Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Investor Presentation (June 2020)
33 slides from Atlantic Union Bankshares's investor presentation, Jun 10, 2020
Slide 1: Investor Presentation May – June 2020
Investor Presentation Nasdaq: AUB May – June 2020
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 Unaudited Pro Forma Financial Information Any unaudited pro forma financial information included in, or discussed in connection with this presentation, is presented for informational purposes only and does not necessarily reflect the financial results of the combined company
Slide 4: Our Company
Our Company 4 Branch Footprint Data as of 3/31/2020, market capitalization as of 5/4/2020 (1) Regional bank defined as having less than $50 billion in assets; rank determined by asset size Assets Loans Deposits Market Capitalization $17.8 $12.8 $13.6 $1.8 • Largest regional banking company headquart
Slide 5: Our Markets - Diversity Supports Growth In Virginia
Richmond Our Markets - Diversity Supports Growth In Virginia 5 Source: SNL Financial; excludes branches greater than $5 billion Deposit data as of 6/30/19; Fredericksburg market defined as Caroline, Fredericksburg City, King George, Spotsylvania and Stafford counties; all other markets per MSA defin
Slide 6: Virginia's Bank
Virginia’s Bank 6 Virginia: All Banks Virginia: Banks Headquartered in VA Rank Institution Deposits ($mm) Market Share Branches 1 Truist Financial Corp $43,724 25.1% 445 2 Wells Fargo & Co 28,636 16.4 254 3 Bank of America Corp. 18,276 10.5 120 4 Atlantic Union Bankshares Corp 12,169 7.0 140 5 Towne
Slide 7: Our Presence in Key Markets
Our Presence in Key Markets 7 Source: S&P Global Market Intelligence Note: Deposit data excludes branches with deposits greater than $5 billion Deposit data as of 6/30/19; pro forma for announced transactions and AUB branch closings (1) Northern Virginia includes only the Virginia branches of the Wa
Slide 8: Among The Most Attractive Markets in USA
Among The Most Attractive Markets in USA 8 Fortune 500 Companies # State # Companies 1 New York 54 2 California 53 3 Texas 50 4 Illinois 37 5 Ohio 27 6 Virginia 22 7 Pennsylvania 22 8 Florida 18 9 Georgia 18 10 New Jersey 17 11 Michigan 17 12 Massachusetts 17 13 Minnesota 16 14 Connecticut 13 15 Ten
Slide 9: Virginia Market Highlights
7.9% 7.2% 6.9% 6.9% 6.7% 6.3% 6.2% 6.0% 6.0% 5.7% 0.0% 2.5% 5.0% 7.5% 10.0% Loudoun, VA New Kent, VA Manassas Park, VA (City) Falls Church, VA (City) Fredericksburg, VA (City) Stafford, VA Prince William, VA Arlington, VA Alexandria, VA (City) James City, VA $145 $131 $127 $124 $124 $123 $123 $123 $
Slide 10: 2020 Operating Environment – New Reality
2020 Operating Environment – New Reality 10 Soundness Profitability Growth During challenging times, it is important to remember our governing philosophy –“Soundness, Profitability, & Growth – in that order of priority” ➢ This core philosophy is serving us well as we manage the Company through the c
Slide 11: 2020 Operating Environment – New Reality
2020 Operating Environment – New Reality 11 Soundness Profitability Growth AUB(149) AUB LPO (3) At March 31,2020 Assets $17.8B Loans $12.8B Deposits $13.6B Managing through COVID- 19 coronavirus pandemic: • Pivoted to a new remote work and branch operating model • Focused on Teammates, clients, comm
Slide 12: Holistic Response to Covid-19
Teammates • 90% of non-branch Teammates are working remotely • Recognition bonuses for eligible Teammates • Continuing to pay Teammates that have potential exposure • COVID-19 related testing and treatment is free under medical plans • Extra cleaning and protective measures put in place • Educate Te
Slide 13: AUB's PPP Loan Stratification Demonstrates a Focus on Serving Small Businesses
13 AUB’s PPP Loan Stratification Demonstrates a Focus on Serving Small Businesses Across Industries Paycheck Protection Program (PPP) Data as of May 3, 2020 Note: Figures may not total to 100% due to rounding • Atlantic Union Bank represented more than 15% of all SBA PPP loan approvals in Virginia b
Slide 14: Loan Modifications as of April 24, 2020
Loan Modifications as of April 24, 2020 14 • ~$1.9 Billion/4,000 Loans have been granted some form of COVID-19 Hardship Relief • ~75% of the COVID-19 hardship relief balances and ~91% of the modified loan count are in the form of a P&I payment deferral, which range from 60 to 180 days depending on t
Slide 15: Asset Quality – COVID-19 Sensitive Loan Segments
Asset Quality – COVID-19 Sensitive Loan Segments 15 Note: Figures may not total to 100% due to rounding 1) Disrupted segment data as of April 24, 2020 Total Loan Portfolio $ 12.8 billion at March 31, 2020 Segments Disrupted by COVID-191: $2.2 Billion Portfolio Highlights No material exposure to Ener
Slide 16: COVID-19 Sensitive Loan Segment Details
COVID-19 Sensitive Loan Segment Details1 16 Retail Trade: ~50% of exposure is convenience stores/gas or auto dealer, ~80% secured by real estate; 7% of clients in PPP Restaurants: Early modifications made; 85% secured by real estate; 10% of clients in PPP Senior Living: Significant liquidity and bra
Slide 17: Strong Capital and Liquidity Position at March 31, 2020
Strong Capital and Liquidity Position at March 31, 2020 Liquidity Sources (March 31, 2020) Amount ($mm) Total Cash and Cash Equivalents $505 Unpledged Investment Securities (market value) $1,053 FHLB Borrowing Availability $1,847 Fed Discount Window Availability $240 Fed Funds Lines $787 Line of Cre
Slide 18: Balance Sheet Trends (GAAP)
$5,671 $6,307 $7,142 $9,716 $12,611 $12,769 2015 2016 2017 2018 2019 1Q2020 $7,693 $8,427 $9,315 $13,766 $17,563 $17,847 2015 2016 2017 2018 2019 1Q2020 $5,964 $6,379 $6,992 $9,971 $13,305 $13,553 2015 2016 2017 2018 2019 1Q2020 Balance Sheet Trends (GAAP) 18 Loans ($MM) Deposits ($MM) Assets ($MM)
Slide 19: Strong Track Record of Performance (GAAP)
Strong Track Record of Performance (GAAP) prior to 2020 COVID-19 Impact 19 Data as of or for the twelve months ended each respective year, except for the three months ended March 31, 2020 Return on Assets (ROA) (%) Return on Equity (ROE) (%) Efficiency Ratio (%) Earnings Per Share ($) $1.49 $1.77 $1
Slide 20: Strong Track Record of Performance (Non-GAAP)
Strong Track Record of Performance (Non-GAAP) prior to 2020 COVID-19 Impact 20 Data as of or for the twelve months ended each respective year, except for the three months ended March 31, 2020 (1) Non-GAAP financial measure; See reconciliation to most directly comparable GAAP measure in "Appendix --
Slide 21: Credit Loss Trends (Non-GAAP)
21 Provision for Credit Losses ($M) Provision for Credit Losses as % of Loans (%) Credit Loss Trends (Non-GAAP) Net Charge-offs ($M) Net Charge-offs as % of Loans (%) Data as of or for the twelve months ended each respective year, except for the three months ended March 31, 2020 $9,450 $8,883 $10,80
Slide 22: Q1 Allowance For Credit Loss (ACL) and Provision - CECL Impact
Q1 Allowance For Credit Loss (ACL) and Provision - CECL Impact 22 Q1 Macroeconomic Forecast Q1 Additional Considerations Regulatory Capital Treatment • Moody’s March 27 Forecast •US GDP -18% in Q2; UR peak near 9% • Virginia Unemployment peaks near 6.5%; hovers near 5.0% for remainder of forecast ho
Slide 23: Strong Track Record of PTPP Performance (Non-GAAP)
23 PTPP Operating Earnings per Share (EPS) ($)(1) Strong Track Record of Pre-tax pre-provision (PTPP) Performance (Non-GAAP) PTPP Operating Return on Assets (ROA) (%)(1) PTPP Operating Earnings ($)(1) PTPP Operating Return on Tangible Common Equity (ROTCE) (%)(1) Data as of or for the twelve months
Slide 24: Long Term Financial Targets – Post COVID-19 Economic Recovery
Long Term Financial Targets – Post COVID-19 Economic Recovery 24 ROTCE ROA Efficiency Ratio (FTE) 1.2% - 1.4% 15% - 17% < 53% Atlantic Union is committed to achieving top tier financial performance and providing our shareholders with above average returns on their investment Key financial performanc
Slide 25: Appendix
Appendix 7) Atlantic /4 Union Bankshares
Slide 26: Investment Highlights
Investment Highlights 26 The Right Scale The Right Markets The Right Team The Right Targets • Largest Virginia headquartered regional banking company ($17.8 billion in assets) •#1 deposit market share ranking in Virginia among Virginia-based banks(1) • Operating with a statewide Virginia footprint o
Slide 27: Atlantic Union's Long-Term Strategic Priorities
Atlantic Union’s Long-Term Strategic Priorities 27 • Increase Commercial lending growth (Commercial & Industrial + Owner Occupied Real Estate) in order to better balance the total loan portfolio over time • Grow fee-based products and services Diversify Loan Portfolio and Revenue Streams • Fund loan
Slide 28: Diversified and Granular Loan Portfolio
Diversified and Granular Loan Portfolio 28 Note: Figures may not total to 100% due to rounding Total Loan Portfolio $ 12.8 billion at March 31, 2020 Non-Owner Occupied CRE Composition - $4.0 Billion Total Portfolio Characteristics Duration Q1 2020 Weighted Average Yield (Tax Equivalent) 1.1 years 4.
Slide 29: Attractive Core Deposit Base
Attractive Core Deposit Base 29 (1) Core deposits defined as total deposits less jumbo time deposits Regional bank defined as having less than $50 billion in assets; rank determined by asset size. Community bank defined as having less than $10 billion in assets Deposit Base Characteristics Deposit C
Slide 30: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 30 Tangible Common Equity As of December 31, 2019 TANGIBLE COMMON EQUITY As of March 31, 2020 (Dollars in thousands) Atlantic Union Bankshares Atlantic Union Bank Assets (GAAP) $ 17,847,376 $ 17,801,873 Less: Intangible assets 1,004,858 1,004,858 Tangible asset
Slide 31: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 31 ($ IN THOUSANDS) Operating Earnings Per Share For the 12 Months Ended 2016 2017 2018 2015 2014 2019 Operating measures exclude merger and rebranding-related costs unrelated to the Company’s normal operations. The Company believes these measures are useful to
Slide 32: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 32 ($ IN THOUSANDS) 2015 For the 12 Months Ended 2014 Return on Asset (ROA) 2016 2017 2018 2019 Pre-tax pre-provision (PTPP) earnings excludes the provision for credit losses, which can fluctuate significantly from period-to-period under the recently adopted CE
Slide 33: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 33 ($ IN THOUSANDS) For the 12 Months Ended 2015 2014 2016 2017 2018 2019 The operating efficiency ratio (FTE) excludes the amortization of intangible assets and merger-related costs. This measure is similar to the measure utilized by the Company when analyzing
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