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Atlantic Union Bankshares Reports Second Quarter Results
来源: Nasdaq GlobeNewswire / 21 7月 2022 06:30:02 America/Chicago
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 assets 11.32 % 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.
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(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
BalanceInterest
Income /
Expense (1)Yield /
Rate (1)(2)Average
BalanceInterest
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
