Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Union Bankshares — Investor Presentation (February 2019)
34 slides from Atlantic Union Bankshares's investor presentation, Feb 11, 2019
Slide 1: Investor Presentation February/March 2019
Investor Presentation Nasdaq: UBSH February/March 2019
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation may constitute forward-looking statements within the Company’s ability to recruit and retain key employees; the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking an insufficient allowance for loan l
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
Our Company Pro Forma Highlights ($bn)(1) Pro Forma Branch Footprint Assets $16.8 Maryland Loans $11.9 UBSH (140) Baltimore RestonReston Baltimore RestonReston ANCX (15) Washington Deposits $12.2 UBSH LPO (2) FredericksburgFredericksburg
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 ($16.8 markets i
Slide 8: Virginia's Bank
Virginia’s Bank Virginia: All Banks Virginia: Banks Headquartered in VA Rank Institution Deposits Market Branches Rank Institution Deposits Market Branches ($mm) Share ($mm) Share 1 Wells Fargo & Co. $28,074 16.5 265 1 Union Bankshares Corp. 9,419 16.5 131 2 BB&T Corp. 23,464 13.8 300 2 TowneBank 6,
Slide 9: Enhancing Our Presence in Key Markets
Enhancing Our Presence in Key Markets Virginia Deposits Market Rank Institution Branches ($mm) Share 1 Wells Fargo & Co. $24,074 15.12% 261 2 BB&T Corp. 23,464 14.74 300 3 Bank of America Corp. 17,676 11.10 126 4 SunTrust Banks Inc. 15,637 9.82 177 Pro Forma 11,567 7.27 146 5 Union Bankshares Corp.
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 $0 Loudon, VA Howard, MD Fairfax, VA Falls Church, San Mateo, CA Santa Clara, Hunterdon, NJ
Slide 14: Union's 2019 Strategic Priorities
Union’s 2019 Strategic Priorities Diversify Loan Portfolio Grow Core Manage to Higher Levels and Revenue Streams Funding of Performance Increase Commercial lending Fund loan growth with deposit Achieve and sustain top tier growth (Commercial & Industrial + growth; attain a 95% loan to financial perf
Slide 15: Brand Transition - A Unified Bank Brand Across All Markets
Brand Transition - A Unified Bank Brand Across All Markets On February 1, we announced that we are rebranding Union Bank & Trust to Atlantic Union Bank to reduce brand complexity and ensure recognition and clarity in the marketplace.1 Maintaining ‘Union’ in the new brand is key because it represents
Slide 16: Balance Sheet and Earnings Per Share Trends (GAAP)
Balance Sheet and Earnings Per Share Trends (GAAP) Loans Deposits ($M) ($M) 16% CAGR $9,716 15% CAGR $9,971 $7,142 $6,992 $6,307 $6,379 $5,346 $5,671 $5,639 $5,964 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Assets Earnings Per Share ($M) ($) $2.22 18% CAGR 17% CAGR $13,766 $1.77 $1.67 $1.49 $
Slide 17: Pro forma Balance Sheet and Operating Earnings Per Share Trends
Pro forma Balance Sheet and Operating Earnings Per Share Trends Loans(1) Deposits(1) ($M) ($M) $12,232 $11,873 15% CAGR 16% CAGR $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 Pro forma Access 2014 2015 2016 2017 2018 Pro forma Access Assets(1) Operati
Slide 18: Strong Track Record of Performance (GAAP)
Strong Track Record of Performance (GAAP) Return on Equity (ROE) Return on Assets (ROA) (%) (%) 1.11% 7.85% 7.79% 0.96% 7.07% 0.90% 6.76% 0.83% 5.30% 0.72% 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Efficiency Ratio (%) 73.1% 67.5% 65.8% 66.1% 63.6% 2014 2015 2016 2017 2018 Data as of or for
Slide 19: Strong Track Record of Performance (Non-GAAP)
Strong Track Record of Performance (Non-GAAP) Operating Return on Tangible Common Equity Operating Return on Assets (ROTCE)(1)(2) (1)(2) (ROA) 1.35% (%) (%) 17.35% 0.96% 0.95% 12.14% 12.24% 0.91% 11.11% 10.81% 0.90% 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Operating Efficiency Ratio (FTE)(1
Slide 20: 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 21: Solid Capital Position
Solid Capital Position Union – Capital Position as of 12/31/18 Post Access Pro forma Capital Position as of 12/31/18 TCE / TA1 8.8% TCE / TA1 9.0% CET1 Ratio 9.9% CET1 Ratio 10.2% Tier 1 Capital Ratio 11.1% Tier 1 Capital Ratio 10.2% Total Capital Ratio 12.9% Total Capital Ratio 12.7% Leverage Ratio
Slide 22: Capital Management
Capital Management Capital Management Capital Targets Priorities 1. Support Organic Growth • Union’s establishes capital targets based 2. Dividend payout ratio targeted at 35-40% on the following objectives: 3. Common Stock Repurchases • Maintain designation as a “well 4. Merger & acquisition activi
Slide 23: Diversified and Granular Loan Portfolio
Diversified and Granular Loan Portfolio Union Loan Composition at December 31, 2018 - $9.7 Billion Total Loan Portfolio CRE Composition - $4.4 Billion Composition by Type CRE Composition by Type Senior Other C&D 3% Non-Owner Living 13% Owner Occupied 4% Other Multifamily Occupied CRE 13% 31% 2% 31%
Slide 24: Attractive Core Deposit Base
Attractive Core Deposit Base Deposit Composition at December 31, 2018 - $10.0 Billion Deposit Base Characteristics Deposit Composition Savings Non- YTD Cost of deposits – 61 bps Jumbo 6% Interest Time Bearing (1) 3% 97% core deposits 21% 44% transactional accounts Retail Time 18% #1 in depos
Slide 25: Pro forma Loans and Deposit Portfolio
Pro forma Loans and Deposit Portfolio Pro forma Loan Composition at December 31, 2018 - $11.8 billion Union Access Pro forma1 Consumer C&D Non-Owner Consumer & Other 5.4% 13% Occupied HELOC 3.1% Other 1.2% C&D 5.0% HELOC 5.7% C&D 11.0% Other CRE 2% 31% Auto 2.5% 1-4 Family Consumer CRE - Owner 17.8%
Slide 26: Investment Thesis
Investment Thesis The Right The Right The Right The Right Scale Markets Team Targets • $16.8 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 27: Appendix
Appendix
Slide 28: 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 29: Reconciliation of Non-GAAP Disclosures: Tangible Common Equity
Reconciliation of Non-GAAP Disclosures Tangible Common Equity As of December 31, 2018 Shareholders’ equity (GAAP) $ 1,924,581 Less: Goodwill and Amortizable Intangibles 775,853 Tangible Shareholders’ equity (non-GAAP) $ 1,148,728 Assets (GAAP) $ 13,765,599 Less: Goodwill and Amortizable Intangibles
Slide 30: Reconciliation of Non-GAAP Disclosures: Operating Earnings Per Share
Reconciliation of Non-GAAP Disclosures Operating Earnings Per Share For the 12 Months Ended 3 Months Ended ($ IN THOUSANDS) 2014 2015 2016 2017 2018 6/30/2018 9/30/2018 12/31/2018 Net incom e (GAAP) $52,164 $67,079 $77,476 $72,923 $146,24 8 $47,327 $38,197 $44,085 Plus: Merger-relat e d costs, net o
Slide 31: Reconciliation of Non-GAAP Disclosures: Return on Assets
Reconciliation of Non-GAAP Disclosures Return on Assets (ROA) For the 12 Months Ended 3 Months Ended ($ IN THOUSANDS) 2014 2015 2016 2017 2018 6/30/2018 9/30/2018 12/31/2018 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 $13,218, 2 2 7 $12,947, 3 5 2 $13,538
Slide 32: Reconciliation of Non-GAAP Disclosures: Return on Tangible Common Equity
Reconciliation of Non-GAAP Disclosures Return on Tangible Common Equity (ROTCE) For the 12 Months Ended 3 Months Ended ($ IN THOUSANDS) 2014 2015 2016 2017 2018 6/30/2018 9/30/2018 12/31/2018 Average equity (GAAP) $983,72 7 $991,97 7 $994,78 5 $1,030,8 4 7 $1,863,2 1 6 $1,847,3 6 6 $1,880,5 8 2 $1,8
Slide 33: Reconciliation of Non-GAAP Disclosures: Efficiency Ratio
Reconciliation of Non-GAAP Disclosures Efficiency Ratio For the 12 Months Ended 3 Months Ended ($ IN THOUSANDS) 2014 2015 2016 2017 2018 6/30/2018 9/30/2018 12/31/2018 Noninterest expens e $222,41 9 $206,31 0 $213,09 0 $225,66 8 $337,76 7 $85,140 $76,349 $74,533 (GAAP) Less: Merger-rel at ed costs 2
Slide 34: Reconciliation of Non-GAAP Disclosures: Net Interest Margin
Reconciliation of Non-GAAP Disclosures Net Interest Margin For the 12 Months Ended ($ IN THOUSANDS) 2013 2014 2015 2016 2017 2018 6/30/2018 9/30/2018 12/31/2018 Net interest incom e $148,19 4 $253,21 3 $250,45 0 $263,96 6 $279,00 7 $426,69 1 $108,16 8 $105,96 3 $109,08 9 (GAAP) FTE adjustm ent 8,688
Union Bankshares — Investor Presentation (February 2019) on 6ix