Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Q1 2020 Earnings Presentation
23 slides from Atlantic Union Bankshares's earnings presentation, Apr 28, 2020
Slide 1: 1st Quarter 2020 Earnings Presentation
1st Quarter 2020 Earnings Presentation Nasdaq: AUB April 28, 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: 2020 Operating Environment – New Reality
2020 Operating Environment – New Reality 4 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, commu
Slide 5: 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 6: AUB’s PPP Loan Stratification Demonstrates a Focus on Serving Small Businesses
6 AUB’s PPP Loan Stratification Demonstrates a Focus on Serving Small Businesses Across Industries Paycheck Protection Program (PPP) Data as of April 16, 2020 Professional, Scientific, Technical Svcs 16% Construction 12% Health Care & Social Assistance 12% Other Svcs (ex Public) 11% Accommodation &
Slide 7: Loan Modifications as of April 24, 2020
Loan Modifications as of April 24, 2020 7 • ~$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 th
Slide 8: Asset Quality – COVID-19 Sensitive Loan Segments
Asset Quality – COVID-19 Sensitive Loan Segments 8 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 Energ
Slide 9: COVID-19 Sensitive Loan Segment Details
COVID-19 Sensitive Loan Segment Details1 9 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 bran
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: Q1’2020 Financial Performance At-a-Glance
Q1’2020 Financial Performance At-a-Glance 11 ▪ Net income of $7.1 million ($0.09 per share) is down significantly from the prior quarter due to the $57.3 million increase in the provision for credit losses compared to the previous quarter. The increase in the provision for credit losses is due to th
Slide 12: Q1 Allowance For Credit Loss (ACL) and Provision - CECL Impact
Q1 Allowance For Credit Loss (ACL) and Provision - CECL Impact 12 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 13: Q1’20 Net Interest Margin
13 Q1’20 Net Interest Margin Market Rates 1Q2020 4Q2019 EOP Avg EOP Avg Fed funds 0.25% 1.41% 1.75% 1.83% Prime 3.25% 4.42% 4.75% 4.83% 1-month Libor 0.99% 1.41% 1.76% 1.79% 2-year Treasury 0.25% 1.11% 1.57% 1.59% 10 - year Treasury 0.67% 1.39% 1.92% 1.79% Margin Overview 1Q2020 4Q2019 Net interest
Slide 14: Noninterest income declined modestly from the prior quarter
14 Noninterest income declined modestly from the prior quarter to $28.9 million from $29.2 million. ▪ Mortgage banking income was lower than prior quarter primarily due to hedging related results negatively impacted by COVID-19 market volatility more than offsetting higher origination volume. ▪ Fidu
Slide 15: Q1’2020 Loan & Deposit Growth
15 Q1’2020 Loan & Deposit Growth • Loans grew at an annualized rate of 5.0% in Q1 while the average loan yield declined by 7 basis points to 4.83% • Commercial loans grew 8.3% on an annualized basis led by strong growth across multiple commercial categories • Consumer loans declined ~10% annualized
Slide 16: Liquidity Position and Sources
Liquidity Position and Sources 16 • Strong liquidity metrics: ~$4 billion in cash, unpledged securities, and secured and unsecured borrowing capacity. Loans to Total Deposits Ratio of 94%. • Paycheck Protection Program loans of approximately $1.4 billion, as of April 16, 2020, are expected to be fun
Slide 17: Strong Capital Position at March 31, 2020
Strong Capital Position at March 31, 2020 17 Capital Ratio Regulatory Well Capitalized 1Atlantic Union Bankshares 1Atlantic Union Bank Common Equity Tier 1 Ratio (CET1) 7.0% 9.7% 11.7% Tier 1 Capital Ratio 8.5% 9.7% 11.7% Total Risk Based Capital Ratio 10.5% 12.4% 12.2% Leverage Ratio 5.0% 8.4% 10.1
Slide 18: Appendix
Appendix 7) Atlantic /4 Union Bankshares
Slide 19: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 19 ($ IN THOUSANDS) Operating Earnings Per Share For the 12 Months Ended 2016 2017 2018 2015 2014 2019 The Company has provided supplemental performance measures on a tax-equivalent, tangible, operating, or pre- tax pre-provision basis. These non-GAAP financial
Slide 20: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 20 ($ IN THOUSANDS) Operating Earnings Per Share For the 12 Months Ended 2016 2017 2018 2015 2014 2019 PRE-TAX PRE-PROVISION OPERATING EARNINGS For the three months ended (Dollars in thousands, except per share amounts) 1Q2020 4Q2019 Net income Net income (GAAP
Slide 21: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 21 ($ IN THOUSANDS) Operating Earnings Per Share For the 12 Months Ended 2016 2017 2018 2015 2014 2019 OPERATING EFFICIENCY RATIO For the three months ended (Dollars in thousands) 1Q2020 4Q2019 Noninterest expense (GAAP) $ 95,645 $ 94,318 Less: Merger-related c
Slide 22: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 22 ($ IN THOUSANDS) Operating Earnings Per Share For the 12 Months Ended 2016 2017 2018 2015 2014 2019 NET INTEREST MARGIN For the three months ended (Dollars in thousands) 1Q2020 4Q2019 Net interest income (GAAP) $ 135,008 $ 135,130 FTE adjustment 2,758 2,657
Slide 23: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 23 ($ IN THOUSANDS) Operating Earnings Per Share For the 12 Months Ended 2016 2017 2018 2015 2014 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:
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