Atlantic Union Bankshares Reports First Quarter Financial Results

RICHMOND, Va., April 25, 2023--(BUSINESS WIRE)--Atlantic Union Bankshares Corporation (the "Company" or "Atlantic Union") (NYSE: AUB) reported net income available to common shareholders of $32.7 million and basic and diluted earnings per common share of $0.44 for the first quarter of 2023.

Excluding a pre-tax loss on the sale of securities of $13.4 million due to the sale of available for sale ("AFS") securities and a $5.0 million legal reserve associated with an ongoing regulatory matter we previously disclosed, the Company reported for the quarter ended March 31, 2023, adjusted operating earnings available to common shareholders(1) of $47.2 million and adjusted diluted operating earnings per common share(1) of $0.63.

On January 18, 2023, February 9, 2023, and March 6th through the 9th of 2023, the Company executed a balance sheet repositioning strategy and sold AFS securities with a total book value of $505.7 million at a pre-tax loss of $13.4 million and used the net proceeds to reduce existing high costing Federal Home Loan Bank borrowings. The deleverage strategy provides the Company with improved liquidity, enhanced tangible common equity, and additional run rate earnings. The Company estimates the loss will be earned back in approximately two years.

"Atlantic Union’s business model has stood the test of time over our 121-year history," said John C. Asbury, president and chief executive officer of Atlantic Union. "Our franchise remains strong even in these uncertain times as we are a diversified, traditional, full-service bank that delivers the products and services of a larger bank with the local decision making, responsiveness and client service orientation to positively set us apart from other banks, both larger and smaller. We also believe that our stable deposit base remains a particular strength of our franchise."

"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 first quarter of 2023, net interest income was $153.4 million, a decrease of $10.4 million from $163.8 million in the fourth quarter of 2022. Net interest income (FTE)(1) was $157.2 million in the first quarter of 2023, a decrease of $10.7 million from the fourth quarter of 2022. The decreases in net interest income and net interest income (FTE)(1) were primarily driven by the lower day count in the quarter, higher deposit and borrowing costs due to increases in market interest rates, as well as changes in the deposit mix as depositors migrated to higher costing interest bearing deposit accounts. These decreases were partially offset by an increase in loan yields due primarily to variable rate loans repricing as short-term interest rates increased and an increase in average loans. Our net interest margin decreased 20 basis points from the prior quarter to 3.41% at March 31, 2023, and our net interest margin (FTE)(1) decreased 20 basis points during the same period to 3.50%. Earning asset yields increased by 38 basis points to 4.92% in the first quarter of 2023 compared to the fourth quarter of 2022, primarily due to the impact of increases in market interest rates on loans. Our cost of funds increased by 58 basis points to 1.42% at March 31, 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. Net accretion related to acquisition accounting was $883,000 for the quarter ended March 31, 2023, representing a decrease of $380,000 from the prior quarter. The fourth quarter of 2022, the first quarter of 2023, and the remaining estimated net accretion impact are reflected in the following table (dollars in thousands):

Loan

Deposit

Borrowings

Accretion

Amortization

Amortization

Total

For the quarter ended December 31, 2022

$

1,484

$

(12

)

$

(209

)

$

1,263

For the quarter ended March 31, 2023

1,106

(14

)

(209

)

883

For the remaining nine months of 2023 (estimated)

2,285

(17

)

(642

)

1,626

For the years ending (estimated):

2024

2,554

(4

)

(877

)

1,673

2025

1,983

(1

)

(900

)

1,082

2026

1,606

(926

)

680

2027

1,222

(953

)

269

2028

932

(983

)

(51

)

Thereafter

5,446

(7,011

)

(1,565

)

Total remaining acquisition accounting fair value adjustments at March 31, 2023

$

16,028

$

(22

)

$

(12,292

)

$

3,714

ASSET QUALITY

Overview

At March 31, 2023, nonperforming assets ("NPAs") as a percentage of loans increased 1 basis point from the prior quarter to 0.20% and included nonaccrual loans of $29.1 million. Accruing past due loans as a percentage of total loans held for investment ("LHFI") totaled 21 basis points at both March 31, 2023 and December 31, 2022, representing a 1 basis point decrease from March 31, 2022. Net charge-offs were 0.13% of total average loans (annualized) for the first quarter of 2023, an increase of 11 basis points from December 31, 2022, and an increase of 13 basis points from March 31, 2022, primarily due to charge-offs associated with two commercial loans. The allowance for credit losses ("ACL") totaled $131.7 million at March 31, 2023, a $7.3 million increase from the prior quarter.

Nonperforming Assets

At March 31, 2023, NPAs totaled $29.1 million, an increase of $2.0 million from December 31, 2022. The following table shows a summary of NPA balances at the quarter ended (dollars in thousands):

March 31,

December 31,

September 30,

June 30,

March 31,

2023

2022

2022

2022

2022

Nonaccrual loans

$

29,082

$

27,038

$

26,500

$

29,070

$

29,032

Foreclosed properties

29

76

2,087

2,065

1,696

Total nonperforming assets

$

29,111

$

27,114

$

28,587

$

31,135

$

30,728

The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):

March 31,

December 31,

September 30,

June 30,

March 31,

2023

2022

2022

2022

2022

Beginning Balance

$

27,038

$

26,500

$

29,070

$

29,032

$

31,100

Net customer payments

(1,755

)

(1,805

)

(3,725

)

(2,472

)

(4,132

)

Additions

4,151

2,935

1,302

3,203

2,087

Charge-offs

(39

)

(461

)

(125

)

(311

)

(23

)

Loans returning to accruing status

(313

)

(131

)

Transfers to foreclosed property

(22

)

(382

)

Ending Balance

$

29,082

$

27,038

$

26,500

$

29,070

$

29,032

Past Due Loans

At March 31, 2023, past due loans still accruing interest totaled $30.9 million or 0.21% of LHFI, compared to $30.0 million or 0.21% of LHFI at December 31, 2022, and $29.6 million or 0.22% of LHFI at March 31, 2022. Of the total past due loans still accruing interest, $7.2 million or 0.05% of LHFI were loans past due 90 days or more at March 31, 2023, compared to $7.5 million or 0.05% of LHFI at December 31, 2022, and $8.2 million or 0.06% of LHFI at March 31, 2022.

Allowance for Credit Losses

At March 31, 2023, the ACL was $131.7 million and included an allowance for loan and lease losses ("ALLL") of $116.5 million and a reserve for unfunded commitments of $15.2 million. The ACL at March 31, 2023 increased $7.3 million from December 31, 2022 due to increasing uncertainty in the economic outlook and loan growth during the first quarter of 2023.

The ACL as a percentage of LHFI was 0.90% at March 31, 2023, an increase of 4 basis points from December 31, 2022. The ALLL as a percentage of LHFI was 0.80% at March 31, 2023, compared to 0.77% at December 31, 2022.

Net Charge-offs

Net charge-offs were $4.6 million or 0.13% of total average LHFI on an annualized basis for the first quarter of 2023, compared to $810,000 or 0.02% (annualized) for the fourth quarter of 2022, and less than 0.01% of total average LHFI (annualized) for the first quarter of 2022. The majority of net charge-offs in the first quarter of 2023 were related to two commercial loans within the commercial and industrial and commercial real estate portfolios.

Provision for Credit Losses

For the first quarter of 2023, the Company recorded a provision for credit losses of $11.9 million, compared to a provision for credit losses of $6.3 million in the prior quarter, and a provision for credit losses of $2.8 million in the first quarter of 2022. The provision for credit losses for the first quarter of 2023 reflected a provision of $10.4 million for loan losses and a $1.5 million provision for unfunded commitments.

NONINTEREST INCOME

Noninterest income decreased $14.9 million to $9.6 million for the first quarter of 2023 from $24.5 million in the prior quarter, primarily due to $13.4 million of losses incurred on the sale of AFS securities, driven by the Company’s balance sheet repositioning transactions executed during the quarter. In addition, loan-related interest rate swap fees decreased $2.2 million from the prior quarter due to lower transaction volumes. These declines in noninterest income were partially offset by increases in several noninterest income categories including certain service charges, fiduciary and asset management fees, mortgage banking income, and bank owned life insurance income.

NONINTEREST EXPENSE

Noninterest expense for the first quarter of 2023 increased to $108.3 million from $99.8 million in the prior quarter primarily due to a $1.8 million increase in salaries and benefits expense due to seasonal increases in payroll related taxes and 401(k) contribution expenses in the first quarter, (which was partially offset by decreases in performance based variable incentive compensation and profit-sharing expenses), a $2.0 million increase in Federal Deposit Insurance Commission ("FDIC") assessment fees due to the increase in the FDIC assessment rates, effective January 1, 2023, and the impact of prior periods’ FDIC assessment fee refunds reflected in the prior quarter, and other expenses increased $7.0 million, reflecting a $5.0 million legal reserve associated with an ongoing regulatory matter previously disclosed, and a prior quarter gain of $3.2 million related to the sale and leaseback of an office building, partially offset by lower teammate and travel costs. These increases in noninterest expense were partially offset by a $1.3 million decrease in technology and data processing primarily due to the write-down of obsolete software in the prior quarter, and a $1.0 million decrease in professional services related to strategic projects that occurred in the prior quarter.

INCOME TAXES

The effective tax rate for the three months ended March 31, 2023 was 17.0%, compared to 17.5% for the three months ended March 31, 2022. The decrease in the effective tax rate primarily reflects the impact of changes in the proportion of tax-exempt income to pre-tax income.

BALANCE SHEET

At March 31, 2023, total assets were $20.1 billion, a decrease of $357.8 million or approximately 7.1% (annualized) from December 31, 2022, and an increase of $320.9 million or approximately 1.6% from March 31, 2022. Total assets decreased from the prior quarter primarily due to a decline in the investment securities portfolio of $514.4 million, primarily due to the sale of AFS securities as part of the Company’s balance sheet repositioning executed during the quarter. The decrease in assets from the prior quarter was partially offset by a $135.1 million increase in loans held for investment (net of deferred fees and costs), driven by loan growth. Total assets increased from the prior year due to the increase in total loans held for investment (net of deferred fees and costs) of $1.1 billion, driven by loan growth, partially offset by a decrease in the investment securities portfolio of $831.8 million primarily due to a decline in the market value of the AFS securities portfolio, as well as the sale of AFS securities as part of the Company’s balance sheet restructuring executed during the first quarter of 2023.

At March 31, 2023, loans held for investment (net of deferred fees and costs) totaled $14.6 billion, an increase of $135.1 million or 3.8% (annualized) from $14.4 billion, at December 31, 2022. Average loans held for investment (net of deferred fees and costs) totaled $14.5 billion at March 31, 2023, an increase of $388.2 million or 11.2% (annualized) from the prior quarter. At March 31, 2023, loans held for investment (net of deferred fees and costs) increased $1.1 billion or 8.4% from March 31, 2022, and quarterly average loans increased $1.2 billion or 9.1% from the same period in the prior year.

At March 31, 2023, total investments were $3.2 billion, a decrease of $514.4 million from December 31, 2022, and a decrease of $831.8 million from March 31, 2022. AFS securities totaled $2.3 billion at March 31, 2023, $2.7 billion at December 31, 2022, and $3.2 billion at March 31, 2022. At March 31, 2023, total net unrealized losses on the AFS securities portfolio were $407.9 million, an improvement of $54.7 million from total net unrealized losses on AFS securities of $462.6 at December 31, 2022. Held to maturity ("HTM") securities are carried at cost and totaled $855.4 million at March 31, 2023, $847.7 million at December 31, 2022, and $756.9 million at March 31, 2022 and have net unrealized losses of $32.3 million at March 31, 2023, an improvement of $13.5 million from net unrealized losses on HTM securities of $45.8 at December 31, 2022.

At March 31, 2023, total deposits were $16.5 billion, an increase of $524.2 million or approximately 13.3% (annualized) from December 31, 2022. Average deposits at March 31, 2023 decreased from the prior quarter by $194.5 million or 4.7% (annualized). Total deposits at March 31, 2023 decreased $28.3 million or 0.2% from March 31, 2022, and quarterly average deposits at March 31, 2023 decreased $97.1 million or 0.6% from the same period in the prior year. Total deposits increased from the prior quarter due to a $829.5 million increase in interest-bearing deposits, which includes approximately $377.9 million in brokered deposits, partially offset by a $305.2 million decrease in demand deposits, as customers moved funds from lower to higher yielding deposit products.

The following table shows the Company’s capital ratios at the quarters ended:

March 31,

December 31,

March 31,

2023

2022

2022

Common equity Tier 1 capital ratio (2)

9.91

%

9.95

%

9.86

%

Tier 1 capital ratio (2)

10.89

%

10.93

%

10.91

%

Total capital ratio (2)

13.76

%

13.70

%

13.79

%

Leverage ratio (Tier 1 capital to average assets) (2)

9.38

%

9.42

%

9.07

%

Common equity to total assets

11.31

%

10.78

%

11.79

%

Tangible common equity to tangible assets (1)

6.91

%

6.43

%

7.21

%

_____________________________

At March 31, 2023, the Company’s common equity to total assets ratio and tangible common equity to tangible assets ratio increased compared to the prior quarter primarily due to the decline in unrealized losses on the AFS securities portfolio, driven by lower long-term interest rates. These ratios decreased compared to the prior year primarily due to unrealized losses on the AFS securities portfolio recorded in other comprehensive income due to higher market interest rates.

During the first 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 fourth quarter of 2022 and the first quarter of 2022. During the first quarter of 2023, the Company also declared and paid cash dividends of $0.30 per common share, consistent with the fourth quarter of 2022 and an increase of $0.02 or approximately 7.1% from the first 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 March 31, 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 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.

FIRST 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 Tuesday, April 25, 2023 during which management will review the financial results for the first 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/uhe7ig3g.

For analysts who wish to participate in the conference call, please register at the following URL: https://register.vevent.com/register/BIfbfa2d1f08f640fdac388b823867a523. 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 March 31, 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, estimates with respect to the earn back period related to our recent balance sheet repositioning and the remaining net accretion related to acquisition accounting, 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 the recent 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; 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 the Company’s Annual Report on Form 10‑K for the year ended December 31, 2022 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

03/31/23

12/31/22

03/31/22

Results of Operations

Interest and dividend income

$

217,546

$

202,068

$

138,456

Interest expense

64,103

38,220

7,525

Net interest income

153,443

163,848

130,931

Provision for credit losses

11,850

6,257

2,800

Net interest income after provision for credit losses

141,593

157,591

128,131

Noninterest income

9,628

24,500

30,153

Noninterest expenses

108,274

99,790

105,321

Income before income taxes

42,947

82,301

52,963

Income tax expense

7,294

11,777

9,273

Net income

35,653

70,524

43,690

Dividends on preferred stock

2,967

2,967

2,967

Net income available to common shareholders

$

32,686

$

67,557

$

40,723

Interest earned on earning assets (FTE) (1)

$

221,334

$

206,186

$

141,792

Net interest income (FTE) (1)

157,231

167,966

134,267

Total revenue (FTE) (1)

166,859

192,466

164,420

Pre-tax pre-provision adjusted operating earnings (7)

73,197

88,559

61,271

Key Ratios

Earnings per common share, diluted

$

0.44

$

0.90

$

0.54

Return on average assets (ROA)

0.71

%

1.39

%

0.89

%

Return on average equity (ROE)

5.97

%

12.05

%

6.66

%

Return on average tangible common equity (ROTCE) (2) (3)

10.71

%

22.92

%

11.53

%

Efficiency ratio

66.40

%

52.98

%

65.38

%

Efficiency ratio (FTE) (1)

64.89

%

51.85

%

64.06

%

Net interest margin

3.41

%

3.61

%

2.97

%

Net interest margin (FTE) (1)

3.50

%

3.70

%

3.04

%

Yields on earning assets (FTE) (1)

4.92

%

4.54

%

3.22

%

Cost of interest-bearing liabilities

2.02

%

1.24

%

0.26

%

Cost of deposits

1.28

%

0.72

%

0.11

%

Cost of funds

1.42

%

0.84

%

0.18

%

Operating Measures (4)

Adjusted operating earnings

$

50,189

$

70,525

$

48,041

Adjusted operating earnings available to common shareholders

47,222

67,558

45,074

Adjusted operating earnings per common share, diluted

$

0.63

$

0.90

$

0.60

Adjusted operating ROA

1.00

%

1.39

%

0.98

%

Adjusted operating ROE

8.40

%

12.05

%

7.32

%

Adjusted operating ROTCE (2) (3)

15.22

%

22.92

%

12.69

%

Adjusted operating efficiency ratio (FTE) (1)(6)

56.03

%

50.61

%

58.86

%

Per Share Data

Earnings per common share, basic

$

0.44

$

0.90

$

0.54

Earnings per common share, diluted

0.44

0.90

0.54

Cash dividends paid per common share

0.30

0.30

0.28

Market value per share

35.05

35.14

36.69

Book value per common share

30.53

29.68

31.12

Tangible book value per common share (2)

17.78

16.87

18.10

Price to earnings ratio, diluted

19.77

9.79

16.75

Price to book value per common share ratio

1.15

1.18

1.18

Price to tangible book value per common share ratio (2)

1.97

2.08

2.03

Weighted average common shares outstanding, basic

74,832,141

74,712,040

75,544,644

Weighted average common shares outstanding, diluted

74,835,514

74,713,972

75,556,127

Common shares outstanding at end of period

74,989,228

74,712,622

75,335,956

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

As of & For Three Months Ended

03/31/23

12/31/22

03/31/22

Capital Ratios

Common equity Tier 1 capital ratio (5)

9.91

%

9.95

%

9.86

%

Tier 1 capital ratio (5)

10.89

%

10.93

%

10.91

%

Total capital ratio (5)

13.76

%

13.70

%

13.79

%

Leverage ratio (Tier 1 capital to average assets) (5)

9.38

%

9.42

%

9.07

%

Common equity to total assets

11.31

%

10.78

%

11.79

%

Tangible common equity to tangible assets (2)

6.91

%

6.43

%

7.21

%

Financial Condition

Assets

$

20,103,370

$

20,461,138

$

19,782,430

LHFI (net of deferred fees and costs)

14,584,280

14,449,142

13,459,349

Securities

3,195,399

3,709,761

4,027,185

Earning Assets

17,984,057

18,271,430

17,731,089

Goodwill

925,211

925,211

935,560

Amortizable intangibles, net

24,482

26,761

40,273

Deposits

16,455,910

15,931,677

16,484,223

Borrowings

798,910

1,708,700

504,032

Stockholders' equity

2,440,236

2,372,737

2,498,335

Tangible common equity (2)

1,324,186

1,254,408

1,356,145

LHFI, net of deferred fees and costs

Construction and land development

$

1,179,872

$

1,101,260

$

969,059

Commercial real estate - owner occupied

1,956,585

1,982,608

2,007,671

Commercial real estate - non-owner occupied

3,968,085

3,996,130

3,875,681

Multifamily real estate

822,006

802,923

723,940

Commercial & Industrial

3,082,478

2,983,349

2,540,680

Residential 1-4 Family - Commercial

522,760

538,063

569,801

Residential 1-4 Family - Consumer

974,511

940,275

824,163

Residential 1-4 Family - Revolving

589,791

585,184

568,403

Auto

600,658

592,976

499,855

Consumer

145,090

152,545

171,875

Other Commercial

742,444

773,829

708,221

Total LHFI

$

14,584,280

$

14,449,142

$

13,459,349

Deposits

Interest checking accounts

$

4,714,366

$

4,186,505

$

4,121,257

Money market accounts

3,547,514

3,922,533

4,151,152

Savings accounts

1,047,914

1,130,899

1,166,922

Customer time deposits of $250,000 and over

541,447

405,060

365,796

Other customer time deposits

1,648,747

1,396,011

1,309,030

Time deposits

2,190,194

1,801,071

1,674,826

Total interest-bearing customer deposits

11,499,988

11,041,008

11,114,157

Brokered deposits

377,913

7,430

3

Total interest-bearing deposits

$

11,877,901

$

11,048,438

$

11,114,160

Demand deposits

4,578,009

4,883,239

5,370,063

Total deposits

$

16,455,910

$

15,931,677

$

16,484,223

Averages

Assets

$

20,384,351

$

20,174,152

$

19,920,368

LHFI (net of deferred fees and costs)

14,505,611

14,117,433

13,300,789

Loans held for sale

5,876

7,809

14,636

Securities

3,467,561

3,644,196

4,198,582

Earning assets

18,238,088

18,000,596

17,885,018

Deposits

16,417,212

16,611,749

16,514,375

Time deposits

2,291,530

1,764,596

1,766,657

Interest-bearing deposits

11,723,865

11,415,032

11,286,277

Borrowings

1,122,244

816,818

511,722

Interest-bearing liabilities

12,846,109

12,231,850

11,797,999

Stockholders' equity

2,423,600

2,321,208

2,660,984

Tangible common equity (2)

1,306,445

1,201,732

1,517,325

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

As of & For Three Months Ended

03/31/23

12/31/22

03/31/22

Asset Quality

Allowance for Credit Losses (ACL)

Beginning balance, Allowance for loan and lease losses (ALLL)

$

110,768

$

108,009

$

99,787

Add: Recoveries

1,167

1,332

1,513

Less: Charge-offs

5,726

2,142

1,509

Add: Provision for loan losses

10,303

3,569

2,800

Ending balance, ALLL

$

116,512

$

110,768

$

102,591

Beginning balance, Reserve for unfunded commitment (RUC)

$

13,675

$

11,000

$

8,000

Add: Provision for unfunded commitments

1,524

2,675

Ending balance, RUC

$

15,199

$

13,675

$

8,000

Total ACL

$

131,711

$

124,443

$

110,591

ACL / total LHFI

0.90

%

0.86

%

0.82

%

ALLL / total LHFI

0.80

%

0.77

%

0.76

%

Net charge-offs / total average LHFI

0.13

%

0.02

%

0.00

%

Provision for loan losses/ total average LHFI

0.29

%

0.10

%

0.09

%

Nonperforming Assets

Construction and land development

$

363

$

307

$

869

Commercial real estate - owner occupied

6,174

7,178

4,865

Commercial real estate - non-owner occupied

1,481

1,263

3,287

Commercial & Industrial

4,815

1,884

1,975

Residential 1-4 Family - Commercial

1,907

1,904

2,239

Residential 1-4 Family - Consumer

10,540

10,846

12,039

Residential 1-4 Family - Revolving

3,449

3,453

3,371

Auto

347

200

333

Consumer

6

3

54

Nonaccrual loans

$

29,082

$

27,038

$

29,032

Foreclosed property

29

76

1,696

Total nonperforming assets (NPAs)

$

29,111

$

27,114

$

30,728

Construction and land development

$

249

$

100

$

1

Commercial real estate - owner occupied

2,133

2,167

2,396

Commercial real estate - non-owner occupied

1,032

607

1,735

Commercial & Industrial

633

459

763

Residential 1-4 Family - Commercial

232

275

878

Residential 1-4 Family - Consumer

859

1,955

1,147

Residential 1-4 Family - Revolving

1,766

1,384

1,065

Auto

137

344

192

Consumer

137

108

70

Other Commercial

66

91

LHFI ≥ 90 days and still accruing

$

7,244

$

7,490

$

8,247

Total NPAs and LHFI ≥ 90 days

$

36,355

$

34,604

$

38,975

NPAs / total LHFI

0.20

%

0.19

%

0.23

%

NPAs / total assets

0.14

%

0.13

%

0.16

%

ALLL / nonaccrual loans

400.63

%

409.68

%

353.37

%

ALLL/ nonperforming assets

400.23

%

408.53

%

333.87

%

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

As of & For Three Months Ended

03/31/23

12/31/22

03/31/22

Past Due Detail

Construction and land development

$

815

$

1,253

$

170

Commercial real estate - owner occupied

2,251

2,305

5,081

Commercial real estate - non-owner occupied

52

1,121

79

Multifamily real estate

1,229

124

Commercial & Industrial

981

824

1,382

Residential 1-4 Family - Commercial

1,399

1,231

827

Residential 1-4 Family - Consumer

11,579

5,951

5,890

Residential 1-4 Family - Revolving

1,384

1,843

1,157

Auto

2,026

2,747

1,508

Consumer

295

351

467

Other Commercial

1,270

LHFI 30-59 days past due

$

20,782

$

18,855

$

17,955

Construction and land development

$

$

45

$

Commercial real estate - owner occupied

798

635

Commercial real estate - non-owner occupied

48

223

Commercial & Industrial

61

174

745

Residential 1-4 Family - Commercial

271

251

Residential 1-4 Family - Consumer

158

1,690

1,018

Residential 1-4 Family - Revolving

1,069

511

651

Auto

295

450

183

Consumer

176

125

201

Other Commercial

95

LHFI 60-89 days past due

$

2,828

$

3,678

$

3,367

Past Due and still accruing

$

30,854

$

30,023

$

29,569

Past Due and still accruing / total LHFI

0.21

%

0.21

%

0.22

%

Alternative Performance Measures (non-GAAP)

Net interest income (FTE) (1)

Net interest income (GAAP)

$

153,443

$

163,848

$

130,931

FTE adjustment

3,788

4,118

3,336

Net interest income (FTE) (non-GAAP)

$

157,231

$

167,966

$

134,267

Noninterest income (GAAP)

9,628

24,500

30,153

Total revenue (FTE) (non-GAAP)

$

166,859

$

192,466

$

164,420

Average earning assets

$

18,238,088

$

18,000,596

$

17,885,018

Net interest margin

3.41

%

3.61

%

2.97

%

Net interest margin (FTE)

3.50

%

3.70

%

3.04

%

Tangible Assets (2)

Ending assets (GAAP)

$

20,103,370

$

20,461,138

$

19,782,430

Less: Ending goodwill

925,211

925,211

935,560

Less: Ending amortizable intangibles

24,482

26,761

40,273

Ending tangible assets (non-GAAP)

$

19,153,677

$

19,509,166

$

18,806,597

Tangible Common Equity (2)

Ending equity (GAAP)

$

2,440,236

$

2,372,737

$

2,498,335

Less: Ending goodwill

925,211

925,211

935,560

Less: Ending amortizable intangibles

24,482

26,761

40,273

Less: Perpetual preferred stock

166,357

166,357

166,357

Ending tangible common equity (non-GAAP)

$

1,324,186

$

1,254,408

$

1,356,145

Average equity (GAAP)

$

2,423,600

$

2,321,208

$

2,660,984

Less: Average goodwill

925,211

925,211

935,560

Less: Average amortizable intangibles

25,588

27,909

41,743

Less: Average perpetual preferred stock

166,356

166,356

166,356

Average tangible common equity (non-GAAP)

$

1,306,445

$

1,201,732

$

1,517,325

ROTCE (2)(3)

Net income available to common shareholders (GAAP)

$

32,686

$

67,557

$

40,723

Plus: Amortization of intangibles, tax effected

1,800

1,881

2,401

Net income available to common shareholders before amortization of intangibles (non-GAAP)

$

34,486

$

69,438

$

43,124

Return on average tangible common equity (ROTCE)

10.71

%

22.92

%

11.53

%

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

As of & For Three Months Ended

03/31/23

12/31/22

03/31/22

Operating Measures (4)

Net income (GAAP)

$

35,653

$

70,524

$

43,690

Plus: Legal reserve, net of tax

3,950

Plus: Strategic branch closing and facility consolidation costs, net of tax

4,351

Plus: Loss on sale of securities, net of tax

10,586

1

Adjusted operating earnings (non-GAAP)

50,189

70,525

48,041

Less: Dividends on preferred stock

2,967

2,967

2,967

Adjusted operating earnings available to common shareholders (non-GAAP)

$

47,222

$

67,558

$

45,074

Noninterest expense (GAAP)

$

108,274

$

99,790

$

105,321

Less: Amortization of intangible assets

2,279

2,381

3,039

Less: Legal reserve

5,000

Less: Strategic branch closing and facility consolidation costs

5,508

Adjusted operating noninterest expense (non-GAAP)

$

100,995

$

97,409

$

96,774

Noninterest income (GAAP)

$

9,628

$

24,500

$

30,153

Plus: Loss on sale of securities

13,400

1

Adjusted operating noninterest income (non-GAAP)

$

23,028

$

24,501

$

30,153

Net interest income (FTE) (non-GAAP) (1)

$

157,231

$

167,966

$

134,267

Adjusted operating noninterest income (non-GAAP)

23,028

24,501

30,153

Total adjusted revenue (FTE) (non-GAAP) (1)

$

180,259

$

192,467

$

164,420

Efficiency ratio

66.40

%

52.98

%

65.38

%

Efficiency ratio (FTE) (1)

64.89

%

51.85

%

64.06

%

Adjusted operating efficiency ratio (FTE) (1)(6)

56.03

%

50.61

%

58.86

%

Operating ROA & ROE (4)

Adjusted operating earnings (non-GAAP)

$

50,189

$

70,525

$

48,041

Average assets (GAAP)

$

20,384,351

$

20,174,152

$

19,920,368

Return on average assets (ROA) (GAAP)

0.71

%

1.39

%

0.89

%

Adjusted operating return on average assets (ROA) (non-GAAP)

1.00

%

1.39

%

0.98

%

Average equity (GAAP)

$

2,423,600

$

2,321,208

$

2,660,984

Return on average equity (ROE) (GAAP)

5.97

%

12.05

%

6.66

%

Adjusted operating return on average equity (ROE) (non-GAAP)

8.40

%

12.05

%

7.32

%

Operating ROTCE (2)(3)(4)

Adjusted operating earnings available to common shareholders (non-GAAP)

$

47,222

$

67,558

$

45,074

Plus: Amortization of intangibles, tax effected

1,800

1,881

2,401

Adjusted operating earnings available to common shareholders before amortization of intangibles (non-GAAP)

$

49,022

$

69,439

$

47,475

Average tangible common equity (non-GAAP)

$

1,306,445

$

1,201,732

$

1,517,325

Adjusted operating return on average tangible common equity (non-GAAP)

15.22

%

22.92

%

12.69

%

Pre-tax pre-provision adjusted operating earnings (7)

Net income (GAAP)

$

35,653

$

70,524

$

43,690

Plus: Provision for credit losses

11,850

6,257

2,800

Plus: Income tax expense

7,294

11,777

9,273

Plus: Legal reserve

5,000

Plus: Strategic branch closing and facility consolidation costs

5,508

Plus: Loss on sale of securities

13,400

1

Pre-tax pre-provision adjusted operating earnings (non-GAAP)

$

73,197

$

88,559

$

61,271

Less: Dividends on preferred stock

2,967

2,967

2,967

Pre-tax pre-provision adjusted operating earnings available to common shareholders (non-GAAP)

$

70,230

$

85,592

$

58,304

Weighted average common shares outstanding, diluted

74,835,514

74,713,972

75,556,127

Pre-tax pre-provision earnings per common share, diluted

$

0.94

$

1.15

$

0.77

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

As of & For Three Months Ended

03/31/23

12/31/22

03/31/22

Mortgage Origination Held for Sale Volume

Refinance Volume

$

3,452

$

2,312

$

33,201

Purchase Volume

32,192

29,262

58,295

Total Mortgage loan originations held for sale

$

35,644

$

31,574

$

91,496

% of originations held for sale that are refinances

9.7

%

7.3

%

36.3

%