankshares Atlantic Union Bank Tangible assets and tangible common equity are Tangible Assets used in the calculation of ce
Slide 26: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures RISK-BASED CAPITAL RATIOS All regulatory capital ratios at March 31, 2023 are As of March 31, 2023 estimates and subject to change pending the Atlantic Union Atlantic Company’s filing of its FR Y-9 C. In addition to (Dollars in thousands, except share data) Ban
Slide 27: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures OPERATING MEASURES Tangible assets and tangible common equity are For the three months ended used in the calculation of certain profitability, capital, (Dollars in thousands, except per share amounts) 1Q2023 4Q2022 1Q2022 and per share ratios. The Company belie
Slide 28: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures Pre-tax pre-provision adjusted earnings excludes PRE-TAX PRE-PROVISION ADJUSTED OPERATING EARNINGS the provision for credit losses, which can fluctuate For the three months ended significantly from period-to-period under the CECL methodology, income tax expense
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