Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Union Bankshares — Investor Presentation (May 2019)
32 slides from Atlantic Union Bankshares's investor presentation, May 13, 2019
Slide 1: Investor Presentation
Investor Presentation Nasdaq: UBSH - current AUB - starting May 20 May 2019 1 1 starting May 20, 2019
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation may constitute “forward-looking statements” an insufficient allowance for loan losses; within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- the quality or composition of the loan or investment port
Slide 3: Additional Information
Additional Information Unaudited Pro Forma Financial Information events that may obscure trends in the Company’s underlying performance. The unaudited pro forma financial information included herein is presented for informational purposes only and does not necessarily Please see “Reconciliation of N
Slide 4: The "New Union" Story: From Virginia Community Bank to Virginia's Bank
The “New Union” Story: FROM VIRGINIA COMMUNITY BANK TO VIRGINIA’S BANK Virginia’s Bank The Union “Moat” • Franchise cannot be replicated • Virginia’s first statewide, independent bank in 20 years • “Crown jewel” deposit base - 44% transaction accounts • The alternative to large competitors • Dense,
Slide 5: Our Value Proposition
Our Value Proposition Shareholder Scale SOLID DIVIDEND YIELD LARGEST VA REGIONAL BANK & PAYOUT RATIO WITH UNIQUE VALUE IN BRANCH EARNINGS UPSIDE FOOTPRINT Opportunity Strength COMMITTED TO TOP-TIER BALANCE SHEET PERFORMANCE & CAPITAL LEVELS Growth ORGANIC & ACQUISITION OPPORTUNITIES 5
Slide 6: Our Company Highlights
Our Company Highlights ($bn) Branch Footprint Assets $16.9 Loans $12.0 Deposits $12.5 Market Capitalization $3.0 • Largest regional banking company headquartered in Virginia with statewide Virginia footprint of 146 branches in all major markets • #1 regional bank1 deposit market share in Virginia •
Slide 7: Investment Highlights
Investment Highlights The Right The Right The Right The Right Scale Markets Team Targets • Largest Virginia • Uniquely positioned in one • New management team • Focus on top tier headquartered regional of the most attractive led by John Asbury performance metrics and banking company ($16.9 markets i
Slide 8: Virginia's Bank
Virginia’s Bank Virginia: All Banks Virginia: Banks Headquartered in VA Rank Institution Deposits Market Branches Rank Institution Deposits Market Branches ($mm) Share ($mm) Share 1 BB&T Corp $39,102 24.6 467 1 Union Bankshares Corp. 11,567 20.6 146 2 Wells Fargo & Co 24,074 15.1 256 2 TowneBank 6,3
Slide 9: Enhancing Our Presence in Key Markets
Enhancing Our Presence in Key Markets Virginia Deposits Market Rank Institution Branches ($mm) Share 1 BB&T Corp $39,102 24.6 467 2 Wells Fargo & Co 24,074 15.1 256 3 Bank of America Corp. 17,676 11.1 124 4 Union Bankshares Corp 11,567 7.3 146 5 TowneBank 6,334 4.0 32 6 United Bankshares Inc. 5,413
Slide 10: Our Acceleration Strategy
Our Acceleration Strategy Establish Design for Drive-to-Scale Focus Success • Set the vision • Put the right team on the field • Press for advantage • Recreate a Virginia regional bank • Position as alternative to large • Efficiently crossed $10B with Xenith • Take back what was lost banks acquisiti
Slide 11: Diversity Supports Growth In Virginia
Diversity Supports Growth In Virginia Richmond Fredericksburg Charlottesville State Capital, Fortune 500 Defense and security contractors, University of Virginia, High-tech and headquarters (7), VCU & VCU Healthcare, Retail, Real Estate professional businesses, Real Medical Center development Estate
Slide 12: Among The Most Attractive Markets in USA
Among The Most Attractive Markets in USA Virginia 2018 Population (mm) ranked Virginia the 4th Best State for Business Pop. # State HHI ($) # State (mm) 1 District of Columbia $82,192 1 California 39.7 2 Maryland 81,294 2 Texas 28.5 3 Hawaii 80,637 3 Florida 21.1 th 4 Alaska 79,735 4 New York 19.8 r
Slide 13: Northern Virginia Market Highlights
Northern Virginia Market Highlights Opportunity in Fast-Growing, Affluent Markets Top 10 Counties in the U.S. – Median HH Income ($000s) (1) $160 $141 $128 $124 $123 $123 $123 $120 $119 $116 $116 $120 $80 $40 $0 Loudon, VA Howard, MD Fairfax, VA Falls Church, San Mateo, CA Santa Clara, Hunterdon, NJ
Slide 14: Union's 2019 Strategic Priorities
Union’s 2019 Strategic Priorities Diversify Loan Portfolio Grow Core Manage to Higher Levels and Revenue Streams Funding of Performance Increase Commercial lending Fund loan growth with deposit Achieve and sustain top tier growth (Commercial & Industrial + growth; attain a 95% loan to financial perf
Slide 15: Brand Transition - A Unified Bank Brand Across All Markets
Brand Transition - A Unified Bank Brand Across All Markets On May 20, we are rebranding Union Bank & Trust to Atlantic Union Bank to reduce brand complexity and ensure recognition and clarity in the marketplace. Maintaining ‘Union’ in the new brand is key because it represents the unification of mul
Slide 16: Balance Sheet Trends (GAAP)
Balance Sheet Trends (GAAP) Loans Deposits ($M) ($M) 21% CAGR $11,952 21% CAGR $12,489 $9,716 $9,971 $7,142 $6,307 $6,379 $6,992 $5,346 $5,671 $5,639 $5,964 2014 2015 2016 2017 2018 1Q 2019 2014 2015 2016 2017 2018 1Q 2019 Assets ($M) 22% CAGR $16,898 $13,766 $8,427 $9,315 $7,359 $7,694 2014 2015 20
Slide 17: Strong Track Record of Performance (GAAP)
Strong Track Record of Performance (GAAP) Earnings Per Share Return on Equity (ROE) ($) (%) $2.22 7.79% 7.85% 7.07% 6.76% 6.37% $1.77 $1.67 $1.49 5.30% $1.13 $0.47 2014 2015 2016 2017 2018 1Q 2019 2014 2015 2016 2017 2018 1Q 2019 Return on Assets (ROA) Efficiency Ratio (%) (%) 1.11% 0.96% 0.92% 0.90
Slide 18: Strong Track Record of Performance (Non-GAAP)
Strong Track Record of Performance (Non-GAAP) Operating Earnings Per Share Operating Return on Tangible Common Equity (1)(2) ($)(1)(2) (ROTCE) $2.71 (%) 17% CAGR 17.35% 16.27% $1.91 $1.77 12.14% 12.24% 11.11% 10.81% $1.43 $1.49 $0.66 2014 2015 2016 2017 2018 1Q 2019 2014 2015 2016 2017 2018 1Q 2019
Slide 19: Financial Targets
Financial Targets Committed to top-tier financial performance Union is committed to achieving top tier financial performance and providing our ROA 1.4% - 1.6% shareholders with above average returns on their investment ROTCE 16% - 18% Efficiency Key financial performance operating Ratio (FTE) < 50%
Slide 20: Solid Capital Position
Solid Capital Position Union – Capital Position as of 3/31/19 TCE / TA1 9.1% CET1 Ratio 10.3% Tier 1 Capital Ratio 10.3% Total Capital Ratio 12.7% Leverage Ratio 9.5% CRE / Total Risk-Based Capital (Bank) 296% Capital information presented herein is based on estimates and subject to change pending t
Slide 21: Capital Management
Capital Management Capital Management Capital Targets Priorities 1. Support Organic Growth • Union establishes capital targets based on 2. Dividend payout ratio targeted at 35-40% the following objectives: 3. Common Stock Repurchases • Maintain designation as a “well 4. Merger & acquisition activity
Slide 22: Diversified and Granular Loan Portfolio
Diversified and Granular Loan Portfolio Total Loan Portfolio $ 12.0 billion at March 31, 2019 CRE Composition - $5.5 Billion Consumer 5.8% Small Mixed C&D 11.1% Other 2.4% HELOC 5.6% Use Building 0.9% Special Use Owner Other 1.9% 4.7% Occupied Commercial CRE - Owner Senior Living RE 35.0% 1-4 Family
Slide 23: Attractive Core Deposit Base
Attractive Core Deposit Base Deposit Base Characteristics Deposit Composition at March 31, 2019 - $12.5 Billion QTD Cost of deposits – 86 bps Savings (1) 96% core deposits 6% Non-Interest Jumbo Time Bearing 4% 44% transactional accounts 24% #1 in deposit market share for Retail Time regional
Slide 24: Investment Thesis
Investment Thesis The Right The Right The Right The Right Scale Markets Team Targets • $16.9 billion in assets • Growing, economically • Deep team with broad • Targeting top tier diversified experience operating performance • Strong market share • Presence across state • Experience in M&A • ROA: 1.4
Slide 25: Appendix
Appendix UNION A Bbiantis. wxshares
Slide 26: Executive Management Team
Executive Management Team • 2+ years at Union John Asbury • 30+ years of experience in the banking industry, primarily at Bank of America and Regions Bank President & CEO • Former President and CEO of First National Bank of Santa Fe • Joined October 2018 Maria Tedesco • 30+ years of experience in th
Slide 27: Reconciliation of Non-GAAP Disclosures: Tangible Common Equity
Reconciliation of Non-GAAP Disclosures Tangible Common Equity As of March 31, 2019 Common equity (GAAP) $2,459,465 Less: Goodwill and Amortizable Intangibles $1,016,313 Tangible Common equity (non-GAAP) $1,443,152 Assets (GAAP) $16,897,655 Less: Goodwill and Amortizable Intangibles $1,016,313 Tangib
Slide 28: Reconciliation of Non-GAAP Disclosures: Operating Earnings Per Share
Reconciliation of Non-GAAP Disclosures Operating Earnings Per Share For the 12 Months Ended For the 3 Months Ended ($ IN THOUSANDS) 2014 2015 2016 2017 2018 3/31/2019 Net incom e (GAAP) $52,164 $67,079 $77,476 $72,923 $146,24 8 $35,631 Plus: Merger-relat e d costs, net of tax $13,724 - - 4,405 32,06
Slide 29: Reconciliation of Non-GAAP Disclosures: Return on Assets
Reconciliation of Non-GAAP Disclosures Return on Assets (ROA) For the 12 Months Ended For the 3 Months Ended ($ IN THOUSANDS) 2014 2015 2016 2017 2018 3/31/2019 Average assets (GAAP) $7,250,4 9 4 $7,492,8 9 5 $8,046,3 0 5 $8,820,1 4 2 $13,181, 6 0 9 $15,699, 7 4 3 Net incom e $52,164 $67,079 $77,476
Slide 30: Reconciliation of Non-GAAP Disclosures: ROTCE
Reconciliation of Non-GAAP Disclosures Return on Tangible Common Equity (ROTCE) For the 12 Months Ended For the 3 Months Ended ($ IN THOUSANDS) 2014 2015 2016 2017 2018 3/31/2019 Average equity (GAAP) $983,72 7 $991,97 7 $994,78 5 $1,030,8 4 7 $1,863,2 1 6 $2,268,3 9 5 Less: Avg Goodwill and $333,49
Slide 31: Reconciliation of Non-GAAP Disclosures: Efficiency Ratio
Reconciliation of Non-GAAP Disclosures Efficiency Ratio For the 12 Months Ended For the 3 Months Ended ($ IN THOUSANDS) 2014 2015 2016 2017 2018 3/31/2019 Noninterest expens e $222,41 9 $206,31 0 $213,09 0 $225,66 8 $337,76 7 $106,72 8 (GAAP) Less: Merger-rel at ed costs $20,345 - - $5,393 $39,728 $
Slide 32: Reconciliation of Non-GAAP Disclosures: Net Interest Margin
Reconciliation of Non-GAAP Disclosures Net Interest Margin For the 12 Months Ended For the 3 Months Ended ($ IN THOUSANDS) 2014 2015 2016 2017 2018 3/31/2019 Net interest incom e $253,21 3 $250,45 0 $263,96 6 $279,00 7 $426,69 1 $127,54 7 (GAAP) FTE adjustm ent $9,932 $10,463 $11,428 $11,767 $8,193