Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Investor Presentation (July 2023)
32 slides from Atlantic Union Bankshares's investor presentation, Jul 31, 2023
Slide 1: Investor Presentation August - September 2023
Investor Presentation NYSE: AUB August - September 2023
Slide 2: Forward Looking Statements
2 Forward Looking Statements This presentation and statements by our management 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 ent
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, which
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 6/30/2023, market capitalization as of 7/26/2023 1) Regional bank defined as having less than $100 billion in assets; rank determined by asset size; data per S&P Global Market Intel
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: Strong Presence in Prime Virginia Markets
6 Strong Presence in Prime Virginia Markets (1) Among midsized and community banks less than $100 billion in assets Source: SNL Financial, FDIC deposit data; excludes branches greater than $5 billion Deposit data as of 6/30/2022; Fredericksburg market defined as Caroline, Fredericksburg City, King G
Slide 7: Virginia's Bank and Sizeable Opportunity to Take Market Share from the Big Three
7 Virginia’s Bank and Sizeable Opportunity to Take Market Share from the Big Three Source: SNL Financial and FDIC deposit data Deposit and branch data as of 6/30/22; pro forma for announced transactions Atlantic Union Bank closed 5 Virginia branches on March 1, 2023 Note: Excludes branches with depo
Slide 8: Virginia Is Among the Most Attractive Markets in USA
8 Virginia Is Among the Most Attractive Markets in USA Source: SNL Financial; Bureau of Economic Analysis; Bureau of Labor Statistics, Fortune.com, U.S. News & World Report; Forbes, CNBC, U.S. Small Business Administration, USA Today; Business Facilities; most recent data available ranked Virginia t
Slide 9: Q2 2023 Highlights and 2023 Outlook
9 Q2 2023 Highlights and 2023 Outlook Loan and Deposit Growth • Relatively flat deposit balances quarter over quarter • 13.3% annualized loan growth in Q2 2023 • Line of Credit Utilization of 34% for Q2 2023 and relatively flat with Q1 2023 • Expect mid-single digit loan growth for 2023 Asset Qualit
Slide 10: We are focused on three Strategic Priorities
10 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 11: Balance Sheet Trends (GAAP)
11 $9,971 $13,305 $15,723 $16,611 $15,932 $16,412 2018 2019 2020 2021 2022 1H 2023 12% CAGR Balance Sheet Trends (GAAP) Data as of or for the twelve months ended each respective year, except for 1H 2023, which is as of or for the six months ended June 30, 2023 Loans ($mm) Deposits ($mm) Assets ($mm)
Slide 12: Strong Track Record of Performance (GAAP)
12 Strong Track Record of Performance (GAAP) Earnings Per Share Available to Common Shareholders ($) Return on Equity (ROE) (%) Return on Assets (ROA) (%) Efficiency Ratio (%) $2.22 $2.41 $1.93 $3.26 $2.97 $1.13 2018 2019 2020 2021 2022 1H 2023 7.85% 7.89% 6.14% 9.68% 9.51% 7.51% 2018 2019 2020 2021
Slide 13: Strong Track Record of Performance (Non-GAAP)
13 Strong Track Record of Performance (Non-GAAP) Data as of or for the twelve months ended each respective year, except for 1H 2023, which is as of or for the six months ended June 30, 2023 (1) Non-GAAP financial measure; See reconciliation to most directly comparable GAAP measure in "Appendix -- Re
Slide 14: Strong Capital Position at June 30, 2023
14 Capital Ratio Regulatory Well Capitalized Minimums Atlantic Union Bankshares Atlantic Union Bank Atlantic Union Bankshares Atlantic Union Bank Common Equity Tier 1 Ratio (CET1) 6.5% 9.9% 12.6% 7.5% 10.3% Tier 1 Capital Ratio 8.0% 10.8% 12.6% 8.4% 10.3% Total Risk Based Capital Ratio 10.0% 13.6% 1
Slide 15: Financial Outlook
15 Financial Outlook1 1Key Economic Assumptions • Stabilizing Interest Rate environment • The Federal Reserve Bank fed funds rate increases to 5.50% and holds there for the rest of 2023 • Increased likelihood of soft landing • Expect relatively stable economy in AUB’s Virginia footprint in 2023 • Ex
Slide 16: Appendix
Appendix Atlanti h Gnion Bankshares
Slide 17: Q2 2023 Allowance For Credit Loss (ACL) and Provision for Credit Losses
17 Q2 2023 Allowance For Credit Loss (ACL) and Provision for Credit Losses Q2 Macroeconomic Forecast Moody’s June 2023 Baseline Forecast: • US GDP expected to average ~1.6% growth in 2023 and ~1.4% in 2024. • The national unemployment rate expected to average ~3.6% in 2023 and ~4.1% in 2024. • Virgi
Slide 18: Attractive Core Deposit Base
18 Attractive Core Deposit Base Deposit Base Characteristics Deposit Composition at June 30, 2023 — $16.4 billion Cost of deposit data is as of or for the three months ended June 30, 2023 (1) Core deposits defined as total deposits less jumbo time deposits and brokered deposits • Q2 2023 cost of dep
Slide 19: Loan and Deposit Betas
19 Loan and Deposit Betas 8% 18% 25% 37% 41% 0.23% 0.55% 1.05% 1.79% 2.20% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Interest Bearing Deposit Beta2 Cumulative Int. Bearing Deposit Beta Int. Bearing Rate Paid 5% 12% 17% 26% 30% 0.15% 0.37% 0.72% 1.28% 1.61% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Total
Slide 20: Granular Deposit Base
20 Granular Deposit Base Top 15 Commercial Deposits by NAICS as of 6/30/2023 NAICS Code/Title % of Total Deposits 52 - Finance and Insurance 8.7% 54 - Professional, Scientific, and Technical Services 6.2% 53 - Real Estate and Rental and Leasing 6.0% 81 - Other Services (except Public Administration)
Slide 21: Diversified and Granular Loan Portfolio
21 Diversified and Granular Loan Portfolio Total Loan Portfolio $15.1 billion at June 30, 2023 Non-Owner Occupied CRE Composition — $4.9 billion Total Portfolio Characteristics Duration Q2 2023 Weighted Average Yield (Tax Equivalent) 1.2 years 5.62% Figures may not total to 100% due to rounding Dura
Slide 22: Non-Owner-Occupied CRE Portfolio as of June 30, 2023
22 Non-Owner-Occupied CRE Portfolio as of June 30, 2023 $ in millions Total Outstandings % of Portfolio Multi Family $789 5.2% Retail $859 5.7% Hotel/Motel B&B $747 5.0% Office $781 5.2% Industrial/Warehouse $693 4.6% Senior Living $367 2.4% Self Storage $346 2.3% Other $319 2.1% Total Non-Owner Occ
Slide 23: Non-Owner-Occupied Office CRE Portfolio as of June 30, 2023
23 Non-Medical Office 77% Medical Offices 23% Medical vs Other Office By Market ($ millions) Key Portfolio Metrics Carolinas $231 Fredericksburg Area $134 Central VA $109 Northern VA/Maryland $73 Western VA $94 Eastern VA $51 Other $88 Total $781 Avg. Office Loan ($ millions) $1.9 Loan Loss Reserve
Slide 24: Liquidity Position at June 30, 2023
24 Cash and Cash Equivalents (unrestricted) $471 Unencumbered Securities $874 FHLB Borrowing Capacity $1,341 Fed Funds Lines $907 Discount Window (ex-Bank Term Funding Program) $300 Discount Window – Bank Term Funding Program $539 Secondary Sources* $1,344 ($ in millions) Liquidity Position at June
Slide 25: Securities Portfolio at June 30, 2023
25 Securities Portfolio at June 30, 2023 • Total securities portfolio of $3.0 billion with a total unrealized loss of $491.9 million • 72% of total portfolio in available-for-sale at an unrealized loss of $450.1 million • 28% of total portfolio designated as held-to-maturity with an unrealized loss
Slide 26: Reconciliation of Non-GAAP Disclosures
26 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 statem
Slide 27: Reconciliation of Non-GAAP Disclosures
27 Reconciliation of Non -GAAP Disclosures Adjusted operating measures exclude, as applicable, strategic cost saving initiatives (principally composed of severance charges related to headcount reductions and charges for exiting leases), a legal reserve associated with an ongoing regulatory matter pr
Slide 28: Reconciliation of Non-GAAP Disclosures
28 Reconciliation of Non-GAAP Disclosures Pre-tax pre-provision adjusted earnings excludes, as applicable, the provision for credit losses, which can fluctuate significantly from period-to-period under the CECL methodology, income tax expense, strategic cost saving initiatives, a legal reserve assoc
Slide 29: Reconciliation of Non-GAAP Disclosures
29 Reconciliation of Non -GAAP Disclosures Adjusted operating measures exclude, as applicable, merger and rebranding -related costs, the gains or losses related to balance sheet repositioning (principally composed of gains and losses on debt extinguishment), gains or losses on sale of securities, ga
Slide 30: Reconciliation of Non-GAAP Disclosures
30 Reconciliation of Non-GAAP Disclosures The adjusted operating efficiency ratio (FTE) excludes, as applicable, merger-related costs, rebranding costs, the amortization of intangible assets, gains or losses on sale of securities, gains on the sale of Visa, Inc. Class B common stock, gain on sale of
Slide 31: Reconciliation of Non-GAAP Disclosures
31 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 be
Slide 32: Reconciliation of Non-GAAP Disclosures
32 Reconciliation of Non-GAAP Disclosures All regulatory capital ratios at June 30, 2023 are estimates and subject to change pending the Company’s filing of its FR Y-9 C. In addition to these regulatory capital ratios, the Company adjusts certain regulatory capital ratios to include the impacts of A
Atlantic Union Bankshares — Investor Presentation (July 2023) on 6ix