Blackstone buys $2B AUB CRE portfolio; discount hints at $140M hit

Rhea-AI Filing Summary

Atlantic Union Bankshares (NYSE:AUB) filed an 8-K announcing it has closed the sale of ~$2 billion of performing commercial real-estate (CRE) loans acquired from Sandy Spring Bank to Blackstone Real Estate Debt Strategies.

The pool was sold in the “low 90s” of par, with Atlantic Union retaining servicing rights. Management will deploy the proceeds to pay down high-cost deposits and other expensive funding sources and to expand its securities portfolio, actions expected to improve the balance-sheet mix and liquidity profile.

• Item 7.01 – press release furnished (Exhibit 99.1)
• Item 8.01 – loan-sale details; no financials required

The transaction was previously contemplated in the April 1 merger with Sandy Spring Bancorp. Standard forward-looking-statement cautions are included; no additional material changes were disclosed.

Positive

• Reduced CRE concentration by divesting $2 billion in loans, lowering sector-specific risk exposure.
• Proceeds targeted to repay high-cost deposits, likely improving funding mix and net interest margin.
• Completed integration milestone within three months of Sandy Spring merger, demonstrating execution capability.

Negative

• Loans sold in the low 90s of par, implying a potential discount of 7-10% (≈$140-$200 million) that could pressure near-term earnings.
• Transaction highlights heightened CRE credit-quality concerns and possible regulatory scrutiny of the loan book.

Insights

Banking Sector Analyst

TL;DR: Sale trims CRE exposure; funding cost relief offsets discount.

Divesting $2 billion of CRE loans removes a high-risk asset class representing a sizeable share of the recently acquired Sandy Spring portfolio. Although the loans were performing, regulators have been pressuring regional banks to curtail CRE concentrations. Proceeds earmarked to retire high-cost deposits should cut funding expense and modestly boost net interest margin once redeployed into the securities book. The discount (‘low 90s’) likely results in a near-term hit to earnings, but valuation marks taken at merger close may already cover much of it. Net capital impact therefore appears manageable, and strategic benefits—risk diversification, liquidity enhancement, smoother integration—could balance the accounting loss. Overall investment thesis unchanged.

Credit Risk Specialist

TL;DR: Discounted CRE exit flags valuation risk—near-term negative.

Selling performing loans at up to a 10% haircut signals market skepticism toward office-heavy CRE collateral. Even if merger purchase accounting absorbed some markdowns, disclosure implies potential incremental loss of roughly $140–$200 million versus par. Retained servicing limits operational disruption but offers little offset to the earnings drag. Furthermore, accelerated de-risking suggests supervisory pressure following recent regional-bank turmoil. While balance-sheet composition improves, the move underscores ongoing credit-quality concern and may foreshadow tighter underwriting or additional portfolio pruning. From a risk-return standpoint, near-term negative until clarity on realized loss and redeployment yield emerges.

8-K Event Classification

3 items: 7.01, 8.01, 9.01

3 items

Item 7.01 Regulation FD Disclosure Disclosure

Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.

Item 8.01 Other Events Other

Voluntary disclosure of events the company deems important to shareholders but not covered by other items.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Understanding 8-K Material Events →

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United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 26, 2025

ATLANTIC UNION BANKSHARES CORPORATION

(Exact name of registrant as specified in its charter)

Virginia	001-39325	54-1598552
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)

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4300 Cox Road

Glen Allen, Virginia 23060

(Address of principal executive offices, including Zip Code)

Registrant’s telephone number, including area code: (804) 633-5031

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $1.33 per share	​	AUB	​	New York Stock Exchange
Depositary Shares, Each Representing a 1/400th Interest in a Share of 6.875% Perpetual Non-Cumulative Preferred Stock, Series A	​	AUB.PRA	​	New York Stock Exchange

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 7.01 Regulation FD Disclosure.

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On June 26, 2025, Atlantic Union Bankshares Corporation (“Atlantic Union”), the holding company for Atlantic Union Bank (the “Bank”), announced the closing of the sale of approximately $2 billion of the Bank’s performing commercial real estate (“CRE”) loans. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1. The information set forth in Item 7.01 of this Current Report on Form 8-K and in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.

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Item 8.01 Other Events.

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On June 26, 2025, Atlantic Union closed on the sale of approximately $2 billion of the Bank’s performing CRE loans acquired from Sandy Spring Bank to vehicles affiliated with Blackstone Real Estate Debt Strategies. The CRE loan sale was contemplated and announced as part of Atlantic Union’s merger with Sandy Spring Bancorp, Inc., which closed on April 1, 2025. The CRE loan pool was sold in the low 90s as a percentage of par value, and the Bank retained customer-facing servicing responsibilities. Atlantic Union intends to use the proceeds from the CRE loan sale to pay down certain high-cost deposits and certain other high-cost funds, as well as to add to its securities portfolio.

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Item 9.01 Financial Statements and Exhibits.

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(d) Exhibits.

Exhibit No.		Description of Exhibit
99.1		Press Release dated June 26, 2025
104	​	Cover Page Interactive Data File – the cover page iXBRL tags are embedded within the Inline XBRL document

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Caution About Forward-Looking Statements

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Certain statements in Current Report on Form 8-K may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, which statements involve inherent risks and uncertainties. Examples of forward-looking statements include, but are not limited to, statements regarding the loan sale, including Atlantic Union’s intended use of proceeds from the sale. Such statements are often characterized by the use of qualified words (and their derivatives) such as “intend,” “may,” “will,” “potential,” “anticipate,” “could,” “should,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” and “project,” as well as words of similar meaning or other statements concerning opinions or judgment of us or our management about future events. Forward-looking statements are based on assumptions as of the time they are made and are subject to risks, uncertainties and other factors that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from anticipated results expressed or implied by such forward-looking statements. Such risks, uncertainties and assumptions, include, among others, the possibility that the intended use of proceeds from the loan sale may change as a result of changes in economic conditions, market interest rates, volatility in the financial services sector, Atlantic Union’s capital position, or as a result of other unexpected factors or events; Atlantic Union’s ability to deploy the net proceeds in the manner it expects; and other factors, many of which are beyond Atlantic Union’s control.

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Although Atlantic Union 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 our actual results will not differ materially from any projected future results expressed or implied by such forward-looking statements. Additional factors that could cause results to differ materially from those described above can be found in Atlantic Union’s most recent annual report on Form 10-K and other documents subsequently filed by Atlantic Union with the Securities Exchange Commission. Investors are cautioned not to rely too heavily on any such forward-looking statements. Forward-looking statements speak only as of the date they are made and Atlantic Union undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ATLANTIC UNION BANKSHARES CORPORATION
Date: June 26, 2025	By:	/s/ Robert M. Gorman
		Robert M. Gorman
		Executive Vice President and
		Chief Financial Officer
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FAQ

How large was the CRE loan sale disclosed by AUB on June 26 2025?

Atlantic Union sold approximately $2 billion of performing commercial real-estate loans.

At what price relative to par did AUB sell the CRE loans?

Management stated the pool was sold in the “low 90s” of par value.

Who purchased the $2 billion CRE portfolio from AUB?

Vehicles affiliated with Blackstone Real Estate Debt Strategies were the buyers.

What will AUB do with the proceeds from the loan sale?

The bank intends to pay down certain high-cost deposits and other expensive funding and add to its securities portfolio.

How does the sale relate to AUB's merger with Sandy Spring Bancorp?

The CRE loans originated at Sandy Spring; their sale was pre-announced as part of the April 1 2025 merger integration plan.

Will Atlantic Union continue servicing the sold CRE loans?

Yes. AUB will retain customer-facing servicing responsibilities for the divested loan pool.