Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Investor Presentation (February 2024)
32 slides from Atlantic Union Bankshares's investor presentation, Feb 1, 2024
Slide 1: Investor Presentation February – March 2024
Investor Presentation NYSE: AUB February – March 2024
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, statements on slides ent
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 12/31/2023, market capitalization as of 1/22/2024 1) Regional bank defined as having less than $100 billion in assets; rank determined by asset size; data per S&P Global Market Inte
Slide 5: Our Shareholder Value Proposition
5 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 6: Strong Presence in Prime Virginia Markets
6 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 6/30/2023; Fredericksburg market defined as Caroline, Fredericksburg City, King G
Slide 7: Virginia's Bank and Sizeable Opportunity to Take Market Share from the Big Three
7 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 6/30/23; pro forma for announced transactions, including our proposed merger with American National Note: Excludes branches with deposits great
Slide 8: Virginia Is Among the Most Attractive Markets in USA
8 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; most recent data available ranked Virginia t
Slide 9: Q4 2023 and FY 2023 Highlights
9 Q4 2023 and FY 2023 Highlights Loan and Deposit Growth • 9.1% annualized loan growth in Q4 2023 and 8.2% for FY 2023 • 0.7% annualized deposit growth in Q4 2023 and 5.6% for FY 2023 • Line of Credit Utilization increased modestly from Q3 2023 Asset Quality • Q4 2023 net charge-offs at 3 bps annual
Slide 10: Our Core Values
10 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 11: We are focused on three Strategic Priorities
11 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 12: Balance Sheet Trends (GAAP)
12 $9,971 $13,305 $15,723 $16,611 $15,932 $16,818 2018 2019 2020 2021 2022 2023 11% CAGR Balance Sheet Trends (GAAP) Data as of December 31 each respective year Loans ($mm) Deposits ($mm) Assets ($mm) 10% CAGR $13,766 $17,563 $19,628 $20,065 $20,461 $21,166 2018 2019 2020 2021 2022 2023 9% CAGR $9,7
Slide 13: Strong Track Record of Performance (GAAP)
13 Strong Track Record of Performance (GAAP) Earnings Per Share Available to Common Shareholders ($) Return on Equity (ROE) (%) Return on Assets (ROA) (%) Efficiency Ratio (%) $2.22 $2.41 $1.93 $3.26 $2.97 $2.53 2018 2019 2020 2021 2022 2023 7.85% 7.89% 6.14% 9.68% 9.51% 8.27% 2018 2019 2020 2021 20
Slide 14: Strong Track Record of Performance (Non-GAAP)
14 Strong Track Record of Performance (Non-GAAP) 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 of Non-GAAP Disclosures” Adjusted Operating Earnings Per Share Av
Slide 15: Strong Capital Position at December 31, 2023
15 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% 9.8% 12.5% 8.0% 10.6% Tier 1 Capital Ratio 8.0% 10.8% 12.5% 8.9% 10.6% Total Risk Based Capital Ratio 10.0% 13.6% 1
Slide 16: Financial Outlook – AUB Standalone
16 Financial Outlook – AUB Standalone1,2 1Key Economic Assumptions • Stabilized Interest Rate environment • The Federal Reserve Bank cuts the fed funds rate by 25 bps three times beginning in June 2024 • Increased likelihood of soft landing • Expect relatively stable economy in AUB’s Virginia footpr
Slide 17: Appendix
Appendix Atlanti h Gnion Bankshares
Slide 18: Q4 2023 Allowance For Credit Losses (ACL) and Provision for Credit Losses
18 Q4 2023 Allowance For Credit Losses (ACL) and Provision for Credit Losses Q4 Macroeconomic Forecast Moody’s December 2023 Baseline Forecast: • US GDP expected to average ~1.7% growth in 2024 and ~1.7% in 2025. • The national unemployment rate expected to average ~4.0% in 2024 and ~4.1% in 2025. Q
Slide 19: Loan and Deposit Betas
19 25% 37% 41% 48% 52% 1.05% 1.79% 2.20% 2.64% 2.92% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Interest Bearing Deposit Beta2 Cumulative Int. Bearing Deposit Beta Int. Bearing Rate Paid 31% 25% 24% 69% 75% 76% Q4 2022 Q3 2023 Q4 2023 Deposit Mix Shift Non Interest Deposits Interest Bearing Deposits $1
Slide 20: Diversified and Granular Loan Portfolio
20 Diversified and Granular Loan Portfolio Total Loan Portfolio $15.6 billion at December 31, 2023 Non-Owner Occupied CRE Composition $4.2 billion at December 31, 2023 Total Portfolio Characteristics Duration Q4 2023 Weighted Average Yield (Tax Equivalent) 1.3 years 5.97% Figures may not total to 10
Slide 21: Non-Owner-Occupied CRE Portfolio at December 31, 2023
21 Non-Owner Occupied Office CRE 5.0% Non-Owner Occupied Non-Office CRE 28.5% All Other Loans 66.5% Non-Owner-Occupied CRE Portfolio at December 31, 2023 $ in millions Total Outstandings % of Portfolio Multi Family $1,062 6.8% Retail $875 5.6% Hotel/Motel B&B $829 5.3% Office $775 5.0% Industrial/Wa
Slide 22: Non-Owner-Occupied Office CRE Portfolio at December 31, 2023
22 Other Office 77% Medical Office 23% Medical vs Other Office By Market ($ millions) Key Portfolio Metrics Carolinas $245 Fredericksburg Area $124 Central VA $106 Northern VA/Maryland $66 Western VA $100 Eastern VA $49 Other $85 Total $775 Avg. Office Loan ($ millions) $1.9 Loan Loss Reserve / Offi
Slide 23: Attractive Core Deposit Base
23 Attractive Core Deposit Base Deposit Base Characteristics Deposit Composition at December 31, 2023 — $16.8 billion Cost of deposit data is as of or for the three months ended December 31, 2023 (1) Core deposits defined as total deposits less jumbo time deposits and brokered deposits • Q4 2023 cos
Slide 24: Granular Deposit Base
24 Granular Deposit Base 33% 28% 26% 27% 29% $5,299 $4,589 $4,343 $4,492 $4,922 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Period End Uninsured and Uncollateralized Deposits as a Percentage of Total Deposits ($ in Millions) $18,000 $19,000 $19,000 $101,000 $100,000 $98,000 Q4 2022 Q3 2023 Q4 2023 Custo
Slide 25: Liquidity Position at December 31, 2023
25 Cash and Cash Equivalents (unrestricted) $406 Unencumbered Securities $938 FHLB Borrowing Capacity $989 Fed Funds Lines $682 Discount Window (ex-Bank Term Funding Program) $295 Discount Window – Bank Term Funding Program $523 Secondary Sources* $1,382 ($ in millions) Liquidity Position at Decembe
Slide 26: Securities Portfolio at December 31, 2023
26 Securities Portfolio at December 31, 2023 • As of December 31, 2023, total securities portfolio of $3.1 billion with a total unrealized loss of $413.6 million • 73% of total portfolio in available-for-sale at an unrealized loss of $384.3 million • 27% of total portfolio designated as held-to-matu
Slide 27: Reconciliation of Non-GAAP Disclosures
27 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 28: Reconciliation of Non-GAAP Disclosures
28 Reconciliation of Non -GAAP Disclosures Adjusted operating measures exclude, as applicable, strategic cost saving initiatives (principally composed of severance charges related to headcount reductions, costs related to modifying certain third party vendor contracts, and charges for exiting certai
Slide 29: Reconciliation of Non-GAAP Disclosures
29 Reconciliation of Non -GAAP Disclosures Adjusted operating measures exclude, as applicable, strategic cost saving initiatives (principally composed of severance charges related to headcount reductions, costs related to modifying certain third party vendor contracts, and charges for exiting certai
Slide 30: Reconciliation of Non-GAAP Disclosures
30 Reconciliation of Non-GAAP Disclosures The adjusted operating efficiency ratio (FTE) excludes, as applicable, the amortization of intangible assets, strategic cost saving initiatives, merger-related costs, a legal reserve associated with our previously disclosed settlement with the CFPB, a FDIC s
Slide 31: Reconciliation of Non-GAAP Disclosures
31 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 32: Reconciliation of Non-GAAP Disclosures
32 Reconciliation of Non-GAAP Disclosures All regulatory capital ratios at December 31, 2023 are estimates and subject to change pending the Company’s filing of its FR Y-9 C. In addition to these regulatory capital ratios, the Company adjusts certain regulatory capital ratios to include the impacts
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