Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Investor Presentation (November 2022)
31 slides from Atlantic Union Bankshares's investor presentation, November 2022
Slide 1: Investor Presentation
Investor Presentation Nasdaq: AUB November-December 2022
Slide 2: Forward Looking Statements
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, without limitation, statements on slides entitled “Financ
Slide 3: Additional Information
Additional Information Non-GAAP Financial Measures No Offer or Solicitation This presentation contains certain financial information determined by methods other than in This presentation does not constitute an offer to sell or a solicitation of an offer to buy any accordance with generally accepted
Slide 4: Our Company
Our Company Soundness | Profitability | Growth Highlights ($bn) Branch/Office Footprint AUB (114) • Statewide Virginia footprint of 109 AUB LPO (3) $ 20.0 $ 13.9 branches in all major markets AUB Equipment Finance Headquarters (1) Assets Loans • #1 regional bank1 deposit market share in Virginia • S
Slide 5: A Transformation Story
A Transformation Story From Virginia Community Bank to Virginia’s Bank and More Virginia’s Bank The Atlantic Union “Moat” – Stronger than Ever • Virginia’s first and only statewide, independent bank in over 20 years • Scarcity value - franchise difficult to replicate • The alternative to large compe
Slide 6: 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 7: Strong Presence in Prime Virginia Markets
Diversity Supports Growth Strong Presence in Prime Virginia Markets In Virginia Richmond Fredericksburg Charlottesville State Capital, Fortune 500 Defense and security contractors, University of Virginia, High-tech and headquarters (7), VCU & VCU Medical Healthcare, Retail, Real Estate professional
Slide 8: Virginia's Bank and Sizeable Opportunity to Take Market Share from the Big Three
Virginia’s Bank and Sizeable Opportunity to Take Market Share from the Big Three Virginia: All Banks Growth Virginia: Banks Headquartered in VA Franchise Opportunity Strength Rank Institution Deposits ($mm) Market Share (%) Branches Rank Institution Deposits ($mm) Market Share (%) Branches 1 Truist
Slide 9: Virginia Is Among the Most Attractive Markets in USA
Virginia Is Among the Most Attractive Markets ranked Virginia the Best State for in USA Business for 2020 and 2021 ranked Virginia the 4th Best State for Business Household Income ($) 2022 Population (mm) • 3rd in Labor Supply # State HHI ($) # State HHI ($) # State Pop. (mm) # State Pop. (mm) • 3rd
Slide 10: Q3 2022 Highlights and 2022 Outlook
Q3 2022 Highlights and 2022 Outlook Loan Growth Operating Leverage Focus Positioning for Long Term • 7.9% annualized loan growth, ex- • ~13% pre-PPP adjusted revenue1 • Building out Asset-Based lending Paycheck Protection Program (PPP) growth from Q3 2021 and ~6% pre-PPP capabilities (Non-GAAP)1, du
Slide 11: Our Core Values
Caring Courageous Committed Working together toward Speaking openly, honestly and Driven to help our clients, Our Core Values common goals, acting with kindness, respect and a accepting our challenges and mistakes as opportunities to Teammates and company succeed, doing what is right and genuine con
Slide 12: We are focused on three Strategic Priorities
We are focused on three Strategic Priorities Organic Inorganic Deliver Organic Growth Innovate and Transform Strategic Investments • Overweighting opportunities in Wholesale • Pressing the relationship model advantage • Leverage FinTech partnerships, strategic partner equity Banking Group where bank
Slide 13: Strategic Imperatives have Evolved Alongside our Transformation
Strategic Imperatives have Evolved Alongside our Transformation This is how we intend to achieve our priorities Achieve & Sustain Top Tier Achieve Operational Great Place to Work & Financial Performance Excellence Build A Career • Maintain a top tier financial position over • Accelerate the moderniz
Slide 14: Balance Sheet Trends (GAAP)
Balance Sheet Trends (GAAP) Loans Deposits Assets ($mm) ($mm) ($mm) 15% 20% 17% CAGR CAGR CAGR $16,611 $16,546 $14,021 $13,919 $15,723 $13,196 $20,065 $19,950 $12,611 $19,628 $13,305 $17,563 $9,716 $9,971 $13,766 $7,142 $6,992 $9,315 2017 2018 2019 2020 2021 3Q 2022 2017 2018 2019 2020 2021 3Q 2022
Slide 15: Strong Track Record of Performance (GAAP)
Strong Track Record of Performance (GAAP) Earnings Per Share Available to Common Shareholders Return on Equity (ROE) ($) (%) $3.26 $2.22 $2.41 9.68% 8.72% $1.93 $2.07 7.07% 7.85% 7.89% $1.67 6.14% 2017 2018 2019 2020 2021 1st 9 months 2017 2018 2019 2020 2021 1st 9 months of 2022 2022 Return on Asse
Slide 16: Strong Track Record of Performance (Non-GAAP)
Strong Track Record of Performance (Non-GAAP) Adjusted Operating Earnings Per Share Available to Common Adjusted Operating Return on Tangible Common Equity Shareholders, diluted ($)(1) (ROTCE) (%)(1) $3.53 17.40% 16.61% 18.07% $2.71 $2.84 15.34% $2.21 12.17% 12.64% $1.90 $2.02 2017 2018 2019 2020 20
Slide 17: Strong Capital Position at September 30, 2022
Strong Capital Position at September 30, 2022 Regulatory Atlantic Union Atlantic Capital Ratio Well Capitalized Bankshares* Union Bank* Common Equity Tier 1 Ratio (CET1) 7.0% 10.0% 12.9% Capital Management Strategy Tier 1 Capital Ratio 8.5% 11.0% 12.9% Atlantic Union capital management objectives ar
Slide 18: Top-Tier Financial Targets
16% – 18% 1.3% – 1.5% ≤ 51% (1) Return on Tangible Return on Assets Efficiency Ratio (FTE) Top-Tier Common Equity Financial Targets Atlantic Union is committed to achieving Key financial performance operating top tier financial performance and metrics benchmarked against top providing our shareholde
Slide 19: Financial Outlook
Financial Outlook1 Q4 2022 Outlook Full Year 2023 Targets versus Q3 2022 versus FY 2022 1Key Economic Assumptions Loan Growth Upper single digits (annualized) Upper single digits • Rising rate environment Net Interest Income (FTE) Growth ~5% from Q3 2022 ~10% – 15% • The Federal Reserve Bank fed fun
Slide 20: We Believe We Are Well Positioned For The Current Environment
Growth Footing We Believe We Are Well Positioned For Asset Sensitivity The Current Expense Management Actions Environment And Optimistic Strong Credit About Our Future Top Tier Financial Performance Increased Shareholder Value 20
Slide 21: Appendix
Appendix y) Atlantic i — ’ fA a , Union Bankshares bens. a
Slide 22: Market Highlights
Market Highlights Opportunity in Affluent Markets Top Counties in the U.S. — Projected Median HH Income ($000s)(1) $162 $149 $147 $142 $137 $137 $136 $133 $132 $129 $129 $126 Loudoun, VA San Mateo, CA Santa Clara, CA Falls Church, VA Fairfax, VA San Francisco, CA Los Alamos, NM Fairfax, VA (City) Do
Slide 23: Q3 2022 Allowance For Credit Loss (ACL) and Provision for Credit Losses
Q3 2022 Allowance For Credit Loss (ACL) and Provision for Credit Losses Q3 Macroeconomic Forecast Allowance for Loan Reserve for Unfunded Allowance for Moody’s September 2022 Baseline Forecast: ($mm) & Lease Losses Commitments Credit Losses • US GDP expected to increase 1.6% in 2022 and 3/31/2022 $1
Slide 24: Diversified and Granular Loan Portfolio
Diversified and Granular Loan Portfolio Total Loan Portfolio $13.9 billion at September 30, 2022 Non-Owner Occupied CRE Composition — $4.7 billion Residential 1-4 Small Mixed Consumer 5.3% family - Use Building Revolving 4.2% C&D 7.7% 1.0% Special Use Retail 17.8% Other 5.4% 12.5% Owner Occupied CRE
Slide 25: Attractive Core Deposit Base
Attractive Core Deposit Base Deposit Base Characteristics Deposit Composition at September 30, 2022 — $16.5 billion • Q3 2022 cost of deposits – 37 bps Savings, 7% • 97% core deposits(1) Jumbo Time, 3% • 58% transactional accounts Non-Interest Retail Time, 8% Bearing, 32% Money Market, 24% Interest
Slide 26: 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 27: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures ADJUSTED OPERATING EARNINGS AND OPERATING LEVERAGE Adjusted operating measures exclude the gains or losses For the three months ended 3Q22 % Change on sale of securities and gain on the sale of DHFB. The (Dollars in thousands, except per share amounts) 3Q2022 2
Slide 28: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures ADJUSTED OPERATING EARNINGS & FINANCIAL METRICS Adjusted operating measures exclude merger and For the nine rebranding-related costs, nonrecurring tax expenses, months ended For the years ended December 31, the gains or losses related to balance sheet (Dollars
Slide 29: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures The adjusted operating efficiency ratio (FTE) ADJUSTED OPERATING EFFICIENCY RATIO excludes merger-related costs, rebranding For the nine costs, the amortization of intangible assets, months ended For the years ended December 31, gains or losses on sale of secur
Slide 30: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures TANGIBLE ASSETS, TANGIBLE COMMON EQUITY, AND LEVERAGE RATIO Tangible assets and tangible common equity As of September 30, 2022 are used in the calculation of certain Atlantic Union (Dollars in thousands, except share data) Bankshares Atlantic Union Bank profit
Slide 31: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures ALLOWANCE FOR CREDIT LOSS RATIOS AND TOTAL ADJUSTED LOANS PPP adjustment impact excludes the As of As of As of unforgiven portion of PPP loans. The (Dollars in thousands) September 30, 2022 June 30, 2022 March 31, 2022 Company believes loans held for investment
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