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 Second Quarter Financial Results By: Atlantic Union Bankshares Corporation via Business Wire July 25, 2023 at 07:30 AM EDT Atlantic Union Bankshares Corporation (the “Company” or “Atlantic Union”) (NYSE: AUB) reported net income available to common shareholders of $52.3 million and basic and diluted earnings per common share of $0.70 for the second quarter of 2023 and adjusted operating earnings available to common shareholders(1) of $55.4 million and adjusted diluted operating earnings per common share(1) of $0.74 for the second quarter of 2023. As previously disclosed, the Company initiated a series of cost saving 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 $3.9 million in pre-tax expenses during the second quarter of 2023, and the Company expects to recognize additional pre-tax expenses associated with these actions of approximately $7.5 million during the third quarter of 2023. “Atlantic Union delivered strong second quarter financial results despite the turmoil in the banking industry during the first half of the year,” said John C. Asbury, president and chief executive officer of Atlantic Union. “Loan growth remained strong and deposit levels were stable during the quarter. 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, in these challenging times.” “Operating under the mantra of soundness, profitability and growth – in that order of priority – Atlantic Union remains committed to generating sustainable, profitable growth and building long term value for our shareholders.” NET INTEREST INCOME For the second quarter of 2023, net interest income was $152.1 million, a decrease of $1.3 million from $153.4 million in the first quarter of 2023. Net interest income (FTE)(1) was $155.8 million in the second quarter of 2023, a decrease of $1.5 million from the first quarter of 2023. The decreases in net interest income and net interest income (FTE)(1) were primarily driven by higher deposit costs due to increases in market interest rates, as well as changes in the deposit mix as depositors migrated to higher cost interest bearing deposit accounts. These decreases were partially offset by an increase in interest income on loans due to net loan growth and variable rate loans repricing as short-term interest rates increased. Our net interest margin decreased 4 basis points from the prior quarter to 3.37% at June 30, 2023, and our net interest margin (FTE)(1) decreased 5 basis points during the same period to 3.45%. Earning asset yields increased by 27 basis points to 5.19% in the second quarter of 2023 compared to the first quarter of 2023, primarily due to the impact of increases in market interest rates on loans. Our cost of funds increased by 32 basis points to 1.74% at June 30, 2023 compared to the prior quarter, driven by higher deposit and borrowing costs and funding mix as noted above. The Company’s net interest margin (FTE) (1) includes the impact of acquisition accounting fair value adjustments. The impact of net accretion in the first and second quarters of 2023 are reflected in the following table (dollars in thousands): Loan Deposit Borrowings Accretion Amortization Amortization Total For the quarter ended March 31, 2023 $ 1,106 $ (14) $ (209) $ 883 For the quarter ended June 30, 2023 1,073 (7) (213) 853 ASSET QUALITY Overview At June 30, 2023, nonperforming assets (“NPAs”) as a percentage of total loans held for investment (“LHFI”) decreased 1 basis point from the prior quarter to 0.19% and included nonaccrual loans of $29.1 million. Accruing past due loans as a percentage of total LHFI totaled 16 basis points at June 30, 2023, a decrease of 5 basis points from March 31, 2023, and an increase of 1 basis point from June 30, 2022. Net charge-offs were 0.04% of total average LHFI (annualized) for the second quarter of 2023, a decrease of 9 basis points from March 31, 2023, and an increase of 1 basis point from June 30, 2022. The allowance for credit losses (“ACL”) totaled $136.2 million at June 30, 2023, a $4.5 million increase from the prior quarter. Nonperforming Assets At June 30, 2023, NPAs totaled $29.2 million, compared to $29.1 million in the prior quarter. The following table shows a summary of NPA balances at the quarter ended (dollars in thousands): June 30, March 31, December 31, September 30, June 30, 2023 2023 2022 2022 2022 Nonaccrual loans $ 29,105 $ 29,082 $ 27,038 $ 26,500 $ 29,070 Foreclosed properties 50 29 76 2,087 2,065 Total nonperforming assets $ 29,155 $ 29,111 $ 27,114 $ 28,587 $ 31,135 The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands): June 30, March 31, December 31, September 30, June 30, 2023 2023 2022 2022 2022 Beginning Balance $ 29,082 $ 27,038 $ 26,500 $ 29,070 $ 29,032 Net customer payments (5,950 ) (1,755 ) (1,805 ) (3,725 ) (2,472 ) Additions 6,685 4,151 2,935 1,302 3,203 Charge-offs (712 ) (39 ) (461 ) (125 ) (311 ) Loans returning to accruing status — (313 ) (131 ) — — Transfers to foreclosed property — — — (22 ) (382 ) Ending Balance $ 29,105 $ 29,082 $ 27,038 $ 26,500 $ 29,070 Past Due Loans At June 30, 2023, past due loans still accruing interest totaled $24.1 million or 0.16% of total LHFI, compared to $30.9 million or 0.21% of total LHFI at March 31, 2023, and $20.4 million or 0.15% of total LHFI at June 30, 2022. Of the total past due loans still accruing interest, $10.1 million or 0.07% of total LHFI were loans past due 90 days or more at June 30, 2023, compared to $7.2 million or 0.05% of total LHFI at March 31, 2023, and $4.6 million or 0.03% of total LHFI at June 30, 2022. The increase in loans past due 90 days or more was primarily due to one credit relationship within the commercial real estate – non-owner occupied portfolio. Allowance for Credit Losses At June 30, 2023, the ACL was $136.2 million and included an allowance for loan and lease losses (“ALLL”) of $120.7 million and a reserve for unfunded commitments of $15.5 million. The ACL at June 30, 2023 increased $4.5 million from March 31, 2023 due to loan growth in the second quarter of 2023 and the impact of continued uncertainty in the economic outlook. At both June 30, 2023 and March 31, 2023, the ACL as a percentage of total LHFI was 0.90%, and the ALLL as a percentage of total LHFI was 0.80%. Net Charge-offs Net charge-offs were $1.6 million or 0.04% of total average LHFI on an annualized basis for the second quarter of 2023, compared to $4.6 million or 0.13% (annualized) for the first quarter of 2023, and $939,000 or 0.03% (annualized) for the second quarter of 2022. Provision for Credit Losses For the second quarter of 2023, the Company recorded a provision for credit losses of $6.1 million, compared to a provision for credit losses of $11.9 million in the prior quarter, and a provision for credit losses of $3.6 million in the second quarter of 2022. The provision for credit losses for the second quarter of 2023 reflected a provision of $5.7 million for loan losses and a $349,000 provision for unfunded commitments. NONINTEREST INCOME Noninterest income increased $14.6 million to $24.2 million for the second quarter of 2023 from $9.6 million in the prior quarter, primarily due to $13.4 million of losses incurred on the sale of available for sale (“AFS”) securities in the prior quarter, driven by the Company’s balance sheet repositioning transactions, and that were not repeated during the second quarter. In addition, loan-related interest rate swap fees increased $877,000 from the prior quarter due to several new swap transactions, and other operating income increased $259,000 from the prior quarter primarily driven by an increase in loan syndication revenue. These increases in noninterest income were partially offset by a $405,000 decrease in mortgage banking income due to a decline in gain on sale margins. NONINTEREST EXPENSE Noninterest expense decreased $2.6 million to $105.7 million for the second quarter of 2023 from $108.3 million in the prior quarter. Adjusted operating noninterest expense,(1) which excludes amortization of intangible assets ($2.2 million in the second quarter and $2.3 million in the first quarter), expenses incurred associated with our strategic cost savings initiatives principally composed of severance charges related to headcount reductions and charges for exiting leases ($3.9 million in the second quarter), and the legal reserve associated with an ongoing regulatory matter as previously disclosed ($5.0 million in the first quarter), decreased $1.5 million to $99.5 million for the second quarter of 2023 from $101.0 million in the prior quarter. The decrease in adjusted operating noninterest expense(1) was primarily due to a $1.8 million decrease included within other expenses, composed of OREO-related gains recognized in the current quarter and reduced branch closing costs as compared to the prior quarter, and a $1.4 million decrease in salaries and benefits expense, outside of severance charges related to headcount reductions in the quarter, primarily due to seasonal decreases in payroll related taxes and 401(k) contribution expenses. These decreases in adjusted operating noninterest expense(1) were partially offset by increases of $1.0 million in professional services expense related to the LIBOR transition and other strategic projects, $466,000 in marketing and advertising expense, and $424,000 in technology and data processing expense. INCOME TAXES The effective tax rate for the three months ended June 30, 2023 and 2022 was 14.4% and 16.7%, respectively, and the effective tax rate for the six months ended June 30, 2023 and 2022 was 15.5% and 17.1%, respectively. The decrease in the effective tax rates is due to the increased proportion of tax-exempt income to pre-tax income for both the three and six months ended June 30, 2023 compared to the prior quarter and prior year, respectively. BALANCE SHEET At June 30, 2023, total assets were $20.6 billion, an increase of $499.0 million or approximately 10.0% (annualized) from March 31, 2023, and an increase of $940.5 million or approximately 4.8% from June 30, 2022. Total assets increased from the prior quarter primarily due to a $482.7 million increase in LHFI (net of deferred fees and costs). 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 $676.8 million decrease in investment securities due to the sale of $505.7 million in AFS securities as part of the Company’s balance sheet restructuring executed in the first quarter of 2023, as well as a decline in the market value of the AFS securities portfolio, due to the impact of market interest rate fluctuations. At June 30, 2023, LHFI (net of deferred fees and costs) totaled $15.1 billion, an increase of $482.7 million or 13.3% (annualized) from $14.6 billion at March 31, 2023. Average LHFI (net of deferred fees and costs) totaled $14.7 billion at June 30, 2023, an increase of $240.6 million or 6.7% (annualized) from the prior quarter. At June 30, 2023, LHFI (net of deferred fees and costs) increased $1.4 billion or 10.3% from June 30, 2022, and quarterly average LHFI (net of deferred fees and costs) increased $1.2 billion or 9.0% from the same period in the prior year. LHFI (net of deferred fees and costs) increased from the prior quarter and 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 June 30, 2023, total investments were $3.1 billion, a decrease of $52.2 million from March 31, 2023 and a decrease of $676.8 million from June 30, 2022. AFS securities totaled $2.2 billion at June 30, 2023, $2.3 billion at March 31, 2023, and $3.0 billion at June 30, 2022. At June 30, 2023, total net unrealized losses on the AFS securities portfolio were $450.1 million, an increase of $42.2 million from total net unrealized losses on AFS securities of $407.9 at March 31, 2023. Held to maturity (“HTM”) securities are carried at cost and totaled $849.6 million at June 30, 2023, $855.4 million at March 31, 2023, and $780.7 million at June 30, 2022 and have net unrealized losses of $41.8 million at June 30, 2023, an increase of $9.5 million from net unrealized losses on HTM securities of $32.3 million at March 31, 2023. At June 30, 2023, total deposits were $16.4 billion, a decrease of $43.9 million or approximately 1.1% (annualized) from March 31, 2023. Average deposits at June 30, 2023 decreased from the prior quarter by $137.1 million or 3.3% (annualized). Total deposits decreased from the prior quarter due to the impact of customer behavior in response to inflation and higher market interest rates, resulting in a decrease in low costing customer deposits, partially offset by an increase in customer time deposits and brokered deposits. Total deposits at June 30, 2023 increased $283.4 million or 1.8% from June 30, 2022, and quarterly average deposits at June 30, 2023 increased $89.1 million or 0.6% from the same period in the prior year. Total deposits increased from the same period in the prior year primarily due to increases in interest bearing customer deposits and brokered deposits, partially offset by decreases in demand deposits. At June 30, 2023, total borrowings were $1.3 billion, an increase of $521.4 million from March 31, 2023 and an increase of $522.4 million from June 30, 2022. Total borrowings increased from the prior quarter and prior year primarily due to an increase in Federal Home Loan Bank short-term borrowings, which was used to fund loan growth. The following table shows the Company’s capital ratios at the quarters ended: June 30, March 31, June 30, 2023 2023 2022 Common equity Tier 1 capital ratio (2) 9.86 % 9.91 % 9.96 % Tier 1 capital ratio (2) 10.81 % 10.89 % 11.00 % Total capital ratio (2) 13.64 % 13.76 % 13.86 % Leverage ratio (Tier 1 capital to average assets) (2) 9.64 % 9.38 % 9.26 % Common equity to total assets 10.96 % 11.31 % 11.32 % Tangible common equity to tangible assets (1) 6.66 % 6.91 % 6.78 % _____________________________ At June 30, 2023, the Company’s common equity to total assets ratio and tangible common equity to tangible assets ratio decreased compared to the prior quarter and prior year primarily due to the unrealized losses on the AFS securities portfolio recorded in other comprehensive income due to higher market interest rates, as well as the increase in total assets. During the second 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 first quarter of 2023 and the second quarter of 2022. During the second quarter of 2023, the Company also declared and paid cash dividends of $0.30 per common share, consistent with the first quarter of 2023 and an increase of $0.02 or approximately 7.1% from the second 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 June 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. ANNOUNCED TRANSACTION As announced and further described in a separate press release issued by the Company today, the Company has entered into a merger agreement to acquire American National Bankshares Inc. (“American National”) in an all-stock transaction. 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 approximately 125 ATMs located throughout Virginia and in portions of Maryland and North Carolina. Certain non-bank financial services affiliates of Atlantic Union Bank include: Atlantic Union Equipment Finance, Inc., which provides equipment financing; Atlantic Union Financial Consultants, LLC, which provides brokerage services; and Union Insurance Group, LLC, which offers various lines of insurance products. SECOND QUARTER 2023 EARNINGS RELEASE CONFERENCE CALL In light of today’s announcement that the Company has entered into a merger agreement to acquire American National, the Company will hold a conference call and webcast for investors at 9:00 a.m. Eastern Time on Tuesday, July 25, 2023 during which the Company’s management will review the Company’s financial results for the second quarter 2023 and discuss the proposed merger. The listen-only webcast and the accompanying slides can be accessed at: https://edge.media-server.com/mmc/p/g5jw6mu3. For analysts who wish to participate in the conference call, please register at the following URL: https://register.vevent.com/register/BI1a5d16a5982740369c57e980002f5ab6. To participate in the conference call, you must use the link to receive an audio dial-in number and an Access PIN. A replay of the webcast, and the accompanying slides, will be available on the Company’s website for 90 days at: https://investors.atlanticunionbank.com/. NON-GAAP FINANCIAL MEASURES In reporting the results as of and for the period ended June 30, 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 impact of cost saving measures, 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; 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 the 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; other factors, many of which are beyond our control; and the risks, uncertainties and assumptions set forth under the heading “Caution About Forward-Looking Statements” in the joint press release issued by the Company and American National on the date hereof with respect to the proposed merger transaction between the Company and American National. 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 Report on Form 10-Q for the quarter ended 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 its 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 Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Results of Operations Interest and dividend income $ 230,247 $ 217,546 $ 148,755 $ 447,793 $ 287,212 Interest expense 78,163 64,103 9,988 142,265 17,514 Net interest income 152,084 153,443 138,767 305,528 269,698 Provision for credit losses 6,069 11,850 3,559 17,920 6,359 Net interest income after provision for credit losses 146,015 141,593 135,208 287,608 263,339 Noninterest income 24,197 9,628 38,286 33,824 68,439 Noninterest expenses 105,661 108,274 98,768 213,934 204,089 Income before income taxes 64,551 42,947 74,726 107,498 127,689 Income tax expense 9,310 7,294 12,500 16,604 21,773 Net income 55,241 35,653 62,226 90,894 105,916 Dividends on preferred stock 2,967 2,967 2,967 5,934 5,934 Net income available to common shareholders $ 52,274 $ 32,686 $ 59,259 $ 84,960 $ 99,982 Interest earned on earning assets (FTE) (1) $ 233,913 $ 221,334 $ 152,332 $ 455,248 $ 294,124 Net interest income (FTE) (1) 155,750 157,231 142,344 312,983 276,610 Total revenue (FTE) (1) 179,947 166,859 180,630 346,807 345,049 Pre-tax pre-provision adjusted operating earnings (7) 74,553 73,197 69,205 147,751 130,476 Key Ratios Earnings per common share, diluted $ 0.70 $ 0.44 $ 0.79 $ 1.13 $ 1.33 Return on average assets (ROA) 1.10 % 0.71 % 1.27 % 0.90 % 1.08 % Return on average equity (ROE) 9.00 % 5.97 % 10.21 % 7.51 % 8.37 % Return on average tangible common equity (ROTCE) (2) (3) 16.11 % 10.71 % 18.93 % 13.46 % 14.97 % Efficiency ratio 59.94 % 66.40 % 55.78 % 63.04 % 60.36 % Efficiency ratio (FTE) (1) 58.72 % 64.89 % 54.68 % 61.69 % 59.15 % Net interest margin 3.37 % 3.41 % 3.15 % 3.39 % 3.06 % Net interest margin (FTE) (1) 3.45 % 3.50 % 3.24 % 3.47 % 3.14 % Yields on earning assets (FTE) (1) 5.19 % 4.92 % 3.46 % 5.05 % 3.34 % Cost of interest-bearing liabilities 2.42 % 2.02 % 0.35 % 2.22 % 0.30 % Cost of deposits 1.61 % 1.28 % 0.15 % 1.44 % 0.13 % Cost of funds 1.74 % 1.42 % 0.22 % 1.58 % 0.20 % Operating Measures (4) Adjusted operating earnings $ 58,348 $ 50,189 $ 54,244 $ 108,537 $ 102,285 Adjusted operating earnings available to common shareholders 55,381 47,222 51,277 102,603 96,351 Adjusted operating earnings per common share, diluted $ 0.74 $ 0.63 $ 0.69 $ 1.37 $ 1.28 Adjusted operating ROA 1.16 % 1.00 % 1.10 % 1.08 % 1.04 % Adjusted operating ROE 9.51 % 8.40 % 8.90 % 8.96 % 8.08 % Adjusted operating ROTCE (2) (3) 17.03 % 15.22 % 16.47 % 16.14 % 14.45 % Adjusted operating efficiency ratio (FTE) (1)(6) 55.30 % 56.03 % 55.88 % 55.66 % 57.34 % Per Share Data Earnings per common share, basic $ 0.70 $ 0.44 $ 0.79 $ 1.13 $ 1.33 Earnings per common share, diluted 0.70 0.44 0.79 1.13 1.33 Cash dividends paid per common share 0.30 0.30 0.28 0.60 0.56 Market value per share 25.95 35.05 33.92 25.95 33.92 Book value per common share 30.31 30.53 29.95 30.31 29.95 Tangible book value per common share (2) 17.58 17.78 17.07 17.58 17.07 Price to earnings ratio, diluted 9.28 19.77 10.68 11.35 12.65 Price to book value per common share ratio 0.86 1.15 1.13 0.86 1.13 Price to tangible book value per common share ratio (2) 1.48 1.97 1.99 1.48 1.99 Weighted average common shares outstanding, basic 74,995,450 74,832,141 74,847,899 74,914,247 75,194,347 Weighted average common shares outstanding, diluted 74,995,557 74,835,514 74,849,871 74,915,977 75,201,326 Common shares outstanding at end of period 74,998,075 74,989,228 74,688,314 74,998,075 74,688,314 ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Capital Ratios Common equity Tier 1 capital ratio (5) 9.86 % 9.91 % 9.96 % 9.86 % 9.96 % Tier 1 capital ratio (5) 10.81 % 10.89 % 11.00 % 10.81 % 11.00 % Total capital ratio (5) 13.64 % 13.76 % 13.86 % 13.64 % 13.86 % Leverage ratio (Tier 1 capital to average assets) (5) 9.64 % 9.38 % 9.26 % 9.64 % 9.26 % Common equity to total assets 10.96 % 11.31 % 11.32 % 10.96 % 11.32 % Tangible common equity to tangible assets (2) 6.66 % 6.91 % 6.78 % 6.66 % 6.78 % Financial Condition Assets $ 20,602,332 $ 20,103,370 $ 19,661,799 $ 20,602,332 $ 19,661,799 LHFI (net of deferred fees and costs) 15,066,930 14,584,280 13,655,408 15,066,930 13,655,408 Securities 3,143,236 3,195,399 3,820,078 3,143,236 3,820,078 Earning Assets 18,452,007 17,984,057 17,578,979 18,452,007 17,578,979 Goodwill 925,211 925,211 925,211 925,211 925,211 Amortizable intangibles, net 23,469 24,482 31,621 23,469 31,621 Deposits 16,411,987 16,455,910 16,128,635 16,411,987 16,128,635 Borrowings 1,320,301 798,910 797,948 1,320,301 797,948 Stockholders' equity 2,424,470 2,440,236 2,391,476 2,424,470 2,391,476 Tangible common equity (2) 1,309,433 1,324,186 1,268,287 1,309,433 1,268,287 LHFI, net of deferred fees and costs Construction and land development $ 1,231,720 $ 1,179,872 $ 988,379 $ 1,231,720 $ 988,379 Commercial real estate - owner occupied 1,952,189 1,956,585 1,965,702 1,952,189 1,965,702 Commercial real estate - non-owner occupied 4,113,318 3,968,085 3,860,819 4,113,318 3,860,819 Multifamily real estate 788,895 822,006 762,502 788,895 762,502 Commercial & Industrial 3,373,148 3,082,478 2,595,891 3,373,148 2,595,891 Residential 1-4 Family - Commercial 518,317 522,760 553,771 518,317 553,771 Residential 1-4 Family - Consumer 1,017,698 974,511 865,174 1,017,698 865,174 Residential 1-4 Family - Revolving 600,339 589,791 583,073 600,339 583,073 Auto 585,756 600,658 525,301 585,756 525,301 Consumer 134,709 145,090 180,045 134,709 180,045 Other Commercial 750,841 742,444 774,751 750,841 774,751 Total LHFI $ 15,066,930 $ 14,584,280 $ 13,655,408 $ 15,066,930 $ 13,655,408 Deposits Interest checking accounts $ 4,824,192 $ 4,714,366 $ 3,943,303 $ 4,824,192 $ 3,943,303 Money market accounts 3,413,936 3,547,514 3,956,046 3,413,936 3,956,046 Savings accounts 986,081 1,047,914 1,165,577 986,081 1,165,577 Customer time deposits of $250,000 and over 578,739 541,447 335,706 578,739 335,706 Other customer time deposits 1,813,031 1,648,747 1,308,493 1,813,031 1,308,493 Time deposits 2,391,770 2,190,194 1,644,199 2,391,770 1,644,199 Total interest-bearing customer deposits 11,615,979 11,499,988 10,709,125 11,615,979 10,709,125 Brokered deposits 485,702 377,913 57,972 485,702 57,972 Total interest-bearing deposits $ 12,101,681 $ 11,877,901 $ 10,767,097 $ 12,101,681 $ 10,767,097 Demand deposits 4,310,306 4,578,009 5,361,538 4,310,306 5,361,538 Total deposits $ 16,411,987 $ 16,455,910 $ 16,128,635 $ 16,411,987 $ 16,128,635 Averages Assets $ 20,209,687 $ 20,384,351 $ 19,719,402 $ 20,296,536 $ 19,819,330 LHFI (net of deferred fees and costs) 14,746,218 14,505,611 13,525,529 14,626,579 13,413,780 Loans held for sale 14,413 5,876 20,634 10,168 17,652 Securities 3,176,662 3,467,561 3,930,912 3,321,308 4,064,007 Earning assets 18,091,809 18,238,088 17,646,470 18,164,545 17,765,085 Deposits 16,280,154 16,417,212 16,191,056 16,348,304 16,351,822 Time deposits 2,500,966 2,291,530 1,667,378 2,396,827 1,716,743 Interest-bearing deposits 11,903,004 11,723,865 10,824,465 11,813,929 11,054,095 Borrowings 1,071,171 1,122,244 765,886 1,096,567 639,506 Interest-bearing liabilities 12,974,175 12,846,109 11,590,351 12,910,496 11,693,601 Stockholders' equity 2,460,741 2,423,600 2,445,045 2,442,273 2,552,418 Tangible common equity (2) 1,345,426 1,306,445 1,304,536 1,326,043 1,410,342 ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Asset Quality Allowance for Credit Losses (ACL) Beginning balance, Allowance for loan and lease losses (ALLL) $ 116,512 $ 110,768 $ 102,591 $ 110,768 $ 99,787 Add: Recoveries 1,035 1,167 1,018 2,202 2,531 Less: Charge-offs 2,602 5,726 1,957 8,328 3,466 Add: Provision for loan losses 5,738 10,303 2,532 16,041 5,332 Ending balance, ALLL $ 120,683 $ 116,512 $ 104,184 $ 120,683 $ 104,184 Beginning balance, Reserve for unfunded commitment (RUC) $ 15,199 $ 13,675 $ 8,000 $ 13,675 $ 8,000 Add: Provision for unfunded commitments 349 1,524 1,000 1,873 1,000 Ending balance, RUC $ 15,548 $ 15,199 $ 9,000 $ 15,548 $ 9,000 Total ACL $ 136,231 $ 131,711 $ 113,184 $ 136,231 $ 113,184 ACL / total LHFI 0.90 % 0.90 % 0.83 % 0.90 % 0.83 % ALLL / total LHFI 0.80 % 0.80 % 0.76 % 0.80 % 0.76 % Net charge-offs / total average LHFI 0.04 % 0.13 % 0.03 % 0.08 % 0.01 % Provision for loan losses/ total average LHFI 0.16 % 0.29 % 0.08 % 0.22 % 0.08 % Nonperforming Assets Construction and land development $ 284 $ 363 $ 581 $ 284 $ 581 Commercial real estate - owner occupied 3,978 6,174 4,996 3,978 4,996 Commercial real estate - non-owner occupied 6,473 1,481 3,301 6,473 3,301 Commercial & Industrial 2,738 4,815 2,728 2,738 2,728 Residential 1-4 Family - Commercial 1,844 1,907 2,031 1,844 2,031 Residential 1-4 Family - Consumer 10,033 10,540 12,084 10,033 12,084 Residential 1-4 Family - Revolving 3,461 3,449 3,069 3,461 3,069 Auto 291 347 279 291 279 Consumer 3 6 1 3 1 Nonaccrual loans $ 29,105 $ 29,082 $ 29,070 $ 29,105 $ 29,070 Foreclosed property 50 29 2,065 50 2,065 Total nonperforming assets (NPAs) $ 29,155 $ 29,111 $ 31,135 $ 29,155 $ 31,135 Construction and land development $ 24 $ 249 $ 1 $ 24 $ 1 Commercial real estate - owner occupied 2,463 2,133 792 2,463 792 Commercial real estate - non-owner occupied 2,763 1,032 642 2,763 642 Commercial & Industrial 810 633 322 810 322 Residential 1-4 Family - Commercial 693 232 184 693 184 Residential 1-4 Family - Consumer 1,716 859 1,112 1,716 1,112 Residential 1-4 Family - Revolving 1,259 1,766 997 1,259 997 Auto 243 137 134 243 134 Consumer 74 137 79 74 79 Other Commercial 66 66 329 66 329 LHFI ≥ 90 days and still accruing $ 10,111 $ 7,244 $ 4,592 $ 10,111 $ 4,592 Total NPAs and LHFI ≥ 90 days $ 39,266 $ 36,355 $ 35,727 $ 39,266 $ 35,727 NPAs / total LHFI 0.19 % 0.20 % 0.23 % 0.19 % 0.23 % NPAs / total assets 0.14 % 0.14 % 0.16 % 0.14 % 0.16 % ALLL / nonaccrual loans 414.65 % 400.63 % 358.39 % 414.65 % 358.39 % ALLL/ nonperforming assets 413.94 % 400.23 % 334.62 % 413.94 % 334.62 % ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Past Due Detail Construction and land development $ 295 $ 815 $ 645 $ 295 $ 645 Commercial real estate - owner occupied 602 2,251 1,374 602 1,374 Commercial real estate - non-owner occupied — 52 511 — 511 Commercial & Industrial 254 981 2,581 254 2,581 Residential 1-4 Family - Commercial 1,076 1,399 1,944 1,076 1,944 Residential 1-4 Family - Consumer 1,504 11,579 594 1,504 594 Residential 1-4 Family - Revolving 1,729 1,384 1,368 1,729 1,368 Auto 2,877 2,026 1,841 2,877 1,841 Consumer 334 295 361 334 361 Other Commercial 23 — 11 23 11 LHFI 30-59 days past due $ 8,694 $ 20,782 $ 11,230 $ 8,694 $ 11,230 Commercial real estate - owner occupied 10 798 807 10 807 Commercial & Industrial 400 61 546 400 546 Residential 1-4 Family - Commercial 189 271 474 189 474 Residential 1-4 Family - Consumer 2,813 158 1,646 2,813 1,646 Residential 1-4 Family - Revolving 1,114 1,069 731 1,114 731 Auto 564 295 213 564 213 Consumer 214 176 210 214 210 LHFI 60-89 days past due $ 5,304 $ 2,828 $ 4,627 $ 5,304 $ 4,627 Past Due and still accruing $ 24,109 $ 30,854 $ 20,449 $ 24,109 $ 20,449 Past Due and still accruing / total LHFI 0.16 % 0.21 % 0.15 % 0.16 % 0.15 % Alternative Performance Measures (non-GAAP) Net interest income (FTE) (1) Net interest income (GAAP) $ 152,084 $ 153,443 $ 138,767 $ 305,528 $ 269,698 FTE adjustment 3,666 3,788 3,577 7,455 6,912 Net interest income (FTE) (non-GAAP) $ 155,750 $ 157,231 $ 142,344 $ 312,983 $ 276,610 Noninterest income (GAAP) 24,197 9,628 38,286 33,824 68,439 Total revenue (FTE) (non-GAAP) $ 179,947 $ 166,859 $ 180,630 $ 346,807 $ 345,049 Average earning assets $ 18,091,809 $ 18,238,088 $ 17,646,470 $ 18,164,545 $ 17,765,085 Net interest margin 3.37 % 3.41 % 3.15 % 3.39 % 3.06 % Net interest margin (FTE) 3.45 % 3.50 % 3.24 % 3.47 % 3.14 % Tangible Assets (2) Ending assets (GAAP) $ 20,602,332 $ 20,103,370 $ 19,661,799 $ 20,602,332 $ 19,661,799 Less: Ending goodwill 925,211 925,211 925,211 925,211 925,211 Less: Ending amortizable intangibles 23,469 24,482 31,621 23,469 31,621 Ending tangible assets (non-GAAP) $ 19,653,652 $ 19,153,677 $ 18,704,967 $ 19,653,652 $ 18,704,967 Tangible Common Equity (2) Ending equity (GAAP) $ 2,424,470 $ 2,440,236 $ 2,391,476 $ 2,424,470 $ 2,391,476 Less: Ending goodwill 925,211 925,211 925,211 925,211 925,211 Less: Ending amortizable intangibles 23,469 24,482 31,621 23,469 31,621 Less: Perpetual preferred stock 166,357 166,357 166,357 166,357 166,357 Ending tangible common equity (non-GAAP) $ 1,309,433 $ 1,324,186 $ 1,268,287 $ 1,309,433 $ 1,268,287 Average equity (GAAP) $ 2,460,741 $ 2,423,600 $ 2,445,045 $ 2,442,273 $ 2,552,418 Less: Average goodwill 925,211 925,211 935,446 925,211 935,503 Less: Average amortizable intangibles 23,748 25,588 38,707 24,663 40,217 Less: Average perpetual preferred stock 166,356 166,356 166,356 166,356 166,356 Average tangible common equity (non-GAAP) $ 1,345,426 $ 1,306,445 $ 1,304,536 $ 1,326,043 $ 1,410,342 ROTCE (2)(3) Net income available to common shareholders (GAAP) $ 52,274 $ 32,686 $ 59,259 $ 84,960 $ 99,982 Plus: Amortization of intangibles, tax effected 1,751 1,800 2,303 3,550 4,704 Net income available to common shareholders before amortization of intangibles (non-GAAP) $ 54,025 $ 34,486 $ 61,562 $ 88,510 $ 104,686 Return on average tangible common equity (ROTCE) 16.11 % 10.71 % 18.93 % 13.46 % 14.97 % ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Operating Measures (4) Net income (GAAP) $ 55,241 $ 35,653 $ 62,226 $ 90,894 $ 105,916 Plus: Strategic cost saving initiatives, net of tax 3,109 — — 3,109 — Plus: Legal reserve, net of tax — 3,950 — 3,950 — Plus: Strategic branch closing and facility consolidation costs, net of tax — — — — 4,351 Less: Gain (loss) on sale of securities, net of tax 2 (10,586 ) (2 ) (10,584 ) (2 ) Less: Gain on sale of DHFB, net of tax — — 7,984 — 7,984 Adjusted operating earnings (non-GAAP) 58,348 50,189 54,244 108,537 102,285 Less: Dividends on preferred stock 2,967 2,967 2,967 5,934 5,934 Adjusted operating earnings available to common shareholders (non-GAAP) $ 55,381 $ 47,222 $ 51,277 $ 102,603 $ 96,351 Noninterest expense (GAAP) $ 105,661 $ 108,274 $ 98,768 $ 213,934 $ 204,089 Less: Amortization of intangible assets 2,216 2,279 2,915 4,494 5,954 Less: Strategic cost saving initiatives 3,935 — — 3,935 — Less: Legal reserve — 5,000 — 5,000 — Less: Strategic branch closing and facility consolidation costs — — — — 5,508 Adjusted operating noninterest expense (non-GAAP) $ 99,510 $ 100,995 $ 95,853 $ 200,505 $ 192,627 Noninterest income (GAAP) $ 24,197 $ 9,628 $ 38,286 $ 33,824 $ 68,439 Less: Gain (loss) on sale of securities 2 (13,400 ) (2 ) (13,398 ) (2 ) Less: Gain on sale of DHFB — — 9,082 — 9,082 Adjusted operating noninterest income (non-GAAP) $ 24,195 $ 23,028 $ 29,206 $ 47,222 $ 59,359 Net interest income (FTE) (non-GAAP) (1) $ 155,750 $ 157,231 $ 142,344 $ 312,983 $ 276,610 Adjusted operating noninterest income (non-GAAP) 24,195 23,028 29,206 47,222 59,359 Total adjusted revenue (FTE) (non-GAAP) (1) $ 179,945 $ 180,259 $ 171,550 $ 360,205 $ 335,969 Efficiency ratio 59.94 % 66.40 % 55.78 % 63.04 % 60.36 % Efficiency ratio (FTE) (1) 58.72 % 64.89 % 54.68 % 61.69 % 59.15 % Adjusted operating efficiency ratio (FTE) (1)(6) 55.30 % 56.03 % 55.88 % 55.66 % 57.34 % Operating ROA & ROE (4) Adjusted operating earnings (non-GAAP) $ 58,348 $ 50,189 $ 54,244 $ 108,537 $ 102,285 Average assets (GAAP) $ 20,209,687 $ 20,384,351 $ 19,719,402 $ 20,296,536 $ 19,819,330 Return on average assets (ROA) (GAAP) 1.10 % 0.71 % 1.27 % 0.90 % 1.08 % Adjusted operating return on average assets (ROA) (non-GAAP) 1.16 % 1.00 % 1.10 % 1.08 % 1.04 % Average equity (GAAP) $ 2,460,741 $ 2,423,600 $ 2,445,045 $ 2,442,273 $ 2,552,418 Return on average equity (ROE) (GAAP) 9.00 % 5.97 % 10.21 % 7.51 % 8.37 % Adjusted operating return on average equity (ROE) (non-GAAP) 9.51 % 8.40 % 8.90 % 8.96 % 8.08 % Operating ROTCE (2)(3)(4) Adjusted operating earnings available to common shareholders (non-GAAP) $ 55,381 $ 47,222 $ 51,277 $ 102,603 $ 96,351 Plus: Amortization of intangibles, tax effected 1,751 1,800 2,303 3,550 4,704 Adjusted operating earnings available to common shareholders before amortization of intangibles (non-GAAP) $ 57,132 $ 49,022 $ 53,580 $ 106,153 $ 101,055 Average tangible common equity (non-GAAP) $ 1,345,426 $ 1,306,445 $ 1,304,536 $ 1,326,043 $ 1,410,342 Adjusted operating return on average tangible common equity (non-GAAP) 17.03 % 15.22 % 16.47 % 16.14 % 14.45 % Pre-tax pre-provision adjusted operating earnings (7) Net income (GAAP) $ 55,241 $ 35,653 $ 62,226 $ 90,894 $ 105,916 Plus: Provision for credit losses 6,069 11,850 3,559 17,920 6,359 Plus: Income tax expense 9,310 7,294 12,500 16,604 21,773 Plus: Strategic cost saving initiatives 3,935 — — 3,935 — Plus: Legal reserve — 5,000 — 5,000 — Plus: Strategic branch closing and facility consolidation costs — — — — 5,508 Less: Gain (loss) on sale of securities 2 (13,400 ) (2 ) (13,398 ) (2 ) Less: Gain on sale of DHFB — — 9,082 — 9,082 Pre-tax pre-provision adjusted operating earnings (non-GAAP) $ 74,553 $ 73,197 $ 69,205 $ 147,751 $ 130,476 Less: Dividends on preferred stock 2,967 2,967 2,967 5,934 5,934 Pre-tax pre-provision adjusted operating earnings available to common shareholders (non-GAAP) $ 71,586 $ 70,230 $ 66,238 $ 141,817 $ 124,542 Weighted average common shares outstanding, diluted 74,995,557 74,835,514 74,849,871 74,915,977 75,201,326 Pre-tax pre-provision earnings per common share, diluted $ 0.95 $ 0.94 $ 0.88 $ 1.89 $ 1.66 ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Mortgage Origination Held for Sale Volume Refinance Volume $ 4,076 $ 3,452 $ 14,916 $ 7,528 $ 48,116 Purchase Volume 32,168 32,192 84,551 64,361 142,846 Total Mortgage loan originations held for sale $ 36,244 $ 35,644 $ 99,467 $ 71,889 $ 190,962 % of originations held for sale that are refinances 11.2 % 9.7 % 15.0 % 10.5 % 25.2 % Wealth Assets under management $ 4,774,501 $ 4,494,268 $ 4,415,537 $ 4,774,501 $ 4,415,537 Other Data End of period full-time employees 1,878 1,840 1,856 1,878 1,856 Number of full-service branches 109 109 114 109 114 Number of automatic transaction machines ("ATMs") 123 127 131 123 131 _____________________________ (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, gain (loss) on sale of securities, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic cost saving initiatives (principally composed of severance charges related to headcount reductions and charges for exiting leases), gain on sale of DHFB, as well as strategic branch closure initiatives and related facility consolidation costs (principally composed of real estate, leases and other assets write downs, as well as severance and expense reduction initiatives). The Company believes these non-GAAP adjusted measures provide investors with important information about the continuing economic results of the organization’s operations. (5) All ratios at June 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, gain (loss) on sale of securities, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic cost saving initiatives, gain on sale of DHFB, as well as strategic branch closure initiatives and related facility consolidation costs. This measure is similar to the measure utilized by the Company when analyzing corporate performance and is also similar to the measure utilized for incentive compensation. The Company believes this adjusted measure provides investors with important information about the 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, gain (loss) on sale of securities, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic cost saving initiatives, gain on sale of DHFB, as well as strategic branch closure initiatives and related facility consolidation costs. The Company believes this adjusted measure provides investors with important information about the continuing economic results of the Company’s operations. ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) June 30, December 31, June 30, 2023 2022 2022 ASSETS (unaudited) (audited) (unaudited) Cash and cash equivalents: Cash and due from banks $ 199,778 $ 216,384 $ 158,902 Interest-bearing deposits in other banks 227,015 102,107 82,086 Federal funds sold 1,474 1,457 388 Total cash and cash equivalents 428,267 319,948 241,376 Securities available for sale, at fair value 2,182,448 2,741,816 2,951,421 Securities held to maturity, at carrying value 849,610 847,732 780,749 Restricted stock, at cost 111,178 120,213 87,908 Loans held for sale 10,327 3,936 15,866 Loans held for investment, net of deferred fees and costs 15,066,930 14,449,142 13,655,408 Less: allowance for loan and lease losses 120,683 110,768 104,184 Total loans held for investment, net 14,946,247 14,338,374 13,551,224 Premises and equipment, net 114,786 118,243 128,661 Goodwill 925,211 925,211 925,211 Amortizable intangibles, net 23,469 26,761 31,621 Bank owned life insurance 446,441 440,656 436,703 Other assets 564,348 578,248 511,059 Total assets $ 20,602,332 $ 20,461,138 $ 19,661,799 LIABILITIES Noninterest-bearing demand deposits $ 4,310,306 $ 4,883,239 $ 5,361,538 Interest-bearing deposits 12,101,681 11,048,438 10,767,097 Total deposits 16,411,987 15,931,677 16,128,635 Securities sold under agreements to repurchase 130,461 142,837 118,658 Other short-term borrowings 799,400 1,176,000 290,000 Long-term borrowings 390,440 389,863 389,290 Other liabilities 445,574 448,024 343,740 Total liabilities 18,177,862 18,088,401 17,270,323 Commitments and contingencies STOCKHOLDERS' EQUITY Preferred stock, $10.00 par value 173 173 173 Common stock, $1.33 par value 99,088 98,873 98,822 Additional paid-in capital 1,776,494 1,772,440 1,767,063 Retained earnings 959,582 919,537 841,701 Accumulated other comprehensive loss (410,867 ) (418,286 ) (316,283 ) Total stockholders' equity 2,424,470 2,372,737 2,391,476 Total liabilities and stockholders' equity $ 20,602,332 $ 20,461,138 $ 19,661,799 Common shares outstanding 74,998,075 74,712,622 74,688,314 Common shares authorized 200,000,000 200,000,000 200,000,000 Preferred shares outstanding 17,250 17,250 17,250 Preferred shares authorized 500,000 500,000 500,000 ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Dollars in thousands, except share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2023 2023 2022 2023 2022 Interest and dividend income: Interest and fees on loans $ 205,172 $ 189,992 $ 123,266 $ 395,165 $ 237,466 Interest on deposits in other banks 1,014 1,493 157 2,507 288 Interest and dividends on securities: Taxable 15,565 16,753 14,695 32,317 28,361 Nontaxable 8,496 9,308 10,637 17,804 21,097 Total interest and dividend income 230,247 217,546 148,755 447,793 287,212 Interest expense: Interest on deposits 65,267 51,834 6,097 117,100 10,580 Interest on short-term borrowings 8,044 7,563 555 15,607 576 Interest on long-term borrowings 4,852 4,706 3,336 9,558 6,358 Total interest expense 78,163 64,103 9,988 142,265 17,514 Net interest income 152,084 153,443 138,767 305,528 269,698 Provision for credit losses 6,069 11,850 3,559 17,920 6,359 Net interest income after provision for credit losses 146,015 141,593 135,208 287,608 263,339 Noninterest income: Service charges on deposit accounts 8,118 7,902 8,040 16,020 15,637 Other service charges, commissions and fees 1,693 1,746 1,709 3,439 3,364 Interchange fees 2,459 2,325 2,268 4,784 4,078 Fiduciary and asset management fees 4,359 4,262 6,939 8,620 14,194 Mortgage banking income 449 854 2,200 1,303 5,317 Gain (loss) on sale of securities 2 (13,400 ) (2 ) (13,398 ) (2 ) Bank owned life insurance income 2,870 2,828 2,716 5,698 5,413 Loan-related interest rate swap fees 2,316 1,439 2,600 3,755 6,460 Other operating income 1,931 1,672 11,816 3,603 13,978 Total noninterest income 24,197 9,628 38,286 33,824 68,439 Noninterest expenses: Salaries and benefits 62,019 60,529 55,305 122,547 113,603 Occupancy expenses 6,094 6,356 6,395 12,450 13,278 Furniture and equipment expenses 3,565 3,752 3,590 7,317 7,187 Technology and data processing 8,566 8,142 7,862 16,708 15,658 Professional services 4,433 3,413 4,680 7,847 8,770 Marketing and advertising expense 2,817 2,351 2,502 5,168 4,665 FDIC assessment premiums and other insurance 4,074 3,899 2,765 7,973 5,250 Franchise and other taxes 4,499 4,498 4,500 8,997 8,999 Loan-related expenses 1,619 1,552 1,867 3,171 3,643 Amortization of intangible assets 2,216 2,279 2,915 4,494 5,954 Other expenses 5,759 11,503 6,387 17,262 17,082 Total noninterest expenses 105,661 108,274 98,768 213,934 204,089 Income before income taxes 64,551 42,947 74,726 107,498 127,689 Income tax expense 9,310 7,294 12,500 16,604 21,773 Net income $ 55,241 $ 35,653 $ 62,226 90,894 105,916 Dividends on preferred stock 2,967 2,967 2,967 5,934 5,934 Net income available to common shareholders $ 52,274 $ 32,686 $ 59,259 $ 84,960 $ 99,982 Basic earnings per common share $ 0.70 $ 0.44 $ 0.79 $ 1.13 $ 1.33 Diluted earnings per common share $ 0.70 $ 0.44 $ 0.79 $ 1.13 $ 1.33 AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS) (UNAUDITED) (Dollars in thousands) For the Quarter Ended June 30, 2023 March 31, 2023 Average Balance Interest Income / Expense (1) Yield / Rate (1)(2) Average Balance Interest Income / Expense (1) Yield / Rate (1)(2) Assets: Securities: Taxable $ 1,865,193 $ 15,565 3.35 % $ 2,038,215 $ 16,753 3.33 % Tax-exempt 1,311,469 10,755 3.29 % 1,429,346 11,782 3.34 % Total securities 3,176,662 26,320 3.32 % 3,467,561 28,535 3.34 % LHFI, net of deferred fees and costs (3) 14,746,218 206,452 5.62 % 14,505,611 191,178 5.35 % Other earning assets 168,929 1,141 2.71 % 264,916 1,621 2.48 % Total earning assets 18,091,809 $ 233,913 5.19 % 18,238,088 $ 221,334 4.92 % Allowance for loan and lease losses (117,643 ) (112,172 ) Total non-earning assets 2,235,521 2,258,435 Total assets $ 20,209,687 $ 20,384,351 Liabilities and Stockholders' Equity: Interest-bearing deposits: Transaction and money market accounts $ 8,387,473 $ 46,953 2.25 % $ 8,344,900 $ 38,315 1.86 % Regular savings 1,014,565 430 0.17 % 1,087,435 364 0.14 % Time deposits 2,500,966 17,884 2.87 % 2,291,530 13,155 2.33 % Total interest-bearing deposits 11,903,004 65,267 2.20 % 11,723,865 51,834 1.79 % Other borrowings 1,071,171 12,896 4.83 % 1,122,244 12,269 4.43 % Total interest-bearing liabilities $ 12,974,175 $ 78,163 2.42 % $ 12,846,109 $ 64,103 2.02 % Noninterest-bearing liabilities: Demand deposits 4,377,150 4,693,347 Other liabilities 397,621 421,295 Total liabilities 17,748,946 17,960,751 Stockholders' equity 2,460,741 2,423,600 Total liabilities and stockholders' equity $ 20,209,687 $ 20,384,351 Net interest income $ 155,750 $ 157,231 Interest rate spread 2.77 % 2.90 % Cost of funds 1.74 % 1.42 % Net interest margin 3.45 % 3.50 % _____________________________ (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/20230725353083/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 Second Quarter Financial Results By: Atlantic Union Bankshares Corporation via Business Wire July 25, 2023 at 07:30 AM EDT Atlantic Union Bankshares Corporation (the “Company” or “Atlantic Union”) (NYSE: AUB) reported net income available to common shareholders of $52.3 million and basic and diluted earnings per common share of $0.70 for the second quarter of 2023 and adjusted operating earnings available to common shareholders(1) of $55.4 million and adjusted diluted operating earnings per common share(1) of $0.74 for the second quarter of 2023. As previously disclosed, the Company initiated a series of cost saving 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 $3.9 million in pre-tax expenses during the second quarter of 2023, and the Company expects to recognize additional pre-tax expenses associated with these actions of approximately $7.5 million during the third quarter of 2023. “Atlantic Union delivered strong second quarter financial results despite the turmoil in the banking industry during the first half of the year,” said John C. Asbury, president and chief executive officer of Atlantic Union. “Loan growth remained strong and deposit levels were stable during the quarter. 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, in these challenging times.” “Operating under the mantra of soundness, profitability and growth – in that order of priority – Atlantic Union remains committed to generating sustainable, profitable growth and building long term value for our shareholders.” NET INTEREST INCOME For the second quarter of 2023, net interest income was $152.1 million, a decrease of $1.3 million from $153.4 million in the first quarter of 2023. Net interest income (FTE)(1) was $155.8 million in the second quarter of 2023, a decrease of $1.5 million from the first quarter of 2023. The decreases in net interest income and net interest income (FTE)(1) were primarily driven by higher deposit costs due to increases in market interest rates, as well as changes in the deposit mix as depositors migrated to higher cost interest bearing deposit accounts. These decreases were partially offset by an increase in interest income on loans due to net loan growth and variable rate loans repricing as short-term interest rates increased. Our net interest margin decreased 4 basis points from the prior quarter to 3.37% at June 30, 2023, and our net interest margin (FTE)(1) decreased 5 basis points during the same period to 3.45%. Earning asset yields increased by 27 basis points to 5.19% in the second quarter of 2023 compared to the first quarter of 2023, primarily due to the impact of increases in market interest rates on loans. Our cost of funds increased by 32 basis points to 1.74% at June 30, 2023 compared to the prior quarter, driven by higher deposit and borrowing costs and funding mix as noted above. The Company’s net interest margin (FTE) (1) includes the impact of acquisition accounting fair value adjustments. The impact of net accretion in the first and second quarters of 2023 are reflected in the following table (dollars in thousands): Loan Deposit Borrowings Accretion Amortization Amortization Total For the quarter ended March 31, 2023 $ 1,106 $ (14) $ (209) $ 883 For the quarter ended June 30, 2023 1,073 (7) (213) 853 ASSET QUALITY Overview At June 30, 2023, nonperforming assets (“NPAs”) as a percentage of total loans held for investment (“LHFI”) decreased 1 basis point from the prior quarter to 0.19% and included nonaccrual loans of $29.1 million. Accruing past due loans as a percentage of total LHFI totaled 16 basis points at June 30, 2023, a decrease of 5 basis points from March 31, 2023, and an increase of 1 basis point from June 30, 2022. Net charge-offs were 0.04% of total average LHFI (annualized) for the second quarter of 2023, a decrease of 9 basis points from March 31, 2023, and an increase of 1 basis point from June 30, 2022. The allowance for credit losses (“ACL”) totaled $136.2 million at June 30, 2023, a $4.5 million increase from the prior quarter. Nonperforming Assets At June 30, 2023, NPAs totaled $29.2 million, compared to $29.1 million in the prior quarter. The following table shows a summary of NPA balances at the quarter ended (dollars in thousands): June 30, March 31, December 31, September 30, June 30, 2023 2023 2022 2022 2022 Nonaccrual loans $ 29,105 $ 29,082 $ 27,038 $ 26,500 $ 29,070 Foreclosed properties 50 29 76 2,087 2,065 Total nonperforming assets $ 29,155 $ 29,111 $ 27,114 $ 28,587 $ 31,135 The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands): June 30, March 31, December 31, September 30, June 30, 2023 2023 2022 2022 2022 Beginning Balance $ 29,082 $ 27,038 $ 26,500 $ 29,070 $ 29,032 Net customer payments (5,950 ) (1,755 ) (1,805 ) (3,725 ) (2,472 ) Additions 6,685 4,151 2,935 1,302 3,203 Charge-offs (712 ) (39 ) (461 ) (125 ) (311 ) Loans returning to accruing status — (313 ) (131 ) — — Transfers to foreclosed property — — — (22 ) (382 ) Ending Balance $ 29,105 $ 29,082 $ 27,038 $ 26,500 $ 29,070 Past Due Loans At June 30, 2023, past due loans still accruing interest totaled $24.1 million or 0.16% of total LHFI, compared to $30.9 million or 0.21% of total LHFI at March 31, 2023, and $20.4 million or 0.15% of total LHFI at June 30, 2022. Of the total past due loans still accruing interest, $10.1 million or 0.07% of total LHFI were loans past due 90 days or more at June 30, 2023, compared to $7.2 million or 0.05% of total LHFI at March 31, 2023, and $4.6 million or 0.03% of total LHFI at June 30, 2022. The increase in loans past due 90 days or more was primarily due to one credit relationship within the commercial real estate – non-owner occupied portfolio. Allowance for Credit Losses At June 30, 2023, the ACL was $136.2 million and included an allowance for loan and lease losses (“ALLL”) of $120.7 million and a reserve for unfunded commitments of $15.5 million. The ACL at June 30, 2023 increased $4.5 million from March 31, 2023 due to loan growth in the second quarter of 2023 and the impact of continued uncertainty in the economic outlook. At both June 30, 2023 and March 31, 2023, the ACL as a percentage of total LHFI was 0.90%, and the ALLL as a percentage of total LHFI was 0.80%. Net Charge-offs Net charge-offs were $1.6 million or 0.04% of total average LHFI on an annualized basis for the second quarter of 2023, compared to $4.6 million or 0.13% (annualized) for the first quarter of 2023, and $939,000 or 0.03% (annualized) for the second quarter of 2022. Provision for Credit Losses For the second quarter of 2023, the Company recorded a provision for credit losses of $6.1 million, compared to a provision for credit losses of $11.9 million in the prior quarter, and a provision for credit losses of $3.6 million in the second quarter of 2022. The provision for credit losses for the second quarter of 2023 reflected a provision of $5.7 million for loan losses and a $349,000 provision for unfunded commitments. NONINTEREST INCOME Noninterest income increased $14.6 million to $24.2 million for the second quarter of 2023 from $9.6 million in the prior quarter, primarily due to $13.4 million of losses incurred on the sale of available for sale (“AFS”) securities in the prior quarter, driven by the Company’s balance sheet repositioning transactions, and that were not repeated during the second quarter. In addition, loan-related interest rate swap fees increased $877,000 from the prior quarter due to several new swap transactions, and other operating income increased $259,000 from the prior quarter primarily driven by an increase in loan syndication revenue. These increases in noninterest income were partially offset by a $405,000 decrease in mortgage banking income due to a decline in gain on sale margins. NONINTEREST EXPENSE Noninterest expense decreased $2.6 million to $105.7 million for the second quarter of 2023 from $108.3 million in the prior quarter. Adjusted operating noninterest expense,(1) which excludes amortization of intangible assets ($2.2 million in the second quarter and $2.3 million in the first quarter), expenses incurred associated with our strategic cost savings initiatives principally composed of severance charges related to headcount reductions and charges for exiting leases ($3.9 million in the second quarter), and the legal reserve associated with an ongoing regulatory matter as previously disclosed ($5.0 million in the first quarter), decreased $1.5 million to $99.5 million for the second quarter of 2023 from $101.0 million in the prior quarter. The decrease in adjusted operating noninterest expense(1) was primarily due to a $1.8 million decrease included within other expenses, composed of OREO-related gains recognized in the current quarter and reduced branch closing costs as compared to the prior quarter, and a $1.4 million decrease in salaries and benefits expense, outside of severance charges related to headcount reductions in the quarter, primarily due to seasonal decreases in payroll related taxes and 401(k) contribution expenses. These decreases in adjusted operating noninterest expense(1) were partially offset by increases of $1.0 million in professional services expense related to the LIBOR transition and other strategic projects, $466,000 in marketing and advertising expense, and $424,000 in technology and data processing expense. INCOME TAXES The effective tax rate for the three months ended June 30, 2023 and 2022 was 14.4% and 16.7%, respectively, and the effective tax rate for the six months ended June 30, 2023 and 2022 was 15.5% and 17.1%, respectively. The decrease in the effective tax rates is due to the increased proportion of tax-exempt income to pre-tax income for both the three and six months ended June 30, 2023 compared to the prior quarter and prior year, respectively. BALANCE SHEET At June 30, 2023, total assets were $20.6 billion, an increase of $499.0 million or approximately 10.0% (annualized) from March 31, 2023, and an increase of $940.5 million or approximately 4.8% from June 30, 2022. Total assets increased from the prior quarter primarily due to a $482.7 million increase in LHFI (net of deferred fees and costs). 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 $676.8 million decrease in investment securities due to the sale of $505.7 million in AFS securities as part of the Company’s balance sheet restructuring executed in the first quarter of 2023, as well as a decline in the market value of the AFS securities portfolio, due to the impact of market interest rate fluctuations. At June 30, 2023, LHFI (net of deferred fees and costs) totaled $15.1 billion, an increase of $482.7 million or 13.3% (annualized) from $14.6 billion at March 31, 2023. Average LHFI (net of deferred fees and costs) totaled $14.7 billion at June 30, 2023, an increase of $240.6 million or 6.7% (annualized) from the prior quarter. At June 30, 2023, LHFI (net of deferred fees and costs) increased $1.4 billion or 10.3% from June 30, 2022, and quarterly average LHFI (net of deferred fees and costs) increased $1.2 billion or 9.0% from the same period in the prior year. LHFI (net of deferred fees and costs) increased from the prior quarter and 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 June 30, 2023, total investments were $3.1 billion, a decrease of $52.2 million from March 31, 2023 and a decrease of $676.8 million from June 30, 2022. AFS securities totaled $2.2 billion at June 30, 2023, $2.3 billion at March 31, 2023, and $3.0 billion at June 30, 2022. At June 30, 2023, total net unrealized losses on the AFS securities portfolio were $450.1 million, an increase of $42.2 million from total net unrealized losses on AFS securities of $407.9 at March 31, 2023. Held to maturity (“HTM”) securities are carried at cost and totaled $849.6 million at June 30, 2023, $855.4 million at March 31, 2023, and $780.7 million at June 30, 2022 and have net unrealized losses of $41.8 million at June 30, 2023, an increase of $9.5 million from net unrealized losses on HTM securities of $32.3 million at March 31, 2023. At June 30, 2023, total deposits were $16.4 billion, a decrease of $43.9 million or approximately 1.1% (annualized) from March 31, 2023. Average deposits at June 30, 2023 decreased from the prior quarter by $137.1 million or 3.3% (annualized). Total deposits decreased from the prior quarter due to the impact of customer behavior in response to inflation and higher market interest rates, resulting in a decrease in low costing customer deposits, partially offset by an increase in customer time deposits and brokered deposits. Total deposits at June 30, 2023 increased $283.4 million or 1.8% from June 30, 2022, and quarterly average deposits at June 30, 2023 increased $89.1 million or 0.6% from the same period in the prior year. Total deposits increased from the same period in the prior year primarily due to increases in interest bearing customer deposits and brokered deposits, partially offset by decreases in demand deposits. At June 30, 2023, total borrowings were $1.3 billion, an increase of $521.4 million from March 31, 2023 and an increase of $522.4 million from June 30, 2022. Total borrowings increased from the prior quarter and prior year primarily due to an increase in Federal Home Loan Bank short-term borrowings, which was used to fund loan growth. The following table shows the Company’s capital ratios at the quarters ended: June 30, March 31, June 30, 2023 2023 2022 Common equity Tier 1 capital ratio (2) 9.86 % 9.91 % 9.96 % Tier 1 capital ratio (2) 10.81 % 10.89 % 11.00 % Total capital ratio (2) 13.64 % 13.76 % 13.86 % Leverage ratio (Tier 1 capital to average assets) (2) 9.64 % 9.38 % 9.26 % Common equity to total assets 10.96 % 11.31 % 11.32 % Tangible common equity to tangible assets (1) 6.66 % 6.91 % 6.78 % _____________________________ At June 30, 2023, the Company’s common equity to total assets ratio and tangible common equity to tangible assets ratio decreased compared to the prior quarter and prior year primarily due to the unrealized losses on the AFS securities portfolio recorded in other comprehensive income due to higher market interest rates, as well as the increase in total assets. During the second 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 first quarter of 2023 and the second quarter of 2022. During the second quarter of 2023, the Company also declared and paid cash dividends of $0.30 per common share, consistent with the first quarter of 2023 and an increase of $0.02 or approximately 7.1% from the second 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 June 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. ANNOUNCED TRANSACTION As announced and further described in a separate press release issued by the Company today, the Company has entered into a merger agreement to acquire American National Bankshares Inc. (“American National”) in an all-stock transaction. 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 approximately 125 ATMs located throughout Virginia and in portions of Maryland and North Carolina. Certain non-bank financial services affiliates of Atlantic Union Bank include: Atlantic Union Equipment Finance, Inc., which provides equipment financing; Atlantic Union Financial Consultants, LLC, which provides brokerage services; and Union Insurance Group, LLC, which offers various lines of insurance products. SECOND QUARTER 2023 EARNINGS RELEASE CONFERENCE CALL In light of today’s announcement that the Company has entered into a merger agreement to acquire American National, the Company will hold a conference call and webcast for investors at 9:00 a.m. Eastern Time on Tuesday, July 25, 2023 during which the Company’s management will review the Company’s financial results for the second quarter 2023 and discuss the proposed merger. The listen-only webcast and the accompanying slides can be accessed at: https://edge.media-server.com/mmc/p/g5jw6mu3. For analysts who wish to participate in the conference call, please register at the following URL: https://register.vevent.com/register/BI1a5d16a5982740369c57e980002f5ab6. To participate in the conference call, you must use the link to receive an audio dial-in number and an Access PIN. A replay of the webcast, and the accompanying slides, will be available on the Company’s website for 90 days at: https://investors.atlanticunionbank.com/. NON-GAAP FINANCIAL MEASURES In reporting the results as of and for the period ended June 30, 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 impact of cost saving measures, 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; 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 the 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; other factors, many of which are beyond our control; and the risks, uncertainties and assumptions set forth under the heading “Caution About Forward-Looking Statements” in the joint press release issued by the Company and American National on the date hereof with respect to the proposed merger transaction between the Company and American National. 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 Report on Form 10-Q for the quarter ended 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 its 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 Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Results of Operations Interest and dividend income $ 230,247 $ 217,546 $ 148,755 $ 447,793 $ 287,212 Interest expense 78,163 64,103 9,988 142,265 17,514 Net interest income 152,084 153,443 138,767 305,528 269,698 Provision for credit losses 6,069 11,850 3,559 17,920 6,359 Net interest income after provision for credit losses 146,015 141,593 135,208 287,608 263,339 Noninterest income 24,197 9,628 38,286 33,824 68,439 Noninterest expenses 105,661 108,274 98,768 213,934 204,089 Income before income taxes 64,551 42,947 74,726 107,498 127,689 Income tax expense 9,310 7,294 12,500 16,604 21,773 Net income 55,241 35,653 62,226 90,894 105,916 Dividends on preferred stock 2,967 2,967 2,967 5,934 5,934 Net income available to common shareholders $ 52,274 $ 32,686 $ 59,259 $ 84,960 $ 99,982 Interest earned on earning assets (FTE) (1) $ 233,913 $ 221,334 $ 152,332 $ 455,248 $ 294,124 Net interest income (FTE) (1) 155,750 157,231 142,344 312,983 276,610 Total revenue (FTE) (1) 179,947 166,859 180,630 346,807 345,049 Pre-tax pre-provision adjusted operating earnings (7) 74,553 73,197 69,205 147,751 130,476 Key Ratios Earnings per common share, diluted $ 0.70 $ 0.44 $ 0.79 $ 1.13 $ 1.33 Return on average assets (ROA) 1.10 % 0.71 % 1.27 % 0.90 % 1.08 % Return on average equity (ROE) 9.00 % 5.97 % 10.21 % 7.51 % 8.37 % Return on average tangible common equity (ROTCE) (2) (3) 16.11 % 10.71 % 18.93 % 13.46 % 14.97 % Efficiency ratio 59.94 % 66.40 % 55.78 % 63.04 % 60.36 % Efficiency ratio (FTE) (1) 58.72 % 64.89 % 54.68 % 61.69 % 59.15 % Net interest margin 3.37 % 3.41 % 3.15 % 3.39 % 3.06 % Net interest margin (FTE) (1) 3.45 % 3.50 % 3.24 % 3.47 % 3.14 % Yields on earning assets (FTE) (1) 5.19 % 4.92 % 3.46 % 5.05 % 3.34 % Cost of interest-bearing liabilities 2.42 % 2.02 % 0.35 % 2.22 % 0.30 % Cost of deposits 1.61 % 1.28 % 0.15 % 1.44 % 0.13 % Cost of funds 1.74 % 1.42 % 0.22 % 1.58 % 0.20 % Operating Measures (4) Adjusted operating earnings $ 58,348 $ 50,189 $ 54,244 $ 108,537 $ 102,285 Adjusted operating earnings available to common shareholders 55,381 47,222 51,277 102,603 96,351 Adjusted operating earnings per common share, diluted $ 0.74 $ 0.63 $ 0.69 $ 1.37 $ 1.28 Adjusted operating ROA 1.16 % 1.00 % 1.10 % 1.08 % 1.04 % Adjusted operating ROE 9.51 % 8.40 % 8.90 % 8.96 % 8.08 % Adjusted operating ROTCE (2) (3) 17.03 % 15.22 % 16.47 % 16.14 % 14.45 % Adjusted operating efficiency ratio (FTE) (1)(6) 55.30 % 56.03 % 55.88 % 55.66 % 57.34 % Per Share Data Earnings per common share, basic $ 0.70 $ 0.44 $ 0.79 $ 1.13 $ 1.33 Earnings per common share, diluted 0.70 0.44 0.79 1.13 1.33 Cash dividends paid per common share 0.30 0.30 0.28 0.60 0.56 Market value per share 25.95 35.05 33.92 25.95 33.92 Book value per common share 30.31 30.53 29.95 30.31 29.95 Tangible book value per common share (2) 17.58 17.78 17.07 17.58 17.07 Price to earnings ratio, diluted 9.28 19.77 10.68 11.35 12.65 Price to book value per common share ratio 0.86 1.15 1.13 0.86 1.13 Price to tangible book value per common share ratio (2) 1.48 1.97 1.99 1.48 1.99 Weighted average common shares outstanding, basic 74,995,450 74,832,141 74,847,899 74,914,247 75,194,347 Weighted average common shares outstanding, diluted 74,995,557 74,835,514 74,849,871 74,915,977 75,201,326 Common shares outstanding at end of period 74,998,075 74,989,228 74,688,314 74,998,075 74,688,314 ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Capital Ratios Common equity Tier 1 capital ratio (5) 9.86 % 9.91 % 9.96 % 9.86 % 9.96 % Tier 1 capital ratio (5) 10.81 % 10.89 % 11.00 % 10.81 % 11.00 % Total capital ratio (5) 13.64 % 13.76 % 13.86 % 13.64 % 13.86 % Leverage ratio (Tier 1 capital to average assets) (5) 9.64 % 9.38 % 9.26 % 9.64 % 9.26 % Common equity to total assets 10.96 % 11.31 % 11.32 % 10.96 % 11.32 % Tangible common equity to tangible assets (2) 6.66 % 6.91 % 6.78 % 6.66 % 6.78 % Financial Condition Assets $ 20,602,332 $ 20,103,370 $ 19,661,799 $ 20,602,332 $ 19,661,799 LHFI (net of deferred fees and costs) 15,066,930 14,584,280 13,655,408 15,066,930 13,655,408 Securities 3,143,236 3,195,399 3,820,078 3,143,236 3,820,078 Earning Assets 18,452,007 17,984,057 17,578,979 18,452,007 17,578,979 Goodwill 925,211 925,211 925,211 925,211 925,211 Amortizable intangibles, net 23,469 24,482 31,621 23,469 31,621 Deposits 16,411,987 16,455,910 16,128,635 16,411,987 16,128,635 Borrowings 1,320,301 798,910 797,948 1,320,301 797,948 Stockholders' equity 2,424,470 2,440,236 2,391,476 2,424,470 2,391,476 Tangible common equity (2) 1,309,433 1,324,186 1,268,287 1,309,433 1,268,287 LHFI, net of deferred fees and costs Construction and land development $ 1,231,720 $ 1,179,872 $ 988,379 $ 1,231,720 $ 988,379 Commercial real estate - owner occupied 1,952,189 1,956,585 1,965,702 1,952,189 1,965,702 Commercial real estate - non-owner occupied 4,113,318 3,968,085 3,860,819 4,113,318 3,860,819 Multifamily real estate 788,895 822,006 762,502 788,895 762,502 Commercial & Industrial 3,373,148 3,082,478 2,595,891 3,373,148 2,595,891 Residential 1-4 Family - Commercial 518,317 522,760 553,771 518,317 553,771 Residential 1-4 Family - Consumer 1,017,698 974,511 865,174 1,017,698 865,174 Residential 1-4 Family - Revolving 600,339 589,791 583,073 600,339 583,073 Auto 585,756 600,658 525,301 585,756 525,301 Consumer 134,709 145,090 180,045 134,709 180,045 Other Commercial 750,841 742,444 774,751 750,841 774,751 Total LHFI $ 15,066,930 $ 14,584,280 $ 13,655,408 $ 15,066,930 $ 13,655,408 Deposits Interest checking accounts $ 4,824,192 $ 4,714,366 $ 3,943,303 $ 4,824,192 $ 3,943,303 Money market accounts 3,413,936 3,547,514 3,956,046 3,413,936 3,956,046 Savings accounts 986,081 1,047,914 1,165,577 986,081 1,165,577 Customer time deposits of $250,000 and over 578,739 541,447 335,706 578,739 335,706 Other customer time deposits 1,813,031 1,648,747 1,308,493 1,813,031 1,308,493 Time deposits 2,391,770 2,190,194 1,644,199 2,391,770 1,644,199 Total interest-bearing customer deposits 11,615,979 11,499,988 10,709,125 11,615,979 10,709,125 Brokered deposits 485,702 377,913 57,972 485,702 57,972 Total interest-bearing deposits $ 12,101,681 $ 11,877,901 $ 10,767,097 $ 12,101,681 $ 10,767,097 Demand deposits 4,310,306 4,578,009 5,361,538 4,310,306 5,361,538 Total deposits $ 16,411,987 $ 16,455,910 $ 16,128,635 $ 16,411,987 $ 16,128,635 Averages Assets $ 20,209,687 $ 20,384,351 $ 19,719,402 $ 20,296,536 $ 19,819,330 LHFI (net of deferred fees and costs) 14,746,218 14,505,611 13,525,529 14,626,579 13,413,780 Loans held for sale 14,413 5,876 20,634 10,168 17,652 Securities 3,176,662 3,467,561 3,930,912 3,321,308 4,064,007 Earning assets 18,091,809 18,238,088 17,646,470 18,164,545 17,765,085 Deposits 16,280,154 16,417,212 16,191,056 16,348,304 16,351,822 Time deposits 2,500,966 2,291,530 1,667,378 2,396,827 1,716,743 Interest-bearing deposits 11,903,004 11,723,865 10,824,465 11,813,929 11,054,095 Borrowings 1,071,171 1,122,244 765,886 1,096,567 639,506 Interest-bearing liabilities 12,974,175 12,846,109 11,590,351 12,910,496 11,693,601 Stockholders' equity 2,460,741 2,423,600 2,445,045 2,442,273 2,552,418 Tangible common equity (2) 1,345,426 1,306,445 1,304,536 1,326,043 1,410,342 ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Asset Quality Allowance for Credit Losses (ACL) Beginning balance, Allowance for loan and lease losses (ALLL) $ 116,512 $ 110,768 $ 102,591 $ 110,768 $ 99,787 Add: Recoveries 1,035 1,167 1,018 2,202 2,531 Less: Charge-offs 2,602 5,726 1,957 8,328 3,466 Add: Provision for loan losses 5,738 10,303 2,532 16,041 5,332 Ending balance, ALLL $ 120,683 $ 116,512 $ 104,184 $ 120,683 $ 104,184 Beginning balance, Reserve for unfunded commitment (RUC) $ 15,199 $ 13,675 $ 8,000 $ 13,675 $ 8,000 Add: Provision for unfunded commitments 349 1,524 1,000 1,873 1,000 Ending balance, RUC $ 15,548 $ 15,199 $ 9,000 $ 15,548 $ 9,000 Total ACL $ 136,231 $ 131,711 $ 113,184 $ 136,231 $ 113,184 ACL / total LHFI 0.90 % 0.90 % 0.83 % 0.90 % 0.83 % ALLL / total LHFI 0.80 % 0.80 % 0.76 % 0.80 % 0.76 % Net charge-offs / total average LHFI 0.04 % 0.13 % 0.03 % 0.08 % 0.01 % Provision for loan losses/ total average LHFI 0.16 % 0.29 % 0.08 % 0.22 % 0.08 % Nonperforming Assets Construction and land development $ 284 $ 363 $ 581 $ 284 $ 581 Commercial real estate - owner occupied 3,978 6,174 4,996 3,978 4,996 Commercial real estate - non-owner occupied 6,473 1,481 3,301 6,473 3,301 Commercial & Industrial 2,738 4,815 2,728 2,738 2,728 Residential 1-4 Family - Commercial 1,844 1,907 2,031 1,844 2,031 Residential 1-4 Family - Consumer 10,033 10,540 12,084 10,033 12,084 Residential 1-4 Family - Revolving 3,461 3,449 3,069 3,461 3,069 Auto 291 347 279 291 279 Consumer 3 6 1 3 1 Nonaccrual loans $ 29,105 $ 29,082 $ 29,070 $ 29,105 $ 29,070 Foreclosed property 50 29 2,065 50 2,065 Total nonperforming assets (NPAs) $ 29,155 $ 29,111 $ 31,135 $ 29,155 $ 31,135 Construction and land development $ 24 $ 249 $ 1 $ 24 $ 1 Commercial real estate - owner occupied 2,463 2,133 792 2,463 792 Commercial real estate - non-owner occupied 2,763 1,032 642 2,763 642 Commercial & Industrial 810 633 322 810 322 Residential 1-4 Family - Commercial 693 232 184 693 184 Residential 1-4 Family - Consumer 1,716 859 1,112 1,716 1,112 Residential 1-4 Family - Revolving 1,259 1,766 997 1,259 997 Auto 243 137 134 243 134 Consumer 74 137 79 74 79 Other Commercial 66 66 329 66 329 LHFI ≥ 90 days and still accruing $ 10,111 $ 7,244 $ 4,592 $ 10,111 $ 4,592 Total NPAs and LHFI ≥ 90 days $ 39,266 $ 36,355 $ 35,727 $ 39,266 $ 35,727 NPAs / total LHFI 0.19 % 0.20 % 0.23 % 0.19 % 0.23 % NPAs / total assets 0.14 % 0.14 % 0.16 % 0.14 % 0.16 % ALLL / nonaccrual loans 414.65 % 400.63 % 358.39 % 414.65 % 358.39 % ALLL/ nonperforming assets 413.94 % 400.23 % 334.62 % 413.94 % 334.62 % ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Past Due Detail Construction and land development $ 295 $ 815 $ 645 $ 295 $ 645 Commercial real estate - owner occupied 602 2,251 1,374 602 1,374 Commercial real estate - non-owner occupied — 52 511 — 511 Commercial & Industrial 254 981 2,581 254 2,581 Residential 1-4 Family - Commercial 1,076 1,399 1,944 1,076 1,944 Residential 1-4 Family - Consumer 1,504 11,579 594 1,504 594 Residential 1-4 Family - Revolving 1,729 1,384 1,368 1,729 1,368 Auto 2,877 2,026 1,841 2,877 1,841 Consumer 334 295 361 334 361 Other Commercial 23 — 11 23 11 LHFI 30-59 days past due $ 8,694 $ 20,782 $ 11,230 $ 8,694 $ 11,230 Commercial real estate - owner occupied 10 798 807 10 807 Commercial & Industrial 400 61 546 400 546 Residential 1-4 Family - Commercial 189 271 474 189 474 Residential 1-4 Family - Consumer 2,813 158 1,646 2,813 1,646 Residential 1-4 Family - Revolving 1,114 1,069 731 1,114 731 Auto 564 295 213 564 213 Consumer 214 176 210 214 210 LHFI 60-89 days past due $ 5,304 $ 2,828 $ 4,627 $ 5,304 $ 4,627 Past Due and still accruing $ 24,109 $ 30,854 $ 20,449 $ 24,109 $ 20,449 Past Due and still accruing / total LHFI 0.16 % 0.21 % 0.15 % 0.16 % 0.15 % Alternative Performance Measures (non-GAAP) Net interest income (FTE) (1) Net interest income (GAAP) $ 152,084 $ 153,443 $ 138,767 $ 305,528 $ 269,698 FTE adjustment 3,666 3,788 3,577 7,455 6,912 Net interest income (FTE) (non-GAAP) $ 155,750 $ 157,231 $ 142,344 $ 312,983 $ 276,610 Noninterest income (GAAP) 24,197 9,628 38,286 33,824 68,439 Total revenue (FTE) (non-GAAP) $ 179,947 $ 166,859 $ 180,630 $ 346,807 $ 345,049 Average earning assets $ 18,091,809 $ 18,238,088 $ 17,646,470 $ 18,164,545 $ 17,765,085 Net interest margin 3.37 % 3.41 % 3.15 % 3.39 % 3.06 % Net interest margin (FTE) 3.45 % 3.50 % 3.24 % 3.47 % 3.14 % Tangible Assets (2) Ending assets (GAAP) $ 20,602,332 $ 20,103,370 $ 19,661,799 $ 20,602,332 $ 19,661,799 Less: Ending goodwill 925,211 925,211 925,211 925,211 925,211 Less: Ending amortizable intangibles 23,469 24,482 31,621 23,469 31,621 Ending tangible assets (non-GAAP) $ 19,653,652 $ 19,153,677 $ 18,704,967 $ 19,653,652 $ 18,704,967 Tangible Common Equity (2) Ending equity (GAAP) $ 2,424,470 $ 2,440,236 $ 2,391,476 $ 2,424,470 $ 2,391,476 Less: Ending goodwill 925,211 925,211 925,211 925,211 925,211 Less: Ending amortizable intangibles 23,469 24,482 31,621 23,469 31,621 Less: Perpetual preferred stock 166,357 166,357 166,357 166,357 166,357 Ending tangible common equity (non-GAAP) $ 1,309,433 $ 1,324,186 $ 1,268,287 $ 1,309,433 $ 1,268,287 Average equity (GAAP) $ 2,460,741 $ 2,423,600 $ 2,445,045 $ 2,442,273 $ 2,552,418 Less: Average goodwill 925,211 925,211 935,446 925,211 935,503 Less: Average amortizable intangibles 23,748 25,588 38,707 24,663 40,217 Less: Average perpetual preferred stock 166,356 166,356 166,356 166,356 166,356 Average tangible common equity (non-GAAP) $ 1,345,426 $ 1,306,445 $ 1,304,536 $ 1,326,043 $ 1,410,342 ROTCE (2)(3) Net income available to common shareholders (GAAP) $ 52,274 $ 32,686 $ 59,259 $ 84,960 $ 99,982 Plus: Amortization of intangibles, tax effected 1,751 1,800 2,303 3,550 4,704 Net income available to common shareholders before amortization of intangibles (non-GAAP) $ 54,025 $ 34,486 $ 61,562 $ 88,510 $ 104,686 Return on average tangible common equity (ROTCE) 16.11 % 10.71 % 18.93 % 13.46 % 14.97 % ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Operating Measures (4) Net income (GAAP) $ 55,241 $ 35,653 $ 62,226 $ 90,894 $ 105,916 Plus: Strategic cost saving initiatives, net of tax 3,109 — — 3,109 — Plus: Legal reserve, net of tax — 3,950 — 3,950 — Plus: Strategic branch closing and facility consolidation costs, net of tax — — — — 4,351 Less: Gain (loss) on sale of securities, net of tax 2 (10,586 ) (2 ) (10,584 ) (2 ) Less: Gain on sale of DHFB, net of tax — — 7,984 — 7,984 Adjusted operating earnings (non-GAAP) 58,348 50,189 54,244 108,537 102,285 Less: Dividends on preferred stock 2,967 2,967 2,967 5,934 5,934 Adjusted operating earnings available to common shareholders (non-GAAP) $ 55,381 $ 47,222 $ 51,277 $ 102,603 $ 96,351 Noninterest expense (GAAP) $ 105,661 $ 108,274 $ 98,768 $ 213,934 $ 204,089 Less: Amortization of intangible assets 2,216 2,279 2,915 4,494 5,954 Less: Strategic cost saving initiatives 3,935 — — 3,935 — Less: Legal reserve — 5,000 — 5,000 — Less: Strategic branch closing and facility consolidation costs — — — — 5,508 Adjusted operating noninterest expense (non-GAAP) $ 99,510 $ 100,995 $ 95,853 $ 200,505 $ 192,627 Noninterest income (GAAP) $ 24,197 $ 9,628 $ 38,286 $ 33,824 $ 68,439 Less: Gain (loss) on sale of securities 2 (13,400 ) (2 ) (13,398 ) (2 ) Less: Gain on sale of DHFB — — 9,082 — 9,082 Adjusted operating noninterest income (non-GAAP) $ 24,195 $ 23,028 $ 29,206 $ 47,222 $ 59,359 Net interest income (FTE) (non-GAAP) (1) $ 155,750 $ 157,231 $ 142,344 $ 312,983 $ 276,610 Adjusted operating noninterest income (non-GAAP) 24,195 23,028 29,206 47,222 59,359 Total adjusted revenue (FTE) (non-GAAP) (1) $ 179,945 $ 180,259 $ 171,550 $ 360,205 $ 335,969 Efficiency ratio 59.94 % 66.40 % 55.78 % 63.04 % 60.36 % Efficiency ratio (FTE) (1) 58.72 % 64.89 % 54.68 % 61.69 % 59.15 % Adjusted operating efficiency ratio (FTE) (1)(6) 55.30 % 56.03 % 55.88 % 55.66 % 57.34 % Operating ROA & ROE (4) Adjusted operating earnings (non-GAAP) $ 58,348 $ 50,189 $ 54,244 $ 108,537 $ 102,285 Average assets (GAAP) $ 20,209,687 $ 20,384,351 $ 19,719,402 $ 20,296,536 $ 19,819,330 Return on average assets (ROA) (GAAP) 1.10 % 0.71 % 1.27 % 0.90 % 1.08 % Adjusted operating return on average assets (ROA) (non-GAAP) 1.16 % 1.00 % 1.10 % 1.08 % 1.04 % Average equity (GAAP) $ 2,460,741 $ 2,423,600 $ 2,445,045 $ 2,442,273 $ 2,552,418 Return on average equity (ROE) (GAAP) 9.00 % 5.97 % 10.21 % 7.51 % 8.37 % Adjusted operating return on average equity (ROE) (non-GAAP) 9.51 % 8.40 % 8.90 % 8.96 % 8.08 % Operating ROTCE (2)(3)(4) Adjusted operating earnings available to common shareholders (non-GAAP) $ 55,381 $ 47,222 $ 51,277 $ 102,603 $ 96,351 Plus: Amortization of intangibles, tax effected 1,751 1,800 2,303 3,550 4,704 Adjusted operating earnings available to common shareholders before amortization of intangibles (non-GAAP) $ 57,132 $ 49,022 $ 53,580 $ 106,153 $ 101,055 Average tangible common equity (non-GAAP) $ 1,345,426 $ 1,306,445 $ 1,304,536 $ 1,326,043 $ 1,410,342 Adjusted operating return on average tangible common equity (non-GAAP) 17.03 % 15.22 % 16.47 % 16.14 % 14.45 % Pre-tax pre-provision adjusted operating earnings (7) Net income (GAAP) $ 55,241 $ 35,653 $ 62,226 $ 90,894 $ 105,916 Plus: Provision for credit losses 6,069 11,850 3,559 17,920 6,359 Plus: Income tax expense 9,310 7,294 12,500 16,604 21,773 Plus: Strategic cost saving initiatives 3,935 — — 3,935 — Plus: Legal reserve — 5,000 — 5,000 — Plus: Strategic branch closing and facility consolidation costs — — — — 5,508 Less: Gain (loss) on sale of securities 2 (13,400 ) (2 ) (13,398 ) (2 ) Less: Gain on sale of DHFB — — 9,082 — 9,082 Pre-tax pre-provision adjusted operating earnings (non-GAAP) $ 74,553 $ 73,197 $ 69,205 $ 147,751 $ 130,476 Less: Dividends on preferred stock 2,967 2,967 2,967 5,934 5,934 Pre-tax pre-provision adjusted operating earnings available to common shareholders (non-GAAP) $ 71,586 $ 70,230 $ 66,238 $ 141,817 $ 124,542 Weighted average common shares outstanding, diluted 74,995,557 74,835,514 74,849,871 74,915,977 75,201,326 Pre-tax pre-provision earnings per common share, diluted $ 0.95 $ 0.94 $ 0.88 $ 1.89 $ 1.66 ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Mortgage Origination Held for Sale Volume Refinance Volume $ 4,076 $ 3,452 $ 14,916 $ 7,528 $ 48,116 Purchase Volume 32,168 32,192 84,551 64,361 142,846 Total Mortgage loan originations held for sale $ 36,244 $ 35,644 $ 99,467 $ 71,889 $ 190,962 % of originations held for sale that are refinances 11.2 % 9.7 % 15.0 % 10.5 % 25.2 % Wealth Assets under management $ 4,774,501 $ 4,494,268 $ 4,415,537 $ 4,774,501 $ 4,415,537 Other Data End of period full-time employees 1,878 1,840 1,856 1,878 1,856 Number of full-service branches 109 109 114 109 114 Number of automatic transaction machines ("ATMs") 123 127 131 123 131 _____________________________ (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, gain (loss) on sale of securities, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic cost saving initiatives (principally composed of severance charges related to headcount reductions and charges for exiting leases), gain on sale of DHFB, as well as strategic branch closure initiatives and related facility consolidation costs (principally composed of real estate, leases and other assets write downs, as well as severance and expense reduction initiatives). The Company believes these non-GAAP adjusted measures provide investors with important information about the continuing economic results of the organization’s operations. (5) All ratios at June 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, gain (loss) on sale of securities, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic cost saving initiatives, gain on sale of DHFB, as well as strategic branch closure initiatives and related facility consolidation costs. This measure is similar to the measure utilized by the Company when analyzing corporate performance and is also similar to the measure utilized for incentive compensation. The Company believes this adjusted measure provides investors with important information about the 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, gain (loss) on sale of securities, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic cost saving initiatives, gain on sale of DHFB, as well as strategic branch closure initiatives and related facility consolidation costs. The Company believes this adjusted measure provides investors with important information about the continuing economic results of the Company’s operations. ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) June 30, December 31, June 30, 2023 2022 2022 ASSETS (unaudited) (audited) (unaudited) Cash and cash equivalents: Cash and due from banks $ 199,778 $ 216,384 $ 158,902 Interest-bearing deposits in other banks 227,015 102,107 82,086 Federal funds sold 1,474 1,457 388 Total cash and cash equivalents 428,267 319,948 241,376 Securities available for sale, at fair value 2,182,448 2,741,816 2,951,421 Securities held to maturity, at carrying value 849,610 847,732 780,749 Restricted stock, at cost 111,178 120,213 87,908 Loans held for sale 10,327 3,936 15,866 Loans held for investment, net of deferred fees and costs 15,066,930 14,449,142 13,655,408 Less: allowance for loan and lease losses 120,683 110,768 104,184 Total loans held for investment, net 14,946,247 14,338,374 13,551,224 Premises and equipment, net 114,786 118,243 128,661 Goodwill 925,211 925,211 925,211 Amortizable intangibles, net 23,469 26,761 31,621 Bank owned life insurance 446,441 440,656 436,703 Other assets 564,348 578,248 511,059 Total assets $ 20,602,332 $ 20,461,138 $ 19,661,799 LIABILITIES Noninterest-bearing demand deposits $ 4,310,306 $ 4,883,239 $ 5,361,538 Interest-bearing deposits 12,101,681 11,048,438 10,767,097 Total deposits 16,411,987 15,931,677 16,128,635 Securities sold under agreements to repurchase 130,461 142,837 118,658 Other short-term borrowings 799,400 1,176,000 290,000 Long-term borrowings 390,440 389,863 389,290 Other liabilities 445,574 448,024 343,740 Total liabilities 18,177,862 18,088,401 17,270,323 Commitments and contingencies STOCKHOLDERS' EQUITY Preferred stock, $10.00 par value 173 173 173 Common stock, $1.33 par value 99,088 98,873 98,822 Additional paid-in capital 1,776,494 1,772,440 1,767,063 Retained earnings 959,582 919,537 841,701 Accumulated other comprehensive loss (410,867 ) (418,286 ) (316,283 ) Total stockholders' equity 2,424,470 2,372,737 2,391,476 Total liabilities and stockholders' equity $ 20,602,332 $ 20,461,138 $ 19,661,799 Common shares outstanding 74,998,075 74,712,622 74,688,314 Common shares authorized 200,000,000 200,000,000 200,000,000 Preferred shares outstanding 17,250 17,250 17,250 Preferred shares authorized 500,000 500,000 500,000 ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Dollars in thousands, except share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2023 2023 2022 2023 2022 Interest and dividend income: Interest and fees on loans $ 205,172 $ 189,992 $ 123,266 $ 395,165 $ 237,466 Interest on deposits in other banks 1,014 1,493 157 2,507 288 Interest and dividends on securities: Taxable 15,565 16,753 14,695 32,317 28,361 Nontaxable 8,496 9,308 10,637 17,804 21,097 Total interest and dividend income 230,247 217,546 148,755 447,793 287,212 Interest expense: Interest on deposits 65,267 51,834 6,097 117,100 10,580 Interest on short-term borrowings 8,044 7,563 555 15,607 576 Interest on long-term borrowings 4,852 4,706 3,336 9,558 6,358 Total interest expense 78,163 64,103 9,988 142,265 17,514 Net interest income 152,084 153,443 138,767 305,528 269,698 Provision for credit losses 6,069 11,850 3,559 17,920 6,359 Net interest income after provision for credit losses 146,015 141,593 135,208 287,608 263,339 Noninterest income: Service charges on deposit accounts 8,118 7,902 8,040 16,020 15,637 Other service charges, commissions and fees 1,693 1,746 1,709 3,439 3,364 Interchange fees 2,459 2,325 2,268 4,784 4,078 Fiduciary and asset management fees 4,359 4,262 6,939 8,620 14,194 Mortgage banking income 449 854 2,200 1,303 5,317 Gain (loss) on sale of securities 2 (13,400 ) (2 ) (13,398 ) (2 ) Bank owned life insurance income 2,870 2,828 2,716 5,698 5,413 Loan-related interest rate swap fees 2,316 1,439 2,600 3,755 6,460 Other operating income 1,931 1,672 11,816 3,603 13,978 Total noninterest income 24,197 9,628 38,286 33,824 68,439 Noninterest expenses: Salaries and benefits 62,019 60,529 55,305 122,547 113,603 Occupancy expenses 6,094 6,356 6,395 12,450 13,278 Furniture and equipment expenses 3,565 3,752 3,590 7,317 7,187 Technology and data processing 8,566 8,142 7,862 16,708 15,658 Professional services 4,433 3,413 4,680 7,847 8,770 Marketing and advertising expense 2,817 2,351 2,502 5,168 4,665 FDIC assessment premiums and other insurance 4,074 3,899 2,765 7,973 5,250 Franchise and other taxes 4,499 4,498 4,500 8,997 8,999 Loan-related expenses 1,619 1,552 1,867 3,171 3,643 Amortization of intangible assets 2,216 2,279 2,915 4,494 5,954 Other expenses 5,759 11,503 6,387 17,262 17,082 Total noninterest expenses 105,661 108,274 98,768 213,934 204,089 Income before income taxes 64,551 42,947 74,726 107,498 127,689 Income tax expense 9,310 7,294 12,500 16,604 21,773 Net income $ 55,241 $ 35,653 $ 62,226 90,894 105,916 Dividends on preferred stock 2,967 2,967 2,967 5,934 5,934 Net income available to common shareholders $ 52,274 $ 32,686 $ 59,259 $ 84,960 $ 99,982 Basic earnings per common share $ 0.70 $ 0.44 $ 0.79 $ 1.13 $ 1.33 Diluted earnings per common share $ 0.70 $ 0.44 $ 0.79 $ 1.13 $ 1.33 AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS) (UNAUDITED) (Dollars in thousands) For the Quarter Ended June 30, 2023 March 31, 2023 Average Balance Interest Income / Expense (1) Yield / Rate (1)(2) Average Balance Interest Income / Expense (1) Yield / Rate (1)(2) Assets: Securities: Taxable $ 1,865,193 $ 15,565 3.35 % $ 2,038,215 $ 16,753 3.33 % Tax-exempt 1,311,469 10,755 3.29 % 1,429,346 11,782 3.34 % Total securities 3,176,662 26,320 3.32 % 3,467,561 28,535 3.34 % LHFI, net of deferred fees and costs (3) 14,746,218 206,452 5.62 % 14,505,611 191,178 5.35 % Other earning assets 168,929 1,141 2.71 % 264,916 1,621 2.48 % Total earning assets 18,091,809 $ 233,913 5.19 % 18,238,088 $ 221,334 4.92 % Allowance for loan and lease losses (117,643 ) (112,172 ) Total non-earning assets 2,235,521 2,258,435 Total assets $ 20,209,687 $ 20,384,351 Liabilities and Stockholders' Equity: Interest-bearing deposits: Transaction and money market accounts $ 8,387,473 $ 46,953 2.25 % $ 8,344,900 $ 38,315 1.86 % Regular savings 1,014,565 430 0.17 % 1,087,435 364 0.14 % Time deposits 2,500,966 17,884 2.87 % 2,291,530 13,155 2.33 % Total interest-bearing deposits 11,903,004 65,267 2.20 % 11,723,865 51,834 1.79 % Other borrowings 1,071,171 12,896 4.83 % 1,122,244 12,269 4.43 % Total interest-bearing liabilities $ 12,974,175 $ 78,163 2.42 % $ 12,846,109 $ 64,103 2.02 % Noninterest-bearing liabilities: Demand deposits 4,377,150 4,693,347 Other liabilities 397,621 421,295 Total liabilities 17,748,946 17,960,751 Stockholders' equity 2,460,741 2,423,600 Total liabilities and stockholders' equity $ 20,209,687 $ 20,384,351 Net interest income $ 155,750 $ 157,231 Interest rate spread 2.77 % 2.90 % Cost of funds 1.74 % 1.42 % Net interest margin 3.45 % 3.50 % _____________________________ (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/20230725353083/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 $52.3 million and basic and diluted earnings per common share of $0.70 for the second quarter of 2023 and adjusted operating earnings available to common shareholders(1) of $55.4 million and adjusted diluted operating earnings per common share(1) of $0.74 for the second quarter of 2023. As previously disclosed, the Company initiated a series of cost saving 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 $3.9 million in pre-tax expenses during the second quarter of 2023, and the Company expects to recognize additional pre-tax expenses associated with these actions of approximately $7.5 million during the third quarter of 2023. “Atlantic Union delivered strong second quarter financial results despite the turmoil in the banking industry during the first half of the year,” said John C. Asbury, president and chief executive officer of Atlantic Union. “Loan growth remained strong and deposit levels were stable during the quarter. 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, in these challenging times.” “Operating under the mantra of soundness, profitability and growth – in that order of priority – Atlantic Union remains committed to generating sustainable, profitable growth and building long term value for our shareholders.” NET INTEREST INCOME For the second quarter of 2023, net interest income was $152.1 million, a decrease of $1.3 million from $153.4 million in the first quarter of 2023. Net interest income (FTE)(1) was $155.8 million in the second quarter of 2023, a decrease of $1.5 million from the first quarter of 2023. The decreases in net interest income and net interest income (FTE)(1) were primarily driven by higher deposit costs due to increases in market interest rates, as well as changes in the deposit mix as depositors migrated to higher cost interest bearing deposit accounts. These decreases were partially offset by an increase in interest income on loans due to net loan growth and variable rate loans repricing as short-term interest rates increased. Our net interest margin decreased 4 basis points from the prior quarter to 3.37% at June 30, 2023, and our net interest margin (FTE)(1) decreased 5 basis points during the same period to 3.45%. Earning asset yields increased by 27 basis points to 5.19% in the second quarter of 2023 compared to the first quarter of 2023, primarily due to the impact of increases in market interest rates on loans. Our cost of funds increased by 32 basis points to 1.74% at June 30, 2023 compared to the prior quarter, driven by higher deposit and borrowing costs and funding mix as noted above. The Company’s net interest margin (FTE) (1) includes the impact of acquisition accounting fair value adjustments. The impact of net accretion in the first and second quarters of 2023 are reflected in the following table (dollars in thousands): Loan Deposit Borrowings Accretion Amortization Amortization Total For the quarter ended March 31, 2023 $ 1,106 $ (14) $ (209) $ 883 For the quarter ended June 30, 2023 1,073 (7) (213) 853 ASSET QUALITY Overview At June 30, 2023, nonperforming assets (“NPAs”) as a percentage of total loans held for investment (“LHFI”) decreased 1 basis point from the prior quarter to 0.19% and included nonaccrual loans of $29.1 million. Accruing past due loans as a percentage of total LHFI totaled 16 basis points at June 30, 2023, a decrease of 5 basis points from March 31, 2023, and an increase of 1 basis point from June 30, 2022. Net charge-offs were 0.04% of total average LHFI (annualized) for the second quarter of 2023, a decrease of 9 basis points from March 31, 2023, and an increase of 1 basis point from June 30, 2022. The allowance for credit losses (“ACL”) totaled $136.2 million at June 30, 2023, a $4.5 million increase from the prior quarter. Nonperforming Assets At June 30, 2023, NPAs totaled $29.2 million, compared to $29.1 million in the prior quarter. The following table shows a summary of NPA balances at the quarter ended (dollars in thousands): June 30, March 31, December 31, September 30, June 30, 2023 2023 2022 2022 2022 Nonaccrual loans $ 29,105 $ 29,082 $ 27,038 $ 26,500 $ 29,070 Foreclosed properties 50 29 76 2,087 2,065 Total nonperforming assets $ 29,155 $ 29,111 $ 27,114 $ 28,587 $ 31,135 The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands): June 30, March 31, December 31, September 30, June 30, 2023 2023 2022 2022 2022 Beginning Balance $ 29,082 $ 27,038 $ 26,500 $ 29,070 $ 29,032 Net customer payments (5,950 ) (1,755 ) (1,805 ) (3,725 ) (2,472 ) Additions 6,685 4,151 2,935 1,302 3,203 Charge-offs (712 ) (39 ) (461 ) (125 ) (311 ) Loans returning to accruing status — (313 ) (131 ) — — Transfers to foreclosed property — — — (22 ) (382 ) Ending Balance $ 29,105 $ 29,082 $ 27,038 $ 26,500 $ 29,070 Past Due Loans At June 30, 2023, past due loans still accruing interest totaled $24.1 million or 0.16% of total LHFI, compared to $30.9 million or 0.21% of total LHFI at March 31, 2023, and $20.4 million or 0.15% of total LHFI at June 30, 2022. Of the total past due loans still accruing interest, $10.1 million or 0.07% of total LHFI were loans past due 90 days or more at June 30, 2023, compared to $7.2 million or 0.05% of total LHFI at March 31, 2023, and $4.6 million or 0.03% of total LHFI at June 30, 2022. The increase in loans past due 90 days or more was primarily due to one credit relationship within the commercial real estate – non-owner occupied portfolio. Allowance for Credit Losses At June 30, 2023, the ACL was $136.2 million and included an allowance for loan and lease losses (“ALLL”) of $120.7 million and a reserve for unfunded commitments of $15.5 million. The ACL at June 30, 2023 increased $4.5 million from March 31, 2023 due to loan growth in the second quarter of 2023 and the impact of continued uncertainty in the economic outlook. At both June 30, 2023 and March 31, 2023, the ACL as a percentage of total LHFI was 0.90%, and the ALLL as a percentage of total LHFI was 0.80%. Net Charge-offs Net charge-offs were $1.6 million or 0.04% of total average LHFI on an annualized basis for the second quarter of 2023, compared to $4.6 million or 0.13% (annualized) for the first quarter of 2023, and $939,000 or 0.03% (annualized) for the second quarter of 2022. Provision for Credit Losses For the second quarter of 2023, the Company recorded a provision for credit losses of $6.1 million, compared to a provision for credit losses of $11.9 million in the prior quarter, and a provision for credit losses of $3.6 million in the second quarter of 2022. The provision for credit losses for the second quarter of 2023 reflected a provision of $5.7 million for loan losses and a $349,000 provision for unfunded commitments. NONINTEREST INCOME Noninterest income increased $14.6 million to $24.2 million for the second quarter of 2023 from $9.6 million in the prior quarter, primarily due to $13.4 million of losses incurred on the sale of available for sale (“AFS”) securities in the prior quarter, driven by the Company’s balance sheet repositioning transactions, and that were not repeated during the second quarter. In addition, loan-related interest rate swap fees increased $877,000 from the prior quarter due to several new swap transactions, and other operating income increased $259,000 from the prior quarter primarily driven by an increase in loan syndication revenue. These increases in noninterest income were partially offset by a $405,000 decrease in mortgage banking income due to a decline in gain on sale margins. NONINTEREST EXPENSE Noninterest expense decreased $2.6 million to $105.7 million for the second quarter of 2023 from $108.3 million in the prior quarter. Adjusted operating noninterest expense,(1) which excludes amortization of intangible assets ($2.2 million in the second quarter and $2.3 million in the first quarter), expenses incurred associated with our strategic cost savings initiatives principally composed of severance charges related to headcount reductions and charges for exiting leases ($3.9 million in the second quarter), and the legal reserve associated with an ongoing regulatory matter as previously disclosed ($5.0 million in the first quarter), decreased $1.5 million to $99.5 million for the second quarter of 2023 from $101.0 million in the prior quarter. The decrease in adjusted operating noninterest expense(1) was primarily due to a $1.8 million decrease included within other expenses, composed of OREO-related gains recognized in the current quarter and reduced branch closing costs as compared to the prior quarter, and a $1.4 million decrease in salaries and benefits expense, outside of severance charges related to headcount reductions in the quarter, primarily due to seasonal decreases in payroll related taxes and 401(k) contribution expenses. These decreases in adjusted operating noninterest expense(1) were partially offset by increases of $1.0 million in professional services expense related to the LIBOR transition and other strategic projects, $466,000 in marketing and advertising expense, and $424,000 in technology and data processing expense. INCOME TAXES The effective tax rate for the three months ended June 30, 2023 and 2022 was 14.4% and 16.7%, respectively, and the effective tax rate for the six months ended June 30, 2023 and 2022 was 15.5% and 17.1%, respectively. The decrease in the effective tax rates is due to the increased proportion of tax-exempt income to pre-tax income for both the three and six months ended June 30, 2023 compared to the prior quarter and prior year, respectively. BALANCE SHEET At June 30, 2023, total assets were $20.6 billion, an increase of $499.0 million or approximately 10.0% (annualized) from March 31, 2023, and an increase of $940.5 million or approximately 4.8% from June 30, 2022. Total assets increased from the prior quarter primarily due to a $482.7 million increase in LHFI (net of deferred fees and costs). 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 $676.8 million decrease in investment securities due to the sale of $505.7 million in AFS securities as part of the Company’s balance sheet restructuring executed in the first quarter of 2023, as well as a decline in the market value of the AFS securities portfolio, due to the impact of market interest rate fluctuations. At June 30, 2023, LHFI (net of deferred fees and costs) totaled $15.1 billion, an increase of $482.7 million or 13.3% (annualized) from $14.6 billion at March 31, 2023. Average LHFI (net of deferred fees and costs) totaled $14.7 billion at June 30, 2023, an increase of $240.6 million or 6.7% (annualized) from the prior quarter. At June 30, 2023, LHFI (net of deferred fees and costs) increased $1.4 billion or 10.3% from June 30, 2022, and quarterly average LHFI (net of deferred fees and costs) increased $1.2 billion or 9.0% from the same period in the prior year. LHFI (net of deferred fees and costs) increased from the prior quarter and 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 June 30, 2023, total investments were $3.1 billion, a decrease of $52.2 million from March 31, 2023 and a decrease of $676.8 million from June 30, 2022. AFS securities totaled $2.2 billion at June 30, 2023, $2.3 billion at March 31, 2023, and $3.0 billion at June 30, 2022. At June 30, 2023, total net unrealized losses on the AFS securities portfolio were $450.1 million, an increase of $42.2 million from total net unrealized losses on AFS securities of $407.9 at March 31, 2023. Held to maturity (“HTM”) securities are carried at cost and totaled $849.6 million at June 30, 2023, $855.4 million at March 31, 2023, and $780.7 million at June 30, 2022 and have net unrealized losses of $41.8 million at June 30, 2023, an increase of $9.5 million from net unrealized losses on HTM securities of $32.3 million at March 31, 2023. At June 30, 2023, total deposits were $16.4 billion, a decrease of $43.9 million or approximately 1.1% (annualized) from March 31, 2023. Average deposits at June 30, 2023 decreased from the prior quarter by $137.1 million or 3.3% (annualized). Total deposits decreased from the prior quarter due to the impact of customer behavior in response to inflation and higher market interest rates, resulting in a decrease in low costing customer deposits, partially offset by an increase in customer time deposits and brokered deposits. Total deposits at June 30, 2023 increased $283.4 million or 1.8% from June 30, 2022, and quarterly average deposits at June 30, 2023 increased $89.1 million or 0.6% from the same period in the prior year. Total deposits increased from the same period in the prior year primarily due to increases in interest bearing customer deposits and brokered deposits, partially offset by decreases in demand deposits. At June 30, 2023, total borrowings were $1.3 billion, an increase of $521.4 million from March 31, 2023 and an increase of $522.4 million from June 30, 2022. Total borrowings increased from the prior quarter and prior year primarily due to an increase in Federal Home Loan Bank short-term borrowings, which was used to fund loan growth. The following table shows the Company’s capital ratios at the quarters ended: June 30, March 31, June 30, 2023 2023 2022 Common equity Tier 1 capital ratio (2) 9.86 % 9.91 % 9.96 % Tier 1 capital ratio (2) 10.81 % 10.89 % 11.00 % Total capital ratio (2) 13.64 % 13.76 % 13.86 % Leverage ratio (Tier 1 capital to average assets) (2) 9.64 % 9.38 % 9.26 % Common equity to total assets 10.96 % 11.31 % 11.32 % Tangible common equity to tangible assets (1) 6.66 % 6.91 % 6.78 % _____________________________ At June 30, 2023, the Company’s common equity to total assets ratio and tangible common equity to tangible assets ratio decreased compared to the prior quarter and prior year primarily due to the unrealized losses on the AFS securities portfolio recorded in other comprehensive income due to higher market interest rates, as well as the increase in total assets. During the second 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 first quarter of 2023 and the second quarter of 2022. During the second quarter of 2023, the Company also declared and paid cash dividends of $0.30 per common share, consistent with the first quarter of 2023 and an increase of $0.02 or approximately 7.1% from the second 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 June 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. ANNOUNCED TRANSACTION As announced and further described in a separate press release issued by the Company today, the Company has entered into a merger agreement to acquire American National Bankshares Inc. (“American National”) in an all-stock transaction. 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 approximately 125 ATMs located throughout Virginia and in portions of Maryland and North Carolina. Certain non-bank financial services affiliates of Atlantic Union Bank include: Atlantic Union Equipment Finance, Inc., which provides equipment financing; Atlantic Union Financial Consultants, LLC, which provides brokerage services; and Union Insurance Group, LLC, which offers various lines of insurance products. SECOND QUARTER 2023 EARNINGS RELEASE CONFERENCE CALL In light of today’s announcement that the Company has entered into a merger agreement to acquire American National, the Company will hold a conference call and webcast for investors at 9:00 a.m. Eastern Time on Tuesday, July 25, 2023 during which the Company’s management will review the Company’s financial results for the second quarter 2023 and discuss the proposed merger. The listen-only webcast and the accompanying slides can be accessed at: https://edge.media-server.com/mmc/p/g5jw6mu3. For analysts who wish to participate in the conference call, please register at the following URL: https://register.vevent.com/register/BI1a5d16a5982740369c57e980002f5ab6. To participate in the conference call, you must use the link to receive an audio dial-in number and an Access PIN. A replay of the webcast, and the accompanying slides, will be available on the Company’s website for 90 days at: https://investors.atlanticunionbank.com/. NON-GAAP FINANCIAL MEASURES In reporting the results as of and for the period ended June 30, 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 impact of cost saving measures, 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; 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 the 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; other factors, many of which are beyond our control; and the risks, uncertainties and assumptions set forth under the heading “Caution About Forward-Looking Statements” in the joint press release issued by the Company and American National on the date hereof with respect to the proposed merger transaction between the Company and American National. 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 Report on Form 10-Q for the quarter ended 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 its 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 Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Results of Operations Interest and dividend income $ 230,247 $ 217,546 $ 148,755 $ 447,793 $ 287,212 Interest expense 78,163 64,103 9,988 142,265 17,514 Net interest income 152,084 153,443 138,767 305,528 269,698 Provision for credit losses 6,069 11,850 3,559 17,920 6,359 Net interest income after provision for credit losses 146,015 141,593 135,208 287,608 263,339 Noninterest income 24,197 9,628 38,286 33,824 68,439 Noninterest expenses 105,661 108,274 98,768 213,934 204,089 Income before income taxes 64,551 42,947 74,726 107,498 127,689 Income tax expense 9,310 7,294 12,500 16,604 21,773 Net income 55,241 35,653 62,226 90,894 105,916 Dividends on preferred stock 2,967 2,967 2,967 5,934 5,934 Net income available to common shareholders $ 52,274 $ 32,686 $ 59,259 $ 84,960 $ 99,982 Interest earned on earning assets (FTE) (1) $ 233,913 $ 221,334 $ 152,332 $ 455,248 $ 294,124 Net interest income (FTE) (1) 155,750 157,231 142,344 312,983 276,610 Total revenue (FTE) (1) 179,947 166,859 180,630 346,807 345,049 Pre-tax pre-provision adjusted operating earnings (7) 74,553 73,197 69,205 147,751 130,476 Key Ratios Earnings per common share, diluted $ 0.70 $ 0.44 $ 0.79 $ 1.13 $ 1.33 Return on average assets (ROA) 1.10 % 0.71 % 1.27 % 0.90 % 1.08 % Return on average equity (ROE) 9.00 % 5.97 % 10.21 % 7.51 % 8.37 % Return on average tangible common equity (ROTCE) (2) (3) 16.11 % 10.71 % 18.93 % 13.46 % 14.97 % Efficiency ratio 59.94 % 66.40 % 55.78 % 63.04 % 60.36 % Efficiency ratio (FTE) (1) 58.72 % 64.89 % 54.68 % 61.69 % 59.15 % Net interest margin 3.37 % 3.41 % 3.15 % 3.39 % 3.06 % Net interest margin (FTE) (1) 3.45 % 3.50 % 3.24 % 3.47 % 3.14 % Yields on earning assets (FTE) (1) 5.19 % 4.92 % 3.46 % 5.05 % 3.34 % Cost of interest-bearing liabilities 2.42 % 2.02 % 0.35 % 2.22 % 0.30 % Cost of deposits 1.61 % 1.28 % 0.15 % 1.44 % 0.13 % Cost of funds 1.74 % 1.42 % 0.22 % 1.58 % 0.20 % Operating Measures (4) Adjusted operating earnings $ 58,348 $ 50,189 $ 54,244 $ 108,537 $ 102,285 Adjusted operating earnings available to common shareholders 55,381 47,222 51,277 102,603 96,351 Adjusted operating earnings per common share, diluted $ 0.74 $ 0.63 $ 0.69 $ 1.37 $ 1.28 Adjusted operating ROA 1.16 % 1.00 % 1.10 % 1.08 % 1.04 % Adjusted operating ROE 9.51 % 8.40 % 8.90 % 8.96 % 8.08 % Adjusted operating ROTCE (2) (3) 17.03 % 15.22 % 16.47 % 16.14 % 14.45 % Adjusted operating efficiency ratio (FTE) (1)(6) 55.30 % 56.03 % 55.88 % 55.66 % 57.34 % Per Share Data Earnings per common share, basic $ 0.70 $ 0.44 $ 0.79 $ 1.13 $ 1.33 Earnings per common share, diluted 0.70 0.44 0.79 1.13 1.33 Cash dividends paid per common share 0.30 0.30 0.28 0.60 0.56 Market value per share 25.95 35.05 33.92 25.95 33.92 Book value per common share 30.31 30.53 29.95 30.31 29.95 Tangible book value per common share (2) 17.58 17.78 17.07 17.58 17.07 Price to earnings ratio, diluted 9.28 19.77 10.68 11.35 12.65 Price to book value per common share ratio 0.86 1.15 1.13 0.86 1.13 Price to tangible book value per common share ratio (2) 1.48 1.97 1.99 1.48 1.99 Weighted average common shares outstanding, basic 74,995,450 74,832,141 74,847,899 74,914,247 75,194,347 Weighted average common shares outstanding, diluted 74,995,557 74,835,514 74,849,871 74,915,977 75,201,326 Common shares outstanding at end of period 74,998,075 74,989,228 74,688,314 74,998,075 74,688,314 ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Capital Ratios Common equity Tier 1 capital ratio (5) 9.86 % 9.91 % 9.96 % 9.86 % 9.96 % Tier 1 capital ratio (5) 10.81 % 10.89 % 11.00 % 10.81 % 11.00 % Total capital ratio (5) 13.64 % 13.76 % 13.86 % 13.64 % 13.86 % Leverage ratio (Tier 1 capital to average assets) (5) 9.64 % 9.38 % 9.26 % 9.64 % 9.26 % Common equity to total assets 10.96 % 11.31 % 11.32 % 10.96 % 11.32 % Tangible common equity to tangible assets (2) 6.66 % 6.91 % 6.78 % 6.66 % 6.78 % Financial Condition Assets $ 20,602,332 $ 20,103,370 $ 19,661,799 $ 20,602,332 $ 19,661,799 LHFI (net of deferred fees and costs) 15,066,930 14,584,280 13,655,408 15,066,930 13,655,408 Securities 3,143,236 3,195,399 3,820,078 3,143,236 3,820,078 Earning Assets 18,452,007 17,984,057 17,578,979 18,452,007 17,578,979 Goodwill 925,211 925,211 925,211 925,211 925,211 Amortizable intangibles, net 23,469 24,482 31,621 23,469 31,621 Deposits 16,411,987 16,455,910 16,128,635 16,411,987 16,128,635 Borrowings 1,320,301 798,910 797,948 1,320,301 797,948 Stockholders' equity 2,424,470 2,440,236 2,391,476 2,424,470 2,391,476 Tangible common equity (2) 1,309,433 1,324,186 1,268,287 1,309,433 1,268,287 LHFI, net of deferred fees and costs Construction and land development $ 1,231,720 $ 1,179,872 $ 988,379 $ 1,231,720 $ 988,379 Commercial real estate - owner occupied 1,952,189 1,956,585 1,965,702 1,952,189 1,965,702 Commercial real estate - non-owner occupied 4,113,318 3,968,085 3,860,819 4,113,318 3,860,819 Multifamily real estate 788,895 822,006 762,502 788,895 762,502 Commercial & Industrial 3,373,148 3,082,478 2,595,891 3,373,148 2,595,891 Residential 1-4 Family - Commercial 518,317 522,760 553,771 518,317 553,771 Residential 1-4 Family - Consumer 1,017,698 974,511 865,174 1,017,698 865,174 Residential 1-4 Family - Revolving 600,339 589,791 583,073 600,339 583,073 Auto 585,756 600,658 525,301 585,756 525,301 Consumer 134,709 145,090 180,045 134,709 180,045 Other Commercial 750,841 742,444 774,751 750,841 774,751 Total LHFI $ 15,066,930 $ 14,584,280 $ 13,655,408 $ 15,066,930 $ 13,655,408 Deposits Interest checking accounts $ 4,824,192 $ 4,714,366 $ 3,943,303 $ 4,824,192 $ 3,943,303 Money market accounts 3,413,936 3,547,514 3,956,046 3,413,936 3,956,046 Savings accounts 986,081 1,047,914 1,165,577 986,081 1,165,577 Customer time deposits of $250,000 and over 578,739 541,447 335,706 578,739 335,706 Other customer time deposits 1,813,031 1,648,747 1,308,493 1,813,031 1,308,493 Time deposits 2,391,770 2,190,194 1,644,199 2,391,770 1,644,199 Total interest-bearing customer deposits 11,615,979 11,499,988 10,709,125 11,615,979 10,709,125 Brokered deposits 485,702 377,913 57,972 485,702 57,972 Total interest-bearing deposits $ 12,101,681 $ 11,877,901 $ 10,767,097 $ 12,101,681 $ 10,767,097 Demand deposits 4,310,306 4,578,009 5,361,538 4,310,306 5,361,538 Total deposits $ 16,411,987 $ 16,455,910 $ 16,128,635 $ 16,411,987 $ 16,128,635 Averages Assets $ 20,209,687 $ 20,384,351 $ 19,719,402 $ 20,296,536 $ 19,819,330 LHFI (net of deferred fees and costs) 14,746,218 14,505,611 13,525,529 14,626,579 13,413,780 Loans held for sale 14,413 5,876 20,634 10,168 17,652 Securities 3,176,662 3,467,561 3,930,912 3,321,308 4,064,007 Earning assets 18,091,809 18,238,088 17,646,470 18,164,545 17,765,085 Deposits 16,280,154 16,417,212 16,191,056 16,348,304 16,351,822 Time deposits 2,500,966 2,291,530 1,667,378 2,396,827 1,716,743 Interest-bearing deposits 11,903,004 11,723,865 10,824,465 11,813,929 11,054,095 Borrowings 1,071,171 1,122,244 765,886 1,096,567 639,506 Interest-bearing liabilities 12,974,175 12,846,109 11,590,351 12,910,496 11,693,601 Stockholders' equity 2,460,741 2,423,600 2,445,045 2,442,273 2,552,418 Tangible common equity (2) 1,345,426 1,306,445 1,304,536 1,326,043 1,410,342 ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Asset Quality Allowance for Credit Losses (ACL) Beginning balance, Allowance for loan and lease losses (ALLL) $ 116,512 $ 110,768 $ 102,591 $ 110,768 $ 99,787 Add: Recoveries 1,035 1,167 1,018 2,202 2,531 Less: Charge-offs 2,602 5,726 1,957 8,328 3,466 Add: Provision for loan losses 5,738 10,303 2,532 16,041 5,332 Ending balance, ALLL $ 120,683 $ 116,512 $ 104,184 $ 120,683 $ 104,184 Beginning balance, Reserve for unfunded commitment (RUC) $ 15,199 $ 13,675 $ 8,000 $ 13,675 $ 8,000 Add: Provision for unfunded commitments 349 1,524 1,000 1,873 1,000 Ending balance, RUC $ 15,548 $ 15,199 $ 9,000 $ 15,548 $ 9,000 Total ACL $ 136,231 $ 131,711 $ 113,184 $ 136,231 $ 113,184 ACL / total LHFI 0.90 % 0.90 % 0.83 % 0.90 % 0.83 % ALLL / total LHFI 0.80 % 0.80 % 0.76 % 0.80 % 0.76 % Net charge-offs / total average LHFI 0.04 % 0.13 % 0.03 % 0.08 % 0.01 % Provision for loan losses/ total average LHFI 0.16 % 0.29 % 0.08 % 0.22 % 0.08 % Nonperforming Assets Construction and land development $ 284 $ 363 $ 581 $ 284 $ 581 Commercial real estate - owner occupied 3,978 6,174 4,996 3,978 4,996 Commercial real estate - non-owner occupied 6,473 1,481 3,301 6,473 3,301 Commercial & Industrial 2,738 4,815 2,728 2,738 2,728 Residential 1-4 Family - Commercial 1,844 1,907 2,031 1,844 2,031 Residential 1-4 Family - Consumer 10,033 10,540 12,084 10,033 12,084 Residential 1-4 Family - Revolving 3,461 3,449 3,069 3,461 3,069 Auto 291 347 279 291 279 Consumer 3 6 1 3 1 Nonaccrual loans $ 29,105 $ 29,082 $ 29,070 $ 29,105 $ 29,070 Foreclosed property 50 29 2,065 50 2,065 Total nonperforming assets (NPAs) $ 29,155 $ 29,111 $ 31,135 $ 29,155 $ 31,135 Construction and land development $ 24 $ 249 $ 1 $ 24 $ 1 Commercial real estate - owner occupied 2,463 2,133 792 2,463 792 Commercial real estate - non-owner occupied 2,763 1,032 642 2,763 642 Commercial & Industrial 810 633 322 810 322 Residential 1-4 Family - Commercial 693 232 184 693 184 Residential 1-4 Family - Consumer 1,716 859 1,112 1,716 1,112 Residential 1-4 Family - Revolving 1,259 1,766 997 1,259 997 Auto 243 137 134 243 134 Consumer 74 137 79 74 79 Other Commercial 66 66 329 66 329 LHFI ≥ 90 days and still accruing $ 10,111 $ 7,244 $ 4,592 $ 10,111 $ 4,592 Total NPAs and LHFI ≥ 90 days $ 39,266 $ 36,355 $ 35,727 $ 39,266 $ 35,727 NPAs / total LHFI 0.19 % 0.20 % 0.23 % 0.19 % 0.23 % NPAs / total assets 0.14 % 0.14 % 0.16 % 0.14 % 0.16 % ALLL / nonaccrual loans 414.65 % 400.63 % 358.39 % 414.65 % 358.39 % ALLL/ nonperforming assets 413.94 % 400.23 % 334.62 % 413.94 % 334.62 % ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Past Due Detail Construction and land development $ 295 $ 815 $ 645 $ 295 $ 645 Commercial real estate - owner occupied 602 2,251 1,374 602 1,374 Commercial real estate - non-owner occupied — 52 511 — 511 Commercial & Industrial 254 981 2,581 254 2,581 Residential 1-4 Family - Commercial 1,076 1,399 1,944 1,076 1,944 Residential 1-4 Family - Consumer 1,504 11,579 594 1,504 594 Residential 1-4 Family - Revolving 1,729 1,384 1,368 1,729 1,368 Auto 2,877 2,026 1,841 2,877 1,841 Consumer 334 295 361 334 361 Other Commercial 23 — 11 23 11 LHFI 30-59 days past due $ 8,694 $ 20,782 $ 11,230 $ 8,694 $ 11,230 Commercial real estate - owner occupied 10 798 807 10 807 Commercial & Industrial 400 61 546 400 546 Residential 1-4 Family - Commercial 189 271 474 189 474 Residential 1-4 Family - Consumer 2,813 158 1,646 2,813 1,646 Residential 1-4 Family - Revolving 1,114 1,069 731 1,114 731 Auto 564 295 213 564 213 Consumer 214 176 210 214 210 LHFI 60-89 days past due $ 5,304 $ 2,828 $ 4,627 $ 5,304 $ 4,627 Past Due and still accruing $ 24,109 $ 30,854 $ 20,449 $ 24,109 $ 20,449 Past Due and still accruing / total LHFI 0.16 % 0.21 % 0.15 % 0.16 % 0.15 % Alternative Performance Measures (non-GAAP) Net interest income (FTE) (1) Net interest income (GAAP) $ 152,084 $ 153,443 $ 138,767 $ 305,528 $ 269,698 FTE adjustment 3,666 3,788 3,577 7,455 6,912 Net interest income (FTE) (non-GAAP) $ 155,750 $ 157,231 $ 142,344 $ 312,983 $ 276,610 Noninterest income (GAAP) 24,197 9,628 38,286 33,824 68,439 Total revenue (FTE) (non-GAAP) $ 179,947 $ 166,859 $ 180,630 $ 346,807 $ 345,049 Average earning assets $ 18,091,809 $ 18,238,088 $ 17,646,470 $ 18,164,545 $ 17,765,085 Net interest margin 3.37 % 3.41 % 3.15 % 3.39 % 3.06 % Net interest margin (FTE) 3.45 % 3.50 % 3.24 % 3.47 % 3.14 % Tangible Assets (2) Ending assets (GAAP) $ 20,602,332 $ 20,103,370 $ 19,661,799 $ 20,602,332 $ 19,661,799 Less: Ending goodwill 925,211 925,211 925,211 925,211 925,211 Less: Ending amortizable intangibles 23,469 24,482 31,621 23,469 31,621 Ending tangible assets (non-GAAP) $ 19,653,652 $ 19,153,677 $ 18,704,967 $ 19,653,652 $ 18,704,967 Tangible Common Equity (2) Ending equity (GAAP) $ 2,424,470 $ 2,440,236 $ 2,391,476 $ 2,424,470 $ 2,391,476 Less: Ending goodwill 925,211 925,211 925,211 925,211 925,211 Less: Ending amortizable intangibles 23,469 24,482 31,621 23,469 31,621 Less: Perpetual preferred stock 166,357 166,357 166,357 166,357 166,357 Ending tangible common equity (non-GAAP) $ 1,309,433 $ 1,324,186 $ 1,268,287 $ 1,309,433 $ 1,268,287 Average equity (GAAP) $ 2,460,741 $ 2,423,600 $ 2,445,045 $ 2,442,273 $ 2,552,418 Less: Average goodwill 925,211 925,211 935,446 925,211 935,503 Less: Average amortizable intangibles 23,748 25,588 38,707 24,663 40,217 Less: Average perpetual preferred stock 166,356 166,356 166,356 166,356 166,356 Average tangible common equity (non-GAAP) $ 1,345,426 $ 1,306,445 $ 1,304,536 $ 1,326,043 $ 1,410,342 ROTCE (2)(3) Net income available to common shareholders (GAAP) $ 52,274 $ 32,686 $ 59,259 $ 84,960 $ 99,982 Plus: Amortization of intangibles, tax effected 1,751 1,800 2,303 3,550 4,704 Net income available to common shareholders before amortization of intangibles (non-GAAP) $ 54,025 $ 34,486 $ 61,562 $ 88,510 $ 104,686 Return on average tangible common equity (ROTCE) 16.11 % 10.71 % 18.93 % 13.46 % 14.97 % ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Operating Measures (4) Net income (GAAP) $ 55,241 $ 35,653 $ 62,226 $ 90,894 $ 105,916 Plus: Strategic cost saving initiatives, net of tax 3,109 — — 3,109 — Plus: Legal reserve, net of tax — 3,950 — 3,950 — Plus: Strategic branch closing and facility consolidation costs, net of tax — — — — 4,351 Less: Gain (loss) on sale of securities, net of tax 2 (10,586 ) (2 ) (10,584 ) (2 ) Less: Gain on sale of DHFB, net of tax — — 7,984 — 7,984 Adjusted operating earnings (non-GAAP) 58,348 50,189 54,244 108,537 102,285 Less: Dividends on preferred stock 2,967 2,967 2,967 5,934 5,934 Adjusted operating earnings available to common shareholders (non-GAAP) $ 55,381 $ 47,222 $ 51,277 $ 102,603 $ 96,351 Noninterest expense (GAAP) $ 105,661 $ 108,274 $ 98,768 $ 213,934 $ 204,089 Less: Amortization of intangible assets 2,216 2,279 2,915 4,494 5,954 Less: Strategic cost saving initiatives 3,935 — — 3,935 — Less: Legal reserve — 5,000 — 5,000 — Less: Strategic branch closing and facility consolidation costs — — — — 5,508 Adjusted operating noninterest expense (non-GAAP) $ 99,510 $ 100,995 $ 95,853 $ 200,505 $ 192,627 Noninterest income (GAAP) $ 24,197 $ 9,628 $ 38,286 $ 33,824 $ 68,439 Less: Gain (loss) on sale of securities 2 (13,400 ) (2 ) (13,398 ) (2 ) Less: Gain on sale of DHFB — — 9,082 — 9,082 Adjusted operating noninterest income (non-GAAP) $ 24,195 $ 23,028 $ 29,206 $ 47,222 $ 59,359 Net interest income (FTE) (non-GAAP) (1) $ 155,750 $ 157,231 $ 142,344 $ 312,983 $ 276,610 Adjusted operating noninterest income (non-GAAP) 24,195 23,028 29,206 47,222 59,359 Total adjusted revenue (FTE) (non-GAAP) (1) $ 179,945 $ 180,259 $ 171,550 $ 360,205 $ 335,969 Efficiency ratio 59.94 % 66.40 % 55.78 % 63.04 % 60.36 % Efficiency ratio (FTE) (1) 58.72 % 64.89 % 54.68 % 61.69 % 59.15 % Adjusted operating efficiency ratio (FTE) (1)(6) 55.30 % 56.03 % 55.88 % 55.66 % 57.34 % Operating ROA & ROE (4) Adjusted operating earnings (non-GAAP) $ 58,348 $ 50,189 $ 54,244 $ 108,537 $ 102,285 Average assets (GAAP) $ 20,209,687 $ 20,384,351 $ 19,719,402 $ 20,296,536 $ 19,819,330 Return on average assets (ROA) (GAAP) 1.10 % 0.71 % 1.27 % 0.90 % 1.08 % Adjusted operating return on average assets (ROA) (non-GAAP) 1.16 % 1.00 % 1.10 % 1.08 % 1.04 % Average equity (GAAP) $ 2,460,741 $ 2,423,600 $ 2,445,045 $ 2,442,273 $ 2,552,418 Return on average equity (ROE) (GAAP) 9.00 % 5.97 % 10.21 % 7.51 % 8.37 % Adjusted operating return on average equity (ROE) (non-GAAP) 9.51 % 8.40 % 8.90 % 8.96 % 8.08 % Operating ROTCE (2)(3)(4) Adjusted operating earnings available to common shareholders (non-GAAP) $ 55,381 $ 47,222 $ 51,277 $ 102,603 $ 96,351 Plus: Amortization of intangibles, tax effected 1,751 1,800 2,303 3,550 4,704 Adjusted operating earnings available to common shareholders before amortization of intangibles (non-GAAP) $ 57,132 $ 49,022 $ 53,580 $ 106,153 $ 101,055 Average tangible common equity (non-GAAP) $ 1,345,426 $ 1,306,445 $ 1,304,536 $ 1,326,043 $ 1,410,342 Adjusted operating return on average tangible common equity (non-GAAP) 17.03 % 15.22 % 16.47 % 16.14 % 14.45 % Pre-tax pre-provision adjusted operating earnings (7) Net income (GAAP) $ 55,241 $ 35,653 $ 62,226 $ 90,894 $ 105,916 Plus: Provision for credit losses 6,069 11,850 3,559 17,920 6,359 Plus: Income tax expense 9,310 7,294 12,500 16,604 21,773 Plus: Strategic cost saving initiatives 3,935 — — 3,935 — Plus: Legal reserve — 5,000 — 5,000 — Plus: Strategic branch closing and facility consolidation costs — — — — 5,508 Less: Gain (loss) on sale of securities 2 (13,400 ) (2 ) (13,398 ) (2 ) Less: Gain on sale of DHFB — — 9,082 — 9,082 Pre-tax pre-provision adjusted operating earnings (non-GAAP) $ 74,553 $ 73,197 $ 69,205 $ 147,751 $ 130,476 Less: Dividends on preferred stock 2,967 2,967 2,967 5,934 5,934 Pre-tax pre-provision adjusted operating earnings available to common shareholders (non-GAAP) $ 71,586 $ 70,230 $ 66,238 $ 141,817 $ 124,542 Weighted average common shares outstanding, diluted 74,995,557 74,835,514 74,849,871 74,915,977 75,201,326 Pre-tax pre-provision earnings per common share, diluted $ 0.95 $ 0.94 $ 0.88 $ 1.89 $ 1.66 ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES KEY FINANCIAL RESULTS (UNAUDITED) (Dollars in thousands, except share data) As of & For Three Months Ended As of & For Six Months Ended 06/30/23 03/31/23 06/30/22 06/30/23 06/30/22 Mortgage Origination Held for Sale Volume Refinance Volume $ 4,076 $ 3,452 $ 14,916 $ 7,528 $ 48,116 Purchase Volume 32,168 32,192 84,551 64,361 142,846 Total Mortgage loan originations held for sale $ 36,244 $ 35,644 $ 99,467 $ 71,889 $ 190,962 % of originations held for sale that are refinances 11.2 % 9.7 % 15.0 % 10.5 % 25.2 % Wealth Assets under management $ 4,774,501 $ 4,494,268 $ 4,415,537 $ 4,774,501 $ 4,415,537 Other Data End of period full-time employees 1,878 1,840 1,856 1,878 1,856 Number of full-service branches 109 109 114 109 114 Number of automatic transaction machines ("ATMs") 123 127 131 123 131 _____________________________ (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, gain (loss) on sale of securities, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic cost saving initiatives (principally composed of severance charges related to headcount reductions and charges for exiting leases), gain on sale of DHFB, as well as strategic branch closure initiatives and related facility consolidation costs (principally composed of real estate, leases and other assets write downs, as well as severance and expense reduction initiatives). The Company believes these non-GAAP adjusted measures provide investors with important information about the continuing economic results of the organization’s operations. (5) All ratios at June 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, gain (loss) on sale of securities, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic cost saving initiatives, gain on sale of DHFB, as well as strategic branch closure initiatives and related facility consolidation costs. This measure is similar to the measure utilized by the Company when analyzing corporate performance and is also similar to the measure utilized for incentive compensation. The Company believes this adjusted measure provides investors with important information about the 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, gain (loss) on sale of securities, a legal reserve associated with an ongoing regulatory matter previously disclosed, strategic cost saving initiatives, gain on sale of DHFB, as well as strategic branch closure initiatives and related facility consolidation costs. The Company believes this adjusted measure provides investors with important information about the continuing economic results of the Company’s operations. ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) June 30, December 31, June 30, 2023 2022 2022 ASSETS (unaudited) (audited) (unaudited) Cash and cash equivalents: Cash and due from banks $ 199,778 $ 216,384 $ 158,902 Interest-bearing deposits in other banks 227,015 102,107 82,086 Federal funds sold 1,474 1,457 388 Total cash and cash equivalents 428,267 319,948 241,376 Securities available for sale, at fair value 2,182,448 2,741,816 2,951,421 Securities held to maturity, at carrying value 849,610 847,732 780,749 Restricted stock, at cost 111,178 120,213 87,908 Loans held for sale 10,327 3,936 15,866 Loans held for investment, net of deferred fees and costs 15,066,930 14,449,142 13,655,408 Less: allowance for loan and lease losses 120,683 110,768 104,184 Total loans held for investment, net 14,946,247 14,338,374 13,551,224 Premises and equipment, net 114,786 118,243 128,661 Goodwill 925,211 925,211 925,211 Amortizable intangibles, net 23,469 26,761 31,621 Bank owned life insurance 446,441 440,656 436,703 Other assets 564,348 578,248 511,059 Total assets $ 20,602,332 $ 20,461,138 $ 19,661,799 LIABILITIES Noninterest-bearing demand deposits $ 4,310,306 $ 4,883,239 $ 5,361,538 Interest-bearing deposits 12,101,681 11,048,438 10,767,097 Total deposits 16,411,987 15,931,677 16,128,635 Securities sold under agreements to repurchase 130,461 142,837 118,658 Other short-term borrowings 799,400 1,176,000 290,000 Long-term borrowings 390,440 389,863 389,290 Other liabilities 445,574 448,024 343,740 Total liabilities 18,177,862 18,088,401 17,270,323 Commitments and contingencies STOCKHOLDERS' EQUITY Preferred stock, $10.00 par value 173 173 173 Common stock, $1.33 par value 99,088 98,873 98,822 Additional paid-in capital 1,776,494 1,772,440 1,767,063 Retained earnings 959,582 919,537 841,701 Accumulated other comprehensive loss (410,867 ) (418,286 ) (316,283 ) Total stockholders' equity 2,424,470 2,372,737 2,391,476 Total liabilities and stockholders' equity $ 20,602,332 $ 20,461,138 $ 19,661,799 Common shares outstanding 74,998,075 74,712,622 74,688,314 Common shares authorized 200,000,000 200,000,000 200,000,000 Preferred shares outstanding 17,250 17,250 17,250 Preferred shares authorized 500,000 500,000 500,000 ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Dollars in thousands, except share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2023 2023 2022 2023 2022 Interest and dividend income: Interest and fees on loans $ 205,172 $ 189,992 $ 123,266 $ 395,165 $ 237,466 Interest on deposits in other banks 1,014 1,493 157 2,507 288 Interest and dividends on securities: Taxable 15,565 16,753 14,695 32,317 28,361 Nontaxable 8,496 9,308 10,637 17,804 21,097 Total interest and dividend income 230,247 217,546 148,755 447,793 287,212 Interest expense: Interest on deposits 65,267 51,834 6,097 117,100 10,580 Interest on short-term borrowings 8,044 7,563 555 15,607 576 Interest on long-term borrowings 4,852 4,706 3,336 9,558 6,358 Total interest expense 78,163 64,103 9,988 142,265 17,514 Net interest income 152,084 153,443 138,767 305,528 269,698 Provision for credit losses 6,069 11,850 3,559 17,920 6,359 Net interest income after provision for credit losses 146,015 141,593 135,208 287,608 263,339 Noninterest income: Service charges on deposit accounts 8,118 7,902 8,040 16,020 15,637 Other service charges, commissions and fees 1,693 1,746 1,709 3,439 3,364 Interchange fees 2,459 2,325 2,268 4,784 4,078 Fiduciary and asset management fees 4,359 4,262 6,939 8,620 14,194 Mortgage banking income 449 854 2,200 1,303 5,317 Gain (loss) on sale of securities 2 (13,400 ) (2 ) (13,398 ) (2 ) Bank owned life insurance income 2,870 2,828 2,716 5,698 5,413 Loan-related interest rate swap fees 2,316 1,439 2,600 3,755 6,460 Other operating income 1,931 1,672 11,816 3,603 13,978 Total noninterest income 24,197 9,628 38,286 33,824 68,439 Noninterest expenses: Salaries and benefits 62,019 60,529 55,305 122,547 113,603 Occupancy expenses 6,094 6,356 6,395 12,450 13,278 Furniture and equipment expenses 3,565 3,752 3,590 7,317 7,187 Technology and data processing 8,566 8,142 7,862 16,708 15,658 Professional services 4,433 3,413 4,680 7,847 8,770 Marketing and advertising expense 2,817 2,351 2,502 5,168 4,665 FDIC assessment premiums and other insurance 4,074 3,899 2,765 7,973 5,250 Franchise and other taxes 4,499 4,498 4,500 8,997 8,999 Loan-related expenses 1,619 1,552 1,867 3,171 3,643 Amortization of intangible assets 2,216 2,279 2,915 4,494 5,954 Other expenses 5,759 11,503 6,387 17,262 17,082 Total noninterest expenses 105,661 108,274 98,768 213,934 204,089 Income before income taxes 64,551 42,947 74,726 107,498 127,689 Income tax expense 9,310 7,294 12,500 16,604 21,773 Net income $ 55,241 $ 35,653 $ 62,226 90,894 105,916 Dividends on preferred stock 2,967 2,967 2,967 5,934 5,934 Net income available to common shareholders $ 52,274 $ 32,686 $ 59,259 $ 84,960 $ 99,982 Basic earnings per common share $ 0.70 $ 0.44 $ 0.79 $ 1.13 $ 1.33 Diluted earnings per common share $ 0.70 $ 0.44 $ 0.79 $ 1.13 $ 1.33 AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS) (UNAUDITED) (Dollars in thousands) For the Quarter Ended June 30, 2023 March 31, 2023 Average Balance Interest Income / Expense (1) Yield / Rate (1)(2) Average Balance Interest Income / Expense (1) Yield / Rate (1)(2) Assets: Securities: Taxable $ 1,865,193 $ 15,565 3.35 % $ 2,038,215 $ 16,753 3.33 % Tax-exempt 1,311,469 10,755 3.29 % 1,429,346 11,782 3.34 % Total securities 3,176,662 26,320 3.32 % 3,467,561 28,535 3.34 % LHFI, net of deferred fees and costs (3) 14,746,218 206,452 5.62 % 14,505,611 191,178 5.35 % Other earning assets 168,929 1,141 2.71 % 264,916 1,621 2.48 % Total earning assets 18,091,809 $ 233,913 5.19 % 18,238,088 $ 221,334 4.92 % Allowance for loan and lease losses (117,643 ) (112,172 ) Total non-earning assets 2,235,521 2,258,435 Total assets $ 20,209,687 $ 20,384,351 Liabilities and Stockholders' Equity: Interest-bearing deposits: Transaction and money market accounts $ 8,387,473 $ 46,953 2.25 % $ 8,344,900 $ 38,315 1.86 % Regular savings 1,014,565 430 0.17 % 1,087,435 364 0.14 % Time deposits 2,500,966 17,884 2.87 % 2,291,530 13,155 2.33 % Total interest-bearing deposits 11,903,004 65,267 2.20 % 11,723,865 51,834 1.79 % Other borrowings 1,071,171 12,896 4.83 % 1,122,244 12,269 4.43 % Total interest-bearing liabilities $ 12,974,175 $ 78,163 2.42 % $ 12,846,109 $ 64,103 2.02 % Noninterest-bearing liabilities: Demand deposits 4,377,150 4,693,347 Other liabilities 397,621 421,295 Total liabilities 17,748,946 17,960,751 Stockholders' equity 2,460,741 2,423,600 Total liabilities and stockholders' equity $ 20,209,687 $ 20,384,351 Net interest income $ 155,750 $ 157,231 Interest rate spread 2.77 % 2.90 % Cost of funds 1.74 % 1.42 % Net interest margin 3.45 % 3.50 % _____________________________ (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/20230725353083/en/