Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Q4 2020 Earnings Presentation
23 slides from Atlantic Union Bankshares's earnings presentation, Jan 26, 2021
Slide 1: 4th Quarter and FY2020 Earnings Presentation
4th Quarter and FY2020 Earnings Presentation Nasdaq: AUB January 26, 2021
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 are statements that include, without limitation, projections, predictions, expectati
Slide 3: Additional Information
Additional Information 3 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 disclosures have limitations as analytical tools an
Slide 4: 2020 Operating Environment
2020 Operating Environment 4 Soundness Profitability Growth At December 31,2020 Assets $19.6B Loans $14.0B Deposits $15.7B Managing through COVID- 19 pandemic: • Pivoted to a new remote work and branch operating model • Focused on Teammates, clients, communities and shareholders • SBA Paycheck Prote
Slide 5: Banking Differently
Banking Differently 5 Digital logins 38% from December 31, 2019 to December 31, 2020 Mobile check deposits 37% from December 31, 2019 to December 31, 2020 Zelle utilization 162% from December 31, 2019 to December 31, 2020 Card control active users 177% from April 1, 2020 to December 31, 2020 Q4 2020
Slide 6: Covid-19 Loan Modifications
Covid-19 Loan Modifications 6 • As of January 18, 2021 ~$132 million in loans, or 1% of the total loan portfolio excluding PPP loans, are in some form of a COVID Modification of which 89% of the balances are Commercial loans. • ~37% of the remaining commercial loan modifications as of January 18, 20
Slide 7: COVID-19 Sensitive Loan Segment Details
COVID-19 Sensitive Loan Segment Details 7 Total Portfolio as of December 31, 2020 Remaining Modifications as of January 18, 2021 Count Balance Exposure % of Total Loans Ex PPP Count Balance % of Portfolio Retail Trade 1,145 $ 548,747,439 $ 624,335,325 4.3% 3 $ 1,204,504 0.2% Restaurant 550 $ 213,284
Slide 8: 2020 Operating Environment – Adapting to the New Reality
2020 Operating Environment – Adapting to the New Reality 8 Soundness Profitability Growth During challenging times, it is important to remember our governing philosophy –“Soundness, Profitability, & Growth – in that order of priority” We believe this core philosophy is serving us well as we manage
Slide 9: Q4 2020 Financial Performance At-a-Glance
Q4 2020 Financial Performance At-a-Glance 9 Summarized Income Statement 4Q2020 3Q2020 Net interest income $ 145,604 $ 137,381 Provision for credit losses (13,813) 6,558 Noninterest income 32,241 34,407 Noninterest expense 121,668 93,222 Taxes 10,560 11,008 Net income (GAAP) 59,430 61,000 - Gain on s
Slide 10: Q4 Allowance For Credit Loss (ACL) and Provision for Credit Losses
Q4 Allowance For Credit Loss (ACL) and Provision for Credit Losses 10 Q4 Macroeconomic Forecast Q4 Additional Considerations Moody’s December Forecast • US GDP returns to pre-COVID levels in Q3 2021 and averages 4.1% in 2021 followed by 4.7% in 2022. The unemployment rate averages 6.9% in 2021 and e
Slide 11: Total Loan Yield and Q4 2020 Net Interest Margin
Total Loan Yield 11 Q4 2020 Net Interest Margin Market Rates 4Q2020 3Q2020 EOP Avg EOP Avg Fed funds 0.25% 0.25% 0.25% 0.25% Prime 3.25% 3.25% 3.25% 3.25% 1-month Libor 0.14% 0.15% 0.15% 0.16% 2-year Treasury 0.12% 0.15% 0.13% 0.14% 10 - year Treasury 0.91% 0.85% 0.69% 0.65% Margin Overview 4Q2020 3
Slide 12: Noninterest Income
12 Noninterest income decreased from the prior quarter to $32.2 million from $34.4 million due to: .. An increase in service charges on deposit accounts of $661,000 due to higher overdraft volumes .. A decrease of $1.4 million in Bank owned life insurance income due to death benefit proceeds receive
Slide 13: Q4 2020 Loan and Deposit Growth
13 Q4 2020 Loan and Deposit Growth For non-GAAP financial measures, see reconciliation to most directly comparable GAAP measures in “Appendix – Reconciliation of Non-GAAP Disclosures” • At quarter end, loans held for investment decreased $361.9 million or 10% (annualized) from the prior quarter driv
Slide 14: Strong Liquidity Position and Multiple Sources of Liquidity
Strong Liquidity Position and Multiple Sources of Liquidity 14 • Strong liquidity metrics: ~$7.6 billion in cash, unpledged securities, and secured and unsecured borrowing capacity as of December 31, 2020. Loans to Total Deposits Ratio of 89% at December 31, 2020 • Paycheck Protection Program loans
Slide 15: Strong Capital Position at December 31, 2020
Strong Capital Position at December 31, 2020 15 Capital Ratio Regulatory Well Capitalized Atlantic Union Bankshares* Atlantic Union Bank* Common Equity Tier 1 Ratio (CET1) 7.0% 10.3% 12.4% Tier 1 Capital Ratio 8.5% 11.4% 12.4% Total Risk Based Capital Ratio 10.5% 14.0% 13.1% Leverage Ratio 5.0% 8.9%
Slide 16: Appendix
Appendix 7) Atlantic /4 Union Bankshares
Slide 17: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 17 Operating Earnings Per Share 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 supplements to GAAP, which is used to prepare th
Slide 18: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 18 Operating Earnings Per Share Adjusted operating measures exclude the after-tax effect of merger and rebranding-related costs unrelated to the Company’s normal operations. In addition, adjusted operating measures now exclude the gains or losses related to bal
Slide 19: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 19 Operating Earnings Per Share Pre-tax pre-provision adjusted earnings excludes the provision for credit losses, which can fluctuate significantly from period-to-period under the recently adopted CECL methodology, merger and rebranding-related costs, income ta
Slide 20: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 20 Operating Earnings Per Share The adjusted operating efficiency ratio (FTE) excludes the amortization of intangible assets, merger and rebranding-related costs and gains or losses related to balance sheet repositioning (principally composed of gains and losse
Slide 21: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 21 Operating Earnings Per Share Net interest income (FTE), which is used in computing net interest margin (FTE), provides valuable additional insight into the net interest margin by adjusting for differences in tax treatment of interest income sources. The enti
Slide 22: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 22 Operating Earnings Per Share Tangible common equity is used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible common equity and the related ratios are meaningful measures of capital adequacy because the
Slide 23: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 23 ($ IN THOUSANDS) Operating Earnings Per Share PPP adjustment impact excludes the SBA guaranteed loans funded during 2020. The Company believes loans held for investment (net of deferred fees and costs), excluding PPP is useful to investors as it provides mor
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