Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Q3 2022 Earnings Presentation
24 slides from Atlantic Union Bankshares's earnings presentation, Oct 20, 2022
Slide 1: 3rd Quarter FY2022 Earnings Presentation
3 rd Quarter FY2022 Earnings Presentation Nasdaq: AUB October 20, 2022
Slide 2: Forward Looking Statements
2 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 “
Slide 3: Additional Information
3 Additional Information 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 financial measures are a supplement to GAAP, wh
Slide 4: Largest Regional Banking Company Headquartered in Virginia
4 Largest Regional Banking Company Headquartered in Virginia Our Company Soundness | Profitability | Growth Data as of 9 /30/2022 , market capitalization as of 10/18/2022 1) Regional bank defined as having less than $100 billion in assets; rank determined by asset size; data per S&P Global Market In
Slide 5: Our Shareholder Value Proposition
5 Our Shareholder Value Proposition Leading Regional Presence Dense, uniquely valuable presence across attractive markets Financial Strength Solid balance sheet & capital levels Attractive Financial Profile Solid dividend yield & payout ratio with earnings upside Strong Growth Potential Organic & ac
Slide 6: Q3 2022 Highlights and 2022 Outlook
6 Q3 2022 Highlights and 2022 Outlook Loan Growth • 7.9% annualized loan growth, ex - Paycheck Protection Program (PPP) (Non - GAAP) 1 , during Q3 2022 • Expect high single digit loan growth for 2022 Asset Quality • Net Charge - offs at 2 bps annualized for Q3 2022 Positioning for Long Term • Buildi
Slide 7: We are focused on three Strategic Priorities
7 We are focused on three Strategic Priorities Organic Deliver Organic Growth • Overweighting opportunities in Wholesale Banking Group • Directing consumer efforts to market segments and delivery channels with the strongest value proposition • Prioritizing fee income growth • Maintaining a reliable
Slide 8: Well Positioned For The Current Environment
8 We Believe We Are Well Positioned For The Current Environment And Optimistic About Our Future Top Tier Financial Performance Increased Shareholder Value Strong Credit Expense Management Actions Asset Sensitivity Growth Footing
Slide 9: Q3 2022 Financial Performance At-a-Glance
9 Q3 2022 Financial Performance At - a - Glance For non - GAAP financial measures, see reconciliation to most directly comparable GAAP measures in “Appendix – Reconciliation of Non - GAAP Disclosures” Note: all tables presented dollars in thousands, except per share amounts • Net income available to
Slide 10: Q3 2022 Allowance For Credit Loss and Provision for Credit Losses
10 Q3 2022 Allowance For Credit Loss (ACL) and Provision for Credit Losses 10 Q3 Macroeconomic Forecast Moody’s September 2022 Baseline Forecast: • US GDP expected to increase 1.6% in 2022 and 1.4% in 2023. The US unemployment rate expected to average around 3.7% in the fourth quarter of 2022 and 3.
Slide 11: Net Interest Margin: Drivers of Change
11 3.24% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.70% 3.90% Quarter 2 NIM Core Loan Yield with Fees Purchase Accounting Accretion PPP Earning Asset Core Borrowings Rate Core Deposit Rate Quarter 3 NIM Net Interest Margin ( FTE) 1 : Drivers of Change 2022 Q2 to Q3 48 bps - 4 bps - 2 bps - 3 bps 3.43% -
Slide 12: Q3 2022 Noninterest Income and Noninterest Expense
12 Q3 2022 Noninterest Income and Noninterest Expense Adjuste d n oninterest income 1 decreased $3.6 million to $25.6 million for the quarter ended September 30, 2022 from $29.2 million in the prior quarter due to: • Decreases in the following noninterest income categories: • Service charges on depo
Slide 13: Q3 2022 Loan and Deposit Growth
13 Q3 2022 Loan and Deposit Growth • At September 30, 2022, loans held for investment totaled $ 13.9 billion, an increase of $263.3 million or 7.7% (annualized) from the prior quarter driven by increases in commercial loan balances ex PPP of $212.6 million and increases in consumer loan balances of
Slide 14: Strong Capital Position at September 30, 2022
14 Strong Capital Position at September 30, 2022 Capital Ratio Regulatory Well Capitalized Atlantic Union Bankshares* Atlantic Union Bank* Common Equity Tier 1 Ratio (CET1) 7.0% 10.0% 12.9% Tier 1 Capital Ratio 8.5% 11.0% 12.9% Total Risk Based Capital Ratio 10.5% 13.8% 13.4% Leverage Ratio 5.0% 9.3
Slide 15: Top-Tier Financial Targets
15 Top - Tier Financial Targets Committed to top - tier financial performance 16 % – 18 % Return on Tangible Common Equity 1.3 % – 1.5 % Return on Assets ≤ 51 % (1) Efficiency Ratio (FTE) Atlantic Union is committed to achieving top tier financial performance and providing our shareholders with abov
Slide 16: Financial Outlook
16 Financial Outlook 1 1 Key Economic Assumptions • Rising rate environment • The Federal Reserve Bank fed funds rate: • 4.50% by the end of 2022; and • 4.50 % average for 2023 • Shallow to Mild recession in 2023 • Expect relatively stable economy in AUB’s Virginia footprint • Virginia unemployment
Slide 17: Appendix
Appendix Atlanti h Gnion Bankshares
Slide 18: Disclosures
18 Reconciliation of Non - GAAP Disclosures The Company has provided supplemental performance measures on a tax - equivalent, tangible, operating, adjusted, or pre - tax pre - pr ovision basis. These non - GAAP financial measures are a supplement to GAAP, which is used to prepare the Company’s finan
Slide 19: Disclosures
19 Reconciliation of Non - GAAP Disclosures Adjusted operating measures exclude the gains or losses on sale of securities and gain on the sale of DHFB. The Company believes these non - GAAP adjusted measures provide investors with important information about the continuing economic results of the Co
Slide 20: Disclosures
20 Reconciliation of Non - GAAP Disclosures Net interest income (FTE) and total adjusted revenue (FTE), which are used in computing net interest margin (FTE), efficiency ratio (FTE) and adjusted operating efficiency ratio (FTE), respectively, provide valuable additional insight into the net interest
Slide 21: Disclosures
21 Reconciliation of Non - GAAP Disclosures Tangible assets and tangible common equity are used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible assets, tangible common equity and the related ratios are meaningful measures of capital adequacy
Slide 22: Disclosures
22 Reconciliation of Non - GAAP Disclosures Tangible assets and tangible common equity are used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible assets, tangible common equity and the related ratios are meaningful measures of capital adequacy
Slide 23: Disclosures
23 Reconciliation of Non - GAAP Disclosures 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 on sale of securities and the gain on the sale
Slide 24: Disclosures
24 Reconciliation of Non - GAAP Disclosures PPP adjustment impact excludes the unforgiven portion of PPP loans. The Company believes loans held for investment (net of deferred fees and costs), excluding PPP is useful to investors as it provides more clarity on the Company’s organic growth. The Compa
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