Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — IPO Roadshow (December 2021)
45 slides from Atlantic Union Bankshares's IPO roadshow presentation, Dec 1, 2021
Slide 1: Investor Presentation November 2021
Investor Presentation November 2021
Slide 2: Forward Looking Statements
2 Forward Looking Statements 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 are statements that include projections, predictions, expectations, o r beliefs
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 disclosures have limitations as analytical tool
Slide 4: Subordinated Debt Term Sheet
4 Subordinated Debt Term Sheet (1) An explanation of the significance of ratings may be obtained from the rating agency. Generally, rating agencies base their rati ngs on such material and information, and such of their own investigations, studies and assumptions, as they deem appropriate. The ratin
Slide 5: Largest Regional Banking Company Headquartered in Virginia
5 Largest Regional Banking Company Headquartered in Virginia Our Company Soundness | Profitability | Growth Data as of 9/30/2021, market capitalization as of 11/23/2021 (1 ) Regional bank defined as having less than $50 billion in assets; rank determined by asset size; data per S&P Global Market Int
Slide 6: Our Executive Leadership
6 • Executive Vice President & Wholesale Banking Group Executive since September 2017 • Executive Vice President & Executive Managing Director, Middle Market, NFP, and Asset - Based Banking at Huntington National Bank (2014 - 2017) • Managing Director, Enterprise Banking at First Niagra Financial Gr
Slide 7: Our Long-Term Strategic Priorities
7 Our Long - Term Strategic Priorities Diversify Loan Portfolio and Revenue Streams • 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 Grow Core Funding • F
Slide 8: Investment Highlights
8 Investment Highlights Strong Growth Potential Organic & acquisition opportunities Financial Strength Solid balance sheet & capital levels Leading Regional Presence Unique value in branch footprint across attractive market Attractive Financial Profile Solid dividend yield & payout ratio with earnin
Slide 9: Our Markets
9 Our Markets Source: SNL Financial; excludes branches greater than $5 billion Deposit data as of 6/30/2021; Fredericksburg market defined as Caroline, Fredericksburg City, King George, Spotsylvania and Stafford counties; all other markets per MSA definitions in SNL 9 Richmond State Capital, Fortune
Slide 10: Virginia's Bank
10 Virginia’s Bank Source: SNL Financial and FDIC deposit data Deposit and branch data as of 6/30/21; pro forma for announced transactions Note: Excludes branches with deposits greater than $5.0 billion Virginia: All Banks Virginia: Banks Headquartered in VA Statewide Branch Footprint Brings Unique
Slide 11: Virginia Is Among the Most Attractive Markets in USA
11 Virginia Is Among the Most Attractive Markets in USA Source: SNL Financial; Bureau of Economic Analysis; Bureau of Labor Statistics, Fortune.com , U.S. News & World Report; Forbes, CNBC, U.S. Small Business Administration, USA Today; Business Facilities Unemployment data as of 10/21 (1) CNBC did
Slide 12: Virginia Market Highlights
12 Virginia Market Highlights Opportunity in Fast - Growing, Affluent Markets Source: S&P Global Market Intelligence Boxes denote county/city of operation (1) Median HH Income projected for 2021 Top Counties in the U.S. — Projected Median HH Income ($ 000s) 1 Top 10 Counties in Virginia — Projected
Slide 13: Our Presence in Key Markets
13 Our Presence in Key Markets Source: S&P Global Market Intelligence Note: Deposit data excludes branches with deposits greater than $5 billion Deposit and branch data as of 6/30/21; pro forma for announced transactions (1) Northern Virginia includes only the Virginia branches of the Washington, Al
Slide 14: Customer Experience Successes
14 14 Customer Experience Successes For J.D. Power 2021 award information, visit jdpower.com /awards Greenwich Excellence 2020 Awards Atlantic Union is #1 among small businesses in the South Region with $1 - $10mm in revenue. Atlantic Union believes that the successful launch of PPP and support of t
Slide 15: Our Core Values
15 Caring Working together toward common goals, acting with kindness, respect and a genuine concern for others. Courageous Speaking openly, honestly and accepting our challenges and mistakes as opportunities to learn and grow. Committed Driven to help our clients, Teammates and company succeed, doin
Slide 16: Environmental, Social, and Governance
16 Governance • All of our directors are independent under NASDAQ standards, other than the CEO • At least four times per year, our independent directors hold an executive session without management present • Each share of our common stock has equal voting rights with one vote per share 16 Environme
Slide 17: Financial Highlights
Financial Highlights A Atlantic Union Bankshares.
Slide 18: Balance Sheet Trends
18 Balance Sheet Trends Data as of or for the twelve months ended each respective year and the nine months ended September 30, 2021 Loans ($mm) Deposits ($mm) Assets ($mm) $6,307 $7,142 $9,716 $12,611 $14,021 $13,140 2016 2017 2018 2019 2020 3Q2021 16% CAGR $6,379 $6,992 $9,971 $13,305 $15,723 $16,6
Slide 19: Consolidated Capital Ratios
19 11.9% 11.2% 14.0% 14.3% 13.0% 12.7% 8.4% 8.1% 8.8% 9.1% 8.3% 8.2% 2016 2017 2018 2019 2020 3Q2021 CE / A TCE / TA 13.6% 12.4% 12.9% 12.6% 14.0% 13.8% 2016 2017 2018 2019 2020 3Q2021 11.0% 10.1% 11.1% 10.2% 11.4% 11.5% 2016 2017 2018 2019 2020 3Q2021 Consolidated Capital Ratios Data as of the twel
Slide 20: C&D and CRE Loan Concentrations
20 80% 96% 84% 72% 48% 43% 2016 2017 2018 2019 2020 3Q2021 C&D and CRE Loan Concentrations Data as of the twelve months ended each respective year and the nine months ended September 30, 2021 C&D Loans / Bank Risk - Based Capital (%) C&D + CRE Loans / Bank Risk - Based Capital (%) 293% 318% 304% 299
Slide 21: Strong Track Record of Performance
21 Strong Track Record of Performance pre and post 2020 COVID - 19 Impact Data as of or for the twelve months ended each respective year except for the first 3Q of 2021, which is the first 9 months e nde d on September 30, 2021 Earnings Per Share Available to Common Shareholders ($) Return on Equity
Slide 22: Strong Track Record of Performance (Non-GAAP)
22 Strong Track Record of Performance (Non - GAAP) pre and post 2020 COVID - 19 Impact Data as of or for the twelve months ended each respective year except for the first 3Q of 2021, which is the first 9 months e nde d on September 30, 2021 (1) Non - GAAP financial measure; See reconciliation to mos
Slide 23: Noninterest Income
23 $59.8 $62.4 $104.2 $132.8 $131.5 $89.4 2016 2017 2018 2019 2020 First 3Q of 2021 Mortgage Banking Income Service Charges on Deposit Accounts Fiduciary and Asset Management Fees Loan-Related Interest Rate Swaps Bank Owned Life Insurance Income Interchange Fees Other Noninterest Income (GAAP) Data
Slide 24: Credit Loss Trends
24 Credit Loss Trends (GAAP) Data as of or for the twelve months ended each respective year except for the first 3Q of 2021, which is the first 9 months e nde d on September 30, 2021 Note: The Company adopted of ASU 2016 - 13, Financial Instruments and Credit Losses (Topic 326): Measurement of Credi
Slide 25: Allowance For Credit Loss and Provision for Credit Losses
25 Q3 Allowance For Credit Loss (ACL) and Provision for Credit Losses Note: Figures may not foot due to rounding (1) Non - GAAP financial measure; See reconciliation to most directly comparable GAAP measure in "Appendix -- Reconciliation of Non - GAAP Disclosures” 25 Q3 Macroeconomic Forecast Moody’
Slide 26: Asset Quality
26 0.28% 0.38% 0.35% 0.26% 0.32% 0.28% 2016 2017 2018 2019 2020 3Q2021 0.59% 0.54% 0.42% 0.34% 1.14% 0.77% 2016 2017 2018 2019 2020 3Q2021 Asset Quality (GAAP) Data as of or for the twelve months ended each respective year and the nine months ended September 30, 2021 Nonperforming Assets / Total Loa
Slide 27: Loan Portfolio
Loan Portfolio A Atlantic Union Bankchavec”
Slide 28: Diversified and Granular Loan Portfolio
28 Diversified and Granular Loan Portfolio Total Loan Portfolio – $13.1 billion Non - Owner Occupied CRE Composition — $4.5 billion C&D 6.7% Owner Occupied CRE 15.4% C&I 19.6% Non - Owner Occupied CRE 34.3% 1 - 4 Family 11.0% Other 4.1% Residential 1 - 4 family - Revolving 4.2% Consumer 4.6% Retail
Slide 29: Top C&I Industry Concentrations and SNC and Purchased Loans
29 Top C&I Industry Concentrations and SNC and Purchased Loans 1.09 years 3.70% C&I Industry Exposure Atlantic Union is well - diversified in its Commercial and Industrial portfolio. Figures at left include PPP loans. SNC and Purchased Loans Atlantic Union’s purchased loans are relatively small in c
Slide 30: Liquidity, Capital and Interest Rate Risk
30 Liquidity, Capital and Interest Rate Risk
Slide 31: Attractive Core Deposit Base
31 Non - Interest Bearing , 32% NOW , 24% Money Market , 25% Retail Time , 9% Jumbo Time , 3% Savings , 6% Attractive Core Deposit Base Deposit Base Characteristics Deposit Composition at September 30, 2021 — $16.6 billion (1) Core deposits defined as total deposits less jumbo time deposits • Q3 202
Slide 32: Securities Portfolio
32 ($millions) Carrying Gain / Fair Value (Loss) Value U.S. Government and Agency Securities $76.9 $0.5 $77.4 Obligations of States and Political Subdivisions 1,500.1 89.7 1,589.8 Corporate & Other Bonds 1 145.2 3.9 149.1 Commercial Mortgage-Backed Securities 438.7 6.5 445.2 Residential Mortgage-Bac
Slide 33: Liquidity Position and Sources
33 Liquidity Position and Sources 1.09 years 3.70% • Strong liquidity metrics: ~$7.8 billion in unrestricted cash, unpledged securities, and secured and unsecured borrowing capacity . Loans to Total Deposits Ratio of 78%. • Paycheck Protection Program loans of approximately $467 million outstanding
Slide 34: Holding Company Liquidity
34 34 Holding Company Liquidity • The Company maintains an alternate line of credit at a correspondent bank, the available balance was $25.0 million at Septemb er 30, 2021 ‒ Amount: $25.0 million ‒ Current outstanding balance: $0 ‒ Facility: Senior unsecured revolving ‒ Renewed: September 2021 for a
Slide 35: Capital Management
35 Capital Targets AUB establishes capital targets based on the following objectives: x Maintain designation as a “well capitalized” institution under fully phased - in Basel III regulatory definitions x Ensure capital levels are commensurate with the Company’s risk profile, capital stress test proj
Slide 36: Interest Rate Sensitivity
36 36 Interest Rate Sensitivity • Atlantic Union is asset sensitive and is within compliance with all interest rate risk policy limits. AUB has become more asset sensitive over the past year primarily as a result of increased non - maturity deposits. 3Q 2021 Interest Rate Risk AUB NII (Growth Shock
Slide 37: Appendix
Appendix / Ghign' Bankshares
Slide 38: Sub. Debt Issuance Pro Forma Capital
38 Sub. Debt Issuance As Reported Less Redemption Pro Forma (Dollars in millions) 9/30/2021 of Existing Notes 9/30/2021 Regulatory Capital Components Common Equity Tier 1 Capital $1,541 $1,541 Additional Tier 1 Capital 167 167 Tier 1 Capital $1,708 $1,708 ACL Includable in Tier 2 Capital $54 $54 Sub
Slide 39: Kroll Bond Rating Agency Summary
39 Source: KBRA – “Atlantic Union Bankshares Corporation Surveillance Report” published 11/22/21 Note: Ratings last affirmed 11/22/21 Note: An explanation of the significance of ratings may be obtained from the rating agency. Generally, rating agencies base their rati ngs on such material and inform
Slide 40: Double Leverage & Interest Coverage
40 Double Leverage & Interest Coverage Dollars in thousands (1 ) For illustrative purposes only, assumes a $200 million subordinated debt raise with a 1.00% gross underwriting spread, and $50 0,000 in offering expenses, for net proceeds of $197.5 million. Additionally, this reflects the redemption a
Slide 41: Reconciliation of Non-GAAP Disclosures
41 Reconciliation of Non - GAAP Disclosures The Company has provided supplemental performance measures on a tax - equivalent, tangible, operating, adjusted, or pre - tax pre - pr ovision basis. These non - GAAP financial measures are supplements to GAAP, which is used to prepare the Company’s financ
Slide 42: Reconciliation of Non-GAAP Disclosures
42 Reconciliation of Non - GAAP Disclosures Adjusted operating measures exclude the after - tax effect of merger and rebranding - related costs unrelated to the Company’s normal operations. In addition, adjusted operating measures exclude the gains or losses related to balance sheet repositioning (p
Slide 43: Reconciliation of Non-GAAP Disclosures
43 Reconciliation of Non - GAAP Disclosures PPP adjustment impact excludes the SBA guaranteed loans funded during 2020 and 2021. The Company believes loans held for investment (net of deferred fees and costs), excluding PPP is useful to investors as it provides more clarity on the Company’s organic
Slide 44: Reconciliation of Non-GAAP Disclosures
44 Reconciliation of Non - GAAP Disclosures The adjusted operating efficiency ratio (FTE) excludes the amortization of intangible assets, merger and rebranding - related costs, the gain on sale of securities, and gains or losses related to balance sheet repositioning (principally composed of gains a
Slide 45: Reconciliation of Non-GAAP Disclosures
45 Reconciliation of Non - GAAP Disclosures Tangible assets, tangible common equity, and adjusted leverage ratio are used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible assets, tangible common equity, adjusted leverage ratio and the related
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