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Atlantic Union Bankshares Reports First Quarter Financial Results

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

%

 

 

 

 

 

 

 

 

 

 

 

Wealth

 

 

 

 

 

 

 

 

 

 

Assets under management

 

$

4,494,268

 

$

4,271,728

 

$

6,519,974

 

 

 

 

 

 

 

 

 

 

 

 

Other Data

 

 

 

 

 

 

 

 

 

 

End of period full-time employees

 

 

1,840

 

 

1,877

 

 

1,853

 

Number of full-service branches

 

 

109

 

 

114

 

 

114

 

Number of automatic transaction machines ("ATMs")

 

 

127

 

 

131

 

 

132

 

_____________________________

(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 losses on sale of securities, a legal reserve associated with an ongoing regulatory matter previously disclosed, as well as strategic branch closure initiatives and related facility consolidation costs (principally composed of real estate, leases and other assets write downs, as well as severance and expense reduction initiatives). The Company believes these non-GAAP adjusted measures provide investors with important information about the continuing economic results of the organization’s operations.

(5)

All ratios at 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.

(6)

The adjusted operating efficiency ratio (FTE) excludes the amortization of intangible assets, losses on sale of securities, a legal reserve associated with an ongoing regulatory matter previously disclosed, as well as strategic branch closure initiatives and related facility consolidation costs. This measure is similar to the measure utilized by the Company when analyzing corporate performance and is also similar to the measure utilized for incentive compensation. The Company believes this adjusted measure provides investors with important information about the continuing economic results of the organization’s operations.

(7)

These are non-GAAP financial measures. Pre-tax pre-provision adjusted earnings excludes the provision for credit losses, which can fluctuate significantly from period-to-period under the CECL methodology, income tax expense, losses on sale of securities, a legal reserve associated with an ongoing regulatory matter previously disclosed, as well as strategic branch closure initiatives and related facility consolidation costs. The Company believes this adjusted measure provides investors with important information about the continuing economic results of the Company’s operations.

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

March 31,

 

2023

 

2022

 

2022

ASSETS

(unaudited)

 

(audited)

 

(unaudited)

Cash and cash equivalents:

 

 

 

 

 

 

 

 

Cash and due from banks

$

187,106

 

 

$

216,384

 

 

$

178,225

 

Interest-bearing deposits in other banks

 

184,371

 

 

 

102,107

 

 

 

213,140

 

Federal funds sold

 

719

 

 

 

1,457

 

 

 

4,938

 

Total cash and cash equivalents

 

372,196

 

 

 

319,948

 

 

 

396,303

 

Securities available for sale, at fair value

 

2,252,365

 

 

 

2,741,816

 

 

 

3,193,280

 

Securities held to maturity, at carrying value

 

855,418

 

 

 

847,732

 

 

 

756,872

 

Restricted stock, at cost

 

87,616

 

 

 

120,213

 

 

 

77,033

 

Loans held for sale, at fair value

 

14,213

 

 

 

3,936

 

 

 

21,227

 

Loans held for investment, net of deferred fees and costs

 

14,584,280

 

 

 

14,449,142

 

 

 

13,459,349

 

Less: allowance for loan and lease losses

 

116,512

 

 

 

110,768

 

 

 

102,591

 

Total loans held for investment, net

 

14,467,768

 

 

 

14,338,374

 

 

 

13,356,758

 

Premises and equipment, net

 

116,466

 

 

 

118,243

 

 

 

130,998

 

Goodwill

 

925,211

 

 

 

925,211

 

 

 

935,560

 

Amortizable intangibles, net

 

24,482

 

 

 

26,761

 

 

 

40,273

 

Bank owned life insurance

 

443,537

 

 

 

440,656

 

 

 

434,012

 

Other assets

 

544,098

 

 

 

578,248

 

 

 

440,114

 

Total assets

$

20,103,370

 

 

$

20,461,138

 

 

$

19,782,430

 

LIABILITIES

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

$

4,578,009

 

 

$

4,883,239

 

 

$

5,370,063

 

Interest-bearing deposits

 

11,877,901

 

 

 

11,048,438

 

 

 

11,114,160

 

Total deposits

 

16,455,910

 

 

 

15,931,677

 

 

 

16,484,223

 

Securities sold under agreements to repurchase

 

163,760

 

 

 

142,837

 

 

 

115,027

 

Other short-term borrowings

 

245,000

 

 

 

1,176,000

 

 

 

 

Long-term borrowings

 

390,150

 

 

 

389,863

 

 

 

389,005

 

Other liabilities

 

408,314

 

 

 

448,024

 

 

 

295,840

 

Total liabilities

 

17,663,134

 

 

 

18,088,401

 

 

 

17,284,095

 

Commitments and contingencies

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Preferred stock, $10.00 par value

 

173

 

 

 

173

 

 

 

173

 

Common stock, $1.33 par value

 

99,072

 

 

 

98,873

 

 

 

99,651

 

Additional paid-in capital

 

1,773,118

 

 

 

1,772,440

 

 

 

1,786,640

 

Retained earnings

 

929,806

 

 

 

919,537

 

 

 

803,354

 

Accumulated other comprehensive loss

 

(361,933

)

 

 

(418,286

)

 

 

(191,483

)

Total stockholders' equity

 

2,440,236

 

 

 

2,372,737

 

 

 

2,498,335

 

Total liabilities and stockholders' equity

$

20,103,370

 

 

$

20,461,138

 

 

$

19,782,430

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

74,989,228

 

 

 

74,712,622

 

 

 

75,335,956

 

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

 

March 31,

 

December 31,

 

March 31,

 

2023

 

2022

 

2022

Interest and dividend income:

 

 

 

 

 

 

 

 

Interest and fees on loans

$

189,992

 

 

$

173,475

 

 

$

114,200

Interest on deposits in other banks

 

1,493

 

 

 

1,383

 

 

 

131

Interest and dividends on securities:

 

 

 

 

 

 

 

 

Taxable

 

16,753

 

 

 

16,196

 

 

 

13,666

Nontaxable

 

9,308

 

 

 

11,014

 

 

 

10,459

Total interest and dividend income

 

217,546

 

 

 

202,068

 

 

 

138,456

Interest expense:

 

 

 

 

 

 

 

 

Interest on deposits

 

51,834

 

 

 

30,236

 

 

 

4,483

Interest on short-term borrowings

 

7,563

 

 

 

3,588

 

 

 

21

Interest on long-term borrowings

 

4,706

 

 

 

4,396

 

 

 

3,021

Total 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:

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

7,902

 

 

 

7,631

 

 

 

7,596

Other service charges, commissions and fees

 

1,746

 

 

 

1,631

 

 

 

1,655

Interchange fees

 

2,325

 

 

 

2,571

 

 

 

1,810

Fiduciary and asset management fees

 

4,262

 

 

 

4,085

 

 

 

7,255

Mortgage banking income

 

854

 

 

 

379

 

 

 

3,117

Loss on sale of securities

 

(13,400

)

 

 

(1

)

 

 

Bank owned life insurance income

 

2,828

 

 

 

2,649

 

 

 

2,697

Loan-related interest rate swap fees

 

1,439

 

 

 

3,664

 

 

 

3,860

Other operating income

 

1,672

 

 

 

1,891

 

 

 

2,163

Total noninterest income

 

9,628

 

 

 

24,500

 

 

 

30,153

Noninterest expenses:

 

 

 

 

 

 

 

 

Salaries and benefits

 

60,529

 

 

 

58,723

 

 

 

58,298

Occupancy expenses

 

6,356

 

 

 

6,328

 

 

 

6,883

Furniture and equipment expenses

 

3,752

 

 

 

3,978

 

 

 

3,597

Technology and data processing

 

8,142

 

 

 

9,442

 

 

 

7,796

Professional services

 

3,413

 

 

 

4,456

 

 

 

4,090

Marketing and advertising expense

 

2,351

 

 

 

2,228

 

 

 

2,163

FDIC assessment premiums and other insurance

 

3,899

 

 

 

1,896

 

 

 

2,485

Franchise and other taxes

 

4,498

 

 

 

4,500

 

 

 

4,499

Loan-related expenses

 

1,552

 

 

 

1,356

 

 

 

1,776

Amortization of intangible assets

 

2,279

 

 

 

2,381

 

 

 

3,039

Other expenses

 

11,503

 

 

 

4,502

 

 

 

10,695

Total 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

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.44

 

 

$

0.90

 

 

$

0.54

Diluted earnings per common share

$

0.44

 

 

$

0.90

 

 

$

0.54

AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)

(UNAUDITED)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Quarter Ended

 

March 31, 2023

 

December 31, 2022

 

Average

Balance

 

Interest

Income /

Expense (1)

 

Yield /

Rate (1)(2)

 

Average

Balance

 

Interest

Income /

Expense (1)

 

Yield /

Rate (1)(2)

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

$

2,038,215

 

 

$

16,753

 

3.33

%

 

$

2,016,845

 

 

$

16,196

 

3.19

%

Tax-exempt

 

1,429,346

 

 

 

11,782

 

3.34

%

 

 

1,627,351

 

 

 

13,942

 

3.40

%

Total securities

 

3,467,561

 

 

 

28,535

 

3.34

%

 

 

3,644,196

 

 

 

30,138

 

3.28

%

Loans, net (3)

 

14,505,611

 

 

 

191,178

 

5.35

%

 

 

14,117,433

 

 

 

174,531

 

4.90

%

Other earning assets

 

264,916

 

 

 

1,621

 

2.48

%

 

 

238,967

 

 

 

1,517

 

2.52

%

Total earning assets

 

18,238,088

 

 

$

221,334

 

4.92

%

 

 

18,000,596

 

 

$

206,186

 

4.54

%

Allowance for loan and lease losses

 

(112,172

)

 

 

 

 

 

 

 

(109,535

)

 

 

 

 

 

Total non-earning assets

 

2,258,435

 

 

 

 

 

 

 

 

2,283,091

 

 

 

 

 

 

Total assets

$

20,384,351

 

 

 

 

 

 

 

$

20,174,152

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transaction and money market accounts

$

8,344,900

 

 

$

38,315

 

1.86

%

 

$

8,495,299

 

 

$

24,712

 

1.15

%

Regular savings

 

1,087,435

 

 

 

364

 

0.14

%

 

 

1,155,137

 

 

 

110

 

0.04

%

Time deposits

 

2,291,530

 

 

 

13,155

 

2.33

%

 

 

1,764,596

 

 

 

5,414

 

1.22

%

Total interest-bearing deposits

 

11,723,865

 

 

 

51,834

 

1.79

%

 

 

11,415,032

 

 

 

30,236

 

1.05

%

Other borrowings

 

1,122,244

 

 

 

12,269

 

4.43

%

 

 

816,818

 

 

 

7,984

 

3.88

%

Total interest-bearing liabilities

$

12,846,109

 

 

$

64,103

 

2.02

%

 

$

12,231,850

 

 

$

38,220

 

1.24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

4,693,347

 

 

 

 

 

 

 

 

5,196,717

 

 

 

 

 

 

Other liabilities

 

421,295

 

 

 

 

 

 

 

 

424,377

 

 

 

 

 

 

Total liabilities

 

17,960,751

 

 

 

 

 

 

 

 

17,852,944

 

 

 

 

 

 

Stockholders' equity

 

2,423,600

 

 

 

 

 

 

 

 

2,321,208

 

 

 

 

 

 

Total liabilities and stockholders' equity

$

20,384,351

 

 

 

 

 

 

 

$

20,174,152

 

 

 

 

 

 

Net interest income

 

 

 

$

157,231

 

 

 

 

 

 

$

167,966

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread

 

 

 

 

 

 

2.90

%

 

 

 

 

 

 

 

3.30

%

Cost of funds

 

 

 

 

 

 

1.42

%

 

 

 

 

 

 

 

0.84

%

Net interest margin

 

 

 

 

 

 

3.50

%

 

 

 

 

 

 

 

3.70

%

_____________________________

(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.

 

Contacts

Robert M. Gorman - (804) 523‑7828

Executive Vice President / Chief Financial Officer

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