Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Union Bankshares — Investor Presentation (February 2018)
28 slides from Atlantic Union Bankshares's investor presentation, Feb 14, 2018
Slide 1: Investor Presentation February/March 2018
Investor Presentation Nasdaq: UBSH February/March 2018
Slide 2: Forward-looking statements
Certain statements in this presentation which are not statements of historical fact constitute forward-looking statements within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, or the “Securities Act,” and Section 21E of the Exchange Act. For
Slide 3: Pro forma information, non-GAAP measures and company description
Unaudited Pro Forma Financial Information The unaudited pro forma financial information included herein is presented for informational purposes only and does not necessarily reflect the financial results of the combined company had the companies actually been combined during periods presented. The a
Slide 4: Highlights (pro forma 12/31/17)
Highlights (pro forma 12/31/17)(1) $13.0 billion in assets $9.6 billion in loans $2.5 billion market capitalization $9.4 billion in customer deposits (2) • Largest regional banking company headquartered in Virginia • Statewide Virginia footprint of 141 branches in all major markets • #1 regional ban
Slide 5: Investment Highlights
Investment Highlights Source: SNL Financial and FDIC deposit data (1) Excludes branches with deposits greater than $1.0 billion (2) Under federal corporate tax rate of 21.0% The Right Scale The Right Markets The Right Team The Right Targets • Largest Virginia headquartered regional banking company (
Slide 6: Virginia's Bank
Virginia’s Bank Virginia: Banks Headquartered in VA Virginia: All Banks Source: SNL Financial and FDIC deposit data Deposit data as of 6/30/17; pro forma for announced transactions Note: Excludes branches with deposits greater than $1.0 billion Deposits Market Rank Institution ($mm) Share Branches 1
Slide 7: Diversity Supports Growth In Virginia
Diversity Supports Growth In Virginia Northern Virginia Richmond • State Capital, Fortune 500 headquarters (6), VCU & VCU Medical Center • $2.6 billion in-market deposits and total deposit market share of 11.4% • Nation’s capital, Defense and security contracts, Associations (lobbyists), High-Tech •
Slide 8: Among The Most Attractive Markets in USA
Among The Most Attractive Markets in USA Source: SNL Financial; Bureau of Economic Analysis; Bureau of Labor Statistics, Statista.com, U.S. News & World Report; Forbes, U.S. Small Business Administration, USA Today Unemployment data as of 11/17/17, and GDP data as of 11/21/17 2018 Median HHI ($) 201
Slide 9: Fourth Quarter Financial Highlights
Fourth Quarter Financial Highlights Net Interest Margin (GAAP / FTE) Net Income (Loss) & EPS Efficiency Ratio (GAAP / FTE) Loan Growth (2) Deferred Tax Asset Writedown (3) ROA & ROE / ROTCE • 13.5% • $57.2 million 9 Data as of or for the three months ended 12/31/17 (1) Excludes merger-related costs
Slide 10: Strong Track Record of Performance (GAAP)
Strong Track Record of Performance (GAAP) NIM (%) ROA (%) Data as of or for the twelve months ended each respective year, except for Q417 data which is as of or for the three months ended December 31, 2017. ROE (%) Efficiency Ratio (%) 10 72.0% 75.3% 68.5% 66.3% 66.7% 66.1% 2013 2014 2015 2016 2017
Slide 11: Strong Track Record of Performance (Non-GAAP)
Strong Track Record of Performance (Non-GAAP) NIM (FTE) (2) (%) Operating ROA (1) (2) (%) Data as of or for the twelve months ended each respective year , except for Q417 data which is as of or for the three months ended December 31, 2017. (1) Excludes merger-related costs and nonrecurring tax expen
Slide 12: Diversified and Granular Loan Portfolio
Diversified and Granular Loan Portfolio Composition by Region Composition by Type Pro Forma Loan Composition at December 31, 2017 - $9.6 Billion Non-Owner Occupied CRE 28% C&D 13% Owner Occupied CRE 13% C&I 11% Residential 1-4 Family 14% Equity LOC 7% Second Mortgages <1% Personal 11% Other 3% Richm
Slide 13: Relationship-based Commercial Real Estate Lending
Relationship-based Commercial Real Estate Lending Pro Forma CRE Composition at December 31, 2017 - $4.0 Billion Unaudited balance sheet figures as of 12/31/17 shown on a pro forma basis, excluding purchase accounting adjustments, as if the merger with Xenith Bankshares, Inc. had occurred on 12/31/17
Slide 14: Attractive Core Deposit Base
Attractive Core Deposit Base Cost of deposits - 49 bps 90% core deposits (2) 45% transactional accounts #1 in deposit market share for regional/community banks in Richmond and Charlottesville MSAs and Fredericksburg #2 in deposit market share for regional/community banks in Blacksburg-Chri
Slide 15: Solid Capital Position
(1) Unaudited balance sheet figures as of 12/31/17 shown on a pro forma basis, inclusive of preliminary estimated purchase accounting adjustments, as if the merger with Xenith Bankshares, Inc. had occurred on 12/31/17, inclusive of DTA writedown (2) Unaudited balance sheet figures as of 9/30/17 show
Slide 16: Strategic priorities
• 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 • Achieve and sustain top tier financial performance • Invest in talent, develop a culture of coaching and
Slide 17: Financial Targets
(1) Under federal corporate income tax rate of 21.0% Financial Targets Financial Targets (1) ROA ROTCE Efficiency Ratio 1.3% - 1.5% 15% - 17% < 55% Committed to top-tier financial performance 17 • Union is committed to achieving top tier financial performance and providing our shareholders with abov
Slide 18: Investment Highlights
Investment Highlights The Right Scale The Right Markets The Right Team The Right Targets • Deep team with broad experience • Experience in M&A integration • Attractive destination for top tier talent • Targeting top tier performance • ROA: 1.3% - 1.5% • ROTCE: 15% - 17% • $13 billion in assets • Str
Slide 19: Appendix
Appendix
Slide 20: Executive Management Team
Executive Management Team John C. Asbury President & CEO 1 year at Union 25+ years of experience in the banking industry, primarily at Bank of America and Regions Bank Former President and CEO of First National Bank of Santa Fe Robert M. Gorman Executive Vice President & CFO 5 years at Union
Slide 21: Achieved Our 2017 Priorities
Diversification Core Funding Efficiency Ratio Crossing $10 Billion in Assets Xenith Acquisition Achieved Our 2017 Priorities Target Results • Loan portfolio • Revenue streams • Lowered CRE concentration and increased C&I portfolio • Added dedicated C&I team in Northern Virginia and Richmond with opp
Slide 22: Delivering the Xenith Economics
Delivering the Xenith Economics Closed January 1, 2018 Focus on seamless transition with systems conversion targeted for May 2018 Leveraging experience of successful conversions and integrations at both companies Continued focus on customer experience, retention and growth 2018 Focus on Succ
Slide 23: Estimated Pro Forma Financial Metrics
(1) Estimated financial impact is presented solely for illustrative purposes using mean analyst estimates. Includes purchase accounting marks and deal related expenses (2) Projected bank level total capital 23 Estimated Pro Forma Financial Metrics Key Xenith Acquisition Impacts to UBSH (1) 2018E & 2
Slide 24: Strong Credit Quality
Strong Credit Quality Dollars in thousands Data as of 12/31/17 24 UBSH XBKS Asset Quality Summary Nonaccrual Loans $21,743 $19,637 Other Real Estate 6,636 4,214 Renegotiated Loans 17,402 20,501 90+ Days Delinquent 3,532 -- Total Nonperforming Assets & 90+PD $49,313 $44,352 NPLs / Loans 0.30% 0.79% N
Slide 25: Reconciliation of Non-GAAP Disclosures
Data as of 12/31/17 (1) Excludes unvested restricted stock awards Reconciliation of Non-GAAP Disclosures 25 Tangible Common Equity (Dollars in thousands) Union (As Reported) Xenith (As Reported) Merger Pro Forma Adjustments Pro Forma Combined Actual shareholders’ equity (GAAP) $1,046,329 $429,741 $3
Slide 26: Reconciliation of Non-GAAP Disclosures: ROA
Reconciliation of Non-GAAP Disclosures 26 Net Operating Income Return on Assets (ROA) Union Standalone Xenith Union For the Twelve Months Ended 12/31 (Dollars in thousands) 2013 2014 2015 2016 2017 Three Months Ended 12/31/17 Average assets (GAAP) $4,051,850 $7,250,494 $7,492,895 $8,046,305 $8,820,1
Slide 27: Reconciliation of Non-GAAP Disclosures: NIM and ROTCE
Reconciliation of Non-GAAP Disclosures 27 Net Interest Margin Union Standalone Xenith Union For the Twelve Months Ended 12/31 (Dollars in thousands) 2013 2014 2015 2016 2017 Three Months Ended 12/31/17 Net interest income (GAAP) $151,626 $255,018 $251,834 $265,150 $280,157 $25,588 $73,392 FTE adjust
Slide 28: Reconciliation of Non-GAAP Disclosures: Efficiency Ratio
Reconciliation of Non-GAAP Disclosures 28 Efficiency Ratio Union Standalone Xenith Union For the Twelve Months Ended 12/31 (Dollars in thousands) 2013 2014 2015 2016 2017 Three Months Ended 12/31/17 Noninterest expense (GAAP) $137,047 $238,216 $216,882 $222,703 $234,765 $25,557 $59,944 Less: Merger-
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