Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Q1 2021 Earnings Presentation
23 slides from Atlantic Union Bankshares's earnings presentation, Apr 22, 2021
Slide 1: 1st Quarter FY2021 Earnings Presentation
1st Quarter FY2021 Earnings Presentation Nasdaq: AUB April 22, 2021
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 are statements that include projections, predictions, expectations, or beliefs about
Slide 3: Additional Information
Additional Information 3 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 tools an
Slide 4: 2021 Operating Environment
2021 Operating Environment 4 Soundness Profitability Growth At March 31,2021 Assets $19.9B Loans $14.3B Deposits $16.3B Managing through COVID- 19 pandemic: • Pivoted to a new remote work and branch operating model • Focused on Teammates, clients, communities and shareholders • SBA Paycheck Protecti
Slide 5: Banking Differently
Banking Differently 5 Digital logins 50% from March 31, 2020 to March 31, 2021 Mobile check deposits 33% from March 31, 2020 to March 31, 2021 Zelle utilization 158% from March 31, 2020 to March 31, 2021 Card control active users 241% from April 1, 2020 to March 31, 2021 Q1 2021 Banking Capability E
Slide 6: Covid-19 Loan Modifications
Covid-19 Loan Modifications 6 • As of April 15, 2021 ~$64 million in loans, or 0.5% of the total loan portfolio excluding PPP loans, are in some form of a COVID Modification of which 85% of the balances are Commercial loans. • ~44% of the remaining commercial loan modifications as of April 15, 2021
Slide 7: COVID-19 Sensitive Loan Segment Details
COVID-19 Sensitive Loan Segment Details 7 Total Portfolio as of March 31, 2021 Remaining Modifications as of April 15, 2021 Count Balance Exposure Count Balance % of Portfolio Retail Trade 1,074 $ 535,806,799 $ 590,334,281 1 $ 401,117 0.1% Restaurant 524 $ 209,862,124 $ 217,569,767 2 $ 1,704,564 0.8
Slide 8: 2021 Operating Environment – Managing through the Pandemic
2021 Operating Environment – Managing through the Pandemic 8 Soundness Profitability Growth During challenging times, it is important to remember our governing philosophy –“Soundness, Profitability, & Growth – in that order of priority” ➢ This core philosophy is serving us well as we manage the Comp
Slide 9: Q1 2021 Financial Performance At-a-Glance
Q1 2021 Financial Performance At-a-Glance 9 Summarized Income Statement 1Q2021 4Q2020 Net interest income $ 134,898 $ 145,604 Provision for credit losses (13,624) (13,813) Noninterest income 30,985 32,241 Noninterest expense 111,937 121,668 Taxes 11,381 10,560 Net income (GAAP) 56,189 59,430 - Gain
Slide 10: Q1 Allowance For Credit Loss (ACL) and Provision for Credit Losses
Q1 Allowance For Credit Loss (ACL) and Provision for Credit Losses 10 Q1 Macroeconomic Forecast Q1 Additional Considerations Moody’s March Baseline Forecast • US GDP returns to pre-COVID levels in Q2 2021 and averages 5.7% growth in 2021 and 2022. The unemployment rate averages 5.7% in 2021 and 4.3%
Slide 11: Q1 2021 Net Interest Margin
3.32% 2.50% 2.60% 2.70% 2.80% 2.90% 3.00% 3.10% 3.20% 3.30% 3.40% Quarter 4 NIM Core Loan Yield with Fees PPP Loans with Fees Core Deposit Rate Earning Asset and Funding Mix Benefit Quarter 1 NIM Net Interest Margin (FTE): Drivers of Change Q4 2020 to Q1 2021 -9 bps -14 bps 6 bps 2 bps 3.16% Total L
Slide 12: Q1 2021 Noninterest Income and Noninterest Expense
12 Noninterest income decreased from the prior quarter to $31.0 million from $32.2 million due to: ▪ A decrease in service charges on deposit accounts of $1.2 million due to a decrease in overdraft fees ▪ A decrease of $858,000 in mortgage banking income driven by a seasonal decline in mortgage orig
Slide 13: Q1 2021 Loan and Deposit Growth
13 Q1 2021 Loan and Deposit Growth For non-GAAP financial measures, see reconciliation to most directly comparable GAAP measures in “Appendix – Reconciliation of Non-GAAP Disclosures” • At March 31, 2021, loans held for investment increased $251.0 million or 7.3% (annualized) from the prior quarter
Slide 14: Strong Liquidity Position and Multiple Sources of Liquidity
Strong Liquidity Position and Multiple Sources of Liquidity 14 • Strong liquidity metrics: ~$8.1 billion in unrestricted cash, unpledged securities, and secured and unsecured borrowing capacity as of March 31, 2021. Loans to Total Deposits Ratio of 88% at March 31, 2021. • Paycheck Protection Progra
Slide 15: Strong Capital Position at March 31, 2021
Strong Capital Position at March 31, 2021 15 Capital Ratio Regulatory Well Capitalized Atlantic Union Bankshares* Atlantic Union Bank* Common Equity Tier 1 Ratio (CET1) 7.0% 10.6% 12.9% Tier 1 Capital Ratio 8.5% 11.7% 12.9% Total Risk Based Capital Ratio 10.5% 14.3% 13.5% Leverage Ratio 5.0% 9.2% 10
Slide 16: Appendix
Appendix h Atlantic 4 Union Bankshares
Slide 17: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 17 Operating Earnings Per Share 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 supplements to GAAP, which is used to prepare th
Slide 18: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 18 Operating Earnings Per Share Adjusted operating measures exclude the gains or losses related to balance sheet repositioning (principally composed of gains and losses on debt extinguishment) and gains or losses on sale of securities. The Company believes thes
Slide 19: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 19 Operating Earnings Per Share Pre-tax pre-provision adjusted earnings excludes the provision for credit losses, which can fluctuate significantly from period-to-period under the CECL methodology, income tax expense, gains or losses related to balance sheet re
Slide 20: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 20 Operating Earnings Per Share The adjusted operating efficiency ratio (FTE) excludes the amortization of intangible assets and gains or losses related to balance sheet repositioning (principally composed of gains and losses on debt extinguishment). This measu
Slide 21: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 21 Operating Earnings Per Share (Dollars in thousands) 1Q2021 4Q2020 1Q2020 Net interest income (GAAP) 134,898 $ 145,604 $ 135,008 $ FTE adjustment 3,053 3,084 2,758 Net interest income (FTE) (non-GAAP) 137,951 $ 148,688 $ 137,766 $ Average earning assets 17,69
Slide 22: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 22 (Dollars in thousands) Atlantic Union Bankshares Atlantic Union Bank Assets (GAAP) 19,854,612 $ 19,799,882 $ Less: Intangible assets 989,031 989,031 Tangible assets (non-GAAP) 18,865,581 $ 18,810,851 $ Less: PPP loans 1,512,714 Tangible assets, excl PPP (non
Slide 23: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 23 ($ IN THOUSANDS) Operating Earnings Per Share (Dollars in thousands) As of March 31, 2021 As of December 31, 2020 As of March 31, 2020 Allowance for loan losses (ALLL) 142,911 $ 160,540 $ 141,043 $ Reserve for unfunded commitment (RUC) 12,833 10,000 9,000 Al
Atlantic Union Bankshares — Q1 2021 Earnings Presentation on 6ix