Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Investor Presentation (September 2020)
35 slides from Atlantic Union Bankshares's investor presentation, Sep 9, 2020
Slide 1: Investor Presentation August – September 2020
Investor Presentation Nasdaq: AUB August – September 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 Financial Information This presentation contains financial information about the Company as of June 30, 2020 and the Company’s COVID-19 loan modification program as of August 28, 2020. Nothing contained in this presentation shall imply that the information contained herein w
Slide 4: Our Company
Our Company 4 Branch Footprint Data as of 6/30/2020, market capitalization as of 7/28/2020 (1) Regional bank defined as having less than $50 billion in assets; rank determined by asset size Assets Loans Deposits Market Capitalization $19.8 $14.3 $15.6 $2.0 • Largest regional banking company headquar
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 – Adapting to the New Reality
2020 Operating Environment – Adapting to the New Reality 10 Soundness Profitability Growth AUB(149) AUB LPO (3) At June 30,2020 Assets $19.8B Loans $14.3B Deposits $15.6B Managing through COVID- 19 coronavirus pandemic: • Pivoted to a new remote work and branch operating model • Focused on Teammates
Slide 11: 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 12: Paycheck Protection Program (PPP)
12 Paycheck Protection Program (PPP) • AUB had 11.1% of dollar share for VA loans, compared to deposit market share of 7% • AUB effectively shared the top spot for number of PPP loans originated in VA and was #1 among VA headquartered banks • AUB had nearly twice the count as the nearest VA headquar
Slide 13: Paycheck Protection Program (PPP)
13 Paycheck Protection Program (PPP) Note: Virginia branches: AUB 140 Truist 445 Italics indicates a VA HQ'd Lender Rank Lender Count of Loans % of Total 1 Truist Bank 10,203 9.3% 2 Atlantic Union Bank 10,197 9.3% 3 Bank of America, National Association 8,487 7.8% 4 Wells Fargo Bank, National Associ
Slide 14: Covid-19 Loan Modifications as of August 28, 2020
Covid-19 Loan Modifications as of August 28, 2020 14 • As of August 28, ~$851 million in loans are in some form of a COVID Modification of which 92% of the balances are Commercial loans. • ~$828MM in Commercial loans rolled off their initial modification, • 42 clients totaling ~$80MM (~10% of dollar
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 June 30, 2020 Total Loan Portfolio $ 14.3 billion at June 30, 2020 Segments Disrupted by COVID-191: $2.3 Billion Portfolio Highlights No significant exposure to Ene
Slide 16: COVID-19 Sensitive Loan Segment Details
COVID-19 Sensitive Loan Segment Details 16 Retail Trade: ~50% of total exposure is convenience stores/gas or auto dealer, ~80% secured by real estate; 20% of clients in PPP Restaurants: Early modifications made; 85% secured by real estate; 25% of clients in PPP Senior Living: Significant liquidity a
Slide 17: Strong Capital and Liquidity Position at June 30, 2020
Strong Capital and Liquidity Position at June 30, 2020 17 Capital Ratio Regulatory Well Capitalized Atlantic Union Bankshares* Atlantic Union Bank* Common Equity Tier 1 Ratio (CET1) 7.0% 9.8% 11.7% Tier 1 Capital Ratio 8.5% 11.0% 11.7% Total Risk Based Capital Ratio 10.5% 13.7% 12.5% Leverage Ratio
Slide 18: Balance Sheet Trends (GAAP)
$5,671 $6,307 $7,142 $9,716 $12,611 $14,309 2015 2016 2017 2018 2019 2Q2020 Balance Sheet Trends (GAAP) 18 Loans ($MM) Deposits ($MM) Assets ($MM) Data as of or for the twelve months ended each respective year and for the six months June 30, 2020 22% CAGR 23% CAGR 23% CAGR $5,964 $6,379 $6,992 $9,97
Slide 19: Strong Track Record of Performance (GAAP)
Strong Track Record of Performance (GAAP) prior to 2020 COVID-19 Impact 19 Data as of or for the twelve months ended each respective year, except for the first six months of 2020 Return on Assets (ROA) (%) Return on Equity (ROE) (%) Efficiency Ratio (%) Earnings Per Share ($) $1.49 $1.77 $1.67 $2.22
Slide 20: Strong Track Record of Performance (Non-GAAP)
$1.49 $1.77 $1.91 $2.71 $2.75 $0.48 2015 2016 2017 2018 2019 1H 2020 Strong Track Record of Performance (Non-GAAP) prior to 2020 COVID-19 Impact 20 Data as of or for the twelve months ended each respective year, except for the six months ended June 30, 2020 (1) Non-GAAP financial measure; See reconc
Slide 21: Credit Loss Trends (GAAP)
21 Provision for Credit Losses ($M) Provision for Loan Losses as % of Loans (%) Credit Loss Trends (GAAP) Net Charge-offs ($M) Net Charge-offs as % of Loans (%) Data as of or for the twelve months ended each respective year, except for the six months ended June 30, 2020 0.17% 0.15% 0.17% 0.15% 0.19%
Slide 22: Credit Loss Trends Excluding impact of PPP loans (Non-GAAP)
22 Provision for Credit Losses ($M) Provision for Loan Losses as % of Loans (%)1 Credit Loss Trends Excluding impact of PPP loans (Non-GAAP) Net Charge-offs ($M) Net Charge-offs as % of Loans (%) 1 Data as of or for the twelve months ended each respective year, except for the six months ended June 3
Slide 23: Q2 Allowance For Credit Loss (ACL) and Provision for Credit Losses
Q2 Allowance For Credit Loss (ACL) and Provision for Credit Losses 23 Q2 Macroeconomic Forecast Q2 Additional Considerations Regulatory Capital Treatment Moody’s June Forecast • US GDP -33% in Q2; US Unemployment Rate peaks near 14% in Q2 and falls to 9.5% by Q4 2020. • Virginia Unemployment peaks a
Slide 24: Strong Track Record of Pre-tax pre-provision (PTPP) Performance (Non-GAAP)
24 PTPP Operating Earnings per Share (EPS) ($)(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 25: 2020 Operating Environment – Adapting to the New Reality
2020 Operating Environment – Adapting to the New Reality 25 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 Compa
Slide 26: Appendix
Appendix 7) Atlantic /4 Union Bankshares
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 $ 14.3 billion at June 30, 2020 Non-Owner Occupied CRE Composition - $4.2 Billion Total Portfolio Characteristics Duration Q2 2020 Weighted Average Yield (Tax Equivalent) 1.0 years 4.1
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 $10 billion in assets Deposit Base Characteristics Deposit C
Slide 30: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 30 Operating Earnings Per Share The Company has provided supplemental performance measures on a tax-equivalent, tangible, operating, or pre- tax pre-provision basis. These non-GAAP financial measures are a supplement to GAAP, which is used to prepare the Compan
Slide 31: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 31 Operating measures exclude merger and rebranding-related costs unrelated to the Company’s normal operations. The Company believes these measures are useful to investors as they exclude certain costs resulting from acquisition activity and allow investors to
Slide 32: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 32 Operating Earnings Per Share The operating efficiency ratio (FTE) excludes the amortization of intangible assets and merger-related costs. This measure is similar to the measure utilized by the Company when analyzing corporate performance and is also similar
Slide 33: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 33 Operating Earnings Per Share Pre-tax pre-provision (PTPP) earnings excludes the provision for credit losses, which can fluctuate significantly from period-to- period under the recently adopted CECL methodology, merger and rebranding-related costs unrelated t
Slide 34: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 34 Operating Earnings Per Share Tangible common equity is used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible common equity and the related ratios are meaningful measures of capital adequacy because the
Slide 35: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 35 ($ IN THOUSANDS) Operating Earnings Per Share Paycheck Protection Program adjustment excludes the SBA guaranteed loans funded during the first half of 2020. The Company believes loans held for investment (net of deferred fees and costs), excluding PPP is use
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