Atlantic Union Bankshares Corporation (the “Company” or
“Atlantic Union”) (NYSE: AUB) reported net income available to
common shareholders of $51.1 million and basic and diluted earnings
per common share of $0.68 for the third quarter of 2023 and
adjusted operating earnings available to common shareholders(1) of
$59.8 million and adjusted diluted operating earnings per common
share(1) of $0.80 for the third quarter of 2023.
“Atlantic Union delivered strong operating results in the third
quarter,” said John C. Asbury, president and chief executive
officer of Atlantic Union. “We were especially pleased with our
customer deposit growth that more than funded loan growth during
the quarter, negligible charge-offs, and the impact of our expense
reduction actions taken earlier in the year. The proactive measures
we have taken to manage this challenging environment are serving us
well.”
“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. 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.”
STRATEGIC ACTIONS
Merger with American National Bankshares Inc. (“American
National”)
On July 25, 2023, the Company announced that it entered into a
merger agreement to acquire American National. During the third
quarter of 2023, the Company incurred pre-tax merger costs of
approximately $2.0 million.
Cost Saving Initiatives
As previously disclosed, the Company initiated a series of
strategic cost savings 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 pre-tax expenses of $8.7 million in the third
quarter of 2023 and $3.9 million in the second quarter of 2023,
principally composed of severance charges related to headcount
reductions, costs related to modifying certain third-party vendor
contracts, and charges for exiting certain leases.
Sale-Leaseback Transaction
On September 20, 2023, Atlantic Union Bank (the “Bank”) executed
a sale-leaseback transaction and sold 27 properties, which
consisted of 25 branches and a drive thru and parking lot, each
adjacent to a sold branch, to a single purchaser for an aggregate
purchase price of $45.8 million. Concurrently, the Bank entered
into absolute net lease agreements with the purchaser under which
the Bank will lease each of the properties for an initial term of
17 years with specified renewal options. The sale-leaseback
transaction resulted in a pre-tax gain of approximately $27.7
million during the third quarter of 2023, after transaction-related
expenses.
Available for Sale (“AFS”) Securities Sale
Concurrent with the sale-leaseback transaction, also on
September 20, 2023, the Company restructured a portion of its
investment portfolio by selling low yielding AFS securities with a
book value of $228.3 million, resulting in a pre-tax net loss of
$27.7 million. The net proceeds from the securities sale
transaction were reinvested into higher yielding AFS securities at
the end of the third quarter of 2023.
NET INTEREST INCOME
For the third quarter of 2023, net interest income was $151.9
million, a decrease of $143,000 from $152.1 million in the second
quarter of 2023. Net interest income (FTE)(1) was $155.7 million in
the third quarter of 2023, a decrease of $65,000 from $155.8
million in the second quarter of 2023 due to higher deposit costs
driven by increases in market interest rates, changes in the
deposit mix as depositors continue to migrate to higher costing
interest bearing deposit accounts, and growth in average deposit
balances, partially offset by an increase in loan yields on
variable rate loans due to increases in short-term interest rates
during the quarter, as well as growth in average loans held for
investment (“LHFI”). Our net interest margin decreased 10 basis
points from the prior quarter to 3.27% at September 30, 2023, and
our net interest margin (FTE)(1) decreased 10 basis points during
the same period to 3.35%. Earning asset yields increased by 20
basis points to 5.39% in the third quarter of 2023 compared to the
second quarter of 2023, primarily due to the impact of increases in
market interest rates on loans and loan growth. Our cost of funds
increased by 30 basis points to 2.04% at September 30, 2023
compared to the prior quarter, due primarily to higher deposit
costs driven by higher rates and changes in the deposit mix as
noted above.
The Company’s net interest margin (FTE) (1) includes the impact
of acquisition accounting fair value adjustments. Net accretion
related to acquisition accounting was $1.1 million for the third
quarter of 2023. The impact of net accretion in the second and
third quarters of 2023 are reflected in the following table
(dollars in thousands):
Loan
Deposit
Borrowings
Accretion
Amortization
Amortization
Total
For the quarter ended June 30, 2023
$
1,073
$
(7)
$
(213)
$
853
For the quarter ended September 30,
2023
1,300
(6)
(215)
1,079
ASSET QUALITY
Overview
At September 30, 2023, nonperforming assets (“NPAs”) as a
percentage of total LHFI was 0.19% and was unchanged from the prior
quarter and included nonaccrual loans of $28.6 million. Accruing
past due loans as a percentage of total LHFI totaled 27 basis
points at September 30, 2023, an increase of 11 basis points from
June 30, 2023, and an increase of 6 basis points from September 30,
2022. The increase in past due loan levels from June 30, 2023 was
primarily within the 30-59 days past due category and resulted
primarily from increases in past due credit relationships within
the commercial real estate and commercial and industrial
portfolios. Net charge-offs were 0.01% of total average LHFI
(annualized) for the third quarter of 2023, a decrease of 3 basis
points from June 30, 2023, and a decrease of 1 basis point from
September 30, 2022. The allowance for credit losses (“ACL”) totaled
$140.9 million at September 30, 2023, a $4.7 million increase from
the prior quarter.
Nonperforming Assets
At September 30, 2023, NPAs totaled $28.8 million, compared to
$29.2 million in the prior quarter. The following table shows a
summary of NPA balances at the quarter ended (dollars in
thousands):
September 30,
June 30,
March 31,
December 31,
September 30,
2023
2023
2023
2022
2022
Nonaccrual loans
$
28,626
$
29,105
$
29,082
$
27,038
$
26,500
Foreclosed properties
149
50
29
76
2,087
Total nonperforming assets
$
28,775
$
29,155
$
29,111
$
27,114
$
28,587
The following table shows the activity in nonaccrual loans for
the quarter ended (dollars in thousands):
September 30,
June 30,
March 31,
December 31,
September 30,
2023
2023
2023
2022
2022
Beginning Balance
$
29,105
$
29,082
$
27,038
$
26,500
$
29,070
Net customer payments
(1,947
)
(5,950
)
(1,755
)
(1,805
)
(3,725
)
Additions
1,651
6,685
4,151
2,935
1,302
Charge-offs
(64
)
(712
)
(39
)
(461
)
(125
)
Loans returning to accruing status
(119
)
—
(313
)
(131
)
—
Transfers to foreclosed property
—
—
—
—
(22
)
Ending Balance
$
28,626
$
29,105
$
29,082
$
27,038
$
26,500
Past Due Loans
At September 30, 2023, past due loans still accruing interest
totaled $40.6 million or 0.27% of total LHFI, compared to $24.1
million or 0.16% of total LHFI at June 30, 2023, and $29.0 million
or 0.21% of total LHFI at September 30, 2022. The increase in past
due loan levels from June 30, 2023 was primarily within the 30-59
days past due category and driven by increases in past due credit
relationships within the commercial real estate and commercial and
industrial portfolios. Of the total past due loans still accruing
interest, $11.9 million or 0.08% of total LHFI were loans past due
90 days or more at September 30, 2023, compared to $10.1 million or
0.07% of total LHFI at June 30, 2023, and $7.4 million or 0.05% of
total LHFI at September 30, 2022.
Allowance for Credit Losses
At September 30, 2023, the ACL was $140.9 million and included
an allowance for loan and lease losses (“ALLL”) of $125.6 million
and a reserve for unfunded commitments of $15.3 million. The ACL at
September 30, 2023 increased $4.7 million from June 30, 2023 due to
loan growth in the third quarter of 2023 and the impact of
continued uncertainty in the economic outlook.
The ACL as a percentage of total LHFI was 0.92% at September 30,
2023, an increase of 2 basis points from June 30, 2023. The ALLL as
a percentage of total LHFI was 0.82% at September 30, 2023,
compared to 0.80% at June 30, 2023.
Net Charge-offs
Net charge-offs were $294,000 or 0.01% of total average LHFI on
an annualized basis for the third quarter of 2023, compared to $1.6
million or 0.04% (annualized) for the second quarter of 2023, and
$587,000 or 0.02% (annualized) for the third quarter of 2022.
Provision for Credit Losses
For the third quarter of 2023, the Company recorded a provision
for credit losses of $5.0 million, compared to a provision for
credit losses of $6.1 million in the prior quarter, and a provision
for credit losses of $6.4 million in the third quarter of 2022.
NONINTEREST INCOME
Noninterest income increased $2.9 million to $27.1 million for
the third quarter of 2023 from $24.2 million in the prior quarter,
primarily driven by a $939,000 increase in other service charges,
commissions and fees primarily due to a merchant services vendor
contract signing bonus, a $714,000 increase in equity method
investment income (included within other operating income), a
$439,000 increase in service charges on deposits accounts, and a
$379,000 increase in loan-related interest rate swap fees due to
several new swap transactions. Noninterest income in the third
quarter also included a $27.7 million gain related to the
sale-leaseback transaction, included in other operating income,
which was almost wholly offset by $27.6 million of losses incurred
on the sale of AFS securities in the third quarter of 2023.
NONINTEREST EXPENSE
Noninterest expense increased $2.8 million to $108.5 million for
the third quarter of 2023 from $105.7 million in the prior quarter,
primarily driven by a $10.0 million increase in other expenses,
which includes $8.7 million in expenses associated with strategic
cost saving initiatives and $2.0 million in merger-related costs.
Adjusted operating noninterest expense,(1) which excludes
amortization of intangible assets ($2.2 million in both the third
quarter and second quarter of 2023), expenses associated with
strategic cost savings initiatives ($8.7 million in the third
quarter and $3.9 million in the second quarter of 2023), and
merger-related costs associated with the American National merger
($2.0 million in the third quarter of 2023), decreased $3.9 million
to $95.7 million for the third quarter of 2023 from $99.5 million
in the prior quarter. The decrease in adjusted operating
noninterest expense(1) was primarily due to a $1.6 million decrease
in salaries and benefits expense reflecting the impact of strategic
cost saving initiatives, a $1.1 million decrease in professional
services expense related to strategic projects in the prior
quarter, a $643,000 decrease in technology and data processing
expense, and a $598,000 decrease in marketing and advertising
expense.
INCOME TAXES
The effective tax rate for the three months ended September 30,
2023 and 2022 was 17.6% and 17.0%, respectively, and the effective
tax rate for the nine months ended September 30, 2023 and 2022 was
16.3% and 17.0%, respectively.
BALANCE SHEET
At September 30, 2023, total assets were $20.7 billion, an
increase of $133.9 million or approximately 2.6% (annualized) from
June 30, 2023, and an increase of $786.0 million or approximately
3.9% from September 30, 2022. Total assets increased from the prior
quarter primarily due to a $216.7 million increase in LHFI (net of
deferred fees and costs), partially offset by a $110.3 million
decrease in investment securities due primarily to the decline in
market value of the AFS securities portfolio due to the impact of
market interest rates. 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 $607.7 million
decrease in investment securities due primarily to the sale of AFS
securities in the first and third quarters of 2023.
At September 30, 2023, LHFI (net of deferred fees and costs)
totaled $15.3 billion, an increase of $216.7 million or 5.7%
(annualized) from $15.1 billion at June 30, 2023. Average LHFI (net
of deferred fees and costs) totaled $15.1 billion at September 30,
2023, an increase of $393.5 million or 10.6% (annualized) from the
prior quarter. At September 30, 2023, both LHFI (net of deferred
fees and costs) and average LHFI (net of deferred fees and costs)
increased $1.4 billion from September 30, 2022. LHFI (net of
deferred fees and costs) increased from the prior quarter primarily
due to increases in the multifamily real estate and other
commercial portfolios and increased from 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 September 30, 2023, total investments were $3.0 billion, a
decrease of $110.3 million from June 30, 2023 and a decrease of
$607.7 million from September 30, 2022. AFS securities totaled $2.1
billion at September 30, 2023, $2.2 billion at June 30, 2023, and
$2.7 billion at September 30, 2022. At September 30, 2023, total
net unrealized losses on the AFS securities portfolio were $523.1
million, compared to $450.1 million at June 30, 2023 and $507.7
million at September 30, 2022. Held to maturity (“HTM”) securities
are carried at cost and totaled $843.3 million at September 30,
2023, $849.6 million at June 30, 2023, and $841.3 million at
September 30, 2022 and had net unrealized losses of $81.2 million
at September 30, 2023, compared to $41.8 million at June 30, 2023
and $75.9 million at September 30, 2022.
At September 30, 2023, total deposits were $16.8 billion, an
increase of $374.5 million or approximately 9.1% (annualized) from
June 30, 2023. Average deposits at September 30, 2023 increased
from the prior quarter by $515.5 million or 12.6% (annualized).
Total deposits at September 30, 2023 increased $240.3 million or
1.5% from September 30, 2022, and quarterly average deposits at
September 30, 2023 increased $307.4 million or 1.9% from the same
period in the prior year. Total deposits increased from the prior
quarter and the prior year period primarily due to increases in
interest bearing customer deposits and brokered deposits, partially
offset by decreases in demand deposits.
At September 30, 2023, total borrowings were $1.0 billion, a
decrease of $299.6 million from June 30, 2023, and an increase of
$351.1 million from September 30, 2022. Total borrowings decreased
from the prior quarter primarily due to paydowns of short-term
borrowings due to deposit growth and increased from the prior year
period due to increased short-term borrowings used to fund loan
growth.
The following table shows the Company’s capital ratios at the
quarters ended:
September 30,
June 30,
September 30,
2023
2023
2022
Common equity Tier 1 capital ratio (2)
9.94
%
9.86
%
9.96
%
Tier 1 capital ratio (2)
10.88
%
10.81
%
10.98
%
Total capital ratio (2)
13.70
%
13.64
%
13.80
%
Leverage ratio (Tier 1 capital to average
assets) (2)
9.62
%
9.64
%
9.32
%
Common equity to total assets
10.72
%
10.96
%
10.60
%
Tangible common equity to tangible assets
(1)
6.45
%
6.66
%
6.11
%
_____________________________
During the third 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 second quarter
of 2023 and the third quarter of 2022. During the third quarter of
2023, the Company also declared and paid cash dividends of $0.30
per common share, consistent with the second quarter of 2023 and
the third 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 September 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.
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 123 ATMs located
throughout Virginia and in portions of Maryland and North Carolina
as of September 30, 2023. 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.
THIRD QUARTER 2023 EARNINGS RELEASE CONFERENCE CALL
The Company will hold a conference call and webcast for
investors at 9:00 a.m. Eastern Time on Thursday, October 19, 2023
during which the Company’s management will review the Company’s
financial results for the third quarter 2023 and provide an update
on recent activities.
The listen-only webcast and the accompanying slides can be
accessed at: https://edge.media-server.com/mmc/p/xamg8swa.
For analysts who wish to participate in the conference call,
please register at the following URL:
https://register.vevent.com/register/BI2b71d4244e9e49b393decce9c92d4054.
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
September 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 expected impact of our cost saving
measures initiative in the second quarter of 2023, 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;
- the failure to close our previously announced merger with
American National when expected or at all because required
regulatory, American National shareholder or other approvals and
other conditions to closing are not received or satisfied on a
timely basis or at all, and the risk that any regulatory approvals
may result in the imposition of conditions that could adversely
affect the combined company or the expected benefits of the
proposed merger;
- the occurrence of any event, change or other circumstances that
could give rise to the right of one or both of the parties to
terminate the merger agreement between the Company and American
National;
- any change in the purchase accounting assumptions used
regarding the American National assets acquired and liabilities
assumed to determine the fair value and credit marks, particularly
in light of the current rising interest rate environment;
- the possibility that the anticipated benefits of the proposed
merger, including anticipated cost savings and strategic gains, are
not realized when expected or at all;
- the proposed merger being more expensive or taking longer to
complete than anticipated, including as a result of unexpected
factors or events;
- the diversion of management’s attention from ongoing business
operations and opportunities do to the proposed merger;
- potential adverse reactions or changes to business or employee
relationships, including those resulting from the announcement or
completion of the proposed merger;
- the dilutive effect of shares of the Company’s common stock to
be issued at the completion of the proposed merger;
- changes in the Company’s or American National’s share price
before closing;
- 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 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; and
- other factors, many of which are beyond our control.
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
Reports on Form 10-Q for the quarters ended June 30, 2023 and 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 our 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 Nine Months
Ended
09/30/23
06/30/23
09/30/22
09/30/23
09/30/22
Results of
Operations
Interest and dividend income
$
247,159
$
230,247
$
171,156
$
694,952
$
458,367
Interest expense
95,218
78,163
20,441
237,483
37,954
Net interest income
151,941
152,084
150,715
457,469
420,413
Provision for credit losses
4,991
6,069
6,412
22,911
12,771
Net interest income after provision for
credit losses
146,950
146,015
144,303
434,558
407,642
Noninterest income
27,094
24,197
25,584
60,918
94,023
Noninterest expenses
108,508
105,661
99,923
322,442
304,012
Income before income taxes
65,536
64,551
69,964
173,034
197,653
Income tax expense
11,519
9,310
11,894
28,123
33,667
Net income
54,017
55,241
58,070
144,911
163,986
Dividends on preferred stock
2,967
2,967
2,967
8,901
8,901
Net income available to common
shareholders
$
51,050
$
52,274
$
55,103
$
136,010
$
155,085
Interest earned on earning assets (FTE)
(1)
$
250,903
$
233,913
$
174,998
$
706,150
$
469,122
Net interest income (FTE) (1)
155,685
155,750
154,557
468,667
431,168
Total revenue (FTE) (1)
182,779
179,947
180,141
529,585
525,191
Pre-tax pre-provision adjusted operating
earnings (7)
81,086
74,553
76,376
228,837
206,852
Key
Ratios
Earnings per common share, diluted
$
0.68
$
0.70
$
0.74
$
1.81
$
2.07
Return on average assets (ROA)
1.04
%
1.10
%
1.15
%
0.95
%
1.10
%
Return on average equity (ROE)
8.76
%
9.00
%
9.45
%
7.93
%
8.72
%
Return on average tangible common equity
(ROTCE) (2) (3)
15.71
%
16.11
%
17.21
%
14.22
%
15.69
%
Efficiency ratio
60.61
%
59.94
%
56.68
%
62.20
%
59.10
%
Efficiency ratio (FTE) (1)
59.37
%
58.72
%
55.47
%
60.89
%
57.89
%
Net interest margin
3.27
%
3.37
%
3.34
%
3.35
%
3.16
%
Net interest margin (FTE) (1)
3.35
%
3.45
%
3.43
%
3.43
%
3.24
%
Yields on earning assets (FTE) (1)
5.39
%
5.19
%
3.88
%
5.17
%
3.52
%
Cost of interest-bearing liabilities
2.80
%
2.42
%
0.68
%
2.42
%
0.43
%
Cost of deposits
1.97
%
1.61
%
0.37
%
1.63
%
0.21
%
Cost of funds
2.04
%
1.74
%
0.45
%
1.74
%
0.28
%
Operating
Measures (4)
Adjusted operating earnings
$
62,749
$
58,348
$
58,070
$
171,286
$
160,355
Adjusted operating earnings available to
common shareholders
59,782
55,381
55,103
162,385
151,454
Adjusted operating earnings per common
share, diluted
$
0.80
$
0.74
$
0.74
$
2.17
$
2.02
Adjusted operating ROA
1.21
%
1.16
%
1.15
%
1.12
%
1.08
%
Adjusted operating ROE
10.17
%
9.51
%
9.45
%
9.37
%
8.53
%
Adjusted operating ROTCE (2) (3)
18.31
%
17.03
%
17.21
%
16.88
%
15.34
%
Adjusted operating efficiency ratio (FTE)
(1)(6)
52.36
%
55.30
%
54.09
%
54.55
%
56.20
%
Per Share
Data
Earnings per common share, basic
$
0.68
$
0.70
$
0.74
$
1.81
$
2.07
Earnings per common share, diluted
0.68
0.70
0.74
1.81
2.07
Cash dividends paid per common share
0.30
0.30
0.30
0.90
0.86
Market value per share
28.78
25.95
30.38
28.78
30.38
Book value per common share
29.82
30.31
28.46
29.82
28.46
Tangible book value per common share
(2)
17.12
17.58
15.61
17.12
15.61
Price to earnings ratio, diluted
10.65
9.28
10.37
11.86
10.99
Price to book value per common share
ratio
0.97
0.86
1.07
0.97
1.07
Price to tangible book value per common
share ratio (2)
1.68
1.48
1.95
1.68
1.95
Weighted average common shares
outstanding, basic
74,999,128
74,995,450
74,703,699
74,942,851
75,029,000
Weighted average common shares
outstanding, diluted
74,999,128
74,995,557
74,705,054
74,943,999
75,034,084
Common shares outstanding at end of
period
74,997,132
74,998,075
74,703,774
74,997,132
74,703,774
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 Nine Months
Ended
09/30/23
06/30/23
09/30/22
09/30/23
09/30/22
Capital
Ratios
Common equity Tier 1 capital ratio (5)
9.94
%
9.86
%
9.96
%
9.94
%
9.96
%
Tier 1 capital ratio (5)
10.88
%
10.81
%
10.98
%
10.88
%
10.98
%
Total capital ratio (5)
13.70
%
13.64
%
13.80
%
13.70
%
13.80
%
Leverage ratio (Tier 1 capital to average
assets) (5)
9.62
%
9.64
%
9.32
%
9.62
%
9.32
%
Common equity to total assets
10.72
%
10.96
%
10.60
%
10.72
%
10.60
%
Tangible common equity to tangible assets
(2)
6.45
%
6.66
%
6.11
%
6.45
%
6.11
%
Financial
Condition
Assets
$
20,736,236
$
20,602,332
$
19,950,231
$
20,736,236
$
19,950,231
LHFI (net of deferred fees and costs)
15,283,620
15,066,930
13,918,720
15,283,620
13,918,720
Securities
3,032,982
3,143,235
3,640,722
3,032,982
3,640,722
Earning Assets
18,491,561
18,452,007
17,790,324
18,491,561
17,790,324
Goodwill
925,211
925,211
925,211
925,211
925,211
Amortizable intangibles, net
21,277
23,469
29,142
21,277
29,142
Deposits
16,786,505
16,411,987
16,546,216
16,786,505
16,546,216
Borrowings
1,020,669
1,320,301
669,558
1,020,669
669,558
Stockholders' equity
2,388,801
2,424,470
2,281,150
2,388,801
2,281,150
Tangible common equity (2)
1,275,956
1,309,433
1,160,440
1,275,956
1,160,440
LHFI, net of
deferred fees and costs
Construction and land development
$
1,132,940
$
1,231,720
$
1,068,201
$
1,132,940
$
1,068,201
Commercial real estate - owner
occupied
1,975,281
1,952,189
1,953,872
1,975,281
1,953,872
Commercial real estate - non-owner
occupied
4,148,218
4,113,318
3,900,325
4,148,218
3,900,325
Multifamily real estate
947,153
788,895
774,970
947,153
774,970
Commercial & Industrial
3,432,319
3,373,148
2,709,047
3,432,319
2,709,047
Residential 1-4 Family - Commercial
517,034
518,317
542,612
517,034
542,612
Residential 1-4 Family - Consumer
1,057,294
1,017,698
891,353
1,057,294
891,353
Residential 1-4 Family - Revolving
599,282
600,339
588,452
599,282
588,452
Auto
534,361
585,756
561,277
534,361
561,277
Consumer
126,151
134,709
172,776
126,151
172,776
Other Commercial
813,587
750,841
755,835
813,587
755,835
Total LHFI
$
15,283,620
$
15,066,930
$
13,918,720
$
15,283,620
$
13,918,720
Deposits
Interest checking accounts
$
5,055,464
$
4,824,192
$
4,354,351
$
5,055,464
$
4,354,351
Money market accounts
3,472,953
3,413,936
3,962,470
3,472,953
3,962,470
Savings accounts
950,363
986,081
1,173,566
950,363
1,173,566
Customer time deposits of $250,000 and
over
634,950
578,739
391,332
634,950
391,332
Other customer time deposits
2,011,106
1,813,031
1,352,440
2,011,106
1,352,440
Time deposits
2,646,056
2,391,770
1,743,772
2,646,056
1,743,772
Total interest-bearing customer
deposits
12,124,836
11,615,979
11,234,159
12,124,836
11,234,159
Brokered deposits
516,720
485,702
21,119
516,720
21,119
Total interest-bearing deposits
$
12,641,556
$
12,101,681
$
11,255,278
$
12,641,556
$
11,255,278
Demand deposits
4,144,949
4,310,306
5,290,938
4,144,949
5,290,938
Total deposits
$
16,786,505
$
16,411,987
$
16,546,216
$
16,786,505
$
16,546,216
Averages
Assets
$
20,596,189
$
20,209,687
$
19,980,500
$
20,397,518
$
19,873,644
LHFI (net of deferred fees and costs)
15,139,761
14,746,218
13,733,447
14,799,520
13,521,507
Loans held for sale
10,649
14,413
15,063
10,330
16,779
Securities
3,101,658
3,176,662
3,818,607
3,247,287
3,981,308
Earning assets
18,462,505
18,091,809
17,879,222
18,264,957
17,803,550
Deposits
16,795,611
16,280,154
16,488,224
16,499,045
16,397,790
Time deposits
2,914,004
2,500,966
1,745,224
2,571,114
1,726,341
Interest-bearing deposits
12,576,776
11,903,004
11,163,945
12,071,006
11,091,115
Borrowings
905,170
1,071,171
703,272
1,032,067
660,995
Interest-bearing liabilities
13,481,946
12,974,175
11,867,217
13,103,073
11,752,110
Stockholders' equity
2,446,902
2,460,741
2,436,999
2,443,833
2,513,522
Tangible common equity (2)
1,332,993
1,345,426
1,315,085
1,328,385
1,378,240
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 Nine Months
Ended
09/30/23
06/30/23
09/30/22
09/30/23
09/30/22
Asset
Quality
Allowance for
Credit Losses (ACL)
Beginning balance, Allowance for loan and
lease losses (ALLL)
$
120,683
$
116,512
$
104,184
$
110,768
$
99,787
Add: Recoveries
1,335
1,035
1,214
3,537
3,745
Less: Charge-offs
1,629
2,602
1,801
9,957
5,267
Add: Provision for loan losses
5,238
5,738
4,412
21,279
9,744
Ending balance, ALLL
$
125,627
$
120,683
$
108,009
$
125,627
$
108,009
Beginning balance, Reserve for unfunded
commitment (RUC)
$
15,548
$
15,199
$
9,000
$
13,675
$
8,000
Add: Provision for unfunded
commitments
(246
)
349
2,000
1,627
3,000
Ending balance, RUC
$
15,302
$
15,548
$
11,000
$
15,302
$
11,000
Total ACL
$
140,929
$
136,231
$
119,009
$
140,929
$
119,009
ACL / total LHFI
0.92
%
0.90
%
0.86
%
0.92
%
0.86
%
ALLL / total LHFI
0.82
%
0.80
%
0.78
%
0.82
%
0.78
%
Net charge-offs / total average LHFI
(annualized)
0.01
%
0.04
%
0.02
%
0.06
%
0.02
%
Provision for loan losses/ total average
LHFI (annualized)
0.14
%
0.16
%
0.13
%
0.19
%
0.10
%
Nonperforming
Assets
Construction and land development
$
355
$
284
$
421
$
355
$
421
Commercial real estate - owner
occupied
3,882
3,978
4,883
3,882
4,883
Commercial real estate - non-owner
occupied
5,999
6,473
1,923
5,999
1,923
Commercial & Industrial
2,256
2,738
2,289
2,256
2,289
Residential 1-4 Family - Commercial
1,833
1,844
1,962
1,833
1,962
Residential 1-4 Family - Consumer
10,368
10,033
11,121
10,368
11,121
Residential 1-4 Family - Revolving
3,572
3,461
3,583
3,572
3,583
Auto
361
291
318
361
318
Consumer
—
3
—
—
—
Nonaccrual loans
$
28,626
$
29,105
$
26,500
$
28,626
$
26,500
Foreclosed property
149
50
2,087
149
2,087
Total nonperforming assets (NPAs)
$
28,775
$
29,155
$
28,587
$
28,775
$
28,587
Construction and land development
$
25
$
24
$
115
$
25
$
115
Commercial real estate - owner
occupied
2,395
2,463
3,517
2,395
3,517
Commercial real estate - non-owner
occupied
2,835
2,763
621
2,835
621
Commercial & Industrial
792
810
526
792
526
Residential 1-4 Family - Commercial
817
693
308
817
308
Residential 1-4 Family - Consumer
3,632
1,716
680
3,632
680
Residential 1-4 Family - Revolving
1,034
1,259
1,255
1,034
1,255
Auto
229
243
148
229
148
Consumer
97
74
86
97
86
Other Commercial
15
66
95
15
95
LHFI ≥ 90 days and still accruing
$
11,871
$
10,111
$
7,351
$
11,871
$
7,351
Total NPAs and LHFI ≥ 90 days
$
40,646
$
39,266
$
35,938
$
40,646
$
35,938
NPAs / total LHFI
0.19
%
0.19
%
0.21
%
0.19
%
0.21
%
NPAs / total assets
0.14
%
0.14
%
0.14
%
0.14
%
0.14
%
ALLL / nonaccrual loans
438.86
%
414.65
%
407.58
%
438.86
%
407.58
%
ALLL/ nonperforming assets
436.58
%
413.94
%
377.83
%
436.58
%
377.83
%
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 Nine Months
Ended
09/30/23
06/30/23
09/30/22
09/30/23
09/30/22
Past Due
Detail
Construction and land development
$
—
$
295
$
120
$
—
$
120
Commercial real estate - owner
occupied
3,501
602
7,337
3,501
7,337
Commercial real estate - non-owner
occupied
4,573
—
—
4,573
—
Commercial & Industrial
3,049
254
796
3,049
796
Residential 1-4 Family - Commercial
744
1,076
1,410
744
1,410
Residential 1-4 Family - Consumer
1,000
1,504
1,123
1,000
1,123
Residential 1-4 Family - Revolving
2,326
1,729
1,115
2,326
1,115
Auto
2,703
2,877
1,876
2,703
1,876
Consumer
517
334
409
517
409
Other Commercial
3,545
23
—
3,545
—
LHFI 30-59 days past due
$
21,958
$
8,694
$
14,186
$
21,958
$
14,186
Construction and land development
$
386
$
—
$
107
$
386
$
107
Commercial real estate - owner
occupied
1,902
10
763
1,902
763
Commercial real estate - non-owner
occupied
797
—
457
797
457
Multifamily real estate
150
—
—
150
—
Commercial & Industrial
576
400
3,128
576
3,128
Residential 1-4 Family - Commercial
67
189
97
67
97
Residential 1-4 Family - Consumer
1,775
2,813
1,449
1,775
1,449
Residential 1-4 Family - Revolving
602
1,114
1,081
602
1,081
Auto
339
564
257
339
257
Consumer
164
214
101
164
101
LHFI 60-89 days past due
$
6,758
$
5,304
$
7,440
$
6,758
$
7,440
Past Due and still accruing
$
40,587
$
24,109
$
28,977
$
40,587
$
28,977
Past Due and still accruing / total
LHFI
0.27
%
0.16
%
0.21
%
0.27
%
0.21
%
Alternative
Performance Measures (non-GAAP)
Net interest
income (FTE) (1)
Net interest income (GAAP)
$
151,941
$
152,084
$
150,715
$
457,469
$
420,413
FTE adjustment
3,744
3,666
3,842
11,198
10,755
Net interest income (FTE) (non-GAAP)
$
155,685
$
155,750
$
154,557
$
468,667
$
431,168
Noninterest income (GAAP)
27,094
24,197
25,584
60,918
94,023
Total revenue (FTE) (non-GAAP)
$
182,779
$
179,947
$
180,141
$
529,585
$
525,191
Average earning assets
$
18,462,505
$
18,091,809
$
17,879,222
$
18,264,957
$
17,803,550
Net interest margin
3.27
%
3.37
%
3.34
%
3.35
%
3.16
%
Net interest margin (FTE)
3.35
%
3.45
%
3.43
%
3.43
%
3.24
%
Tangible
Assets (2)
Ending assets (GAAP)
$
20,736,236
$
20,602,332
$
19,950,231
$
20,736,236
$
19,950,231
Less: Ending goodwill
925,211
925,211
925,211
925,211
925,211
Less: Ending amortizable intangibles
21,277
23,469
29,142
21,277
29,142
Ending tangible assets (non-GAAP)
$
19,789,748
$
19,653,652
$
18,995,878
$
19,789,748
$
18,995,878
Tangible Common
Equity (2)
Ending equity (GAAP)
$
2,388,801
$
2,424,470
$
2,281,150
$
2,388,801
$
2,281,150
Less: Ending goodwill
925,211
925,211
925,211
925,211
925,211
Less: Ending amortizable intangibles
21,277
23,469
29,142
21,277
29,142
Less: Perpetual preferred stock
166,357
166,357
166,357
166,357
166,357
Ending tangible common equity
(non-GAAP)
$
1,275,956
$
1,309,433
$
1,160,440
$
1,275,956
$
1,160,440
Average equity (GAAP)
$
2,446,902
$
2,460,741
$
2,436,999
$
2,443,833
$
2,513,522
Less: Average goodwill
925,211
925,211
925,211
925,211
932,035
Less: Average amortizable intangibles
22,342
23,748
30,347
23,881
36,891
Less: Average perpetual preferred
stock
166,356
166,356
166,356
166,356
166,356
Average tangible common equity
(non-GAAP)
$
1,332,993
$
1,345,426
$
1,315,085
$
1,328,385
$
1,378,240
ROTCE
(2)(3)
Net income available to common
shareholders (GAAP)
$
51,050
$
52,274
$
55,103
$
136,010
$
155,085
Plus: Amortization of intangibles, tax
effected
1,732
1,751
1,959
5,283
6,663
Net income available to common
shareholders before amortization of intangibles (non-GAAP)
$
52,782
$
54,025
$
57,062
$
141,293
$
161,748
Return on average tangible common equity
(ROTCE)
15.71
%
16.11
%
17.21
%
14.22
%
15.69
%
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 Nine Months
Ended
09/30/23
06/30/23
09/30/22
09/30/23
09/30/22
Operating
Measures (4)
Net income (GAAP)
$
54,017
$
55,241
$
58,070
$
144,911
$
163,986
Plus: Strategic cost saving initiatives,
net of tax
6,851
3,109
—
9,959
—
Plus: Merger-related costs, net of tax
1,965
—
—
1,965
—
Plus: Legal reserve, net of tax
—
—
—
3,950
—
Plus: Strategic branch closing and
facility consolidation costs, net of tax
—
—
—
—
4,351
Less: (Loss) gain on sale of securities,
net of tax
(21,799
)
2
—
(32,384
)
(2
)
Less: Gain on sale-leaseback transaction,
net of tax
21,883
—
—
21,883
—
Less: Gain on sale of DHFB, net of tax
—
—
—
—
7,984
Adjusted operating earnings (non-GAAP)
62,749
58,348
58,070
171,286
160,355
Less: Dividends on preferred stock
2,967
2,967
2,967
8,901
8,901
Adjusted operating earnings available to
common shareholders (non-GAAP)
$
59,782
$
55,381
$
55,103
$
162,385
$
151,454
Operating
Efficiency Ratio (1)(6)
Noninterest expense (GAAP)
$
108,508
$
105,661
$
99,923
$
322,442
$
304,012
Less: Amortization of intangible
assets
2,193
2,216
2,480
6,687
8,434
Less: Strategic cost saving
initiatives
8,672
3,935
—
12,607
—
Less: Merger-related costs
1,993
—
—
1,993
—
Less: Legal reserve
—
—
—
5,000
—
Less: Strategic branch closing and
facility consolidation costs
—
—
—
—
5,508
Adjusted operating noninterest expense
(non-GAAP)
$
95,650
$
99,510
$
97,443
$
296,155
$
290,070
Noninterest income (GAAP)
$
27,094
$
24,197
$
25,584
$
60,918
$
94,023
Less: (Loss) gain on sale of
securities
(27,594
)
2
—
(40,992
)
(2
)
Less: Gain on sale-leaseback
transaction
27,700
—
—
27,700
—
Less: Gain on sale of DHFB
—
—
—
—
9,082
Adjusted operating noninterest income
(non-GAAP)
$
26,988
$
24,195
$
25,584
$
74,210
$
84,943
Net interest income (FTE) (non-GAAP)
(1)
$
155,685
$
155,750
$
154,557
$
468,667
$
431,168
Adjusted operating noninterest income
(non-GAAP)
26,988
24,195
25,584
74,210
84,943
Total adjusted revenue (FTE) (non-GAAP)
(1)
$
182,673
$
179,945
$
180,141
$
542,877
$
516,111
Efficiency ratio
60.61
%
59.94
%
56.68
%
62.20
%
59.10
%
Efficiency ratio (FTE) (1)
59.37
%
58.72
%
55.47
%
60.89
%
57.89
%
Adjusted operating efficiency ratio (FTE)
(1)(6)
52.36
%
55.30
%
54.09
%
54.55
%
56.20
%
Operating ROA
& ROE (4)
Adjusted operating earnings (non-GAAP)
$
62,749
$
58,348
$
58,070
$
171,286
$
160,355
Average assets (GAAP)
$
20,596,189
$
20,209,687
$
19,980,500
$
20,397,518
$
19,873,644
Return on average assets (ROA) (GAAP)
1.04
%
1.10
%
1.15
%
0.95
%
1.10
%
Adjusted operating return on average
assets (ROA) (non-GAAP)
1.21
%
1.16
%
1.15
%
1.12
%
1.08
%
Average equity (GAAP)
$
2,446,902
$
2,460,741
$
2,436,999
$
2,443,833
$
2,513,522
Return on average equity (ROE) (GAAP)
8.76
%
9.00
%
9.45
%
7.93
%
8.72
%
Adjusted operating return on average
equity (ROE) (non-GAAP)
10.17
%
9.51
%
9.45
%
9.37
%
8.53
%
Operating
ROTCE (2)(3)(4)
Adjusted operating earnings available to
common shareholders (non-GAAP)
$
59,782
$
55,381
$
55,103
$
162,385
$
151,454
Plus: Amortization of intangibles, tax
effected
1,732
1,751
1,959
5,283
6,663
Adjusted operating earnings available to
common shareholders before amortization of intangibles
(non-GAAP)
$
61,514
$
57,132
$
57,062
$
167,668
$
158,117
Average tangible common equity
(non-GAAP)
$
1,332,993
$
1,345,426
$
1,315,085
$
1,328,385
$
1,378,240
Adjusted operating return on average
tangible common equity (non-GAAP)
18.31
%
17.03
%
17.21
%
16.88
%
15.34
%
Pre-tax
pre-provision adjusted operating earnings (7)
Net income (GAAP)
$
54,017
$
55,241
$
58,070
$
144,911
$
163,986
Plus: Provision for credit losses
4,991
6,069
6,412
22,911
12,771
Plus: Income tax expense
11,519
9,310
11,894
28,123
33,667
Plus: Strategic cost saving
initiatives
8,672
3,935
—
12,607
—
Plus: Merger-related costs
1,993
—
—
1,993
—
Plus: Legal reserve
—
—
—
5,000
—
Plus: Strategic branch closing and
facility consolidation costs
—
—
—
—
5,508
Less: (Loss) gain on sale of
securities
(27,594
)
2
—
(40,992
)
(2
)
Less: Gain on sale-leaseback
transaction
27,700
—
—
27,700
—
Less: Gain on sale of DHFB
—
—
—
—
9,082
Pre-tax pre-provision adjusted operating
earnings (non-GAAP)
$
81,086
$
74,553
$
76,376
$
228,837
$
206,852
Less: Dividends on preferred stock
2,967
2,967
2,967
8,901
8,901
Pre-tax pre-provision adjusted operating
earnings available to common shareholders (non-GAAP)
$
78,119
$
71,586
$
73,409
$
219,936
$
197,951
Weighted average common shares
outstanding, diluted
74,999,128
74,995,557
74,705,054
74,943,999
75,034,084
Pre-tax pre-provision earnings per common
share, diluted
$
1.04
$
0.95
$
0.98
$
2.93
$
2.64
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 Nine Months
Ended
09/30/23
06/30/23
09/30/22
09/30/23
09/30/22
Mortgage
Origination Held for Sale Volume
Refinance Volume
$
2,239
$
4,076
$
5,637
$
9,767
$
53,753
Purchase Volume
35,815
32,168
66,360
100,175
209,206
Total Mortgage loan originations held for
sale
$
38,054
$
36,244
$
71,997
$
109,942
$
262,959
% of originations held for sale that are
refinances
5.9
%
11.2
%
7.8
%
8.9
%
20.4
%
Wealth
Assets under management
$
4,675,523
$
4,774,501
$
4,065,059
$
4,675,523
$
4,065,059
Other
Data
End of period full-time employees
1,788
1,878
1,890
1,788
1,890
Number of full-service branches
109
109
114
109
114
Number of automatic transaction machines
("ATMs")
123
123
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, strategic cost
saving initiatives (principally composed of severance charges
related to headcount reductions, costs related to modifying certain
third party vendor contracts, and charges for exiting certain
leases), merger-related costs, a legal reserve associated with an
ongoing regulatory matter previously disclosed, strategic branch
closing and related facility consolidation costs (principally
composed of real estate, leases and other assets write downs, as
well as severance and expense reduction initiatives), (loss) gain
on sale of securities, gain on sale-leaseback transaction, and gain
on sale of DHFB. 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 September 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, strategic cost saving initiatives, merger-related costs, a
legal reserve associated with an ongoing regulatory matter
previously disclosed, strategic branch closing and related facility
consolidation costs, (loss) gain on sale of securities, gain on
sale-leaseback transaction, and gain on sale of DHFB. 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, strategic cost saving initiatives, merger-related costs, a
legal reserve associated with an ongoing regulatory matter
previously disclosed, strategic branch closure initiatives and
related facility consolidation costs, (loss) gain on sale of
securities, gain on sale-leaseback transaction, and gain on sale of
DHFB. 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)
September 30,
December 31,
September 30,
2023
2022
2022
ASSETS
(unaudited)
(audited)
(unaudited)
Cash and cash equivalents:
Cash and due from banks
$
233,526
$
216,384
$
177,969
Interest-bearing deposits in other
banks
159,718
102,107
211,785
Federal funds sold
5,701
1,457
1,188
Total cash and cash equivalents
398,945
319,948
390,942
Securities available for sale, at fair
value
2,084,928
2,741,816
2,717,323
Securities held to maturity, at
carrying value
843,269
847,732
841,349
Restricted stock, at cost
104,785
120,213
82,050
Loans held for sale
6,608
3,936
12,889
Loans held for investment, net of
deferred fees and costs
15,283,620
14,449,142
13,918,720
Less: allowance for loan and lease
losses
125,627
110,768
108,009
Total loans held for investment,
net
15,157,993
14,338,374
13,810,711
Premises and equipment, net
94,510
118,243
126,374
Goodwill
925,211
925,211
925,211
Amortizable intangibles, net
21,277
26,761
29,142
Bank owned life insurance
449,452
440,656
437,988
Other assets
649,258
578,248
576,252
Total assets
$
20,736,236
$
20,461,138
$
19,950,231
LIABILITIES
Noninterest-bearing demand
deposits
$
4,144,949
$
4,883,239
$
5,290,938
Interest-bearing deposits
12,641,556
11,048,438
11,255,278
Total deposits
16,786,505
15,931,677
16,546,216
Securities sold under agreements to
repurchase
134,936
142,837
146,182
Other short-term borrowings
495,000
1,176,000
133,800
Long-term borrowings
390,733
389,863
389,576
Other liabilities
540,261
448,024
453,307
Total liabilities
18,347,435
18,088,401
17,669,081
Commitments and contingencies
STOCKHOLDERS'
EQUITY
Preferred stock, $10.00 par
value
173
173
173
Common stock, $1.33 par value
99,120
98,873
98,845
Additional paid-in capital
1,779,281
1,772,440
1,769,858
Retained earnings
988,133
919,537
874,393
Accumulated other comprehensive
loss
(477,906
)
(418,286
)
(462,119
)
Total stockholders' equity
2,388,801
2,372,737
2,281,150
Total liabilities and stockholders'
equity
$
20,736,236
$
20,461,138
$
19,950,231
Common shares outstanding
74,997,132
74,712,622
74,703,774
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
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2023
2023
2022
2023
2022
Interest and dividend income:
Interest and fees on loans
$
221,380
$
205,172
$
144,673
$
616,544
$
382,139
Interest on deposits in other banks
1,309
1,014
941
3,815
1,229
Interest and dividends on securities:
Taxable
16,055
15,565
14,750
48,373
43,110
Nontaxable
8,415
8,496
10,792
26,220
31,889
Total interest and dividend
income
247,159
230,247
171,156
694,952
458,367
Interest expense:
Interest on deposits
83,590
65,267
15,386
200,690
25,966
Interest on short-term borrowings
6,499
8,044
1,229
22,106
1,805
Interest on long-term borrowings
5,129
4,852
3,826
14,687
10,183
Total interest expense
95,218
78,163
20,441
237,483
37,954
Net interest income
151,941
152,084
150,715
457,469
420,413
Provision for credit losses
4,991
6,069
6,412
22,911
12,771
Net interest income after provision for
credit losses
146,950
146,015
144,303
434,558
407,642
Noninterest income:
Service charges on deposit accounts
8,557
8,118
6,784
24,577
22,421
Other service charges, commissions and
fees
2,632
1,693
1,770
6,071
5,134
Interchange fees
2,314
2,459
2,461
7,098
6,539
Fiduciary and asset management fees
4,549
4,359
4,134
13,169
18,329
Mortgage banking income
666
449
1,390
1,969
6,707
(Loss) gain on sale of securities
(27,594
)
2
—
(40,992
)
(2
)
Bank owned life insurance income
2,973
2,870
3,445
8,671
8,858
Loan-related interest rate swap fees
2,695
2,316
2,050
6,450
8,510
Other operating income
30,302
1,931
3,550
33,905
17,527
Total noninterest income
27,094
24,197
25,584
60,918
94,023
Noninterest expenses:
Salaries and benefits
57,449
62,019
56,600
179,996
170,203
Occupancy expenses
6,053
6,094
6,408
18,503
19,685
Furniture and equipment expenses
3,449
3,565
3,673
10,765
10,860
Technology and data processing
7,923
8,566
8,273
24,631
23,930
Professional services
3,291
4,433
3,504
11,138
12,274
Marketing and advertising expense
2,219
2,817
2,343
7,387
7,008
FDIC assessment premiums and other
insurance
4,258
4,074
3,094
12,231
8,344
Franchise and other taxes
4,510
4,499
4,507
13,508
13,506
Loan-related expenses
1,388
1,619
1,575
4,560
5,218
Amortization of intangible assets
2,193
2,216
2,480
6,687
8,434
Other expenses
15,775
5,759
7,466
33,036
24,550
Total noninterest expenses
108,508
105,661
99,923
322,442
304,012
Income before income taxes
65,536
64,551
69,964
173,034
197,653
Income tax expense
11,519
9,310
11,894
28,123
33,667
Net income
$
54,017
$
55,241
$
58,070
144,911
163,986
Dividends on preferred stock
2,967
2,967
2,967
8,901
8,901
Net income available to common
shareholders
$
51,050
$
52,274
$
55,103
$
136,010
$
155,085
Basic earnings per common share
$
0.68
$
0.70
$
0.74
$
1.81
$
2.07
Diluted earnings per common share
$
0.68
$
0.70
$
0.74
$
1.81
$
2.07
AVERAGE BALANCES, INCOME AND EXPENSES,
YIELDS AND RATES (TAXABLE EQUIVALENT BASIS) (UNAUDITED)
(Dollars in thousands)
For the Quarter Ended
September 30, 2023
June 30, 2023
Average Balance
Interest Income / Expense
(1)
Yield / Rate (1)(2)
Average Balance
Interest Income / Expense
(1)
Yield / Rate (1)(2)
Assets:
Securities:
Taxable
$
1,799,675
$
16,055
3.54
%
$
1,865,193
$
15,565
3.35
%
Tax-exempt
1,301,983
10,653
3.25
%
1,311,469
10,755
3.29
%
Total securities
3,101,658
26,708
3.42
%
3,176,662
26,320
3.32
%
LHFI, net of deferred fees and costs
(3)
15,139,761
222,698
5.84
%
14,746,218
206,452
5.62
%
Other earning assets
221,086
1,497
2.69
%
168,929
1,141
2.71
%
Total earning assets
18,462,505
$
250,903
5.39
%
18,091,809
$
233,913
5.19
%
Allowance for loan and lease losses
(121,229
)
(117,643
)
Total non-earning assets
2,254,913
2,235,521
Total assets
$
20,596,189
$
20,209,687
Liabilities and
Stockholders' Equity:
Interest-bearing deposits:
Transaction and money market accounts
$
8,697,801
$
57,378
2.62
%
$
8,387,473
$
46,953
2.25
%
Regular savings
964,971
499
0.21
%
1,014,565
430
0.17
%
Time deposits
2,914,004
25,713
3.50
%
2,500,966
17,884
2.87
%
Total interest-bearing deposits
12,576,776
83,590
2.64
%
11,903,004
65,267
2.20
%
Other borrowings
905,170
11,628
5.10
%
1,071,171
12,896
4.83
%
Total interest-bearing
liabilities
$
13,481,946
$
95,218
2.80
%
$
12,974,175
$
78,163
2.42
%
Noninterest-bearing
liabilities:
Demand deposits
4,218,835
4,377,150
Other liabilities
448,506
397,621
Total liabilities
18,149,287
17,748,946
Stockholders' equity
2,446,902
2,460,741
Total liabilities and stockholders'
equity
$
20,596,189
$
20,209,687
Net interest income
$
155,685
$
155,750
Interest rate spread
2.59
%
2.77
%
Cost of funds
2.04
%
1.74
%
Net interest margin
3.35
%
3.45
%
(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/20231019447738/en/
Robert M. Gorman - (804) 523‑7828 Executive Vice President /
Chief Financial Officer
Atlantic Union Bankshares (NYSE:AUB)
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