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Atlantic Union Bankshares Reports Third Quarter Financial Results
来源: Nasdaq GlobeNewswire / 20 10月 2022 07:30:01 America/New_York
RICHMOND, Va., Oct. 20, 2022 (GLOBE NEWSWIRE) -- Atlantic Union Bankshares Corporation (the “Company” or “Atlantic Union”) (Nasdaq: AUB) reported net income available to common shareholders of $55.1 million and basic and diluted earnings per common share of $0.74 for the third quarter ended September 30, 2022. Adjusted operating earnings available to common shareholders(1) were $55.1 million, diluted adjusted operating earnings per common share(1) were $0.74, and pre-tax pre-provision adjusted operating earnings available to common shareholders(1) were $73.4 million for the third quarter ended September 30, 2022.
“We believe the third quarter financial results show that Atlantic Union Bankshares is delivering on what we said we would do - with upper single digit annualized loan growth, double digit deposit growth, strong credit quality, an expanding net interest margin and positive operating leverage,” said John C. Asbury, president and chief executive officer of Atlantic Union. “We continue to see resiliency and positive market dynamics in our footprint, which combined with our asset sensitivity, gives us confidence in our ability to achieve our top tier financial targets.”
“Operating under the mantra of soundness, profitability and growth – in that order of priority - Atlantic Union remains committed to generating sustainable, profitable growth and building long term value for our shareholders.”
NET INTEREST INCOME
For the third quarter of 2022, net interest income was $150.7 million, an increase of $11.9 million from $138.8 million for the second quarter of 2022. Net interest income (FTE)(1) was $154.6 million in the third quarter of 2022, an increase of $12.2 million from the second quarter of 2022. The increases in net interest income and net interest income (FTE)(1) were primarily driven by increases in loan yields on the Company’s variable rate loans due to higher market interest rates, higher interest income due to average loan growth from the prior quarter, and the additional day count in the third quarter, compared to the second quarter. These increases were partially offset by decreases in Paycheck Protection Program (“PPP)” and fair value accretion interest income and increases in deposit and borrowing costs as a result of increases in short-term market rates and average deposit growth from the prior quarter. The third quarter net interest margin increased 19 basis points from the prior quarter to 3.34% at September 30, 2022, and the net interest margin (FTE)(1) increased 19 basis points during the same period to 3.43%. Earning asset yields increased by 42 basis points in the third quarter of 2022 compared to the second quarter due to the impact of rising market interest rates on loans and investment securities yields. The cost of funds increased from the prior quarter by 23 basis points to 45 basis points at September 30, 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 $1.1 million for the quarter ended September 30, 2022, representing a decrease of $1.6 million from the prior quarter. The first, second, and third 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 quarter ended September 30, 2022 1,326 (11 ) (209 ) 1,106 For the remaining three months of 2022 (estimated) 945 (12 ) (208 ) 725 For the years ending (estimated): 2023 3,338 (31 ) (852 ) 2,455 2024 2,714 (4 ) (877 ) 1,833 2025 2,123 (1 ) (900 ) 1,222 2026 1,707 — (926 ) 781 2027 1,306 — (953 ) 353 Thereafter 6,469 — (7,994 ) (1,525 ) Total remaining acquisition accounting fair value adjustments at September 30, 2022 $ 18,602 $ (48 ) $ (12,710 ) $ 5,844 ASSET QUALITY
Overview
During the third quarter of 2022, nonperforming assets (“NPAs”) as a percentage of loans remained low at 0.21% at September 30, 2022. Accruing past due loan levels as a percentage of total loans held for investment at September 30, 2022 totaled 21 basis points, which was a 6 basis point increase from June 30, 2022, and a 9 basis point decrease from September 30, 2021. Net charge-off levels remained low at 0.02% of total average loans (annualized) for the third quarter of 2022. The allowance for credit losses (“ACL”) totaled $119.0 million at September 30, 2022, a $5.8 million increase from the prior quarter.Nonperforming Assets
At September 30, 2022, NPAs totaled $28.6 million, a decrease of $2.5 million from June 30, 2022. The following table shows a summary of NPA balances at the quarter ended (dollars in thousands):September 30, June 30, March 31, December 31, September 30, 2022 2022 2022 2021 2021 Nonaccrual loans $ 26,500 $ 29,070 $ 29,032 $ 31,100 $ 35,472 Foreclosed properties 2,087 2,065 1,696 1,696 1,696 Total nonperforming assets $ 28,587 $ 31,135 $ 30,728 $ 32,796 $ 37,168 The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):
September 30, June 30, March 31, December 31, September 30, 2022 2022 2022 2021 2021 Beginning Balance $ 29,070 $ 29,032 $ 31,100 $ 35,472 $ 36,399 Net customer payments (3,725 ) (2,472 ) (4,132 ) (5,068 ) (4,719 ) Additions 1,302 3,203 2,087 1,294 4,177 Charge-offs (125 ) (311 ) (23 ) (598 ) (385 ) Transfers to foreclosed property (22 ) (382 ) — — — Ending Balance $ 26,500 $ 29,070 $ 29,032 $ 31,100 $ 35,472 Past Due Loans
Past due loans still accruing interest totaled $29.0 million or 0.21% of total loans held for investment at September 30, 2022, compared to $20.4 million or 0.15% of total loans held for investment at June 30, 2022, and $38.8 million or 0.30% of total loans held for investment at September 30, 2021. The increase in past due loan levels in the third quarter of 2022 as compared to the second quarter of 2022 was primarily due to increases in past due credit relationships within the commercial real estate – owner occupied and commercial and industrial portfolios. Of the total past due loans still accruing interest, $7.4 million or 0.05% of total loans held for investment were loans past due 90 days or more at September 30, 2022, compared to $4.6 million or 0.03% of total loans held for investment at June 30, 2022, and $11.0 million or 0.08% of total loans held for investment at September 30, 2021.Allowance for Credit Losses
At September 30, 2022, the ACL was $119.0 million and included an allowance for loan and lease losses (“ALLL”) of $108.0 million and a reserve for unfunded commitments (“RUC”) of $11.0 million. The ACL at September 30, 2022 increased $5.8 million from June 30, 2022, primarily due to increased uncertainty in the macroeconomic outlook and the impact of loan growth in the third quarter of 2022.The ACL as a percentage of total loans increased to 0.86% at September 30, 2022, compared to 0.83% at June 30, 2022. The ALLL as a percentage of total loans was 0.78% at September 30, 2022, compared to 0.76% at June 30, 2022.
Net Charge-offs
Net charge-offs were $587,000 or 0.02% of total average loans on an annualized basis for the quarter ended September 30, 2022, compared to $939,000 or 0.03% (annualized) for the second quarter of 2022, and $113,000 or less than 0.01% (annualized) for the third quarter of 2021. On a year-to-date basis through September 30, 2022, net charge-offs totaled $1.5 million or 0.02% of total average loans (annualized).Provision for Credit Losses
For the quarter ended September 30, 2022, the Company recorded a provision for credit losses of $6.4 million, compared to a provision for credit losses of $3.6 million in the previous quarter, and a negative provision for credit losses of $18.8 million recorded during the same quarter in 2021. The provision for credit losses for the third quarter of 2022 reflected a provision of $4.4 million for loan and lease losses and a $2.0 million reserve for unfunded commitments.NONINTEREST INCOME
Noninterest income decreased $12.7 million to $25.6 million for the quarter ended September 30, 2022 from $38.3 million in the prior quarter, primarily due to the impact of the sale of Dixon, Hubard, Feinour & Brown, Inc. (“DHFB”), as the prior quarter included a $9.1 million pre-tax gain on the transaction within other operating income. In addition, the current quarter’s fiduciary and asset management fees decreased $2.8 million from the prior quarter due to a decrease in assets under management primarily driven by the DHFB sale. Other decreases from the prior quarter include a $1.3 million decrease in service charges on deposit accounts, reflective of the changes to the Company’s overdraft policy, a $810,000 decrease in mortgage banking income due to a decline in mortgage origination volumes and lower gain on sales margins, and a $550,000 reduction in loan related interest rate swap fee income driven by a decrease in average transaction swap fees. These noninterest income category decreases were partially offset by increases of $819,000 primarily related to syndication, foreign exchange, and other capital market transaction fees, included in other operating income, an increase of $729,000 in bank owned life insurance income due to mortality benefits, and an increase of $193,000 in interchange fees.
NONINTEREST EXPENSE
Noninterest expense increased to $99.9 million for the quarter ended September 30, 2022 from $98.8 million in the prior quarter, primarily driven by a $1.3 million increase in salaries and benefits expense due primarily to elevated new hire recruiting expenses and lower deferred loan origination costs resulting from changes in loan originations production mix from the prior quarter. In addition, other expenses increased from the prior quarter by $1.1 million primarily driven by OREO gains of $631,000 realized in the prior quarter. The increases to noninterest expense were partially offset by a $1.2 million decline in professional services expense primarily driven by lower strategic project costs.
INCOME TAXES
The effective tax rate for the three months ended September 30, 2022 was 17.0%, compared to 16.7% for the three months ended June 30, 2022, as the prior quarter reflected the impact of discrete items related to the sale of DHFB.
BALANCE SHEET
At September 30, 2022, total assets were $20.0 billion, an increase of $288.4 million or approximately 5.8% (annualized) from June 30, 2022, and an increase of $14.6 million or approximately 0.1% from September 30, 2021. Total assets increased from the prior quarter due to the increase in total loans held for investment (net of deferred fees and costs) of $263.3 million driven by loan growth, as well as an increase in cash and cash equivalents of $150.0 million due to deposit growth, partially offset by a decline in the investment securities portfolio of $179.4 million primarily related to the impact of market interest rate increases on the market value of the available for sale securities portfolio.
At September 30, 2022, loans held for investment (net of deferred fees and costs) totaled $13.9 billion, including $12.1 million in PPP loans, an increase of $263.3 million or 7.7% (annualized) from $13.7 billion, including $21.7 million in PPP loans, at June 30, 2022. Average loans held for investment (net of deferred fees and costs) totaled $13.7 billion at September 30, 2022, an increase of $207.9 million or 6.1% (annualized) from the prior quarter. Excluding the effects of the PPP(1), adjusted loans held for investment (net of deferred fees and costs) at September 30, 2022 increased $272.9 million or 7.9% (annualized) from June 30, 2022 and adjusted average loans increased $237.0 million or 7.0% (annualized) from the prior quarter. At September 30, 2022, loans held for investment (net of deferred fees and costs) increased $779.1 million or 5.9% from September 30, 2021, and quarterly average loans increased $281.8 million or 2.1% 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 September 30, 2022 increased $1.2 billion or 9.7% from the same period in the prior year, and adjusted quarterly average loans during the third quarter of 2022 increased $954.8 million or 7.5% from the same period in the prior year.
At September 30, 2022, total deposits were $16.5 billion, an increase of $417.6 million or approximately 10.3% (annualized) from June 30, 2022. Average deposits at September 30, 2022 also increased from the prior quarter by $297.2 million or 7.3% (annualized). Total deposits at September 30, 2022 decreased $75.9 million or 0.5% from September 30, 2021, and quarterly average deposits at September 30, 2022 decreased $229.9 million or 1.4% from the same period in the prior year. The decrease in total deposits from the prior year was primarily due to maturing high cost time deposits.
The following table shows the Company’s capital ratios at the quarters ended:
September 30, June 30, September 30, 2022 2022 2021 Common equity Tier 1 capital ratio (2) 9.96 % 9.96 % 10.37 % Tier 1 capital ratio (2) 10.98 % 11.00 % 11.49 % Total capital ratio (2) 13.80 % 13.86 % 13.78 % Leverage ratio (Tier 1 capital to average assets) (2) 9.32 % 9.26 % 8.97 % Common equity to total assets 10.60 % 11.32 % 12.68 % Tangible common equity to tangible assets (1) 6.11 % 6.78 % 8.16 % For the quarter ended September 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 available for sale securities portfolio recorded in other comprehensive income due to market interest rate increases in the third quarter of 2022.
During the third 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 second quarter of 2022 and the third quarter of 2021. During the third quarter of 2022, the Company also declared and paid cash dividends of $0.30 per common share, an increase of $0.02 or approximately 7.1% from the second quarter of 2022 and the third 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 September 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.
THIRD QUARTER 2022 EARNINGS RELEASE CONFERENCE CALL
The Company will hold a conference call and webcast for investors at 9:00 a.m. Eastern Time on Thursday, October 20, 2022 during which management will review the financial results for the three and nine months ended September 30, 2022 and provide an update on recent activities.
The listen-only webcast and the accompanying slides can be accessed at:
https://edge.media-server.com/mmc/p/st4hi3qy.For analysts who wish to participate in the call, please register at the following URL:
https://register.vevent.com/register/BI0d0b7ad4bc21407885cc5e244e5d623f. To participate in the conference call, you must use the link to receive an audio dial-in number and an Access PIN.A replay of the webcast, and the accompanying slides, will be available on the Company’s website for 90 days at: https://investors.atlanticunionbank.com/.
NON-GAAP FINANCIAL MEASURESIn reporting the results as of and for the periods ended September 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)” in the tables within the section “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, estimates with respect to the remaining net accretion related to acquisition accounting, 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 that 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,” “continue,” “confidence,” 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 Company’s loan or investment portfolios and changes therein;
- demand for loan products and financial services in the Company’s market areas;
- 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 Company’s lending area;
- an insufficient ACL;
- changes in accounting principles, standards, rules, and interpretations, and the related impact on the Company’s financial statements;
- volatility in the ACL resulting from the CECL methodology, either alone or as that may be affected by conditions arising out of the COVID-19 pandemic, inflation, changing interest rates, or other factors;
- 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;
- operational, technological, cultural, regulatory, legal, credit, and other risks associated with the exploration, consummation and integration of potential future acquisitions, whether involving stock or cash considerations;
- the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts (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;
- any event or development that would cause the Company to conclude that there was an impairment of any asset, including intangible assets, such as goodwill; and
- other factors, many of which are beyond the control of the Company.
Please also refer to such other factors as discussed throughout Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the year ended December 31, 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 and therein 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 and therein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on the Company or its businesses or operations. Readers are cautioned not to rely too heavily on the forward-looking statements 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 Nine Months Ended 09/30/22 06/30/22 09/30/21 09/30/22 09/30/21 Results of Operations Interest and dividend income $ 171,156 $ 148,755 $ 146,379 $ 458,367 $ 444,904 Interest expense 20,441 9,988 8,891 37,954 31,970 Net interest income 150,715 138,767 137,488 420,413 412,934 Provision for credit losses 6,412 3,559 (18,850 ) 12,771 (59,888 ) Net interest income after provision for credit losses 144,303 135,208 156,338 407,642 472,822 Noninterest income 25,584 38,286 29,938 94,023 89,388 Noninterest expenses 99,923 98,768 95,343 304,012 299,251 Income before income taxes 69,964 74,726 90,933 197,653 262,959 Income tax expense 11,894 12,500 16,368 33,667 46,821 Net income 58,070 62,226 74,565 163,986 216,138 Dividends on preferred stock 2,967 2,967 2,967 8,901 8,901 Net income available to common shareholders $ 55,103 $ 59,259 $ 71,598 $ 155,085 $ 207,237 Interest earned on earning assets (FTE) (1) $ 174,998 $ 152,332 $ 149,543 $ 469,122 $ 454,265 Net interest income (FTE) (1) 154,557 142,344 140,652 431,168 422,295 Total revenue (FTE) (1) 180,141 180,630 170,590 525,191 511,683 Pre-PPP total adjusted revenue (FTE) (1) (10) 179,687 170,204 159,408 511,325 474,790 Pre-tax pre-provision adjusted operating earnings (8) 76,376 69,205 72,074 206,852 218,581 Pre-PPP pre-tax pre-provision adjusted operating earnings (8) (10) 75,922 67,859 60,901 202,066 181,775 Key Ratios Earnings per common share, diluted $ 0.74 $ 0.79 $ 0.94 $ 2.07 $ 2.66 Return on average assets (ROA) 1.15 % 1.27 % 1.47 % 1.10 % 1.45 % Return on average equity (ROE) 9.45 % 10.21 % 10.88 % 8.72 % 10.59 % Return on average tangible common equity (ROTCE) (2) (3) 17.21 % 18.93 % 18.79 % 15.69 % 18.31 % Efficiency ratio 56.68 % 55.78 % 56.95 % 59.10 % 59.57 % Efficiency ratio (FTE) (1) 55.47 % 54.68 % 55.89 % 57.89 % 58.48 % Net interest margin 3.34 % 3.15 % 3.05 % 3.16 % 3.10 % Net interest margin (FTE) (1) 3.43 % 3.24 % 3.12 % 3.24 % 3.17 % Yields on earning assets (FTE) (1) 3.88 % 3.46 % 3.31 % 3.52 % 3.41 % Cost of interest-bearing liabilities 0.68 % 0.35 % 0.30 % 0.43 % 0.36 % Cost of deposits 0.37 % 0.15 % 0.14 % 0.21 % 0.18 % Cost of funds 0.45 % 0.22 % 0.19 % 0.28 % 0.24 % Operating Measures (4) Adjusted operating earnings $ 58,070 $ 54,244 $ 74,558 $ 160,355 $ 228,391 Adjusted operating earnings available to common shareholders 55,103 51,277 71,591 151,454 219,490 Adjusted operating earnings per common share, diluted $ 0.74 $ 0.69 $ 0.94 $ 2.02 $ 2.81 Adjusted operating ROA 1.15 % 1.10 % 1.47 % 1.08 % 1.54 % Adjusted operating ROE 9.45 % 8.90 % 10.88 % 8.53 % 11.19 % Adjusted operating ROTCE (2) (3) 17.21 % 16.47 % 18.79 % 15.34 % 19.35 % Adjusted operating efficiency ratio (FTE) (1)(7) 54.09 % 55.88 % 53.91 % 56.20 % 53.36 % Per Share Data Earnings per common share, basic $ 0.74 $ 0.79 $ 0.94 $ 2.07 $ 2.66 Earnings per common share, diluted 0.74 0.79 0.94 2.07 2.66 Cash dividends paid per common share 0.30 0.28 0.28 0.86 0.81 Market value per share 30.38 33.92 36.85 30.38 36.85 Book value per common share 28.46 29.95 33.60 28.46 33.60 Tangible book value per common share (2) 15.61 17.07 20.55 15.61 20.55 Price to earnings ratio, diluted 10.37 10.68 9.88 10.99 10.36 Price to book value per common share ratio 1.07 1.13 1.10 1.07 1.10 Price to tangible book value per common share ratio (2) 1.95 1.99 1.79 1.95 1.79 Weighted average common shares outstanding, basic 74,703,699 74,847,899 76,309,355 75,029,000 77,988,151 Weighted average common shares outstanding, diluted 74,705,054 74,849,871 76,322,736 75,034,084 78,007,543 Common shares outstanding at end of period 74,703,774 74,688,314 75,645,031 74,703,774 75,645,031 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 Nine Months Ended 09/30/22 06/30/22 09/30/21 09/30/22 09/30/21 Capital Ratios Common equity Tier 1 capital ratio (5) 9.96 % 9.96 % 10.37 % 9.96 % 10.37 % Tier 1 capital ratio (5) 10.98 % 11.00 % 11.49 % 10.98 % 11.49 % Total capital ratio (5) 13.80 % 13.86 % 13.78 % 13.80 % 13.78 % Leverage ratio (Tier 1 capital to average assets) (5) 9.32 % 9.26 % 8.97 % 9.32 % 8.97 % Common equity to total assets 10.60 % 11.32 % 12.68 % 10.60 % 12.68 % Tangible common equity to tangible assets (2) 6.11 % 6.78 % 8.16 % 6.11 % 8.16 % Financial Condition Assets $ 19,950,231 $ 19,661,799 $ 19,935,657 $ 19,950,231 $ 19,935,657 Loans held for investment (net of deferred fees and costs) 13,918,720 13,655,408 13,139,586 13,918,720 13,139,586 Securities 3,640,722 3,820,078 3,807,723 3,640,722 3,807,723 Earning Assets 17,790,324 17,578,979 17,795,784 17,790,324 17,795,784 Goodwill 925,211 925,211 935,560 925,211 935,560 Amortizable intangibles, net 29,142 31,621 46,537 29,142 46,537 Deposits 16,546,216 16,128,635 16,622,160 16,546,216 16,622,160 Borrowings 669,558 797,948 385,765 669,558 385,765 Stockholders' equity 2,281,150 2,391,476 2,694,439 2,281,150 2,694,439 Tangible common equity (2) 1,160,440 1,268,287 1,545,985 1,160,440 1,545,985 Loans held for investment, net of deferred fees and costs Construction and land development $ 1,068,201 $ 988,379 $ 877,351 $ 1,068,201 $ 877,351 Commercial real estate - owner occupied 1,953,872 1,965,702 2,027,299 1,953,872 2,027,299 Commercial real estate - non-owner occupied 3,900,325 3,860,819 3,730,720 3,900,325 3,730,720 Multifamily real estate 774,970 762,502 776,287 774,970 776,287 Commercial & Industrial 2,709,047 2,595,891 2,580,190 2,709,047 2,580,190 Residential 1-4 Family - Commercial 542,612 553,771 624,347 542,612 624,347 Residential 1-4 Family - Consumer 891,353 865,174 822,971 891,353 822,971 Residential 1-4 Family - Revolving 588,452 583,073 557,803 588,452 557,803 Auto 561,277 525,301 425,436 561,277 425,436 Consumer 172,776 180,045 182,039 172,776 182,039 Other Commercial 755,835 774,751 535,143 755,835 535,143 Total loans held for investment $ 13,918,720 $ 13,655,408 $ 13,139,586 $ 13,918,720 $ 13,139,586 Deposits Interest checking accounts $ 4,354,351 $ 3,943,303 $ 4,016,505 $ 4,354,351 $ 4,016,505 Money market accounts 3,962,473 3,956,050 4,152,986 3,962,473 4,152,986 Savings accounts 1,173,566 1,165,577 1,079,735 1,173,566 1,079,735 Time deposits of $250,000 and over 415,984 360,158 546,199 415,984 546,199 Other time deposits 1,348,904 1,342,009 1,497,897 1,348,904 1,497,897 Time deposits 1,764,888 1,702,167 2,044,096 1,764,888 2,044,096 Total interest-bearing deposits $ 11,255,278 $ 10,767,097 $ 11,293,322 $ 11,255,278 $ 11,293,322 Demand deposits 5,290,938 5,361,538 5,328,838 5,290,938 5,328,838 Total deposits $ 16,546,216 $ 16,128,635 $ 16,622,160 $ 16,546,216 $ 16,622,160 Averages Assets $ 19,980,500 $ 19,719,402 $ 20,056,570 $ 19,873,644 $ 19,890,155 Loans held for investment (net of deferred fees and costs) 13,733,447 13,525,529 13,451,674 13,521,507 13,827,002 Loans held for sale 15,063 20,634 30,035 16,779 43,162 Securities 3,818,607 3,930,912 3,679,977 3,981,308 3,438,285 Earning assets 17,879,222 17,646,470 17,910,389 17,803,550 17,824,607 Deposits 16,488,224 16,191,056 16,718,144 16,397,790 16,433,470 Time deposits 1,745,224 1,667,378 2,109,131 1,726,341 2,288,530 Interest-bearing deposits 11,163,945 10,824,465 11,512,825 11,091,115 11,483,654 Borrowings 703,272 765,886 395,984 660,995 456,184 Interest-bearing liabilities 11,867,217 11,590,351 11,908,809 11,752,110 11,939,838 Stockholders' equity 2,436,999 2,445,045 2,718,032 2,513,522 2,728,605 Tangible common equity (2) 1,315,085 1,304,536 1,567,937 1,378,240 1,574,961 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 Nine Months Ended 09/30/22 06/30/22 09/30/21 09/30/22 09/30/21 Asset Quality Allowance for Credit Losses (ACL) Beginning balance, Allowance for loan and lease losses (ALLL) $ 104,184 $ 102,591 $ 118,261 $ 99,787 $ 160,540 Add: Recoveries 1,214 1,018 2,153 3,745 6,498 Less: Charge-offs 1,801 1,957 2,266 5,267 7,852 Add: Provision for loan losses 4,412 2,532 (16,350 ) 9,744 (57,388 ) Ending balance, ALLL $ 108,009 $ 104,184 $ 101,798 $ 108,009 $ 101,798 Beginning balance, Reserve for unfunded commitment (RUC) $ 9,000 $ 8,000 $ 10,000 $ 8,000 $ 10,000 Add: Provision for unfunded commitments 2,000 1,000 (2,500 ) 3,000 (2,500 ) Ending balance, RUC $ 11,000 $ 9,000 $ 7,500 $ 11,000 $ 7,500 Total ACL $ 119,009 $ 113,184 $ 109,298 $ 119,009 $ 109,298 ACL / total outstanding loans 0.86 % 0.83 % 0.83 % 0.86 % 0.83 % ACL / total adjusted loans(9) 0.86 % 0.83 % 0.86 % 0.86 % 0.86 % ALLL / total outstanding loans 0.78 % 0.76 % 0.77 % 0.78 % 0.77 % ALLL / total adjusted loans(9) 0.78 % 0.76 % 0.80 % 0.78 % 0.80 % Net charge-offs / total average loans 0.02 % 0.03 % 0.00 % 0.02 % 0.01 % Net charge-offs / total adjusted average loans(9) 0.02 % 0.03 % 0.00 % 0.02 % 0.01 % Provision for loan losses/ total average loans 0.13 % 0.08 % (0.48 ) % 0.10 % (0.55 ) % Provision for loan losses/ total adjusted average loans(9) 0.13 % 0.08 % (0.51 ) % 0.10 % (0.60 ) % Nonperforming Assets (6) Construction and land development $ 421 $ 581 $ 2,710 $ 421 $ 2,710 Commercial real estate - owner occupied 4,883 4,996 7,786 4,883 7,786 Commercial real estate - non-owner occupied 1,923 3,301 4,174 1,923 4,174 Multifamily real estate — — 113 — 113 Commercial & Industrial 2,289 2,728 2,062 2,289 2,062 Residential 1-4 Family - Commercial 1,962 2,031 2,445 1,962 2,445 Residential 1-4 Family - Consumer 11,121 12,084 12,150 11,121 12,150 Residential 1-4 Family - Revolving 3,583 3,069 3,723 3,583 3,723 Auto 318 279 255 318 255 Consumer — 1 54 — 54 Nonaccrual loans $ 26,500 $ 29,070 $ 35,472 $ 26,500 $ 35,472 Foreclosed property 2,087 2,065 1,696 2,087 1,696 Total nonperforming assets (NPAs) $ 28,587 $ 31,135 $ 37,168 $ 28,587 $ 37,168 Construction and land development $ 115 $ 1 $ 304 $ 115 $ 304 Commercial real estate - owner occupied 3,517 792 1,886 3,517 1,886 Commercial real estate - non-owner occupied 621 642 1,175 621 1,175 Commercial & Industrial 526 322 1,256 526 1,256 Residential 1-4 Family - Commercial 308 184 1,091 308 1,091 Residential 1-4 Family - Consumer 680 1,112 2,462 680 2,462 Residential 1-4 Family - Revolving 1,255 997 2,474 1,255 2,474 Auto 148 134 209 148 209 Consumer 86 79 173 86 173 Other Commercial 95 329 — 95 — Loans ≥ 90 days and still accruing $ 7,351 $ 4,592 $ 11,030 $ 7,351 $ 11,030 Total NPAs and loans ≥ 90 days $ 35,938 $ 35,727 $ 48,198 $ 35,938 $ 48,198 NPAs / total outstanding loans 0.21 % 0.23 % 0.28 % 0.21 % 0.28 % NPAs / total adjusted loans(9) 0.21 % 0.23 % 0.29 % 0.21 % 0.29 % NPAs / total assets 0.14 % 0.16 % 0.19 % 0.14 % 0.19 % ALLL / nonaccrual loans 407.58 % 358.39 % 286.98 % 407.58 % 286.98 % ALLL/ nonperforming assets 377.83 % 334.62 % 273.89 % 377.83 % 273.89 % ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
KEY FINANCIAL RESULTS (UNAUDITED)
(Dollars in thousands, except share data)As of & For Three Months Ended As of & For Nine Months Ended 09/30/22 06/30/22 09/30/21 09/30/22 09/30/21 Past Due Detail (6) Construction and land development $ 120 $ 645 $ 744 $ 120 $ 744 Commercial real estate - owner occupied 7,337 1,374 735 7,337 735 Commercial real estate - non-owner occupied — 511 1,302 — 1,302 Commercial & Industrial 796 2,581 11,089 796 11,089 Residential 1-4 Family - Commercial 1,410 1,944 807 1,410 807 Residential 1-4 Family - Consumer 1,123 594 406 1,123 406 Residential 1-4 Family - Revolving 1,115 1,368 1,092 1,115 1,092 Auto 1,876 1,841 1,548 1,876 1,548 Consumer 409 361 790 409 790 Other Commercial — 11 631 — 631 Loans 30-59 days past due $ 14,186 $ 11,230 $ 19,144 $ 14,186 $ 19,144 Construction and land development $ 107 $ — $ 58 $ 107 $ 58 Commercial real estate - owner occupied 763 807 61 763 61 Commercial real estate - non-owner occupied 457 — 570 457 570 Commercial & Industrial 3,128 546 3,328 3,128 3,328 Residential 1-4 Family - Commercial 97 474 698 97 698 Residential 1-4 Family - Consumer 1,449 1,646 2,188 1,449 2,188 Residential 1-4 Family - Revolving 1,081 731 587 1,081 587 Auto 257 213 202 257 202 Consumer 101 210 317 101 317 Other Commercial — — 600 — 600 Loans 60-89 days past due $ 7,440 $ 4,627 $ 8,609 $ 7,440 $ 8,609 Past Due and still accruing $ 28,977 $ 20,449 $ 38,783 $ 28,977 $ 38,783 Past Due and still accruing / total loans 0.21 % 0.15 % 0.30 % 0.21 % 0.30 % Troubled Debt Restructurings Performing $ 10,333 $ 10,662 $ 11,335 $ 10,333 $ 11,335 Nonperforming 5,298 7,298 7,365 5,298 7,365 Total troubled debt restructurings $ 15,631 $ 17,960 $ 18,700 $ 15,631 $ 18,700 Alternative Performance Measures (non-GAAP) Net interest income (FTE) (1) Net interest income (GAAP) $ 150,715 $ 138,767 $ 137,488 $ 420,413 $ 412,934 FTE adjustment 3,842 3,577 3,164 10,755 9,361 Net interest income (FTE) (non-GAAP) $ 154,557 $ 142,344 $ 140,652 $ 431,168 $ 422,295 Noninterest income (GAAP) 25,584 38,286 29,938 94,023 89,388 Total revenue (FTE) (non-GAAP) $ 180,141 $ 180,630 $ 170,590 $ 525,191 $ 511,683 Average earning assets $ 17,879,222 $ 17,646,470 $ 17,910,389 $ 17,803,550 $ 17,824,607 Net interest margin 3.34 % 3.15 % 3.05 % 3.16 % 3.10 % Net interest margin (FTE) 3.43 % 3.24 % 3.12 % 3.24 % 3.17 % Tangible Assets (2) Ending assets (GAAP) $ 19,950,231 $ 19,661,799 $ 19,935,657 $ 19,950,231 $ 19,935,657 Less: Ending goodwill 925,211 925,211 935,560 925,211 935,560 Less: Ending amortizable intangibles 29,142 31,621 46,537 29,142 46,537 Ending tangible assets (non-GAAP) $ 18,995,878 $ 18,704,967 $ 18,953,560 $ 18,995,878 $ 18,953,560 Tangible Common Equity (2) Ending equity (GAAP) $ 2,281,150 $ 2,391,476 $ 2,694,439 $ 2,281,150 $ 2,694,439 Less: Ending goodwill 925,211 925,211 935,560 925,211 935,560 Less: Ending amortizable intangibles 29,142 31,621 46,537 29,142 46,537 Less: Perpetual preferred stock 166,357 166,357 166,357 166,357 166,357 Ending tangible common equity (non-GAAP) $ 1,160,440 $ 1,268,287 $ 1,545,985 $ 1,160,440 $ 1,545,985 Average equity (GAAP) $ 2,436,999 $ 2,445,045 $ 2,718,032 $ 2,513,522 $ 2,728,605 Less: Average goodwill 925,211 935,446 935,560 932,035 935,560 Less: Average amortizable intangibles 30,347 38,707 48,179 36,891 51,728 Less: Average perpetual preferred stock 166,356 166,356 166,356 166,356 166,356 Average tangible common equity (non-GAAP) $ 1,315,085 $ 1,304,536 $ 1,567,937 $ 1,378,240 $ 1,574,961 ROTCE (2)(3) Net income available to common shareholders (GAAP) $ 55,103 $ 59,259 $ 71,598 $ 155,085 $ 207,237 Plus: Amortization of intangibles, tax effected 1,959 2,303 2,671 6,663 8,436 Net income available to common shareholders before amortization of intangibles (non-GAAP) $ 57,062 $ 61,562 $ 74,269 $ 161,748 $ 215,673 Return on average tangible common equity (ROTCE) 17.21 % 18.93 % 18.79 % 15.69 % 18.31 % 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 Nine Months Ended 09/30/22 06/30/22 09/30/21 09/30/22 09/30/21 Operating Measures (4) Net income (GAAP) $ 58,070 $ 62,226 $ 74,565 $ 163,986 $ 216,138 Plus: Net loss related to balance sheet repositioning, net of tax — — — — 11,609 Less: (Loss) gain on sale of securities, net of tax — (2 ) 7 (2 ) 69 Less: Gain on sale of DHFB, net of tax — 7,984 — 7,984 — Plus: Branch closing and facility consolidation costs, net of tax — — — 4,351 713 Adjusted operating earnings (non-GAAP) 58,070 54,244 74,558 160,355 228,391 Less: Dividends on preferred stock 2,967 2,967 2,967 8,901 8,901 Adjusted operating earnings available to common shareholders (non-GAAP) $ 55,103 $ 51,277 $ 71,591 $ 151,454 $ 219,490 Noninterest expense (GAAP) $ 99,923 $ 98,768 $ 95,343 $ 304,012 $ 299,251 Less: Amortization of intangible assets 2,480 2,915 3,381 8,434 10,679 Less: Losses related to balance sheet repositioning — — — — 14,695 Less: Branch closing and facility consolidation costs — — — 5,508 902 Adjusted operating noninterest expense (non-GAAP) $ 97,443 $ 95,853 $ 91,962 $ 290,070 $ 272,975 Noninterest income (GAAP) $ 25,584 $ 38,286 $ 29,938 $ 94,023 $ 89,388 Less: (Loss) gain on sale of securities — (2 ) 9 (2 ) 87 Less: Gain on sale of DHFB — 9,082 — 9,082 — Adjusted operating noninterest income (non-GAAP) $ 25,584 $ 29,206 $ 29,929 $ 84,943 $ 89,301 Net interest income (FTE) (non-GAAP) (1) $ 154,557 $ 142,344 $ 140,652 $ 431,168 $ 422,295 Adjusted operating noninterest income (non-GAAP) 25,584 29,206 29,929 84,943 89,301 Total adjusted revenue (FTE) (non-GAAP) (1) 180,141 171,550 170,581 516,111 511,596 Less: PPP accretion interest income and fees 454 1,346 11,173 4,786 36,806 Pre-PPP total adjusted revenue (FTE) (non-GAAP) (1) (10) $ 179,687 $ 170,204 $ 159,408 $ 511,325 $ 474,790 Efficiency ratio 56.68 % 55.78 % 56.95 % 59.10 % 59.57 % Efficiency ratio (FTE) (1) 55.47 % 54.68 % 55.89 % 57.89 % 58.48 % Adjusted operating efficiency ratio (FTE) (1)(7) 54.09 % 55.88 % 53.91 % 56.20 % 53.36 % Operating ROA & ROE (4) Adjusted operating earnings (non-GAAP) $ 58,070 $ 54,244 $ 74,558 $ 160,355 $ 228,391 Average assets (GAAP) $ 19,980,500 $ 19,719,402 $ 20,056,570 $ 19,873,644 $ 19,890,155 Return on average assets (ROA) (GAAP) 1.15 % 1.27 % 1.47 % 1.10 % 1.45 % Adjusted operating return on average assets (ROA) (non-GAAP) 1.15 % 1.10 % 1.47 % 1.08 % 1.54 % Average equity (GAAP) $ 2,436,999 $ 2,445,045 $ 2,718,032 $ 2,513,522 $ 2,728,605 Return on average equity (ROE) (GAAP) 9.45 % 10.21 % 10.88 % 8.72 % 10.59 % Adjusted operating return on average equity (ROE) (non-GAAP) 9.45 % 8.90 % 10.88 % 8.53 % 11.19 % Operating ROTCE (2)(3)(4) Adjusted operating earnings available to common shareholders (non-GAAP) $ 55,103 $ 51,277 $ 71,591 $ 151,454 $ 219,490 Plus: Amortization of intangibles, tax effected 1,959 2,303 2,671 6,663 8,436 Adjusted operating earnings available to common shareholders before amortization of intangibles (non-GAAP) $ 57,062 $ 53,580 $ 74,262 $ 158,117 $ 227,926 Average tangible common equity (non-GAAP) $ 1,315,085 $ 1,304,536 $ 1,567,937 $ 1,378,240 $ 1,574,961 Adjusted operating return on average tangible common equity (non-GAAP) 17.21 % 16.47 % 18.79 % 15.34 % 19.35 % Pre-tax pre-provision adjusted operating earnings (8) Net income (GAAP) $ 58,070 $ 62,226 $ 74,565 $ 163,986 $ 216,138 Plus: Provision for credit losses 6,412 3,559 (18,850 ) 12,771 (59,888 ) Plus: Income tax expense 11,894 12,500 16,368 33,667 46,821 Plus: Net loss related to balance sheet repositioning — — — — 14,695 Less: (Loss) gain on sale of securities — (2 ) 9 (2 ) 87 Less: Gain on sale of DHFB — 9,082 — 9,082 — Plus: Branch closing and facility consolidation costs — — — 5,508 902 Pre-tax pre-provision adjusted operating earnings (non-GAAP) $ 76,376 $ 69,205 $ 72,074 $ 206,852 $ 218,581 Less: Dividends on preferred stock 2,967 2,967 2,967 8,901 8,901 Pre-tax pre-provision adjusted operating earnings available to common shareholders (non-GAAP) $ 73,409 $ 66,238 $ 69,107 $ 197,951 $ 209,680 Pre-tax pre-provision adjusted operating earnings (non-GAAP) $ 76,376 $ 69,205 $ 72,074 $ 206,852 $ 218,581 Less: PPP accretion interest income and fees 454 1,346 11,173 4,786 36,806 Pre-PPP pre-tax pre-provision adjusted operating earnings (non-GAAP) (10) $ 75,922 $ 67,859 $ 60,901 $ 202,066 $ 181,775 Weighted average common shares outstanding, diluted 74,705,054 74,849,871 76,322,736 75,034,084 78,007,543 Pre-tax pre-provision earnings per common share, diluted $ 0.98 $ 0.88 $ 0.91 $ 2.64 $ 2.69 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 Nine Months Ended 09/30/22 06/30/22 09/30/21 09/30/22 09/30/21 Adjusted Loans (9) Loans held for investment (net of deferred fees and costs) (GAAP) $ 13,918,720 $ 13,655,408 $ 13,139,586 $ 13,918,720 $ 13,139,586 Less: PPP adjustments (net of deferred fees and costs) 12,146 21,749 466,609 12,146 466,609 Total adjusted loans (non-GAAP) $ 13,906,574 $ 13,633,659 $ 12,672,977 $ 13,906,574 $ 12,672,977 Average loans held for investment (net of deferred fees and costs) (GAAP) $ 13,733,447 $ 13,525,529 $ 13,451,674 $ 13,521,507 $ 13,827,002 Less: Average PPP adjustments (net of deferred fees and costs) 14,280 43,391 687,259 53,246 1,059,130 Total adjusted average loans (non-GAAP) $ 13,719,167 $ 13,482,138 $ 12,764,415 $ 13,468,261 $ 12,767,872 Mortgage Origination Held for Sale Volume Refinance Volume $ 5,637 $ 14,916 $ 49,154 $ 53,753 $ 241,401 Purchase Volume 66,360 84,551 93,819 209,206 250,523 Total Mortgage loan originations held for sale $ 71,997 $ 99,467 $ 142,973 $ 262,959 $ 491,924 % of originations held for sale that are refinances 7.8 % 15.0 % 34.4 % 20.4 % 49.1 % Wealth Assets under management ("AUM") $ 4,065,059 $ 4,415,537 $ 6,377,518 $ 4,065,059 $ 6,377,518 Other Data End of period full-time employees 1,890 1,856 1,918 1,890 1,918 Number of full-service branches 114 114 130 114 130 Number of automatic transaction machines ("ATMs") 131 131 149 131 149 (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 losses related to balance sheet repositioning (principally composed of 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 September 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, losses related to balance sheet repositioning (principally composed of 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) These are non-GAAP financial measures. Pre-tax pre-provision adjusted earnings excludes the provision for credit losses, which can fluctuate significantly from period-to-period under the CECL methodology, income tax expense, losses related to balance sheet repositioning (principally composed of 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.
(10) These are non-GAAP financial measures. The Company believes excluding PPP accretion interest income and fees from operating earnings is useful to investors as it provides more clarity on the Company’s non-PPP related income.
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)September 30, December 31, September 30, 2022 2021 2021 ASSETS (unaudited) (audited) (unaudited) Cash and cash equivalents: Cash and due from banks $ 177,969 $ 180,963 $ 255,648 Interest-bearing deposits in other banks 211,785 618,714 807,225 Federal funds sold 1,188 2,824 377 Total cash and cash equivalents 390,942 802,501 1,063,250 Securities available for sale, at fair value 2,717,323 3,481,650 3,195,176 Securities held to maturity, at carrying value 841,349 628,000 535,722 Restricted stock, at cost 82,050 76,825 76,825 Loans held for sale, at fair value 12,889 20,861 35,417 Loans held for investment, net of deferred fees and costs 13,918,720 13,195,843 13,139,586 Less: allowance for loan and lease losses 108,009 99,787 101,798 Total loans held for investment, net 13,810,711 13,096,056 13,037,788 Premises and equipment, net 126,374 134,808 159,588 Goodwill 925,211 935,560 935,560 Amortizable intangibles, net 29,142 43,312 46,537 Bank owned life insurance 437,988 431,517 430,341 Other assets 576,252 413,706 419,453 Total assets $ 19,950,231 $ 20,064,796 $ 19,935,657 LIABILITIES Noninterest-bearing demand deposits $ 5,290,938 $ 5,207,324 $ 5,328,838 Interest-bearing deposits 11,255,278 11,403,744 11,293,322 Total deposits 16,546,216 16,611,068 16,622,160 Securities sold under agreements to repurchase 146,182 117,870 95,181 Other short-term borrowings 133,800 — — Long-term borrowings 389,576 388,724 290,584 Other liabilities 453,307 237,063 233,293 Total liabilities 17,669,081 17,354,725 17,241,218 Commitments and contingencies STOCKHOLDERS' EQUITY Preferred stock, $10.00 par value 173 173 173 Common stock, $1.33 par value 98,845 100,101 100,062 Additional paid-in capital 1,769,858 1,807,368 1,804,617 Retained earnings 874,393 783,794 760,164 Accumulated other comprehensive income (loss) (462,119 ) 18,635 29,423 Total stockholders' equity 2,281,150 2,710,071 2,694,439 Total liabilities and stockholders' equity $ 19,950,231 $ 20,064,796 $ 19,935,657 Common shares outstanding 74,703,774 75,663,648 75,645,031 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 Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2022 2022 2021 2022 2021 Interest and dividend income: Interest and fees on loans $ 144,673 $ 123,266 $ 124,999 $ 382,139 $ 383,575 Interest on deposits in other banks 941 157 291 1,229 454 Interest and dividends on securities: Taxable 14,750 14,695 11,230 43,110 32,102 Nontaxable 10,792 10,637 9,859 31,889 28,773 Total interest and dividend income 171,156 148,755 146,379 458,367 444,904 Interest expense: Interest on deposits 15,386 6,097 5,837 25,966 22,203 Interest on short-term borrowings 1,229 555 22 1,805 91 Interest on long-term borrowings 3,826 3,336 3,032 10,183 9,676 Total interest expense 20,441 9,988 8,891 37,954 31,970 Net interest income 150,715 138,767 137,488 420,413 412,934 Provision for credit losses 6,412 3,559 (18,850 ) 12,771 (59,888 ) Net interest income after provision for credit losses 144,303 135,208 156,338 407,642 472,822 Noninterest income: Service charges on deposit accounts 6,784 8,040 7,198 22,421 19,314 Other service charges, commissions and fees 1,770 1,709 1,534 5,134 4,970 Interchange fees 2,461 2,268 2,203 6,539 6,252 Fiduciary and asset management fees 4,134 6,939 7,029 18,329 20,323 Mortgage banking income 1,390 2,200 4,818 6,707 17,692 Bank owned life insurance income 3,445 2,716 2,727 8,858 8,202 Loan-related interest rate swap fees 2,050 2,600 1,102 8,510 4,176 Other operating income 3,550 11,814 3,327 17,525 8,459 Total noninterest income 25,584 38,286 29,938 94,023 89,388 Noninterest expenses: Salaries and benefits 56,600 55,305 53,534 170,203 156,959 Occupancy expenses 6,408 6,395 7,251 19,685 21,705 Furniture and equipment expenses 3,673 3,590 4,040 10,860 11,919 Technology and data processing 8,273 7,862 7,534 23,930 21,657 Professional services 3,504 4,680 3,792 12,274 13,161 Marketing and advertising expense 2,343 2,502 2,548 7,008 7,330 FDIC assessment premiums and other insurance 3,094 2,765 2,172 8,344 6,798 Franchise and other taxes 4,507 4,500 4,432 13,506 13,303 Loan-related expenses 1,575 1,867 1,503 5,218 5,289 Amortization of intangible assets 2,480 2,915 3,381 8,434 10,679 Loss on debt extinguishment — — — — 14,695 Other expenses 7,466 6,387 5,156 24,550 15,756 Total noninterest expenses 99,923 98,768 95,343 304,012 299,251 Income before income taxes 69,964 74,726 90,933 197,653 262,959 Income tax expense 11,894 12,500 16,368 33,667 46,821 Net income $ 58,070 $ 62,226 $ 74,565 163,986 216,138 Dividends on preferred stock 2,967 2,967 2,967 8,901 8,901 Net income available to common shareholders $ 55,103 $ 59,259 $ 71,598 $ 155,085 $ 207,237 Basic earnings per common share $ 0.74 $ 0.79 $ 0.94 $ 2.07 $ 2.66 Diluted earnings per common share $ 0.74 $ 0.79 $ 0.94 $ 2.07 $ 2.66 AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS) (UNAUDITED)
(Dollars in thousands)For the Quarter Ended September 30, 2022 June 30, 2022 Average
BalanceInterest
Income /
Expense (1)Yield /
Rate (1)(2)Average
BalanceInterest
Income /
Expense (1)Yield /
Rate (1)(2)Assets: Securities: Taxable $ 2,193,279 $ 14,750 2.67 % $ 2,322,024 $ 14,695 2.54 % Tax-exempt 1,625,328 13,661 3.33 % 1,608,888 13,465 3.36 % Total securities 3,818,607 28,411 2.95 % 3,930,912 28,160 2.87 % Loans, net (3) 13,733,447 145,433 4.20 % 13,525,529 123,764 3.67 % Other earning assets 327,168 1,154 1.40 % 190,029 408 0.86 % Total earning assets $ 17,879,222 $ 174,998 3.88 % $ 17,646,470 $ 152,332 3.46 % Allowance for loan and lease losses (104,746 ) (103,211 ) Total non-earning assets 2,206,024 2,176,143 Total assets $ 19,980,500 $ 19,719,402 Liabilities and Stockholders' Equity: Interest-bearing deposits: Transaction and money market accounts $ 8,247,650 $ 11,342 0.55 % $ 7,987,888 $ 3,082 0.15 % Regular savings 1,171,071 64 0.02 % 1,169,199 55 0.02 % Time deposits 1,745,224 3,980 0.90 % 1,667,378 2,960 0.71 % Total interest-bearing deposits 11,163,945 15,386 0.55 % 10,824,465 6,097 0.23 % Other borrowings 703,272 5,055 2.85 % 765,886 3,891 2.04 % Total interest-bearing liabilities $ 11,867,217 $ 20,441 0.68 % $ 11,590,351 $ 9,988 0.35 % Noninterest-bearing liabilities: Demand deposits 5,324,279 5,366,591 Other liabilities 352,005 317,415 Total liabilities $ 17,543,501 $ 17,274,357 Stockholders' equity 2,436,999 2,445,045 Total liabilities and stockholders' equity $ 19,980,500 $ 19,719,402 Net interest income $ 154,557 $ 142,344 Interest rate spread 3.20 % 3.11 % Cost of funds 0.45 % 0.22 % Net interest margin 3.43 % 3.24 % (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