Atlantic Union Bankshares Corporation (the “Company” or
“Atlantic Union”) (NYSE: AUB) reported net income available to
common shareholders of $52.3 million and basic and diluted earnings
per common share of $0.70 for the second quarter of 2023 and
adjusted operating earnings available to common shareholders(1) of
$55.4 million and adjusted diluted operating earnings per common
share(1) of $0.74 for the second quarter of 2023.
As previously disclosed, the Company initiated a series of cost
saving measures during the second quarter of 2023 that is expected
to reduce the annual expense run rate by approximately $17 million.
As a result of these measures, the Company incurred $3.9 million in
pre-tax expenses during the second quarter of 2023, and the Company
expects to recognize additional pre-tax expenses associated with
these actions of approximately $7.5 million during the third
quarter of 2023.
“Atlantic Union delivered strong second quarter financial
results despite the turmoil in the banking industry during the
first half of the year,” said John C. Asbury, president and chief
executive officer of Atlantic Union. “Loan growth remained strong
and deposit levels were stable during the quarter. We believe that
our model of a diversified, traditional, full-service bank that
delivers the products and services that our customers want and need
combined with local decision making, responsiveness and client
service orientation positively sets us apart from other banks, both
larger and smaller, in these challenging times.”
“Operating under the mantra of soundness, profitability and
growth – in that order of priority – Atlantic Union remains
committed to generating sustainable, profitable growth and building
long term value for our shareholders.”
NET INTEREST INCOME
For the second quarter of 2023, net interest income was $152.1
million, a decrease of $1.3 million from $153.4 million in the
first quarter of 2023. Net interest income (FTE)(1) was $155.8
million in the second quarter of 2023, a decrease of $1.5 million
from the first quarter of 2023. The decreases in net interest
income and net interest income (FTE)(1) were primarily driven by
higher deposit costs due to increases in market interest rates, as
well as changes in the deposit mix as depositors migrated to higher
cost interest bearing deposit accounts. These decreases were
partially offset by an increase in interest income on loans due to
net loan growth and variable rate loans repricing as short-term
interest rates increased. Our net interest margin decreased 4 basis
points from the prior quarter to 3.37% at June 30, 2023, and our
net interest margin (FTE)(1) decreased 5 basis points during the
same period to 3.45%. Earning asset yields increased by 27 basis
points to 5.19% in the second quarter of 2023 compared to the first
quarter of 2023, primarily due to the impact of increases in market
interest rates on loans. Our cost of funds increased by 32 basis
points to 1.74% at June 30, 2023 compared to the prior quarter,
driven by higher deposit and borrowing costs and funding mix as
noted above.
The Company’s net interest margin (FTE) (1) includes the impact
of acquisition accounting fair value adjustments. The impact of net
accretion in the first and second quarters of 2023 are reflected in
the following table (dollars in thousands):
Loan
Deposit
Borrowings
Accretion
Amortization
Amortization
Total
For the quarter ended March 31, 2023
$
1,106
$
(14)
$
(209)
$
883
For the quarter ended June 30, 2023
1,073
(7)
(213)
853
ASSET QUALITY
Overview
At June 30, 2023, nonperforming assets (“NPAs”) as a percentage
of total loans held for investment (“LHFI”) decreased 1 basis point
from the prior quarter to 0.19% and included nonaccrual loans of
$29.1 million. Accruing past due loans as a percentage of total
LHFI totaled 16 basis points at June 30, 2023, a decrease of 5
basis points from March 31, 2023, and an increase of 1 basis point
from June 30, 2022. Net charge-offs were 0.04% of total average
LHFI (annualized) for the second quarter of 2023, a decrease of 9
basis points from March 31, 2023, and an increase of 1 basis point
from June 30, 2022. The allowance for credit losses (“ACL”) totaled
$136.2 million at June 30, 2023, a $4.5 million increase from the
prior quarter.
Nonperforming Assets
At June 30, 2023, NPAs totaled $29.2 million, compared to $29.1
million in the prior quarter. The following table shows a summary
of NPA balances at the quarter ended (dollars in thousands):
June 30,
March 31,
December 31,
September 30,
June 30,
2023
2023
2022
2022
2022
Nonaccrual loans
$
29,105
$
29,082
$
27,038
$
26,500
$
29,070
Foreclosed properties
50
29
76
2,087
2,065
Total nonperforming assets
$
29,155
$
29,111
$
27,114
$
28,587
$
31,135
The following table shows the activity in nonaccrual loans for
the quarter ended (dollars in thousands):
June 30,
March 31,
December 31,
September 30,
June 30,
2023
2023
2022
2022
2022
Beginning Balance
$
29,082
$
27,038
$
26,500
$
29,070
$
29,032
Net customer payments
(5,950
)
(1,755
)
(1,805
)
(3,725
)
(2,472
)
Additions
6,685
4,151
2,935
1,302
3,203
Charge-offs
(712
)
(39
)
(461
)
(125
)
(311
)
Loans returning to accruing status
—
(313
)
(131
)
—
—
Transfers to foreclosed property
—
—
—
(22
)
(382
)
Ending Balance
$
29,105
$
29,082
$
27,038
$
26,500
$
29,070
Past Due Loans
At June 30, 2023, past due loans still accruing interest totaled
$24.1 million or 0.16% of total LHFI, compared to $30.9 million or
0.21% of total LHFI at March 31, 2023, and $20.4 million or 0.15%
of total LHFI at June 30, 2022. Of the total past due loans still
accruing interest, $10.1 million or 0.07% of total LHFI were loans
past due 90 days or more at June 30, 2023, compared to $7.2 million
or 0.05% of total LHFI at March 31, 2023, and $4.6 million or 0.03%
of total LHFI at June 30, 2022. The increase in loans past due 90
days or more was primarily due to one credit relationship within
the commercial real estate – non-owner occupied portfolio.
Allowance for Credit Losses
At June 30, 2023, the ACL was $136.2 million and included an
allowance for loan and lease losses (“ALLL”) of $120.7 million and
a reserve for unfunded commitments of $15.5 million. The ACL at
June 30, 2023 increased $4.5 million from March 31, 2023 due to
loan growth in the second quarter of 2023 and the impact of
continued uncertainty in the economic outlook.
At both June 30, 2023 and March 31, 2023, the ACL as a
percentage of total LHFI was 0.90%, and the ALLL as a percentage of
total LHFI was 0.80%.
Net Charge-offs
Net charge-offs were $1.6 million or 0.04% of total average LHFI
on an annualized basis for the second quarter of 2023, compared to
$4.6 million or 0.13% (annualized) for the first quarter of 2023,
and $939,000 or 0.03% (annualized) for the second quarter of
2022.
Provision for Credit Losses
For the second quarter of 2023, the Company recorded a provision
for credit losses of $6.1 million, compared to a provision for
credit losses of $11.9 million in the prior quarter, and a
provision for credit losses of $3.6 million in the second quarter
of 2022. The provision for credit losses for the second quarter of
2023 reflected a provision of $5.7 million for loan losses and a
$349,000 provision for unfunded commitments.
NONINTEREST INCOME
Noninterest income increased $14.6 million to $24.2 million for
the second quarter of 2023 from $9.6 million in the prior quarter,
primarily due to $13.4 million of losses incurred on the sale of
available for sale (“AFS”) securities in the prior quarter, driven
by the Company’s balance sheet repositioning transactions, and that
were not repeated during the second quarter. In addition,
loan-related interest rate swap fees increased $877,000 from the
prior quarter due to several new swap transactions, and other
operating income increased $259,000 from the prior quarter
primarily driven by an increase in loan syndication revenue. These
increases in noninterest income were partially offset by a $405,000
decrease in mortgage banking income due to a decline in gain on
sale margins.
NONINTEREST EXPENSE
Noninterest expense decreased $2.6 million to $105.7 million for
the second quarter of 2023 from $108.3 million in the prior
quarter. Adjusted operating noninterest expense,(1) which excludes
amortization of intangible assets ($2.2 million in the second
quarter and $2.3 million in the first quarter), expenses incurred
associated with our strategic cost savings initiatives principally
composed of severance charges related to headcount reductions and
charges for exiting leases ($3.9 million in the second quarter),
and the legal reserve associated with an ongoing regulatory matter
as previously disclosed ($5.0 million in the first quarter),
decreased $1.5 million to $99.5 million for the second quarter of
2023 from $101.0 million in the prior quarter. The decrease in
adjusted operating noninterest expense(1) was primarily due to a
$1.8 million decrease included within other expenses, composed of
OREO-related gains recognized in the current quarter and reduced
branch closing costs as compared to the prior quarter, and a $1.4
million decrease in salaries and benefits expense, outside of
severance charges related to headcount reductions in the quarter,
primarily due to seasonal decreases in payroll related taxes and
401(k) contribution expenses. These decreases in adjusted operating
noninterest expense(1) were partially offset by increases of $1.0
million in professional services expense related to the LIBOR
transition and other strategic projects, $466,000 in marketing and
advertising expense, and $424,000 in technology and data processing
expense.
INCOME TAXES
The effective tax rate for the three months ended June 30, 2023
and 2022 was 14.4% and 16.7%, respectively, and the effective tax
rate for the six months ended June 30, 2023 and 2022 was 15.5% and
17.1%, respectively. The decrease in the effective tax rates is due
to the increased proportion of tax-exempt income to pre-tax income
for both the three and six months ended June 30, 2023 compared to
the prior quarter and prior year, respectively.
BALANCE SHEET
At June 30, 2023, total assets were $20.6 billion, an increase
of $499.0 million or approximately 10.0% (annualized) from March
31, 2023, and an increase of $940.5 million or approximately 4.8%
from June 30, 2022. Total assets increased from the prior quarter
primarily due to a $482.7 million increase in LHFI (net of deferred
fees and costs). Total assets increased from the prior year period
primarily due to a $1.4 billion increase in LHFI (net of deferred
fees and costs), partially offset by a $676.8 million decrease in
investment securities due to the sale of $505.7 million in AFS
securities as part of the Company’s balance sheet restructuring
executed in the first quarter of 2023, as well as a decline in the
market value of the AFS securities portfolio, due to the impact of
market interest rate fluctuations.
At June 30, 2023, LHFI (net of deferred fees and costs) totaled
$15.1 billion, an increase of $482.7 million or 13.3% (annualized)
from $14.6 billion at March 31, 2023. Average LHFI (net of deferred
fees and costs) totaled $14.7 billion at June 30, 2023, an increase
of $240.6 million or 6.7% (annualized) from the prior quarter. At
June 30, 2023, LHFI (net of deferred fees and costs) increased $1.4
billion or 10.3% from June 30, 2022, and quarterly average LHFI
(net of deferred fees and costs) increased $1.2 billion or 9.0%
from the same period in the prior year. LHFI (net of deferred fees
and costs) increased from the prior quarter and the same period in
the prior year primarily due to increases in the commercial and
industrial and commercial real estate non-owner occupied
portfolios.
At June 30, 2023, total investments were $3.1 billion, a
decrease of $52.2 million from March 31, 2023 and a decrease of
$676.8 million from June 30, 2022. AFS securities totaled $2.2
billion at June 30, 2023, $2.3 billion at March 31, 2023, and $3.0
billion at June 30, 2022. At June 30, 2023, total net unrealized
losses on the AFS securities portfolio were $450.1 million, an
increase of $42.2 million from total net unrealized losses on AFS
securities of $407.9 at March 31, 2023. Held to maturity (“HTM”)
securities are carried at cost and totaled $849.6 million at June
30, 2023, $855.4 million at March 31, 2023, and $780.7 million at
June 30, 2022 and have net unrealized losses of $41.8 million at
June 30, 2023, an increase of $9.5 million from net unrealized
losses on HTM securities of $32.3 million at March 31, 2023.
At June 30, 2023, total deposits were $16.4 billion, a decrease
of $43.9 million or approximately 1.1% (annualized) from March 31,
2023. Average deposits at June 30, 2023 decreased from the prior
quarter by $137.1 million or 3.3% (annualized). Total deposits
decreased from the prior quarter due to the impact of customer
behavior in response to inflation and higher market interest rates,
resulting in a decrease in low costing customer deposits, partially
offset by an increase in customer time deposits and brokered
deposits. Total deposits at June 30, 2023 increased $283.4 million
or 1.8% from June 30, 2022, and quarterly average deposits at June
30, 2023 increased $89.1 million or 0.6% from the same period in
the prior year. Total deposits increased from the same period in
the prior year primarily due to increases in interest bearing
customer deposits and brokered deposits, partially offset by
decreases in demand deposits.
At June 30, 2023, total borrowings were $1.3 billion, an
increase of $521.4 million from March 31, 2023 and an increase of
$522.4 million from June 30, 2022. Total borrowings increased from
the prior quarter and prior year primarily due to an increase in
Federal Home Loan Bank short-term borrowings, which was used to
fund loan growth.
The following table shows the Company’s capital ratios at the
quarters ended:
June 30,
March 31,
June 30,
2023
2023
2022
Common equity Tier 1 capital ratio (2)
9.86
%
9.91
%
9.96
%
Tier 1 capital ratio (2)
10.81
%
10.89
%
11.00
%
Total capital ratio (2)
13.64
%
13.76
%
13.86
%
Leverage ratio (Tier 1 capital to average
assets) (2)
9.64
%
9.38
%
9.26
%
Common equity to total assets
10.96
%
11.31
%
11.32
%
Tangible common equity to tangible assets
(1)
6.66
%
6.91
%
6.78
%
_____________________________
At June 30, 2023, the Company’s common equity to total assets
ratio and tangible common equity to tangible assets ratio decreased
compared to the prior quarter and prior year primarily due to the
unrealized losses on the AFS securities portfolio recorded in other
comprehensive income due to higher market interest rates, as well
as the increase in total assets.
During the second quarter of 2023, the Company declared and paid
a quarterly dividend on the outstanding shares of Series A
Preferred Stock of $171.88 per share (equivalent to $0.43 per
outstanding depositary share), consistent with the first quarter of
2023 and the second quarter of 2022. During the second quarter of
2023, the Company also declared and paid cash dividends of $0.30
per common share, consistent with the first quarter of 2023 and an
increase of $0.02 or approximately 7.1% from the second quarter of
2022.
_____________________________
(1) These are financial measures not
calculated in accordance with generally accepted accounting
principles (“GAAP”). For a reconciliation of these non-GAAP
financial measures, see the “Alternative Performance Measures
(non-GAAP)” section of the Key Financial Results.
(2) All ratios at June 30, 2023 are
estimates and subject to change pending the Company’s filing of its
FR Y9-C. All other periods are presented as filed.
ANNOUNCED TRANSACTION
As announced and further described in a separate press release
issued by the Company today, the Company has entered into a merger
agreement to acquire American National Bankshares Inc. (“American
National”) in an all-stock transaction.
ABOUT ATLANTIC UNION BANKSHARES CORPORATION
Headquartered in Richmond, Virginia, Atlantic Union Bankshares
Corporation (NYSE: AUB) is the holding company for Atlantic Union
Bank. Atlantic Union Bank has 109 branches and approximately 125
ATMs located throughout Virginia and in portions of Maryland and
North Carolina. Certain non-bank financial services affiliates of
Atlantic Union Bank include: Atlantic Union Equipment Finance,
Inc., which provides equipment financing; Atlantic Union Financial
Consultants, LLC, which provides brokerage services; and Union
Insurance Group, LLC, which offers various lines of insurance
products.
SECOND QUARTER 2023 EARNINGS RELEASE CONFERENCE CALL
In light of today’s announcement that the Company has entered
into a merger agreement to acquire American National, the Company
will hold a conference call and webcast for investors at 9:00 a.m.
Eastern Time on Tuesday, July 25, 2023 during which the Company’s
management will review the Company’s financial results for the
second quarter 2023 and discuss the proposed merger.
The listen-only webcast and the accompanying slides can be
accessed at: https://edge.media-server.com/mmc/p/g5jw6mu3.
For analysts who wish to participate in the conference call,
please register at the following URL:
https://register.vevent.com/register/BI1a5d16a5982740369c57e980002f5ab6.
To participate in the conference call, you must use the link to
receive an audio dial-in number and an Access PIN.
A replay of the webcast, and the accompanying slides, will be
available on the Company’s website for 90 days at:
https://investors.atlanticunionbank.com/.
NON-GAAP FINANCIAL MEASURES
In reporting the results as of and for the period ended June 30,
2023, 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 the Company’s
financial statements, and should not be considered in isolation or
as a substitute for comparable measures calculated in accordance
with GAAP. In addition, the Company’s non-GAAP financial measures
may not be comparable to non-GAAP financial measures of other
companies. The Company uses the non-GAAP financial measures
discussed herein in its analysis of the Company’s performance. The
Company’s management believes that these non-GAAP financial
measures provide additional understanding of ongoing operations,
enhance comparability of results of operations with prior periods
and show the effects of significant gains and charges in the
periods presented without the impact of items or events that may
obscure trends in the Company’s underlying performance. For a
reconciliation of these measures to their most directly comparable
GAAP measures and additional information about these non-GAAP
financial measures, see “Alternative Performance Measures
(non-GAAP)” in the tables within the section “Key Financial
Results.”
FORWARD-LOOKING STATEMENTS
This press release and statements by our management 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,
statements made in Mr. Asbury’s quotations, statements regarding
our expectations with regard to our business, financial and
operating results, including our deposit base, the impact of future
economic conditions, the impact of cost saving measures, and
statements that include other projections, predictions,
expectations, or beliefs about future events or results or
otherwise are not statements of historical fact. Such
forward-looking statements are based on certain assumptions as of
the time they are made, and are inherently subject to known and
unknown risks, uncertainties, and other factors, some of which
cannot be predicted or quantified, that may cause actual results,
performance, or achievements to be materially different from those
expressed or implied by such forward-looking statements.
Forward-looking statements are often characterized by the use of
qualified words (and their derivatives) such as “expect,”
“believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,”
“will,” “may,” “view,” “opportunity,” “potential,” “continue,”
“confidence,” or words of similar meaning or other statements
concerning opinions or judgment of the Company and our management
about future events. Although we believe that our expectations with
respect to forward-looking statements are based upon reasonable
assumptions within the bounds of our existing knowledge of our
business and operations, there can be no assurance that actual
future results, performance, or achievements of, or trends
affecting, us will not differ materially from any projected future
results, performance, achievements or trends expressed or implied
by such forward-looking statements. Actual future results,
performance, achievements or trends may differ materially from
historical results or those anticipated depending on a variety of
factors, including, but not limited to, the effects of or changes
in:
- market interest rates and their related impacts on
macroeconomic conditions, customer and client behavior, our funding
costs and our loan and securities portfolios;
- inflation and its impacts on economic growth and customer and
client behavior;
- adverse developments in the financial industry generally, such
as bank failures, responsive measures to mitigate and manage such
developments, related supervisory and regulatory actions and costs,
and related impacts on customer and client behavior;
- the sufficiency of liquidity;
- general economic and financial market conditions, in the United
States generally and particularly in the markets in which we
operate and which our loans are concentrated, including the effects
of declines in real estate values, an increase in unemployment
levels and slowdowns in economic growth;
- monetary and fiscal policies of the U.S. government, including
policies of the U.S. Department of the Treasury and the Federal
Reserve;
- the quality or composition of our loan or investment portfolios
and changes therein;
- demand for loan products and financial services in our market
areas;
- our ability to manage our growth or implement our growth
strategy;
- the effectiveness of expense reduction plans;
- the introduction of new lines of business or new products and
services;
- our ability to recruit and retain key employees;
- real estate values in our lending area;
- changes in accounting principles, standards, rules, and
interpretations, and the related impact on our financial
statements;
- an insufficient ACL or volatility in the ACL resulting from the
CECL methodology, either alone or as that may be affected by
inflation, changing interest rates, or other factors;
- our liquidity and capital positions;
- concentrations of loans secured by real estate, particularly
commercial real estate;
- the effectiveness of our credit processes and management of our
credit risk;
- our ability to compete in the market for financial services and
increased competition from fintech companies;
- technological risks and developments, and cyber threats,
attacks, or events;
- operational, technological, cultural, regulatory, legal,
credit, and other risks associated with the exploration,
consummation and integration of potential future acquisitions,
whether involving stock or cash considerations;
- the potential adverse effects of unusual and infrequently
occurring events, such as weather-related disasters, terrorist
acts, geopolitical conflicts or public health events, and of
governmental and societal responses thereto; these potential
adverse effects may include, without limitation, adverse effects on
the ability of our borrowers to satisfy their obligations to us, on
the value of collateral securing loans, on the demand for the our
loans or our other products and services, on supply chains and
methods used to distribute products and services, on incidents of
cyberattack and fraud, on our liquidity or capital positions, on
risks posed by reliance on third-party service providers, on other
aspects of our business operations and on financial markets and
economic growth;
- the discontinuation of LIBOR and its impact on the financial
markets, and our ability to manage operational, legal, and
compliance risks related to the discontinuation of LIBOR and
implementation of one or more alternate reference rates;
- performance by our counterparties or vendors;
- deposit flows;
- the availability of financing and the terms thereof;
- the level of prepayments on loans and mortgage-backed
securities;
- legislative or regulatory changes and requirements;
- actual or potential claims, damages, and fines related to
litigation or government actions, which may result in, among other
things, additional costs, fines, penalties, restrictions on our
business activities, reputational harm, or other adverse
consequences;
- the effects of changes in federal, state or local tax laws and
regulations;
- any event or development that would cause us to conclude that
there was an impairment of any asset, including intangible assets,
such as goodwill;
- other factors, many of which are beyond our control; and
- the risks, uncertainties and assumptions set forth under the
heading “Caution About Forward-Looking Statements” in the joint
press release issued by the Company and American National on the
date hereof with respect to the proposed merger transaction between
the Company and American National.
Please also refer to such other factors as discussed throughout
Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” of our Annual Report on Form 10‑K for the year ended
December 31, 2022, Part II, Item 1A. Risk Factors in our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2023, and
related disclosures in other filings, which have been filed with
the U.S. Securities and Exchange Commission (“SEC”) and are
available on the SEC’s website at www.sec.gov. All risk factors and
uncertainties described herein and therein should be considered in
evaluating forward-looking statements, and all of the
forward-looking statements are expressly qualified by the
cautionary statements contained or referred to herein and therein.
The actual results or developments anticipated may not be realized
or, even if substantially realized, they may not have the expected
consequences to or effects on the Company or its businesses or
operations. Readers are cautioned not to rely too heavily on the
forward-looking statements, and undue reliance should not be placed
on such forward-looking statements. Forward-looking statements
speak only as of the date they are made. We do not intend or assume
any obligation to update, revise or clarify any forward-looking
statements that may be made from time to time by or on behalf of
the Company, whether as a result of new information, future events
or otherwise.
ATLANTIC UNION BANKSHARES CORPORATION
AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(UNAUDITED)
(Dollars in thousands, except share
data)
As of & For Three Months
Ended
As of & For Six Months
Ended
06/30/23
03/31/23
06/30/22
06/30/23
06/30/22
Results of
Operations
Interest and dividend income
$
230,247
$
217,546
$
148,755
$
447,793
$
287,212
Interest expense
78,163
64,103
9,988
142,265
17,514
Net interest income
152,084
153,443
138,767
305,528
269,698
Provision for credit losses
6,069
11,850
3,559
17,920
6,359
Net interest income after provision for
credit losses
146,015
141,593
135,208
287,608
263,339
Noninterest income
24,197
9,628
38,286
33,824
68,439
Noninterest expenses
105,661
108,274
98,768
213,934
204,089
Income before income taxes
64,551
42,947
74,726
107,498
127,689
Income tax expense
9,310
7,294
12,500
16,604
21,773
Net income
55,241
35,653
62,226
90,894
105,916
Dividends on preferred stock
2,967
2,967
2,967
5,934
5,934
Net income available to common
shareholders
$
52,274
$
32,686
$
59,259
$
84,960
$
99,982
Interest earned on earning assets (FTE)
(1)
$
233,913
$
221,334
$
152,332
$
455,248
$
294,124
Net interest income (FTE) (1)
155,750
157,231
142,344
312,983
276,610
Total revenue (FTE) (1)
179,947
166,859
180,630
346,807
345,049
Pre-tax pre-provision adjusted operating
earnings (7)
74,553
73,197
69,205
147,751
130,476
Key
Ratios
Earnings per common share, diluted
$
0.70
$
0.44
$
0.79
$
1.13
$
1.33
Return on average assets (ROA)
1.10
%
0.71
%
1.27
%
0.90
%
1.08
%
Return on average equity (ROE)
9.00
%
5.97
%
10.21
%
7.51
%
8.37
%
Return on average tangible common equity
(ROTCE) (2) (3)
16.11
%
10.71
%
18.93
%
13.46
%
14.97
%
Efficiency ratio
59.94
%
66.40
%
55.78
%
63.04
%
60.36
%
Efficiency ratio (FTE) (1)
58.72
%
64.89
%
54.68
%
61.69
%
59.15
%
Net interest margin
3.37
%
3.41
%
3.15
%
3.39
%
3.06
%
Net interest margin (FTE) (1)
3.45
%
3.50
%
3.24
%
3.47
%
3.14
%
Yields on earning assets (FTE) (1)
5.19
%
4.92
%
3.46
%
5.05
%
3.34
%
Cost of interest-bearing liabilities
2.42
%
2.02
%
0.35
%
2.22
%
0.30
%
Cost of deposits
1.61
%
1.28
%
0.15
%
1.44
%
0.13
%
Cost of funds
1.74
%
1.42
%
0.22
%
1.58
%
0.20
%
Operating
Measures (4)
Adjusted operating earnings
$
58,348
$
50,189
$
54,244
$
108,537
$
102,285
Adjusted operating earnings available to
common shareholders
55,381
47,222
51,277
102,603
96,351
Adjusted operating earnings per common
share, diluted
$
0.74
$
0.63
$
0.69
$
1.37
$
1.28
Adjusted operating ROA
1.16
%
1.00
%
1.10
%
1.08
%
1.04
%
Adjusted operating ROE
9.51
%
8.40
%
8.90
%
8.96
%
8.08
%
Adjusted operating ROTCE (2) (3)
17.03
%
15.22
%
16.47
%
16.14
%
14.45
%
Adjusted operating efficiency ratio (FTE)
(1)(6)
55.30
%
56.03
%
55.88
%
55.66
%
57.34
%
Per Share
Data
Earnings per common share, basic
$
0.70
$
0.44
$
0.79
$
1.13
$
1.33
Earnings per common share, diluted
0.70
0.44
0.79
1.13
1.33
Cash dividends paid per common share
0.30
0.30
0.28
0.60
0.56
Market value per share
25.95
35.05
33.92
25.95
33.92
Book value per common share
30.31
30.53
29.95
30.31
29.95
Tangible book value per common share
(2)
17.58
17.78
17.07
17.58
17.07
Price to earnings ratio, diluted
9.28
19.77
10.68
11.35
12.65
Price to book value per common share
ratio
0.86
1.15
1.13
0.86
1.13
Price to tangible book value per common
share ratio (2)
1.48
1.97
1.99
1.48
1.99
Weighted average common shares
outstanding, basic
74,995,450
74,832,141
74,847,899
74,914,247
75,194,347
Weighted average common shares
outstanding, diluted
74,995,557
74,835,514
74,849,871
74,915,977
75,201,326
Common shares outstanding at end of
period
74,998,075
74,989,228
74,688,314
74,998,075
74,688,314
ATLANTIC UNION BANKSHARES CORPORATION
AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(UNAUDITED)
(Dollars in thousands, except share
data)
As of & For Three Months
Ended
As of & For Six Months
Ended
06/30/23
03/31/23
06/30/22
06/30/23
06/30/22
Capital
Ratios
Common equity Tier 1 capital ratio (5)
9.86
%
9.91
%
9.96
%
9.86
%
9.96
%
Tier 1 capital ratio (5)
10.81
%
10.89
%
11.00
%
10.81
%
11.00
%
Total capital ratio (5)
13.64
%
13.76
%
13.86
%
13.64
%
13.86
%
Leverage ratio (Tier 1 capital to average
assets) (5)
9.64
%
9.38
%
9.26
%
9.64
%
9.26
%
Common equity to total assets
10.96
%
11.31
%
11.32
%
10.96
%
11.32
%
Tangible common equity to tangible assets
(2)
6.66
%
6.91
%
6.78
%
6.66
%
6.78
%
Financial
Condition
Assets
$
20,602,332
$
20,103,370
$
19,661,799
$
20,602,332
$
19,661,799
LHFI (net of deferred fees and costs)
15,066,930
14,584,280
13,655,408
15,066,930
13,655,408
Securities
3,143,236
3,195,399
3,820,078
3,143,236
3,820,078
Earning Assets
18,452,007
17,984,057
17,578,979
18,452,007
17,578,979
Goodwill
925,211
925,211
925,211
925,211
925,211
Amortizable intangibles, net
23,469
24,482
31,621
23,469
31,621
Deposits
16,411,987
16,455,910
16,128,635
16,411,987
16,128,635
Borrowings
1,320,301
798,910
797,948
1,320,301
797,948
Stockholders' equity
2,424,470
2,440,236
2,391,476
2,424,470
2,391,476
Tangible common equity (2)
1,309,433
1,324,186
1,268,287
1,309,433
1,268,287
LHFI, net of
deferred fees and costs
Construction and land development
$
1,231,720
$
1,179,872
$
988,379
$
1,231,720
$
988,379
Commercial real estate - owner
occupied
1,952,189
1,956,585
1,965,702
1,952,189
1,965,702
Commercial real estate - non-owner
occupied
4,113,318
3,968,085
3,860,819
4,113,318
3,860,819
Multifamily real estate
788,895
822,006
762,502
788,895
762,502
Commercial & Industrial
3,373,148
3,082,478
2,595,891
3,373,148
2,595,891
Residential 1-4 Family - Commercial
518,317
522,760
553,771
518,317
553,771
Residential 1-4 Family - Consumer
1,017,698
974,511
865,174
1,017,698
865,174
Residential 1-4 Family - Revolving
600,339
589,791
583,073
600,339
583,073
Auto
585,756
600,658
525,301
585,756
525,301
Consumer
134,709
145,090
180,045
134,709
180,045
Other Commercial
750,841
742,444
774,751
750,841
774,751
Total LHFI
$
15,066,930
$
14,584,280
$
13,655,408
$
15,066,930
$
13,655,408
Deposits
Interest checking accounts
$
4,824,192
$
4,714,366
$
3,943,303
$
4,824,192
$
3,943,303
Money market accounts
3,413,936
3,547,514
3,956,046
3,413,936
3,956,046
Savings accounts
986,081
1,047,914
1,165,577
986,081
1,165,577
Customer time deposits of $250,000 and
over
578,739
541,447
335,706
578,739
335,706
Other customer time deposits
1,813,031
1,648,747
1,308,493
1,813,031
1,308,493
Time deposits
2,391,770
2,190,194
1,644,199
2,391,770
1,644,199
Total interest-bearing customer
deposits
11,615,979
11,499,988
10,709,125
11,615,979
10,709,125
Brokered deposits
485,702
377,913
57,972
485,702
57,972
Total interest-bearing deposits
$
12,101,681
$
11,877,901
$
10,767,097
$
12,101,681
$
10,767,097
Demand deposits
4,310,306
4,578,009
5,361,538
4,310,306
5,361,538
Total deposits
$
16,411,987
$
16,455,910
$
16,128,635
$
16,411,987
$
16,128,635
Averages
Assets
$
20,209,687
$
20,384,351
$
19,719,402
$
20,296,536
$
19,819,330
LHFI (net of deferred fees and costs)
14,746,218
14,505,611
13,525,529
14,626,579
13,413,780
Loans held for sale
14,413
5,876
20,634
10,168
17,652
Securities
3,176,662
3,467,561
3,930,912
3,321,308
4,064,007
Earning assets
18,091,809
18,238,088
17,646,470
18,164,545
17,765,085
Deposits
16,280,154
16,417,212
16,191,056
16,348,304
16,351,822
Time deposits
2,500,966
2,291,530
1,667,378
2,396,827
1,716,743
Interest-bearing deposits
11,903,004
11,723,865
10,824,465
11,813,929
11,054,095
Borrowings
1,071,171
1,122,244
765,886
1,096,567
639,506
Interest-bearing liabilities
12,974,175
12,846,109
11,590,351
12,910,496
11,693,601
Stockholders' equity
2,460,741
2,423,600
2,445,045
2,442,273
2,552,418
Tangible common equity (2)
1,345,426
1,306,445
1,304,536
1,326,043
1,410,342
ATLANTIC UNION BANKSHARES CORPORATION
AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(UNAUDITED)
(Dollars in thousands, except share
data)
As of & For Three Months
Ended
As of & For Six Months
Ended
06/30/23
03/31/23
06/30/22
06/30/23
06/30/22
Asset
Quality
Allowance for
Credit Losses (ACL)
Beginning balance, Allowance for loan and
lease losses (ALLL)
$
116,512
$
110,768
$
102,591
$
110,768
$
99,787
Add: Recoveries
1,035
1,167
1,018
2,202
2,531
Less: Charge-offs
2,602
5,726
1,957
8,328
3,466
Add: Provision for loan losses
5,738
10,303
2,532
16,041
5,332
Ending balance, ALLL
$
120,683
$
116,512
$
104,184
$
120,683
$
104,184
Beginning balance, Reserve for unfunded
commitment (RUC)
$
15,199
$
13,675
$
8,000
$
13,675
$
8,000
Add: Provision for unfunded
commitments
349
1,524
1,000
1,873
1,000
Ending balance, RUC
$
15,548
$
15,199
$
9,000
$
15,548
$
9,000
Total ACL
$
136,231
$
131,711
$
113,184
$
136,231
$
113,184
ACL / total LHFI
0.90
%
0.90
%
0.83
%
0.90
%
0.83
%
ALLL / total LHFI
0.80
%
0.80
%
0.76
%
0.80
%
0.76
%
Net charge-offs / total average LHFI
0.04
%
0.13
%
0.03
%
0.08
%
0.01
%
Provision for loan losses/ total average
LHFI
0.16
%
0.29
%
0.08
%
0.22
%
0.08
%
Nonperforming
Assets
Construction and land development
$
284
$
363
$
581
$
284
$
581
Commercial real estate - owner
occupied
3,978
6,174
4,996
3,978
4,996
Commercial real estate - non-owner
occupied
6,473
1,481
3,301
6,473
3,301
Commercial & Industrial
2,738
4,815
2,728
2,738
2,728
Residential 1-4 Family - Commercial
1,844
1,907
2,031
1,844
2,031
Residential 1-4 Family - Consumer
10,033
10,540
12,084
10,033
12,084
Residential 1-4 Family - Revolving
3,461
3,449
3,069
3,461
3,069
Auto
291
347
279
291
279
Consumer
3
6
1
3
1
Nonaccrual loans
$
29,105
$
29,082
$
29,070
$
29,105
$
29,070
Foreclosed property
50
29
2,065
50
2,065
Total nonperforming assets (NPAs)
$
29,155
$
29,111
$
31,135
$
29,155
$
31,135
Construction and land development
$
24
$
249
$
1
$
24
$
1
Commercial real estate - owner
occupied
2,463
2,133
792
2,463
792
Commercial real estate - non-owner
occupied
2,763
1,032
642
2,763
642
Commercial & Industrial
810
633
322
810
322
Residential 1-4 Family - Commercial
693
232
184
693
184
Residential 1-4 Family - Consumer
1,716
859
1,112
1,716
1,112
Residential 1-4 Family - Revolving
1,259
1,766
997
1,259
997
Auto
243
137
134
243
134
Consumer
74
137
79
74
79
Other Commercial
66
66
329
66
329
LHFI ≥ 90 days and still accruing
$
10,111
$
7,244
$
4,592
$
10,111
$
4,592
Total NPAs and LHFI ≥ 90 days
$
39,266
$
36,355
$
35,727
$
39,266
$
35,727
NPAs / total LHFI
0.19
%
0.20
%
0.23
%
0.19
%
0.23
%
NPAs / total assets
0.14
%
0.14
%
0.16
%
0.14
%
0.16
%
ALLL / nonaccrual loans
414.65
%
400.63
%
358.39
%
414.65
%
358.39
%
ALLL/ nonperforming assets
413.94
%
400.23
%
334.62
%
413.94
%
334.62
%
ATLANTIC UNION BANKSHARES CORPORATION
AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(UNAUDITED)
(Dollars in thousands, except share
data)
As of & For Three Months
Ended
As of & For Six Months
Ended
06/30/23
03/31/23
06/30/22
06/30/23
06/30/22
Past Due
Detail
Construction and land development
$
295
$
815
$
645
$
295
$
645
Commercial real estate - owner
occupied
602
2,251
1,374
602
1,374
Commercial real estate - non-owner
occupied
—
52
511
—
511
Commercial & Industrial
254
981
2,581
254
2,581
Residential 1-4 Family - Commercial
1,076
1,399
1,944
1,076
1,944
Residential 1-4 Family - Consumer
1,504
11,579
594
1,504
594
Residential 1-4 Family - Revolving
1,729
1,384
1,368
1,729
1,368
Auto
2,877
2,026
1,841
2,877
1,841
Consumer
334
295
361
334
361
Other Commercial
23
—
11
23
11
LHFI 30-59 days past due
$
8,694
$
20,782
$
11,230
$
8,694
$
11,230
Commercial real estate - owner
occupied
10
798
807
10
807
Commercial & Industrial
400
61
546
400
546
Residential 1-4 Family - Commercial
189
271
474
189
474
Residential 1-4 Family - Consumer
2,813
158
1,646
2,813
1,646
Residential 1-4 Family - Revolving
1,114
1,069
731
1,114
731
Auto
564
295
213
564
213
Consumer
214
176
210
214
210
LHFI 60-89 days past due
$
5,304
$
2,828
$
4,627
$
5,304
$
4,627
Past Due and still accruing
$
24,109
$
30,854
$
20,449
$
24,109
$
20,449
Past Due and still accruing / total
LHFI
0.16
%
0.21
%
0.15
%
0.16
%
0.15
%
Alternative
Performance Measures (non-GAAP)
Net interest
income (FTE) (1)
Net interest income (GAAP)
$
152,084
$
153,443
$
138,767
$
305,528
$
269,698
FTE adjustment
3,666
3,788
3,577
7,455
6,912
Net interest income (FTE) (non-GAAP)
$
155,750
$
157,231
$
142,344
$
312,983
$
276,610
Noninterest income (GAAP)
24,197
9,628
38,286
33,824
68,439
Total revenue (FTE) (non-GAAP)
$
179,947
$
166,859
$
180,630
$
346,807
$
345,049
Average earning assets
$
18,091,809
$
18,238,088
$
17,646,470
$
18,164,545
$
17,765,085
Net interest margin
3.37
%
3.41
%
3.15
%
3.39
%
3.06
%
Net interest margin (FTE)
3.45
%
3.50
%
3.24
%
3.47
%
3.14
%
Tangible
Assets (2)
Ending assets (GAAP)
$
20,602,332
$
20,103,370
$
19,661,799
$
20,602,332
$
19,661,799
Less: Ending goodwill
925,211
925,211
925,211
925,211
925,211
Less: Ending amortizable intangibles
23,469
24,482
31,621
23,469
31,621
Ending tangible assets (non-GAAP)
$
19,653,652
$
19,153,677
$
18,704,967
$
19,653,652
$
18,704,967
Tangible Common
Equity (2)
Ending equity (GAAP)
$
2,424,470
$
2,440,236
$
2,391,476
$
2,424,470
$
2,391,476
Less: Ending goodwill
925,211
925,211
925,211
925,211
925,211
Less: Ending amortizable intangibles
23,469
24,482
31,621
23,469
31,621
Less: Perpetual preferred stock
166,357
166,357
166,357
166,357
166,357
Ending tangible common equity
(non-GAAP)
$
1,309,433
$
1,324,186
$
1,268,287
$
1,309,433
$
1,268,287
Average equity (GAAP)
$
2,460,741
$
2,423,600
$
2,445,045
$
2,442,273
$
2,552,418
Less: Average goodwill
925,211
925,211
935,446
925,211
935,503
Less: Average amortizable intangibles
23,748
25,588
38,707
24,663
40,217
Less: Average perpetual preferred
stock
166,356
166,356
166,356
166,356
166,356
Average tangible common equity
(non-GAAP)
$
1,345,426
$
1,306,445
$
1,304,536
$
1,326,043
$
1,410,342
ROTCE
(2)(3)
Net income available to common
shareholders (GAAP)
$
52,274
$
32,686
$
59,259
$
84,960
$
99,982
Plus: Amortization of intangibles, tax
effected
1,751
1,800
2,303
3,550
4,704
Net income available to common
shareholders before amortization of intangibles (non-GAAP)
$
54,025
$
34,486
$
61,562
$
88,510
$
104,686
Return on average tangible common equity
(ROTCE)
16.11
%
10.71
%
18.93
%
13.46
%
14.97
%
ATLANTIC UNION BANKSHARES CORPORATION
AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(UNAUDITED)
(Dollars in thousands, except share
data)
As of & For Three Months
Ended
As of & For Six Months
Ended
06/30/23
03/31/23
06/30/22
06/30/23
06/30/22
Operating
Measures (4)
Net income (GAAP)
$
55,241
$
35,653
$
62,226
$
90,894
$
105,916
Plus: Strategic cost saving initiatives,
net of tax
3,109
—
—
3,109
—
Plus: Legal reserve, net of tax
—
3,950
—
3,950
—
Plus: Strategic branch closing and
facility consolidation costs, net of tax
—
—
—
—
4,351
Less: Gain (loss) on sale of securities,
net of tax
2
(10,586
)
(2
)
(10,584
)
(2
)
Less: Gain on sale of DHFB, net of tax
—
—
7,984
—
7,984
Adjusted operating earnings (non-GAAP)
58,348
50,189
54,244
108,537
102,285
Less: Dividends on preferred stock
2,967
2,967
2,967
5,934
5,934
Adjusted operating earnings available to
common shareholders (non-GAAP)
$
55,381
$
47,222
$
51,277
$
102,603
$
96,351
Noninterest expense (GAAP)
$
105,661
$
108,274
$
98,768
$
213,934
$
204,089
Less: Amortization of intangible
assets
2,216
2,279
2,915
4,494
5,954
Less: Strategic cost saving
initiatives
3,935
—
—
3,935
—
Less: Legal reserve
—
5,000
—
5,000
—
Less: Strategic branch closing and
facility consolidation costs
—
—
—
—
5,508
Adjusted operating noninterest expense
(non-GAAP)
$
99,510
$
100,995
$
95,853
$
200,505
$
192,627
Noninterest income (GAAP)
$
24,197
$
9,628
$
38,286
$
33,824
$
68,439
Less: Gain (loss) on sale of
securities
2
(13,400
)
(2
)
(13,398
)
(2
)
Less: Gain on sale of DHFB
—
—
9,082
—
9,082
Adjusted operating noninterest income
(non-GAAP)
$
24,195
$
23,028
$
29,206
$
47,222
$
59,359
Net interest income (FTE) (non-GAAP)
(1)
$
155,750
$
157,231
$
142,344
$
312,983
$
276,610
Adjusted operating noninterest income
(non-GAAP)
24,195
23,028
29,206
47,222
59,359
Total adjusted revenue (FTE) (non-GAAP)
(1)
$
179,945
$
180,259
$
171,550
$
360,205
$
335,969
Efficiency ratio
59.94
%
66.40
%
55.78
%
63.04
%
60.36
%
Efficiency ratio (FTE) (1)
58.72
%
64.89
%
54.68
%
61.69
%
59.15
%
Adjusted operating efficiency ratio (FTE)
(1)(6)
55.30
%
56.03
%
55.88
%
55.66
%
57.34
%
Operating ROA
& ROE (4)
Adjusted operating earnings (non-GAAP)
$
58,348
$
50,189
$
54,244
$
108,537
$
102,285
Average assets (GAAP)
$
20,209,687
$
20,384,351
$
19,719,402
$
20,296,536
$
19,819,330
Return on average assets (ROA) (GAAP)
1.10
%
0.71
%
1.27
%
0.90
%
1.08
%
Adjusted operating return on average
assets (ROA) (non-GAAP)
1.16
%
1.00
%
1.10
%
1.08
%
1.04
%
Average equity (GAAP)
$
2,460,741
$
2,423,600
$
2,445,045
$
2,442,273
$
2,552,418
Return on average equity (ROE) (GAAP)
9.00
%
5.97
%
10.21
%
7.51
%
8.37
%
Adjusted operating return on average
equity (ROE) (non-GAAP)
9.51
%
8.40
%
8.90
%
8.96
%
8.08
%
Operating
ROTCE (2)(3)(4)
Adjusted operating earnings available to
common shareholders (non-GAAP)
$
55,381
$
47,222
$
51,277
$
102,603
$
96,351
Plus: Amortization of intangibles, tax
effected
1,751
1,800
2,303
3,550
4,704
Adjusted operating earnings available to
common shareholders before amortization of intangibles
(non-GAAP)
$
57,132
$
49,022
$
53,580
$
106,153
$
101,055
Average tangible common equity
(non-GAAP)
$
1,345,426
$
1,306,445
$
1,304,536
$
1,326,043
$
1,410,342
Adjusted operating return on average
tangible common equity (non-GAAP)
17.03
%
15.22
%
16.47
%
16.14
%
14.45
%
Pre-tax
pre-provision adjusted operating earnings (7)
Net income (GAAP)
$
55,241
$
35,653
$
62,226
$
90,894
$
105,916
Plus: Provision for credit losses
6,069
11,850
3,559
17,920
6,359
Plus: Income tax expense
9,310
7,294
12,500
16,604
21,773
Plus: Strategic cost saving
initiatives
3,935
—
—
3,935
—
Plus: Legal reserve
—
5,000
—
5,000
—
Plus: Strategic branch closing and
facility consolidation costs
—
—
—
—
5,508
Less: Gain (loss) on sale of
securities
2
(13,400
)
(2
)
(13,398
)
(2
)
Less: Gain on sale of DHFB
—
—
9,082
—
9,082
Pre-tax pre-provision adjusted operating
earnings (non-GAAP)
$
74,553
$
73,197
$
69,205
$
147,751
$
130,476
Less: Dividends on preferred stock
2,967
2,967
2,967
5,934
5,934
Pre-tax pre-provision adjusted operating
earnings available to common shareholders (non-GAAP)
$
71,586
$
70,230
$
66,238
$
141,817
$
124,542
Weighted average common shares
outstanding, diluted
74,995,557
74,835,514
74,849,871
74,915,977
75,201,326
Pre-tax pre-provision earnings per common
share, diluted
$
0.95
$
0.94
$
0.88
$
1.89
$
1.66
ATLANTIC UNION BANKSHARES CORPORATION
AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(UNAUDITED)
(Dollars in thousands, except share
data)
As of & For Three Months
Ended
As of & For Six Months
Ended
06/30/23
03/31/23
06/30/22
06/30/23
06/30/22
Mortgage
Origination Held for Sale Volume
Refinance Volume
$
4,076
$
3,452
$
14,916
$
7,528
$
48,116
Purchase Volume
32,168
32,192
84,551
64,361
142,846
Total Mortgage loan originations held for
sale
$
36,244
$
35,644
$
99,467
$
71,889
$
190,962
% of originations held for sale that are
refinances
11.2
%
9.7
%
15.0
%
10.5
%
25.2
%
Wealth
Assets under management
$
4,774,501
$
4,494,268
$
4,415,537
$
4,774,501
$
4,415,537
Other
Data
End of period full-time employees
1,878
1,840
1,856
1,878
1,856
Number of full-service branches
109
109
114
109
114
Number of automatic transaction machines
("ATMs")
123
127
131
123
131
_____________________________
(1)
These are non-GAAP financial measures. The
Company believes net interest income (FTE), total revenue (FTE),
and total adjusted revenue (FTE), which are used in computing net
interest margin (FTE), efficiency ratio (FTE) and adjusted
operating efficiency ratio (FTE), provide valuable additional
insight into the net interest margin and the efficiency ratio by
adjusting for differences in tax treatment of interest income
sources. The entire FTE adjustment is attributable to interest
income on earning assets, which is used in computing yield on
earning assets. Interest expense and the related cost of
interest-bearing liabilities and cost of funds ratios are not
affected by the FTE components.
(2)
These are non-GAAP financial measures.
Tangible assets and tangible common equity are used in the
calculation of certain profitability, capital, and per share
ratios. The Company believes tangible assets, tangible common
equity and the related ratios are meaningful measures of capital
adequacy because they provide a meaningful base for
period-to-period and company-to-company comparisons, which the
Company believes will assist investors in assessing the capital of
the Company and its ability to absorb potential losses. The Company
believes tangible common equity is an important indication of its
ability to grow organically and through business combinations as
well as its ability to pay dividends and to engage in various
capital management strategies.
(3)
These are non-GAAP financial measures. The
Company believes that ROTCE is a meaningful supplement to GAAP
financial measures and is useful to investors because it measures
the performance of a business consistently across time without
regard to whether components of the business were acquired or
developed internally.
(4)
These are non-GAAP financial measures.
Adjusted operating measures exclude, as applicable, gain (loss) on
sale of securities, a legal reserve associated with an ongoing
regulatory matter previously disclosed, strategic cost saving
initiatives (principally composed of severance charges related to
headcount reductions and charges for exiting leases), gain on sale
of DHFB, as well as strategic branch closure initiatives and
related facility consolidation costs (principally composed of real
estate, leases and other assets write downs, as well as severance
and expense reduction initiatives). The Company believes these
non-GAAP adjusted measures provide investors with important
information about the continuing economic results of the
organization’s operations.
(5)
All ratios at June 30, 2023 are estimates
and subject to change pending the Company’s filing of its FR Y9‑C.
All other periods are presented as filed.
(6)
The adjusted operating efficiency ratio
(FTE) excludes, as applicable, the amortization of intangible
assets, gain (loss) on sale of securities, a legal reserve
associated with an ongoing regulatory matter previously disclosed,
strategic cost saving initiatives, gain on sale of DHFB, as well as
strategic branch closure initiatives and related facility
consolidation costs. This measure is similar to the measure
utilized by the Company when analyzing corporate performance and is
also similar to the measure utilized for incentive compensation.
The Company believes this adjusted measure provides investors with
important information about the continuing economic results of the
organization’s operations.
(7)
These are non-GAAP financial measures.
Pre-tax pre-provision adjusted earnings excludes, as applicable,
the provision for credit losses, which can fluctuate significantly
from period-to-period under the CECL methodology, income tax
expense, gain (loss) on sale of securities, a legal reserve
associated with an ongoing regulatory matter previously disclosed,
strategic cost saving initiatives, gain on sale of DHFB, as well as
strategic branch closure initiatives and related facility
consolidation costs. The Company believes this adjusted measure
provides investors with important information about the continuing
economic results of the Company’s operations.
ATLANTIC UNION BANKSHARES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share
data)
June 30,
December 31,
June 30,
2023
2022
2022
ASSETS
(unaudited)
(audited)
(unaudited)
Cash and cash equivalents:
Cash and due from banks
$
199,778
$
216,384
$
158,902
Interest-bearing deposits in other
banks
227,015
102,107
82,086
Federal funds sold
1,474
1,457
388
Total cash and cash equivalents
428,267
319,948
241,376
Securities available for sale, at fair
value
2,182,448
2,741,816
2,951,421
Securities held to maturity, at
carrying value
849,610
847,732
780,749
Restricted stock, at cost
111,178
120,213
87,908
Loans held for sale
10,327
3,936
15,866
Loans held for investment, net of
deferred fees and costs
15,066,930
14,449,142
13,655,408
Less: allowance for loan and lease
losses
120,683
110,768
104,184
Total loans held for investment,
net
14,946,247
14,338,374
13,551,224
Premises and equipment, net
114,786
118,243
128,661
Goodwill
925,211
925,211
925,211
Amortizable intangibles, net
23,469
26,761
31,621
Bank owned life insurance
446,441
440,656
436,703
Other assets
564,348
578,248
511,059
Total assets
$
20,602,332
$
20,461,138
$
19,661,799
LIABILITIES
Noninterest-bearing demand
deposits
$
4,310,306
$
4,883,239
$
5,361,538
Interest-bearing deposits
12,101,681
11,048,438
10,767,097
Total deposits
16,411,987
15,931,677
16,128,635
Securities sold under agreements to
repurchase
130,461
142,837
118,658
Other short-term borrowings
799,400
1,176,000
290,000
Long-term borrowings
390,440
389,863
389,290
Other liabilities
445,574
448,024
343,740
Total liabilities
18,177,862
18,088,401
17,270,323
Commitments and contingencies
STOCKHOLDERS'
EQUITY
Preferred stock, $10.00 par
value
173
173
173
Common stock, $1.33 par value
99,088
98,873
98,822
Additional paid-in capital
1,776,494
1,772,440
1,767,063
Retained earnings
959,582
919,537
841,701
Accumulated other comprehensive
loss
(410,867
)
(418,286
)
(316,283
)
Total stockholders' equity
2,424,470
2,372,737
2,391,476
Total liabilities and stockholders'
equity
$
20,602,332
$
20,461,138
$
19,661,799
Common shares outstanding
74,998,075
74,712,622
74,688,314
Common shares authorized
200,000,000
200,000,000
200,000,000
Preferred shares outstanding
17,250
17,250
17,250
Preferred shares authorized
500,000
500,000
500,000
ATLANTIC UNION BANKSHARES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Dollars in thousands, except share
data)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
Interest and dividend income:
Interest and fees on loans
$
205,172
$
189,992
$
123,266
$
395,165
$
237,466
Interest on deposits in other banks
1,014
1,493
157
2,507
288
Interest and dividends on securities:
Taxable
15,565
16,753
14,695
32,317
28,361
Nontaxable
8,496
9,308
10,637
17,804
21,097
Total interest and dividend
income
230,247
217,546
148,755
447,793
287,212
Interest expense:
Interest on deposits
65,267
51,834
6,097
117,100
10,580
Interest on short-term borrowings
8,044
7,563
555
15,607
576
Interest on long-term borrowings
4,852
4,706
3,336
9,558
6,358
Total interest expense
78,163
64,103
9,988
142,265
17,514
Net interest income
152,084
153,443
138,767
305,528
269,698
Provision for credit losses
6,069
11,850
3,559
17,920
6,359
Net interest income after provision for
credit losses
146,015
141,593
135,208
287,608
263,339
Noninterest income:
Service charges on deposit accounts
8,118
7,902
8,040
16,020
15,637
Other service charges, commissions and
fees
1,693
1,746
1,709
3,439
3,364
Interchange fees
2,459
2,325
2,268
4,784
4,078
Fiduciary and asset management fees
4,359
4,262
6,939
8,620
14,194
Mortgage banking income
449
854
2,200
1,303
5,317
Gain (loss) on sale of securities
2
(13,400
)
(2
)
(13,398
)
(2
)
Bank owned life insurance income
2,870
2,828
2,716
5,698
5,413
Loan-related interest rate swap fees
2,316
1,439
2,600
3,755
6,460
Other operating income
1,931
1,672
11,816
3,603
13,978
Total noninterest income
24,197
9,628
38,286
33,824
68,439
Noninterest expenses:
Salaries and benefits
62,019
60,529
55,305
122,547
113,603
Occupancy expenses
6,094
6,356
6,395
12,450
13,278
Furniture and equipment expenses
3,565
3,752
3,590
7,317
7,187
Technology and data processing
8,566
8,142
7,862
16,708
15,658
Professional services
4,433
3,413
4,680
7,847
8,770
Marketing and advertising expense
2,817
2,351
2,502
5,168
4,665
FDIC assessment premiums and other
insurance
4,074
3,899
2,765
7,973
5,250
Franchise and other taxes
4,499
4,498
4,500
8,997
8,999
Loan-related expenses
1,619
1,552
1,867
3,171
3,643
Amortization of intangible assets
2,216
2,279
2,915
4,494
5,954
Other expenses
5,759
11,503
6,387
17,262
17,082
Total noninterest expenses
105,661
108,274
98,768
213,934
204,089
Income before income taxes
64,551
42,947
74,726
107,498
127,689
Income tax expense
9,310
7,294
12,500
16,604
21,773
Net income
$
55,241
$
35,653
$
62,226
90,894
105,916
Dividends on preferred stock
2,967
2,967
2,967
5,934
5,934
Net income available to common
shareholders
$
52,274
$
32,686
$
59,259
$
84,960
$
99,982
Basic earnings per common share
$
0.70
$
0.44
$
0.79
$
1.13
$
1.33
Diluted earnings per common share
$
0.70
$
0.44
$
0.79
$
1.13
$
1.33
AVERAGE BALANCES, INCOME AND EXPENSES,
YIELDS AND RATES (TAXABLE EQUIVALENT BASIS) (UNAUDITED)
(Dollars in thousands)
For the Quarter Ended
June 30, 2023
March 31, 2023
Average Balance
Interest Income / Expense
(1)
Yield / Rate (1)(2)
Average Balance
Interest Income / Expense
(1)
Yield / Rate (1)(2)
Assets:
Securities:
Taxable
$
1,865,193
$
15,565
3.35
%
$
2,038,215
$
16,753
3.33
%
Tax-exempt
1,311,469
10,755
3.29
%
1,429,346
11,782
3.34
%
Total securities
3,176,662
26,320
3.32
%
3,467,561
28,535
3.34
%
LHFI, net of deferred fees and costs
(3)
14,746,218
206,452
5.62
%
14,505,611
191,178
5.35
%
Other earning assets
168,929
1,141
2.71
%
264,916
1,621
2.48
%
Total earning assets
18,091,809
$
233,913
5.19
%
18,238,088
$
221,334
4.92
%
Allowance for loan and lease losses
(117,643
)
(112,172
)
Total non-earning assets
2,235,521
2,258,435
Total assets
$
20,209,687
$
20,384,351
Liabilities and
Stockholders' Equity:
Interest-bearing deposits:
Transaction and money market accounts
$
8,387,473
$
46,953
2.25
%
$
8,344,900
$
38,315
1.86
%
Regular savings
1,014,565
430
0.17
%
1,087,435
364
0.14
%
Time deposits
2,500,966
17,884
2.87
%
2,291,530
13,155
2.33
%
Total interest-bearing deposits
11,903,004
65,267
2.20
%
11,723,865
51,834
1.79
%
Other borrowings
1,071,171
12,896
4.83
%
1,122,244
12,269
4.43
%
Total interest-bearing
liabilities
$
12,974,175
$
78,163
2.42
%
$
12,846,109
$
64,103
2.02
%
Noninterest-bearing
liabilities:
Demand deposits
4,377,150
4,693,347
Other liabilities
397,621
421,295
Total liabilities
17,748,946
17,960,751
Stockholders' equity
2,460,741
2,423,600
Total liabilities and stockholders'
equity
$
20,209,687
$
20,384,351
Net interest income
$
155,750
$
157,231
Interest rate spread
2.77
%
2.90
%
Cost of funds
1.74
%
1.42
%
Net interest margin
3.45
%
3.50
%
_____________________________
(1)
Income and yields are reported on a
taxable equivalent basis using the statutory federal corporate tax
rate of 21%.
(2)
Rates and yields are annualized and
calculated from actual, not rounded amounts in thousands, which
appear above.
(3)
Nonaccrual loans are included in average
loans outstanding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230725353083/en/
Robert M. Gorman - (804) 523‑7828 Executive Vice President /
Chief Financial Officer
Atlantic Union Bankshares (NYSE:AUB)
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