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Thu. 21 Jul 2022, 7:30am ET Benzinga Earnings, Press Releases

RICHMOND, Va., July 21, 2022 (GLOBE NEWSWIRE) -- Atlantic Union Bankshares Corporation (the "Company" or "Atlantic Union") (NASDAQ:AUB) reported net income available to common shareholders of $59.3 million and basic and diluted earnings per common share of $0.79 for the second quarter ended June 30, 2022. Adjusted operating earnings available to common shareholders(1) were $51.3 million, diluted operating earnings per common share(1) were $0.69, and pre-tax pre-provision adjusted operating earnings available to common shareholders(1) were $66.2 million for the second quarter ended June 30, 2022.

"Atlantic Union Bankshares delivered solid second quarter results with upper single digit annualized loan growth, strong credit metrics, and an expanding net interest margin," said John C. Asbury, president and chief executive officer of Atlantic Union. "We continue to be mindful of the current economic uncertainties, but remain encouraged by our competitive positioning, market dynamics, asset sensitivity and the economic strength in our footprint, which gives us confidence in our ability to achieve our top tier financial targets in the second half of the year."

"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."

Share Repurchase Program

On December 10, 2021, the Company's Board of Directors authorized a share repurchase program (the "Repurchase Program") to purchase up to $100 million of the Company's common stock through December 9, 2022 in open market transactions or privately negotiated transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and / or Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As part of the Repurchase Program, approximately 1.3 million shares (or $48.2 million) were repurchased during the six months ended June 30, 2022, and of these shares approximately 649,000 shares (or $23.2 million) were repurchased during the second quarter of 2022. At June 30, 2022, approximately $51.8 million of share repurchases remain available under the Repurchase Program.

NET INTEREST INCOME

For the second quarter of 2022, net interest income was $138.8 million, an increase of $7.9 million from $130.9 million for the first quarter of 2022. Net interest income (FTE)(1) was $142.3 million in the second quarter of 2022, an increase of approximately $8.1 million from the first quarter of 2022. The increases in net interest income and net interest income (FTE)(1) were primarily driven by higher interest income due to average loan growth from the prior quarter, increases in loan yields on the Company's variable rate loans due to higher market interest rates and the additional day count in the second quarter, partially offset by increases in deposit and borrowing costs. The second quarter net interest margin increased 18 basis points to 3.15% from the previous quarter, and the net interest margin (FTE)(1) increased 20 basis points during the same period to 3.24%. The cost of funds increased by 4 basis points to 22 basis points, compared to the first quarter of 2022, driven by higher deposit and borrowing costs 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 $2.7 million for the quarter ended June 30, 2022, representing an increase of $621,000 from the prior quarter. The first and second quarters of 2022 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 March 31, 2022$2,253  $(10) $(203) $2,040 
For the quarter ended June 30, 2022 2,879   (11)  (207)  2,661 
For the remaining six months of 2022 (estimated) 2,026   (23)  (418)  1,585 
For the years ending (estimated):            
2023 3,390   (31)  (852)  2,507 
2024 2,769   (4)  (877)  1,888 
2025 2,162   (1)  (900)  1,261 
2026 1,727      (926)  801 
2027 1,317      (953)  364 
Thereafter 6,532      (7,993)  (1,461)
Total remaining acquisition accounting fair value adjustments at June 30, 2022$19,923  $(59) $(12,919) $6,945 
                

ASSET QUALITY

Overview

During the second quarter of 2022, nonperforming assets ("NPAs") as a percentage of loans remained low at 0.23% at June 30, 2022. Accruing past due loan levels as a percentage of total loans held for investment at June 30, 2022 totaled 15 basis points, which was a 7 basis point decrease as compared to March 31, 2022, and 3 basis points lower than at June 30, 2021. Net charge-off levels remained low at 0.03% of total average loans for the second quarter of 2022. The allowance for credit losses ("ACL") totaled $113.2 million at June 30, 2022, a $2.6 million increase from the prior quarter.

Nonperforming Assets

At June 30, 2022, NPAs totaled $31.1 million, an increase of $407,000 from March 31, 2022. The following table shows a summary of NPA balances at the quarter ended (dollars in thousands):

 June 30,     March 31,     December 31,     September 30,     June 30, 
 2022 2022 2021 2021 2021
Nonaccrual loans$29,070  $29,032  $31,100  $35,472  $36,399 
Foreclosed properties 2,065   1,696   1,696   1,696   1,696 
Total nonperforming assets$31,135  $30,728  $32,796  $37,168  $38,095 
                    

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

 June 30,     March 31,     December 31,     September 30,     June 30, 
 2022 2022 2021 2021 2021
Beginning Balance$29,032  $31,100  $35,472  $36,399  $41,866 
Net customer payments (2,472)  (4,132)  (5,068)  (4,719)  (9,307)
Additions 3,203   2,087   1,294   4,177   4,162 
Charge-offs (311)  (23)  (598)  (385)  (183)
Loans returning to accruing status             (153)
Transfers to foreclosed property (382)           14 
Ending Balance$29,070  $29,032  $31,100  $35,472  $36,399 
                    

Past Due Loans

Past due loans still accruing interest totaled $20.4 million or 0.15% of total loans held for investment at June 30, 2022, compared to $29.6 million or 0.22% of total loans held for investment at March 31, 2022, and $25.1 million or 0.18% of total loans held for investment at June 30, 2021. Of the total past due loans still accruing interest, $4.6 million or 0.03% of total loans held for investment were loans past due 90 days or more at June 30, 2022, compared to $8.2 million or 0.06% of total loans held for investment at March 31, 2022, and $8.7 million or 0.06% of total loans held for investment at June 30, 2021.

Net Charge-offs

Net charge-offs were $939,000 or 0.03% of total average loans on an annualized basis for the quarter ended June 30, 2022, compared to insignificant net charge-offs of less than 0.01% for the first quarter of 2022 and the second quarter of 2021. On a year to date basis through June 30, 2022, net charge-offs were $935,000 or 0.01% of total average loans (annualized).

Provision for Credit Losses

For the quarter ended June 30, 2022, the Company recorded a provision for credit losses of $3.6 million, compared to a provision for credit losses of $2.8 million in the previous quarter, and a negative provision for credit losses of $27.4 million recorded during the same quarter in 2021. The provision for credit losses for the second quarter of 2022 reflected a provision of $2.6 million for loan and securities losses and $1.0 million for unfunded commitments.

Allowance for Credit Losses

At June 30, 2022, the ACL was $113.2 million and included an allowance for loan and lease losses ("ALLL") of $104.2 million and a reserve for unfunded commitments ("RUC") of $9.0 million. The ACL at June 30, 2022 increased $2.6 million from March 31, 2022, primarily due to increased uncertainty in the macroeconomic outlook and the impact of loan growth in the second quarter of 2022.

The ACL as a percentage of total loans increased slightly to 0.83% at June 30, 2022, compared to 0.82% at March 31, 2022. The ALLL as a percentage of total loans was 0.76% at June 30, 2022, consistent with March 31, 2022.

NONINTEREST INCOME

Noninterest income increased $8.1 million to $38.3 million for the quarter ended June 30, 2022 from $30.2 million in the prior quarter, primarily due to a $9.1 million pre-tax gain resulting from the sale of Dixon, Hubard, Feinour & Brown, Inc. ("DHFB"), a $458,000 increase in interchange fees due to an increase in transaction and dollar volumes, and a $444,000 increase in service charges on deposit accounts. These noninterest category increases were partially offset by a decrease in loan interest rate swap fee income of $1.3 million due to a decrease in average swap fees, a decrease in unrealized gains on equity method investments of $1.1 million, and lower mortgage banking income of $917,000, resulting from declining gain on sale margins.

NONINTEREST EXPENSE

Noninterest expense decreased $6.5 million to $98.8 million for the quarter ended June 30, 2022 from $105.3 million in the prior quarter, primarily driven by a decrease in restructuring expenses, as the prior quarter reflected $5.5 million related to the Company's restructure activity that included the consolidation of 16 branches that was completed in March 2022. In addition, salaries and benefits expense declined by $3.0 million during the second quarter, due to decreases in payroll related taxes and 401(k) contribution expenses, which are typically seasonally higher in the first quarter. Partially offsetting these expense reductions was an increase of $590,000 in professional services expenses, an increase of $350,000 in Teammate related expenses (included as a component of other expenses) associated with the re-opening of our corporate offices, an increase in marketing and advertising expenses of $339,000, and an increase in FDIC assessment premiums of $281,000.

INCOME TAXES

The effective tax rate for the three months ended June 30, 2022 was 16.7%, compared to 17.5% for the three months ended March 31, 2022, reflecting the impact of discrete items related to the sale of DHFB.

BALANCE SHEET

At June 30, 2022, total assets were $19.7 billion, a decrease of $120.6 million or approximately 2.4% (annualized) from March 31, 2022, and a decrease of $327.6 million or approximately 1.6% from June 30, 2021. Total assets declined from the prior quarter due to a decline in the investment securities portfolio of $207.1 million primarily due to the impact of market interest rate increases on the market value of the AFS securities portfolio, partially offset by the net impact of the decrease in cash and cash equivalents of $154.9 million, which was deployed to fund $196.1 million in loan growth during the quarter.

At June 30, 2022, loans held for investment (net of deferred fees and costs) totaled $13.7 billion, including $21.7 million in Paycheck Protection Program ("PPP") loans, an increase of $196.1 million or 5.8% (annualized) from $13.5 billion, including $67.4 million in PPP loans, at March 31, 2022. Average loans held for investment (net of deferred fees and costs) totaled $13.5 billion at June 30, 2022, an increase of $224.7 million or 6.8% (annualized) from the prior quarter. Excluding the effects of the PPP(1), adjusted loans held for investment (net of deferred fees and costs) at June 30, 2022 increased $241.8 million or 7.2% (annualized) from March 31, 2022 and adjusted average loans increased $284.4 million or 8.6% (annualized) from the prior quarter. At June 30, 2022 loans held for investment (net of deferred fees and costs) decreased $42.5 million or 0.3% from June 30, 2021, and quarterly average loans decreased $446.4 million or 3.2% from the same period in the prior year. Excluding the effects of the PPP(1), adjusted loans held for investment (net of deferred fees and costs) at June 30, 2022 increased $795.1 million or 6.2% from the same period in the prior year, and adjusted quarterly average loans during the second quarter of 2022 increased $697.8 million or 5.5% from the same period in the prior year.

At June 30, 2022, total deposits were $16.1 billion, a decrease of $355.6 million or approximately 8.7% (annualized) from March 31, 2022. Average deposits at June 30, 2022 also decreased from the prior quarter by $323.3 million or 7.9% (annualized). The decline in deposits was primarily driven by a public funds client that used available deposit funds to repay higher cost, longer-term debt obligations during the second quarter. Total deposits at June 30, 2022 decreased $530.6 million or 3.2% from June 30, 2021, and quarterly average deposits at June 30, 2022 decreased $309.5 million or 1.9% from the same period in the prior year. The decrease in total deposits from the prior year was primarily due to a decline in money market account balances of $494.7 million and maturing time deposits.

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

 June 30,     March 31,     June 30,  
 2022 2021 2021 
Common equity Tier 1 capital ratio (2)9.96%  9.86%  10.56%
Tier 1 capital ratio (2)11.00%  10.91%  11.68%
Total capital ratio (2)13.85%  13.79%  14.05%
Leverage ratio (Tier 1 capital to average assets) (2)9.26%  9.07%  9.20%
Common equity to total assets11.32%  11.79%  12.91%
Tangible common equity to tangible assets (1)6.78%  7.21%  8.40%

_______________

For the quarter ended June 30, 2022, the Company's common equity to total assets capital ratio and the tangible common equity to tangible assets capital ratio decreased from the prior quarter and prior year primarily due to the unrealized losses on the AFS securities portfolio recorded in other comprehensive income due to market interest rate increases in the second quarter of 2022.

During the second quarter of 2022, 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 2022 and the second quarter of 2021. During the second quarter of 2022, the Company also declared and paid cash dividends of $0.28 per common share, consistent with the first quarter of 2022 and the second quarter of 2021.

_______________

(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 Alternative Performance Measures (non-GAAP) section of the Key Financial Results.

(2) All ratios at June 30, 2022 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 (NASDAQ:AUB) is the holding company for Atlantic Union Bank. Atlantic Union Bank has 114 branches and approximately 130 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.

Sale of Dixon, Hubard, Feinour & Brown, Inc.

Effective June 30, 2022, the Company transferred its ownership interest in DHFB, which was formerly a subsidiary of Atlantic Union Bank (the "Bank") to Cary Street Partners Financial LLC ("CSP") in exchange for a minority ownership interest in CSP.

SECOND QUARTER 2022 EARNINGS RELEASE CONFERENCE CALL

The Company will hold a conference call and webcast for analysts on Thursday, July 21, 2022 at 9:00 a.m. Eastern Time during which management will review the financial results for the three and six months ended June 30, 2022 and provide an update on recent activities.

Interested parties may participate in the call by registering at the following URL:

https://register.vevent.com/register/BI251d953edb164e91bd37f98e5106e347. The conference call provider has changed its dial-in procedures, so all attendees must utilize the link to receive an audio dial-in number and their Access PIN.

Management will conduct a listen-only webcast with accompanying slides, which can be found at:

https://edge.media-server.com/mmc/p/8t2h7c2u.

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 periods ended June 30, 2022, 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) section of the Key Financial Results.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release 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 quotes, statements regarding the Company's outlook on future economic conditions and the impacts of the current economic uncertainties and statements that include, projections, predictions, expectations, or beliefs about future events or results, including the Company's ability to meet its top tier financial targets, 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. Such 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," or words of similar meaning or other statements concerning opinions or judgment of the Company and its management about future events. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual future results, performance, or achievements of, or trends affecting, the Company 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 the impacts on macroeconomic conditions, customer and client behavior, the Company's funding costs and the Company's loan and securities portfolio;
  • inflation and its impacts on economic growth and customer and client behavior;
  • general economic and financial market conditions, in the United States generally and particularly in the markets in which the Company operates and which its 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 the loan or investment portfolios and changes therein;
  • demand for loan products and financial services in the Company's market area;
  • the Company's ability to manage its growth or implement its growth strategy;
  • the effectiveness of expense reduction plans;
  • the introduction of new lines of business or new products and services;
  • the Company's ability to recruit and retain key employees;
  • real estate values in the Bank's lending area;
  • an insufficient ACL;
  • changes in accounting principles, including without limitation, relating to the CECL methodology;
  • the Company's liquidity and capital positions;
  • concentrations of loans secured by real estate, particularly commercial real estate;
  • the effectiveness of the Company's credit processes and management of the Company's credit risk;
  • the Company's 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;
  • the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts (such as the ongoing conflict between Russia and Ukraine) or public health events (such as COVID-19), and of governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of the Company's borrowers to satisfy their obligations to the Company, on the value of collateral securing loans, on the demand for the Company's loans or its other products and services, on supply chains and methods used to distribute products and services, on incidents of cyberattack and fraud, on the Company's liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of the Company's business operations and on financial markets and economic growth;
  • the effect of steps the Company takes in response to the COVID-19 pandemic, the severity and duration of the pandemic, the uncertainty regarding new variants of COVID-19 that have emerged, the speed and efficacy of vaccine and treatment developments, the impact of loosening or tightening of government restrictions, the pace of recovery when the pandemic subsides and the heightened impact it has on many of the risks described herein;
  • the discontinuation of LIBOR and its impact on the financial markets, and the Company's 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 the Company's 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;
  • potential claims, damages, and fines related to litigation or government actions;
  • the effects of changes in federal, state or local tax laws and regulations;
  • changes to applicable accounting principles and guidelines; and
  • other factors, many of which are beyond the control of the Company.

Please refer to the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's Annual Report on Form 10-K for the year ended December 31, 2021 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 should be considered in evaluating forward-looking statements, all forward-looking statements made in this press release are expressly qualified by the cautionary statements contained or referred to herein. 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 contained in the press release, and undue reliance should not be placed on such forward-looking statements. Forward-looking statements speak only as of the date they are made. The Company does not intend or assume any obligation to update, revise or clarify any forward-looking statements that may be made from time to time by or on behalf of the Company, whether as a result of new information, future events or otherwise.

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

 As of & For Three Months Ended As of & For Six Months Ended 
 06/30/22    03/31/22    06/30/21 06/30/22 06/30/21 
Results of Operations          
Interest and dividend income$ 148,755 $138,456 $150,852  $ 287,212 $298,525  
Interest expense  9,988  7,525  10,304    17,514  23,079  
Net interest income  138,767  130,931  140,548    269,698  275,446  
Provision for credit losses  3,559  2,800  (27,414)   6,359  (41,037) 
Net interest income after provision for credit losses  135,208  128,131  167,962    263,339  316,483  
Noninterest income  38,286  30,153  28,466    68,439  59,451  
Noninterest expenses  98,768  105,321  91,971    204,089  203,908  
Income before income taxes  74,726  52,963  104,457    127,689  172,026  
Income tax expense  12,500  9,273  19,073    21,773  30,453  
Net income  62,226  43,690  85,384    105,916  141,573  
Dividends on preferred stock  2,967  2,967  2,967    5,934  5,934  
Net income available to common shareholders$ 59,259 $40,723 $82,417  $ 99,982 $135,639  
                
Interest earned on earning assets (FTE) (1)$ 152,332 $141,792 $153,996  $ 294,124 $304,722  
Net interest income (FTE) (1)  142,344  134,267  143,692    276,610  281,643  
Total revenue (FTE) (1)  180,630  164,420  172,158    345,049  341,094  
Pre-tax pre-provision adjusted operating earnings (8)  69,205  61,271  77,021    130,476  146,508  
                
Key Ratios               
Earnings per common share, diluted$0.79 $0.54 $1.05  $1.33 $1.72  
Return on average assets (ROA) 1.27% 0.89% 1.72 % 1.08% 1.44 %
Return on average equity (ROE) 10.21% 6.66% 12.46 % 8.37% 10.44 %
Return on average tangible common equity (ROTCE) (2) (3) 18.93% 11.53% 21.44 % 14.97% 18.06 %
Efficiency ratio 55.78% 65.38% 54.42 % 60.36% 60.89 %
Efficiency ratio (FTE) (1) 54.68% 64.06% 53.42 % 59.15% 59.78 %
Net interest margin 3.15% 2.97% 3.15 % 3.06% 3.12 %
Net interest margin (FTE) (1) 3.24% 3.04% 3.23 % 3.14% 3.19 %
Yields on earning assets (FTE) (1) 3.46% 3.22% 3.46 % 3.34% 3.46 %
Cost of interest-bearing liabilities 0.35% 0.26% 0.35 % 0.30% 0.39 %
Cost of deposits 0.15% 0.11% 0.18 % 0.13% 0.20 %
Cost of funds 0.22% 0.18% 0.23 % 0.20% 0.27 %
                
Operating Measures (4)               
Adjusted operating earnings$ 54,244 $48,041 $85,367  $ 102,285 $153,833  
Adjusted operating earnings available to common shareholders  51,277  45,074  82,400    96,351  147,899  
Adjusted operating earnings per common share, diluted$0.69 $0.60 $1.05  $1.28 $1.88  
Adjusted operating ROA 1.10% 0.98% 1.72 % 1.04% 1.57 %
Adjusted operating ROE 8.90% 7.32% 12.46 % 8.08% 11.35 %
Adjusted operating ROTCE (2) (3) 16.47% 12.69% 21.44 % 14.45% 19.63 %
Adjusted operating efficiency ratio (FTE) (1)(7) 55.88% 58.86% 51.36 % 57.34% 53.08 %
                
Per Share Data               
Earnings per common share, basic$0.79 $0.54 $1.05  $1.33 $1.72  
Earnings per common share, diluted 0.79  0.54  1.05   1.33  1.72  
Cash dividends paid per common share 0.28  0.28  0.28   0.56  0.53  
Market value per share 33.92  36.69  36.22   33.92  36.22  
Book value per common share 29.95  31.12  33.30   29.95  33.30  
Tangible book value per common share (2) 17.07  18.10  20.59   17.07  20.59  
Price to earnings ratio, diluted 10.68  16.75  8.60   12.65  10.44  
Price to book value per common share ratio 1.13  1.18  1.09   1.13  1.09  
Price to tangible book value per common share ratio (2) 1.99  2.03  1.76   1.99  1.76  
Weighted average common shares outstanding, basic  74,847,899  75,544,644  78,819,697    75,194,347  78,841,462  
Weighted average common shares outstanding, diluted  74,849,871  75,556,127  78,843,724    75,201,326  78,863,859  
Common shares outstanding at end of period  74,688,314  75,335,956  77,928,948    74,688,314  77,928,948  
                  

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

 As of & For Three Months Ended As of & For Six Months Ended 
 06/30/22    03/31/22    06/30/21 06/30/22 06/30/21 
Capital Ratios          
Common equity Tier 1 capital ratio (5) 9.96%   9.86% 10.56% 9.96%   10.56%
Tier 1 capital ratio (5) 11.00%   10.91% 11.68% 11.00%   11.68%
Total capital ratio (5) 13.85%   13.79% 14.05% 13.85%   14.05%
Leverage ratio (Tier 1 capital to average assets) (5) 9.26%   9.07% 9.20% 9.26%   9.20%
Common equity to total assets 11.32%   11.79% 12.91% 11.32%   12.91%
Tangible common equity to tangible assets (2) 6.78%   7.21% 8.40% 6.78%   8.40%
                
Financial Condition                 
Assets$ 19,661,799 $19,782,430 $19,989,356 $ 19,661,799 $19,989,356 
Loans held for investment (net of deferred fees and costs)  13,655,408  13,459,349  13,697,929   13,655,408  13,697,929 
Securities  3,820,078  4,027,185  3,491,669   3,820,078  3,491,669 
Earning Assets  17,578,979  17,731,089  17,824,283   17,578,979  17,824,283 
Goodwill  925,211  935,560  935,560   925,211  935,560 
Amortizable intangibles, net  31,621  40,273  49,917   31,621  49,917 
Deposits  16,128,635  16,484,223  16,659,219   16,128,635  16,659,219 
Borrowings  797,948  504,032  380,079   797,948  380,079 
Stockholders' equity  2,391,476  2,498,335  2,747,597   2,391,476  2,747,597 
Tangible common equity (2)  1,268,287  1,356,145  1,595,763   1,268,287  1,595,763 
                
Loans held for investment, net of deferred fees and costs                 
Construction and land development$ 988,379 $969,059 $838,722 $ 988,379 $838,722 
Commercial real estate - owner occupied  1,965,702  2,007,671  2,069,658   1,965,702  2,069,658 
Commercial real estate - non-owner occupied  3,860,819  3,875,681  3,712,607   3,860,819  3,712,607 
Multifamily real estate  762,502  723,940  860,081   762,502  860,081 
Commercial & Industrial  2,595,891  2,540,680  2,990,622   2,595,891  2,990,622 
Residential 1-4 Family - Commercial  553,771  569,801  637,485   553,771  637,485 
Residential 1-4 Family - Consumer  865,174  824,163  823,355   865,174  823,355 
Residential 1-4 Family - Revolving  583,073  568,403  559,014   583,073  559,014 
Auto  525,301  499,855  411,073   525,301  411,073 
Consumer  180,045  171,875  195,036   180,045  195,036 
Other Commercial  774,751  708,221  600,276   774,751  600,276 
Total loans held for investment$ 13,655,408 $13,459,349 $13,697,929 $ 13,655,408 $13,697,929 
                
Deposits                 
Interest checking accounts$ 3,943,303 $4,121,257 $3,777,540 $ 3,943,303 $3,777,540 
Money market accounts  3,956,050  4,151,155  4,450,724   3,956,050  4,450,724 
Savings accounts  1,165,577  1,166,922  1,032,171   1,165,577  1,032,171 
Time deposits of $250,000 and over  360,158  365,796  566,180   360,158  566,180 
Other time deposits  1,342,009  1,309,030  1,610,032   1,342,009  1,610,032 
Time deposits  1,702,167  1,674,826  2,176,212   1,702,167  2,176,212 
Total interest-bearing deposits$ 10,767,097 $11,114,160 $11,436,647 $ 10,767,097 $11,436,647 
Demand deposits  5,361,538  5,370,063  5,222,572   5,361,538  5,222,572 
Total deposits$ 16,128,635 $16,484,223 $16,659,219 $ 16,128,635 $16,659,219 
                
Averages                 
Assets$ 19,719,402 $19,920,368 $19,922,978 $ 19,819,330 $19,805,569 
Loans held for investment (net of deferred fees and costs)  13,525,529  13,300,789  13,971,939   13,413,780  14,017,777 
Loans held for sale  20,634  14,636  36,790   17,652  49,834 
Securities  3,930,912  4,198,582  3,420,329   4,064,007  3,315,435 
Earning assets  17,646,470  17,885,018  17,868,938   17,765,085  17,781,005 
Deposits  16,191,056  16,514,375  16,500,541   16,351,822  16,288,772 
Time deposits  1,667,378  1,766,657  2,270,217   1,716,743  2,379,716 
Interest-bearing deposits  10,824,465  11,286,277  11,446,768   11,054,095  11,468,826 
Borrowings  765,886  511,722  399,855   639,506  486,784 
Interest-bearing liabilities  11,590,351  11,797,999  11,846,623   11,693,601  11,955,610 
Stockholders' equity  2,445,045  2,660,984  2,747,864   2,552,418  2,733,980 
Tangible common equity (2)  1,304,536  1,517,325  1,594,311   1,410,342  1,578,531 
                

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

 As of & For Three Months Ended As of & For Six Months Ended 
 06/30/22    03/31/22    06/30/21 06/30/22 06/30/21 
Asset Quality          
Allowance for Credit Losses (ACL)               
Beginning balance, Allowance for loan and lease losses (ALLL)$ 102,591 $99,787 $142,911  $ 99,787 $160,540  
Add: Recoveries  1,018  1,513  1,876    2,531  4,345  
Less: Charge-offs  1,957  1,509  1,945    3,466  5,586  
Add: Provision for loan losses  2,532  2,800  (24,581)   5,332  (41,038) 
Ending balance, ALLL$ 104,184 $102,591 $118,261  $ 104,184 $118,261  
                
Beginning balance, Reserve for unfunded commitment (RUC)$ 8,000 $8,000 $12,833  $ 8,000 $10,000  
Add: Provision for unfunded commitments  1,000    (2,833)   1,000    
Ending balance, RUC$ 9,000 $8,000 $10,000  $ 9,000 $10,000  
Total ACL$ 113,184 $110,591 $128,261  $ 113,184 $128,261  
                
ACL / total outstanding loans 0.83%   0.82% 0.94 % 0.83%   0.94 %
ACL / total adjusted loans(9) 0.83%   0.83% 1.00 % 0.83%   1.00 %
ALLL / total outstanding loans 0.76%   0.76% 0.86 % 0.76%   0.86 %
ALLL / total adjusted loans(9) 0.76%   0.77% 0.92 % 0.76%   0.92 %
Net charge-offs / total average loans 0.03%   0.00% 0.00 % 0.01%   0.02 %
Net charge-offs / total adjusted average loans(9) 0.03%   0.00% 0.00 % 0.01%   0.02 %
Provision for loan losses/ total average loans 0.08%   0.09% (0.71)% 0.08%   (0.59)%
Provision for loan losses/ total adjusted average loans(9) 0.08%   0.09% (0.77)% 0.08%   (0.65)%
                
Nonperforming Assets (6)                 
Construction and land development$ 581 $869 $2,685  $ 581 $2,685  
Commercial real estate - owner occupied  4,996  4,865  6,969    4,996  6,969  
Commercial real estate - non-owner occupied  3,301  3,287  3,026    3,301  3,026  
Multifamily real estate     113     113  
Commercial & Industrial  2,728  1,975  1,908    2,728  1,908  
Residential 1-4 Family - Commercial  2,031  2,239  4,200    2,031  4,200  
Residential 1-4 Family - Consumer  12,084  12,039  13,489    12,084  13,489  
Residential 1-4 Family - Revolving  3,069  3,371  3,726    3,069  3,726  
Auto  279  333  179    279  179  
Consumer  1  54  104    1  104  
Nonaccrual loans$ 29,070 $29,032 $36,399  $ 29,070 $36,399  
Foreclosed property  2,065  1,696�� 1,696    2,065  1,696  
Total nonperforming assets (NPAs)$ 31,135 $30,728 $38,095  $ 31,135 $38,095  
Construction and land development$ 1 $1 $186  $ 1 $186  
Commercial real estate - owner occupied  792  2,396  2,276    792  2,276  
Commercial real estate - non-owner occupied  642  1,735  827    642  827  
Commercial & Industrial  322  763  1,088    322  1,088  
Residential 1-4 Family - Commercial  184  878  759    184  759  
Residential 1-4 Family - Consumer  1,112  1,147  2,725    1,112  2,725  
Residential 1-4 Family - Revolving  997  1,065  561    997  561  
Auto  134  192  168    134  168  
Consumer  79  70  156    79  156  
Other Commercial  329        329    
Loans ≥ 90 days and still accruing$ 4,592 $8,247 $8,746  $ 4,592 $8,746  
Total NPAs and loans ≥ 90 days$ 35,727 $38,975 $46,841  $ 35,727 $46,841  
NPAs / total outstanding loans  0.23%   0.23% 0.28 %  0.23%   0.28 %
NPAs / total adjusted loans(9)  0.23%   0.23% 0.30 %  0.23%   0.30 %
NPAs / total assets  0.16%   0.16% 0.19 %  0.16%   0.19 %
ALLL / nonaccrual loans 358.39%   353.37% 324.90 % 358.39%   324.90 %
ALLL/ nonperforming assets 334.62%   333.87% 310.44 % 334.62%   310.44 %
                  

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

 As of & For Three Months Ended As of & For Six Months Ended 
 06/30/22    03/31/22    06/30/21 06/30/22 06/30/21 
Past Due Detail (6)          
Construction and land development$ 645 $170 $798 $ 645 $798 
Commercial real estate - owner occupied  1,374  5,081  1,450   1,374  1,450 
Commercial real estate - non-owner occupied  511  79  1,501   511  1,501 
Multifamily real estate   124  156    156 
Commercial & Industrial  2,581  1,382  948   2,581  948 
Residential 1-4 Family - Commercial  1,944  827  710   1,944  710 
Residential 1-4 Family - Consumer  594  5,890  764   594  764 
Residential 1-4 Family - Revolving  1,368  1,157  919   1,368  919 
Auto  1,841  1,508  1,333   1,841  1,333 
Consumer  361  467  545   361  545 
Other Commercial  11  1,270  375   11  375 
Loans 30-59 days past due$ 11,230 $17,955 $9,499 $ 11,230 $9,499 
Construction and land development$ $ $310 $ $310 
Commercial real estate - owner occupied  807    2,008   807  2,008 
Commercial real estate - non-owner occupied   223  78    78 
Commercial & Industrial  546  745  1,733   546  1,733 
Residential 1-4 Family - Commercial  474  251  565   474  565 
Residential 1-4 Family - Consumer  1,646  1,018  992   1,646  992 
Residential 1-4 Family - Revolving  731  651  678   731  678 
Auto  213  183  165   213  165 
Consumer  210  201  297   210  297 
Other Commercial   95       
Loans 60-89 days past due$ 4,627 $3,367 $6,826 $ 4,627 $6,826 
                
Past Due and still accruing$ 20,449 $29,569 $25,071 $ 20,449 $25,071 
Past Due and still accruing / total loans  0.15%   0.22% 0.18%  0.15%   0.18%
                
Troubled Debt Restructurings                 
Performing$ 10,662 $12,157 $13,053 $ 10,662 $13,053 
Nonperforming  7,298  7,552  6,231   7,298  6,231 
Total troubled debt restructurings$ 17,960 $19,709 $19,284 $ 17,960 $19,284 
                
Alternative Performance Measures (non-GAAP)                 
Net interest income (FTE) (1)                 
Net interest income (GAAP)$ 138,767 $130,931 $140,548 $ 269,698 $275,446 
FTE adjustment  3,577  3,336  3,144   6,912  6,197 
Net interest income (FTE) (non-GAAP)$ 142,344 $134,267 $143,692 $ 276,610 $281,643 
Noninterest income (GAAP)  38,286  30,153  28,466   68,439  59,451 
Total revenue (FTE) (non-GAAP)$ 180,630 $164,420 $172,158 $ 345,049 $341,094 
                
Average earning assets$ 17,646,470 $17,885,018 $17,868,938 $ 17,765,085 $17,781,005 
Net interest margin 3.15%   2.97% 3.15% 3.06%   3.12%
Net interest margin (FTE) 3.24%   3.04% 3.23% 3.14%   3.19%
                
Tangible Assets (2)                 
Ending assets (GAAP)$ 19,661,799 $19,782,430 $19,989,356 $ 19,661,799 $19,989,356 
Less: Ending goodwill  925,211  935,560  935,560   925,211  935,560 
Less: Ending amortizable intangibles  31,621  40,273  49,917   31,621  49,917 
Ending tangible assets (non-GAAP)$ 18,704,967 $18,806,597 $19,003,879 $ 18,704,967 $19,003,879 
                
Tangible Common Equity (2)                 
Ending equity (GAAP)$ 2,391,476 $2,498,335 $2,747,597 $ 2,391,476 $2,747,597 
Less: Ending goodwill  925,211  935,560  935,560   925,211  935,560 
Less: Ending amortizable intangibles  31,621  40,273  49,917   31,621  49,917 
Less: Perpetual preferred stock  166,357  166,357  166,357   166,357  166,357 
Ending tangible common equity (non-GAAP)$ 1,268,287 $1,356,145 $1,595,763 $ 1,268,287 $1,595,763 
                
Average equity (GAAP)$ 2,445,045 $2,660,984 $2,747,864 $ 2,552,418 $2,733,980 
Less: Average goodwill  935,446  935,560  935,560   935,503  935,560 
Less: Average amortizable intangibles  38,707  41,743  51,637   40,217  53,533 
Less: Average perpetual preferred stock  166,356  166,356  166,356   166,356  166,356 
Average tangible common equity (non-GAAP)$ 1,304,536 $1,517,325 $1,594,311 $ 1,410,342 $1,578,531 
                
ROTCE (2)(3)               
Net income available to common shareholders (GAAP)$ 59,259 $40,723 $82,417 $ 99,982 $135,639 
Plus: Amortization of intangibles, tax effected  2,303  2,401  2,819   4,704  5,765 
Net income available to common shareholders before amortization of intangibles (non-GAAP)$ 61,562 $43,124 $85,236 $ 104,686 $141,404 
                
Return on average tangible common equity (ROTCE) 18.93%   11.53% 21.44% 14.97%   18.06%
                

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

 As of & For Three Months Ended As of & For Six Months Ended 
 06/30/22   03/31/22  06/30/21  06/30/22 06/30/21 
Operating Measures (4)          
Net income (GAAP)$ 62,226  $43,690 $85,384  $ 105,916  $141,573  
Plus: Net loss related to balance sheet repositioning, net of tax            11,609  
Less: (Loss) gain on sale of securities, net of tax  (2)        (2)  62  
Less: Gain on sale of DHFB, net of tax  7,984         7,984     
Plus: Branch closing and facility consolidation costs, net of tax    4,351  (17)   4,351   713  
Adjusted operating earnings (non-GAAP)  54,244   48,041  85,367    102,285   153,833  
Less: Dividends on preferred stock  2,967   2,967  2,967    5,934   5,934  
Adjusted operating earnings available to common shareholders (non-GAAP)$ 51,277  $45,074 $82,400  $ 96,351  $147,899  
                
Noninterest expense (GAAP)$ 98,768  $105,321 $91,971  $ 204,089  $203,908  
Less: Amortization of intangible assets  2,915   3,039  3,568    5,954   7,298  
Less: Losses related to balance sheet repositioning            14,695  
Less: Branch closing and facility consolidation costs    5,508  (22)   5,508   902  
Adjusted operating noninterest expense (non-GAAP)$ 95,853  $96,774 $88,425  $ 192,627  $181,013  
                
Noninterest income (GAAP)$ 38,286  $30,153 $28,466  $ 68,439  $59,451  
Less: (Loss) gain on sale of securities  (2)        (2)  78  
Less: Gain on sale of DHFB  9,082         9,082     
Adjusted operating noninterest income (non-GAAP)$ 29,206  $30,153 $28,466  $ 59,359  $59,373  
                
Net interest income (FTE) (non-GAAP) (1)$ 142,344  $134,267 $143,692  $ 276,610  $281,643  
Adjusted operating noninterest income (non-GAAP)  29,206   30,153  28,466    59,359   59,373  
Total adjusted revenue (FTE) (non-GAAP) (1)$ 171,550  $164,420 $172,158  $ 335,969  $341,016  
                
Efficiency ratio 55.78 %   65.38% 54.42 % 60.36 %   60.89 %
Efficiency ratio (FTE) (1) 54.68 %   64.06% 53.42 % 59.15 %   59.78 %
Adjusted operating efficiency ratio (FTE) (1)(7) 55.88 %   58.86% 51.36 % 57.34 %   53.08 %
                
Operating ROTCE (2)(3)(4)                 
Adjusted operating earnings available to common shareholders (non-GAAP)$ 51,277  $45,074 $82,400  $ 96,351  $147,899  
Plus: Amortization of intangibles, tax effected  2,303   2,401  2,819    4,704   5,765  
Adjusted operating earnings available to common shareholders before amortization of intangibles (non-GAAP)$ 53,580  $47,475 $85,219  $ 101,054  $153,665  
                
Average tangible common equity (non-GAAP)$ 1,304,536  $1,517,325 $1,594,311  $ 1,410,342  $1,578,531  
Adjusted operating return on average tangible common equity (non-GAAP) 16.47 %   12.69% 21.44 % 14.45 %   19.63 %
                
Pre-tax pre-provision adjusted operating earnings (8)               
Net income (GAAP)$ 62,226  $43,690 $85,384  $ 105,916  $141,573  
Plus: Provision for credit losses  3,559   2,800  (27,414)   6,359   (41,037) 
Plus: Income tax expense  12,500   9,273  19,073    21,773   30,453  
Plus: Net loss related to balance sheet repositioning            14,695  
Less: (Loss) gain on sale of securities  (2)        (2)  78  
Less: Gain on sale of DHFB  9,082         9,082     
Plus: Branch closing and facility consolidation costs    5,508  (22)   5,508   902  
Pre-tax pre-provision adjusted operating earnings (non-GAAP)$ 69,205  $61,271 $77,021  $ 130,476  $146,508  
Less: Dividends on preferred stock  2,967   2,967  2,967    5,934   5,934  
Pre-tax pre-provision adjusted operating earnings available to common shareholders (non-GAAP)$ 66,238  $58,304 $74,054  $ 124,542  $140,574  
                
Weighted average common shares outstanding, diluted  74,849,871   75,556,127  78,843,724    75,201,326   78,863,859  
Pre-tax pre-provision earnings per common share, diluted$ 0.88  $0.77 $0.94  $ 1.66  $1.78  
                
Adjusted Loans (9)               
Loans held for investment (net of deferred fees and costs) (GAAP)$ 13,655,408  $13,459,349 $13,697,929  $ 13,655,408  $13,697,929  
Less: PPP adjustments (net of deferred fees and costs)  21,749   67,444  859,386    21,749   859,386  
Total adjusted loans (non-GAAP)$ 13,633,659  $13,391,905 $12,838,543  $ 13,633,659  $12,838,543  
                
Average loans held for investment (net of deferred fees and costs) (GAAP)$ 13,525,529  $13,300,789 $13,971,939  $ 13,413,780  $14,017,777  
Less: Average PPP adjustments (net of deferred fees and costs)  43,391��  103,041  1,187,641    73,052   1,248,147  
Total adjusted average loans (non-GAAP)$ 13,482,138  $13,197,748 $12,784,298  $ 13,340,728  $12,769,630  
                    

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS (UNAUDITED)

(Dollars in thousands, except share data)

 As of & For Three Months Ended As of & For Six Months Ended 
 06/30/22   03/31/22  06/30/21  06/30/22 06/30/21 
Mortgage Origination Held for Sale Volume          
Refinance Volume$ 14,916 $33,201 $73,330 $ 48,116 $192,248 
Purchase Volume  84,551  58,295  88,747   142,846  156,704 
Total Mortgage loan originations held for sale$ 99,467 $91,496 $162,077 $ 190,962 $348,952 
% of originations held for sale that are refinances 15.0%   36.3% 45.2% 25.2%   55.1%
                
Wealth                 
Assets under management (AUM)$ 4,415,537 $6,519,974 $6,396,010 $ 4,415,537 $6,396,010 
                
Other Data                 
End of period full-time employees  1,856  1,853  1,884   1,856  1,884 
Number of full-service branches  114  114  129   114  129 
Number of automatic transaction machines (ATMs)  131  132  149   131  149 
                

_______________

(1)   These are non-GAAP financial measures. Net interest income (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.

(3)   These are non-GAAP financial measures. The Company believes that ROTCE is a meaningful supplement to GAAP financial measures and 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 the gains or losses related to balance sheet repositioning (principally composed of gains and losses on debt extinguishment), gains or losses on sale of securities, gain on the sale of DHFB, as well as branch closing and facility consolidation costs (principally composed of real estate, leases and other assets write downs, as well as severance associated with branch closing and corporate 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. Prior periods reflect adjustments for previously announced branch closing and corporate expense reduction initiatives.

(5)   All ratios at June 30, 2022 are estimates and subject to change pending the Company's filing of its FR Y9-C. All other periods are presented as filed.

(6)   These balances reflect the impact of the CARES Act and the joint guidance issued by the five federal bank regulatory agencies and the Conference of State Bank Supervisors on March 22, 2020, as subsequently revised on April 7, 2020, which provides relief for TDR designations and also provides guidance on past due reporting for modified loans.

(7)   The adjusted operating efficiency ratio (FTE) excludes the amortization of intangible assets, gains or losses on sale of securities, gain on the sale of DHFB, gains or losses related to balance sheet repositioning (principally composed of gains and losses on debt extinguishment), as well as branch closing and 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 combined economic results of the organization's operations. Prior periods reflect adjustments for previously announced branch closing and corporate expense reduction initiatives.

(8)   This is a non-GAAP financial measure. 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, gains or losses related to balance sheet repositioning (principally composed of gains and losses on debt extinguishment), gains or losses on sale of securities, gain on the sale of DHFB, as well as branch closing and facility consolidation costs. The Company believes this adjusted measure provides investors with important information about the combined economic results of the organization's operations. Prior periods reflect adjustments for previously announced branch closing and corporate expense reduction initiatives.

(9)   These are non-GAAP financial measures. PPP adjustment impact excludes the unforgiven portion of PPP loans. The Company believes loans held for investment (net of deferred fees and costs), excluding PPP is useful to investors as it provides more clarity on the Company's organic growth. The Company also believes that the related non-GAAP financial measures of past due loans still accruing interest as a percentage of total loans held for investment (net of deferred fees and costs), excluding PPP, are useful to investors as loans originated under the PPP carry a Small Business Administration ("SBA") guarantee. The Company believes that the ALLL as a percentage of loans held for investment (net of deferred fees and costs), excluding PPP, is useful to investors because of the size of the Company's PPP originations and the impact of the embedded credit enhancement provided by the SBA guarantee.

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

 June 30, December 31, June 30,
 2022 2021 2021
ASSETS(unaudited)  (audited)   (unaudited) 
Cash and cash equivalents:          
Cash and due from banks$ 158,902  $180,963  $268,682 
Interest-bearing deposits in other banks  82,086   618,714   593,271 
Federal funds sold  388   2,824   3,217 
Total cash and cash equivalents  241,376   802,501   865,170 
Securities available for sale, at fair value  2,951,421   3,481,650   2,873,405 
Securities held to maturity, at carrying value  780,749   628,000   541,439 
Restricted stock, at cost  87,908   76,825   76,825 
Loans held for sale, at fair value  15,866   20,861   32,726 
Loans held for investment, net of deferred fees and costs  13,655,408   13,195,843   13,697,929 
Less: allowance for loan and lease losses  104,184   99,787   118,261 
Total loans held for investment, net  13,551,224   13,096,056   13,579,668 
Premises and equipment, net  128,661   134,808   161,114 
Goodwill  925,211   935,560   935,560 
Amortizable intangibles, net  31,621   43,312   49,917 
Bank owned life insurance  436,703   431,517   427,727 
Other assets  511,059   413,706   445,805 
Total assets$ 19,661,799  $20,064,796  $19,989,356 
LIABILITIES          
Noninterest-bearing demand deposits$ 5,361,538  $5,207,324  $5,222,572 
Interest-bearing deposits  10,767,097   11,403,744   11,436,647 
Total deposits  16,128,635   16,611,068   16,659,219 
Securities sold under agreements to repurchase  118,658   117,870   89,749 
Other short-term borrowings  290,000       
Long-term borrowings  389,290   388,724   290,330 
Other liabilities  343,740   237,063   202,461 
Total liabilities  17,270,323   17,354,725   17,241,759 
Commitments and contingencies          
STOCKHOLDERS' EQUITY          
Preferred stock, $10.00 par value  173   173   173 
Common stock, $1.33 par value  98,822   100,101   103,091 
Additional paid-in capital  1,767,063   1,807,368   1,881,395 
Retained earnings  841,701   783,794   709,866 
Accumulated other comprehensive income (loss)  (316,283)  18,635   53,072 
Total stockholders' equity  2,391,476   2,710,071   2,747,597 
Total liabilities and stockholders' equity$ 19,661,799  $20,064,796  $19,989,356 
           
Common shares outstanding  74,688,314   75,663,648   77,928,948 
Common shares authorized  200,000,000   200,000,000   200,000,000 
Preferred shares outstanding  17,250   17,250   17,250 
Preferred shares authorized  500,000   500,000   500,000 
            

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in thousands, except share data)

 Three Months Ended Six Months Ended
 June 30, March 31, June 30, June 30, June 30,
 2022 2022 2021 2022 2021
Interest and dividend income:            ��    
Interest and fees on loans$ 123,266  $114,200  $130,570  $ 237,466  $258,576 
Interest on deposits in other banks  157   131   86    288   163 
Interest and dividends on securities:                 
Taxable  14,695   13,666   10,519    28,361   20,872 
Nontaxable  10,637   10,459   9,677    21,097   18,914 
Total interest and dividend income  148,755   138,456   150,852    287,212   298,525 
Interest expense:                 
Interest on deposits  6,097   4,483   7,238    10,580   16,366 
Interest on short-term borrowings  555   21   21    576   69 
Interest on long-term borrowings  3,336   3,021   3,045    6,358   6,644 
Total interest expense  9,988   7,525   10,304    17,514   23,079 
Net interest income  138,767   130,931   140,548    269,698   275,446 
Provision for credit losses  3,559   2,800   (27,414)   6,359   (41,037)
Net interest income after provision for credit losses  135,208   128,131   167,962    263,339   316,483 
Noninterest income:                 
Service charges on deposit accounts  8,040   7,596   6,607    15,637   12,116 
Other service charges, commissions and fees  1,709   1,655   1,735    3,364   3,436 
Interchange fees  2,268   1,810   2,203    4,078   4,050 
Fiduciary and asset management fees  6,939   7,255   6,819    14,194   13,294 
Mortgage banking income  2,200   3,117   4,619    5,317   12,874 
Bank owned life insurance income  2,716   2,697   3,209    5,413   5,475 
Loan-related interest rate swap fees  2,600   3,860   1,321    6,460   3,075 
Other operating income  11,814   2,163   1,953    13,976   5,131 
Total noninterest income  38,286   30,153   28,466    68,439   59,451 
Noninterest expenses:                 
Salaries and benefits  55,305   58,298   50,766    113,603   103,426 
Occupancy expenses  6,395   6,883   7,140    13,278   14,454 
Furniture and equipment expenses  3,590   3,597   3,911    7,187   7,880 
Technology and data processing  7,862   7,796   7,219    15,658   14,123 
Professional services  4,680   4,090   4,408    8,770   9,369 
Marketing and advertising expense  2,502   2,163   2,738    4,665   4,782 
FDIC assessment premiums and other insurance  2,765   2,485   2,319    5,250   4,626 
Franchise and other taxes  4,500   4,499   4,435    8,999   8,871 
Loan-related expenses  1,867   1,776   1,909    3,643   3,786 
Amortization of intangible assets  2,915   3,039   3,568    5,954   7,298 
Loss on debt extinguishment             14,695 
Other expenses  6,387   10,695   3,558    17,082   10,598 
Total noninterest expenses  98,768   105,321   91,971    204,089   203,908 
Income before income taxes  74,726   52,963   104,457    127,689   172,026 
Income tax expense  12,500   9,273   19,073    21,773   30,453 
Net income$ 62,226  $43,690  $85,384    105,916   141,573 
Dividends on preferred stock  2,967   2,967   2,967    5,934   5,934 
Net income available to common shareholders$ 59,259  $40,723  $82,417  $ 99,982  $135,639 
                  
Basic earnings per common share$0.79  $0.54  $1.05  $1.33  $1.72 
Diluted earnings per common share$0.79  $0.54  $1.05  $1.33  $1.72 
                    

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

 For the Quarter Ended
 June 30, 2022 March 31, 2022
 Average

Balance
    Interest

Income /

Expense (1)
    Yield /

Rate (1)(2)
    Average

Balance
    Interest

Income /

Expense (1)
    Yield /

Rate (1)(2)
 (Dollars in thousands)
Assets:               
Securities:               
Taxable$ 2,322,024  $ 14,695 2.54% $2,617,156  $13,666 2.12%
Tax-exempt  1,608,888    13,465 3.36%  1,581,426   13,240 3.40%
Total securities  3,930,912    28,160 2.87%  4,198,582   26,906 2.60%
Loans, net (3)  13,525,529    123,764 3.67%  13,300,789   114,602 3.49%
Other earning assets  190,029    408 0.86%  385,647   284 0.30%
Total earning assets$ 17,646,470  $ 152,332 3.46% $17,885,018  $141,792 3.22%
Allowance for loan and lease losses  (103,211)       (100,342)     
Total non-earning assets  2,176,143        2,135,692      
Total assets$ 19,719,402       $19,920,368      
                
Liabilities and Stockholders' Equity:               
Interest-bearing deposits:               
Transaction and money market accounts$ 7,987,888  $ 3,082 0.15% $8,376,766  $1,324 0.06%
Regular savings  1,169,199    55 0.02%  1,142,854   55 0.02%
Time deposits  1,667,378    2,960 0.71%  1,766,657   3,104 0.71%
Total interest-bearing deposits   10,824,465    6,097 0.23%  11,286,277   4,483 0.16%
Other borrowings  765,886    3,891 2.04%  511,722   3,042 2.41%
Total interest-bearing liabilities$ 11,590,351  $ 9,988 0.35% $11,797,999  $7,525 0.26%
                
Noninterest-bearing liabilities:               
Demand deposits  5,366,591        5,228,098      
Other liabilities  317,415        233,287      
Total liabilities$ 17,274,357       $17,259,384      
Stockholders' equity  2,445,045        2,660,984      
Total liabilities and stockholders' equity$ 19,719,402       $19,920,368      
Net interest income   $ 142,344      $134,267  
                
Interest rate spread      3.11%       2.96%
Cost of funds      0.22%       0.18%
Net interest margin      3.24%       3.04%
                  

_______________

(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.

Contact:     Robert M. Gorman - (804) 523-7828

Executive Vice President / Chief Financial Officer