Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Atlantic Union Bankshares Reports Third Quarter Financial Results By: Atlantic Union Bankshares Corporation via Business Wire October 19, 2023 at 06:45 AM EDT Atlantic Union Bankshares Corporation (the “Company” or “Atlantic Union”) (NYSE: AUB) reported net income available to common shareholders of $51.1 million and basic and diluted earnings per common share of $0.68 for the third quarter of 2023 and adjusted operating earnings available to common shareholders(1) of $59.8 million and adjusted diluted operating earnings per common share(1) of $0.80 for the third quarter of 2023. “Atlantic Union delivered strong operating results in the third quarter,” said John C. Asbury, president and chief executive officer of Atlantic Union. “We were especially pleased with our customer deposit growth that more than funded loan growth during the quarter, negligible charge-offs, and the impact of our expense reduction actions taken earlier in the year. The proactive measures we have taken to manage this challenging environment are serving us well.” “We believe that our model of a diversified, traditional, full-service bank that delivers the products and services that our customers want and need combined with local decision making, responsiveness and client service orientation positively sets us apart from other banks, both larger and smaller. 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.” STRATEGIC ACTIONS Merger with American National Bankshares Inc. (“American National”) On July 25, 2023, the Company announced that it entered into a merger agreement to acquire American National. During the third quarter of 2023, the Company incurred pre-tax merger costs of approximately $2.0 million. Cost Saving Initiatives As previously disclosed, the Company initiated a series of strategic cost savings measures during the second quarter of 2023 that is expected to reduce the annual expense run rate by approximately $17 million. As a result of these measures, the Company incurred pre-tax expenses of $8.7 million in the third quarter of 2023 and $3.9 million in the second quarter of 2023, principally composed of severance charges related to headcount reductions, costs related to modifying certain third-party vendor contracts, and charges for exiting certain leases. Sale-Leaseback Transaction On September 20, 2023, Atlantic Union Bank (the “Bank”) executed a sale-leaseback transaction and sold 27 properties, which consisted of 25 branches and a drive thru and parking lot, each adjacent to a sold branch, to a single purchaser for an aggregate purchase price of $45.8 million. Concurrently, the Bank entered into absolute net lease agreements with the purchaser under which the Bank will lease each of the properties for an initial term of 17 years with specified renewal options. The sale-leaseback transaction resulted in a pre-tax gain of approximately $27.7 million during the third quarter of 2023, after transaction-related expenses. Available for Sale (“AFS”) Securities Sale Concurrent with the sale-leaseback transaction, also on September 20, 2023, the Company restructured a portion of its investment portfolio by selling low yielding AFS securities with a book value of $228.3 million, resulting in a pre-tax net loss of $27.7 million. The net proceeds from the securities sale transaction were reinvested into higher yielding AFS securities at the end of the third quarter of 2023. NET INTEREST INCOME For the third quarter of 2023, net interest income was $151.9 million, a decrease of $143,000 from $152.1 million in the second quarter of 2023. Net interest income (FTE)(1) was $155.7 million in the third quarter of 2023, a decrease of $65,000 from $155.8 million in the second quarter of 2023 due to higher deposit costs driven by increases in market interest rates, changes in the deposit mix as depositors continue to migrate to higher costing interest bearing deposit accounts, and growth in average deposit balances, partially offset by an increase in loan yields on variable rate loans due to increases in short-term interest rates during the quarter, as well as growth in average loans held for investment (“LHFI”). Our net interest margin decreased 10 basis points from the prior quarter to 3.27% at September 30, 2023, and our net interest margin (FTE)(1) decreased 10 basis points during the same period to 3.35%. Earning asset yields increased by 20 basis points to 5.39% in the third quarter of 2023 compared to the second quarter of 2023, primarily due to the impact of increases in market interest rates on loans and loan growth. Our cost of funds increased by 30 basis points to 2.04% at September 30, 2023 compared to the prior quarter, due primarily to higher deposit costs driven by higher rates and changes in the deposit mix as noted above. The Company’s net interest margin (FTE) (1) includes the impact of acquisition accounting fair value adjustments. Net accretion related to acquisition accounting was $1.1 million for the third quarter of 2023. The impact of net accretion in the second and third quarters of 2023 are reflected in the following table (dollars in thousands): Loan Deposit Borrowings Accretion Amortization Amortization Total For the quarter ended June 30, 2023 $ 1,073 $ (7) $ (213) $ 853 For the quarter ended September 30, 2023 1,300 (6) (215) 1,079 ASSET QUALITY Overview At September 30, 2023, nonperforming assets (“NPAs”) as a percentage of total LHFI was 0.19% and was unchanged from the prior quarter and included nonaccrual loans of $28.6 million. Accruing past due loans as a percentage of total LHFI totaled 27 basis points at September 30, 2023, an increase of 11 basis points from June 30, 2023, and an increase of 6 basis points from September 30, 2022. The increase in past due loan levels from June 30, 2023 was primarily within the 30-59 days past due category and resulted primarily from increases in past due credit relationships within the commercial real estate and commercial and industrial portfolios. Net charge-offs were 0.01% of total average LHFI (annualized) for the third quarter of 2023, a decrease of 3 basis points from June 30, 2023, and a decrease of 1 basis point from September 30, 2022. The allowance for credit losses (“ACL”) totaled $140.9 million at September 30, 2023, a $4.7 million increase from the prior quarter. Nonperforming Assets At September 30, 2023, NPAs totaled $28.8 million, compared to $29.2 million in the prior quarter. 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, 2023 2023 2023 2022 2022 Nonaccrual loans $ 28,626 $ 29,105 $ 29,082 $ 27,038 $ 26,500 Foreclosed properties 149 50 29 76 2,087 Total nonperforming assets $ 28,775 $ 29,155 $ 29,111 $ 27,114 $ 28,587 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, 2023 2023 2023 2022 2022 Beginning Balance $ 29,105 $ 29,082 $ 27,038 $ 26,500 $ 29,070 Net customer payments (1,947 ) (5,950 ) (1,755 ) (1,805 ) (3,725 ) Additions 1,651 6,685 4,151 2,935 1,302 Charge-offs (64 ) (712 ) (39 ) (461 ) (125 ) Loans returning to accruing status (119 ) — (313 ) (131 ) — Transfers to foreclosed property — — — — (22 ) Ending Balance $ 28,626 $ 29,105 $ 29,082 $ 27,038 $ 26,500 Past Due Loans At September 30, 2023, past due loans still accruing interest totaled $40.6 million or 0.27% of total LHFI, compared to $24.1 million or 0.16% of total LHFI at June 30, 2023, and $29.0 million or 0.21% of total LHFI at September 30, 2022. The increase in past due loan levels from June 30, 2023 was primarily within the 30-59 days past due category and driven by increases in past due credit relationships within the commercial real estate and commercial and industrial portfolios. Of the total past due loans still accruing interest, $11.9 million or 0.08% of total LHFI were loans past due 90 days or more at September 30, 2023, compared to $10.1 million or 0.07% of total LHFI at June 30, 2023, and $7.4 million or 0.05% of total LHFI at September 30, 2022. Allowance for Credit Losses At September 30, 2023, the ACL was $140.9 million and included an allowance for loan and lease losses (“ALLL”) of $125.6 million and a reserve for unfunded commitments of $15.3 million. The ACL at September 30, 2023 increased $4.7 million from June 30, 2023 due to loan growth in the third quarter of 2023 and the impact of continued uncertainty in the economic outlook. The ACL as a percentage of total LHFI was 0.92% at September 30, 2023, an increase of 2 basis points from June 30, 2023. The ALLL as a percentage of total LHFI was 0.82% at September 30, 2023, compared to 0.80% at June 30, 2023. Net Charge-offs Net charge-offs were $294,000 or 0.01% of total average LHFI on an annualized basis for the third quarter of 2023, compared to $1.6 million or 0.04% (annualized) for the second quarter of 2023, and $587,000 or 0.02% (annualized) for the third quarter of 2022. Provision for Credit Losses For the third quarter of 2023, the Company recorded a provision for credit losses of $5.0 million, compared to a provision for credit losses of $6.1 million in the prior quarter, and a provision for credit losses of $6.4 million in the third quarter of 2022. NONINTEREST INCOME Noninterest income increased $2.9 million to $27.1 million for the third quarter of 2023 from $24.2 million in the prior quarter, primarily driven by a $939,000 increase in other service charges, commissions and fees primarily due to a merchant services vendor contract signing bonus, a $714,000 increase in equity method investment income (included within other operating income), a $439,000 increase in service charges on deposits accounts, and a $379,000 increase in loan-related interest rate swap fees due to several new swap transactions. Noninterest income in the third quarter also included a $27.7 million gain related to the sale-leaseback transaction, included in other operating income, which was almost wholly offset by $27.6 million of losses incurred on the sale of AFS securities in the third quarter of 2023. NONINTEREST EXPENSE Noninterest expense increased $2.8 million to $108.5 million for the third quarter of 2023 from $105.7 million in the prior quarter, primarily driven by a $10.0 million increase in other expenses, which includes $8.7 million in expenses associated with strategic cost saving initiatives and $2.0 million in merger-related costs. Adjusted operating noninterest expense,(1) which excludes amortization of intangible assets ($2.2 million in both the third quarter and second quarter of 2023), expenses associated with strategic cost savings initiatives ($8.7 million in the third quarter and $3.9 million in the second quarter of 2023), and merger-related costs associated with the American National merger ($2.0 million in the third quarter of 2023), decreased $3.9 million to $95.7 million for the third quarter of 2023 from $99.5 million in the prior quarter. The decrease in adjusted operating noninterest expense(1) was primarily due to a $1.6 million decrease in salaries and benefits expense reflecting the impact of strategic cost saving initiatives, a $1.1 million decrease in professional services expense related to strategic projects in the prior quarter, a $643,000 decrease in technology and data processing expense, and a $598,000 decrease in marketing and advertising expense. INCOME TAXES The effective tax rate for the three months ended September 30, 2023 and 2022 was 17.6% and 17.0%, respectively, and the effective tax rate for the nine months ended September 30, 2023 and 2022 was 16.3% and 17.0%, respectively. BALANCE SHEET At September 30, 2023, total assets were $20.7 billion, an increase of $133.9 million or approximately 2.6% (annualized) from June 30, 2023, and an increase of $786.0 million or approximately 3.9% from September 30, 2022. Total assets increased from the prior quarter primarily due to a $216.7 million increase in LHFI (net of deferred fees and costs), partially offset by a $110.3 million decrease in investment securities due primarily to the decline in market value of the AFS securities portfolio due to the impact of market interest rates. Total assets increased from the prior year period primarily due to a $1.4 billion increase in LHFI (net of deferred fees and costs), partially offset by a $607.7 million decrease in investment securities due primarily to the sale of AFS securities in the first and third quarters of 2023. At September 30, 2023, LHFI (net of deferred fees and costs) totaled $15.3 billion, an increase of $216.7 million or 5.7% (annualized) from $15.1 billion at June 30, 2023. Average LHFI (net of deferred fees and costs) totaled $15.1 billion at September 30, 2023, an increase of $393.5 million or 10.6% (annualized) from the prior quarter. At September 30, 2023, both LHFI (net of deferred fees and costs) and average LHFI (net of deferred fees and costs) increased $1.4 billion from September 30, 2022. LHFI (net of deferred fees and costs) increased from the prior quarter primarily due to increases in the multifamily real estate and other commercial portfolios and increased from the same period in the prior year primarily due to increases in the commercial and industrial and commercial real estate non-owner occupied portfolios. At September 30, 2023, total investments were $3.0 billion, a decrease of $110.3 million from June 30, 2023 and a decrease of $607.7 million from September 30, 2022. AFS securities totaled $2.1 billion at September 30, 2023, $2.2 billion at June 30, 2023, and $2.7 billion at September 30, 2022. At September 30, 2023, total net unrealized losses on the AFS securities portfolio were $523.1 million, compared to $450.1 million at June 30, 2023 and $507.7 million at September 30, 2022. Held to maturity (“HTM”) securities are carried at cost and totaled $843.3 million at September 30, 2023, $849.6 million at June 30, 2023, and $841.3 million at September 30, 2022 and had net unrealized losses of $81.2 million at September 30, 2023, compared to $41.8 million at June 30, 2023 and $75.9 million at September 30, 2022. At September 30, 2023, total deposits were $16.8 billion, an increase of $374.5 million or approximately 9.1% (annualized) from June 30, 2023. Average deposits at September 30, 2023 increased from the prior quarter by $515.5 million or 12.6% (annualized). Total deposits at September 30, 2023 increased $240.3 million or 1.5% from September 30, 2022, and quarterly average deposits at September 30, 2023 increased $307.4 million or 1.9% from the same period in the prior year. Total deposits increased from the prior quarter and the prior year period primarily due to increases in interest bearing customer deposits and brokered deposits, partially offset by decreases in demand deposits. At September 30, 2023, total borrowings were $1.0 billion, a decrease of $299.6 million from June 30, 2023, and an increase of $351.1 million from September 30, 2022. Total borrowings decreased from the prior quarter primarily due to paydowns of short-term borrowings due to deposit growth and increased from the prior year period due to increased short-term borrowings used to fund loan growth. The following table shows the Company’s capital ratios at the quarters ended: September 30, June 30, September 30, 2023 2023 2022 Common equity Tier 1 capital ratio (2) 9.94 % 9.86 % 9.96 % Tier 1 capital ratio (2) 10.88 % 10.81 % 10.98 % Total capital ratio (2) 13.70 % 13.64 % 13.80 % Leverage ratio (Tier 1 capital to average assets) (2) 9.62 % 9.64 % 9.32 % Common equity to total assets 10.72 % 10.96 % 10.60 % Tangible common equity to tangible assets (1) 6.45 % 6.66 % 6.11 % _____________________________ During the third quarter of 2023, the Company declared and paid a quarterly dividend on the outstanding shares of Series A Preferred Stock of $171.88 per share (equivalent to $0.43 per outstanding depositary share), consistent with the second quarter of 2023 and the third quarter of 2022. During the third quarter of 2023, the Company also declared and paid cash dividends of $0.30 per common share, consistent with the second quarter of 2023 and the third quarter of 2022. _____________________________ (1) These are financial measures not calculated in accordance with generally accepted accounting principles (“GAAP”). For a reconciliation of these non-GAAP financial measures, see the “Alternative Performance Measures (non-GAAP)” section of the Key Financial Results. (2) All ratios at September 30, 2023 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed. ABOUT ATLANTIC UNION BANKSHARES CORPORATION Headquartered in Richmond, Virginia, Atlantic Union Bankshares Corporation (NYSE: AUB) is the holding company for Atlantic Union Bank. Atlantic Union Bank has 109 branches and 123 ATMs located throughout Virginia and in portions of Maryland and North Carolina as of September 30, 2023. 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 2023 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 19, 2023 during which the Company’s management will review the Company’s financial results for the third quarter 2023 and provide an update on recent activities. The listen-only webcast and the accompanying slides can be accessed at: https://edge.media-server.com/mmc/p/xamg8swa. For analysts who wish to participate in the conference call, please register at the following URL: https://register.vevent.com/register/BI2b71d4244e9e49b393decce9c92d4054. To participate in the conference call, you must use the link to receive an audio dial-in number and an Access PIN. A replay of the webcast, and the accompanying slides, will be available on the Company’s website for 90 days at: https://investors.atlanticunionbank.com/. NON-GAAP FINANCIAL MEASURES In reporting the results as of and for the period ended September 30, 2023, the Company has provided supplemental performance measures on a tax-equivalent, tangible, operating, adjusted or pre-tax pre-provision basis. These non-GAAP financial measures are a supplement to GAAP, which is used to prepare the Company’s financial statements, and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP. In addition, the Company’s non-GAAP financial measures may not be comparable to non-GAAP financial measures of other companies. The Company uses the non-GAAP financial measures discussed herein in its analysis of the Company’s performance. The Company’s management believes that these non-GAAP financial measures provide additional understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented without the impact of items or events that may obscure trends in the Company’s underlying performance. For a reconciliation of these measures to their most directly comparable GAAP measures and additional information about these non-GAAP financial measures, see “Alternative Performance Measures (non-GAAP)” in the tables within the section “Key Financial Results.” FORWARD-LOOKING STATEMENTS This press release and statements by our management may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include, without limitation, statements made in Mr. Asbury’s quotations, statements regarding our expectations with regard to our business, financial and operating results, including our deposit base, the impact of future economic conditions, the expected impact of our cost saving measures initiative in the second quarter of 2023, and statements that include other projections, predictions, expectations, or beliefs about future events or results or otherwise are not statements of historical fact. Such forward-looking statements are based on certain assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties, and other factors, some of which cannot be predicted or quantified, that may cause actual results, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements. Forward-looking statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” “continue,” “confidence,” or words of similar meaning or other statements concerning opinions or judgment of the Company and our management about future events. Although we believe that our expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of our existing knowledge of our business and operations, there can be no assurance that actual future results, performance, or achievements of, or trends affecting, us will not differ materially from any projected future results, performance, achievements or trends expressed or implied by such forward-looking statements. Actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of or changes in: market interest rates and their related impacts on macroeconomic conditions, customer and client behavior, our funding costs and our loan and securities portfolios; inflation and its impacts on economic growth and customer and client behavior; adverse developments in the financial industry generally, such as bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior; the sufficiency of liquidity; general economic and financial market conditions, in the United States generally and particularly in the markets in which we operate and which our loans are concentrated, including the effects of declines in real estate values, an increase in unemployment levels and slowdowns in economic growth; the failure to close our previously announced merger with American National when expected or at all because required regulatory, American National shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all, and the risk that any regulatory approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed merger; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement between the Company and American National; any change in the purchase accounting assumptions used regarding the American National assets acquired and liabilities assumed to determine the fair value and credit marks, particularly in light of the current rising interest rate environment; the possibility that the anticipated benefits of the proposed merger, including anticipated cost savings and strategic gains, are not realized when expected or at all; the proposed merger being more expensive or taking longer to complete than anticipated, including as a result of unexpected factors or events; the diversion of management’s attention from ongoing business operations and opportunities do to the proposed merger; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed merger; the dilutive effect of shares of the Company’s common stock to be issued at the completion of the proposed merger; changes in the Company’s or American National’s share price before closing; monetary and fiscal policies of the U.S. government, including policies of the U.S. Department of the Treasury and the Federal Reserve; the quality or composition of our loan or investment portfolios and changes therein; demand for loan products and financial services in our market areas; our ability to manage our growth or implement our growth strategy; the effectiveness of expense reduction plans; the introduction of new lines of business or new products and services; our ability to recruit and retain key employees; real estate values in our lending area; changes in accounting principles, standards, rules, and interpretations, and the related impact on our financial statements; an insufficient ACL or volatility in the ACL resulting from the CECL methodology, either alone or as that may be affected by inflation, changing interest rates, or other factors; our liquidity and capital positions; concentrations of loans secured by real estate, particularly commercial real estate; the effectiveness of our credit processes and management of our credit risk; our ability to compete in the market for financial services and increased competition from fintech companies; technological risks and developments, and cyber threats, attacks, or events; operational, technological, cultural, regulatory, legal, credit, and other risks associated with the exploration, consummation and integration of potential future acquisitions, whether involving stock or cash considerations; the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts or public health events, and of governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of our borrowers to satisfy their obligations to us, on the value of collateral securing loans, on the demand for our loans or our other products and services, on supply chains and methods used to distribute products and services, on incidents of cyberattack and fraud, on our liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of our business operations and on financial markets and economic growth; the discontinuation of LIBOR and its impact on the financial markets, and our ability to manage operational, legal, and compliance risks related to the discontinuation of LIBOR and implementation of one or more alternate reference rates; performance by our counterparties or vendors; deposit flows; the availability of financing and the terms thereof; the level of prepayments on loans and mortgage-backed securities; legislative or regulatory changes and requirements; actual or potential claims, damages, and fines related to litigation or government actions, which may result in, among other things, additional costs, fines, penalties, restrictions on our business activities, reputational harm, or other adverse consequences; the effects of changes in federal, state or local tax laws and regulations; any event or development that would cause us to conclude that there was an impairment of any asset, including intangible assets, such as goodwill; and other factors, many of which are beyond our control. Please also refer to such other factors as discussed throughout Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10‑K for the year ended December 31, 2022, Part II, Item 1A. Risk Factors in our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2023 and March 31, 2023, and related disclosures in other filings, which have been filed with the U.S. Securities and Exchange Commission (“SEC”) and are available on the SEC’s website at www.sec.gov. All risk factors and uncertainties described herein and therein should be considered in evaluating forward-looking statements, and all of the forward-looking statements are expressly qualified by the cautionary statements contained or referred to herein and therein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on the Company or our businesses or operations. Readers are cautioned not to rely too heavily on the forward-looking statements, and undue reliance should not be placed on such forward-looking statements. Forward-looking statements speak only as of the date they are made. We do not intend or assume any obligation to update, revise or clarify any forward-looking statements that may be made from time to time by or on behalf of the Company, whether as a result of new information, future events or otherwise. ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Nine Months Ended 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Results of Operations Interest and dividend income $ 247,159 $ 230,247 $ 171,156 $ 694,952 $ 458,367 Interest expense 95,218 78,163 20,441 237,483 37,954 Net interest income 151,941 152,084 150,715 457,469 420,413 Provision for credit losses 4,991 6,069 6,412 22,911 12,771 Net interest income after provision for credit losses 146,950 146,015 144,303 434,558 407,642 Noninterest income 27,094 24,197 25,584 60,918 94,023 Noninterest expenses 108,508 105,661 99,923 322,442 304,012 Income before income taxes 65,536 64,551 69,964 173,034 197,653 Income tax expense 11,519 9,310 11,894 28,123 33,667 Net income 54,017 55,241 58,070 144,911 163,986 Dividends on preferred stock 2,967 2,967 2,967 8,901 8,901 Net income available to common shareholders $ 51,050 $ 52,274 $ 55,103 $ 136,010 $ 155,085 Interest earned on earning assets (FTE) (1) $ 250,903 $ 233,913 $ 174,998 $ 706,150 $ 469,122 Net interest income (FTE) (1) 155,685 155,750 154,557 468,667 431,168 Total revenue (FTE) (1) 182,779 179,947 180,141 529,585 525,191 Pre-tax pre-provision adjusted operating earnings (7) 81,086 74,553 76,376 228,837 206,852 Key Ratios Earnings per common share, diluted $ 0.68 $ 0.70 $ 0.74 $ 1.81 $ 2.07 Return on average assets (ROA) 1.04 % 1.10 % 1.15 % 0.95 % 1.10 % Return on average equity (ROE) 8.76 % 9.00 % 9.45 % 7.93 % 8.72 % Return on average tangible common equity (ROTCE) (2) (3) 15.71 % 16.11 % 17.21 % 14.22 % 15.69 % Efficiency ratio 60.61 % 59.94 % 56.68 % 62.20 % 59.10 % Efficiency ratio (FTE) (1) 59.37 % 58.72 % 55.47 % 60.89 % 57.89 % Net interest margin 3.27 % 3.37 % 3.34 % 3.35 % 3.16 % Net interest margin (FTE) (1) 3.35 % 3.45 % 3.43 % 3.43 % 3.24 % Yields on earning assets (FTE) (1) 5.39 % 5.19 % 3.88 % 5.17 % 3.52 % Cost of interest-bearing liabilities 2.80 % 2.42 % 0.68 % 2.42 % 0.43 % Cost of deposits 1.97 % 1.61 % 0.37 % 1.63 % 0.21 % Cost of funds 2.04 % 1.74 % 0.45 % 1.74 % 0.28 % Operating Measures (4) Adjusted operating earnings $ 62,749 $ 58,348 $ 58,070 $ 171,286 $ 160,355 Adjusted operating earnings available to common shareholders 59,782 55,381 55,103 162,385 151,454 Adjusted operating earnings per common share, diluted $ 0.80 $ 0.74 $ 0.74 $ 2.17 $ 2.02 Adjusted operating ROA 1.21 % 1.16 % 1.15 % 1.12 % 1.08 % Adjusted operating ROE 10.17 % 9.51 % 9.45 % 9.37 % 8.53 % Adjusted operating ROTCE (2) (3) 18.31 % 17.03 % 17.21 % 16.88 % 15.34 % Adjusted operating efficiency ratio (FTE) (1)(6) 52.36 % 55.30 % 54.09 % 54.55 % 56.20 % Per Share Data Earnings per common share, basic $ 0.68 $ 0.70 $ 0.74 $ 1.81 $ 2.07 Earnings per common share, diluted 0.68 0.70 0.74 1.81 2.07 Cash dividends paid per common share 0.30 0.30 0.30 0.90 0.86 Market value per share 28.78 25.95 30.38 28.78 30.38 Book value per common share 29.82 30.31 28.46 29.82 28.46 Tangible book value per common share (2) 17.12 17.58 15.61 17.12 15.61 Price to earnings ratio, diluted 10.65 9.28 10.37 11.86 10.99 Price to book value per common share ratio 0.97 0.86 1.07 0.97 1.07 Price to tangible book value per common share ratio (2) 1.68 1.48 1.95 1.68 1.95 Weighted average common shares outstanding, basic 74,999,128 74,995,450 74,703,699 74,942,851 75,029,000 Weighted average common shares outstanding, diluted 74,999,128 74,995,557 74,705,054 74,943,999 75,034,084 Common shares outstanding at end of period 74,997,132 74,998,075 74,703,774 74,997,132 74,703,774 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Capital Ratios Common equity Tier 1 capital ratio (5) 9.94 % 9.86 % 9.96 % 9.94 % 9.96 % Tier 1 capital ratio (5) 10.88 % 10.81 % 10.98 % 10.88 % 10.98 % Total capital ratio (5) 13.70 % 13.64 % 13.80 % 13.70 % 13.80 % Leverage ratio (Tier 1 capital to average assets) (5) 9.62 % 9.64 % 9.32 % 9.62 % 9.32 % Common equity to total assets 10.72 % 10.96 % 10.60 % 10.72 % 10.60 % Tangible common equity to tangible assets (2) 6.45 % 6.66 % 6.11 % 6.45 % 6.11 % Financial Condition Assets $ 20,736,236 $ 20,602,332 $ 19,950,231 $ 20,736,236 $ 19,950,231 LHFI (net of deferred fees and costs) 15,283,620 15,066,930 13,918,720 15,283,620 13,918,720 Securities 3,032,982 3,143,235 3,640,722 3,032,982 3,640,722 Earning Assets 18,491,561 18,452,007 17,790,324 18,491,561 17,790,324 Goodwill 925,211 925,211 925,211 925,211 925,211 Amortizable intangibles, net 21,277 23,469 29,142 21,277 29,142 Deposits 16,786,505 16,411,987 16,546,216 16,786,505 16,546,216 Borrowings 1,020,669 1,320,301 669,558 1,020,669 669,558 Stockholders' equity 2,388,801 2,424,470 2,281,150 2,388,801 2,281,150 Tangible common equity (2) 1,275,956 1,309,433 1,160,440 1,275,956 1,160,440 LHFI, net of deferred fees and costs Construction and land development $ 1,132,940 $ 1,231,720 $ 1,068,201 $ 1,132,940 $ 1,068,201 Commercial real estate - owner occupied 1,975,281 1,952,189 1,953,872 1,975,281 1,953,872 Commercial real estate - non-owner occupied 4,148,218 4,113,318 3,900,325 4,148,218 3,900,325 Multifamily real estate 947,153 788,895 774,970 947,153 774,970 Commercial & Industrial 3,432,319 3,373,148 2,709,047 3,432,319 2,709,047 Residential 1-4 Family - Commercial 517,034 518,317 542,612 517,034 542,612 Residential 1-4 Family - Consumer 1,057,294 1,017,698 891,353 1,057,294 891,353 Residential 1-4 Family - Revolving 599,282 600,339 588,452 599,282 588,452 Auto 534,361 585,756 561,277 534,361 561,277 Consumer 126,151 134,709 172,776 126,151 172,776 Other Commercial 813,587 750,841 755,835 813,587 755,835 Total LHFI $ 15,283,620 $ 15,066,930 $ 13,918,720 $ 15,283,620 $ 13,918,720 Deposits Interest checking accounts $ 5,055,464 $ 4,824,192 $ 4,354,351 $ 5,055,464 $ 4,354,351 Money market accounts 3,472,953 3,413,936 3,962,470 3,472,953 3,962,470 Savings accounts 950,363 986,081 1,173,566 950,363 1,173,566 Customer time deposits of $250,000 and over 634,950 578,739 391,332 634,950 391,332 Other customer time deposits 2,011,106 1,813,031 1,352,440 2,011,106 1,352,440 Time deposits 2,646,056 2,391,770 1,743,772 2,646,056 1,743,772 Total interest-bearing customer deposits 12,124,836 11,615,979 11,234,159 12,124,836 11,234,159 Brokered deposits 516,720 485,702 21,119 516,720 21,119 Total interest-bearing deposits $ 12,641,556 $ 12,101,681 $ 11,255,278 $ 12,641,556 $ 11,255,278 Demand deposits 4,144,949 4,310,306 5,290,938 4,144,949 5,290,938 Total deposits $ 16,786,505 $ 16,411,987 $ 16,546,216 $ 16,786,505 $ 16,546,216 Averages Assets $ 20,596,189 $ 20,209,687 $ 19,980,500 $ 20,397,518 $ 19,873,644 LHFI (net of deferred fees and costs) 15,139,761 14,746,218 13,733,447 14,799,520 13,521,507 Loans held for sale 10,649 14,413 15,063 10,330 16,779 Securities 3,101,658 3,176,662 3,818,607 3,247,287 3,981,308 Earning assets 18,462,505 18,091,809 17,879,222 18,264,957 17,803,550 Deposits 16,795,611 16,280,154 16,488,224 16,499,045 16,397,790 Time deposits 2,914,004 2,500,966 1,745,224 2,571,114 1,726,341 Interest-bearing deposits 12,576,776 11,903,004 11,163,945 12,071,006 11,091,115 Borrowings 905,170 1,071,171 703,272 1,032,067 660,995 Interest-bearing liabilities 13,481,946 12,974,175 11,867,217 13,103,073 11,752,110 Stockholders' equity 2,446,902 2,460,741 2,436,999 2,443,833 2,513,522 Tangible common equity (2) 1,332,993 1,345,426 1,315,085 1,328,385 1,378,240 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Asset Quality Allowance for Credit Losses (ACL) Beginning balance, Allowance for loan and lease losses (ALLL) $ 120,683 $ 116,512 $ 104,184 $ 110,768 $ 99,787 Add: Recoveries 1,335 1,035 1,214 3,537 3,745 Less: Charge-offs 1,629 2,602 1,801 9,957 5,267 Add: Provision for loan losses 5,238 5,738 4,412 21,279 9,744 Ending balance, ALLL $ 125,627 $ 120,683 $ 108,009 $ 125,627 $ 108,009 Beginning balance, Reserve for unfunded commitment (RUC) $ 15,548 $ 15,199 $ 9,000 $ 13,675 $ 8,000 Add: Provision for unfunded commitments (246 ) 349 2,000 1,627 3,000 Ending balance, RUC $ 15,302 $ 15,548 $ 11,000 $ 15,302 $ 11,000 Total ACL $ 140,929 $ 136,231 $ 119,009 $ 140,929 $ 119,009 ACL / total LHFI 0.92 % 0.90 % 0.86 % 0.92 % 0.86 % ALLL / total LHFI 0.82 % 0.80 % 0.78 % 0.82 % 0.78 % Net charge-offs / total average LHFI (annualized) 0.01 % 0.04 % 0.02 % 0.06 % 0.02 % Provision for loan losses/ total average LHFI (annualized) 0.14 % 0.16 % 0.13 % 0.19 % 0.10 % Nonperforming Assets Construction and land development $ 355 $ 284 $ 421 $ 355 $ 421 Commercial real estate - owner occupied 3,882 3,978 4,883 3,882 4,883 Commercial real estate - non-owner occupied 5,999 6,473 1,923 5,999 1,923 Commercial & Industrial 2,256 2,738 2,289 2,256 2,289 Residential 1-4 Family - Commercial 1,833 1,844 1,962 1,833 1,962 Residential 1-4 Family - Consumer 10,368 10,033 11,121 10,368 11,121 Residential 1-4 Family - Revolving 3,572 3,461 3,583 3,572 3,583 Auto 361 291 318 361 318 Consumer — 3 — — — Nonaccrual loans $ 28,626 $ 29,105 $ 26,500 $ 28,626 $ 26,500 Foreclosed property 149 50 2,087 149 2,087 Total nonperforming assets (NPAs) $ 28,775 $ 29,155 $ 28,587 $ 28,775 $ 28,587 Construction and land development $ 25 $ 24 $ 115 $ 25 $ 115 Commercial real estate - owner occupied 2,395 2,463 3,517 2,395 3,517 Commercial real estate - non-owner occupied 2,835 2,763 621 2,835 621 Commercial & Industrial 792 810 526 792 526 Residential 1-4 Family - Commercial 817 693 308 817 308 Residential 1-4 Family - Consumer 3,632 1,716 680 3,632 680 Residential 1-4 Family - Revolving 1,034 1,259 1,255 1,034 1,255 Auto 229 243 148 229 148 Consumer 97 74 86 97 86 Other Commercial 15 66 95 15 95 LHFI ≥ 90 days and still accruing $ 11,871 $ 10,111 $ 7,351 $ 11,871 $ 7,351 Total NPAs and LHFI ≥ 90 days $ 40,646 $ 39,266 $ 35,938 $ 40,646 $ 35,938 NPAs / total LHFI 0.19 % 0.19 % 0.21 % 0.19 % 0.21 % NPAs / total assets 0.14 % 0.14 % 0.14 % 0.14 % 0.14 % ALLL / nonaccrual loans 438.86 % 414.65 % 407.58 % 438.86 % 407.58 % ALLL/ nonperforming assets 436.58 % 413.94 % 377.83 % 436.58 % 377.83 % 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Past Due Detail Construction and land development $ — $ 295 $ 120 $ — $ 120 Commercial real estate - owner occupied 3,501 602 7,337 3,501 7,337 Commercial real estate - non-owner occupied 4,573 — — 4,573 — Commercial & Industrial 3,049 254 796 3,049 796 Residential 1-4 Family - Commercial 744 1,076 1,410 744 1,410 Residential 1-4 Family - Consumer 1,000 1,504 1,123 1,000 1,123 Residential 1-4 Family - Revolving 2,326 1,729 1,115 2,326 1,115 Auto 2,703 2,877 1,876 2,703 1,876 Consumer 517 334 409 517 409 Other Commercial 3,545 23 — 3,545 — LHFI 30-59 days past due $ 21,958 $ 8,694 $ 14,186 $ 21,958 $ 14,186 Construction and land development $ 386 $ — $ 107 $ 386 $ 107 Commercial real estate - owner occupied 1,902 10 763 1,902 763 Commercial real estate - non-owner occupied 797 — 457 797 457 Multifamily real estate 150 — — 150 — Commercial & Industrial 576 400 3,128 576 3,128 Residential 1-4 Family - Commercial 67 189 97 67 97 Residential 1-4 Family - Consumer 1,775 2,813 1,449 1,775 1,449 Residential 1-4 Family - Revolving 602 1,114 1,081 602 1,081 Auto 339 564 257 339 257 Consumer 164 214 101 164 101 LHFI 60-89 days past due $ 6,758 $ 5,304 $ 7,440 $ 6,758 $ 7,440 Past Due and still accruing $ 40,587 $ 24,109 $ 28,977 $ 40,587 $ 28,977 Past Due and still accruing / total LHFI 0.27 % 0.16 % 0.21 % 0.27 % 0.21 % Alternative Performance Measures (non-GAAP) Net interest income (FTE) (1) Net interest income (GAAP) $ 151,941 $ 152,084 $ 150,715 $ 457,469 $ 420,413 FTE adjustment 3,744 3,666 3,842 11,198 10,755 Net interest income (FTE) (non-GAAP) $ 155,685 $ 155,750 $ 154,557 $ 468,667 $ 431,168 Noninterest income (GAAP) 27,094 24,197 25,584 60,918 94,023 Total revenue (FTE) (non-GAAP) $ 182,779 $ 179,947 $ 180,141 $ 529,585 $ 525,191 Average earning assets $ 18,462,505 $ 18,091,809 $ 17,879,222 $ 18,264,957 $ 17,803,550 Net interest margin 3.27 % 3.37 % 3.34 % 3.35 % 3.16 % Net interest margin (FTE) 3.35 % 3.45 % 3.43 % 3.43 % 3.24 % Tangible Assets (2) Ending assets (GAAP) $ 20,736,236 $ 20,602,332 $ 19,950,231 $ 20,736,236 $ 19,950,231 Less: Ending goodwill 925,211 925,211 925,211 925,211 925,211 Less: Ending amortizable intangibles 21,277 23,469 29,142 21,277 29,142 Ending tangible assets (non-GAAP) $ 19,789,748 $ 19,653,652 $ 18,995,878 $ 19,789,748 $ 18,995,878 Tangible Common Equity (2) Ending equity (GAAP) $ 2,388,801 $ 2,424,470 $ 2,281,150 $ 2,388,801 $ 2,281,150 Less: Ending goodwill 925,211 925,211 925,211 925,211 925,211 Less: Ending amortizable intangibles 21,277 23,469 29,142 21,277 29,142 Less: Perpetual preferred stock 166,357 166,357 166,357 166,357 166,357 Ending tangible common equity (non-GAAP) $ 1,275,956 $ 1,309,433 $ 1,160,440 $ 1,275,956 $ 1,160,440 Average equity (GAAP) $ 2,446,902 $ 2,460,741 $ 2,436,999 $ 2,443,833 $ 2,513,522 Less: Average goodwill 925,211 925,211 925,211 925,211 932,035 Less: Average amortizable intangibles 22,342 23,748 30,347 23,881 36,891 Less: Average perpetual preferred stock 166,356 166,356 166,356 166,356 166,356 Average tangible common equity (non-GAAP) $ 1,332,993 $ 1,345,426 $ 1,315,085 $ 1,328,385 $ 1,378,240 ROTCE (2)(3) Net income available to common shareholders (GAAP) $ 51,050 $ 52,274 $ 55,103 $ 136,010 $ 155,085 Plus: Amortization of intangibles, tax effected 1,732 1,751 1,959 5,283 6,663 Net income available to common shareholders before amortization of intangibles (non-GAAP) $ 52,782 $ 54,025 $ 57,062 $ 141,293 $ 161,748 Return on average tangible common equity (ROTCE) 15.71 % 16.11 % 17.21 % 14.22 % 15.69 % 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Operating Measures (4) Net income (GAAP) $ 54,017 $ 55,241 $ 58,070 $ 144,911 $ 163,986 Plus: Strategic cost saving initiatives, net of tax 6,851 3,109 — 9,959 — Plus: Merger-related costs, net of tax 1,965 — — 1,965 — Plus: Legal reserve, net of tax — — — 3,950 — Plus: Strategic branch closing and facility consolidation costs, net of tax — — — — 4,351 Less: (Loss) gain on sale of securities, net of tax (21,799 ) 2 — (32,384 ) (2 ) Less: Gain on sale-leaseback transaction, net of tax 21,883 — — 21,883 — Less: Gain on sale of DHFB, net of tax — — — — 7,984 Adjusted operating earnings (non-GAAP) 62,749 58,348 58,070 171,286 160,355 Less: Dividends on preferred stock 2,967 2,967 2,967 8,901 8,901 Adjusted operating earnings available to common shareholders (non-GAAP) $ 59,782 $ 55,381 $ 55,103 $ 162,385 $ 151,454 Operating Efficiency Ratio (1)(6) Noninterest expense (GAAP) $ 108,508 $ 105,661 $ 99,923 $ 322,442 $ 304,012 Less: Amortization of intangible assets 2,193 2,216 2,480 6,687 8,434 Less: Strategic cost saving initiatives 8,672 3,935 — 12,607 — Less: Merger-related costs 1,993 — — 1,993 — Less: Legal reserve — — — 5,000 — Less: Strategic branch closing and facility consolidation costs — — — — 5,508 Adjusted operating noninterest expense (non-GAAP) $ 95,650 $ 99,510 $ 97,443 $ 296,155 $ 290,070 Noninterest income (GAAP) $ 27,094 $ 24,197 $ 25,584 $ 60,918 $ 94,023 Less: (Loss) gain on sale of securities (27,594 ) 2 — (40,992 ) (2 ) Less: Gain on sale-leaseback transaction 27,700 — — 27,700 — Less: Gain on sale of DHFB — — — — 9,082 Adjusted operating noninterest income (non-GAAP) $ 26,988 $ 24,195 $ 25,584 $ 74,210 $ 84,943 Net interest income (FTE) (non-GAAP) (1) $ 155,685 $ 155,750 $ 154,557 $ 468,667 $ 431,168 Adjusted operating noninterest income (non-GAAP) 26,988 24,195 25,584 74,210 84,943 Total adjusted revenue (FTE) (non-GAAP) (1) $ 182,673 $ 179,945 $ 180,141 $ 542,877 $ 516,111 Efficiency ratio 60.61 % 59.94 % 56.68 % 62.20 % 59.10 % Efficiency ratio (FTE) (1) 59.37 % 58.72 % 55.47 % 60.89 % 57.89 % Adjusted operating efficiency ratio (FTE) (1)(6) 52.36 % 55.30 % 54.09 % 54.55 % 56.20 % Operating ROA & ROE (4) Adjusted operating earnings (non-GAAP) $ 62,749 $ 58,348 $ 58,070 $ 171,286 $ 160,355 Average assets (GAAP) $ 20,596,189 $ 20,209,687 $ 19,980,500 $ 20,397,518 $ 19,873,644 Return on average assets (ROA) (GAAP) 1.04 % 1.10 % 1.15 % 0.95 % 1.10 % Adjusted operating return on average assets (ROA) (non-GAAP) 1.21 % 1.16 % 1.15 % 1.12 % 1.08 % Average equity (GAAP) $ 2,446,902 $ 2,460,741 $ 2,436,999 $ 2,443,833 $ 2,513,522 Return on average equity (ROE) (GAAP) 8.76 % 9.00 % 9.45 % 7.93 % 8.72 % Adjusted operating return on average equity (ROE) (non-GAAP) 10.17 % 9.51 % 9.45 % 9.37 % 8.53 % Operating ROTCE (2)(3)(4) Adjusted operating earnings available to common shareholders (non-GAAP) $ 59,782 $ 55,381 $ 55,103 $ 162,385 $ 151,454 Plus: Amortization of intangibles, tax effected 1,732 1,751 1,959 5,283 6,663 Adjusted operating earnings available to common shareholders before amortization of intangibles (non-GAAP) $ 61,514 $ 57,132 $ 57,062 $ 167,668 $ 158,117 Average tangible common equity (non-GAAP) $ 1,332,993 $ 1,345,426 $ 1,315,085 $ 1,328,385 $ 1,378,240 Adjusted operating return on average tangible common equity (non-GAAP) 18.31 % 17.03 % 17.21 % 16.88 % 15.34 % Pre-tax pre-provision adjusted operating earnings (7) Net income (GAAP) $ 54,017 $ 55,241 $ 58,070 $ 144,911 $ 163,986 Plus: Provision for credit losses 4,991 6,069 6,412 22,911 12,771 Plus: Income tax expense 11,519 9,310 11,894 28,123 33,667 Plus: Strategic cost saving initiatives 8,672 3,935 — 12,607 — Plus: Merger-related costs 1,993 — — 1,993 — Plus: Legal reserve — — — 5,000 — Plus: Strategic branch closing and facility consolidation costs — — — — 5,508 Less: (Loss) gain on sale of securities (27,594 ) 2 — (40,992 ) (2 ) Less: Gain on sale-leaseback transaction 27,700 — — 27,700 — Less: Gain on sale of DHFB — — — — 9,082 Pre-tax pre-provision adjusted operating earnings (non-GAAP) $ 81,086 $ 74,553 $ 76,376 $ 228,837 $ 206,852 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) $ 78,119 $ 71,586 $ 73,409 $ 219,936 $ 197,951 Weighted average common shares outstanding, diluted 74,999,128 74,995,557 74,705,054 74,943,999 75,034,084 Pre-tax pre-provision earnings per common share, diluted $ 1.04 $ 0.95 $ 0.98 $ 2.93 $ 2.64 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Mortgage Origination Held for Sale Volume Refinance Volume $ 2,239 $ 4,076 $ 5,637 $ 9,767 $ 53,753 Purchase Volume 35,815 32,168 66,360 100,175 209,206 Total Mortgage loan originations held for sale $ 38,054 $ 36,244 $ 71,997 $ 109,942 $ 262,959 % of originations held for sale that are refinances 5.9 % 11.2 % 7.8 % 8.9 % 20.4 % Wealth Assets under management $ 4,675,523 $ 4,774,501 $ 4,065,059 $ 4,675,523 $ 4,065,059 Other Data End of period full-time employees 1,788 1,878 1,890 1,788 1,890 Number of full-service branches 109 109 114 109 114 Number of automatic transaction machines ("ATMs") 123 123 131 123 131 (1) These are non-GAAP financial measures. The Company believes net interest income (FTE), total revenue (FTE), and total adjusted revenue (FTE), which are used in computing net interest margin (FTE), efficiency ratio (FTE) and adjusted operating efficiency ratio (FTE), provide valuable additional insight into the net interest margin and the efficiency ratio by adjusting for differences in tax treatment of interest income sources. The entire FTE adjustment is attributable to interest income on earning assets, which is used in computing yield on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the FTE components. (2) These are non-GAAP financial measures. Tangible assets and tangible common equity are used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible assets, tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes will assist investors in assessing the capital of the Company and its ability to absorb potential losses. The Company believes tangible common equity is an important indication of its ability to grow organically and through business combinations as well as its ability to pay dividends and to engage in various capital management strategies. (3) These are non-GAAP financial measures. The Company believes that ROTCE is a meaningful supplement to GAAP financial measures and is useful to investors because it measures the performance of a business consistently across time without regard to whether components of the business were acquired or developed internally. (4) These are non-GAAP financial measures. Adjusted operating measures exclude, as applicable, strategic cost saving initiatives (principally composed of severance charges related to headcount reductions, costs related to modifying certain third party vendor contracts, and charges for exiting certain leases), merger-related costs, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic branch closing and related facility consolidation costs (principally composed of real estate, leases and other assets write downs, as well as severance and expense reduction initiatives), (loss) gain on sale of securities, gain on sale-leaseback transaction, and gain on sale of DHFB. The Company believes these non-GAAP adjusted measures provide investors with important information about the continuing economic results of the organization’s operations. (5) All ratios at September 30, 2023 are estimates and subject to change pending the Company’s filing of its FR Y9‑C. All other periods are presented as filed. (6) The adjusted operating efficiency ratio (FTE) excludes, as applicable, the amortization of intangible assets, strategic cost saving initiatives, merger-related costs, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic branch closing and related facility consolidation costs, (loss) gain on sale of securities, gain on sale-leaseback transaction, and gain on sale of DHFB. This measure is similar to the measure utilized by the Company when analyzing corporate performance and is also similar to the measure utilized for incentive compensation. The Company believes this adjusted measure provides investors with important information about the continuing economic results of the organization’s operations. (7) These are non-GAAP financial measures. Pre-tax pre-provision adjusted earnings excludes, as applicable, the provision for credit losses, which can fluctuate significantly from period-to-period under the CECL methodology, income tax expense, strategic cost saving initiatives, merger-related costs, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic branch closure initiatives and related facility consolidation costs, (loss) gain on sale of securities, gain on sale-leaseback transaction, and gain on sale of DHFB. The Company believes this adjusted measure provides investors with important information about the continuing economic results of the Company’s operations. ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) September 30, December 31, September 30, 2023 2022 2022 ASSETS (unaudited) (audited) (unaudited) Cash and cash equivalents: Cash and due from banks $ 233,526 $ 216,384 $ 177,969 Interest-bearing deposits in other banks 159,718 102,107 211,785 Federal funds sold 5,701 1,457 1,188 Total cash and cash equivalents 398,945 319,948 390,942 Securities available for sale, at fair value 2,084,928 2,741,816 2,717,323 Securities held to maturity, at carrying value 843,269 847,732 841,349 Restricted stock, at cost 104,785 120,213 82,050 Loans held for sale 6,608 3,936 12,889 Loans held for investment, net of deferred fees and costs 15,283,620 14,449,142 13,918,720 Less: allowance for loan and lease losses 125,627 110,768 108,009 Total loans held for investment, net 15,157,993 14,338,374 13,810,711 Premises and equipment, net 94,510 118,243 126,374 Goodwill 925,211 925,211 925,211 Amortizable intangibles, net 21,277 26,761 29,142 Bank owned life insurance 449,452 440,656 437,988 Other assets 649,258 578,248 576,252 Total assets $ 20,736,236 $ 20,461,138 $ 19,950,231 LIABILITIES Noninterest-bearing demand deposits $ 4,144,949 $ 4,883,239 $ 5,290,938 Interest-bearing deposits 12,641,556 11,048,438 11,255,278 Total deposits 16,786,505 15,931,677 16,546,216 Securities sold under agreements to repurchase 134,936 142,837 146,182 Other short-term borrowings 495,000 1,176,000 133,800 Long-term borrowings 390,733 389,863 389,576 Other liabilities 540,261 448,024 453,307 Total liabilities 18,347,435 18,088,401 17,669,081 Commitments and contingencies STOCKHOLDERS' EQUITY Preferred stock, $10.00 par value 173 173 173 Common stock, $1.33 par value 99,120 98,873 98,845 Additional paid-in capital 1,779,281 1,772,440 1,769,858 Retained earnings 988,133 919,537 874,393 Accumulated other comprehensive loss (477,906 ) (418,286 ) (462,119 ) Total stockholders' equity 2,388,801 2,372,737 2,281,150 Total liabilities and stockholders' equity $ 20,736,236 $ 20,461,138 $ 19,950,231 Common shares outstanding 74,997,132 74,712,622 74,703,774 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, 2023 2023 2022 2023 2022 Interest and dividend income: Interest and fees on loans $ 221,380 $ 205,172 $ 144,673 $ 616,544 $ 382,139 Interest on deposits in other banks 1,309 1,014 941 3,815 1,229 Interest and dividends on securities: Taxable 16,055 15,565 14,750 48,373 43,110 Nontaxable 8,415 8,496 10,792 26,220 31,889 Total interest and dividend income 247,159 230,247 171,156 694,952 458,367 Interest expense: Interest on deposits 83,590 65,267 15,386 200,690 25,966 Interest on short-term borrowings 6,499 8,044 1,229 22,106 1,805 Interest on long-term borrowings 5,129 4,852 3,826 14,687 10,183 Total interest expense 95,218 78,163 20,441 237,483 37,954 Net interest income 151,941 152,084 150,715 457,469 420,413 Provision for credit losses 4,991 6,069 6,412 22,911 12,771 Net interest income after provision for credit losses 146,950 146,015 144,303 434,558 407,642 Noninterest income: Service charges on deposit accounts 8,557 8,118 6,784 24,577 22,421 Other service charges, commissions and fees 2,632 1,693 1,770 6,071 5,134 Interchange fees 2,314 2,459 2,461 7,098 6,539 Fiduciary and asset management fees 4,549 4,359 4,134 13,169 18,329 Mortgage banking income 666 449 1,390 1,969 6,707 (Loss) gain on sale of securities (27,594 ) 2 — (40,992 ) (2 ) Bank owned life insurance income 2,973 2,870 3,445 8,671 8,858 Loan-related interest rate swap fees 2,695 2,316 2,050 6,450 8,510 Other operating income 30,302 1,931 3,550 33,905 17,527 Total noninterest income 27,094 24,197 25,584 60,918 94,023 Noninterest expenses: Salaries and benefits 57,449 62,019 56,600 179,996 170,203 Occupancy expenses 6,053 6,094 6,408 18,503 19,685 Furniture and equipment expenses 3,449 3,565 3,673 10,765 10,860 Technology and data processing 7,923 8,566 8,273 24,631 23,930 Professional services 3,291 4,433 3,504 11,138 12,274 Marketing and advertising expense 2,219 2,817 2,343 7,387 7,008 FDIC assessment premiums and other insurance 4,258 4,074 3,094 12,231 8,344 Franchise and other taxes 4,510 4,499 4,507 13,508 13,506 Loan-related expenses 1,388 1,619 1,575 4,560 5,218 Amortization of intangible assets 2,193 2,216 2,480 6,687 8,434 Other expenses 15,775 5,759 7,466 33,036 24,550 Total noninterest expenses 108,508 105,661 99,923 322,442 304,012 Income before income taxes 65,536 64,551 69,964 173,034 197,653 Income tax expense 11,519 9,310 11,894 28,123 33,667 Net income $ 54,017 $ 55,241 $ 58,070 144,911 163,986 Dividends on preferred stock 2,967 2,967 2,967 8,901 8,901 Net income available to common shareholders $ 51,050 $ 52,274 $ 55,103 $ 136,010 $ 155,085 Basic earnings per common share $ 0.68 $ 0.70 $ 0.74 $ 1.81 $ 2.07 Diluted earnings per common share $ 0.68 $ 0.70 $ 0.74 $ 1.81 $ 2.07 AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS) (UNAUDITED) (Dollars in thousands) For the Quarter Ended September 30, 2023 June 30, 2023 Average Balance Interest Income / Expense (1) Yield / Rate (1)(2) Average Balance Interest Income / Expense (1) Yield / Rate (1)(2) Assets: Securities: Taxable $ 1,799,675 $ 16,055 3.54 % $ 1,865,193 $ 15,565 3.35 % Tax-exempt 1,301,983 10,653 3.25 % 1,311,469 10,755 3.29 % Total securities 3,101,658 26,708 3.42 % 3,176,662 26,320 3.32 % LHFI, net of deferred fees and costs (3) 15,139,761 222,698 5.84 % 14,746,218 206,452 5.62 % Other earning assets 221,086 1,497 2.69 % 168,929 1,141 2.71 % Total earning assets 18,462,505 $ 250,903 5.39 % 18,091,809 $ 233,913 5.19 % Allowance for loan and lease losses (121,229 ) (117,643 ) Total non-earning assets 2,254,913 2,235,521 Total assets $ 20,596,189 $ 20,209,687 Liabilities and Stockholders' Equity: Interest-bearing deposits: Transaction and money market accounts $ 8,697,801 $ 57,378 2.62 % $ 8,387,473 $ 46,953 2.25 % Regular savings 964,971 499 0.21 % 1,014,565 430 0.17 % Time deposits 2,914,004 25,713 3.50 % 2,500,966 17,884 2.87 % Total interest-bearing deposits 12,576,776 83,590 2.64 % 11,903,004 65,267 2.20 % Other borrowings 905,170 11,628 5.10 % 1,071,171 12,896 4.83 % Total interest-bearing liabilities $ 13,481,946 $ 95,218 2.80 % $ 12,974,175 $ 78,163 2.42 % Noninterest-bearing liabilities: Demand deposits 4,218,835 4,377,150 Other liabilities 448,506 397,621 Total liabilities 18,149,287 17,748,946 Stockholders' equity 2,446,902 2,460,741 Total liabilities and stockholders' equity $ 20,596,189 $ 20,209,687 Net interest income $ 155,685 $ 155,750 Interest rate spread 2.59 % 2.77 % Cost of funds 2.04 % 1.74 % Net interest margin 3.35 % 3.45 % (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. View source version on businesswire.com: https://www.businesswire.com/news/home/20231019447738/en/Contacts Robert M. Gorman - (804) 523‑7828 Executive Vice President / Chief Financial Officer Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Atlantic Union Bankshares Reports Third Quarter Financial Results By: Atlantic Union Bankshares Corporation via Business Wire October 19, 2023 at 06:45 AM EDT Atlantic Union Bankshares Corporation (the “Company” or “Atlantic Union”) (NYSE: AUB) reported net income available to common shareholders of $51.1 million and basic and diluted earnings per common share of $0.68 for the third quarter of 2023 and adjusted operating earnings available to common shareholders(1) of $59.8 million and adjusted diluted operating earnings per common share(1) of $0.80 for the third quarter of 2023. “Atlantic Union delivered strong operating results in the third quarter,” said John C. Asbury, president and chief executive officer of Atlantic Union. “We were especially pleased with our customer deposit growth that more than funded loan growth during the quarter, negligible charge-offs, and the impact of our expense reduction actions taken earlier in the year. The proactive measures we have taken to manage this challenging environment are serving us well.” “We believe that our model of a diversified, traditional, full-service bank that delivers the products and services that our customers want and need combined with local decision making, responsiveness and client service orientation positively sets us apart from other banks, both larger and smaller. 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.” STRATEGIC ACTIONS Merger with American National Bankshares Inc. (“American National”) On July 25, 2023, the Company announced that it entered into a merger agreement to acquire American National. During the third quarter of 2023, the Company incurred pre-tax merger costs of approximately $2.0 million. Cost Saving Initiatives As previously disclosed, the Company initiated a series of strategic cost savings measures during the second quarter of 2023 that is expected to reduce the annual expense run rate by approximately $17 million. As a result of these measures, the Company incurred pre-tax expenses of $8.7 million in the third quarter of 2023 and $3.9 million in the second quarter of 2023, principally composed of severance charges related to headcount reductions, costs related to modifying certain third-party vendor contracts, and charges for exiting certain leases. Sale-Leaseback Transaction On September 20, 2023, Atlantic Union Bank (the “Bank”) executed a sale-leaseback transaction and sold 27 properties, which consisted of 25 branches and a drive thru and parking lot, each adjacent to a sold branch, to a single purchaser for an aggregate purchase price of $45.8 million. Concurrently, the Bank entered into absolute net lease agreements with the purchaser under which the Bank will lease each of the properties for an initial term of 17 years with specified renewal options. The sale-leaseback transaction resulted in a pre-tax gain of approximately $27.7 million during the third quarter of 2023, after transaction-related expenses. Available for Sale (“AFS”) Securities Sale Concurrent with the sale-leaseback transaction, also on September 20, 2023, the Company restructured a portion of its investment portfolio by selling low yielding AFS securities with a book value of $228.3 million, resulting in a pre-tax net loss of $27.7 million. The net proceeds from the securities sale transaction were reinvested into higher yielding AFS securities at the end of the third quarter of 2023. NET INTEREST INCOME For the third quarter of 2023, net interest income was $151.9 million, a decrease of $143,000 from $152.1 million in the second quarter of 2023. Net interest income (FTE)(1) was $155.7 million in the third quarter of 2023, a decrease of $65,000 from $155.8 million in the second quarter of 2023 due to higher deposit costs driven by increases in market interest rates, changes in the deposit mix as depositors continue to migrate to higher costing interest bearing deposit accounts, and growth in average deposit balances, partially offset by an increase in loan yields on variable rate loans due to increases in short-term interest rates during the quarter, as well as growth in average loans held for investment (“LHFI”). Our net interest margin decreased 10 basis points from the prior quarter to 3.27% at September 30, 2023, and our net interest margin (FTE)(1) decreased 10 basis points during the same period to 3.35%. Earning asset yields increased by 20 basis points to 5.39% in the third quarter of 2023 compared to the second quarter of 2023, primarily due to the impact of increases in market interest rates on loans and loan growth. Our cost of funds increased by 30 basis points to 2.04% at September 30, 2023 compared to the prior quarter, due primarily to higher deposit costs driven by higher rates and changes in the deposit mix as noted above. The Company’s net interest margin (FTE) (1) includes the impact of acquisition accounting fair value adjustments. Net accretion related to acquisition accounting was $1.1 million for the third quarter of 2023. The impact of net accretion in the second and third quarters of 2023 are reflected in the following table (dollars in thousands): Loan Deposit Borrowings Accretion Amortization Amortization Total For the quarter ended June 30, 2023 $ 1,073 $ (7) $ (213) $ 853 For the quarter ended September 30, 2023 1,300 (6) (215) 1,079 ASSET QUALITY Overview At September 30, 2023, nonperforming assets (“NPAs”) as a percentage of total LHFI was 0.19% and was unchanged from the prior quarter and included nonaccrual loans of $28.6 million. Accruing past due loans as a percentage of total LHFI totaled 27 basis points at September 30, 2023, an increase of 11 basis points from June 30, 2023, and an increase of 6 basis points from September 30, 2022. The increase in past due loan levels from June 30, 2023 was primarily within the 30-59 days past due category and resulted primarily from increases in past due credit relationships within the commercial real estate and commercial and industrial portfolios. Net charge-offs were 0.01% of total average LHFI (annualized) for the third quarter of 2023, a decrease of 3 basis points from June 30, 2023, and a decrease of 1 basis point from September 30, 2022. The allowance for credit losses (“ACL”) totaled $140.9 million at September 30, 2023, a $4.7 million increase from the prior quarter. Nonperforming Assets At September 30, 2023, NPAs totaled $28.8 million, compared to $29.2 million in the prior quarter. 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, 2023 2023 2023 2022 2022 Nonaccrual loans $ 28,626 $ 29,105 $ 29,082 $ 27,038 $ 26,500 Foreclosed properties 149 50 29 76 2,087 Total nonperforming assets $ 28,775 $ 29,155 $ 29,111 $ 27,114 $ 28,587 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, 2023 2023 2023 2022 2022 Beginning Balance $ 29,105 $ 29,082 $ 27,038 $ 26,500 $ 29,070 Net customer payments (1,947 ) (5,950 ) (1,755 ) (1,805 ) (3,725 ) Additions 1,651 6,685 4,151 2,935 1,302 Charge-offs (64 ) (712 ) (39 ) (461 ) (125 ) Loans returning to accruing status (119 ) — (313 ) (131 ) — Transfers to foreclosed property — — — — (22 ) Ending Balance $ 28,626 $ 29,105 $ 29,082 $ 27,038 $ 26,500 Past Due Loans At September 30, 2023, past due loans still accruing interest totaled $40.6 million or 0.27% of total LHFI, compared to $24.1 million or 0.16% of total LHFI at June 30, 2023, and $29.0 million or 0.21% of total LHFI at September 30, 2022. The increase in past due loan levels from June 30, 2023 was primarily within the 30-59 days past due category and driven by increases in past due credit relationships within the commercial real estate and commercial and industrial portfolios. Of the total past due loans still accruing interest, $11.9 million or 0.08% of total LHFI were loans past due 90 days or more at September 30, 2023, compared to $10.1 million or 0.07% of total LHFI at June 30, 2023, and $7.4 million or 0.05% of total LHFI at September 30, 2022. Allowance for Credit Losses At September 30, 2023, the ACL was $140.9 million and included an allowance for loan and lease losses (“ALLL”) of $125.6 million and a reserve for unfunded commitments of $15.3 million. The ACL at September 30, 2023 increased $4.7 million from June 30, 2023 due to loan growth in the third quarter of 2023 and the impact of continued uncertainty in the economic outlook. The ACL as a percentage of total LHFI was 0.92% at September 30, 2023, an increase of 2 basis points from June 30, 2023. The ALLL as a percentage of total LHFI was 0.82% at September 30, 2023, compared to 0.80% at June 30, 2023. Net Charge-offs Net charge-offs were $294,000 or 0.01% of total average LHFI on an annualized basis for the third quarter of 2023, compared to $1.6 million or 0.04% (annualized) for the second quarter of 2023, and $587,000 or 0.02% (annualized) for the third quarter of 2022. Provision for Credit Losses For the third quarter of 2023, the Company recorded a provision for credit losses of $5.0 million, compared to a provision for credit losses of $6.1 million in the prior quarter, and a provision for credit losses of $6.4 million in the third quarter of 2022. NONINTEREST INCOME Noninterest income increased $2.9 million to $27.1 million for the third quarter of 2023 from $24.2 million in the prior quarter, primarily driven by a $939,000 increase in other service charges, commissions and fees primarily due to a merchant services vendor contract signing bonus, a $714,000 increase in equity method investment income (included within other operating income), a $439,000 increase in service charges on deposits accounts, and a $379,000 increase in loan-related interest rate swap fees due to several new swap transactions. Noninterest income in the third quarter also included a $27.7 million gain related to the sale-leaseback transaction, included in other operating income, which was almost wholly offset by $27.6 million of losses incurred on the sale of AFS securities in the third quarter of 2023. NONINTEREST EXPENSE Noninterest expense increased $2.8 million to $108.5 million for the third quarter of 2023 from $105.7 million in the prior quarter, primarily driven by a $10.0 million increase in other expenses, which includes $8.7 million in expenses associated with strategic cost saving initiatives and $2.0 million in merger-related costs. Adjusted operating noninterest expense,(1) which excludes amortization of intangible assets ($2.2 million in both the third quarter and second quarter of 2023), expenses associated with strategic cost savings initiatives ($8.7 million in the third quarter and $3.9 million in the second quarter of 2023), and merger-related costs associated with the American National merger ($2.0 million in the third quarter of 2023), decreased $3.9 million to $95.7 million for the third quarter of 2023 from $99.5 million in the prior quarter. The decrease in adjusted operating noninterest expense(1) was primarily due to a $1.6 million decrease in salaries and benefits expense reflecting the impact of strategic cost saving initiatives, a $1.1 million decrease in professional services expense related to strategic projects in the prior quarter, a $643,000 decrease in technology and data processing expense, and a $598,000 decrease in marketing and advertising expense. INCOME TAXES The effective tax rate for the three months ended September 30, 2023 and 2022 was 17.6% and 17.0%, respectively, and the effective tax rate for the nine months ended September 30, 2023 and 2022 was 16.3% and 17.0%, respectively. BALANCE SHEET At September 30, 2023, total assets were $20.7 billion, an increase of $133.9 million or approximately 2.6% (annualized) from June 30, 2023, and an increase of $786.0 million or approximately 3.9% from September 30, 2022. Total assets increased from the prior quarter primarily due to a $216.7 million increase in LHFI (net of deferred fees and costs), partially offset by a $110.3 million decrease in investment securities due primarily to the decline in market value of the AFS securities portfolio due to the impact of market interest rates. Total assets increased from the prior year period primarily due to a $1.4 billion increase in LHFI (net of deferred fees and costs), partially offset by a $607.7 million decrease in investment securities due primarily to the sale of AFS securities in the first and third quarters of 2023. At September 30, 2023, LHFI (net of deferred fees and costs) totaled $15.3 billion, an increase of $216.7 million or 5.7% (annualized) from $15.1 billion at June 30, 2023. Average LHFI (net of deferred fees and costs) totaled $15.1 billion at September 30, 2023, an increase of $393.5 million or 10.6% (annualized) from the prior quarter. At September 30, 2023, both LHFI (net of deferred fees and costs) and average LHFI (net of deferred fees and costs) increased $1.4 billion from September 30, 2022. LHFI (net of deferred fees and costs) increased from the prior quarter primarily due to increases in the multifamily real estate and other commercial portfolios and increased from the same period in the prior year primarily due to increases in the commercial and industrial and commercial real estate non-owner occupied portfolios. At September 30, 2023, total investments were $3.0 billion, a decrease of $110.3 million from June 30, 2023 and a decrease of $607.7 million from September 30, 2022. AFS securities totaled $2.1 billion at September 30, 2023, $2.2 billion at June 30, 2023, and $2.7 billion at September 30, 2022. At September 30, 2023, total net unrealized losses on the AFS securities portfolio were $523.1 million, compared to $450.1 million at June 30, 2023 and $507.7 million at September 30, 2022. Held to maturity (“HTM”) securities are carried at cost and totaled $843.3 million at September 30, 2023, $849.6 million at June 30, 2023, and $841.3 million at September 30, 2022 and had net unrealized losses of $81.2 million at September 30, 2023, compared to $41.8 million at June 30, 2023 and $75.9 million at September 30, 2022. At September 30, 2023, total deposits were $16.8 billion, an increase of $374.5 million or approximately 9.1% (annualized) from June 30, 2023. Average deposits at September 30, 2023 increased from the prior quarter by $515.5 million or 12.6% (annualized). Total deposits at September 30, 2023 increased $240.3 million or 1.5% from September 30, 2022, and quarterly average deposits at September 30, 2023 increased $307.4 million or 1.9% from the same period in the prior year. Total deposits increased from the prior quarter and the prior year period primarily due to increases in interest bearing customer deposits and brokered deposits, partially offset by decreases in demand deposits. At September 30, 2023, total borrowings were $1.0 billion, a decrease of $299.6 million from June 30, 2023, and an increase of $351.1 million from September 30, 2022. Total borrowings decreased from the prior quarter primarily due to paydowns of short-term borrowings due to deposit growth and increased from the prior year period due to increased short-term borrowings used to fund loan growth. The following table shows the Company’s capital ratios at the quarters ended: September 30, June 30, September 30, 2023 2023 2022 Common equity Tier 1 capital ratio (2) 9.94 % 9.86 % 9.96 % Tier 1 capital ratio (2) 10.88 % 10.81 % 10.98 % Total capital ratio (2) 13.70 % 13.64 % 13.80 % Leverage ratio (Tier 1 capital to average assets) (2) 9.62 % 9.64 % 9.32 % Common equity to total assets 10.72 % 10.96 % 10.60 % Tangible common equity to tangible assets (1) 6.45 % 6.66 % 6.11 % _____________________________ During the third quarter of 2023, the Company declared and paid a quarterly dividend on the outstanding shares of Series A Preferred Stock of $171.88 per share (equivalent to $0.43 per outstanding depositary share), consistent with the second quarter of 2023 and the third quarter of 2022. During the third quarter of 2023, the Company also declared and paid cash dividends of $0.30 per common share, consistent with the second quarter of 2023 and the third quarter of 2022. _____________________________ (1) These are financial measures not calculated in accordance with generally accepted accounting principles (“GAAP”). For a reconciliation of these non-GAAP financial measures, see the “Alternative Performance Measures (non-GAAP)” section of the Key Financial Results. (2) All ratios at September 30, 2023 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed. ABOUT ATLANTIC UNION BANKSHARES CORPORATION Headquartered in Richmond, Virginia, Atlantic Union Bankshares Corporation (NYSE: AUB) is the holding company for Atlantic Union Bank. Atlantic Union Bank has 109 branches and 123 ATMs located throughout Virginia and in portions of Maryland and North Carolina as of September 30, 2023. 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 2023 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 19, 2023 during which the Company’s management will review the Company’s financial results for the third quarter 2023 and provide an update on recent activities. The listen-only webcast and the accompanying slides can be accessed at: https://edge.media-server.com/mmc/p/xamg8swa. For analysts who wish to participate in the conference call, please register at the following URL: https://register.vevent.com/register/BI2b71d4244e9e49b393decce9c92d4054. To participate in the conference call, you must use the link to receive an audio dial-in number and an Access PIN. A replay of the webcast, and the accompanying slides, will be available on the Company’s website for 90 days at: https://investors.atlanticunionbank.com/. NON-GAAP FINANCIAL MEASURES In reporting the results as of and for the period ended September 30, 2023, the Company has provided supplemental performance measures on a tax-equivalent, tangible, operating, adjusted or pre-tax pre-provision basis. These non-GAAP financial measures are a supplement to GAAP, which is used to prepare the Company’s financial statements, and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP. In addition, the Company’s non-GAAP financial measures may not be comparable to non-GAAP financial measures of other companies. The Company uses the non-GAAP financial measures discussed herein in its analysis of the Company’s performance. The Company’s management believes that these non-GAAP financial measures provide additional understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented without the impact of items or events that may obscure trends in the Company’s underlying performance. For a reconciliation of these measures to their most directly comparable GAAP measures and additional information about these non-GAAP financial measures, see “Alternative Performance Measures (non-GAAP)” in the tables within the section “Key Financial Results.” FORWARD-LOOKING STATEMENTS This press release and statements by our management may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include, without limitation, statements made in Mr. Asbury’s quotations, statements regarding our expectations with regard to our business, financial and operating results, including our deposit base, the impact of future economic conditions, the expected impact of our cost saving measures initiative in the second quarter of 2023, and statements that include other projections, predictions, expectations, or beliefs about future events or results or otherwise are not statements of historical fact. Such forward-looking statements are based on certain assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties, and other factors, some of which cannot be predicted or quantified, that may cause actual results, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements. Forward-looking statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” “continue,” “confidence,” or words of similar meaning or other statements concerning opinions or judgment of the Company and our management about future events. Although we believe that our expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of our existing knowledge of our business and operations, there can be no assurance that actual future results, performance, or achievements of, or trends affecting, us will not differ materially from any projected future results, performance, achievements or trends expressed or implied by such forward-looking statements. Actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of or changes in: market interest rates and their related impacts on macroeconomic conditions, customer and client behavior, our funding costs and our loan and securities portfolios; inflation and its impacts on economic growth and customer and client behavior; adverse developments in the financial industry generally, such as bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior; the sufficiency of liquidity; general economic and financial market conditions, in the United States generally and particularly in the markets in which we operate and which our loans are concentrated, including the effects of declines in real estate values, an increase in unemployment levels and slowdowns in economic growth; the failure to close our previously announced merger with American National when expected or at all because required regulatory, American National shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all, and the risk that any regulatory approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed merger; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement between the Company and American National; any change in the purchase accounting assumptions used regarding the American National assets acquired and liabilities assumed to determine the fair value and credit marks, particularly in light of the current rising interest rate environment; the possibility that the anticipated benefits of the proposed merger, including anticipated cost savings and strategic gains, are not realized when expected or at all; the proposed merger being more expensive or taking longer to complete than anticipated, including as a result of unexpected factors or events; the diversion of management’s attention from ongoing business operations and opportunities do to the proposed merger; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed merger; the dilutive effect of shares of the Company’s common stock to be issued at the completion of the proposed merger; changes in the Company’s or American National’s share price before closing; monetary and fiscal policies of the U.S. government, including policies of the U.S. Department of the Treasury and the Federal Reserve; the quality or composition of our loan or investment portfolios and changes therein; demand for loan products and financial services in our market areas; our ability to manage our growth or implement our growth strategy; the effectiveness of expense reduction plans; the introduction of new lines of business or new products and services; our ability to recruit and retain key employees; real estate values in our lending area; changes in accounting principles, standards, rules, and interpretations, and the related impact on our financial statements; an insufficient ACL or volatility in the ACL resulting from the CECL methodology, either alone or as that may be affected by inflation, changing interest rates, or other factors; our liquidity and capital positions; concentrations of loans secured by real estate, particularly commercial real estate; the effectiveness of our credit processes and management of our credit risk; our ability to compete in the market for financial services and increased competition from fintech companies; technological risks and developments, and cyber threats, attacks, or events; operational, technological, cultural, regulatory, legal, credit, and other risks associated with the exploration, consummation and integration of potential future acquisitions, whether involving stock or cash considerations; the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts or public health events, and of governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of our borrowers to satisfy their obligations to us, on the value of collateral securing loans, on the demand for our loans or our other products and services, on supply chains and methods used to distribute products and services, on incidents of cyberattack and fraud, on our liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of our business operations and on financial markets and economic growth; the discontinuation of LIBOR and its impact on the financial markets, and our ability to manage operational, legal, and compliance risks related to the discontinuation of LIBOR and implementation of one or more alternate reference rates; performance by our counterparties or vendors; deposit flows; the availability of financing and the terms thereof; the level of prepayments on loans and mortgage-backed securities; legislative or regulatory changes and requirements; actual or potential claims, damages, and fines related to litigation or government actions, which may result in, among other things, additional costs, fines, penalties, restrictions on our business activities, reputational harm, or other adverse consequences; the effects of changes in federal, state or local tax laws and regulations; any event or development that would cause us to conclude that there was an impairment of any asset, including intangible assets, such as goodwill; and other factors, many of which are beyond our control. Please also refer to such other factors as discussed throughout Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10‑K for the year ended December 31, 2022, Part II, Item 1A. Risk Factors in our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2023 and March 31, 2023, and related disclosures in other filings, which have been filed with the U.S. Securities and Exchange Commission (“SEC”) and are available on the SEC’s website at www.sec.gov. All risk factors and uncertainties described herein and therein should be considered in evaluating forward-looking statements, and all of the forward-looking statements are expressly qualified by the cautionary statements contained or referred to herein and therein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on the Company or our businesses or operations. Readers are cautioned not to rely too heavily on the forward-looking statements, and undue reliance should not be placed on such forward-looking statements. Forward-looking statements speak only as of the date they are made. We do not intend or assume any obligation to update, revise or clarify any forward-looking statements that may be made from time to time by or on behalf of the Company, whether as a result of new information, future events or otherwise. ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Nine Months Ended 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Results of Operations Interest and dividend income $ 247,159 $ 230,247 $ 171,156 $ 694,952 $ 458,367 Interest expense 95,218 78,163 20,441 237,483 37,954 Net interest income 151,941 152,084 150,715 457,469 420,413 Provision for credit losses 4,991 6,069 6,412 22,911 12,771 Net interest income after provision for credit losses 146,950 146,015 144,303 434,558 407,642 Noninterest income 27,094 24,197 25,584 60,918 94,023 Noninterest expenses 108,508 105,661 99,923 322,442 304,012 Income before income taxes 65,536 64,551 69,964 173,034 197,653 Income tax expense 11,519 9,310 11,894 28,123 33,667 Net income 54,017 55,241 58,070 144,911 163,986 Dividends on preferred stock 2,967 2,967 2,967 8,901 8,901 Net income available to common shareholders $ 51,050 $ 52,274 $ 55,103 $ 136,010 $ 155,085 Interest earned on earning assets (FTE) (1) $ 250,903 $ 233,913 $ 174,998 $ 706,150 $ 469,122 Net interest income (FTE) (1) 155,685 155,750 154,557 468,667 431,168 Total revenue (FTE) (1) 182,779 179,947 180,141 529,585 525,191 Pre-tax pre-provision adjusted operating earnings (7) 81,086 74,553 76,376 228,837 206,852 Key Ratios Earnings per common share, diluted $ 0.68 $ 0.70 $ 0.74 $ 1.81 $ 2.07 Return on average assets (ROA) 1.04 % 1.10 % 1.15 % 0.95 % 1.10 % Return on average equity (ROE) 8.76 % 9.00 % 9.45 % 7.93 % 8.72 % Return on average tangible common equity (ROTCE) (2) (3) 15.71 % 16.11 % 17.21 % 14.22 % 15.69 % Efficiency ratio 60.61 % 59.94 % 56.68 % 62.20 % 59.10 % Efficiency ratio (FTE) (1) 59.37 % 58.72 % 55.47 % 60.89 % 57.89 % Net interest margin 3.27 % 3.37 % 3.34 % 3.35 % 3.16 % Net interest margin (FTE) (1) 3.35 % 3.45 % 3.43 % 3.43 % 3.24 % Yields on earning assets (FTE) (1) 5.39 % 5.19 % 3.88 % 5.17 % 3.52 % Cost of interest-bearing liabilities 2.80 % 2.42 % 0.68 % 2.42 % 0.43 % Cost of deposits 1.97 % 1.61 % 0.37 % 1.63 % 0.21 % Cost of funds 2.04 % 1.74 % 0.45 % 1.74 % 0.28 % Operating Measures (4) Adjusted operating earnings $ 62,749 $ 58,348 $ 58,070 $ 171,286 $ 160,355 Adjusted operating earnings available to common shareholders 59,782 55,381 55,103 162,385 151,454 Adjusted operating earnings per common share, diluted $ 0.80 $ 0.74 $ 0.74 $ 2.17 $ 2.02 Adjusted operating ROA 1.21 % 1.16 % 1.15 % 1.12 % 1.08 % Adjusted operating ROE 10.17 % 9.51 % 9.45 % 9.37 % 8.53 % Adjusted operating ROTCE (2) (3) 18.31 % 17.03 % 17.21 % 16.88 % 15.34 % Adjusted operating efficiency ratio (FTE) (1)(6) 52.36 % 55.30 % 54.09 % 54.55 % 56.20 % Per Share Data Earnings per common share, basic $ 0.68 $ 0.70 $ 0.74 $ 1.81 $ 2.07 Earnings per common share, diluted 0.68 0.70 0.74 1.81 2.07 Cash dividends paid per common share 0.30 0.30 0.30 0.90 0.86 Market value per share 28.78 25.95 30.38 28.78 30.38 Book value per common share 29.82 30.31 28.46 29.82 28.46 Tangible book value per common share (2) 17.12 17.58 15.61 17.12 15.61 Price to earnings ratio, diluted 10.65 9.28 10.37 11.86 10.99 Price to book value per common share ratio 0.97 0.86 1.07 0.97 1.07 Price to tangible book value per common share ratio (2) 1.68 1.48 1.95 1.68 1.95 Weighted average common shares outstanding, basic 74,999,128 74,995,450 74,703,699 74,942,851 75,029,000 Weighted average common shares outstanding, diluted 74,999,128 74,995,557 74,705,054 74,943,999 75,034,084 Common shares outstanding at end of period 74,997,132 74,998,075 74,703,774 74,997,132 74,703,774 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Capital Ratios Common equity Tier 1 capital ratio (5) 9.94 % 9.86 % 9.96 % 9.94 % 9.96 % Tier 1 capital ratio (5) 10.88 % 10.81 % 10.98 % 10.88 % 10.98 % Total capital ratio (5) 13.70 % 13.64 % 13.80 % 13.70 % 13.80 % Leverage ratio (Tier 1 capital to average assets) (5) 9.62 % 9.64 % 9.32 % 9.62 % 9.32 % Common equity to total assets 10.72 % 10.96 % 10.60 % 10.72 % 10.60 % Tangible common equity to tangible assets (2) 6.45 % 6.66 % 6.11 % 6.45 % 6.11 % Financial Condition Assets $ 20,736,236 $ 20,602,332 $ 19,950,231 $ 20,736,236 $ 19,950,231 LHFI (net of deferred fees and costs) 15,283,620 15,066,930 13,918,720 15,283,620 13,918,720 Securities 3,032,982 3,143,235 3,640,722 3,032,982 3,640,722 Earning Assets 18,491,561 18,452,007 17,790,324 18,491,561 17,790,324 Goodwill 925,211 925,211 925,211 925,211 925,211 Amortizable intangibles, net 21,277 23,469 29,142 21,277 29,142 Deposits 16,786,505 16,411,987 16,546,216 16,786,505 16,546,216 Borrowings 1,020,669 1,320,301 669,558 1,020,669 669,558 Stockholders' equity 2,388,801 2,424,470 2,281,150 2,388,801 2,281,150 Tangible common equity (2) 1,275,956 1,309,433 1,160,440 1,275,956 1,160,440 LHFI, net of deferred fees and costs Construction and land development $ 1,132,940 $ 1,231,720 $ 1,068,201 $ 1,132,940 $ 1,068,201 Commercial real estate - owner occupied 1,975,281 1,952,189 1,953,872 1,975,281 1,953,872 Commercial real estate - non-owner occupied 4,148,218 4,113,318 3,900,325 4,148,218 3,900,325 Multifamily real estate 947,153 788,895 774,970 947,153 774,970 Commercial & Industrial 3,432,319 3,373,148 2,709,047 3,432,319 2,709,047 Residential 1-4 Family - Commercial 517,034 518,317 542,612 517,034 542,612 Residential 1-4 Family - Consumer 1,057,294 1,017,698 891,353 1,057,294 891,353 Residential 1-4 Family - Revolving 599,282 600,339 588,452 599,282 588,452 Auto 534,361 585,756 561,277 534,361 561,277 Consumer 126,151 134,709 172,776 126,151 172,776 Other Commercial 813,587 750,841 755,835 813,587 755,835 Total LHFI $ 15,283,620 $ 15,066,930 $ 13,918,720 $ 15,283,620 $ 13,918,720 Deposits Interest checking accounts $ 5,055,464 $ 4,824,192 $ 4,354,351 $ 5,055,464 $ 4,354,351 Money market accounts 3,472,953 3,413,936 3,962,470 3,472,953 3,962,470 Savings accounts 950,363 986,081 1,173,566 950,363 1,173,566 Customer time deposits of $250,000 and over 634,950 578,739 391,332 634,950 391,332 Other customer time deposits 2,011,106 1,813,031 1,352,440 2,011,106 1,352,440 Time deposits 2,646,056 2,391,770 1,743,772 2,646,056 1,743,772 Total interest-bearing customer deposits 12,124,836 11,615,979 11,234,159 12,124,836 11,234,159 Brokered deposits 516,720 485,702 21,119 516,720 21,119 Total interest-bearing deposits $ 12,641,556 $ 12,101,681 $ 11,255,278 $ 12,641,556 $ 11,255,278 Demand deposits 4,144,949 4,310,306 5,290,938 4,144,949 5,290,938 Total deposits $ 16,786,505 $ 16,411,987 $ 16,546,216 $ 16,786,505 $ 16,546,216 Averages Assets $ 20,596,189 $ 20,209,687 $ 19,980,500 $ 20,397,518 $ 19,873,644 LHFI (net of deferred fees and costs) 15,139,761 14,746,218 13,733,447 14,799,520 13,521,507 Loans held for sale 10,649 14,413 15,063 10,330 16,779 Securities 3,101,658 3,176,662 3,818,607 3,247,287 3,981,308 Earning assets 18,462,505 18,091,809 17,879,222 18,264,957 17,803,550 Deposits 16,795,611 16,280,154 16,488,224 16,499,045 16,397,790 Time deposits 2,914,004 2,500,966 1,745,224 2,571,114 1,726,341 Interest-bearing deposits 12,576,776 11,903,004 11,163,945 12,071,006 11,091,115 Borrowings 905,170 1,071,171 703,272 1,032,067 660,995 Interest-bearing liabilities 13,481,946 12,974,175 11,867,217 13,103,073 11,752,110 Stockholders' equity 2,446,902 2,460,741 2,436,999 2,443,833 2,513,522 Tangible common equity (2) 1,332,993 1,345,426 1,315,085 1,328,385 1,378,240 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Asset Quality Allowance for Credit Losses (ACL) Beginning balance, Allowance for loan and lease losses (ALLL) $ 120,683 $ 116,512 $ 104,184 $ 110,768 $ 99,787 Add: Recoveries 1,335 1,035 1,214 3,537 3,745 Less: Charge-offs 1,629 2,602 1,801 9,957 5,267 Add: Provision for loan losses 5,238 5,738 4,412 21,279 9,744 Ending balance, ALLL $ 125,627 $ 120,683 $ 108,009 $ 125,627 $ 108,009 Beginning balance, Reserve for unfunded commitment (RUC) $ 15,548 $ 15,199 $ 9,000 $ 13,675 $ 8,000 Add: Provision for unfunded commitments (246 ) 349 2,000 1,627 3,000 Ending balance, RUC $ 15,302 $ 15,548 $ 11,000 $ 15,302 $ 11,000 Total ACL $ 140,929 $ 136,231 $ 119,009 $ 140,929 $ 119,009 ACL / total LHFI 0.92 % 0.90 % 0.86 % 0.92 % 0.86 % ALLL / total LHFI 0.82 % 0.80 % 0.78 % 0.82 % 0.78 % Net charge-offs / total average LHFI (annualized) 0.01 % 0.04 % 0.02 % 0.06 % 0.02 % Provision for loan losses/ total average LHFI (annualized) 0.14 % 0.16 % 0.13 % 0.19 % 0.10 % Nonperforming Assets Construction and land development $ 355 $ 284 $ 421 $ 355 $ 421 Commercial real estate - owner occupied 3,882 3,978 4,883 3,882 4,883 Commercial real estate - non-owner occupied 5,999 6,473 1,923 5,999 1,923 Commercial & Industrial 2,256 2,738 2,289 2,256 2,289 Residential 1-4 Family - Commercial 1,833 1,844 1,962 1,833 1,962 Residential 1-4 Family - Consumer 10,368 10,033 11,121 10,368 11,121 Residential 1-4 Family - Revolving 3,572 3,461 3,583 3,572 3,583 Auto 361 291 318 361 318 Consumer — 3 — — — Nonaccrual loans $ 28,626 $ 29,105 $ 26,500 $ 28,626 $ 26,500 Foreclosed property 149 50 2,087 149 2,087 Total nonperforming assets (NPAs) $ 28,775 $ 29,155 $ 28,587 $ 28,775 $ 28,587 Construction and land development $ 25 $ 24 $ 115 $ 25 $ 115 Commercial real estate - owner occupied 2,395 2,463 3,517 2,395 3,517 Commercial real estate - non-owner occupied 2,835 2,763 621 2,835 621 Commercial & Industrial 792 810 526 792 526 Residential 1-4 Family - Commercial 817 693 308 817 308 Residential 1-4 Family - Consumer 3,632 1,716 680 3,632 680 Residential 1-4 Family - Revolving 1,034 1,259 1,255 1,034 1,255 Auto 229 243 148 229 148 Consumer 97 74 86 97 86 Other Commercial 15 66 95 15 95 LHFI ≥ 90 days and still accruing $ 11,871 $ 10,111 $ 7,351 $ 11,871 $ 7,351 Total NPAs and LHFI ≥ 90 days $ 40,646 $ 39,266 $ 35,938 $ 40,646 $ 35,938 NPAs / total LHFI 0.19 % 0.19 % 0.21 % 0.19 % 0.21 % NPAs / total assets 0.14 % 0.14 % 0.14 % 0.14 % 0.14 % ALLL / nonaccrual loans 438.86 % 414.65 % 407.58 % 438.86 % 407.58 % ALLL/ nonperforming assets 436.58 % 413.94 % 377.83 % 436.58 % 377.83 % 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Past Due Detail Construction and land development $ — $ 295 $ 120 $ — $ 120 Commercial real estate - owner occupied 3,501 602 7,337 3,501 7,337 Commercial real estate - non-owner occupied 4,573 — — 4,573 — Commercial & Industrial 3,049 254 796 3,049 796 Residential 1-4 Family - Commercial 744 1,076 1,410 744 1,410 Residential 1-4 Family - Consumer 1,000 1,504 1,123 1,000 1,123 Residential 1-4 Family - Revolving 2,326 1,729 1,115 2,326 1,115 Auto 2,703 2,877 1,876 2,703 1,876 Consumer 517 334 409 517 409 Other Commercial 3,545 23 — 3,545 — LHFI 30-59 days past due $ 21,958 $ 8,694 $ 14,186 $ 21,958 $ 14,186 Construction and land development $ 386 $ — $ 107 $ 386 $ 107 Commercial real estate - owner occupied 1,902 10 763 1,902 763 Commercial real estate - non-owner occupied 797 — 457 797 457 Multifamily real estate 150 — — 150 — Commercial & Industrial 576 400 3,128 576 3,128 Residential 1-4 Family - Commercial 67 189 97 67 97 Residential 1-4 Family - Consumer 1,775 2,813 1,449 1,775 1,449 Residential 1-4 Family - Revolving 602 1,114 1,081 602 1,081 Auto 339 564 257 339 257 Consumer 164 214 101 164 101 LHFI 60-89 days past due $ 6,758 $ 5,304 $ 7,440 $ 6,758 $ 7,440 Past Due and still accruing $ 40,587 $ 24,109 $ 28,977 $ 40,587 $ 28,977 Past Due and still accruing / total LHFI 0.27 % 0.16 % 0.21 % 0.27 % 0.21 % Alternative Performance Measures (non-GAAP) Net interest income (FTE) (1) Net interest income (GAAP) $ 151,941 $ 152,084 $ 150,715 $ 457,469 $ 420,413 FTE adjustment 3,744 3,666 3,842 11,198 10,755 Net interest income (FTE) (non-GAAP) $ 155,685 $ 155,750 $ 154,557 $ 468,667 $ 431,168 Noninterest income (GAAP) 27,094 24,197 25,584 60,918 94,023 Total revenue (FTE) (non-GAAP) $ 182,779 $ 179,947 $ 180,141 $ 529,585 $ 525,191 Average earning assets $ 18,462,505 $ 18,091,809 $ 17,879,222 $ 18,264,957 $ 17,803,550 Net interest margin 3.27 % 3.37 % 3.34 % 3.35 % 3.16 % Net interest margin (FTE) 3.35 % 3.45 % 3.43 % 3.43 % 3.24 % Tangible Assets (2) Ending assets (GAAP) $ 20,736,236 $ 20,602,332 $ 19,950,231 $ 20,736,236 $ 19,950,231 Less: Ending goodwill 925,211 925,211 925,211 925,211 925,211 Less: Ending amortizable intangibles 21,277 23,469 29,142 21,277 29,142 Ending tangible assets (non-GAAP) $ 19,789,748 $ 19,653,652 $ 18,995,878 $ 19,789,748 $ 18,995,878 Tangible Common Equity (2) Ending equity (GAAP) $ 2,388,801 $ 2,424,470 $ 2,281,150 $ 2,388,801 $ 2,281,150 Less: Ending goodwill 925,211 925,211 925,211 925,211 925,211 Less: Ending amortizable intangibles 21,277 23,469 29,142 21,277 29,142 Less: Perpetual preferred stock 166,357 166,357 166,357 166,357 166,357 Ending tangible common equity (non-GAAP) $ 1,275,956 $ 1,309,433 $ 1,160,440 $ 1,275,956 $ 1,160,440 Average equity (GAAP) $ 2,446,902 $ 2,460,741 $ 2,436,999 $ 2,443,833 $ 2,513,522 Less: Average goodwill 925,211 925,211 925,211 925,211 932,035 Less: Average amortizable intangibles 22,342 23,748 30,347 23,881 36,891 Less: Average perpetual preferred stock 166,356 166,356 166,356 166,356 166,356 Average tangible common equity (non-GAAP) $ 1,332,993 $ 1,345,426 $ 1,315,085 $ 1,328,385 $ 1,378,240 ROTCE (2)(3) Net income available to common shareholders (GAAP) $ 51,050 $ 52,274 $ 55,103 $ 136,010 $ 155,085 Plus: Amortization of intangibles, tax effected 1,732 1,751 1,959 5,283 6,663 Net income available to common shareholders before amortization of intangibles (non-GAAP) $ 52,782 $ 54,025 $ 57,062 $ 141,293 $ 161,748 Return on average tangible common equity (ROTCE) 15.71 % 16.11 % 17.21 % 14.22 % 15.69 % 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Operating Measures (4) Net income (GAAP) $ 54,017 $ 55,241 $ 58,070 $ 144,911 $ 163,986 Plus: Strategic cost saving initiatives, net of tax 6,851 3,109 — 9,959 — Plus: Merger-related costs, net of tax 1,965 — — 1,965 — Plus: Legal reserve, net of tax — — — 3,950 — Plus: Strategic branch closing and facility consolidation costs, net of tax — — — — 4,351 Less: (Loss) gain on sale of securities, net of tax (21,799 ) 2 — (32,384 ) (2 ) Less: Gain on sale-leaseback transaction, net of tax 21,883 — — 21,883 — Less: Gain on sale of DHFB, net of tax — — — — 7,984 Adjusted operating earnings (non-GAAP) 62,749 58,348 58,070 171,286 160,355 Less: Dividends on preferred stock 2,967 2,967 2,967 8,901 8,901 Adjusted operating earnings available to common shareholders (non-GAAP) $ 59,782 $ 55,381 $ 55,103 $ 162,385 $ 151,454 Operating Efficiency Ratio (1)(6) Noninterest expense (GAAP) $ 108,508 $ 105,661 $ 99,923 $ 322,442 $ 304,012 Less: Amortization of intangible assets 2,193 2,216 2,480 6,687 8,434 Less: Strategic cost saving initiatives 8,672 3,935 — 12,607 — Less: Merger-related costs 1,993 — — 1,993 — Less: Legal reserve — — — 5,000 — Less: Strategic branch closing and facility consolidation costs — — — — 5,508 Adjusted operating noninterest expense (non-GAAP) $ 95,650 $ 99,510 $ 97,443 $ 296,155 $ 290,070 Noninterest income (GAAP) $ 27,094 $ 24,197 $ 25,584 $ 60,918 $ 94,023 Less: (Loss) gain on sale of securities (27,594 ) 2 — (40,992 ) (2 ) Less: Gain on sale-leaseback transaction 27,700 — — 27,700 — Less: Gain on sale of DHFB — — — — 9,082 Adjusted operating noninterest income (non-GAAP) $ 26,988 $ 24,195 $ 25,584 $ 74,210 $ 84,943 Net interest income (FTE) (non-GAAP) (1) $ 155,685 $ 155,750 $ 154,557 $ 468,667 $ 431,168 Adjusted operating noninterest income (non-GAAP) 26,988 24,195 25,584 74,210 84,943 Total adjusted revenue (FTE) (non-GAAP) (1) $ 182,673 $ 179,945 $ 180,141 $ 542,877 $ 516,111 Efficiency ratio 60.61 % 59.94 % 56.68 % 62.20 % 59.10 % Efficiency ratio (FTE) (1) 59.37 % 58.72 % 55.47 % 60.89 % 57.89 % Adjusted operating efficiency ratio (FTE) (1)(6) 52.36 % 55.30 % 54.09 % 54.55 % 56.20 % Operating ROA & ROE (4) Adjusted operating earnings (non-GAAP) $ 62,749 $ 58,348 $ 58,070 $ 171,286 $ 160,355 Average assets (GAAP) $ 20,596,189 $ 20,209,687 $ 19,980,500 $ 20,397,518 $ 19,873,644 Return on average assets (ROA) (GAAP) 1.04 % 1.10 % 1.15 % 0.95 % 1.10 % Adjusted operating return on average assets (ROA) (non-GAAP) 1.21 % 1.16 % 1.15 % 1.12 % 1.08 % Average equity (GAAP) $ 2,446,902 $ 2,460,741 $ 2,436,999 $ 2,443,833 $ 2,513,522 Return on average equity (ROE) (GAAP) 8.76 % 9.00 % 9.45 % 7.93 % 8.72 % Adjusted operating return on average equity (ROE) (non-GAAP) 10.17 % 9.51 % 9.45 % 9.37 % 8.53 % Operating ROTCE (2)(3)(4) Adjusted operating earnings available to common shareholders (non-GAAP) $ 59,782 $ 55,381 $ 55,103 $ 162,385 $ 151,454 Plus: Amortization of intangibles, tax effected 1,732 1,751 1,959 5,283 6,663 Adjusted operating earnings available to common shareholders before amortization of intangibles (non-GAAP) $ 61,514 $ 57,132 $ 57,062 $ 167,668 $ 158,117 Average tangible common equity (non-GAAP) $ 1,332,993 $ 1,345,426 $ 1,315,085 $ 1,328,385 $ 1,378,240 Adjusted operating return on average tangible common equity (non-GAAP) 18.31 % 17.03 % 17.21 % 16.88 % 15.34 % Pre-tax pre-provision adjusted operating earnings (7) Net income (GAAP) $ 54,017 $ 55,241 $ 58,070 $ 144,911 $ 163,986 Plus: Provision for credit losses 4,991 6,069 6,412 22,911 12,771 Plus: Income tax expense 11,519 9,310 11,894 28,123 33,667 Plus: Strategic cost saving initiatives 8,672 3,935 — 12,607 — Plus: Merger-related costs 1,993 — — 1,993 — Plus: Legal reserve — — — 5,000 — Plus: Strategic branch closing and facility consolidation costs — — — — 5,508 Less: (Loss) gain on sale of securities (27,594 ) 2 — (40,992 ) (2 ) Less: Gain on sale-leaseback transaction 27,700 — — 27,700 — Less: Gain on sale of DHFB — — — — 9,082 Pre-tax pre-provision adjusted operating earnings (non-GAAP) $ 81,086 $ 74,553 $ 76,376 $ 228,837 $ 206,852 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) $ 78,119 $ 71,586 $ 73,409 $ 219,936 $ 197,951 Weighted average common shares outstanding, diluted 74,999,128 74,995,557 74,705,054 74,943,999 75,034,084 Pre-tax pre-provision earnings per common share, diluted $ 1.04 $ 0.95 $ 0.98 $ 2.93 $ 2.64 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Mortgage Origination Held for Sale Volume Refinance Volume $ 2,239 $ 4,076 $ 5,637 $ 9,767 $ 53,753 Purchase Volume 35,815 32,168 66,360 100,175 209,206 Total Mortgage loan originations held for sale $ 38,054 $ 36,244 $ 71,997 $ 109,942 $ 262,959 % of originations held for sale that are refinances 5.9 % 11.2 % 7.8 % 8.9 % 20.4 % Wealth Assets under management $ 4,675,523 $ 4,774,501 $ 4,065,059 $ 4,675,523 $ 4,065,059 Other Data End of period full-time employees 1,788 1,878 1,890 1,788 1,890 Number of full-service branches 109 109 114 109 114 Number of automatic transaction machines ("ATMs") 123 123 131 123 131 (1) These are non-GAAP financial measures. The Company believes net interest income (FTE), total revenue (FTE), and total adjusted revenue (FTE), which are used in computing net interest margin (FTE), efficiency ratio (FTE) and adjusted operating efficiency ratio (FTE), provide valuable additional insight into the net interest margin and the efficiency ratio by adjusting for differences in tax treatment of interest income sources. The entire FTE adjustment is attributable to interest income on earning assets, which is used in computing yield on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the FTE components. (2) These are non-GAAP financial measures. Tangible assets and tangible common equity are used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible assets, tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes will assist investors in assessing the capital of the Company and its ability to absorb potential losses. The Company believes tangible common equity is an important indication of its ability to grow organically and through business combinations as well as its ability to pay dividends and to engage in various capital management strategies. (3) These are non-GAAP financial measures. The Company believes that ROTCE is a meaningful supplement to GAAP financial measures and is useful to investors because it measures the performance of a business consistently across time without regard to whether components of the business were acquired or developed internally. (4) These are non-GAAP financial measures. Adjusted operating measures exclude, as applicable, strategic cost saving initiatives (principally composed of severance charges related to headcount reductions, costs related to modifying certain third party vendor contracts, and charges for exiting certain leases), merger-related costs, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic branch closing and related facility consolidation costs (principally composed of real estate, leases and other assets write downs, as well as severance and expense reduction initiatives), (loss) gain on sale of securities, gain on sale-leaseback transaction, and gain on sale of DHFB. The Company believes these non-GAAP adjusted measures provide investors with important information about the continuing economic results of the organization’s operations. (5) All ratios at September 30, 2023 are estimates and subject to change pending the Company’s filing of its FR Y9‑C. All other periods are presented as filed. (6) The adjusted operating efficiency ratio (FTE) excludes, as applicable, the amortization of intangible assets, strategic cost saving initiatives, merger-related costs, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic branch closing and related facility consolidation costs, (loss) gain on sale of securities, gain on sale-leaseback transaction, and gain on sale of DHFB. This measure is similar to the measure utilized by the Company when analyzing corporate performance and is also similar to the measure utilized for incentive compensation. The Company believes this adjusted measure provides investors with important information about the continuing economic results of the organization’s operations. (7) These are non-GAAP financial measures. Pre-tax pre-provision adjusted earnings excludes, as applicable, the provision for credit losses, which can fluctuate significantly from period-to-period under the CECL methodology, income tax expense, strategic cost saving initiatives, merger-related costs, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic branch closure initiatives and related facility consolidation costs, (loss) gain on sale of securities, gain on sale-leaseback transaction, and gain on sale of DHFB. The Company believes this adjusted measure provides investors with important information about the continuing economic results of the Company’s operations. ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) September 30, December 31, September 30, 2023 2022 2022 ASSETS (unaudited) (audited) (unaudited) Cash and cash equivalents: Cash and due from banks $ 233,526 $ 216,384 $ 177,969 Interest-bearing deposits in other banks 159,718 102,107 211,785 Federal funds sold 5,701 1,457 1,188 Total cash and cash equivalents 398,945 319,948 390,942 Securities available for sale, at fair value 2,084,928 2,741,816 2,717,323 Securities held to maturity, at carrying value 843,269 847,732 841,349 Restricted stock, at cost 104,785 120,213 82,050 Loans held for sale 6,608 3,936 12,889 Loans held for investment, net of deferred fees and costs 15,283,620 14,449,142 13,918,720 Less: allowance for loan and lease losses 125,627 110,768 108,009 Total loans held for investment, net 15,157,993 14,338,374 13,810,711 Premises and equipment, net 94,510 118,243 126,374 Goodwill 925,211 925,211 925,211 Amortizable intangibles, net 21,277 26,761 29,142 Bank owned life insurance 449,452 440,656 437,988 Other assets 649,258 578,248 576,252 Total assets $ 20,736,236 $ 20,461,138 $ 19,950,231 LIABILITIES Noninterest-bearing demand deposits $ 4,144,949 $ 4,883,239 $ 5,290,938 Interest-bearing deposits 12,641,556 11,048,438 11,255,278 Total deposits 16,786,505 15,931,677 16,546,216 Securities sold under agreements to repurchase 134,936 142,837 146,182 Other short-term borrowings 495,000 1,176,000 133,800 Long-term borrowings 390,733 389,863 389,576 Other liabilities 540,261 448,024 453,307 Total liabilities 18,347,435 18,088,401 17,669,081 Commitments and contingencies STOCKHOLDERS' EQUITY Preferred stock, $10.00 par value 173 173 173 Common stock, $1.33 par value 99,120 98,873 98,845 Additional paid-in capital 1,779,281 1,772,440 1,769,858 Retained earnings 988,133 919,537 874,393 Accumulated other comprehensive loss (477,906 ) (418,286 ) (462,119 ) Total stockholders' equity 2,388,801 2,372,737 2,281,150 Total liabilities and stockholders' equity $ 20,736,236 $ 20,461,138 $ 19,950,231 Common shares outstanding 74,997,132 74,712,622 74,703,774 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, 2023 2023 2022 2023 2022 Interest and dividend income: Interest and fees on loans $ 221,380 $ 205,172 $ 144,673 $ 616,544 $ 382,139 Interest on deposits in other banks 1,309 1,014 941 3,815 1,229 Interest and dividends on securities: Taxable 16,055 15,565 14,750 48,373 43,110 Nontaxable 8,415 8,496 10,792 26,220 31,889 Total interest and dividend income 247,159 230,247 171,156 694,952 458,367 Interest expense: Interest on deposits 83,590 65,267 15,386 200,690 25,966 Interest on short-term borrowings 6,499 8,044 1,229 22,106 1,805 Interest on long-term borrowings 5,129 4,852 3,826 14,687 10,183 Total interest expense 95,218 78,163 20,441 237,483 37,954 Net interest income 151,941 152,084 150,715 457,469 420,413 Provision for credit losses 4,991 6,069 6,412 22,911 12,771 Net interest income after provision for credit losses 146,950 146,015 144,303 434,558 407,642 Noninterest income: Service charges on deposit accounts 8,557 8,118 6,784 24,577 22,421 Other service charges, commissions and fees 2,632 1,693 1,770 6,071 5,134 Interchange fees 2,314 2,459 2,461 7,098 6,539 Fiduciary and asset management fees 4,549 4,359 4,134 13,169 18,329 Mortgage banking income 666 449 1,390 1,969 6,707 (Loss) gain on sale of securities (27,594 ) 2 — (40,992 ) (2 ) Bank owned life insurance income 2,973 2,870 3,445 8,671 8,858 Loan-related interest rate swap fees 2,695 2,316 2,050 6,450 8,510 Other operating income 30,302 1,931 3,550 33,905 17,527 Total noninterest income 27,094 24,197 25,584 60,918 94,023 Noninterest expenses: Salaries and benefits 57,449 62,019 56,600 179,996 170,203 Occupancy expenses 6,053 6,094 6,408 18,503 19,685 Furniture and equipment expenses 3,449 3,565 3,673 10,765 10,860 Technology and data processing 7,923 8,566 8,273 24,631 23,930 Professional services 3,291 4,433 3,504 11,138 12,274 Marketing and advertising expense 2,219 2,817 2,343 7,387 7,008 FDIC assessment premiums and other insurance 4,258 4,074 3,094 12,231 8,344 Franchise and other taxes 4,510 4,499 4,507 13,508 13,506 Loan-related expenses 1,388 1,619 1,575 4,560 5,218 Amortization of intangible assets 2,193 2,216 2,480 6,687 8,434 Other expenses 15,775 5,759 7,466 33,036 24,550 Total noninterest expenses 108,508 105,661 99,923 322,442 304,012 Income before income taxes 65,536 64,551 69,964 173,034 197,653 Income tax expense 11,519 9,310 11,894 28,123 33,667 Net income $ 54,017 $ 55,241 $ 58,070 144,911 163,986 Dividends on preferred stock 2,967 2,967 2,967 8,901 8,901 Net income available to common shareholders $ 51,050 $ 52,274 $ 55,103 $ 136,010 $ 155,085 Basic earnings per common share $ 0.68 $ 0.70 $ 0.74 $ 1.81 $ 2.07 Diluted earnings per common share $ 0.68 $ 0.70 $ 0.74 $ 1.81 $ 2.07 AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS) (UNAUDITED) (Dollars in thousands) For the Quarter Ended September 30, 2023 June 30, 2023 Average Balance Interest Income / Expense (1) Yield / Rate (1)(2) Average Balance Interest Income / Expense (1) Yield / Rate (1)(2) Assets: Securities: Taxable $ 1,799,675 $ 16,055 3.54 % $ 1,865,193 $ 15,565 3.35 % Tax-exempt 1,301,983 10,653 3.25 % 1,311,469 10,755 3.29 % Total securities 3,101,658 26,708 3.42 % 3,176,662 26,320 3.32 % LHFI, net of deferred fees and costs (3) 15,139,761 222,698 5.84 % 14,746,218 206,452 5.62 % Other earning assets 221,086 1,497 2.69 % 168,929 1,141 2.71 % Total earning assets 18,462,505 $ 250,903 5.39 % 18,091,809 $ 233,913 5.19 % Allowance for loan and lease losses (121,229 ) (117,643 ) Total non-earning assets 2,254,913 2,235,521 Total assets $ 20,596,189 $ 20,209,687 Liabilities and Stockholders' Equity: Interest-bearing deposits: Transaction and money market accounts $ 8,697,801 $ 57,378 2.62 % $ 8,387,473 $ 46,953 2.25 % Regular savings 964,971 499 0.21 % 1,014,565 430 0.17 % Time deposits 2,914,004 25,713 3.50 % 2,500,966 17,884 2.87 % Total interest-bearing deposits 12,576,776 83,590 2.64 % 11,903,004 65,267 2.20 % Other borrowings 905,170 11,628 5.10 % 1,071,171 12,896 4.83 % Total interest-bearing liabilities $ 13,481,946 $ 95,218 2.80 % $ 12,974,175 $ 78,163 2.42 % Noninterest-bearing liabilities: Demand deposits 4,218,835 4,377,150 Other liabilities 448,506 397,621 Total liabilities 18,149,287 17,748,946 Stockholders' equity 2,446,902 2,460,741 Total liabilities and stockholders' equity $ 20,596,189 $ 20,209,687 Net interest income $ 155,685 $ 155,750 Interest rate spread 2.59 % 2.77 % Cost of funds 2.04 % 1.74 % Net interest margin 3.35 % 3.45 % (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. View source version on businesswire.com: https://www.businesswire.com/news/home/20231019447738/en/Contacts Robert M. Gorman - (804) 523‑7828 Executive Vice President / Chief Financial Officer
Atlantic Union Bankshares Corporation (the “Company” or “Atlantic Union”) (NYSE: AUB) reported net income available to common shareholders of $51.1 million and basic and diluted earnings per common share of $0.68 for the third quarter of 2023 and adjusted operating earnings available to common shareholders(1) of $59.8 million and adjusted diluted operating earnings per common share(1) of $0.80 for the third quarter of 2023. “Atlantic Union delivered strong operating results in the third quarter,” said John C. Asbury, president and chief executive officer of Atlantic Union. “We were especially pleased with our customer deposit growth that more than funded loan growth during the quarter, negligible charge-offs, and the impact of our expense reduction actions taken earlier in the year. The proactive measures we have taken to manage this challenging environment are serving us well.” “We believe that our model of a diversified, traditional, full-service bank that delivers the products and services that our customers want and need combined with local decision making, responsiveness and client service orientation positively sets us apart from other banks, both larger and smaller. 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.” STRATEGIC ACTIONS Merger with American National Bankshares Inc. (“American National”) On July 25, 2023, the Company announced that it entered into a merger agreement to acquire American National. During the third quarter of 2023, the Company incurred pre-tax merger costs of approximately $2.0 million. Cost Saving Initiatives As previously disclosed, the Company initiated a series of strategic cost savings measures during the second quarter of 2023 that is expected to reduce the annual expense run rate by approximately $17 million. As a result of these measures, the Company incurred pre-tax expenses of $8.7 million in the third quarter of 2023 and $3.9 million in the second quarter of 2023, principally composed of severance charges related to headcount reductions, costs related to modifying certain third-party vendor contracts, and charges for exiting certain leases. Sale-Leaseback Transaction On September 20, 2023, Atlantic Union Bank (the “Bank”) executed a sale-leaseback transaction and sold 27 properties, which consisted of 25 branches and a drive thru and parking lot, each adjacent to a sold branch, to a single purchaser for an aggregate purchase price of $45.8 million. Concurrently, the Bank entered into absolute net lease agreements with the purchaser under which the Bank will lease each of the properties for an initial term of 17 years with specified renewal options. The sale-leaseback transaction resulted in a pre-tax gain of approximately $27.7 million during the third quarter of 2023, after transaction-related expenses. Available for Sale (“AFS”) Securities Sale Concurrent with the sale-leaseback transaction, also on September 20, 2023, the Company restructured a portion of its investment portfolio by selling low yielding AFS securities with a book value of $228.3 million, resulting in a pre-tax net loss of $27.7 million. The net proceeds from the securities sale transaction were reinvested into higher yielding AFS securities at the end of the third quarter of 2023. NET INTEREST INCOME For the third quarter of 2023, net interest income was $151.9 million, a decrease of $143,000 from $152.1 million in the second quarter of 2023. Net interest income (FTE)(1) was $155.7 million in the third quarter of 2023, a decrease of $65,000 from $155.8 million in the second quarter of 2023 due to higher deposit costs driven by increases in market interest rates, changes in the deposit mix as depositors continue to migrate to higher costing interest bearing deposit accounts, and growth in average deposit balances, partially offset by an increase in loan yields on variable rate loans due to increases in short-term interest rates during the quarter, as well as growth in average loans held for investment (“LHFI”). Our net interest margin decreased 10 basis points from the prior quarter to 3.27% at September 30, 2023, and our net interest margin (FTE)(1) decreased 10 basis points during the same period to 3.35%. Earning asset yields increased by 20 basis points to 5.39% in the third quarter of 2023 compared to the second quarter of 2023, primarily due to the impact of increases in market interest rates on loans and loan growth. Our cost of funds increased by 30 basis points to 2.04% at September 30, 2023 compared to the prior quarter, due primarily to higher deposit costs driven by higher rates and changes in the deposit mix as noted above. The Company’s net interest margin (FTE) (1) includes the impact of acquisition accounting fair value adjustments. Net accretion related to acquisition accounting was $1.1 million for the third quarter of 2023. The impact of net accretion in the second and third quarters of 2023 are reflected in the following table (dollars in thousands): Loan Deposit Borrowings Accretion Amortization Amortization Total For the quarter ended June 30, 2023 $ 1,073 $ (7) $ (213) $ 853 For the quarter ended September 30, 2023 1,300 (6) (215) 1,079 ASSET QUALITY Overview At September 30, 2023, nonperforming assets (“NPAs”) as a percentage of total LHFI was 0.19% and was unchanged from the prior quarter and included nonaccrual loans of $28.6 million. Accruing past due loans as a percentage of total LHFI totaled 27 basis points at September 30, 2023, an increase of 11 basis points from June 30, 2023, and an increase of 6 basis points from September 30, 2022. The increase in past due loan levels from June 30, 2023 was primarily within the 30-59 days past due category and resulted primarily from increases in past due credit relationships within the commercial real estate and commercial and industrial portfolios. Net charge-offs were 0.01% of total average LHFI (annualized) for the third quarter of 2023, a decrease of 3 basis points from June 30, 2023, and a decrease of 1 basis point from September 30, 2022. The allowance for credit losses (“ACL”) totaled $140.9 million at September 30, 2023, a $4.7 million increase from the prior quarter. Nonperforming Assets At September 30, 2023, NPAs totaled $28.8 million, compared to $29.2 million in the prior quarter. 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, 2023 2023 2023 2022 2022 Nonaccrual loans $ 28,626 $ 29,105 $ 29,082 $ 27,038 $ 26,500 Foreclosed properties 149 50 29 76 2,087 Total nonperforming assets $ 28,775 $ 29,155 $ 29,111 $ 27,114 $ 28,587 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, 2023 2023 2023 2022 2022 Beginning Balance $ 29,105 $ 29,082 $ 27,038 $ 26,500 $ 29,070 Net customer payments (1,947 ) (5,950 ) (1,755 ) (1,805 ) (3,725 ) Additions 1,651 6,685 4,151 2,935 1,302 Charge-offs (64 ) (712 ) (39 ) (461 ) (125 ) Loans returning to accruing status (119 ) — (313 ) (131 ) — Transfers to foreclosed property — — — — (22 ) Ending Balance $ 28,626 $ 29,105 $ 29,082 $ 27,038 $ 26,500 Past Due Loans At September 30, 2023, past due loans still accruing interest totaled $40.6 million or 0.27% of total LHFI, compared to $24.1 million or 0.16% of total LHFI at June 30, 2023, and $29.0 million or 0.21% of total LHFI at September 30, 2022. The increase in past due loan levels from June 30, 2023 was primarily within the 30-59 days past due category and driven by increases in past due credit relationships within the commercial real estate and commercial and industrial portfolios. Of the total past due loans still accruing interest, $11.9 million or 0.08% of total LHFI were loans past due 90 days or more at September 30, 2023, compared to $10.1 million or 0.07% of total LHFI at June 30, 2023, and $7.4 million or 0.05% of total LHFI at September 30, 2022. Allowance for Credit Losses At September 30, 2023, the ACL was $140.9 million and included an allowance for loan and lease losses (“ALLL”) of $125.6 million and a reserve for unfunded commitments of $15.3 million. The ACL at September 30, 2023 increased $4.7 million from June 30, 2023 due to loan growth in the third quarter of 2023 and the impact of continued uncertainty in the economic outlook. The ACL as a percentage of total LHFI was 0.92% at September 30, 2023, an increase of 2 basis points from June 30, 2023. The ALLL as a percentage of total LHFI was 0.82% at September 30, 2023, compared to 0.80% at June 30, 2023. Net Charge-offs Net charge-offs were $294,000 or 0.01% of total average LHFI on an annualized basis for the third quarter of 2023, compared to $1.6 million or 0.04% (annualized) for the second quarter of 2023, and $587,000 or 0.02% (annualized) for the third quarter of 2022. Provision for Credit Losses For the third quarter of 2023, the Company recorded a provision for credit losses of $5.0 million, compared to a provision for credit losses of $6.1 million in the prior quarter, and a provision for credit losses of $6.4 million in the third quarter of 2022. NONINTEREST INCOME Noninterest income increased $2.9 million to $27.1 million for the third quarter of 2023 from $24.2 million in the prior quarter, primarily driven by a $939,000 increase in other service charges, commissions and fees primarily due to a merchant services vendor contract signing bonus, a $714,000 increase in equity method investment income (included within other operating income), a $439,000 increase in service charges on deposits accounts, and a $379,000 increase in loan-related interest rate swap fees due to several new swap transactions. Noninterest income in the third quarter also included a $27.7 million gain related to the sale-leaseback transaction, included in other operating income, which was almost wholly offset by $27.6 million of losses incurred on the sale of AFS securities in the third quarter of 2023. NONINTEREST EXPENSE Noninterest expense increased $2.8 million to $108.5 million for the third quarter of 2023 from $105.7 million in the prior quarter, primarily driven by a $10.0 million increase in other expenses, which includes $8.7 million in expenses associated with strategic cost saving initiatives and $2.0 million in merger-related costs. Adjusted operating noninterest expense,(1) which excludes amortization of intangible assets ($2.2 million in both the third quarter and second quarter of 2023), expenses associated with strategic cost savings initiatives ($8.7 million in the third quarter and $3.9 million in the second quarter of 2023), and merger-related costs associated with the American National merger ($2.0 million in the third quarter of 2023), decreased $3.9 million to $95.7 million for the third quarter of 2023 from $99.5 million in the prior quarter. The decrease in adjusted operating noninterest expense(1) was primarily due to a $1.6 million decrease in salaries and benefits expense reflecting the impact of strategic cost saving initiatives, a $1.1 million decrease in professional services expense related to strategic projects in the prior quarter, a $643,000 decrease in technology and data processing expense, and a $598,000 decrease in marketing and advertising expense. INCOME TAXES The effective tax rate for the three months ended September 30, 2023 and 2022 was 17.6% and 17.0%, respectively, and the effective tax rate for the nine months ended September 30, 2023 and 2022 was 16.3% and 17.0%, respectively. BALANCE SHEET At September 30, 2023, total assets were $20.7 billion, an increase of $133.9 million or approximately 2.6% (annualized) from June 30, 2023, and an increase of $786.0 million or approximately 3.9% from September 30, 2022. Total assets increased from the prior quarter primarily due to a $216.7 million increase in LHFI (net of deferred fees and costs), partially offset by a $110.3 million decrease in investment securities due primarily to the decline in market value of the AFS securities portfolio due to the impact of market interest rates. Total assets increased from the prior year period primarily due to a $1.4 billion increase in LHFI (net of deferred fees and costs), partially offset by a $607.7 million decrease in investment securities due primarily to the sale of AFS securities in the first and third quarters of 2023. At September 30, 2023, LHFI (net of deferred fees and costs) totaled $15.3 billion, an increase of $216.7 million or 5.7% (annualized) from $15.1 billion at June 30, 2023. Average LHFI (net of deferred fees and costs) totaled $15.1 billion at September 30, 2023, an increase of $393.5 million or 10.6% (annualized) from the prior quarter. At September 30, 2023, both LHFI (net of deferred fees and costs) and average LHFI (net of deferred fees and costs) increased $1.4 billion from September 30, 2022. LHFI (net of deferred fees and costs) increased from the prior quarter primarily due to increases in the multifamily real estate and other commercial portfolios and increased from the same period in the prior year primarily due to increases in the commercial and industrial and commercial real estate non-owner occupied portfolios. At September 30, 2023, total investments were $3.0 billion, a decrease of $110.3 million from June 30, 2023 and a decrease of $607.7 million from September 30, 2022. AFS securities totaled $2.1 billion at September 30, 2023, $2.2 billion at June 30, 2023, and $2.7 billion at September 30, 2022. At September 30, 2023, total net unrealized losses on the AFS securities portfolio were $523.1 million, compared to $450.1 million at June 30, 2023 and $507.7 million at September 30, 2022. Held to maturity (“HTM”) securities are carried at cost and totaled $843.3 million at September 30, 2023, $849.6 million at June 30, 2023, and $841.3 million at September 30, 2022 and had net unrealized losses of $81.2 million at September 30, 2023, compared to $41.8 million at June 30, 2023 and $75.9 million at September 30, 2022. At September 30, 2023, total deposits were $16.8 billion, an increase of $374.5 million or approximately 9.1% (annualized) from June 30, 2023. Average deposits at September 30, 2023 increased from the prior quarter by $515.5 million or 12.6% (annualized). Total deposits at September 30, 2023 increased $240.3 million or 1.5% from September 30, 2022, and quarterly average deposits at September 30, 2023 increased $307.4 million or 1.9% from the same period in the prior year. Total deposits increased from the prior quarter and the prior year period primarily due to increases in interest bearing customer deposits and brokered deposits, partially offset by decreases in demand deposits. At September 30, 2023, total borrowings were $1.0 billion, a decrease of $299.6 million from June 30, 2023, and an increase of $351.1 million from September 30, 2022. Total borrowings decreased from the prior quarter primarily due to paydowns of short-term borrowings due to deposit growth and increased from the prior year period due to increased short-term borrowings used to fund loan growth. The following table shows the Company’s capital ratios at the quarters ended: September 30, June 30, September 30, 2023 2023 2022 Common equity Tier 1 capital ratio (2) 9.94 % 9.86 % 9.96 % Tier 1 capital ratio (2) 10.88 % 10.81 % 10.98 % Total capital ratio (2) 13.70 % 13.64 % 13.80 % Leverage ratio (Tier 1 capital to average assets) (2) 9.62 % 9.64 % 9.32 % Common equity to total assets 10.72 % 10.96 % 10.60 % Tangible common equity to tangible assets (1) 6.45 % 6.66 % 6.11 % _____________________________ During the third quarter of 2023, the Company declared and paid a quarterly dividend on the outstanding shares of Series A Preferred Stock of $171.88 per share (equivalent to $0.43 per outstanding depositary share), consistent with the second quarter of 2023 and the third quarter of 2022. During the third quarter of 2023, the Company also declared and paid cash dividends of $0.30 per common share, consistent with the second quarter of 2023 and the third quarter of 2022. _____________________________ (1) These are financial measures not calculated in accordance with generally accepted accounting principles (“GAAP”). For a reconciliation of these non-GAAP financial measures, see the “Alternative Performance Measures (non-GAAP)” section of the Key Financial Results. (2) All ratios at September 30, 2023 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed. ABOUT ATLANTIC UNION BANKSHARES CORPORATION Headquartered in Richmond, Virginia, Atlantic Union Bankshares Corporation (NYSE: AUB) is the holding company for Atlantic Union Bank. Atlantic Union Bank has 109 branches and 123 ATMs located throughout Virginia and in portions of Maryland and North Carolina as of September 30, 2023. 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 2023 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 19, 2023 during which the Company’s management will review the Company’s financial results for the third quarter 2023 and provide an update on recent activities. The listen-only webcast and the accompanying slides can be accessed at: https://edge.media-server.com/mmc/p/xamg8swa. For analysts who wish to participate in the conference call, please register at the following URL: https://register.vevent.com/register/BI2b71d4244e9e49b393decce9c92d4054. To participate in the conference call, you must use the link to receive an audio dial-in number and an Access PIN. A replay of the webcast, and the accompanying slides, will be available on the Company’s website for 90 days at: https://investors.atlanticunionbank.com/. NON-GAAP FINANCIAL MEASURES In reporting the results as of and for the period ended September 30, 2023, the Company has provided supplemental performance measures on a tax-equivalent, tangible, operating, adjusted or pre-tax pre-provision basis. These non-GAAP financial measures are a supplement to GAAP, which is used to prepare the Company’s financial statements, and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP. In addition, the Company’s non-GAAP financial measures may not be comparable to non-GAAP financial measures of other companies. The Company uses the non-GAAP financial measures discussed herein in its analysis of the Company’s performance. The Company’s management believes that these non-GAAP financial measures provide additional understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented without the impact of items or events that may obscure trends in the Company’s underlying performance. For a reconciliation of these measures to their most directly comparable GAAP measures and additional information about these non-GAAP financial measures, see “Alternative Performance Measures (non-GAAP)” in the tables within the section “Key Financial Results.” FORWARD-LOOKING STATEMENTS This press release and statements by our management may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include, without limitation, statements made in Mr. Asbury’s quotations, statements regarding our expectations with regard to our business, financial and operating results, including our deposit base, the impact of future economic conditions, the expected impact of our cost saving measures initiative in the second quarter of 2023, and statements that include other projections, predictions, expectations, or beliefs about future events or results or otherwise are not statements of historical fact. Such forward-looking statements are based on certain assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties, and other factors, some of which cannot be predicted or quantified, that may cause actual results, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements. Forward-looking statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” “continue,” “confidence,” or words of similar meaning or other statements concerning opinions or judgment of the Company and our management about future events. Although we believe that our expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of our existing knowledge of our business and operations, there can be no assurance that actual future results, performance, or achievements of, or trends affecting, us will not differ materially from any projected future results, performance, achievements or trends expressed or implied by such forward-looking statements. Actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of or changes in: market interest rates and their related impacts on macroeconomic conditions, customer and client behavior, our funding costs and our loan and securities portfolios; inflation and its impacts on economic growth and customer and client behavior; adverse developments in the financial industry generally, such as bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior; the sufficiency of liquidity; general economic and financial market conditions, in the United States generally and particularly in the markets in which we operate and which our loans are concentrated, including the effects of declines in real estate values, an increase in unemployment levels and slowdowns in economic growth; the failure to close our previously announced merger with American National when expected or at all because required regulatory, American National shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all, and the risk that any regulatory approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed merger; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement between the Company and American National; any change in the purchase accounting assumptions used regarding the American National assets acquired and liabilities assumed to determine the fair value and credit marks, particularly in light of the current rising interest rate environment; the possibility that the anticipated benefits of the proposed merger, including anticipated cost savings and strategic gains, are not realized when expected or at all; the proposed merger being more expensive or taking longer to complete than anticipated, including as a result of unexpected factors or events; the diversion of management’s attention from ongoing business operations and opportunities do to the proposed merger; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed merger; the dilutive effect of shares of the Company’s common stock to be issued at the completion of the proposed merger; changes in the Company’s or American National’s share price before closing; monetary and fiscal policies of the U.S. government, including policies of the U.S. Department of the Treasury and the Federal Reserve; the quality or composition of our loan or investment portfolios and changes therein; demand for loan products and financial services in our market areas; our ability to manage our growth or implement our growth strategy; the effectiveness of expense reduction plans; the introduction of new lines of business or new products and services; our ability to recruit and retain key employees; real estate values in our lending area; changes in accounting principles, standards, rules, and interpretations, and the related impact on our financial statements; an insufficient ACL or volatility in the ACL resulting from the CECL methodology, either alone or as that may be affected by inflation, changing interest rates, or other factors; our liquidity and capital positions; concentrations of loans secured by real estate, particularly commercial real estate; the effectiveness of our credit processes and management of our credit risk; our ability to compete in the market for financial services and increased competition from fintech companies; technological risks and developments, and cyber threats, attacks, or events; operational, technological, cultural, regulatory, legal, credit, and other risks associated with the exploration, consummation and integration of potential future acquisitions, whether involving stock or cash considerations; the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts or public health events, and of governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of our borrowers to satisfy their obligations to us, on the value of collateral securing loans, on the demand for our loans or our other products and services, on supply chains and methods used to distribute products and services, on incidents of cyberattack and fraud, on our liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of our business operations and on financial markets and economic growth; the discontinuation of LIBOR and its impact on the financial markets, and our ability to manage operational, legal, and compliance risks related to the discontinuation of LIBOR and implementation of one or more alternate reference rates; performance by our counterparties or vendors; deposit flows; the availability of financing and the terms thereof; the level of prepayments on loans and mortgage-backed securities; legislative or regulatory changes and requirements; actual or potential claims, damages, and fines related to litigation or government actions, which may result in, among other things, additional costs, fines, penalties, restrictions on our business activities, reputational harm, or other adverse consequences; the effects of changes in federal, state or local tax laws and regulations; any event or development that would cause us to conclude that there was an impairment of any asset, including intangible assets, such as goodwill; and other factors, many of which are beyond our control. Please also refer to such other factors as discussed throughout Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10‑K for the year ended December 31, 2022, Part II, Item 1A. Risk Factors in our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2023 and March 31, 2023, and related disclosures in other filings, which have been filed with the U.S. Securities and Exchange Commission (“SEC”) and are available on the SEC’s website at www.sec.gov. All risk factors and uncertainties described herein and therein should be considered in evaluating forward-looking statements, and all of the forward-looking statements are expressly qualified by the cautionary statements contained or referred to herein and therein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on the Company or our businesses or operations. Readers are cautioned not to rely too heavily on the forward-looking statements, and undue reliance should not be placed on such forward-looking statements. Forward-looking statements speak only as of the date they are made. We do not intend or assume any obligation to update, revise or clarify any forward-looking statements that may be made from time to time by or on behalf of the Company, whether as a result of new information, future events or otherwise. ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Nine Months Ended 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Results of Operations Interest and dividend income $ 247,159 $ 230,247 $ 171,156 $ 694,952 $ 458,367 Interest expense 95,218 78,163 20,441 237,483 37,954 Net interest income 151,941 152,084 150,715 457,469 420,413 Provision for credit losses 4,991 6,069 6,412 22,911 12,771 Net interest income after provision for credit losses 146,950 146,015 144,303 434,558 407,642 Noninterest income 27,094 24,197 25,584 60,918 94,023 Noninterest expenses 108,508 105,661 99,923 322,442 304,012 Income before income taxes 65,536 64,551 69,964 173,034 197,653 Income tax expense 11,519 9,310 11,894 28,123 33,667 Net income 54,017 55,241 58,070 144,911 163,986 Dividends on preferred stock 2,967 2,967 2,967 8,901 8,901 Net income available to common shareholders $ 51,050 $ 52,274 $ 55,103 $ 136,010 $ 155,085 Interest earned on earning assets (FTE) (1) $ 250,903 $ 233,913 $ 174,998 $ 706,150 $ 469,122 Net interest income (FTE) (1) 155,685 155,750 154,557 468,667 431,168 Total revenue (FTE) (1) 182,779 179,947 180,141 529,585 525,191 Pre-tax pre-provision adjusted operating earnings (7) 81,086 74,553 76,376 228,837 206,852 Key Ratios Earnings per common share, diluted $ 0.68 $ 0.70 $ 0.74 $ 1.81 $ 2.07 Return on average assets (ROA) 1.04 % 1.10 % 1.15 % 0.95 % 1.10 % Return on average equity (ROE) 8.76 % 9.00 % 9.45 % 7.93 % 8.72 % Return on average tangible common equity (ROTCE) (2) (3) 15.71 % 16.11 % 17.21 % 14.22 % 15.69 % Efficiency ratio 60.61 % 59.94 % 56.68 % 62.20 % 59.10 % Efficiency ratio (FTE) (1) 59.37 % 58.72 % 55.47 % 60.89 % 57.89 % Net interest margin 3.27 % 3.37 % 3.34 % 3.35 % 3.16 % Net interest margin (FTE) (1) 3.35 % 3.45 % 3.43 % 3.43 % 3.24 % Yields on earning assets (FTE) (1) 5.39 % 5.19 % 3.88 % 5.17 % 3.52 % Cost of interest-bearing liabilities 2.80 % 2.42 % 0.68 % 2.42 % 0.43 % Cost of deposits 1.97 % 1.61 % 0.37 % 1.63 % 0.21 % Cost of funds 2.04 % 1.74 % 0.45 % 1.74 % 0.28 % Operating Measures (4) Adjusted operating earnings $ 62,749 $ 58,348 $ 58,070 $ 171,286 $ 160,355 Adjusted operating earnings available to common shareholders 59,782 55,381 55,103 162,385 151,454 Adjusted operating earnings per common share, diluted $ 0.80 $ 0.74 $ 0.74 $ 2.17 $ 2.02 Adjusted operating ROA 1.21 % 1.16 % 1.15 % 1.12 % 1.08 % Adjusted operating ROE 10.17 % 9.51 % 9.45 % 9.37 % 8.53 % Adjusted operating ROTCE (2) (3) 18.31 % 17.03 % 17.21 % 16.88 % 15.34 % Adjusted operating efficiency ratio (FTE) (1)(6) 52.36 % 55.30 % 54.09 % 54.55 % 56.20 % Per Share Data Earnings per common share, basic $ 0.68 $ 0.70 $ 0.74 $ 1.81 $ 2.07 Earnings per common share, diluted 0.68 0.70 0.74 1.81 2.07 Cash dividends paid per common share 0.30 0.30 0.30 0.90 0.86 Market value per share 28.78 25.95 30.38 28.78 30.38 Book value per common share 29.82 30.31 28.46 29.82 28.46 Tangible book value per common share (2) 17.12 17.58 15.61 17.12 15.61 Price to earnings ratio, diluted 10.65 9.28 10.37 11.86 10.99 Price to book value per common share ratio 0.97 0.86 1.07 0.97 1.07 Price to tangible book value per common share ratio (2) 1.68 1.48 1.95 1.68 1.95 Weighted average common shares outstanding, basic 74,999,128 74,995,450 74,703,699 74,942,851 75,029,000 Weighted average common shares outstanding, diluted 74,999,128 74,995,557 74,705,054 74,943,999 75,034,084 Common shares outstanding at end of period 74,997,132 74,998,075 74,703,774 74,997,132 74,703,774 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Capital Ratios Common equity Tier 1 capital ratio (5) 9.94 % 9.86 % 9.96 % 9.94 % 9.96 % Tier 1 capital ratio (5) 10.88 % 10.81 % 10.98 % 10.88 % 10.98 % Total capital ratio (5) 13.70 % 13.64 % 13.80 % 13.70 % 13.80 % Leverage ratio (Tier 1 capital to average assets) (5) 9.62 % 9.64 % 9.32 % 9.62 % 9.32 % Common equity to total assets 10.72 % 10.96 % 10.60 % 10.72 % 10.60 % Tangible common equity to tangible assets (2) 6.45 % 6.66 % 6.11 % 6.45 % 6.11 % Financial Condition Assets $ 20,736,236 $ 20,602,332 $ 19,950,231 $ 20,736,236 $ 19,950,231 LHFI (net of deferred fees and costs) 15,283,620 15,066,930 13,918,720 15,283,620 13,918,720 Securities 3,032,982 3,143,235 3,640,722 3,032,982 3,640,722 Earning Assets 18,491,561 18,452,007 17,790,324 18,491,561 17,790,324 Goodwill 925,211 925,211 925,211 925,211 925,211 Amortizable intangibles, net 21,277 23,469 29,142 21,277 29,142 Deposits 16,786,505 16,411,987 16,546,216 16,786,505 16,546,216 Borrowings 1,020,669 1,320,301 669,558 1,020,669 669,558 Stockholders' equity 2,388,801 2,424,470 2,281,150 2,388,801 2,281,150 Tangible common equity (2) 1,275,956 1,309,433 1,160,440 1,275,956 1,160,440 LHFI, net of deferred fees and costs Construction and land development $ 1,132,940 $ 1,231,720 $ 1,068,201 $ 1,132,940 $ 1,068,201 Commercial real estate - owner occupied 1,975,281 1,952,189 1,953,872 1,975,281 1,953,872 Commercial real estate - non-owner occupied 4,148,218 4,113,318 3,900,325 4,148,218 3,900,325 Multifamily real estate 947,153 788,895 774,970 947,153 774,970 Commercial & Industrial 3,432,319 3,373,148 2,709,047 3,432,319 2,709,047 Residential 1-4 Family - Commercial 517,034 518,317 542,612 517,034 542,612 Residential 1-4 Family - Consumer 1,057,294 1,017,698 891,353 1,057,294 891,353 Residential 1-4 Family - Revolving 599,282 600,339 588,452 599,282 588,452 Auto 534,361 585,756 561,277 534,361 561,277 Consumer 126,151 134,709 172,776 126,151 172,776 Other Commercial 813,587 750,841 755,835 813,587 755,835 Total LHFI $ 15,283,620 $ 15,066,930 $ 13,918,720 $ 15,283,620 $ 13,918,720 Deposits Interest checking accounts $ 5,055,464 $ 4,824,192 $ 4,354,351 $ 5,055,464 $ 4,354,351 Money market accounts 3,472,953 3,413,936 3,962,470 3,472,953 3,962,470 Savings accounts 950,363 986,081 1,173,566 950,363 1,173,566 Customer time deposits of $250,000 and over 634,950 578,739 391,332 634,950 391,332 Other customer time deposits 2,011,106 1,813,031 1,352,440 2,011,106 1,352,440 Time deposits 2,646,056 2,391,770 1,743,772 2,646,056 1,743,772 Total interest-bearing customer deposits 12,124,836 11,615,979 11,234,159 12,124,836 11,234,159 Brokered deposits 516,720 485,702 21,119 516,720 21,119 Total interest-bearing deposits $ 12,641,556 $ 12,101,681 $ 11,255,278 $ 12,641,556 $ 11,255,278 Demand deposits 4,144,949 4,310,306 5,290,938 4,144,949 5,290,938 Total deposits $ 16,786,505 $ 16,411,987 $ 16,546,216 $ 16,786,505 $ 16,546,216 Averages Assets $ 20,596,189 $ 20,209,687 $ 19,980,500 $ 20,397,518 $ 19,873,644 LHFI (net of deferred fees and costs) 15,139,761 14,746,218 13,733,447 14,799,520 13,521,507 Loans held for sale 10,649 14,413 15,063 10,330 16,779 Securities 3,101,658 3,176,662 3,818,607 3,247,287 3,981,308 Earning assets 18,462,505 18,091,809 17,879,222 18,264,957 17,803,550 Deposits 16,795,611 16,280,154 16,488,224 16,499,045 16,397,790 Time deposits 2,914,004 2,500,966 1,745,224 2,571,114 1,726,341 Interest-bearing deposits 12,576,776 11,903,004 11,163,945 12,071,006 11,091,115 Borrowings 905,170 1,071,171 703,272 1,032,067 660,995 Interest-bearing liabilities 13,481,946 12,974,175 11,867,217 13,103,073 11,752,110 Stockholders' equity 2,446,902 2,460,741 2,436,999 2,443,833 2,513,522 Tangible common equity (2) 1,332,993 1,345,426 1,315,085 1,328,385 1,378,240 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Asset Quality Allowance for Credit Losses (ACL) Beginning balance, Allowance for loan and lease losses (ALLL) $ 120,683 $ 116,512 $ 104,184 $ 110,768 $ 99,787 Add: Recoveries 1,335 1,035 1,214 3,537 3,745 Less: Charge-offs 1,629 2,602 1,801 9,957 5,267 Add: Provision for loan losses 5,238 5,738 4,412 21,279 9,744 Ending balance, ALLL $ 125,627 $ 120,683 $ 108,009 $ 125,627 $ 108,009 Beginning balance, Reserve for unfunded commitment (RUC) $ 15,548 $ 15,199 $ 9,000 $ 13,675 $ 8,000 Add: Provision for unfunded commitments (246 ) 349 2,000 1,627 3,000 Ending balance, RUC $ 15,302 $ 15,548 $ 11,000 $ 15,302 $ 11,000 Total ACL $ 140,929 $ 136,231 $ 119,009 $ 140,929 $ 119,009 ACL / total LHFI 0.92 % 0.90 % 0.86 % 0.92 % 0.86 % ALLL / total LHFI 0.82 % 0.80 % 0.78 % 0.82 % 0.78 % Net charge-offs / total average LHFI (annualized) 0.01 % 0.04 % 0.02 % 0.06 % 0.02 % Provision for loan losses/ total average LHFI (annualized) 0.14 % 0.16 % 0.13 % 0.19 % 0.10 % Nonperforming Assets Construction and land development $ 355 $ 284 $ 421 $ 355 $ 421 Commercial real estate - owner occupied 3,882 3,978 4,883 3,882 4,883 Commercial real estate - non-owner occupied 5,999 6,473 1,923 5,999 1,923 Commercial & Industrial 2,256 2,738 2,289 2,256 2,289 Residential 1-4 Family - Commercial 1,833 1,844 1,962 1,833 1,962 Residential 1-4 Family - Consumer 10,368 10,033 11,121 10,368 11,121 Residential 1-4 Family - Revolving 3,572 3,461 3,583 3,572 3,583 Auto 361 291 318 361 318 Consumer — 3 — — — Nonaccrual loans $ 28,626 $ 29,105 $ 26,500 $ 28,626 $ 26,500 Foreclosed property 149 50 2,087 149 2,087 Total nonperforming assets (NPAs) $ 28,775 $ 29,155 $ 28,587 $ 28,775 $ 28,587 Construction and land development $ 25 $ 24 $ 115 $ 25 $ 115 Commercial real estate - owner occupied 2,395 2,463 3,517 2,395 3,517 Commercial real estate - non-owner occupied 2,835 2,763 621 2,835 621 Commercial & Industrial 792 810 526 792 526 Residential 1-4 Family - Commercial 817 693 308 817 308 Residential 1-4 Family - Consumer 3,632 1,716 680 3,632 680 Residential 1-4 Family - Revolving 1,034 1,259 1,255 1,034 1,255 Auto 229 243 148 229 148 Consumer 97 74 86 97 86 Other Commercial 15 66 95 15 95 LHFI ≥ 90 days and still accruing $ 11,871 $ 10,111 $ 7,351 $ 11,871 $ 7,351 Total NPAs and LHFI ≥ 90 days $ 40,646 $ 39,266 $ 35,938 $ 40,646 $ 35,938 NPAs / total LHFI 0.19 % 0.19 % 0.21 % 0.19 % 0.21 % NPAs / total assets 0.14 % 0.14 % 0.14 % 0.14 % 0.14 % ALLL / nonaccrual loans 438.86 % 414.65 % 407.58 % 438.86 % 407.58 % ALLL/ nonperforming assets 436.58 % 413.94 % 377.83 % 436.58 % 377.83 % 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Past Due Detail Construction and land development $ — $ 295 $ 120 $ — $ 120 Commercial real estate - owner occupied 3,501 602 7,337 3,501 7,337 Commercial real estate - non-owner occupied 4,573 — — 4,573 — Commercial & Industrial 3,049 254 796 3,049 796 Residential 1-4 Family - Commercial 744 1,076 1,410 744 1,410 Residential 1-4 Family - Consumer 1,000 1,504 1,123 1,000 1,123 Residential 1-4 Family - Revolving 2,326 1,729 1,115 2,326 1,115 Auto 2,703 2,877 1,876 2,703 1,876 Consumer 517 334 409 517 409 Other Commercial 3,545 23 — 3,545 — LHFI 30-59 days past due $ 21,958 $ 8,694 $ 14,186 $ 21,958 $ 14,186 Construction and land development $ 386 $ — $ 107 $ 386 $ 107 Commercial real estate - owner occupied 1,902 10 763 1,902 763 Commercial real estate - non-owner occupied 797 — 457 797 457 Multifamily real estate 150 — — 150 — Commercial & Industrial 576 400 3,128 576 3,128 Residential 1-4 Family - Commercial 67 189 97 67 97 Residential 1-4 Family - Consumer 1,775 2,813 1,449 1,775 1,449 Residential 1-4 Family - Revolving 602 1,114 1,081 602 1,081 Auto 339 564 257 339 257 Consumer 164 214 101 164 101 LHFI 60-89 days past due $ 6,758 $ 5,304 $ 7,440 $ 6,758 $ 7,440 Past Due and still accruing $ 40,587 $ 24,109 $ 28,977 $ 40,587 $ 28,977 Past Due and still accruing / total LHFI 0.27 % 0.16 % 0.21 % 0.27 % 0.21 % Alternative Performance Measures (non-GAAP) Net interest income (FTE) (1) Net interest income (GAAP) $ 151,941 $ 152,084 $ 150,715 $ 457,469 $ 420,413 FTE adjustment 3,744 3,666 3,842 11,198 10,755 Net interest income (FTE) (non-GAAP) $ 155,685 $ 155,750 $ 154,557 $ 468,667 $ 431,168 Noninterest income (GAAP) 27,094 24,197 25,584 60,918 94,023 Total revenue (FTE) (non-GAAP) $ 182,779 $ 179,947 $ 180,141 $ 529,585 $ 525,191 Average earning assets $ 18,462,505 $ 18,091,809 $ 17,879,222 $ 18,264,957 $ 17,803,550 Net interest margin 3.27 % 3.37 % 3.34 % 3.35 % 3.16 % Net interest margin (FTE) 3.35 % 3.45 % 3.43 % 3.43 % 3.24 % Tangible Assets (2) Ending assets (GAAP) $ 20,736,236 $ 20,602,332 $ 19,950,231 $ 20,736,236 $ 19,950,231 Less: Ending goodwill 925,211 925,211 925,211 925,211 925,211 Less: Ending amortizable intangibles 21,277 23,469 29,142 21,277 29,142 Ending tangible assets (non-GAAP) $ 19,789,748 $ 19,653,652 $ 18,995,878 $ 19,789,748 $ 18,995,878 Tangible Common Equity (2) Ending equity (GAAP) $ 2,388,801 $ 2,424,470 $ 2,281,150 $ 2,388,801 $ 2,281,150 Less: Ending goodwill 925,211 925,211 925,211 925,211 925,211 Less: Ending amortizable intangibles 21,277 23,469 29,142 21,277 29,142 Less: Perpetual preferred stock 166,357 166,357 166,357 166,357 166,357 Ending tangible common equity (non-GAAP) $ 1,275,956 $ 1,309,433 $ 1,160,440 $ 1,275,956 $ 1,160,440 Average equity (GAAP) $ 2,446,902 $ 2,460,741 $ 2,436,999 $ 2,443,833 $ 2,513,522 Less: Average goodwill 925,211 925,211 925,211 925,211 932,035 Less: Average amortizable intangibles 22,342 23,748 30,347 23,881 36,891 Less: Average perpetual preferred stock 166,356 166,356 166,356 166,356 166,356 Average tangible common equity (non-GAAP) $ 1,332,993 $ 1,345,426 $ 1,315,085 $ 1,328,385 $ 1,378,240 ROTCE (2)(3) Net income available to common shareholders (GAAP) $ 51,050 $ 52,274 $ 55,103 $ 136,010 $ 155,085 Plus: Amortization of intangibles, tax effected 1,732 1,751 1,959 5,283 6,663 Net income available to common shareholders before amortization of intangibles (non-GAAP) $ 52,782 $ 54,025 $ 57,062 $ 141,293 $ 161,748 Return on average tangible common equity (ROTCE) 15.71 % 16.11 % 17.21 % 14.22 % 15.69 % 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Operating Measures (4) Net income (GAAP) $ 54,017 $ 55,241 $ 58,070 $ 144,911 $ 163,986 Plus: Strategic cost saving initiatives, net of tax 6,851 3,109 — 9,959 — Plus: Merger-related costs, net of tax 1,965 — — 1,965 — Plus: Legal reserve, net of tax — — — 3,950 — Plus: Strategic branch closing and facility consolidation costs, net of tax — — — — 4,351 Less: (Loss) gain on sale of securities, net of tax (21,799 ) 2 — (32,384 ) (2 ) Less: Gain on sale-leaseback transaction, net of tax 21,883 — — 21,883 — Less: Gain on sale of DHFB, net of tax — — — — 7,984 Adjusted operating earnings (non-GAAP) 62,749 58,348 58,070 171,286 160,355 Less: Dividends on preferred stock 2,967 2,967 2,967 8,901 8,901 Adjusted operating earnings available to common shareholders (non-GAAP) $ 59,782 $ 55,381 $ 55,103 $ 162,385 $ 151,454 Operating Efficiency Ratio (1)(6) Noninterest expense (GAAP) $ 108,508 $ 105,661 $ 99,923 $ 322,442 $ 304,012 Less: Amortization of intangible assets 2,193 2,216 2,480 6,687 8,434 Less: Strategic cost saving initiatives 8,672 3,935 — 12,607 — Less: Merger-related costs 1,993 — — 1,993 — Less: Legal reserve — — — 5,000 — Less: Strategic branch closing and facility consolidation costs — — — — 5,508 Adjusted operating noninterest expense (non-GAAP) $ 95,650 $ 99,510 $ 97,443 $ 296,155 $ 290,070 Noninterest income (GAAP) $ 27,094 $ 24,197 $ 25,584 $ 60,918 $ 94,023 Less: (Loss) gain on sale of securities (27,594 ) 2 — (40,992 ) (2 ) Less: Gain on sale-leaseback transaction 27,700 — — 27,700 — Less: Gain on sale of DHFB — — — — 9,082 Adjusted operating noninterest income (non-GAAP) $ 26,988 $ 24,195 $ 25,584 $ 74,210 $ 84,943 Net interest income (FTE) (non-GAAP) (1) $ 155,685 $ 155,750 $ 154,557 $ 468,667 $ 431,168 Adjusted operating noninterest income (non-GAAP) 26,988 24,195 25,584 74,210 84,943 Total adjusted revenue (FTE) (non-GAAP) (1) $ 182,673 $ 179,945 $ 180,141 $ 542,877 $ 516,111 Efficiency ratio 60.61 % 59.94 % 56.68 % 62.20 % 59.10 % Efficiency ratio (FTE) (1) 59.37 % 58.72 % 55.47 % 60.89 % 57.89 % Adjusted operating efficiency ratio (FTE) (1)(6) 52.36 % 55.30 % 54.09 % 54.55 % 56.20 % Operating ROA & ROE (4) Adjusted operating earnings (non-GAAP) $ 62,749 $ 58,348 $ 58,070 $ 171,286 $ 160,355 Average assets (GAAP) $ 20,596,189 $ 20,209,687 $ 19,980,500 $ 20,397,518 $ 19,873,644 Return on average assets (ROA) (GAAP) 1.04 % 1.10 % 1.15 % 0.95 % 1.10 % Adjusted operating return on average assets (ROA) (non-GAAP) 1.21 % 1.16 % 1.15 % 1.12 % 1.08 % Average equity (GAAP) $ 2,446,902 $ 2,460,741 $ 2,436,999 $ 2,443,833 $ 2,513,522 Return on average equity (ROE) (GAAP) 8.76 % 9.00 % 9.45 % 7.93 % 8.72 % Adjusted operating return on average equity (ROE) (non-GAAP) 10.17 % 9.51 % 9.45 % 9.37 % 8.53 % Operating ROTCE (2)(3)(4) Adjusted operating earnings available to common shareholders (non-GAAP) $ 59,782 $ 55,381 $ 55,103 $ 162,385 $ 151,454 Plus: Amortization of intangibles, tax effected 1,732 1,751 1,959 5,283 6,663 Adjusted operating earnings available to common shareholders before amortization of intangibles (non-GAAP) $ 61,514 $ 57,132 $ 57,062 $ 167,668 $ 158,117 Average tangible common equity (non-GAAP) $ 1,332,993 $ 1,345,426 $ 1,315,085 $ 1,328,385 $ 1,378,240 Adjusted operating return on average tangible common equity (non-GAAP) 18.31 % 17.03 % 17.21 % 16.88 % 15.34 % Pre-tax pre-provision adjusted operating earnings (7) Net income (GAAP) $ 54,017 $ 55,241 $ 58,070 $ 144,911 $ 163,986 Plus: Provision for credit losses 4,991 6,069 6,412 22,911 12,771 Plus: Income tax expense 11,519 9,310 11,894 28,123 33,667 Plus: Strategic cost saving initiatives 8,672 3,935 — 12,607 — Plus: Merger-related costs 1,993 — — 1,993 — Plus: Legal reserve — — — 5,000 — Plus: Strategic branch closing and facility consolidation costs — — — — 5,508 Less: (Loss) gain on sale of securities (27,594 ) 2 — (40,992 ) (2 ) Less: Gain on sale-leaseback transaction 27,700 — — 27,700 — Less: Gain on sale of DHFB — — — — 9,082 Pre-tax pre-provision adjusted operating earnings (non-GAAP) $ 81,086 $ 74,553 $ 76,376 $ 228,837 $ 206,852 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) $ 78,119 $ 71,586 $ 73,409 $ 219,936 $ 197,951 Weighted average common shares outstanding, diluted 74,999,128 74,995,557 74,705,054 74,943,999 75,034,084 Pre-tax pre-provision earnings per common share, diluted $ 1.04 $ 0.95 $ 0.98 $ 2.93 $ 2.64 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 09/30/23 06/30/23 09/30/22 09/30/23 09/30/22 Mortgage Origination Held for Sale Volume Refinance Volume $ 2,239 $ 4,076 $ 5,637 $ 9,767 $ 53,753 Purchase Volume 35,815 32,168 66,360 100,175 209,206 Total Mortgage loan originations held for sale $ 38,054 $ 36,244 $ 71,997 $ 109,942 $ 262,959 % of originations held for sale that are refinances 5.9 % 11.2 % 7.8 % 8.9 % 20.4 % Wealth Assets under management $ 4,675,523 $ 4,774,501 $ 4,065,059 $ 4,675,523 $ 4,065,059 Other Data End of period full-time employees 1,788 1,878 1,890 1,788 1,890 Number of full-service branches 109 109 114 109 114 Number of automatic transaction machines ("ATMs") 123 123 131 123 131 (1) These are non-GAAP financial measures. The Company believes net interest income (FTE), total revenue (FTE), and total adjusted revenue (FTE), which are used in computing net interest margin (FTE), efficiency ratio (FTE) and adjusted operating efficiency ratio (FTE), provide valuable additional insight into the net interest margin and the efficiency ratio by adjusting for differences in tax treatment of interest income sources. The entire FTE adjustment is attributable to interest income on earning assets, which is used in computing yield on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the FTE components. (2) These are non-GAAP financial measures. Tangible assets and tangible common equity are used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible assets, tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes will assist investors in assessing the capital of the Company and its ability to absorb potential losses. The Company believes tangible common equity is an important indication of its ability to grow organically and through business combinations as well as its ability to pay dividends and to engage in various capital management strategies. (3) These are non-GAAP financial measures. The Company believes that ROTCE is a meaningful supplement to GAAP financial measures and is useful to investors because it measures the performance of a business consistently across time without regard to whether components of the business were acquired or developed internally. (4) These are non-GAAP financial measures. Adjusted operating measures exclude, as applicable, strategic cost saving initiatives (principally composed of severance charges related to headcount reductions, costs related to modifying certain third party vendor contracts, and charges for exiting certain leases), merger-related costs, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic branch closing and related facility consolidation costs (principally composed of real estate, leases and other assets write downs, as well as severance and expense reduction initiatives), (loss) gain on sale of securities, gain on sale-leaseback transaction, and gain on sale of DHFB. The Company believes these non-GAAP adjusted measures provide investors with important information about the continuing economic results of the organization’s operations. (5) All ratios at September 30, 2023 are estimates and subject to change pending the Company’s filing of its FR Y9‑C. All other periods are presented as filed. (6) The adjusted operating efficiency ratio (FTE) excludes, as applicable, the amortization of intangible assets, strategic cost saving initiatives, merger-related costs, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic branch closing and related facility consolidation costs, (loss) gain on sale of securities, gain on sale-leaseback transaction, and gain on sale of DHFB. This measure is similar to the measure utilized by the Company when analyzing corporate performance and is also similar to the measure utilized for incentive compensation. The Company believes this adjusted measure provides investors with important information about the continuing economic results of the organization’s operations. (7) These are non-GAAP financial measures. Pre-tax pre-provision adjusted earnings excludes, as applicable, the provision for credit losses, which can fluctuate significantly from period-to-period under the CECL methodology, income tax expense, strategic cost saving initiatives, merger-related costs, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic branch closure initiatives and related facility consolidation costs, (loss) gain on sale of securities, gain on sale-leaseback transaction, and gain on sale of DHFB. The Company believes this adjusted measure provides investors with important information about the continuing economic results of the Company’s operations. ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) September 30, December 31, September 30, 2023 2022 2022 ASSETS (unaudited) (audited) (unaudited) Cash and cash equivalents: Cash and due from banks $ 233,526 $ 216,384 $ 177,969 Interest-bearing deposits in other banks 159,718 102,107 211,785 Federal funds sold 5,701 1,457 1,188 Total cash and cash equivalents 398,945 319,948 390,942 Securities available for sale, at fair value 2,084,928 2,741,816 2,717,323 Securities held to maturity, at carrying value 843,269 847,732 841,349 Restricted stock, at cost 104,785 120,213 82,050 Loans held for sale 6,608 3,936 12,889 Loans held for investment, net of deferred fees and costs 15,283,620 14,449,142 13,918,720 Less: allowance for loan and lease losses 125,627 110,768 108,009 Total loans held for investment, net 15,157,993 14,338,374 13,810,711 Premises and equipment, net 94,510 118,243 126,374 Goodwill 925,211 925,211 925,211 Amortizable intangibles, net 21,277 26,761 29,142 Bank owned life insurance 449,452 440,656 437,988 Other assets 649,258 578,248 576,252 Total assets $ 20,736,236 $ 20,461,138 $ 19,950,231 LIABILITIES Noninterest-bearing demand deposits $ 4,144,949 $ 4,883,239 $ 5,290,938 Interest-bearing deposits 12,641,556 11,048,438 11,255,278 Total deposits 16,786,505 15,931,677 16,546,216 Securities sold under agreements to repurchase 134,936 142,837 146,182 Other short-term borrowings 495,000 1,176,000 133,800 Long-term borrowings 390,733 389,863 389,576 Other liabilities 540,261 448,024 453,307 Total liabilities 18,347,435 18,088,401 17,669,081 Commitments and contingencies STOCKHOLDERS' EQUITY Preferred stock, $10.00 par value 173 173 173 Common stock, $1.33 par value 99,120 98,873 98,845 Additional paid-in capital 1,779,281 1,772,440 1,769,858 Retained earnings 988,133 919,537 874,393 Accumulated other comprehensive loss (477,906 ) (418,286 ) (462,119 ) Total stockholders' equity 2,388,801 2,372,737 2,281,150 Total liabilities and stockholders' equity $ 20,736,236 $ 20,461,138 $ 19,950,231 Common shares outstanding 74,997,132 74,712,622 74,703,774 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, 2023 2023 2022 2023 2022 Interest and dividend income: Interest and fees on loans $ 221,380 $ 205,172 $ 144,673 $ 616,544 $ 382,139 Interest on deposits in other banks 1,309 1,014 941 3,815 1,229 Interest and dividends on securities: Taxable 16,055 15,565 14,750 48,373 43,110 Nontaxable 8,415 8,496 10,792 26,220 31,889 Total interest and dividend income 247,159 230,247 171,156 694,952 458,367 Interest expense: Interest on deposits 83,590 65,267 15,386 200,690 25,966 Interest on short-term borrowings 6,499 8,044 1,229 22,106 1,805 Interest on long-term borrowings 5,129 4,852 3,826 14,687 10,183 Total interest expense 95,218 78,163 20,441 237,483 37,954 Net interest income 151,941 152,084 150,715 457,469 420,413 Provision for credit losses 4,991 6,069 6,412 22,911 12,771 Net interest income after provision for credit losses 146,950 146,015 144,303 434,558 407,642 Noninterest income: Service charges on deposit accounts 8,557 8,118 6,784 24,577 22,421 Other service charges, commissions and fees 2,632 1,693 1,770 6,071 5,134 Interchange fees 2,314 2,459 2,461 7,098 6,539 Fiduciary and asset management fees 4,549 4,359 4,134 13,169 18,329 Mortgage banking income 666 449 1,390 1,969 6,707 (Loss) gain on sale of securities (27,594 ) 2 — (40,992 ) (2 ) Bank owned life insurance income 2,973 2,870 3,445 8,671 8,858 Loan-related interest rate swap fees 2,695 2,316 2,050 6,450 8,510 Other operating income 30,302 1,931 3,550 33,905 17,527 Total noninterest income 27,094 24,197 25,584 60,918 94,023 Noninterest expenses: Salaries and benefits 57,449 62,019 56,600 179,996 170,203 Occupancy expenses 6,053 6,094 6,408 18,503 19,685 Furniture and equipment expenses 3,449 3,565 3,673 10,765 10,860 Technology and data processing 7,923 8,566 8,273 24,631 23,930 Professional services 3,291 4,433 3,504 11,138 12,274 Marketing and advertising expense 2,219 2,817 2,343 7,387 7,008 FDIC assessment premiums and other insurance 4,258 4,074 3,094 12,231 8,344 Franchise and other taxes 4,510 4,499 4,507 13,508 13,506 Loan-related expenses 1,388 1,619 1,575 4,560 5,218 Amortization of intangible assets 2,193 2,216 2,480 6,687 8,434 Other expenses 15,775 5,759 7,466 33,036 24,550 Total noninterest expenses 108,508 105,661 99,923 322,442 304,012 Income before income taxes 65,536 64,551 69,964 173,034 197,653 Income tax expense 11,519 9,310 11,894 28,123 33,667 Net income $ 54,017 $ 55,241 $ 58,070 144,911 163,986 Dividends on preferred stock 2,967 2,967 2,967 8,901 8,901 Net income available to common shareholders $ 51,050 $ 52,274 $ 55,103 $ 136,010 $ 155,085 Basic earnings per common share $ 0.68 $ 0.70 $ 0.74 $ 1.81 $ 2.07 Diluted earnings per common share $ 0.68 $ 0.70 $ 0.74 $ 1.81 $ 2.07 AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS) (UNAUDITED) (Dollars in thousands) For the Quarter Ended September 30, 2023 June 30, 2023 Average Balance Interest Income / Expense (1) Yield / Rate (1)(2) Average Balance Interest Income / Expense (1) Yield / Rate (1)(2) Assets: Securities: Taxable $ 1,799,675 $ 16,055 3.54 % $ 1,865,193 $ 15,565 3.35 % Tax-exempt 1,301,983 10,653 3.25 % 1,311,469 10,755 3.29 % Total securities 3,101,658 26,708 3.42 % 3,176,662 26,320 3.32 % LHFI, net of deferred fees and costs (3) 15,139,761 222,698 5.84 % 14,746,218 206,452 5.62 % Other earning assets 221,086 1,497 2.69 % 168,929 1,141 2.71 % Total earning assets 18,462,505 $ 250,903 5.39 % 18,091,809 $ 233,913 5.19 % Allowance for loan and lease losses (121,229 ) (117,643 ) Total non-earning assets 2,254,913 2,235,521 Total assets $ 20,596,189 $ 20,209,687 Liabilities and Stockholders' Equity: Interest-bearing deposits: Transaction and money market accounts $ 8,697,801 $ 57,378 2.62 % $ 8,387,473 $ 46,953 2.25 % Regular savings 964,971 499 0.21 % 1,014,565 430 0.17 % Time deposits 2,914,004 25,713 3.50 % 2,500,966 17,884 2.87 % Total interest-bearing deposits 12,576,776 83,590 2.64 % 11,903,004 65,267 2.20 % Other borrowings 905,170 11,628 5.10 % 1,071,171 12,896 4.83 % Total interest-bearing liabilities $ 13,481,946 $ 95,218 2.80 % $ 12,974,175 $ 78,163 2.42 % Noninterest-bearing liabilities: Demand deposits 4,218,835 4,377,150 Other liabilities 448,506 397,621 Total liabilities 18,149,287 17,748,946 Stockholders' equity 2,446,902 2,460,741 Total liabilities and stockholders' equity $ 20,596,189 $ 20,209,687 Net interest income $ 155,685 $ 155,750 Interest rate spread 2.59 % 2.77 % Cost of funds 2.04 % 1.74 % Net interest margin 3.35 % 3.45 % (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. View source version on businesswire.com: https://www.businesswire.com/news/home/20231019447738/en/