Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Q2 2023 Earnings Presentation
27 slides from Atlantic Union Bankshares's earnings presentation, Jul 25, 2023
Slide 1: 2nd Quarter 2023 Earnings Presentation
2nd Quarter 2023 Earnings Presentation NYSE: AUB July 25, 2023
Slide 2: Forward Looking Statements
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 entit
Slide 3: Additional Information
Additional Information Non-GAAP Financial Measures No Offer or Solicitation This presentation contains certain financial information determined by methods other This presentation does not constitute an offer to sell or a solicitation of an offer to buy than in accordance with generally accepted acco
Slide 4: Our Company
Our Company Soundness | Profitability | Growth Highlights ($bn) Branch/Office Footprint AUB (109) • Statewide Virginia footprint of 104 AUB LPO (2) $ 20.6 $ 15.1 branches in all major markets AUB Equipment Finance Headquarters (1) Assets Loans • #1 regional bank1 deposit market share in Virginia • S
Slide 5: Our Shareholder Value Proposition
Leading Regional Presence Dense, uniquely valuable presence across attractive markets Our Shareholder Value Proposition Attractive Financial Profile Financial Strength Solid dividend yield Solid balance sheet & payout ratio with & capital levels earnings upside Peer-Leading Strong Growth Performance
Slide 6: Q2 2023 Highlights and 2023 Outlook
Q2 2023 Highlights and 2023 Outlook Loan and Deposit Growth Operating Leverage Focus Positioning for Long Term • Relatively flat deposit balances quarter • ~4.9% adjusted revenue growth1 year • Lending pipelines remain resilient over quarter over year • No material deposit run-off to larger • 13.3%
Slide 7: Loan and Deposit Betas
Loan and Deposit Betas Total Loan Beta1 Deposit Mix Shift 42% 44% $16,129 $16,456 $16,412 39% 34% 5.35% 5.62% 2Q 2023 Highlights 4.90% 26% 4.20% 67% 3.67% 72% 74% • Total deposits relatively flat from Q1 2023 • Mix shift into higher costing deposit 33% 28% 26% products and higher deposit betas drove
Slide 8: Q2 2023 Financial Performance At-a-Glance
• Net income available to common shareholders for the second quarter Q2 2023 Financial Performance At-a-Glance of 2023 was $52.3 million or $0.70 per share, up $19.6 million or $0.26 per share compared to the prior quarter. The results were driven by: • An increase in noninterest income, primarily d
Slide 9: Q2 2023 Allowance For Credit Loss and Provision for Credit Losses
Q2 2023 Allowance For Credit Loss (ACL) and Provision for Credit Losses Q2 Macroeconomic Forecast Allowance for Loan Reserve for Unfunded Allowance for Moody’s June 2023 Baseline Forecast: & Lease Losses Commitments Credit Losses • US GDP expected to average ~1.6% growth in 12/31/2022 $111MM $14MM $
Slide 10: Q2 2023 Net Interest Margin
Q2 2023 Net Interest Margin Margin Overview Market Rates 2Q2023 1Q2023 2Q2023 1Q2023 Net interest margin (FTE)1 3.45% 3.50% EOP Avg EOP Avg Loan yield 5.62% 5.35% Fed funds 5.25% 5.16% 5.00% 4.69% Investment yield 3.32% 3.34% Prime 8.25% 8.16% 8.00% 7.69% Earning asset yield 5.19% 4.92% 1-month LIBO
Slide 11: Q2 2023 Noninterest Income and Noninterest Expense
Q2 2023 Noninterest Income and Noninterest Expense Noninterest Income Noninterest Expense ($ thousands) 2Q2023 1Q2023 ($ thousands) 2Q2023 1Q2023 Service charges on deposit accounts $ 8,118 $ 7,902 Salaries and benefits $ 62,019 $ 60,529 Other service charges, commissions and fees 1,693 1,746 Occupa
Slide 12: Q2 2023 Loan and Deposit Growth
Q2 2023 Loan and Deposit Growth QTD Annualized Loan Growth ($ thousands) 2Q2023 1Q2023 Growth • At June 30, 2023, loans held for investment (net of deferred fees and Commercial & Industrial $ 3,373,148 $ 3,082,478 37.8% costs) totaled $15.1 billion, an increase of $482.7 million or 13.3% Commercial
Slide 13: Strong Capital Position at June 30, 2023
Strong Capital Position at June 30, 2023 Proforma including AOCI and Reported Regulatory HTM unrealized losses Capital Management Strategy Well Capitalized Atlantic Union Atlantic Atlantic Union Atlantic Union Atlantic Union capital management Capital Ratio Minimums Bankshares Union Bank Bankshares
Slide 14: Liquidity Position at June 30, 2023
Liquidity Position at June 30, 2023 Total Liquidity Sources of $5.8 billion ~133% liquidity coverage ratio of uninsured/uncollateralized deposits of $4.3 billion ($ in millions) Discount Window (ex-Bank Term Funding Program) Fed Funds Lines $300 $907 Discount Window – Bank Term Funding Program $539
Slide 15: Securities Portfolio at June 30, 2023
Securities Portfolio at June 30, 2023 • Total securities portfolio of $3.0 billion with a total unrealized loss of $491.9 million Investment Securities Balances • 72% of total portfolio in available-for-sale at (in millions) an unrealized loss of $450.1 million Total AFS (fair value) and HTM (carryi
Slide 16: Financial Outlook
Financial Outlook1 Full Year 2023 Outlook versus FY 2022 1Key Economic Assumptions Loan Growth Mid-single digits growth • Stabilizing Interest Rate environment Net Interest Income (FTE) Growth Mid-single digits growth • The Federal Reserve Bank fed funds rate increases to 5.50% and holds there for t
Slide 17: Appendix
Appendix d Atlantic Union Bankshares
Slide 18: Granular Deposit Base
Granular Deposit Base Customer Deposit Granularity Top 15 Commercial Deposits by NAICS as of 6/30/2023 NAICS Code/Title % of Total Deposits 52 - Finance and Insurance 8.7% $102,000 $99,000 $98,000 54 - Professional, Scientific, and Technical Services 6.2% 53 - Real Estate and Rental and Leasing 6.0%
Slide 19: Non-Owner-Occupied CRE Portfolio as of June 30, 2023
Non-Owner-Occupied CRE Portfolio as of June 30, 2023 Non-Owner Occupied Office CRE Non-Owner- 5.2% Occupied Non-Office CRE 27.4% Non-Owner-Occupied CRE By Type $ in millions Total Outstandings % of Portfolio Multi Family $789 5.2% $15.1B Retail $859 5.7% Hotel/Motel B&B $747 5.0% Total Office $781 5
Slide 20: Non-Owner-Occupied Office CRE Portfolio as of June 30, 2023
Non-Owner-Occupied Office CRE Portfolio as of June 30, 2023 Medical vs Other Office Geographically Diverse Non-Owner Non Owner-Occupied Office Medical Offices Occupied Office Portfolio Portfolio Credit Quality 23% By Market ($ millions) Key Portfolio Metrics Carolinas $231 Avg. Office Loan ($ millio
Slide 21: Reconciliation of Non-GAAP Disclosures
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 statement
Slide 22: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures ADJUSTED OPERATING EARNINGS, OPERATING LEVERAGE, AND EFFICIENCY RATIO For the three months ended 2Q23% Change (Dollars in thousands, except per share amounts) 2Q2023 1Q2023 2Q2022 QoQ YoY Adjusted operating measures exclude, as applicable, strategic cost saving
Slide 23: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures The Company believes net interest income (FTE), NET INTEREST MARGIN total revenue (FTE), and total adjusted revenue (FTE), which are used in computing net interest For the three months ended margin (FTE), efficiency ratio (FTE) and adjusted (Dollars in thousand
Slide 24: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures TANGIBLE ASSETS, TANGIBLE COMMON EQUITY, AND LEVERAGE RATIO As of June 30, 2023 Atlantic Union Tangible assets and tangible common equity are (Dollars in thousands, except share data) Bankshares Atlantic Union Bank used in the calculation of certain profitabili
Slide 25: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures RISK-BASED CAPITAL RATIOS All regulatory capital ratios at June 30, 2023 are estimates and subject to change pending the As of June 30, 2023 Company’s filing of its FR Y-9 C. In addition to Atlantic Union Atlantic Union these regulatory capital ratios, the Comp
Slide 26: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures OPERATING MEASURES For the three months ended Tangible assets and tangible common equity are used in the calculation of certain profitability, capital, (Dollars in thousands) 2Q2023 1Q2023 2Q2022 and per share ratios. The Company believes Return on average asse
Slide 27: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures Pre-tax pre-provision adjusted earnings excludes, PRE-TAX PRE-PROVISION ADJUSTED OPERATING EARNINGS as applicable, the provision for credit losses, For the three months ended which can fluctuate significantly from period-to- (Dollars in thousands) 2Q2023 1Q2023
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