Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Investor Presentation (November 2020)
35 slides from Atlantic Union Bankshares's investor presentation, Nov 6, 2020
Slide 1: Investor Presentation November – December 2020
Investor Presentation Nasdaq: AUB November – December 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 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 an analytical tool
Slide 4: Our Company
Our Company 4 Branch Footprint Data as of 9/30/2020, market capitalization as of 10/22/2020 (1) Regional bank defined as having less than $50 billion in assets; rank determined by asset size Assets Loans Deposits Market Capitalization $19.9 $14.4 $15.6 $2.3 • Largest regional banking company headqua
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 $5 billion Deposit data as of 6/30/2020; Fredericksburg market defined as Caroline, Fredericksburg City, King George, Spotsylvania and Stafford counties; all other markets per MSA def
Slide 6: Virginia's Bank
Virginia’s Bank 6 Virginia: All Banks Virginia: Banks Headquartered in VA Rank Institution Deposits ($mm) Market Share (%) Branches 1 Truist Financial Corp $48,832 23.8% 436 2 Wells Fargo & Co 33,337 16.2 250 3 Bank of America Corp. 21,769 10.6 121 4 Atlantic Union Bankshares Corp 15,360 7.5 128 5 T
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 6/30/20; 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
$149 $141 $138 $137 $135 $130 $130 $129 $126 $125 $0 $40 $80 $120 $160 Loudoun, VA Falls Church, VA Santa Clara, CA San Mateo, CA Marin, CA Somerset, NJ Arlington, VA Fairfax, VA Howard, MD Douglas, CO 6.9% 6.6% 6.0% 5.8% 5.8% 5.7% 5.4% 5.1% 5.0% 4.9% 0.0% 2.5% 5.0% 7.5% 10.0% Loudoun, VA New Kent,
Slide 10: 2020 Operating Environment – New Reality
2020 Operating Environment – New Reality 10 Soundness Profitability Growth AUB(135) AUB LPO (3) At September 30,2020 Assets $19.9B Loans $14.4B Deposits $15.6B Managing through COVID- 19 pandemic: • Pivoted to a new remote work and branch operating model • Focused on Teammates, clients, communities
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: Covid-19 Loan Modifications as of October 31, 2020
Covid-19 Loan Modifications as of October 31, 2020 12 • As of October 31, ~$403 million in loans are in some form of a COVID Modification of which 91% of the balances are Commercial loans. • ~$1.3 billion in Commercial loans rolled off their initial modification, • 50 clients totaling ~$86MM (~7% of
Slide 13: Asset Quality – COVID-19 Sensitive Loan Segments
Asset Quality – COVID-19 Sensitive Loan Segments 13 Note: Figures may not total to 100% due to rounding 1) Disrupted segment data as of September 30, 2020 Total Loan Portfolio $ 14.4 billion at September 30, 2020 Segments Disrupted by COVID-191: $2.7 Billion Portfolio Highlights No significant expos
Slide 14: COVID-19 Sensitive Loan Segment Details
COVID-19 Sensitive Loan Segment Details 14 Retail Trade: ~80% secured by real estate; 21% of clients in PPP Restaurants: Early modifications made; 85% secured by real estate; 24% of clients in PPP Senior Living: All clients have come off of modification Hotel: Primarily flagged non-resort hotel prop
Slide 15: Strong Capital and Liquidity Position at September 30, 2020
Strong Capital and Liquidity Position at September 30, 2020 15 Capital Ratio Regulatory Well Capitalized Atlantic Union Bankshares* Atlantic Union Bank* Common Equity Tier 1 Ratio (CET1) 7.0% 10.0% 12.0% Tier 1 Capital Ratio 8.5% 11.2% 12.0% Total Risk Based Capital Ratio 10.5% 13.9% 12.8% Leverage
Slide 16: Balance Sheet Trends (GAAP)
$7,693 $8,427 $9,315 $13,766 $17,563 $19,931 2015 2016 2017 2018 2019 3Q2020 $5,964 $6,379 $6,992 $9,971 $13,305 $15,576 2015 2016 2017 2018 2019 3Q2020 $5,671 $6,307 $7,142 $9,716 $12,611 $14,383 2015 2016 2017 2018 2019 3Q2020 Balance Sheet Trends (GAAP) 16 Loans ($MM) Deposits ($MM) Assets ($MM)
Slide 17: Strong Track Record of Performance (GAAP)
$1.49 $1.77 $1.67 $2.22 $2.41 $1.22 2015 2016 2017 2018 2019 1st 9 months 2020 6.76% 7.79% 7.07% 7.85% 7.89% 5.19% 2015 2016 2017 2018 2019 1st 9 months 2020 Strong Track Record of Performance (GAAP) prior to 2020 COVID-19 Impact 17 Data as of or for the twelve months ended each respective year, exc
Slide 18: Strong Track Record of Performance (Non-GAAP)
Strong Track Record of Performance (Non-GAAP) prior to 2020 COVID-19 Impact 18 Data as of or for the twelve months ended each respective year, except for the nine months ended September 30, 2020 (1) Non-GAAP financial measure; See reconciliation to most directly comparable GAAP measure in "Appendix
Slide 19: Credit Loss Trends (GAAP)
19 Provision for Credit Losses ($M) Provision for Credit Losses as % of Average Loans (%) Credit Loss Trends (GAAP) Net Charge-offs ($M) Net Charge-offs as % of Average Loans (%) Data as of or for the twelve months ended each respective year, except for the nine months ended September 30, 2020 $9,45
Slide 20: Credit Loss Trends Excluding Impact of PPP Loans (Non-GAAP)
20 Provision for Credit Losses ($M) Provision for Credit Losses as % of Average Loans (%)(1) Credit Loss Trends Excluding Impact of PPP loans (Non-GAAP) Net Charge-offs ($M) Net Charge-offs as % of Average Loans (%)(1) Data as of or for the twelve months ended each respective year, except for the ni
Slide 21: Q3 Allowance For Credit Loss and Provision for Credit Losses
Q3 Allowance For Credit Loss (ACL) and Provision for Credit Losses 21 Q3 Macroeconomic Forecast Q3 Additional Considerations Moody’s September Forecast • US GDP returns to pre-COVID levels in 2022. 2021 GDP forecasted at 3.5% growth relative to Moody’s June forecast of 1.6% for 2021. • US Unemployme
Slide 22: Strong Track Record of Pre-tax Pre-provision Performance (Non-GAAP)
22 PTPP Operating Earnings per Share Available to Common Shareholders, diluted (EPS) ($)(1) Strong Track Record of Pre-tax pre-provision (PTPP) Performance (Non-GAAP) PTPP Operating Return on Assets (ROA) (%)(1) PTPP Net Operating Earnings Available to Common Shareholders ($)(1) PTPP Operating Retur
Slide 23: 2020 Operating Environment – Adapting to the New Reality
2020 Operating Environment – Adapting to the New Reality 23 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 24: Appendix
Appendix 7) Atlantic /4 Union Bankshares
Slide 25: Atlantic Union's Long-Term Strategic Priorities
Atlantic Union’s Long-Term Strategic Priorities 25 • 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 26: Diversified and Granular Loan Portfolio
Diversified and Granular Loan Portfolio 26 Note: Figures may not total to 100% due to rounding Total Loan Portfolio $ 14.4 billion at September 30, 2020 Non-Owner Occupied CRE Composition - $4.2 Billion Total Portfolio Characteristics Duration Q3 2020 Weighted Average Yield (Tax Equivalent) 0.95 yea
Slide 27: Attractive Core Deposit Base
Attractive Core Deposit Base 27 (1) Core deposits defined as total deposits less jumbo time deposits Deposit Base Characteristics Deposit Composition at September 30, 2020 - $15.6 Billion • Q3 2020 Cost of deposits – 39 bps • 96% core deposits (1) • 50% transactional accounts Non-Interest Bearing, 2
Slide 28: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 28 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 a supplement to GAAP, which is used to prepare th
Slide 29: Reconciliation of Non-GAAP Disclosures: Operating Earnings & Financial Metrics
Reconciliation of Non-GAAP Disclosures 29 OPERATING EARNINGS & FINANCIAL METRICS For the years ended December 31, For the nine months ended (Dollars in thousands, except per share amounts) 2015 2016 2017 2018 2019 September 30, 2020 Net income Net income (GAAP) $ 67,079 $ 77,476 $ 72,923 $ 146,248 $
Slide 30: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 30 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 and income tax expense. The Company believes this
Slide 31: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 31 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 32: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 32 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 33: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 33 ($ IN THOUSANDS) Operating Earnings Per Share Paycheck Protection Program (PPP) 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
Slide 34: Paycheck Protection Program (PPP)
34 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 35: Paycheck Protection Program (PPP)
35 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
Atlantic Union Bankshares — Investor Presentation (November 2020) on 6ix