Atlantic Union Bankshares Reports Second Quarter Financial Results

Atlantic Union Bankshares Corporation (the “Company” or “Atlantic Union”) (NYSE: AUB) reported net income available to common shareholders of $22.2 million and basic and diluted earnings per common share of $0.25 for the second quarter of 2024 and adjusted operating earnings available to common shareholders(1) of $56.4 million and adjusted diluted operating earnings per common share(1) of $0.63 for the second quarter of 2024.

Merger with American National Bankshares Inc. (“American National”)

On April 1, 2024, the Company completed its acquisition of American National. American National’s results of operations are included in the Company’s consolidated results since the date of acquisition, and, therefore, the Company’s second quarter and first half of 2024 results reflect increased levels of average balances, net interest income, and expense compared to its prior quarter and first half of 2023 results. After purchase accounting fair value adjustments, the acquisition added $2.9 billion of total assets, including $2.2 billion of loans held for investment (“LHFI”), and $2.7 billion of total liabilities, including $2.6 billion in total deposits. The Company recorded preliminary goodwill of $282.3 million related to the acquisition.

In connection with the acquisition, the Company recorded an initial allowance for credit losses (“ACL”) of $18.5 million that consisted of an allowance for loan and lease losses (“ALLL”) of $17.1 million, which included a $3.9 million reserve on acquired loans that experienced a more-than insignificant amount of credit deterioration since origination (“PCD” loans), and a reserve for unfunded commitments (“RUC”) discussed below. The Company also recorded a $13.2 million reserve on purchased non-credit deteriorated loans (“non-PCD” loans) established through provision expense, which represents the CECL “double count” of the non-PCD credit mark, and a $1.4 million RUC through the provision for credit losses.

The Company incurred pre-tax merger costs of approximately $29.8 million during the second quarter of 2024 related to the American National acquisition.

“Atlantic Union delivered solid operating metrics in the second quarter, which is the first to include the financial impact of our merger with American National, which closed on April 1st,” said John C. Asbury, president and chief executive officer of Atlantic Union. “During the second quarter, we successfully completed the core systems integration over Memorial Day weekend, and now operate as one brand across our footprint. We believe the combination positions us well to deliver differentiated financial performance, increases our density and market power in central and western Virginia, and expands our franchise into contiguous markets in southern Virginia and in North Carolina.

Operating under the mantra of soundness, profitability, and growth – in that order of priority – Atlantic Union remains committed to generating sustainable, profitable growth, and building long-term value for our shareholders.”

NET INTEREST INCOME

For the second quarter of 2024, net interest income was $184.5 million, an increase of $36.7 million from $147.8 million in the first quarter of 2024. Net interest income (FTE)(1) was $188.3 million in the second quarter of 2024, an increase of $36.8 million from $151.5 million in the first quarter of 2024. The increases in both net interest income and net interest income (FTE)(1) were primarily the result of a $2.8 billion increase in average interest earning assets, partially offset by a $2.2 billion increase in average interest bearing liabilities, in each case primarily related to the acquisition of American National. For the second quarter of 2024, the Company’s net interest margin increased 28 basis points to 3.39% and the net interest margin (FTE)(1) increased 27 basis points to 3.46% compared to the prior quarter, primarily due to the impacts associated with the American National acquisition. Earning asset yields for the second quarter of 2024 increased 34 basis points to 5.96% compared to the first quarter of 2024, and the cost of funds increased by 7 basis points to 2.50%, due to changes in deposit mix as depositors continued to move to higher yielding deposit products.

The Company’s net interest margin (FTE) (1) includes the impact of acquisition accounting fair value adjustments. Net accretion income related to acquisition accounting was $14.3 million for the quarter ended June 30, 2024, compared to $602,000 for the quarter ended March 31, 2024, with the increase due to the American National acquisition. The impact of accretion and amortization for the periods presented are reflected in the following table (dollars in thousands):

Loan

Deposit

Borrowings

Accretion

Amortization

Total

For the quarter ended March 31, 2024

819

(1)

(216)

602

For the quarter ended June 30, 2024

15,660

(1,035)

(285)

14,340

ASSET QUALITY

Overview

At June 30, 2024, nonperforming assets (“NPAs”) as a percentage of total LHFI was 0.20%, a decrease of 3 basis points from the prior quarter and included nonaccrual loans of $35.9 million. This decline in the NPA ratio was primarily due to the effects of the American National acquisition, and the approximately $2.2 billion of LHFI acquired in that transaction. Accruing past due loans as a percentage of total LHFI totaled 22 basis points at June 30, 2024, a decrease of 10 basis points from March 31, 2024, and an increase of 6 basis points from June 30, 2023. Net charge-offs were 0.04% of total average LHFI (annualized) for the second quarter of 2024, a decrease of 9 basis points from March 31, 2024, and consistent with June 30, 2023. The ACL totaled $175.7 million at June 30, 2024, an increase of $23.9 million from the prior quarter and included the initial ACL related to the American National acquisition of $18.5 million, as well as the impact of loan growth and the impact of continued uncertainty in the economic outlook on certain portfolios.

Nonperforming Assets

At June 30, 2024, NPAs totaled $36.1 million, compared to $36.4 million in the prior quarter. The following table shows a summary of NPA balances at the quarters ended (dollars in thousands):

June 30,

March 31,

December 31,

September 30,

June 30,

2024

2023

Nonaccrual loans

35,913

36,389

36,860

28,626

29,105

Foreclosed properties

230

149

Total nonperforming assets

36,143

36,418

36,889

28,775

29,155

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

June 30,

March 31,

December 31,

September 30,

June 30,

2024

2023

Beginning Balance

36,389

36,860

28,626

29,105

29,082

Net customer payments

(6,293

)

(1,583

)

(2,198

)

(1,947

)

(5,950

)

Additions

6,831

5,047

10,604

1,651

6,685

Charge-offs

(759

)

(3,935

)

(172

)

(64

)

(712

)

Loans returning to accruing status

(54

)

—

(119

)

—

Transfers to foreclosed property

(201

)

—

Ending Balance

35,913

36,389

36,860

28,626

29,105

Past Due Loans

At June 30, 2024, past due loans still accruing interest totaled $40.2 million or 0.22% of total LHFI, compared to $50.7 million or 0.32% of total LHFI at March 31, 2024, and $24.1 million or 0.16% of total LHFI at June 30, 2023. The decrease in past due loan levels at June 30, 2024 from March 31, 2024 was primarily within the 30-59 days past due category and driven by decreases in past due relationships within the other commercial, residential 1-4 family consumer, and commercial and industrial portfolios. Of the total past due loans still accruing interest, $15.6 million or 0.09% of total LHFI were past due 90 days or more at June 30, 2024, compared to $11.4 million or 0.07% of total LHFI at March 31, 2024, and $10.1 million or 0.07% of total LHFI at June 30, 2023. The increase in loans past due 90 days or more at June 30, 2024 from both March 31, 2024 and June 30, 2023 was primarily due to one credit relationship within the other commercial portfolio.

Allowance for Credit Losses

At June 30, 2024, the ACL was $175.7 million and included an ALLL of $158.1 million and a RUC of $17.6 million. At April 1, 2024, the initial ACL related to American National was $18.5 million, consisting of an ALLL of $17.1 million, which included a $3.9 million reserve on PCD loans, and a RUC of $1.4 million. Outside of the initial ACL related to the American National acquisition, the ACL at June 30, 2024 increased $5.4 million from March 31, 2024, primarily due to loan growth in the second quarter of 2024 and the impact of continued uncertainty in the economic outlook on certain portfolios.

The ACL as a percentage of total LHFI was 0.96% at June 30, 2024 and March 31, 2024. The ALLL as a percentage of total LHFI was 0.86% at June 30, 2024 and March 31, 2024.

Net Charge-offs

Net charge-offs were $1.7 million or 0.04% of total average LHFI on an annualized basis for the second quarter of 2024, compared to $4.9 million or 0.13% (annualized) for the first quarter of 2024, and $1.6 million or 0.04% (annualized) for the second quarter of 2023.

Provision for Credit Losses

For the second quarter of 2024, the Company recorded a provision for credit losses of $21.8 million, compared to a provision for credit losses of $8.2 million in the prior quarter, and a provision for credit losses of $6.1 million in the second quarter of 2023. Included in the provision for credit losses for the second quarter of 2024 was $13.2 million initial provision expense on non-PCD loans and $1.4 million on unfunded commitments, each acquired from American National. As compared to the prior quarter, the decrease in provision for credit losses, outside of the initial provision expense recorded on non-PCD loans and unfunded commitments acquired from American National, primarily reflects the impact of lower net charge-offs in the second quarter of 2024. As compared to the same period in the prior year, the increase in provision for credit losses, outside of the initial provision expense recorded on non-PCD loans and unfunded commitments acquired from American National, primarily reflects the impact of loan growth and the impact of continued uncertainty in the economic outlook on certain portfolios.

NONINTEREST INCOME

Noninterest income decreased $1.8 million to $23.8 million for the second quarter of 2024 from $25.6 million in the prior quarter, primarily driven by $6.5 million of pre-tax losses incurred on the sale of available for sale (“AFS”) securities as part of the Company’s restructuring of the American National securities portfolio, partially offset by increases in noninterest income due to the full quarter impact of the American National acquisition that closed on April 1, 2024.

Adjusted operating noninterest income,(1) which excludes losses and gains on sale of AFS securities (losses of $6.5 million in the second quarter and gains of $3,000 in the first quarter), increased $4.8 million to $30.3 million for the second quarter from $25.5 million in the prior quarter, primarily due to the impact of the American National acquisition, which drove the majority of the $2.1 million increase in fiduciary and asset management fees, the $832,000 increase in interchange fees, the $517,000 increase in service charges on deposit accounts, the $418,000 increase in loan-related interest rate swap fees, and the $236,000 increase in other service charges, commissions, and fees. In addition to the acquisition impact, BOLI income increased $546,000 compared to the prior quarter, primarily driven by a death benefit received in the second quarter, and mortgage banking income increased $326,000.

NONINTEREST EXPENSE

Noninterest expense increased $44.7 million to $150.0 million for the second quarter of 2024 from $105.3 million in the prior quarter, primarily driven by a $27.9 million increase in pre-tax merger-related expenses, as well as other increases in noninterest expense due to the full quarter impact of the American National acquisition.

Adjusted operating noninterest expense,(1) which excludes merger-related costs ($29.8 million in the second quarter and $1.9 million in the first quarter), amortization of intangible assets ($6.0 million in the second quarter and $1.9 million in the first quarter), and a FDIC special assessment ($840,000 in the first quarter), increased $13.5 million to $114.2 million for the second quarter from $100.7 million in the prior quarter, primarily due to the impact of the American National acquisition, which drove the majority of the $6.6 million increase in salaries and benefits, the $2.1 million increase in technology and data processing, the $1.2 million increase in occupancy expenses, and the $512,000 increase in franchise and other taxes compared to the prior quarter. In addition to the acquisition impact, professional services increased $1.3 million, primarily due to fees associated with various strategic projects, and marketing and advertising expense increased $665,000 compared to the prior quarter.

INCOME TAXES

As of each reporting date, the Company considers existing evidence, both positive and negative, that could impact the future realization of deferred tax assets. The Company’s bank subsidiary, Atlantic Union Bank, is subject to a bank franchise tax but not state income tax in Virginia, its primary place of business. The Company, its subsidiaries, and Atlantic Union Bank’s non-bank subsidiaries are subject to income taxes and may be able to utilize state deferred tax assets, depending on a number of factors including those entities’ financial results. During the quarter ended June 30, 2024, the Company reviewed its business plans considering the American National acquisition and other business changes and noted shifts within its state income tax footprint and other factors that impacted projected future realization of state deferred tax items, including those attributable to operations in Virginia. As a result, the Company concluded it is more likely than not that the benefit for certain state net operating loss carryforwards will not be realized, and the Company recorded a valuation allowance of $4.8 million via a non-cash charge to income tax expense for the second quarter of 2024.

The Company’s effective tax rate for the three months ended June 30, 2024 and 2023 was 31.2% and 14.4%, respectively, and the effective tax rate for the six months ended June 30, 2024 and 2023 was 22.3% and 15.5%. respectively. The increases in the effective tax rate for both the three and six months ended June 30, 2024 were primarily due to the valuation allowance established on June 30, 2024, which resulted in a 13 and 5 percentage point increase, respectively, in the effective tax rate.

BALANCE SHEET

At June 30, 2024, the Company’s consolidated balance sheet includes the impact of the American National acquisition, which closed April 1, 2024, as discussed above. ASC 805, Business Combinations, allows for a measurement period of 12 months beyond the acquisition date to finalize the fair value measurements of the acquired Company’s net assets as additional information existing as of the acquisition date becomes available. Any future measurement period adjustments will be recorded through goodwill upon identification. Below is a summary of the related impact of the acquisition on the Company's consolidated balance sheet as of the acquisition date.

The fair value of assets acquired totaled $2.9 billion and included total loans of $2.2 billion with an initial loan discount of $164.6 million.
The fair value of the liabilities assumed totaled $2.7 billion and included total deposits of $2.6 billion with an initial deposit mark related to time deposits of $4.1 million.
Core deposit intangibles and other intangibles acquired totaled $84.7 million.
Preliminary goodwill totaled $282.3 million.

At June 30, 2024, total assets were $24.8 billion, an increase of $3.4 billion from March 31, 2024 and $4.2 billion or approximately 20.2% from June 30, 2023. The increases in total assets from the prior quarter and prior year were primarily driven by growth in LHFI (net of deferred fees and costs) and the AFS securities portfolio, primarily due to the American National acquisition.

At June 30, 2024, LHFI (net of deferred fees and costs) totaled $18.3 billion, an increase of $2.5 billion from $15.9 billion at March 31, 2024, and an increase of $3.3 billion or 21.8% from June 30, 2023. LHFI increased from the prior quarter and prior year primarily due to the American National acquisition, as well as loan growth.

At June 30, 2024, total investments were $3.5 billion, an increase of $350.1 million from March 31, 2024, and an increase of $348.2 million or 11.1% from June 30, 2023. AFS securities totaled $2.6 billion at June 30, 2024 and $2.2 billion at both March 31, 2024 and June 30, 2023. The increases compared to the prior quarter and prior year were primarily due to the acquisition of American National. Total net unrealized losses on the AFS securities portfolio were $420.7 million at June 30, 2024, compared to $410.9 million at March 31, 2024 and $450.1 million at June 30, 2023. Held to maturity securities are carried at cost and totaled $810.5 million at June 30, 2024, $828.9 million at March 31, 2024, and $849.6 million at June 30, 2023 and had net unrealized losses of $44.0 million at June 30, 2024, $37.6 million at March 31, 2024, and $41.8 million at June 30, 2023.

At June 30, 2024, total deposits were $20.0 billion, an increase of $2.7 billion from the prior quarter, and an increase of $3.6 billion or 21.9% from June 30, 2023. The increases in deposit balances from the prior quarter and prior year are primarily due to increases in interest bearing customer deposits and demand deposits, primarily related to the addition of the American National acquired deposits, as well as increases in brokered deposits.

At June 30, 2024, total borrowings were $1.2 billion, an increase of $149.0 million from March 31, 2024 and a decrease of $113.6 million or 8.6% from June 30, 2023. At June 30, 2024 average borrowings were $1.0 billion, consistent with March 31, 2024, and a decrease of $53.3 million from June 30, 2023. The increase in borrowings from the prior quarter was primarily driven by increased use of short-term borrowings to fund loan growth, as well as increases associated with the American National acquisition, while the decrease from the same period in the prior year was due to paydowns of short-term borrowings due to deposit growth.

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

June 30,

March 31,

June 30,

2024

2023

Common equity Tier 1 capital ratio (2)

9.47

9.86

Tier 1 capital ratio (2)

10.27

10.77

10.81

Total capital ratio (2)

13.00

13.62

13.64

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

9.05

9.62

9.64

Common equity to total assets

11.62

11.14

10.96

Tangible common equity to tangible assets (1)

6.71

7.05

6.66

_______________________________

(1) These are financial measures not calculated in accordance with generally accepted accounting principles (“GAAP”). For a reconciliation of these non-GAAP financial measures, see the “Alternative Performance Measures (non-GAAP)” section of the Key Financial Results.

(2) All ratios at June 30, 2024 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed.

During the second quarter of 2024, the Company declared and paid a quarterly dividend on the outstanding shares of Series A Preferred Stock of $171.88 per share (equivalent to $0.43 per outstanding depositary share), consistent with the first quarter of 2024 and the second quarter of 2023. During the second quarter of 2024, the Company also declared and paid cash dividends of $0.32 per common share, consistent with the first quarter of 2024 and a $0.02 increase or approximately 6.7% from the second quarter of 2023.

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 had 129 branches and approximately 150 ATMs located throughout Virginia and in portions of Maryland and North Carolina as of June 30, 2024. Certain non-bank financial services affiliates of Atlantic Union Bank include: Atlantic Union Equipment Finance, Inc., which provides equipment financing; Atlantic Union Financial Consultants, LLC, which provides brokerage services; and Union Insurance Group, LLC, which offers various lines of insurance products.

SECOND QUARTER 2024 EARNINGS RELEASE CONFERENCE CALL

The Company will hold a conference call and webcast for investors at 9:00 a.m. Eastern Time on Thursday, July 25, 2024, during which management will review our financial results for the second quarter 2024 and provide an update on our recent activities.

The listen-only webcast and the accompanying slides can be accessed at: https://edge.media-server.com/mmc/p/ct8s95ox.

For analysts who wish to participate in the conference call, please register at the following URL: https://register.vevent.com/register/BI670b5991ba5d495ea7c519f17cf6b388. To participate in the conference call, you must use the link to receive an audio dial-in number and an Access PIN.

A replay of the webcast, and the accompanying slides, will be available on the Company’s website for 90 days at: https://investors.atlanticunionbank.com/.

NON-GAAP FINANCIAL MEASURES

In reporting the results as of and for the period ended June 30, 2024, the Company has provided supplemental performance measures determined by methods other than in accordance with GAAP. 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 the benefits of the American National acquisition, statements regarding our future ability to recognize the benefits of certain tax assets, our business, financial and operating results, including our deposit base and funding, the impact of future economic conditions, changes in economic conditions, our asset quality, our customer relationships, and statements that include other projections, predictions, expectations, or beliefs about future events or results or otherwise are not statements of historical fact. Such forward-looking statements are based on certain assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties, and other factors, some of which cannot be predicted or quantified, that may cause actual results, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements. Forward-looking statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” “continue,” “confidence,” or words of similar meaning or other statements concerning opinions or judgment of the Company and our management about future events. Although we believe that our expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of our existing knowledge of our business and operations, there can be no assurance that actual future results, performance, or achievements of, or trends affecting, us will not differ materially from any projected future results, performance, achievements or trends expressed or implied by such forward-looking statements. Actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of or changes in:

market interest rates and their related impacts on macroeconomic conditions, customer and client behavior, our funding costs and our loan and securities portfolios;
inflation and its impacts on economic growth and customer and client behavior;
adverse developments in the financial industry generally, such as bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior;
the sufficiency of liquidity and changes in our capital positions;
general economic and financial market conditions, in the United States generally and particularly in the markets in which we operate and which our loans are concentrated, including the effects of declines in real estate values, an increase in unemployment levels and slowdowns in economic growth;
the impact of purchase accounting with respect to the American National acquisition, or any change in the assumptions used regarding the assets acquired and liabilities assumed to determine the fair value and credit marks;
the possibility that the anticipated benefits of the American National acquisition, including anticipated cost savings and strategic gains, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the recent integration of the two companies or as a result of the strength of the economy, competitive factors in the areas where we do business, or as a result of other unexpected factors or events;
potential adverse reactions or changes to business or employee relationships, including those resulting from the American National acquisition;
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 changing economic conditions, credit concentrations, inflation, changing interest rates, or other factors;
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 (such as pandemics), and of governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of our borrowers to satisfy their obligations to us, on the value of collateral securing loans, on the demand for our loans or our other products and services, on supply chains and methods used to distribute products and services, on incidents of cyberattack and fraud, on our liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of our business operations and on financial markets and economic growth;
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;
the effects of legislative or regulatory changes and requirements, including changes in federal, state or local tax laws;
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;
any event or development that would cause us to conclude that there was an impairment of any asset, including intangible assets, such as goodwill; and
other factors, many of which are beyond our control.

Please also refer to such other factors as discussed throughout Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10‑K for the year ended December 31, 2023 and related disclosures in other filings, which have been filed with the U.S. Securities and Exchange Commission (“SEC”) and are available on the SEC’s website at www.sec.gov. All risk factors and uncertainties described herein and therein should be considered in evaluating forward-looking statements, and all of the forward-looking statements are expressly qualified by the cautionary statements contained or referred to herein and therein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on the Company or our businesses or operations. Readers are cautioned not to rely too heavily on 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, except as required by law.

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

As of & For Three Months Ended

As of & For Six Months Ended

6/30/24

3/31/24

6/30/23

6/30/24

6/30/23

Results of Operations

Interest and dividend income

320,888

262,915

230,247

583,802

447,793

Interest expense

136,354

115,090

78,163

251,444

142,265

Net interest income

184,534

147,825

152,084

332,358

305,528

Provision for credit losses

21,751

8,239

6,069

29,989

17,920

Net interest income after provision for credit losses

162,783

139,586

146,015

302,369

287,608

Noninterest income

23,812

25,552

24,197

49,365

33,824

Noninterest expenses

150,005

105,273

105,661

255,279

213,934

Income before income taxes

36,590

59,865

64,551

96,455

107,498

Income tax expense

11,429

10,096

9,310

21,525

16,604

Net income

25,161

49,769

55,241

74,930

90,894

Dividends on preferred stock

2,967

2,967

5,934

5,934

Net income available to common shareholders

22,194

46,802

52,274

68,996

84,960

Interest earned on earning assets (FTE) (1)

324,702

266,636

233,913

591,339

455,248

Net interest income (FTE) (1)

188,348

151,546

155,750

339,895

312,983

Total revenue (FTE) (1)

212,160

177,098

179,947

389,260

346,807

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

94,635

70,815

74,553

165,449

147,751

Key Ratios

Earnings per common share, diluted

0.25

0.62

0.70

0.84

1.13

Return on average assets (ROA)

0.41

0.94

1.10

0.66

0.90

Return on average equity (ROE)

3.35

7.79

9.00

5.39

7.51

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

6.99

13.32

16.11

10.06

13.46

Efficiency ratio

72.00

60.72

59.94

66.88

63.04

Efficiency ratio (FTE) (1)

70.70

59.44

58.72

65.58

61.69

Net interest margin

3.39

3.11

3.37

3.26

3.39

Net interest margin (FTE) (1)

3.46

3.19

3.45

3.33

3.47

Yields on earning assets (FTE) (1)

5.96

5.62

5.19

5.80

5.05

Cost of interest-bearing liabilities

3.33

3.23

2.42

3.28

2.22

Cost of deposits

2.46

2.39

1.61

2.43

1.44

Cost of funds

2.50

2.43

1.74

2.47

1.58

Operating Measures (4)

Adjusted operating earnings

59,319

51,994

58,348

111,312

108,537

Adjusted operating earnings available to common shareholders

56,352

49,027

55,381

105,378

102,603

Adjusted operating earnings per common share, diluted

0.63

0.65

0.74

1.28

1.37

Adjusted operating ROA

0.97

0.99

1.16

0.98

1.08

Adjusted operating ROE

7.90

8.14

9.51

8.01

8.96

Adjusted operating ROTCE (2) (3)

15.85

13.93

17.03

14.92

16.14

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

52.24

56.84

55.30

54.30

55.66

Per Share Data

Earnings per common share, basic

0.25

0.62

0.70

0.84

1.13

Earnings per common share, diluted

0.25

0.62

0.70

0.84

1.13

Cash dividends paid per common share

0.32

0.32

0.30

0.64

0.60

Market value per share

32.85

35.31

25.95

32.85

25.95

Book value per common share

32.30

31.88

30.31

32.30

30.31

Tangible book value per common share (2)

17.67

19.27

17.58

17.67

17.58

Price to earnings ratio, diluted

33.04

14.11

9.28

19.53

11.35

Price to book value per common share ratio

1.02

1.11

0.86

1.02

0.86

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

1.86

1.83

1.48

1.86

1.48

Weighted average common shares outstanding, basic

89,768,466

75,197,113

74,995,450

82,482,790

74,914,247

Weighted average common shares outstanding, diluted

89,768,466

75,197,376

74,995,557

82,482,921

74,915,977

Common shares outstanding at end of period

89,769,734

75,381,740

74,998,075

89,769,734

74,998,075

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

As of & For Three Months Ended

As of & For Six Months Ended

6/30/24

3/31/24

6/30/23

6/30/24

6/30/23

Capital Ratios

Common equity Tier 1 capital ratio (5)

9.47

9.86

9.47

9.86

Tier 1 capital ratio (5)

10.27

10.77

10.81

10.27

10.81

Total capital ratio (5)

13.00

13.62

13.64

13.00

13.64

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

9.05

9.62

9.64

9.05

9.64

Common equity to total assets

11.62

11.14

10.96

11.62

10.96

Tangible common equity to tangible assets (2)

6.71

7.05

6.66

6.71

6.66

Financial Condition

Assets

24,761,413

21,378,120

20,602,332

24,761,413

20,602,332

LHFI (net of deferred fees and costs)

18,347,190

15,851,628

15,066,930

18,347,190

15,066,930

Securities

3,491,481

3,141,416

3,143,236

3,491,481

3,143,236

Earning Assets

22,067,549

19,236,100

18,452,007

22,067,549

18,452,007

Goodwill

1,207,484

925,211

1,207,484

925,211

Amortizable intangibles, net

95,980

17,288

23,469

95,980

23,469

Deposits

20,000,877

17,278,435

16,411,987

20,000,877

16,411,987

Borrowings

1,206,734

1,057,724

1,320,301

1,206,734

1,320,301

Stockholders' equity

3,043,686

2,548,928

2,424,470

3,043,686

2,424,470

Tangible common equity (2)

1,573,865

1,440,072

1,309,433

1,573,865

1,309,433

Loans held for investment, net of deferred fees and costs

Construction and land development

1,454,545

1,246,251

1,231,720

1,454,545

1,231,720

Commercial real estate - owner occupied

2,397,700

1,981,613

1,952,189

2,397,700

1,952,189

Commercial real estate - non-owner occupied

4,906,285

4,225,018

4,113,318

4,906,285

4,113,318

Multifamily real estate

1,353,024

1,074,957

788,895

1,353,024

788,895

Commercial & Industrial

3,944,723

3,561,971

3,373,148

3,944,723

3,373,148

Residential 1-4 Family - Commercial

737,687

515,667

518,317

737,687

518,317

Residential 1-4 Family - Consumer

1,251,033

1,081,094

1,017,698

1,251,033

1,017,698

Residential 1-4 Family - Revolving

718,491

616,951

600,339

718,491

600,339

Auto

396,776

440,118

585,756

396,776

585,756

Consumer

115,541

113,414

134,709

115,541

134,709

Other Commercial

1,071,385

994,574

750,841

1,071,385

750,841

Total LHFI

18,347,190

15,851,628

15,066,930

18,347,190

15,066,930

Deposits

Interest checking accounts

5,044,503

4,753,485

4,824,192

5,044,503

4,824,192

Money market accounts

4,330,928

4,104,282

3,413,936

4,330,928

3,413,936

Savings accounts

1,056,474

895,213

986,081

1,056,474

986,081

Customer time deposits of $250,000 and over

1,015,032

721,155

578,739

1,015,032

578,739

Other customer time deposits

2,691,600

2,293,800

1,813,031

2,691,600

1,813,031

Time deposits

3,706,632

3,014,955

2,391,770

3,706,632

2,391,770

Total interest-bearing customer deposits

14,138,537

12,767,935

11,615,979

14,138,537

11,615,979

Brokered deposits

1,335,092

665,309

485,702

1,335,092

485,702

Total interest-bearing deposits

15,473,629

13,433,244

12,101,681

15,473,629

12,101,681

Demand deposits

4,527,248

3,845,191

4,310,306

4,527,248

4,310,306

Total deposits

20,000,877

17,278,435

16,411,987

20,000,877

16,411,987

Averages

Assets

24,620,198

21,222,756

20,209,687

22,921,478

20,296,536

LHFI (net of deferred fees and costs)

18,154,673

15,732,599

14,746,218

16,943,636

14,626,579

Loans held for sale

12,392

9,142

14,413

10,767

10,168

Securities

3,476,890

3,153,556

3,176,662

3,315,223

3,321,308

Earning assets

21,925,128

19,089,393

18,091,809

20,507,261

18,164,545

Deposits

20,033,678

17,147,181

16,280,154

18,590,430

16,348,304

Time deposits

4,243,344

3,459,138

2,500,966

3,851,241

2,396,827

Interest-bearing deposits

15,437,549

13,311,837

11,903,004

14,374,693

11,813,929

Borrowings

1,043,297

1,012,797

1,071,171

1,028,047

1,096,567

Interest-bearing liabilities

16,480,846

14,324,634

12,974,175

15,402,740

12,910,496

Stockholders' equity

3,021,929

2,568,243

2,460,741

2,795,086

2,442,273

Tangible common equity (2)

1,549,876

1,458,478

1,345,426

1,504,178

1,326,043

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

As of & For Three Months Ended

As of & For Six Months Ended

6/30/24

3/31/24

6/30/23

6/30/24

6/30/23

Asset Quality

Allowance for Credit Losses (ACL)

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

136,190

132,182

116,512

132,182

110,768

Add: Recoveries

1,348

977

1,035

2,325

2,202

Less: Charge-offs

3,088

5,894

2,602

8,982

8,328

Add: Initial Allowance - PCD American National loans

3,896

—

3,896

—

Add: Initial Provision - Non-PCD American National loans

13,229

—

13,229

—

Add: Provision for loan losses

6,556

8,925

5,738

15,481

16,041

Ending balance, ALLL

158,131

136,190

120,683

158,131

120,683

Beginning balance, Reserve for unfunded commitment (RUC)

15,582

16,269

15,199

16,269

13,675

Add: Initial Provision - RUC American National loans

1,353

—

1,353

—

Add: Provision for unfunded commitments

622

(687)

349

(65)

1,873

Ending balance, RUC

17,557

15,582

15,548

17,557

15,548

Total ACL

175,688

151,772

136,231

175,688

136,231

ACL / total LHFI

0.96

0.96

0.90

0.96

0.90

ALLL / total LHFI

0.86

0.86

0.80

0.86

0.80

Net charge-offs / total average LHFI (annualized)

0.04

0.13

0.04

0.08

0.08

Provision for loan losses/ total average LHFI (annualized)

0.44

0.23

0.16

0.34

0.22

Nonperforming Assets

Construction and land development

1,144

342

284

1,144

284

Commercial real estate - owner occupied

4,651

2,888

3,978

4,651

3,978

Commercial real estate - non-owner occupied

10,741

10,335

6,473

10,741

6,473

Multifamily real estate

—

Commercial & Industrial

3,408

6,480

2,738

3,408

2,738

Residential 1-4 Family - Commercial

1,783

1,790

1,844

1,783

1,844

Residential 1-4 Family - Consumer

10,799

10,990

10,033

10,799

10,033

Residential 1-4 Family - Revolving

3,028

3,135

3,461

3,028

3,461

Auto

354

429

291

354

291

Consumer

—

Nonaccrual loans

35,913

36,389

29,105

35,913

29,105

Foreclosed property

230

Total nonperforming assets (NPAs)

36,143

36,418

29,155

36,143

29,155

Construction and land development

764

171

764

Commercial real estate - owner occupied

1,047

3,634

2,463

1,047

2,463

Commercial real estate - non-owner occupied

1,309

1,197

2,763

1,309

2,763

Multifamily real estate

141

144

—

141

—

Commercial & Industrial

684

1,860

810

684

810

Residential 1-4 Family - Commercial

678

1,030

693

678

693

Residential 1-4 Family - Consumer

1,645

1,641

1,716

1,645

1,716

Residential 1-4 Family - Revolving

1,449

1,343

1,259

1,449

1,259

Auto

263

284

243

263

243

Consumer

176

141

176

Other Commercial

7,464

—

7,464

LHFI ≥ 90 days and still accruing

15,620

11,445

10,111

15,620

10,111

Total NPAs and LHFI ≥ 90 days

51,763

47,863

39,266

51,763

39,266

NPAs / total LHFI

0.20

0.23

0.19

0.20

0.19

NPAs / total assets

0.15

0.17

0.14

0.15

0.14

ALLL / nonaccrual loans

440.32

374.26

414.65

440.32

414.65

ALLL/ nonperforming assets

437.51

373.96

413.94

437.51

413.94

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

As of & For Three Months Ended

As of & For Six Months Ended

6/30/24

3/31/24

6/30/23

6/30/24

6/30/23

Past Due Detail

Construction and land development

1,689

2,163

295

1,689

295

Commercial real estate - owner occupied

3,450

3,663

602

3,450

602

Commercial real estate - non-owner occupied

1,316

2,271

—

1,316

—

Multifamily real estate

1,694

—

1,694

—

Commercial & Industrial

2,154

5,540

254

2,154

254

Residential 1-4 Family - Commercial

873

1,407

1,076

873

1,076

Residential 1-4 Family - Consumer

1,331

6,070

1,504

1,331

1,504

Residential 1-4 Family - Revolving

2,518

1,920

1,729

2,518

1,729

Auto

3,463

3,192

2,877

3,463

2,877

Consumer

385

418

334

385

334

Other Commercial

289

8,187

289

LHFI 30-59 days past due

19,162

34,831

8,694

19,162

8,694

Construction and land development

155

1,097

—

155

—

Commercial real estate - owner occupied

—

Commercial real estate - non-owner occupied

—

558

—

Multifamily real estate

632

—

632

—

Commercial & Industrial

192

348

400

192

400

Residential 1-4 Family - Commercial

689

189

689

189

Residential 1-4 Family - Consumer

1,960

204

2,813

1,960

2,813

Residential 1-4 Family - Revolving

795

1,477

1,114

795

1,114

Auto

565

330

564

565

564

Consumer

309

197

214

309

214

Other Commercial

—

102

—

LHFI 60-89 days past due

5,369

4,411

5,304

5,369

5,304

Past Due and still accruing

40,151

50,687

24,109

40,151

24,109

Past Due and still accruing / total LHFI

0.22

0.32

0.16

0.22

0.16

Alternative Performance Measures (non-GAAP)

Net interest income (FTE) (1)

Net interest income (GAAP)

184,534

147,825

152,084

332,358

305,528

FTE adjustment

3,814

3,721

3,666

7,537

7,455

Net interest income (FTE) (non-GAAP)

188,348

151,546

155,750

339,895

312,983

Noninterest income (GAAP)

23,812

25,552

24,197

49,365

33,824

Total revenue (FTE) (non-GAAP)

212,160

177,098

179,947

389,260

346,807

Average earning assets

21,925,128

19,089,393

18,091,809

20,507,261

18,164,545

Net interest margin

3.39

3.11

3.37

3.26

3.39

Net interest margin (FTE)

3.46

3.19

3.45

3.33

3.47

Tangible Assets (2)

Ending assets (GAAP)

24,761,413

21,378,120

20,602,332

24,761,413

20,602,332

Less: Ending goodwill

1,207,484

925,211

1,207,484

925,211

Less: Ending amortizable intangibles

95,980

17,288

23,469

95,980

23,469

Ending tangible assets (non-GAAP)

23,457,949

20,435,621

19,653,652

23,457,949

19,653,652

Tangible Common Equity (2)

Ending equity (GAAP)

3,043,686

2,548,928

2,424,470

3,043,686

2,424,470

Less: Ending goodwill

1,207,484

925,211

1,207,484

925,211

Less: Ending amortizable intangibles

95,980

17,288

23,469

95,980

23,469

Less: Perpetual preferred stock

166,357

166,357

166,357

166,357

Ending tangible common equity (non-GAAP)

1,573,865

1,440,072

1,309,433

1,573,865

1,309,433

Average equity (GAAP)

3,021,929

2,568,243

2,460,741

2,795,086

2,442,273

Less: Average goodwill

1,208,588

925,211

1,066,899

925,211

Less: Average amortizable intangibles

97,109

18,198

23,748

57,653

24,663

Less: Average perpetual preferred stock

166,356

166,356

166,356

166,356

Average tangible common equity (non-GAAP)

1,549,876

1,458,478

1,345,426

1,504,178

1,326,043

ROTCE (2)(3)

Net income available to common shareholders (GAAP)

22,194

46,802

52,274

68,996

84,960

Plus: Amortization of intangibles, tax effected

4,736

1,497

1,751

6,232

3,550

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

26,930

48,299

54,025

75,228

88,510

Return on average tangible common equity (ROTCE)

6.99

13.32

16.11

10.06

13.46

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

As of & For Three Months Ended

As of & For Six Months Ended

6/30/24

3/31/24

6/30/23

6/30/24

6/30/23

Operating Measures (4)

Net income (GAAP)

25,161

49,769

55,241

74,930

90,894

Plus: Merger-related costs, net of tax

24,236

1,563

—

25,799

—

Plus: Strategic cost saving initiatives, net of tax

—

3,109

—

3,109

Plus: FDIC special assessment, net of tax

—

664

—

664

—

Plus: Legal reserve, net of tax

—

3,950

Plus: Deferred tax asset write-down

4,774

—

4,774

—

Less: (Loss) gain on sale of securities, net of tax

(5,148)

(5,145)

(10,584)

Adjusted operating earnings (non-GAAP)

59,319

51,994

58,348

111,312

108,537

Less: Dividends on preferred stock

2,967

2,967

5,934

5,934

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

56,352

49,027

55,381

105,378

102,603

Operating Efficiency Ratio (1)(6)

Noninterest expense (GAAP)

150,005

105,273

105,661

255,279

213,934

Less: Amortization of intangible assets

5,995

1,895

2,216

7,889

4,494

Less: Merger-related costs

29,778

1,874

—

31,652

—

Less: FDIC special assessment

—

840

—

840

—

Less: Strategic cost saving initiatives

—

3,935

—

3,935

Less: Legal reserve

—

5,000

Adjusted operating noninterest expense (non-GAAP)

114,232

100,664

99,510

214,898

200,505

Noninterest income (GAAP)

23,812

25,552

24,197

49,365

33,824

Less: (Loss) gain on sale of securities

(6,516)

(6,513)

(13,398)

Adjusted operating noninterest income (non-GAAP)

30,328

25,549

24,195

55,878

47,222

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

188,348

151,546

155,750

339,895

312,983

Adjusted operating noninterest income (non-GAAP)

30,328

25,549

24,195

55,878

47,222

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

218,676

177,095

179,945

395,773

360,205

Efficiency ratio

72.00

60.72

59.94

66.88

63.04

Efficiency ratio (FTE) (1)

70.70

59.44

58.72

65.58

61.69

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

52.24

56.84

55.30

54.30

55.66

Operating ROA & ROE (4)

Adjusted operating earnings (non-GAAP)

59,319

51,994

58,348

111,312

108,537

Average assets (GAAP)

24,620,198

21,222,756

20,209,687

22,921,478

20,296,536

Return on average assets (ROA) (GAAP)

0.41

0.94

1.10

0.66

0.90

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

0.97

0.99

1.16

0.98

1.08

Average equity (GAAP)

3,021,929

2,568,243

2,460,741

2,795,086

2,442,273

Return on average equity (ROE) (GAAP)

3.35

7.79

9.00

5.39

7.51

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

7.90

8.14

9.51

8.01

8.96

Operating ROTCE (2)(3)(4)

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

56,352

49,027

55,381

105,378

102,603

Plus: Amortization of intangibles, tax effected

4,736

1,497

1,751

6,232

3,550

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

61,088

50,524

57,132

111,610

106,153

Average tangible common equity (non-GAAP)

1,549,876

1,458,478

1,345,426

1,504,178

1,326,043

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

15.85

13.93

17.03

14.92

16.14

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

Net income (GAAP)

25,161

49,769

55,241

74,930

90,894

Plus: Provision for credit losses

21,751

8,239

6,069

29,989

17,920

Plus: Income tax expense

11,429

10,096

9,310

21,525

16,604

Plus: Merger-related costs

29,778

1,874

—

31,652

—

Plus: Strategic cost saving initiatives

—

3,935

—

3,935

Plus: FDIC special assessment

—

840

—

840

—

Plus: Legal reserve

—

5,000

Less: (Loss) gain on sale of securities, net of tax

(6,516)

(6,513)

(13,398)

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

94,635

70,815

74,553

165,449

147,751

Less: Dividends on preferred stock

2,967

2,967

5,934

5,934

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

91,668

67,848

71,586

159,515

141,817

Weighted average common shares outstanding, diluted

89,768,466

75,197,376

74,995,557

82,482,921

74,915,977

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

1.02

0.90

0.95

1.93

1.89

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

As of & For Three Months Ended

As of & For Six Months Ended

6/30/24

3/31/24

6/30/23

6/30/24

6/30/23

Mortgage Origination Held for Sale Volume

Refinance Volume

4,234

5,638

4,076

9,872

7,528

Purchase Volume

48,487

31,768

32,168

80,255

64,361

Total Mortgage loan originations held for sale

52,721

37,406

36,244

90,127

71,889

% of originations held for sale that are refinances

8.0

15.1

11.2

11.0

10.5

Wealth

Assets under management

6,487,087

5,258,880

4,774,501

6,487,087

4,774,501

Other Data

End of period full-time employees

2,083

1,745

1,878

2,083

1,878

Number of full-service branches

129

109

129

109

Number of automatic transaction machines (ATMs)

149

123

149

123

____________________________

(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 the yield on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the FTE components.

(2)

These are non-GAAP financial measures. Tangible assets and tangible common equity are used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible assets, tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes will assist investors in assessing the capital of the Company and its ability to absorb potential losses. The Company believes tangible common equity is an important indication of its ability to grow organically and through business combinations as well as its ability to pay dividends and to engage in various capital management strategies.

(3)

These are non-GAAP financial measures. The Company believes that ROTCE is a meaningful supplement to GAAP financial measures and is useful to investors because it measures the performance of a business consistently across time without regard to whether components of the business were acquired or developed internally.

(4)

These are non-GAAP financial measures. Adjusted operating measures exclude, as applicable, merger-related costs, strategic cost saving initiatives (principally composed of severance charges related to headcount reductions and charges for exiting leases), FDIC special assessments, legal reserves associated with our previously disclosed settlement with the CFPB, deferred tax asset write-down, and (loss) gain on sale of securities. The Company believes these non-GAAP adjusted measures provide investors with important information about the continuing economic results of the Company’s operations.

(5)

All ratios at June 30, 2024 are estimates and subject to change pending the Company’s filing of its FR Y9‑C. All other periods are presented as filed.

(6)

The adjusted operating efficiency ratio (FTE) excludes, as applicable, the amortization of intangible assets, merger-related costs, FDIC special assessments, strategic cost saving initiatives (principally composed of severance charges related to headcount reductions and charges for exiting leases), legal reserves associated with our previously disclosed settlement with the CFPB, and (loss) gain on sale of securities. This measure is similar to the measure used by the Company when analyzing corporate performance and is also similar to the measure used for incentive compensation. The Company believes this adjusted measure provides investors with important information about the continuing economic results of the Company’s operations.

(7)

These are non-GAAP financial measures. Pre-tax pre-provision adjusted earnings excludes, as applicable, the provision for credit losses, which can fluctuate significantly from period-to-period under the CECL methodology, income tax expense, merger-related costs, strategic cost saving initiatives (principally composed of severance charges related to headcount reductions and charges for exiting leases), FDIC special assessments, legal reserves associated with our previously disclosed settlement with the CFPB, and (loss) gain on sale of securities. The Company believes this adjusted measure provides investors with important information about the continuing economic results of the Company’s operations.

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

June 30,

December 31,

June 30,

2024

2023

ASSETS

(unaudited)

(audited)

(unaudited)

Cash and cash equivalents:

Cash and due from banks

233,065

196,754

199,778

Interest-bearing deposits in other banks

207,129

167,601

227,015

Federal funds sold

5,820

13,776

1,474

Total cash and cash equivalents

446,014

378,131

428,267

Securities available for sale, at fair value

2,555,723

2,231,261

2,182,448

Securities held to maturity, at carrying value

810,450

837,378

849,610

Restricted stock, at cost

125,308

115,472

111,178

Loans held for sale

12,906

6,710

10,327

Loans held for investment, net of deferred fees and costs

18,347,190

15,635,043

15,066,930

Less: allowance for loan and lease losses

158,131

132,182

120,683

Total loans held for investment, net

18,189,059

15,502,861

14,946,247

Premises and equipment, net

114,987

90,959

114,786

Goodwill

1,207,484

925,211

Amortizable intangibles, net

95,980

19,183

23,469

Bank owned life insurance

489,550

452,565

446,441

Other assets

713,952

606,466

564,348

Total assets

24,761,413

21,166,197

20,602,332

LIABILITIES

Noninterest-bearing demand deposits

4,527,248

3,963,181

4,310,306

Interest-bearing deposits

15,473,629

12,854,948

12,101,681

Total deposits

20,000,877

16,818,129

16,411,987

Securities sold under agreements to repurchase

64,585

110,833

130,461

Other short-term borrowings

725,500

810,000

799,400

Long-term borrowings

416,649

391,025

390,440

Other liabilities

510,116

479,883

445,574

Total liabilities

21,717,727

18,609,870

18,177,862

Commitments and contingencies

STOCKHOLDERS' EQUITY

Preferred stock, $10.00 par value

173

173

Common stock, $1.33 par value

118,475

99,147

99,088

Additional paid-in capital

2,273,312

1,782,286

1,776,494

Retained earnings

1,034,313

1,018,070

959,582

Accumulated other comprehensive loss

(382,587)

(343,349)

(410,867)

Total stockholders' equity

3,043,686

2,556,327

2,424,470

Total liabilities and stockholders' equity

24,761,413

21,166,197

20,602,332

Common shares outstanding

89,769,734

75,023,327

74,998,075

Common shares authorized

200,000,000

200,000,000

Preferred shares outstanding

17,250

17,250

Preferred shares authorized

500,000

500,000

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in thousands, except share data)

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

2024

2023

2024

2023

Interest and dividend income:

Interest and fees on loans

285,198

234,600

205,172

519,796

395,165

Interest on deposits in other banks

2,637

1,280

1,014

3,918

2,507

Interest and dividends on securities:

Taxable

24,886

18,879

15,565

43,765

32,317

Nontaxable

8,167

8,156

8,496

16,323

17,804

Total interest and dividend income

320,888

262,915

230,247

583,802

447,793

Interest expense:

Interest on deposits

122,504

101,864

65,267

224,368

117,100

Interest on short-term borrowings

8,190

8,161

8,044

16,351

15,607

Interest on long-term borrowings

5,660

5,065

4,852

10,725

9,558

Total interest expense

136,354

115,090

78,163

251,444

142,265

Net interest income

184,534

147,825

152,084

332,358

305,528

Provision for credit losses

21,751

8,239

6,069

29,989

17,920

Net interest income after provision for credit losses

162,783

139,586

146,015

302,369

287,608

Noninterest income:

Service charges on deposit accounts

9,086

8,569

8,118

17,655

16,020

Other service charges, commissions and fees

1,967

1,731

1,693

3,698

3,439

Interchange fees

3,126

2,294

2,459

5,420

4,784

Fiduciary and asset management fees

6,907

4,838

4,359

11,745

8,620

Mortgage banking income

1,193

867

449

2,060

1,303

(Loss) gain on sale of securities

(6,516)

(6,513)

(13,398)

Bank owned life insurance income

3,791

3,245

2,870

7,037

5,698

Loan-related interest rate swap fees

1,634

1,216

2,316

2,850

3,755

Other operating income

2,624

2,789

1,931

5,413

3,603

Total noninterest income

23,812

25,552

24,197

49,365

33,824

Noninterest expenses:

Salaries and benefits

68,531

61,882

62,019

130,413

122,547

Occupancy expenses

7,836

6,625

6,094

14,462

12,450

Furniture and equipment expenses

3,805

3,309

3,565

7,114

7,317

Technology and data processing

10,274

8,127

8,566

18,401

16,708

Professional services

4,377

3,081

4,433

7,458

7,847

Marketing and advertising expense

2,983

2,318

2,817

5,301

5,168

FDIC assessment premiums and other insurance

4,675

5,143

4,074

9,818

7,973

Franchise and other taxes

5,013

4,501

4,499

9,514

8,997

Loan-related expenses

1,275

1,323

1,619

2,598

3,171

Amortization of intangible assets

5,995

1,895

2,216

7,889

4,494

Merger-related costs

29,778

1,874

—

31,652

—

Other expenses

5,463

5,195

5,759

10,659

17,262

Total noninterest expenses

150,005

105,273

105,661

255,279

213,934

Income before income taxes

36,590

59,865

64,551

96,455

107,498

Income tax expense

11,429

10,096

9,310

21,525

16,604

Net Income

25,161

49,769

55,241

74,930

90,894

Dividends on preferred stock

2,967

2,967

5,934

5,934

Net income available to common shareholders

22,194

46,802

52,274

68,996

84,960

Basic earnings per common share

0.25

0.62

0.70

0.84

1.13

Diluted earnings per common share

0.25

0.62

0.70

0.84

1.13

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

(Dollars in thousands)

For the Quarter Ended

June 30, 2024

March 31, 2024

Average Balance

Interest Income / Expense (1)

Yield / Rate (1)(2)

Average Balance

Interest Income / Expense (1)

Yield / Rate (1)(2)

Assets:

Securities:

Taxable

2,221,486

24,886

4.51%

1,895,820

18,879

4.01%

Tax-exempt

1,255,404

10,338

3.31%

1,257,736

10,324

3.30%

Total securities

3,476,890

35,224

4.07%

3,153,556

29,203

3.72%

LHFI, net of deferred fees and costs (3)(4)

18,154,673

286,391

6.34%

15,732,599

235,832

6.03%

Other earning assets

293,565

3,087

4.23%

203,238

1,601

3.17%

Total earning assets

21,925,128

324,702

5.96%

19,089,393

266,636

5.62%

Allowance for loan and lease losses

(157,204)

(133,090)

Total non-earning assets

2,852,274

2,266,453

Total assets

24,620,198

21,222,756

Liabilities and Stockholders' Equity:

Interest-bearing deposits:

Transaction and money market accounts

10,117,794

74,833

2.97%

8,952,119

65,254

2.93%

Regular savings

1,076,411

555

0.21%

900,580

501

0.22%

Time deposits (5)

4,243,344

47,116

4.47%

3,459,138

36,109

4.20%

Total interest-bearing deposits

15,437,549

122,504

3.19%

13,311,837

101,864

3.08%

Other borrowings (6)

1,043,297

13,850

5.34%

1,012,797

13,226

5.25%

Total interest-bearing liabilities

16,480,846

136,354

3.33%

14,324,634

115,090

3.23%

Noninterest-bearing liabilities:

Demand deposits

4,596,129

3,835,344

Other liabilities

521,294

494,535

Total liabilities

21,598,269

18,654,513

Stockholders' equity

3,021,929

2,568,243

Total liabilities and stockholders' equity

24,620,198

21,222,756

Net interest income (FTE)

188,348

151,546

Interest rate spread

2.63%

2.39%

Cost of funds

2.50%

2.43%

Net interest margin (FTE)

3.46%

3.19%

_______________________________

(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 rounded amounts in thousands, which appear above.

(3)

Nonaccrual loans are included in average loans outstanding.

(4)

Interest income on loans includes $15.7 million and $819,000 for the three months ended June 30, 2024 and March 31, 2024, respectively, in accretion of the fair market value adjustments related to acquisitions.

(5)

Interest expense on time deposits includes $1.0 million and $1,000 for the three months ended June 30, 2024 and March 31, 2024, respectively, in accretion of the fair market value adjustments related to acquisitions.

(6)

Interest expense on borrowings includes $285,000 and $216,000 for the three months ended June 30, 2024 and March 31, 2024, respectively, in amortization of the fair market value adjustments related to acquisitions.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240725694679/en/

Robert M. Gorman - (804) 523‑7828 Executive Vice President / Chief Financial Officer

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