Atlantic Union Bankshares Corporation · NYSE:AUB
Atlantic Union Bankshares — Q2 2021 Earnings Presentation
25 slides from Atlantic Union Bankshares's earnings presentation, Jul 22, 2021
Slide 1: 2nd Quarter FY2021 Earnings Presentation
2nd Quarter FY2021 Earnings Presentation Nasdaq: AUB July 22, 2021
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, projections, predictions, expectations, or beliefs abou
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 analytical tools an
Slide 4: 2021 Operating Environment
2021 Operating Environment 4 Soundness Profitability Growth At June 30,2021 Assets $20.0B Loans $13.7B Deposits $16.7B Managed through COVID-19 pandemic: • Pivoted to a new remote work and branch operating model • Focused on Teammates, clients, communities and shareholders • SBA Paycheck Protection
Slide 5: 2021 Operating Environment – Managing through the Pandemic
2021 Operating Environment – Managing through the Pandemic 5 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 Comp
Slide 6: Core Values Refined
Core Values Refined 6 CARING Working together toward common goals, acting with kindness, respect and a genuine concern for others. COURAGEOUS Speaking openly, honestly and accepting our challenges and mistakes as opportunities to learn and grow. COMMITTED Driven to help our clients, Teammates and co
Slide 7: Customer Experience Successes
Customer Experience Successes 7 AUB Overall (Verint/Foresee) 2019 2020 YOY Overall Satisfaction 86 87 +1 Recommend AUB 85 87 +2 Increase Business 84 86 +2 Make Banking Easy 87% 88% +1% Net Promoter Score(NPS) 57 61 +4 Atlantic Union Bank is ranked #1 in Customer Satisfaction with Consumer Banking in
Slide 8: Excellence in Small Business Banking
Excellence in Small Business Banking 8 2020 Greenwich Excellence Award Winner, South Region Greenwich Excellence 2020 Awards Based on over 12,000 interviews with small businesses across the country. 95 74 70 69 0 10 20 30 40 50 60 70 80 90 100 Atlantic Union Bank Big Bank #1 Big Bank #2 Big Bank #3
Slide 9: Banking Differently
Banking Differently 9 Digital logins 63% Mobile check deposits 46% Zelle utilization 196% Card control active users 241% Commercial Mobile Deposits 49% Q2 2021 Digital Banking Capability Enhancements • Completed the business E-banking platform upgrade to the Digital One platform. • Rolled out a dedi
Slide 10: 2021 Operating Environment – Managing through the Pandemic
2021 Operating Environment – Managing through the Pandemic 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 Com
Slide 11: Q2 2021 Financial Performance At-a-Glance
Q2 2021 Financial Performance At-a-Glance 11 For non-GAAP financial measures, see reconciliation to most directly comparable GAAP measures in “Appendix – Reconciliation of Non-GAAP Disclosures” Note: all tables presented dollars in thousands, expect per share amounts .. Net income available to commo
Slide 12: Q2 Allowance For Credit Loss (ACL) and Provision for Credit Losses
Q2 Allowance For Credit Loss (ACL) and Provision for Credit Losses 12 Q2 Macroeconomic Forecast Q2 Additional Considerations Moody’s June Baseline Forecast • US GDP averages 6.9% growth in 2021 and 5% in 2022. The unemployment rate averages 5.4% in 2021 and 3.7% in 2022. • Virginia’s unemployment ra
Slide 13: Q2 2021 Net Interest Margin
3.16% 3.23% 2.50% 2.60% 2.70% 2.80% 2.90% 3.00% 3.10% 3.20% 3.30% Quarter 1 NIM Core Loan Yield with fees PPP Loans with Fees Securities Yield Earning Asset Mix Core Deposit Rate Funding Mix and Borrowing Rate Quarter 2 NIM Net Interest Margin (FTE): Drivers of Change Q1 2021 to Q2 2021 -5 bps 10 bp
Slide 14: Q2 2021 Noninterest Income and Noninterest Expense
14 Noninterest income decreased from the prior quarter to $28.5 million from $31.0 million due to: .. A decline of $3.6 million in mortgage banking income driven by a seasonal decline in mortgage origination volumes and lower refinance loan volume; .. A decline in interest rate swap income of $433,0
Slide 15: Q2 2021 Loan and Deposit Growth
15 Q2 2021 Loan and Deposit Growth For non-GAAP financial measures, see reconciliation to most directly comparable GAAP measures in “Appendix – Reconciliation of Non-GAAP Disclosures” • At June 30, 2021, loans held for investment decreased $574 million or -16.1% (annualized) from the prior quarter d
Slide 16: Strong Capital Position at June 30, 2021
Strong Capital Position at June 30, 2021 16 Capital Ratio Regulatory Well Capitalized Atlantic Union Bankshares* Atlantic Union Bank* Common Equity Tier 1 Ratio (CET1) 7.0% 10.6% 13.2% Tier 1 Capital Ratio 8.5% 11.7% 13.2% Total Risk Based Capital Ratio 10.5% 14.0% 13.6% Leverage Ratio 5.0% 9.2% (9.
Slide 17: Appendix
Appendix h Atlantic 4 Union Bankshares
Slide 18: Strong Liquidity Position and Multiple Sources of Liquidity
Strong Liquidity Position and Multiple Sources of Liquidity 18 • Strong liquidity metrics: ~$7.4 billion in unrestricted cash, unpledged securities, and secured and unsecured borrowing capacity as of June 30, 2021 • Loans to Total Deposits Ratio of 82% at June 30, 2021 • Paycheck Protection Program
Slide 19: Disclosures
Reconciliation of Non-GAAP Disclosures 19 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 supplements to GAAP, which is used to prepare th
Slide 20: Disclosures
Reconciliation of Non-GAAP Disclosures 20 Operating Earnings Per Share Adjusted operating measures exclude the gains or losses related to balance sheet repositioning (principally composed of gains and losses on debt extinguishment) and gains or losses on sale of securities. The Company believes thes
Slide 21: Disclosures
Reconciliation of Non-GAAP Disclosures 21 Operating Earnings Per Share Net interest income (FTE) and total adjusted revenue (FTE), which are used in computing net interest margin (FTE) and adjusted operating efficiency ratio (FTE), respectively, provide valuable additional insight into the net inter
Slide 22: Disclosures
Reconciliation of Non-GAAP Disclosures 22 Tangible assets, tangible common equity, and leverage ratio are used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible assets, tangible common equity, leverage ratio, and the related ratios are meaningf
Slide 23: Disclosures
Reconciliation of Non-GAAP Disclosures 23 Operating Earnings Per Share The Company believes that return on tangible common equity (ROTCE) is a meaningful supplement to GAAP financial measures and useful to investors because it measures the performance of a business consistently across time without r
Slide 24: Disclosures
Reconciliation of Non-GAAP Disclosures 24 Operating Earnings Per Share Pre-tax pre-provision adjusted earnings excludes the provision for credit losses, which can fluctuate significantly from period-to-period under the CECL methodology, income tax expense, gains or losses related to balance sheet re
Slide 25: Disclosures
Reconciliation of Non-GAAP Disclosures 25 ($ IN THOUSANDS) Operating Earnings Per Share PPP adjustment impact excludes the SBA guaranteed loans funded during 2020 and 2021. The Company believes loans held for investment (net of deferred fees and costs), excluding PPP is useful to investors as it pro
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