Atlantic Union Bankshares Reports Fourth Quarter Financial Results
01/24/2023 - 06:30 AM
RICHMOND, Va. --(BUSINESS WIRE)--
Atlantic Union Bankshares Corporation (the “Company” or “Atlantic Union”) (NYSE: AUB) reported net income available to common shareholders and adjusted operating earnings available to common shareholders(1) of $67.6 million and basic and diluted earnings per common share of $0.90 for the fourth quarter ended December 31, 2022 . Pre-tax pre-provision adjusted operating earnings available to common shareholders(1) totaled $85.6 million for the fourth quarter ended December 31, 2022 .
“Atlantic Union Bankshares delivered strong fourth quarter financial results as we hit our profitability and efficiency targets - with low double-digit annualized loan growth, strong credit quality, an expanding net interest margin and positive operating leverage,” said John C. Asbury , president and chief executive officer of Atlantic Union . “Our markets continue to show resiliency and positive dynamics, which combined with our asset sensitivity lead us to believe we are well-positioned for 2023.”
“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 fourth quarter of 2022, net interest income was $163.8 million , an increase of $13.1 million from $150.7 million for the third quarter of 2022. Net interest income (FTE)(1) was $168.0 million in the fourth quarter of 2022, an increase of $13.4 million from the third quarter of 2022. The increases in net interest income and net interest income (FTE)(1) were primarily driven by higher loan yields on the Company’s variable rate loans due to rising market interest rates, average loan growth, and increases in investment income primarily due to higher yield on taxable securities. These increases were partially offset by an increase in interest expense due to higher cost of funds, primarily due to an increase in short-term interest rates on borrowings and deposits, increased use of short-term funding and higher average deposits from the prior quarter. The fourth quarter net interest margin and net interest margin (FTE)(1) increased 27 basis points from the prior quarter to 3.61% and 3.70% , respectively, at December 31, 2022 . Earning asset yields increased by 66 basis points in the fourth quarter of 2022 compared to the third quarter of 2022 due to the impact of rising market interest rates on loans and investment securities yields. The cost of funds increased from the prior quarter by 39 basis points to 84 basis points at December 31, 2022 , driven by higher deposit and borrowing costs as noted above.
The Company’s net interest margin (FTE) (1) includes the impact of acquisition accounting fair value adjustments. Net accretion related to acquisition accounting was $1.3 million for the quarter ended December 31, 2022 , representing an increase of $157,000 from the prior quarter. The four quarters of 2022 and the remaining estimated net accretion impact are reflected in the following table (dollars in thousands):
Loan
Deposit
Borrowings
Accretion
Amortization
Amortization
Total
For the quarter ended March 31, 2022
$
2,253
$
(10
)
$
(203
)
$
2,040
For the quarter ended June 30, 2022
2,879
(11
)
(207
)
2,661
For the quarter ended September 30, 2022
1,326
(11
)
(209
)
1,106
For the quarter ended December 31, 2022
1,484
(12
)
(209
)
1,263
Total for the year ended December 31, 2022
$
7,942
$
(44
)
$
(828
)
$
7,070
For the years ending (estimated):
2023
3,169
(31
)
(852
)
2,286
2024
2,597
(4
)
(877
)
1,716
2025
2,036
(1
)
(900
)
1,135
2026
1,650
—
(926
)
724
2027
1,259
—
(953
)
306
Thereafter
6,423
—
(7,993
)
(1,570
)
Total remaining acquisition accounting fair value adjustments at December 31, 2022
$
17,134
$
(36
)
$
(12,501
)
$
4,597
ASSET QUALITY
Overview
Nonperforming assets (“NPAs”) as a percentage of loans decreased 2 basis points to 0.19% at December 31, 2022 , compared to the prior quarter. Accruing past due loan levels as a percentage of total loans held for investment at December 31, 2022 totaled 21 basis points, which is consistent with September 30, 2022 , and represents a 2 basis point decrease from December 31, 2021 . Net charge-off levels remained low at 0.02% of total average loans (annualized) for the fourth quarter of 2022, consistent with the quarters ended September 30, 2022 and December 31, 2021 . The allowance for credit losses (“ACL”) totaled $124.4 million at December 31, 2022 , a $5.4 million increase from the prior quarter.
Nonperforming Assets
At December 31, 2022 , NPAs totaled $27.1 million , a decrease of $1.5 million from September 30, 2022 . The following table shows a summary of NPA balances at the quarter ended (dollars in thousands):
December 31 ,
September 30 ,
June 30 ,
March 31 ,
December 31 ,
2022
2022
2022
2022
2021
Nonaccrual loans
$
27,038
$
26,500
$
29,070
$
29,032
$
31,100
Foreclosed properties
76
2,087
2,065
1,696
1,696
Total nonperforming assets
$
27,114
$
28,587
$
31,135
$
30,728
$
32,796
The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):
December 31 ,
September 30 ,
June 30 ,
March 31 ,
December 31 ,
2022
2022
2022
2022
2021
Beginning Balance
$
26,500
$
29,070
$
29,032
$
31,100
$
35,472
Net customer payments
(1,805
)
(3,725
)
(2,472
)
(4,132
)
(5,068
)
Additions
2,935
1,302
3,203
2,087
1,294
Charge-offs
(461
)
(125
)
(311
)
(23
)
(598
)
Loans returning to accruing status
(131
)
—
—
—
—
Transfers to foreclosed property
—
(22
)
(382
)
—
—
Ending Balance
$
27,038
$
26,500
$
29,070
$
29,032
$
31,100
Past Due Loans
Past due loans still accruing interest totaled $30.0 million or 0.21% of total loans held for investment at December 31, 2022 , compared to $29.0 million or 0.21% of total loans held for investment at September 30, 2022 , and $29.9 million or 0.23% of total loans held for investment at December 31, 2021 . Of the total past due loans still accruing interest, $7.5 million or 0.05% of total loans held for investment were loans past due 90 days or more at December 31, 2022 , compared to $7.4 million or 0.05% of total loans held for investment at September 30, 2022 , and $9.1 million or 0.07% of total loans held for investment at December 31, 2021 .
Allowance for Credit Losses
At December 31, 2022 , the ACL was $124.4 million and included an allowance for loan and lease losses (“ALLL”) of $110.8 million and a reserve for unfunded commitments (“RUC”) of $13.6 million . The ACL at December 31, 2022 increased $5.4 million from September 30, 2022 due to increased uncertainty in the macroeconomic outlook and the impact of loan growth in the fourth quarter of 2022.
The ACL as a percentage of total loans was 0.86% at December 31, 2022 , consistent with September 30, 2022 . The ALLL as a percentage of total loans was 0.77% at December 31, 2022 , compared to 0.78% at September 30, 2022 .
Net Charge-offs
Net charge-offs were $810,000 or 0.02% of total average loans on an annualized basis for the quarter ended December 31, 2022 , compared to $587,000 or 0.02% (annualized) for the third quarter of 2022, and $511,000 or 0.02% (annualized) for the fourth quarter of 2021. On a year-to-date basis through December 31, 2022 , net charge-offs totaled $2.3 million or 0.02% of total average loans.
Provision for Credit Losses
For the quarter ended December 31, 2022 , the Company recorded a provision for credit losses of $6.3 million , compared to a provision for credit losses of $6.4 million in the previous quarter, and a negative provision for credit losses of $1.0 million in the fourth quarter of 2021. The provision for credit losses for the fourth quarter of 2022 reflected a provision of $3.6 million for loan losses and a $2.7 million provision for unfunded commitments.
NONINTEREST INCOME
Noninterest income decreased $1.1 million to $24.5 million for the quarter ended December 31, 2022 from $25.6 million in the prior quarter primarily due to declines in equity method investment income, partially offset by increases in loan syndication, Small Business Administration (“SBA”) 7a, and foreign exchange revenues, each included within other operating income. In addition, mortgage banking income decreased $1.0 million from the prior quarter due to lower mortgage origination volumes and gain on sale margins, and bank owned life insurance income decreased $796,000 , reflecting the impact of the prior quarter’s mortality benefit. These noninterest income category decreases were partially offset by increases in loan-related interest rate swap fees of $1.6 million due to an increase in average deal size among swaps executed in the current quarter.
NONINTEREST EXPENSE
Noninterest expense for the quarter ended December 31, 2022 decreased to $99.8 million from $99.9 million in the prior quarter. Notable noninterest expense activity in the fourth quarter of 2022 included a gain related to the sale and leaseback of an office building, refunds of prior period FDIC assessment expenses, costs related to the closure of five branches expected to close in the first quarter of 2023 and other restructuring expenses, the write-down of obsolete software, increased variable incentive compensation and profit-sharing expenses, as well as professional services increases related to strategic projects.
INCOME TAXES
The effective tax rate for the three months ended December 31, 2022 was 14.3% , compared to 17.0% for the three months ended September 30, 2022 . The decrease in the effective tax rate reflects the impact of changes in the proportion of tax-exempt income to pre-tax income.
BALANCE SHEET
At December 31, 2022 , total assets were $20.5 billion , an increase of $510.9 million or approximately 10.2% (annualized) from September 30, 2022 , and an increase of $396.3 million or approximately 2.0% from December 31, 2021 . Total assets increased from the prior quarter primarily due to the $530.4 million increase in total loans held for investment (net of deferred fees and costs) driven by loan growth, which was funded primarily by a $1.0 billion increase in short-term borrowings and partially by a $70.1 million decrease in cash and cash equivalents.
At December 31, 2022 , loans held for investment (net of deferred fees and costs) totaled $14.4 billion , including $7.3 million in Paycheck Protection Program (“PPP”) loans, an increase of $530.4 million or 15.1% (annualized) from $13.9 billion , including $12.1 million in PPP loans, at September 30, 2022 . Average loans held for investment (net of deferred fees and costs) totaled $14.1 billion at December 31, 2022 , an increase of $384.0 million or 11.1% (annualized) from the prior quarter. Excluding PPP loans (net of deferred fees and costs)(1) , adjusted loans held for investment (net of deferred fees and costs) at December 31, 2022 increased $535.3 million or 15.3% (annualized) from September 30, 2022 and adjusted average loans increased $390.0 million or 11.3% (annualized) from the prior quarter. At December 31, 2022 , loans held for investment (net of deferred fees and costs) increased $1.3 billion or 9.5% from December 31, 2021 , and quarterly average loans increased $1.0 billion or 7.9% from the same period in the prior year. Excluding PPP loans (net of deferred fees and costs)(1) , adjusted loans held for investment (net of deferred fees and costs) at December 31, 2022 increased $1.4 billion or 10.7% from December 31, 2021 , and adjusted quarterly average loans during the fourth quarter of 2022 increased $1.3 billion or 10.3% from the fourth quarter of 2021.
At December 31, 2022 , total deposits were $15.9 billion , a decrease of $614.5 million or approximately 14.7% (annualized) from September 30, 2022 . Average deposits at December 31, 2022 increased from the prior quarter by $123.5 million or 3.0% (annualized). Total deposits at December 31, 2022 decreased $679.4 million or 4.1% from December 31, 2021 , and quarterly average deposits during the fourth quarter of 2022 also decreased $249.5 million or 1.5% from the fourth quarter of 2021. Total deposits decreased from the prior quarter and prior year primarily due to the impact of customer behavior in response to inflation and higher market interest rates, in addition to seasonal outflows.
The following table shows the Company’s capital ratios at the quarters ended:
December 31 ,
September 30 ,
December 31 ,
2022
2022
2021
Common equity Tier 1 capital ratio (2)
9.95
%
9.96
%
10.24
%
Tier 1 capital ratio (2)
10.94
%
10.98
%
11.32
%
Total capital ratio (2)
13.70
%
13.80
%
14.17
%
Leverage ratio (Tier 1 capital to average assets) (2)
9.42
%
9.32
%
9.01
%
Common equity to total assets
10.78
%
10.60
%
12.68
%
Tangible common equity to tangible assets (1)
6.43
%
6.11
%
8.20
%
_________________________
At December 31, 2022 , the Company’s common equity to total assets capital ratio and tangible common equity to tangible assets capital ratio decreased from the prior year primarily due to the unrealized losses on the available for sale (“AFS”) securities portfolio recorded in other comprehensive income due to market interest rate increases, while these ratios increased from the prior quarter due to the increase in the value of the AFS securities portfolio, as long-term rates decreased during the fourth quarter of 2022.
During the fourth quarter of 2022, the Company declared and paid a quarterly dividend on the outstanding shares of Series A Preferred Stock of $171.88 per share (equivalent to $0.43 per outstanding depositary share), consistent with the third quarter of 2022 and the fourth quarter of 2021. During the fourth quarter of 2022, the Company also declared and paid cash dividends of $0.30 per common share, consistent with the third quarter of 2022 and an increase of $0.02 or approximately 7.1% from the fourth quarter of 2021.
_________________________
(1) These are financial measures not calculated in accordance with generally accepted accounting principles (“GAAP”). For a reconciliation of these non-GAAP financial measures, se e Alternative Performance Measures (non-GAAP) section of the Key Financial Results.
(2) All ratios at December 31, 2022 are estimates and subject to change pending the Company’s filing of its FR Y9 -C. All other periods are presented as filed.
ABOUT ATLANTIC UNION BANKSHARES CORPORATION
Headquartered in Richmond, Virginia , Atlantic Union Bankshares Corporation (NYSE: AUB) is the holding company for Atlantic Union Bank . Atlantic Union Bank has 114 branches and approximately 130 ATMs located throughout Virginia , and in portions of Maryland and North Carolina . Certain non-bank financial services affiliates of Atlantic Union Bank include: Atlantic Union Equipment Finance, Inc. , which provides equipment financing; Atlantic Union Financial Consultants, LLC , which provides brokerage services; and Union Insurance Group, LLC , which offers various lines of insurance products.
On January 18, 2023 , the Company completed the transfer of the listing of its common stock and its depositary shares, each representing a 1/400th interest in a share of the Company’s 6.875% Perpetual Non-Cumulative Preferred Stock, Series A, from The Nasdaq Stock Market LLC to the New York Stock Exchange , under the ticker symbols of “AUB” and “AUB.PRA”, respectively.
FOURTH QUARTER AND FISCAL YEAR 2022 EARNINGS RELEASE CONFERENCE CALL
The Company will hold a conference call and webcast for investors at 9:00 a.m. Eastern Time on Tuesday, January 24, 2023 during which management will review the financial results for the fourth quarter and fiscal year 2022 and provide an update on recent activities.
The listen-only webcast and the accompanying slides can be accessed at: https://edge.media-server.com/mmc/p/d6afrqsq .
For analysts who wish to participate in the conference call, please register at the following URL: https://register.vevent.com/register/BI10abddc24ec746bdb44736355d7d0588 . 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 periods ended December 31, 2022 , the Company has provided supplemental performance measures on a tax-equivalent, tangible, operating, adjusted or pre-tax pre-provision basis. These non-GAAP financial measures are a supplement to GAAP, which is used to prepare the Company’s financial statements, and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP. In addition, the Company’s non-GAAP financial measures may not be comparable to non-GAAP financial measures of other companies. The Company uses the non-GAAP financial measures discussed herein in its analysis of the Company’s performance. The Company’s management believes that these non-GAAP financial measures provide additional understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented without the impact of items or events that may obscure trends in the Company’s underlying performance. For a reconciliation of these measures to their most directly comparable GAAP measures and additional information about these non-GAAP financial measures, see “Alternative Performance Measures (non-GAAP)” in the tables within the section “Key Financial Results.”
FORWARD-LOOKING STATEMENTS
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 future economic conditions and the impacts of the current economic uncertainties, estimates with respect to the remaining net accretion related to acquisition accounting, and statements that include other projections, predictions, expectations, or beliefs about future events or results, including the Company’s ability to meet its top tier financial targets, or otherwise are not statements of historical fact. Such forward-looking statements are based on certain assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties, and other factors, some of which cannot be predicted or quantified, that may cause actual results, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements. 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 its management about future events. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual future results, performance, or achievements of, or trends affecting, the Company will not differ materially from any projected future results, performance, achievements or trends expressed or implied by such forward-looking statements. Actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to the effects of or changes in:
market interest rates and their related impacts on macroeconomic conditions, customer and client behavior, the Company’s funding costs and the Company’s loan and securities portfolios;
inflation and its impacts on economic growth and customer and client behavior;
general economic and financial market conditions, in the United States generally and particularly in the markets in which the Company operates and which its loans are concentrated, including the effects of declines in real estate values, an increase in unemployment levels and slowdowns in economic growth;
monetary and fiscal policies of the U.S. government, including policies of the U.S. Department of the Treasury and the Federal Reserve ;
the quality or composition of the Company’s loan or investment portfolios and changes therein;
demand for loan products and financial services in the Company’s market areas;
the Company’s ability to manage its growth or implement its growth strategy;
the effectiveness of expense reduction plans;
the introduction of new lines of business or new products and services;
the Company’s ability to recruit and retain key employees;
real estate values in the Company’s lending area;
an insufficient ACL;
changes in accounting principles, standards, rules, and interpretations, and the related impact on the Company’s financial statements;
volatility in the ACL resulting from the CECL methodology, either alone or as that may be affected by conditions arising out of the COVID-19 pandemic, inflation, changing interest rates, or other factors;
the Company’s liquidity and capital positions;
concentrations of loans secured by real estate, particularly commercial real estate;
the effectiveness of the Company’s credit processes and management of the Company’s credit risk;
the Company’s ability to compete in the market for financial services and increased competition from fintech companies;
technological risks and developments, and cyber threats, attacks, or events;
operational, technological, cultural, regulatory, legal, credit, and other risks associated with the exploration, consummation and integration of potential future acquisitions, whether involving stock or cash considerations;
the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts (such as the ongoing conflict between Russia and Ukraine ) or public health events (such as COVID-19), and of governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of the Company's borrowers to satisfy their obligations to the Company, on the value of collateral securing loans, on the demand for the Company's loans or its other products and services, on supply chains and methods used to distribute products and services, on incidents of cyberattack and fraud, on the Company’s liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of the Company's business operations and on financial markets and economic growth;
the effect of steps the Company takes in response to the COVID-19 pandemic, the severity and duration of the pandemic, the uncertainty regarding new variants of COVID-19 that have emerged, the speed and efficacy of vaccine and treatment developments, the impact of loosening or tightening of government restrictions, the pace of recovery when the pandemic subsides and the heightened impact it has on many of the risks described herein;
the discontinuation of LIBOR and its impact on the financial markets, and the Company’s ability to manage operational, legal and compliance risks related to the discontinuation of LIBOR and implementation of one or more alternate reference rates;
performance by the Company’s counterparties or vendors;
deposit flows;
the availability of financing and the terms thereof;
the level of prepayments on loans and mortgage-backed securities;
legislative or regulatory changes and requirements;
potential claims, damages, and fines related to litigation or government actions;
the effects of changes in federal, state or local tax laws and regulations;
any event or development that would cause the Company to conclude that there was an impairment of any asset, including intangible assets, such as goodwill; and
other factors, many of which are beyond the control of the Company.
Please also refer to such other factors as discussed throughout Part I, Item 1A. “Risk Factors” and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10‑K for the year ended December 31, 2021 and related disclosures in other filings, which have been filed with the U.S. Securities and Exchange Commission (“SEC”) and are available on the SEC’s website at www.sec.gov . All risk factors and uncertainties described herein and therein should be considered in evaluating forward-looking statements, 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. The Company does not intend or assume any obligation to update, revise or clarify any forward-looking statements that may be made from time to time by or on behalf of the Company, whether as a result of new information, future events or otherwise.
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(Dollars in thousands, except share data)
As of & For Three Months Ended
As of & For Year Ended
12/31/22
09/30/22
12/31/21
12/31/22
12/31/21
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Results of Operations
Interest and dividend income
$
202,068
$
171,156
$
147,456
$
660,435
$
592,359
Interest expense
38,220
20,441
9,129
76,174
41,099
Net interest income
163,848
150,715
138,327
584,261
551,260
Provision for credit losses
6,257
6,412
(1,000
)
19,028
(60,888
)
Net interest income after provision for credit losses
157,591
144,303
139,327
565,233
612,148
Noninterest income
24,500
25,584
36,417
118,523
125,806
Noninterest expenses
99,790
99,923
119,944
403,802
419,195
Income before income taxes
82,301
69,964
55,800
279,954
318,759
Income tax expense
11,777
11,894
8,021
45,444
54,842
Net income
70,524
58,070
47,779
234,510
263,917
Dividends on preferred stock
2,967
2,967
2,967
11,868
11,868
Net income available to common shareholders
$
67,557
$
55,103
$
44,812
$
222,642
$
252,049
Interest earned on earning assets (FTE) (1)
$
206,186
$
174,998
$
150,684
$
675,308
$
604,950
Net interest income (FTE) (1)
167,966
154,557
141,555
599,134
563,851
Total revenue (FTE) (1)
192,466
180,141
177,972
717,657
689,657
Pre-PPP total adjusted revenue (FTE) (1) (10)
192,447
179,687
161,423
703,772
636,215
Pre-tax pre-provision adjusted operating earnings (8)
88,559
76,376
66,199
295,411
284,779
Pre-PPP pre-tax pre-provision adjusted operating earnings (8) (10)
88,539
75,922
54,787
290,605
236,561
Key Ratios
Earnings per common share, diluted
$
0.90
$
0.74
$
0.59
$
2.97
$
3.26
Return on average assets (ROA)
1.39
%
1.15
%
0.94
%
1.18
%
1.32
%
Return on average equity (ROE)
12.05
%
9.45
%
6.98
%
9.51
%
9.68
%
Return on average tangible common equity (ROTCE) (2) (3)
22.92
%
17.21
%
11.98
%
17.33
%
16.72
%
Efficiency ratio
52.98
%
56.68
%
68.64
%
57.46
%
61.91
%
Efficiency ratio (FTE) (1)
51.85
%
55.47
%
67.39
%
56.27
%
60.78
%
Net interest margin
3.61
%
3.34
%
3.03
%
3.27
%
3.08
%
Net interest margin (FTE) (1)
3.70
%
3.43
%
3.10
%
3.36
%
3.15
%
Yields on earning assets (FTE) (1)
4.54
%
3.88
%
3.30
%
3.78
%
3.38
%
Cost of interest-bearing liabilities
1.24
%
0.68
%
0.30
%
0.64
%
0.34
%
Cost of deposits
0.72
%
0.37
%
0.12
%
0.34
%
0.16
%
Cost of funds
0.84
%
0.45
%
0.20
%
0.42
%
0.23
%
Operating Measures (4)
Adjusted operating earnings
$
70,525
$
58,070
$
56,784
$
230,879
$
285,174
Adjusted operating earnings available to common shareholders
67,558
55,103
53,817
219,011
273,306
Adjusted operating earnings per common share, diluted
$
0.90
$
0.74
$
0.71
$
2.92
$
3.53
Adjusted operating ROA
1.39
%
1.15
%
1.11
%
1.16
%
1.43
%
Adjusted operating ROE
12.05
%
9.45
%
8.30
%
9.37
%
10.46
%
Adjusted operating ROTCE (2) (3)
22.92
%
17.21
%
14.25
%
17.06
%
18.07
%
Adjusted operating efficiency ratio (FTE) (1)(7)
50.61
%
54.09
%
57.96
%
54.68
%
54.52
%
Per Share Data
Earnings per common share, basic
$
0.90
$
0.74
$
0.59
$
2.97
$
3.26
Earnings per common share, diluted
0.90
0.74
0.59
2.97
3.26
Cash dividends paid per common share
0.30
0.30
0.28
1.16
1.09
Market value per share
35.14
30.38
37.29
35.14
37.29
Book value per common share
29.68
28.46
33.80
29.68
33.80
Tangible book value per common share (2)
16.87
15.61
20.79
16.87
20.79
Price to earnings ratio, diluted
9.79
10.37
15.93
11.83
11.44
Price to book value per common share ratio
1.18
1.07
1.10
1.18
1.10
Price to tangible book value per common share ratio (2)
2.08
1.95
1.79
2.08
1.79
Weighted average common shares outstanding, basic
74,712,040
74,703,699
75,654,336
74,949,109
77,399,902
Weighted average common shares outstanding, diluted
74,713,972
74,705,054
75,667,759
74,953,398
77,417,801
Common shares outstanding at end of period
74,712,622
74,703,774
75,663,648
74,712,622
75,663,648
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(Dollars in thousands, except share data)
As of & For Three Months Ended
As of & For Year Ended
12/31/22
09/30/22
12/31/21
12/31/22
12/31/21
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Capital Ratios
Common equity Tier 1 capital ratio (5)
9.95
%
9.96
%
10.24
%
9.95
%
10.24
%
Tier 1 capital ratio (5)
10.94
%
10.98
%
11.32
%
10.94
%
11.32
%
Total capital ratio (5)
13.70
%
13.80
%
14.17
%
13.70
%
14.17
%
Leverage ratio (Tier 1 capital to average assets) (5)
9.42
%
9.32
%
9.01
%
9.42
%
9.01
%
Common equity to total assets
10.78
%
10.60
%
12.68
%
10.78
%
12.68
%
Tangible common equity to tangible assets (2)
6.43
%
6.11
%
8.20
%
6.43
%
8.20
%
Financial Condition
Assets
$
20,461,138
$
19,950,231
$
20,064,796
$
20,461,138
$
20,064,796
Loans held for investment (net of deferred fees and costs)
14,449,142
13,918,720
13,195,843
14,449,142
13,195,843
Securities
3,709,761
3,640,722
4,186,475
3,709,761
4,186,475
Earning Assets
18,271,430
17,790,324
18,030,138
18,271,430
18,030,138
Goodwill
925,211
925,211
935,560
925,211
935,560
Amortizable intangibles, net
26,761
29,142
43,312
26,761
43,312
Deposits
15,931,677
16,546,216
16,611,068
15,931,677
16,611,068
Borrowings
1,708,700
669,558
506,594
1,708,700
506,594
Stockholders' equity
2,372,737
2,281,150
2,710,071
2,372,737
2,710,071
Tangible common equity (2)
1,254,408
1,160,440
1,564,842
1,254,408
1,564,842
Loans held for investment, net of deferred fees and costs
Construction and land development
$
1,101,260
$
1,068,201
$
862,236
$
1,101,260
$
862,236
Commercial real estate - owner occupied
1,982,608
1,953,872
1,995,409
1,982,608
1,995,409
Commercial real estate - non-owner occupied
3,996,130
3,900,325
3,789,377
3,996,130
3,789,377
Multifamily real estate
802,923
774,970
778,626
802,923
778,626
Commercial & Industrial
2,983,349
2,709,047
2,542,243
2,983,349
2,542,243
Residential 1-4 Family - Commercial
538,063
542,612
607,337
538,063
607,337
Residential 1-4 Family - Consumer
940,275
891,353
816,524
940,275
816,524
Residential 1-4 Family - Revolving
585,184
588,452
560,796
585,184
560,796
Auto
592,976
561,277
461,052
592,976
461,052
Consumer
152,545
172,776
176,992
152,545
176,992
Other Commercial
773,829
755,835
605,251
773,829
605,251
Total loans held for investment
$
14,449,142
$
13,918,720
$
13,195,843
$
14,449,142
$
13,195,843
Deposits
Interest checking accounts
$
4,186,505
$
4,354,351
$
4,176,032
$
4,186,505
$
4,176,032
Money market accounts
3,922,536
3,962,473
4,249,858
3,922,536
4,249,858
Savings accounts
1,130,899
1,173,566
1,121,297
1,130,899
1,121,297
Time deposits of $250,000 and over
405,060
415,984
452,193
405,060
452,193
Other time deposits
1,403,438
1,348,904
1,404,364
1,403,438
1,404,364
Time deposits
1,808,498
1,764,888
1,856,557
1,808,498
1,856,557
Total interest-bearing deposits
$
11,048,438
$
11,255,278
$
11,403,744
$
11,048,438
$
11,403,744
Demand deposits
4,883,239
5,290,938
5,207,324
4,883,239
5,207,324
Total deposits
$
15,931,677
$
16,546,216
$
16,611,068
$
15,931,677
$
16,611,068
Averages
Assets
$
20,174,152
$
19,980,500
$
20,236,889
$
19,949,388
$
19,977,551
Loans held for investment (net of deferred fees and costs)
14,117,433
13,733,447
13,082,412
13,671,714
13,639,325
Loans held for sale
7,809
15,063
26,775
14,519
39,031
Securities
3,644,196
3,818,607
3,998,058
3,896,337
3,579,378
Earning assets
18,000,596
17,879,222
18,138,285
17,853,216
17,903,671
Deposits
16,611,749
16,488,224
16,861,219
16,451,718
16,541,286
Time deposits
1,764,596
1,745,224
1,941,420
1,735,983
2,201,039
Interest-bearing deposits
11,415,032
11,163,945
11,489,510
11,172,759
11,485,130
Borrowings
816,818
703,272
445,344
700,271
453,452
Interest-bearing liabilities
12,231,850
11,867,217
11,934,854
11,873,030
11,938,582
Stockholders' equity
2,321,208
2,436,999
2,715,610
2,465,049
2,725,330
Tangible common equity (2)
1,201,732
1,315,085
1,568,828
1,333,751
1,573,415
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(Dollars in thousands, except share data)
As of & For Three Months Ended
As of & For Year Ended
12/31/22
09/30/22
12/31/21
12/31/22
12/31/21
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Asset Quality
Allowance for Credit Losses (ACL)
Beginning balance, Allowance for loan and lease losses (ALLL)
$
108,009
$
104,184
$
101,798
$
99,787
$
160,540
Add: Recoveries
1,332
1,214
1,720
5,076
8,218
Less: Charge-offs
2,142
1,801
2,231
7,409
10,083
Add: Provision for loan losses
3,569
4,412
(1,500
)
13,314
(58,888
)
Ending balance, ALLL
$
110,768
$
108,009
$
99,787
$
110,768
$
99,787
Beginning balance, Reserve for unfunded commitment (RUC)
$
11,000
$
9,000
$
7,500
$
8,000
$
10,000
Add: Provision for unfunded commitments
2,675
2,000
500
5,675
(2,000
)
Ending balance, RUC
$
13,675
$
11,000
$
8,000
$
13,675
$
8,000
Total ACL
$
124,443
$
119,009
$
107,787
$
124,443
$
107,787
ACL / total outstanding loans
0.86
%
0.86
%
0.82
%
0.86
%
0.82
%
ACL / total adjusted loans(9)
0.86
%
0.86
%
0.83
%
0.86
%
0.83
%
ALLL / total outstanding loans
0.77
%
0.78
%
0.76
%
0.77
%
0.76
%
ALLL / total adjusted loans(9)
0.77
%
0.78
%
0.76
%
0.77
%
0.76
%
Net charge-offs / total average loans
0.02
%
0.02
%
0.02
%
0.02
%
0.01
%
Net charge-offs / total adjusted average loans(9)
0.02
%
0.02
%
0.02
%
0.02
%
0.01
%
Provision for loan losses/ total average loans
0.10
%
0.13
%
(0.05
)
%
0.10
%
(0.43
)
%
Provision for loan losses/ total adjusted average loans(9)
0.10
%
0.13
%
(0.05
)
%
0.10
%
(0.46
)
%
Nonperforming Assets (6)
Construction and land development
$
307
$
421
$
2,697
$
307
$
2,697
Commercial real estate - owner occupied
7,178
4,883
5,637
7,178
5,637
Commercial real estate - non-owner occupied
1,263
1,923
3,641
1,263
3,641
Multifamily real estate
—
—
113
—
113
Commercial & Industrial
1,884
2,289
1,647
1,884
1,647
Residential 1-4 Family - Commercial
1,904
1,962
2,285
1,904
2,285
Residential 1-4 Family - Consumer
10,846
11,121
11,397
10,846
11,397
Residential 1-4 Family - Revolving
3,453
3,583
3,406
3,453
3,406
Auto
200
318
223
200
223
Consumer
3
—
54
3
54
Nonaccrual loans
$
27,038
$
26,500
$
31,100
$
27,038
$
31,100
Foreclosed property
76
2,087
1,696
76
1,696
Total nonperforming assets (NPAs)
$
27,114
$
28,587
$
32,796
$
27,114
$
32,796
Construction and land development
$
100
$
115
$
299
$
100
$
299
Commercial real estate - owner occupied
2,167
3,517
1,257
2,167
1,257
Commercial real estate - non-owner occupied
607
621
433
607
433
Commercial & Industrial
459
526
1,897
459
1,897
Residential 1-4 Family - Commercial
275
308
990
275
990
Residential 1-4 Family - Consumer
1,955
680
3,013
1,955
3,013
Residential 1-4 Family - Revolving
1,384
1,255
882
1,384
882
Auto
344
148
241
344
241
Consumer
108
86
120
108
120
Other Commercial
91
95
—
91
—
Loans ≥ 90 days and still accruing
$
7,490
$
7,351
$
9,132
$
7,490
$
9,132
Total NPAs and loans ≥ 90 days
$
34,604
$
35,938
$
41,928
$
34,604
$
41,928
NPAs / total outstanding loans
0.19
%
0.21
%
0.25
%
0.19
%
0.25
%
NPAs / total adjusted loans(9)
0.19
%
0.21
%
0.25
%
0.19
%
0.25
%
NPAs / total assets
0.13
%
0.14
%
0.16
%
0.13
%
0.16
%
ALLL / nonaccrual loans
409.68
%
407.58
%
320.86
%
409.68
%
320.86
%
ALLL/ nonperforming assets
408.53
%
377.83
%
304.27
%
408.53
%
304.27
%
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(Dollars in thousands, except share data)
As of & For Three Months Ended
As of & For Year Ended
12/31/22
09/30/22
12/31/21
12/31/22
12/31/21
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Past Due Detail (6)
Construction and land development
$
1,253
$
120
$
1,357
$
1,253
$
1,357
Commercial real estate - owner occupied
2,305
7,337
1,230
2,305
1,230
Commercial real estate - non-owner occupied
1,121
—
1,965
1,121
1,965
Multifamily real estate
1,229
—
84
1,229
84
Commercial & Industrial
824
796
1,161
824
1,161
Residential 1-4 Family - Commercial
1,231
1,410
1,844
1,231
1,844
Residential 1-4 Family - Consumer
5,951
1,123
3,368
5,951
3,368
Residential 1-4 Family - Revolving
1,843
1,115
1,493
1,843
1,493
Auto
2,747
1,876
1,866
2,747
1,866
Consumer
351
409
689
351
689
Other Commercial
—
—
37
—
37
Loans 30-59 days past due
$
18,855
$
14,186
$
15,094
$
18,855
$
15,094
Construction and land development
$
45
$
107
$
—
$
45
$
—
Commercial real estate - owner occupied
635
763
152
635
152
Commercial real estate - non-owner occupied
48
457
127
48
127
Commercial & Industrial
174
3,128
1,438
174
1,438
Residential 1-4 Family - Commercial
—
97
272
—
272
Residential 1-4 Family - Consumer
1,690
1,449
2,925
1,690
2,925
Residential 1-4 Family - Revolving
511
1,081
363
511
363
Auto
450
257
249
450
249
Consumer
125
101
186
125
186
Loans 60-89 days past due
$
3,678
$
7,440
$
5,712
$
3,678
$
5,712
Past Due and still accruing
$
30,023
$
28,977
$
29,938
$
30,023
$
29,938
Past Due and still accruing / total loans
0.21
%
0.21
%
0.23
%
0.21
%
0.23
%
Troubled Debt Restructurings
Performing
$
9,273
$
10,333
$
10,313
$
9,273
$
10,313
Nonperforming
4,917
5,298
7,642
4,917
7,642
Total troubled debt restructurings
$
14,190
$
15,631
$
17,955
$
14,190
$
17,955
Alternative Performance Measures (non-GAAP)
Net interest income (FTE) (1)
Net interest income (GAAP)
$
163,848
$
150,715
$
138,327
$
584,261
$
551,260
FTE adjustment
4,118
3,842
3,228
14,873
12,591
Net interest income (FTE) (non-GAAP)
$
167,966
$
154,557
$
141,555
$
599,134
$
563,851
Noninterest income (GAAP)
24,500
25,584
36,417
118,523
125,806
Total revenue (FTE) (non-GAAP)
$
192,466
$
180,141
$
177,972
$
717,657
$
689,657
Average earning assets
$
18,000,596
$
17,879,222
$
18,138,285
$
17,853,216
$
17,903,671
Net interest margin
3.61
%
3.34
%
3.03
%
3.27
%
3.08
%
Net interest margin (FTE)
3.70
%
3.43
%
3.10
%
3.36
%
3.15
%
Tangible Assets (2)
Ending assets (GAAP)
$
20,461,138
$
19,950,231
$
20,064,796
$
20,461,138
$
20,064,796
Less: Ending goodwill
925,211
925,211
935,560
925,211
935,560
Less: Ending amortizable intangibles
26,761
29,142
43,312
26,761
43,312
Ending tangible assets (non-GAAP)
$
19,509,166
$
18,995,878
$
19,085,924
$
19,509,166
$
19,085,924
Tangible Common Equity (2)
Ending equity (GAAP)
$
2,372,737
$
2,281,150
$
2,710,071
$
2,372,737
$
2,710,071
Less: Ending goodwill
925,211
925,211
935,560
925,211
935,560
Less: Ending amortizable intangibles
26,761
29,142
43,312
26,761
43,312
Less: Perpetual preferred stock
166,357
166,357
166,357
166,357
166,357
Ending tangible common equity (non-GAAP)
$
1,254,408
$
1,160,440
$
1,564,842
$
1,254,408
$
1,564,842
Average equity (GAAP)
$
2,321,208
$
2,436,999
$
2,715,610
$
2,465,049
$
2,725,330
Less: Average goodwill
925,211
925,211
935,560
930,315
935,560
Less: Average amortizable intangibles
27,909
30,347
44,866
34,627
49,999
Less: Average perpetual preferred stock
166,356
166,356
166,356
166,356
166,356
Average tangible common equity (non-GAAP)
$
1,201,732
$
1,315,085
$
1,568,828
$
1,333,751
$
1,573,415
ROTCE (2)(3)
Net income available to common shareholders (GAAP)
$
67,557
$
55,103
$
44,812
$
222,642
$
252,049
Plus: Amortization of intangibles, tax effected
1,881
1,959
2,548
8,544
10,984
Net income available to common shareholders before amortization of intangibles (non-GAAP)
$
69,438
$
57,062
$
47,360
$
231,186
$
263,033
Return on average tangible common equity (ROTCE)
22.92
%
17.21
%
11.98
%
17.33
%
16.72
%
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(Dollars in thousands, except share data)
As of & For Three Months Ended
As of & For Year Ended
12/31/22
09/30/22
12/31/21
12/31/22
12/31/21
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Operating Measures (4)
Net income (GAAP)
$
70,524
$
58,070
$
47,779
$
234,510
$
263,917
Plus: Net loss related to balance sheet repositioning, net of tax
—
—
—
—
11,609
Plus: Branch closing and facility consolidation costs, net of tax
—
—
13,063
4,351
13,775
Less: (Loss) gain on sale of securities, net of tax
(1
)
—
—
(2
)
69
Less: Gain on sale of DHFB, net of tax
—
—
—
7,984
—
Less: Gain on Visa, Inc. Class B common stock, net of tax
—
—
4,058
—
4,058
Adjusted operating earnings (non-GAAP)
70,525
58,070
56,784
230,879
285,174
Less: Dividends on preferred stock
2,967
2,967
2,967
11,868
11,868
Adjusted operating earnings available to common shareholders (non-GAAP)
$
67,558
$
55,103
$
53,817
$
219,011
$
273,306
Noninterest expense (GAAP)
$
99,790
$
99,923
$
119,944
$
403,802
$
419,195
Less: Amortization of intangible assets
2,381
2,480
3,225
10,815
13,904
Less: Losses related to balance sheet repositioning
—
—
—
—
14,695
Less: Branch closing and facility consolidation costs
—
—
16,536
5,508
17,437
Adjusted operating noninterest expense (non-GAAP)
$
97,409
$
97,443
$
100,183
$
387,479
$
373,159
Noninterest income (GAAP)
$
24,500
$
25,584
$
36,417
$
118,523
$
125,806
Less: (Loss) gain on sale of securities
(1
)
—
—
(3
)
87
Less: Gain on sale of DHFB
—
—
—
9,082
—
Less: Gain on Visa, Inc. Class B common stock
—
—
5,137
—
5,137
Adjusted operating noninterest income (non-GAAP)
$
24,501
$
25,584
$
31,280
$
109,444
$
120,582
Net interest income (FTE) (non-GAAP) (1)
$
167,966
$
154,557
$
141,555
$
599,134
$
563,851
Adjusted operating noninterest income (non-GAAP)
24,501
25,584
31,280
109,444
120,582
Total adjusted revenue (FTE) (non-GAAP) (1)
$
192,467
$
180,141
$
172,835
$
708,578
$
684,433
Less: PPP accretion interest income and fees
20
454
11,412
4,806
48,218
Pre-PPP total adjusted revenue (FTE) (non-GAAP) (1) (10)
$
192,447
$
179,687
$
161,423
$
703,772
$
636,215
Efficiency ratio
52.98
%
56.68
%
68.64
%
57.46
%
61.91
%
Efficiency ratio (FTE) (1)
51.85
%
55.47
%
67.39
%
56.27
%
60.78
%
Adjusted operating efficiency ratio (FTE) (1)(7)
50.61
%
54.09
%
57.96
%
54.68
%
54.52
%
Operating ROA & ROE (4)
Adjusted operating earnings (non-GAAP)
$
70,525
$
58,070
$
56,784
$
230,879
$
285,174
Average assets (GAAP)
$
20,174,152
$
19,980,500
$
20,236,889
$
19,949,388
$
19,977,551
Return on average assets (ROA) (GAAP)
1.39
%
1.15
%
0.94
%
1.18
%
1.32
%
Adjusted operating return on average assets (ROA) (non-GAAP)
1.39
%
1.15
%
1.11
%
1.16
%
1.43
%
Average equity (GAAP)
$
2,321,208
$
2,436,999
$
2,715,610
$
2,465,049
$
2,725,330
Return on average equity (ROE) (GAAP)
12.05
%
9.45
%
6.98
%
9.51
%
9.68
%
Adjusted operating return on average equity (ROE) (non-GAAP)
12.05
%
9.45
%
8.30
%
9.37
%
10.46
%
Operating ROTCE (2)(3)(4)
Adjusted operating earnings available to common shareholders (non-GAAP)
$
67,558
$
55,103
$
53,817
$
219,011
$
273,306
Plus: Amortization of intangibles, tax effected
1,881
1,959
2,548
8,544
10,984
Adjusted operating earnings available to common shareholders before amortization of intangibles (non-GAAP)
$
69,439
$
57,062
$
56,365
$
227,555
$
284,290
Average tangible common equity (non-GAAP)
$
1,201,732
$
1,315,085
$
1,568,828
$
1,333,751
$
1,573,415
Adjusted operating return on average tangible common equity (non-GAAP)
22.92
%
17.21
%
14.25
%
17.06
%
18.07
%
Pre-tax pre-provision adjusted operating earnings (8)
Net income (GAAP)
$
70,524
$
58,070
$
47,779
$
234,510
$
263,917
Plus: Provision for credit losses
6,257
6,412
(1,000
)
19,028
(60,888
)
Plus: Income tax expense
11,777
11,894
8,021
45,444
54,842
Plus: Net loss related to balance sheet repositioning
—
—
—
—
14,695
Plus: Branch closing and facility consolidation costs
—
—
16,536
5,508
17,437
Less: (Loss) gain on sale of securities
(1
)
—
—
(3
)
87
Less: Gain on sale of DHFB
—
—
—
9,082
—
Less: Gain on Visa, Inc. Class B common stock
—
—
5,137
—
5,137
Pre-tax pre-provision adjusted operating earnings (non-GAAP)
$
88,559
$
76,376
$
66,199
$
295,411
$
284,779
Less: Dividends on preferred stock
2,967
2,967
2,967
11,868
11,868
Pre-tax pre-provision adjusted operating earnings available to common shareholders (non-GAAP)
$
85,592
$
73,409
$
63,232
$
283,543
$
272,911
Pre-tax pre-provision adjusted operating earnings (non-GAAP)
$
88,559
$
76,376
$
66,199
$
295,411
$
284,779
Less: PPP accretion interest income and fees
20
454
11,412
4,806
48,218
Pre-PPP pre-tax pre-provision adjusted operating earnings (non-GAAP) (10)
$
88,539
$
75,922
$
54,787
$
290,605
$
236,561
Weighted average common shares outstanding, diluted
74,713,972
74,705,054
75,667,759
74,953,398
77,417,801
Pre-tax pre-provision earnings per common share, diluted
$
1.15
$
0.98
$
0.84
$
3.78
$
3.53
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(Dollars in thousands, except share data)
As of & For Three Months Ended
As of & For Year Ended
12/31/22
09/30/22
12/31/21
12/31/22
12/31/21
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Adjusted Loans (9)
Loans held for investment (net of deferred fees and costs) (GAAP)
$
14,449,142
$
13,918,720
$
13,195,843
$
14,449,142
$
13,195,843
Less: PPP loans (net of deferred fees and costs)
7,286
12,146
150,363
7,286
150,363
Total adjusted loans (non-GAAP)
$
14,441,856
$
13,906,574
$
13,045,480
$
14,441,856
$
13,045,480
Average loans held for investment (net of deferred fees and costs) (GAAP)
$
14,117,433
$
13,733,447
$
13,082,412
$
13,671,714
$
13,639,325
Less: Average PPP loans (net of deferred fees and costs)
8,217
14,280
288,204
41,896
864,814
Total adjusted average loans (non-GAAP)
$
14,109,216
$
13,719,167
$
12,794,208
$
13,629,818
$
12,774,511
Mortgage Origination Held for Sale Volume
Refinance Volume
$
2,312
$
5,637
$
46,575
$
55,725
$
287,976
Purchase Volume
29,262
66,360
71,969
238,310
322,492
Total Mortgage loan originations held for sale
$
31,574
$
71,997
$
118,544
$
294,035
$
610,468
% of originations held for sale that are refinances
7.3
%
7.8
%
39.3
%
19.0
%
47.2
%
Wealth
Assets under management ("AUM")
$
4,271,728
$
4,065,059
$
6,741,022
$
4,271,728
$
6,741,022
Other Data
End of period full-time employees
1,877
1,890
1,876
1,877
1,876
Number of full-service branches
114
114
130
114
130
Number of automatic transaction machines ("ATMs")
131
131
148
131
148
_________________________
(1)
These are non-GAAP financial measures. 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 useful to investors because it measures the performance of a business consistently across time without regard to whether components of the business were acquired or developed internally.
(4)
These are non-GAAP financial measures. Adjusted operating measures exclude the losses related to balance sheet repositioning (principally composed of losses on debt extinguishment), gains or losses on sale of securities, gains on the sale of Visa, Inc. Class B common stock, gain on the sale of Dixon, Hubard, Feinour & Brown, Inc. (“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. Prior periods reflect adjustments for previously announced strategic branch closure and expense reduction initiatives.
(5)
All ratios at December 31, 2022 are estimates and subject to change pending the Company’s filing of its FR Y9 C. All other periods are presented as filed.
(6)
These balances reflect the impact of the Coronavirus Aid, Relief, and Economic Security Act and the joint guidance issued by the five federal bank regulatory agencies and the Conference of State Bank Supervisors on March 22, 2020 , as subsequently revised on April 7, 2020 , which provides relief for TDR designations and also provides guidance on past due reporting for modified loans made between March 1, 2020 and January 1, 2022 .
(7)
The adjusted operating efficiency ratio (FTE) excludes the amortization of intangible assets, gains or losses on sale of securities, gains on the sale of Visa, Inc. Class B common stock, gain on the sale of DHFB, losses related to balance sheet repositioning (principally composed of losses on debt extinguishment), 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 combined economic results of the organization’s operations. Prior periods reflect adjustments for previously announced strategic branch closure and expense reduction initiatives.
(8)
These are non-GAAP financial measures. Pre-tax pre-provision adjusted earnings excludes the provision for credit losses, which can fluctuate significantly from period-to-period under the CECL methodology, income tax expense, losses related to balance sheet repositioning (principally composed of losses on debt extinguishment), gains or losses on sale of securities, gains on the sale of Visa, Inc. Class B common stock, gain on the 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 combined economic results of the organization’s operations. Prior periods reflect adjustments for previously announced strategic branch closure and expense reduction initiatives.
(9)
These are non-GAAP financial measures. PPP adjustment impact excludes the unforgiven portion of PPP loans. The Company believes loans held for investment (net of deferred fees and costs), excluding PPP is useful to investors as it provides more clarity on the Company’s organic growth. The Company also believes that the related non-GAAP financial measures of past due loans still accruing interest as a percentage of total loans held for investment (net of deferred fees and costs), excluding PPP, are useful to investors as loans originated under the PPP carry a SBA guarantee. The Company believes that the ALLL as a percentage of loans held for investment (net of deferred fees and costs), excluding PPP, is useful to investors because of the size of the Company’s PPP originations and the impact of the embedded credit enhancement provided by the SBA guarantee.
(10)
These are non-GAAP financial measures. The Company believes excluding PPP accretion interest income and fees from operating earnings is useful to investors as it provides more clarity on the Company’s non-PPP related income.
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
December 31 ,
September 30 ,
December 31 ,
2022
2022
2021
ASSETS
(unaudited)
(unaudited)
(audited)
Cash and cash equivalents:
Cash and due from banks
$
216,384
$
177,969
$
180,963
Interest-bearing deposits in other banks
102,107
211,785
618,714
Federal funds sold
1,457
1,188
2,824
Total cash and cash equivalents
319,948
390,942
802,501
Securities available for sale, at fair value
2,741,816
2,717,323
3,481,650
Securities held to maturity, at carrying value
847,732
841,349
628,000
Restricted stock, at cost
120,213
82,050
76,825
Loans held for sale, at fair value
3,936
12,889
20,861
Loans held for investment, net of deferred fees and costs
14,449,142
13,918,720
13,195,843
Less: allowance for loan and lease losses
110,768
108,009
99,787
Total loans held for investment, net
14,338,374
13,810,711
13,096,056
Premises and equipment, net
118,243
126,374
134,808
Goodwill
925,211
925,211
935,560
Amortizable intangibles, net
26,761
29,142
43,312
Bank owned life insurance
440,656
437,988
431,517
Other assets
578,248
576,252
413,706
Total assets
$
20,461,138
$
19,950,231
$
20,064,796
LIABILITIES
Noninterest-bearing demand deposits
$
4,883,239
$
5,290,938
$
5,207,324
Interest-bearing deposits
11,048,438
11,255,278
11,403,744
Total deposits
15,931,677
16,546,216
16,611,068
Securities sold under agreements to repurchase
142,837
146,182
117,870
Other short-term borrowings
1,176,000
133,800
—
Long-term borrowings
389,863
389,576
388,724
Other liabilities
448,024
453,307
237,063
Total liabilities
18,088,401
17,669,081
17,354,725
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $10.00 par value
173
173
173
Common stock, $1.33 par value
98,873
98,845
100,101
Additional paid-in capital
1,772,440
1,769,858
1,807,368
Retained earnings
919,537
874,393
783,794
Accumulated other comprehensive income (loss)
(418,286
)
(462,119
)
18,635
Total stockholders' equity
2,372,737
2,281,150
2,710,071
Total liabilities and stockholders' equity
$
20,461,138
$
19,950,231
$
20,064,796
Common shares outstanding
74,712,622
74,703,774
75,663,648
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
(Dollars in thousands, except share data)
Three Months Ended
Year Ended
December 31 ,
September 30 ,
December 31 ,
December 31 ,
December 31 ,
2022
2022
2021
2022
2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(audited)
Interest and dividend income:
Interest and fees on loans
$
173,475
$
144,673
$
125,195
$
555,614
$
508,770
Interest on deposits in other banks
1,383
941
401
2,612
855
Interest and dividends on securities:
Taxable
16,196
14,750
11,757
59,306
43,859
Nontaxable
11,014
10,792
10,103
42,903
38,875
Total interest and dividend income
202,068
171,156
147,456
660,435
592,359
Interest expense:
Interest on deposits
30,236
15,386
4,915
56,201
27,117
Interest on short-term borrowings
3,588
1,229
17
5,393
108
Interest on long-term borrowings
4,396
3,826
4,197
14,580
13,874
Total interest expense
38,220
20,441
9,129
76,174
41,099
Net interest income
163,848
150,715
138,327
584,261
551,260
Provision for credit losses
6,257
6,412
(1,000
)
19,028
(60,888
)
Net interest income after provision for credit losses
157,591
144,303
139,327
565,233
612,148
Noninterest income:
Service charges on deposit accounts
7,631
6,784
7,808
30,052
27,122
Other service charges, commissions and fees
1,631
1,770
1,625
6,765
6,595
Interchange fees
2,571
2,461
2,027
9,110
8,279
Fiduciary and asset management fees
4,085
4,134
7,239
22,414
27,562
Mortgage banking income
379
1,390
3,330
7,085
21,022
Bank owned life insurance income
2,649
3,445
3,286
11,507
11,488
Loan-related interest rate swap fees
3,664
2,050
1,443
12,174
5,620
Other operating income
1,890
3,550
9,659
19,416
18,118
Total noninterest income
24,500
25,584
36,417
118,523
125,806
Noninterest expenses:
Salaries and benefits
58,723
56,600
57,970
228,926
214,929
Occupancy expenses
6,328
6,408
7,013
26,013
28,718
Furniture and equipment expenses
3,978
3,673
4,031
14,838
15,950
Technology and data processing
9,442
8,273
8,543
33,372
30,200
Professional services
4,456
3,504
4,680
16,730
17,841
Marketing and advertising expense
2,228
2,343
2,545
9,236
9,875
FDIC assessment premiums and other insurance
1,896
3,094
2,684
10,241
9,482
Franchise and other taxes
4,500
4,507
4,436
18,006
17,740
Loan-related expenses
1,356
1,575
1,715
6,574
7,004
Amortization of intangible assets
2,381
2,480
3,225
10,815
13,904
Loss on debt extinguishment
—
—
—
—
14,695
Other expenses
4,502
7,466
23,102
29,051
38,857
Total noninterest expenses
99,790
99,923
119,944
403,802
419,195
Income before income taxes
82,301
69,964
55,800
279,954
318,759
Income tax expense
11,777
11,894
8,021
45,444
54,842
Net income
$
70,524
$
58,070
$
47,779
234,510
263,917
Dividends on preferred stock
2,967
2,967
2,967
11,868
11,868
Net income available to common shareholders
$
67,557
$
55,103
$
44,812
$
222,642
$
252,049
Basic earnings per common share
$
0.90
$
0.74
$
0.59
$
2.97
$
3.26
Diluted earnings per common share
$
0.90
$
0.74
$
0.59
$
2.97
$
3.26
AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS) (UNAUDITED)
(Dollars in thousands)
For the Quarter Ended
December 31, 2022
September 30, 2022
Average
Balance
Interest
Income /
Expense (1)
Yield /
Rate (1)(2)
Average
Balance
Interest
Income /
Expense (1)
Yield /
Rate (1)(2)
Assets:
Securities:
Taxable
$
2,016,845
$
16,196
3.19
%
$
2,193,279
$
14,750
2.67
%
Tax-exempt
1,627,351
13,942
3.40
%
1,625,328
13,661
3.33
%
Total securities
3,644,196
30,138
3.28
%
3,818,607
28,411
2.95
%
Loans, net (3)
14,117,433
174,531
4.90
%
13,733,447
145,433
4.20
%
Other earning assets
238,967
1,517
2.52
%
327,168
1,154
1.40
%
Total earning assets
18,000,596
$
206,186
4.54
%
17,879,222
$
174,998
3.88
%
Allowance for loan and lease losses
(109,535
)
(104,746
)
Total non-earning assets
2,283,091
2,206,024
Total assets
$
20,174,152
$
19,980,500
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
Transaction and money market accounts
$
8,495,299
$
24,712
1.15
%
$
8,247,650
$
11,342
0.55
%
Regular savings
1,155,137
110
0.04
%
1,171,071
64
0.02
%
Time deposits
1,764,596
5,414
1.22
%
1,745,224
3,980
0.90
%
Total interest-bearing deposits
11,415,032
30,236
1.05
%
11,163,945
15,386
0.55
%
Other borrowings
816,818
7,984
3.88
%
703,272
5,055
2.85
%
Total interest-bearing liabilities
$
12,231,850
$
38,220
1.24
%
$
11,867,217
$
20,441
0.68
%
Noninterest-bearing liabilities:
Demand deposits
5,196,717
5,324,279
Other liabilities
424,377
352,005
Total liabilities
17,852,944
17,543,501
Stockholders' equity
2,321,208
2,436,999
Total liabilities and stockholders' equity
$
20,174,152
$
19,980,500
Net interest income
$
167,966
$
154,557
Interest rate spread
3.30
%
3.20
%
Cost of funds
0.84
%
0.45
%
Net interest margin
3.70
%
3.43
%
_________________________
(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/20230124005327/en/
Robert M. Gorman - (804) 523‑7828
Executive Vice President / Chief Financial Officer
Source: Atlantic Union Bankshares Corporation