Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Investor Presentation (August 2019)
31 slides from Atlantic Union Bankshares's investor presentation, Aug 2, 2019
Slide 1: Investor Presentation August – September 2019
Investor Presentation Nasdaq: AUB August – September 2019
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 include, without limitation, projections, predictions, expectations or beliefs abou
Slide 3: Additional Information
Additional Information 3 Unaudited Pro Forma Financial Information Any unaudited pro forma financial information included herein, or discussed in connection with, is presented for informational purposes only and does not necessarily reflect the financial results of the combined company had the compa
Slide 4: The Atlantic Union Story: From Virginia Community Bank to Virginia's Bank
The “Atlantic Union” Story: FROM VIRGINIA COMMUNITY BANK TO VIRGINIA’S BANK 4 Virginia’s Bank The Atlantic Union “Moat” Larger Bank Executive Leadership Talent Magnet • Virginia’s first statewide, independent bank in 20 years • The alternative to large competitors • Organic growth model + effective
Slide 5: Our Value Proposition
Shareholder SOLID DIVIDEND YIELD & PAYOUT RATIO WITH EARNINGS UPSIDE Scale LARGEST VA REGIONAL BANK UNIQUE VALUE IN BRANCH FOOTPRINT Strength BALANCE SHEET & CAPITAL LEVELS Opportunity COMMITTED TO TOP-TIER PERFORMANCE Our Value Proposition 5 Growth ORGANIC & ACQUISITION OPPORTUNITIES
Slide 6: Our Company
Our Company 6 Branch Footprint AUB(153) AUB LPO (3) Data as of 6/30/19, market capitalization as of 7/26/19 (1) Regional bank defined as having less than $50 billion in assets; rank determined by asset size Assets Loans Deposits Market Capitalization $17.2 $12.2 $12.5 $3.1 • Largest regional banking
Slide 7: Investment Highlights
Investment Highlights 7 The Right Scale The Right Markets The Right Team The Right Targets • Largest Virginia headquartered regional banking company ($17.2 billion in assets) •#1 deposit market share ranking in Virginia among Virginia-based banks(1) • Operating with a statewide Virginia footprint of
Slide 8: Virginia's Bank
Virginia’s Bank 8 Virginia: All Banks Virginia: Banks Headquartered in VA Rank Institution Deposits ($mm) Market Share Branches 1 BB&T Corp (“Truist”) $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 Atlantic Union Bankshares Corp 11,567 7.3 144 5 TowneBa
Slide 9: Our Presence in Key Markets
Our Presence in Key Markets 9 Source: S&P Global Market Intelligence Note: Deposit data excludes branches with deposits greater than $1 billion Deposit data as of 6/30/18; pro forma for announced transactions (1) Includes the following counties: Alexandria (City), Arlington, Fairfax, Fairfax (City),
Slide 10: Our Acceleration Strategy
Our Acceleration Strategy 10 Establish Focus Design for Success Drive-to-Scale • Set the vision • Recreate a Virginia regional bank • Take back what was lost • Establish strategic priorities • Align goals & compensation to priorities • Make tough decisions • Divest non-strategic businesses • Union M
Slide 11: Richmond Diversity Supports Growth In Virginia
Richmond Diversity Supports Growth In Virginia 11 Source: SNL Financial Deposit data as of 6/30/18; Fredericksburg market defined as Caroline, Fredericksburg City, King George, Spotsylvania and Stafford counties; all other markets per MSA definitions in SNL State Capital, Fortune 500 headquarters (7
Slide 12: Among The Most Attractive Markets in USA
Among The Most Attractive Markets in USA 12 Household Income ($) # State HHI ($) 1 District of Columbia $82,192 2 Maryland 81,294 3 Hawaii 80,637 4 Alaska 79,735 5 New Jersey 78,317 6 Massachusetts 77,248 7 Connecticut 76,633 8 New Hampshire 75,742 9 Virginia 71,167 10 California 71,061 11 Washingto
Slide 13: Virginia Market Highlights
8.5% 7.4% 7.4% 6.8% 6.7% 6.6% 6.6% 6.4% 6.4% 6.0% 0.0% 2.5% 5.0% 7.5% 10.0% Loudon, VA Falls Church, VA (City) New Kent, VA Manassas Park, VA (City) Fredericksburg, VA (City) Alexandria, VA (City) Prince William, VA Stafford, VA Arlington, VA James City, VA $141 $128 $124 $123 $123 $123 $120 $119 $1
Slide 14: Atlantic Union's 2019 Strategic Priorities
Atlantic Union’s 2019 Strategic Priorities 14 Source: SNL Financial and FDIC deposit data Excludes branches with deposits greater than $1.0 billion Increase Commercial lending growth (Commercial & Industrial + Owner Occupied Real Estate) in order to better balance the total loan portfolio over time
Slide 15: Brand Transition - A Unified Bank Brand Across All Markets
Brand Transition - A Unified Bank Brand Across All Markets 15 On May 20th, we rebranded 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)
$7,359 $7,694 $8,427 $9,315 $13,766 $16,898 $17,159 2014 2015 2016 2017 2018 1Q 2019 2Q 2019 $5,639 $5,964 $6,379 $6,992 $9,971 $12,489 $12,516 2014 2015 2016 2017 2018 1Q 2019 2Q 2019 $5,346 $5,671 $6,307 $7,142 $9,716 $11,952 $12,221 2014 2015 2016 2017 2018 1Q 2019 2Q 2019 Balance Sheet Trends (G
Slide 17: Strong Track Record of Performance (GAAP)
Strong Track Record of Performance (GAAP) 17 Data as of or for the twelve months ended each respective year, except for the three months ended March 31, 2019 and June 30, 2019 and the six months ended June 30, 2019 Return on Assets (ROA) (%) Return on Equity (ROE) (%) Efficiency Ratio (%) Earnings P
Slide 18: Strong Track Record of Performance (Non-GAAP)
Strong Track Record of Performance (Non-GAAP) 18 Data as of or for the twelve months ended each respective year, except for the three months ended March 31, 2019 and June 30, 2019 and the six months ended June 30, 2019 (1)Non-GAAP financial measure; See reconciliation to most directly comparable GAA
Slide 19: Financial Targets
Financial Targets 19 ROTCE ROA Efficiency Ratio (FTE) 1.4% - 1.6% 16% - 18% < 50% Atlantic Union is committed to achieving top tier financial performance and providing our shareholders with above average returns on their investment Key financial performance operating metrics benchmarked against top
Slide 20: Solid Capital Position
Solid Capital Position 20 Capital information presented herein is based on estimates and subject to change pending the Company’s filing of its FR Y-9C (1) Non-GAAP financial measure; See reconciliation to most directly comparable GAAP measure in "Appendix -- Reconciliation of Non-GAAP Disclosures“ T
Slide 21: Capital Management
Capital Management 21 Capital Management Priorities • Atlantic Union establishes capital targets based on the following objectives: • Maintain designation as a “well capitalized” institution under fully phased-in Basel III regulatory definitions • Ensure capital levels are commensurate with the comp
Slide 22: Diversified and Granular Loan Portfolio
Diversified and Granular Loan Portfolio 22 Note: Figures may not total to 100% due to rounding Total Loan Portfolio $ 12.2 billion at June 30, 2019 CRE Composition - $5.7 Billion Total Portfolio Characteristics Duration Q2 19 Weighted Average Yield (Tax Equivalent) 1.6 years 5.28% C&D 10.3% CRE - Ow
Slide 23: Attractive Core Deposit Base
Attractive Core Deposit Base 23 (1) Core deposits defined as total deposits less jumbo time deposits Regional bank defined as having less than $50 billion in assets; rank determined by asset size. Communitybank defined as having less than $10 billion in assets Deposit Base Characteristics Deposit Co
Slide 24: Investment Thesis
Investment Thesis 24 The Right Scale The Right Markets The Right Team The Right Targets • $17.2 billion in assets • Strong market share • Extensive product mix, enhanced C&I focus • Growing, economically diversified • Presence across state • Scale in the sizable Northern Virginia, Richmond and Hampt
Slide 25: Appendix
Appendix 7) Atlantic /4 Union Bankshares
Slide 26: Reconciliation of Non-GAAP Disclosures: Tangible Common Equity
Reconciliation of Non-GAAP Disclosures 26 Tangible Common Equity As of June 30, 2019 Common equity (GAAP) $2,512,295 Less: Goodwill and Amortizable Intangibles $1,013,425 Tangible Common equity (non-GAAP) $1,498,870 Assets (GAAP) $17,159,384 Less: Goodwill and Amortizable Intangibles $1,013,425 Tang
Slide 27: Reconciliation of Non-GAAP Disclosures: Operating Earnings Per Share
Reconciliation of Non-GAAP Disclosures 27 ($ IN THOUSANDS) Operating Earnings Per Share For the 12 Months Ended For the 3 Months Ended 3/31/2019 2016 2017 2018 Net income (GAAP) $52,164 $67,079 $77,476 $72,923 $146,24 8 $35,631 $48,823 Plus: Merger-relat e d and rebranding costs ( 1), net of tax $13
Slide 28: Reconciliation of Non-GAAP Disclosures: Return on Assets
Reconciliation of Non-GAAP Disclosures 28 ($ IN THOUSANDS) Average assets (GAAP) $7,250,4 9 4 $7,492,8 9 5 $8,046,3 0 5 $8,820,1 4 2 $13,181,609 $15,699,743 $16,997,531 Net incom e (loss (GAAP) $52,164 $67,079 $77,476 $72,923 $146,24 8 $35,631 $48,823 Net operating earnings (non-GAAP) $65,888 $67,07
Slide 29: Reconciliation of Non-GAAP Disclosures: Return on Tangible Equity
Reconciliation of Non-GAAP Disclosures 29 ($ IN THOUSANDS) Average equity (GAAP) $983,72 7 $991,97 7 $994,78 5 $1,030,8 4 7 $1,863,2 1 6 $2,268,395 $2,490,049 Less: Avg Goodwill and Amortizable Intangibles $333,49 5 $320,90 6 $318,13 1 $315,72 2 $776,94 4 $934,34 4 $1,015,021 Avg tangible common equ
Slide 30: Reconciliation of Non-GAAP Disclosures: Efficiency Ratio
Reconciliation of Non-GAAP Disclosures 30 ($ IN THOUSANDS) Noninterest expense (GAAP) $222,41 9 $206,31 0 $213,09 0 $225,66 8 $337,76 7 $106,72 8 $105,60 8 Less: Merger-related costs $20,345 -- $5,393 $39,728 $18,122 $6,371 Less: Rebranding Costs $407 $4,012 Less: Amortization of intangible assets $
Slide 31: Reconciliation of Non-GAAP Disclosures: Net Interest Margin
Reconciliation of Non-GAAP Disclosures 31 ($ IN THOUSANDS) Net interest income (GAAP) $253,21 3 $250,45 0 $263,96 6 $279,00 7 $426,69 1 $127,54 7 $138,59 4 FTE adjustment $9,932 $10,463 $11,428 $11,767 $8,193 $2,748 $2,920 Net interest income (FTE) (non-GAAP) $263,14 5 $260,91 3 $275,39 4 $290,77 4
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