Atlantic Union Bankshares Reports Third Quarter Results

Rhea-AI Summary

Atlantic Union Bankshares Corporation (AUB) reported a net income of $58.3 million for Q3 2020, translating to diluted earnings of $0.74 per share. For the first nine months, net income totaled $96.1 million with earnings of $1.22 per share. The bank processed over 11,000 PPP loans worth $1.7 billion. Notably, operating expenses decreased by $9.6 million, driven by branch consolidations and lower costs. As of September 30, 2020, total assets were approximately $19.9 billion, reflecting a 14.3% year-over-year increase. The capital ratios remain strong with a Common equity Tier 1 capital ratio of 10.04%.

Positive

• Net income available to common shareholders increased to $58.3 million for Q3 2020.
• Total assets rose to $19.9 billion, a 14.3% increase from the previous year.
• Reduced operating expenses by $9.6 million through branch closures and efficiency measures.
• Sustained profitability with diluted earnings per share at $0.74.

Negative

• Net interest margin fell 15 basis points to 3.08%, influenced by lower loan yields.
• Noninterest income decreased by $1.5 million due to prior quarter gains not repeated.
• Past due loans increased as a percentage of total loans, indicating potential credit risk.

RICHMOND, Va., Oct. 22, 2020 (GLOBE NEWSWIRE) -- Atlantic Union Bankshares Corporation (the “Company” or “Atlantic Union”) (Nasdaq: AUB) today reported net income available to common shareholders of $58.3 million and diluted earnings per common share of $0.74 for its third quarter ended September 30, 2020. Pre-tax pre-provision operating earnings⁽¹⁾ were $78.6 million for the third quarter ended September 30, 2020.

Net income available to common shareholders was $96.1 million and diluted earnings per common share were $1.22 for the nine months ended September 30, 2020. Pre-tax pre-provision operating earnings ⁽¹⁾ were $217.3 million for the nine months ended September 30, 2020.

“During the third quarter, Atlantic Union delivered strong financial results and continued to demonstrate the resilience, agility and innovation required to successfully navigate through the challenging economic, credit and interest rate headwinds of COVID-19,” said John C. Asbury, president and chief executive officer of Atlantic Union.

“Operating under the mantra of soundness, profitability and growth – in that order of priority - Atlantic Union continues to be in a strong financial position with ample liquidity and a well-fortified capital base. Our financial performance has and will continue to benefit from the decisive actions the Company has taken to reduce its expense run rate to more closely align with revenue growth pressures driven by the lower for longer interest rate environment. These expense reduction actions include the consolidation of 14 branches in September, or nearly 10% of our branch network.

Looking forward, we believe that Atlantic Union will emerge from the challenges of COVID-19 as a stronger company that is well positioned to generate sustainable, profitable growth and is committed to leveraging the Atlantic Union franchise to build long term value for our shareholders.”

Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”)

During 2020, the Company participated in the SBA PPP under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which was intended to provide economic relief to small businesses that have been adversely impacted by the COVID-19 global pandemic (“COVID-19”). The Company processed over 11,000 PPP loans, which totaled $1.7 billion with a recorded investment of $1.6 billion as of September 30, 2020, which included unamortized deferred fees of $32.6 million. The loans carry a 1% interest rate.

Expense Reduction Measures

During 2020, the Company undertook several actions, including the consolidation of 14 branches, which was completed in September 2020, to reduce expenses in light of the current and expected operating environment. These actions resulted in expenses during the third quarter of 2020 of approximately $2.6 million, primarily related to lease termination costs and real estate write-downs.

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⁽¹⁾ These are financial measures not calculated in accordance with generally accepted accounting principles (“GAAP”). For a reconciliation of these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results

NET INTEREST INCOME

For the third quarter of 2020, net interest income was $137.4 million, an increase from $137.3 million reported in the second quarter of 2020. Net interest income (FTE)⁽¹⁾ was $140.3 million in the third quarter of 2020, an increase of $172,000 from the second quarter of 2020. The third quarter net interest margin decreased 15 basis points to 3.08% from 3.23% in the previous quarter, while the net interest margin (FTE)⁽¹⁾ decreased 15 basis points to 3.14% from 3.29% during the same period. The decreases in the net interest margin and net interest margin (FTE) were principally due to a 31 basis point decrease in the yield on earning assets (FTE)⁽¹⁾ offset by a 16 basis point decrease in cost of funds. The decline in the Company’s earning asset yields was driven by lower loan accretion income, an increase in the earning asset mix of lower yielding investment securities and the impact of lower market interest rates. The cost of funds decline was driven by lower deposit costs and wholesale borrowing costs driven by lower interest rate environment and a favorable funding mix.

The Company’s net interest margin (FTE) includes the impact of acquisition accounting fair value adjustments. Net accretion related to acquisition accounting decreased $2.7 million from the prior quarter to $3.7 million for the quarter ended September 30, 2020. The second and third quarters of 2020, and the remaining estimated net accretion impact are reflected in the following table (dollars in thousands):

					Deposit
		Loan			Accretion				Borrowings
		Accretion			(Amortization)				Amortization				Total
For the quarter ended March 31, 2020		$	9,528			50				(138	)		$	9,440
For the quarter ended June 30, 2020			6,443			34				(140	)			6,337
For the quarter ended September 30, 2020			3,814			26				(167	)			3,673
For the remaining three months of 2020 (estimated)			2,530			23				(187	)			2,366
For the years ending (estimated):
2021			9,242			14				(807	)			8,449
2022			7,449			(43	)			(829	)			6,577
2023			5,346			(32	)			(852	)			4,462
2024			4,334			(4	)			(877	)			3,453
2025			3,248			(1	)			(900	)			2,347
Thereafter			14,485			—				(9,873	)			4,612
Total remaining acquisition accounting fair value adjustments at September 30, 2020			46,634			(43	)			(14,325	)			32,266

ASSET QUALITY

Overview
During the third quarter of 2020, the Company experienced a slight decrease in nonperforming assets (“NPAs”). Past due loan levels as a percentage of total loans held for investment at September 30, 2020 were higher than past due loan levels at June 30, 2020 and lower than past due loan levels at September 30, 2019. The increase in past due loan levels from June 30, 2020 was primarily within the 30-59 days past due category. Net charge-off levels and the provision for loan losses for the third quarter of 2020 decreased from the second quarter of 2020.

Loan Modifications for Borrowers Affected by COVID-19
On March 22, 2020, the five federal bank regulatory agencies and the Conference of State Bank Supervisors issued joint guidance (subsequently revised on April 7, 2020) with respect to loan modifications for borrowers affected by COVID-19 (the “March 22 Joint Guidance”). The March 22 Joint Guidance encourages banks, savings associations, and credit unions to make loan modifications for borrowers affected by COVID-19 and, importantly, assures those financial institutions that they will not (i) receive supervisory criticism for such prudent loan modifications and (ii) be required by examiners to automatically categorize COVID-19-related loan modifications as TDRs. The federal banking regulators have confirmed with the Financial Accounting Standards Board (or FASB) that short-term loan modifications made on a good faith basis in response to COVID-19 to borrowers who were current (i.e., less than 30 days past due on contractual payments) when the modification program was implemented are not considered TDRs.

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⁽¹⁾ These are financial measures not calculated in accordance with GAAP. For a reconciliation of these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results

In addition, Section 4013 of the CARES Act provides banks, savings associations, and credit unions with the ability to make loan modifications related to COVID-19 without categorizing the loan as a TDR or conducting the analysis to make the determination, which is intended to streamline the loan modification process. Any such suspension is effective for the term of the loan modification; however, the suspension is only permitted for loan modifications made during the effective period of Section 4013 and only for those loans that were not more than thirty days past due as of December 31, 2019.

The Company has made certain loan modifications pursuant to the March 22 Joint Guidance or Section 4013 of the CARES Act and as of September 30, 2020 approximately $769.6 million remain under their modified terms, a decline of $831.3 million as compared to June 30, 2020. The majority of the Company’s modifications as of September 30, 2020 were in the commercial real estate portfolios.

Nonperforming Assets
At September 30, 2020, NPAs totaled $43.2 million, a decrease of $839,000 from June 30, 2020. NPAs as a percentage of total outstanding loans at September 30, 2020 were 0.30%, a decrease of 1 basis point from 0.31% at June 30, 2020. Excluding the impact of the PPP loans⁽¹⁾, NPAs as a percentage of total outstanding loans were 0.34%, a decrease of 1 basis point from June 30, 2020.

The Company’s adoption of current expected credit loss (“CECL”) on January 1, 2020 resulted in a change in the accounting and reporting related to purchased credit impaired (“PCI”) loans, which are now defined as purchased credit deteriorated (“PCD”) and evaluated at the loan level instead of being evaluated in pools under PCI accounting.   All prior period nonaccrual and past due loan metrics discussed herein have not been restated for CECL accounting and exclude PCI-related loan balances.

The following table shows a summary of nonperforming asset balances at the quarter ended (dollars in thousands):

		September 30,			June 30,			March 31,			December 31,			September 30,
		2020			2020			2020			2019			2019
Nonaccrual loans		$	39,023		$	39,624		$	44,022		$	28,232		$	30,032
Foreclosed properties			4,159			4,397			4,444			4,708			6,385
Total nonperforming assets		$	43,182		$	44,021		$	48,466		$	32,940		$	36,417

The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):

		September 30,				June 30,				March 31,				December 31,				September 30,
		2020				2020				2020				2019				2019
Beginning Balance		$	39,624			$	44,022			$	28,232			$	30,032			$	27,462
Net customer payments			(2,803	)			(6,524	)			(3,451	)			(5,741	)			(3,612	)
Additions			2,790				3,206				6,059				5,631				8,327
Impact of CECL adoption			—				—				14,381				—				—
Charge-offs			(588	)			(1,088	)			(1,199	)			(1,690	)			(884	)
Loans returning to accruing status			—				8				—				—				(1,103	)
Transfers to foreclosed property			—				—				—				—				(158	)
Ending Balance		$	39,023			$	39,624			$	44,022			$	28,232			$	30,032

The following table shows the activity in foreclosed properties for the quarter ended (dollars in thousands):

		September 30,				June 30,				March 31,				December 31,				September 30,
		2020				2020				2020				2019				2019
Beginning Balance		$	4,397			$	4,444			$	4,708			$	6,385			$	6,506
Additions of foreclosed property			—				—				615				62				645
Valuation adjustments			—				—				(44	)			(375	)			(62	)
Proceeds from sales			(254	)			(55	)			(854	)			(1,442	)			(737	)
Gains (losses) from sales			16				8				19				78				33
Ending Balance		$	4,159			$	4,397			$	4,444			$	4,708			$	6,385

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⁽¹⁾ These are financial measures not calculated in accordance with GAAP. For a reconciliation of these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results

Past Due Loans
Past due loans still accruing interest totaled $50.9 million or 0.35% of total loans held for investment at September 30, 2020, compared to $40.5 million or 0.28% of total loans held for investment at June 30, 2020, and $55.1 million or 0.45% of total loans held for investment at September 30, 2019. Excluding the impact of the PPP loans⁽¹⁾, past due loans still accruing interest were 0.40% of total loans held for investment at September 30, 2020, compared to 0.32% of total loans held for investment at June 30, 2020. The increase in past due loans in the third quarter of 2020 as compared to the second quarter was primarily within the 30-59 days past due category and due to increases in past due credit relationships within the owner occupied commercial real estate, commercial & industrial, and residential 1-4 family – consumer portfolios.

Of the total past due loans still accruing interest, $15.6 million or 0.11% of total loans held for investment were loans past due 90 days or more at September 30, 2020, compared to $19.3 million or 0.13% of total loans held for investment at June 30, 2020, and $12.0 million or 0.10% of total loans held for investment at September 30, 2019.

Net Charge-offs
For the third quarter of 2020, net charge-offs were $1.4 million, or 0.04% of total average loans on an annualized basis, compared to $3.3 million, or 0.09%, for the second quarter of 2020, and $7.7 million, or 0.25%, for the third quarter last year. Excluding the impact of the PPP loans⁽¹⁾, net charge-offs were 0.04% of total average loans on an annualized basis, compared to 0.10% for the second quarter of 2020. The majority of net charge-offs in the third quarter of 2020 were related to the third-party consumer loan portfolio.

Provision for Credit Losses
The provision for credit losses for the third quarter of 2020 was $6.6 million, a decrease of $27.6 million compared to the previous quarter and a decrease of $2.5 million compared to the same quarter in 2019. The provision for credit losses for the third quarter of 2020 consisted of $5.6 million in provision for loan losses and $1.0 million in provision for unfunded commitment.

Allowance for Credit Losses (“ACL”)
At September 30, 2020, the ACL was $186.1 million and included an allowance for loan and lease losses (“ALLL”) of $174.1 million and a reserve for unfunded commitments (“RUC”) of $12.0 million. The ACL increased $5.1 million from June 30, 2020, primarily due to the continued economic uncertainty related to COVID-19.

The ALLL increased $4.1 million and the RUC increased $1.0 million from June 30, 2020. The ALLL as a percentage of the total loan portfolio was 1.21% at September 30, 2020 and 1.19% at June 30, 2020. The ACL as percentage of total loans was 1.29% at September 30, 2020 and 1.26% at June 30, 2020. When excluding PPP loans⁽¹⁾, which are 100% guaranteed by the SBA, the ALLL as a percentage of adjusted loans increased 2 basis points to 1.36% from the prior quarter and the ACL as a percentage of adjusted loans increased 4 basis points to 1.46% from the prior quarter. The ratio of the ALLL to nonaccrual loans was 446.2% at September 30, 2020, compared to 429.0% at June 30, 2020.

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⁽¹⁾ These are financial measures not calculated in accordance with GAAP. For a reconciliation of these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.

NONINTEREST INCOME

Noninterest income decreased $1.5 million to $34.4 million for the quarter ended September 30, 2020 from $35.9 million in the prior quarter primarily driven by a $10.3 million gain on sale of investment securities recorded during the second quarter and a decline of $2.3 million in loan-related interest rate swap income due to lower transaction volumes during the third quarter, which were significantly offset by increases in several other non-interest income categories. These positive offsets include an increase in mortgage banking income of $3.1 million primarily due to increased mortgage loan origination volumes due to the current low interest rate environment. In addition, in the third quarter of 2020, $1.7 million in unrealized gains were recognized related to equity method investments that experienced unrealized losses during the second quarter, bank owned life insurance income increased $1.4 million primarily related to death benefit proceeds received during the quarter, and service charges on deposit accounts increased $1.1 million primarily due to higher NSF and overdraft fees.

NONINTEREST EXPENSE

Noninterest expense decreased $9.6 million to $93.2 million for the quarter ended September 30, 2020 from $102.8 million in the prior quarter primarily driven by the recognition of approximately $10.3 million loss on debt extinguishment in the second quarter resulting from the prepayment of approximately $200.0 million in long-term FHLB advances. In addition, during the third quarter of 2020, there was a decline in the FDIC assessment of approximately $1.1 million due to the positive impact of PPP loans on the Company’s assessment rate. Noninterest expense also included approximately $2.6 million in costs related to the Company’s expense reduction plans, including the closure of 14 branches in September, approximately $639,000 in costs related to the Company’s response to COVID-19, and an increase in marketing expenses related to donations made by the Company to support organizations that fight the injustices of inequality and contribute to change in our communities.

INCOME TAXES

The effective tax rate for the three months ended September 30, 2020 was 15.3% compared to 15.2% for the three months ended June 30, 2020.

BALANCE SHEET

At September 30, 2020, total assets were $19.9 billion, an increase of $178.3 million, or approximately 3.6% (annualized), from June 30, 2020, and an increase of $2.5 billion, or approximately 14.3% from September 30, 2019. The increase in assets from the prior quarter was driven by an increase in the Company’s securities portfolio partially offset by a reduction in cash balances while growth from the prior year was primarily a result of both organic and PPP loan growth.

At September 30, 2020, loans held for investment (net of deferred fees and costs) were $14.4 billion, an increase of $74.6 million, or 2.1% (annualized), from June 30, 2020, while average loans increased $401.0 million, or 11.4% (annualized), from the prior quarter. Loans held for investment (net of deferred fees and costs) increased $2.1 billion, or 16.9% from September 30, 2019, while quarterly average loans increased $2.1 billion, or 17.3% from the prior year. Excluding the effects of the PPP⁽²⁾, loans held for investment (net of deferred fees and costs) increased $475.6 million, or 3.9%, while quarterly average loans increased $480.2 million, or 3.9% from the prior year.

At September 30, 2020, total deposits were $15.6 billion, a slight decrease of $29.0 million, or approximately 0.7% (annualized), from June 30, 2020, while average deposits increased $620.1 million, or 16.5% (annualized), from the prior quarter. Deposits increased $2.5 billion, or 19.4% from September 30, 2019, while quarterly average deposits increased $2.8 billion, or 21.6% from the prior year. The increase in deposits from the prior year was primarily due to the impact of PPP loan related deposits and government stimulus.

The following table shows the Company’s capital ratios at the quarters ended:

		September 30,		June 30,		September 30,
		2020		2020		2019
Common equity Tier 1 capital ratio (1)		10.04	%	9.88	%	10.48	%
Tier 1 capital ratio (1)		11.18	%	11.03	%	10.48	%
Total capital ratio (1)		13.92	%	13.81	%	12.93	%
Leverage ratio (Tier 1 capital to average assets) (1)		8.82	%	8.82	%	8.94	%
Common equity to total assets		12.52	%	12.41	%	14.48	%
Tangible common equity to tangible assets (2)		7.91	%	7.74	%	9.23	%

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⁽¹⁾ All ratios at September 30, 2020 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed.
⁽²⁾ These are financial measures not calculated in accordance with GAAP. For a reconciliation of these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.

On June 9, 2020, the Company issued and sold 6,900,000 depositary shares, each representing a 1/400th ownership interest in a share of the Company’s 6.875% Perpetual Non-Cumulative Preferred Stock, Series A (“Series A Preferred Stock”), par value $10.00 per share of Series A Preferred Stock, with a liquidation preference of $10,000 per share of Series A Preferred Stock. The net proceeds received from the issuance of the Series A Preferred Stock was approximately $166.4 million, after deducting the underwriting discount and other offering expenses payable by the Company. The Series A Preferred Stock is included in Tier 1 capital.  

During the third quarter of 2020, the Company declared and paid cash dividends of $0.25 per common share, consistent with the second quarter of 2020 and the third quarter of 2019. During the third quarter of 2020, the Board also declared and paid a quarterly dividend on the outstanding shares of Series A Preferred Stock of $156.60 per share (equivalent to $0.39 per outstanding depositary share). On July 10, 2019, the Company announced that its Board of Directors had authorized a share repurchase program (effective July 8, 2019) to purchase up to $150 million of the Company’s common stock through June 30, 2021 in open market transactions or privately negotiated transactions. On March 20, 2020, the Company suspended its share repurchase program, which had $20 million remaining in the authorization when it was suspended. The Company repurchased an aggregate of approximately 3.7 million shares, at an average price of $35.48 per share, under the authorization prior to the suspension.

ABOUT ATLANTIC UNION BANKSHARES CORPORATION

Headquartered in Richmond, Virginia, Atlantic Union Bankshares Corporation (Nasdaq: AUB) is the holding company for Atlantic Union Bank. Atlantic Union Bank has 135 branches and approximately 155 ATMs located throughout Virginia, and in portions of Maryland and North Carolina. Middleburg Financial is a brand name used by Atlantic Union Bank and certain affiliates when providing trust, wealth management, private banking, and investment advisory products and services. Certain non-bank affiliates of Atlantic Union Bank include: Old Dominion Capital Management, Inc., and its subsidiary, Outfitter Advisors, Ltd., and Dixon, Hubard, Feinour, & Brown, Inc., which provide investment advisory services; Middleburg Investment Services, LLC, which provides brokerage services; and Union Insurance Group, LLC, which offers various lines of insurance products.

THIRD QUARTER 2020 EARNINGS RELEASE CONFERENCE CALL

The Company will hold a conference call on Thursday, October 22, 2020 at 9:00 a.m. Eastern Time during which management will review the third quarter 2020 financial results and provide an update on recent activities. Interested parties may participate in the call toll-free by dialing (866) 2204170; international callers wishing to participate may do so by dialing (864) 6635235. The conference ID number is 9936549.   Management will conduct a listen-only webcast with accompanying slides, which can be found at: https://edge.media-server.com/mmc/p/s65vcnnd. 

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 of the quarter ended September 30, 2020, 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) section of the Key Financial Results.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including without limitation, statements made in Mr. Asbury’s quotes, are statements that include, projections, predictions, expectations, or beliefs about future events or results that are not statements of historical fact. Such forward-looking statements are based on various 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 accompanied by words that convey projected future events or outcomes such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” 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 results, performance, or achievements of, or trends affecting, the Company will not differ materially from any projected future results, performance, or achievements 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:

• changes in interest rates;
• 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, including as a result of COVID-19;
• the quality or composition of the loan or investment portfolios and changes therein;
• demand for loan products and financial services in the Company’s market area;
• 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;
• the incremental cost and/or decreased revenues associated with exceeding $10 billion in assets;
• real estate values in the Bank’s lending area;
• an insufficient ACL;
• changes in accounting principles relating to loan loss recognition (CECL);
• 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 relating to fintech;
• technological risks and developments, and cyber threats, attacks, or events;
• the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts 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 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 COVID-19, the severity and duration of the pandemic, including whether there is a resurgence of COVID-19 infections in connection with the seasonal flu, 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;
• 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, including the impact of the CARES Act and other legislative and regulatory reactions to COVID-19;
• potential claims, damages, and fines related to litigation or government actions, including litigation or actions arising from the Company’s participation in and administration of programs related to COVID-19, including, among other things, the CARES Act;
• the effects of changes in federal, state or local tax laws and regulations;
• monetary and fiscal policies of the U.S. government, including policies of the U.S. Department of the Treasury and the Federal Reserve;
• changes to applicable accounting principles and guidelines; and
• other factors, many of which are beyond the control of the Company.
  

Please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10K for the year ended December 31, 2019 and comparable “Risk Factors” sections of the Company’s Quarterly Reports on Form 10Q and related disclosures in other filings, which have been filed with the SEC and are available on the SEC’s website at www.sec.gov. All of the forward-looking statements made in this press release are expressly qualified by the cautionary statements contained or referred to herein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on the Company or its businesses or operations. Readers are cautioned not to rely too heavily on the forward-looking statements contained in this press release. Forward-looking statements speak only as of the date they are made and the Company does not undertake any obligation to update, revise or clarify these forward-looking statements, 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 Nine Months Ended
		09/30/20			06/30/20			09/30/19			09/30/20			09/30/19
Results of Operations		(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Interest and dividend income		$	157,414		$	162,867		$	178,345		$	491,607		$	525,122
Interest expense			20,033			25,562			41,744			81,913			122,379
Net interest income			137,381			137,305			136,601			409,694			402,743
Provision for credit losses			6,558			34,200			9,100			100,954			18,192
Net interest income after provision for credit losses			130,823			103,105			127,501			308,740			384,551
Noninterest income			34,407			35,932			48,106			99,245			103,621
Noninterest expenses			93,222			102,814			111,687			291,681			324,022
Income before income taxes			72,008			36,223			63,920			116,304			164,150
Income tax expense			11,008			5,514			10,724			17,506			26,330
Income from continuing operations			61,000			30,709			53,196			98,798			137,820
Discontinued operations, net of tax			—			—			42			—			(128	)
Net income			61,000			30,709			53,238			98,798			137,692
Dividends on preferred stock			2,691			—			—			2,691			—
Net income available to common shareholders		$	58,309		$	30,709		$	53,238		$	96,107		$	137,692
Interest earned on earning assets (FTE) (1)		$	160,315		$	165,672		$	181,149		$	500,069		$	533,590
Net interest income (FTE) (1)			140,282			140,110			139,405			418,156			411,211
Total revenue (FTE) (1)			174,689			176,042			187,511			517,401			514,832
Pre-tax pre-provision operating earnings (8)			78,566			70,423			76,630			217,258			214,695
Key Ratios
Earnings per common share, diluted		$	0.74		$	0.39		$	0.65		$	1.22		$	1.72
Return on average assets (ROA)			1.23	%		0.64	%		1.23	%		0.70	%		1.11	%
Return on average equity (ROE)			9.16	%		4.96	%		8.35	%		5.19	%		7.58	%
Efficiency ratio			54.27	%		59.35	%		60.47	%		57.31	%		63.99	%
Net interest margin			3.08	%		3.23	%		3.57	%		3.26	%		3.66	%
Net interest margin (FTE) (1)			3.14	%		3.29	%		3.64	%		3.32	%		3.74	%
Yields on earning assets (FTE) (1)			3.59	%		3.90	%		4.73	%		3.97	%		4.85	%
Cost of interest-bearing liabilities			0.64	%		0.84	%		1.45	%		0.90	%		1.47	%
Cost of deposits			0.39	%		0.53	%		0.95	%		0.58	%		0.92	%
Cost of funds			0.45	%		0.61	%		1.09	%		0.65	%		1.11	%
Operating Measures (4)
Net operating earnings		$	61,000		$	30,709		$	56,057		$	98,798		$	163,665
Net operating earnings available to common shareholders			58,309			30,709			56,057			96,107			163,665
Operating earnings per share, diluted		$	0.74		$	0.39		$	0.69		$	1.22		$	2.04
Operating ROA			1.23	%		0.64	%		1.29	%		0.70	%		1.32	%
Operating ROE			9.16	%		4.96	%		8.80	%		5.19	%		9.01	%
Operating ROTCE (2) (3)			16.49	%		9.46	%		15.64	%		9.64	%		16.18	%
Operating efficiency ratio (FTE) (1)(7)			51.04	%		56.00	%		55.12	%		53.92	%		53.92	%
Per Share Data
Earnings per common share, basic		$	0.74		$	0.39		$	0.65		$	1.22		$	1.72
Earnings per common share, diluted			0.74			0.39			0.65			1.22			1.72
Cash dividends paid per common share			0.25			0.25			0.25			0.75			0.71
Market value per share			21.37			23.16			37.25			21.37			37.25
Book value per common share			31.86			31.32			31.29			31.86			31.29
Tangible book value per common share (2)			19.13			18.54			18.80			19.13			18.80
Price to earnings ratio, diluted			7.26			14.77			14.44			13.11			16.20
Price to book value per common share ratio			0.67			0.74			1.19			0.67			1.19
Price to tangible book value per common share ratio (2)			1.12			1.25			1.98			1.12			1.98
Weighted average common shares outstanding, basic			78,714,353			78,711,765			81,769,193			78,904,792			80,120,725
Weighted average common shares outstanding, diluted			78,725,346			78,722,690			81,832,868			78,921,108			80,183,113
Common shares outstanding at end of period			78,718,850			78,713,056			81,147,896			78,718,850			81,147,896

		As of & For Three Months Ended									As of & For Nine Months Ended
		09/30/20			06/30/20			09/30/19			09/30/20			09/30/19
Capital Ratios		(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Common equity Tier 1 capital ratio (5)			10.04	%		9.88	%		10.48	%		10.04	%		10.48	%
Tier 1 capital ratio (5)			11.18	%		11.03	%		10.48	%		11.18	%		10.48	%
Total capital ratio (5)			13.92	%		13.81	%		12.93	%		13.92	%		12.93	%
Leverage ratio (Tier 1 capital to average assets) (5)			8.82	%		8.82	%		8.94	%		8.82	%		8.94	%
Common equity to total assets			12.52	%		12.41	%		14.48	%		12.52	%		14.48	%
Tangible common equity to tangible assets (2)			7.91	%		7.74	%		9.23	%		7.91	%		9.23	%
Financial Condition
Assets		$	19,930,650		$	19,752,317		$	17,441,035		$	19,930,650		$	17,441,035
Loans held for investment			14,383,215			14,308,646			12,306,997			14,383,215			12,306,997
Securities			3,102,217			2,672,557			2,607,748			3,102,217			2,607,748
Earning Assets			17,885,975			17,680,876			15,365,753			17,885,975			15,365,753
Goodwill			935,560			935,560			929,815			935,560			929,815
Amortizable intangibles, net			61,068			65,105			78,241			61,068			78,241
Deposits			15,576,098			15,605,139			13,044,712			15,576,098			13,044,712
Borrowings			1,314,322			1,125,030			1,549,181			1,314,322			1,549,181
Stockholders' equity			2,660,885			2,618,226			2,525,031			2,660,885			2,525,031
Tangible common equity (2)			1,497,900			1,451,197			1,516,975			1,497,900			1,516,975
Loans held for investment, net of deferred fees and costs
Construction and land development		$	1,207,190		$	1,247,939		$	1,201,149		$	1,207,190		$	1,201,149
Commercial real estate - owner occupied			2,107,333			2,067,087			1,979,052			2,107,333			1,979,052
Commercial real estate - non-owner occupied			3,497,929			3,455,125			3,198,580			3,497,929			3,198,580
Multifamily real estate			731,582			717,719			659,946			731,582			659,946
Commercial & Industrial			3,536,249			3,555,971			2,058,133			3,536,249			2,058,133
Residential 1-4 Family - Commercial			696,944			715,384			721,185			696,944			721,185
Residential 1-4 Family - Consumer			830,144			841,051			913,245			830,144			913,245
Residential 1-4 Family - Revolving			618,320			627,765			660,963			618,320			660,963
Auto			387,417			380,053			328,456			387,417			328,456
Consumer			276,023			311,362			386,848			276,023			386,848
Other Commercial			494,084			389,190			199,440			494,084			199,440
Total loans held for investment		$	14,383,215		$	14,308,646		$	12,306,997		$	14,383,215		$	12,306,997
Deposits
NOW accounts		$	3,460,480		$	3,618,523		$	2,515,777		$	3,460,480		$	2,515,777
Money market accounts			4,269,696			4,158,325			3,737,426			4,269,696			3,737,426
Savings accounts			861,685			824,164			739,505			861,685			739,505
Time deposits of $250,000 and over			633,252			689,693			717,090			633,252			717,090
Other time deposits			1,930,320			1,968,474			2,179,740			1,930,320			2,179,740
Time deposits			2,563,572			2,658,167			2,896,830			2,563,572			2,896,830
Total interest-bearing deposits		$	11,155,433		$	11,259,179		$	9,889,538		$	11,155,433		$	9,889,538
Demand deposits			4,420,665			4,345,960			3,155,174			4,420,665			3,155,174
Total deposits		$	15,576,098		$	15,605,139		$	13,044,712		$	15,576,098		$	13,044,712
Averages
Assets		$	19,785,167		$	19,157,238		$	17,203,328		$	18,837,580		$	16,639,041
Loans held for investment			14,358,666			13,957,711			12,240,254			13,639,401			11,821,612
Loans held for sale			45,201			56,846			75,558			50,902			46,095
Securities			2,891,210			2,648,967			2,660,270			2,721,161			2,681,463
Earning assets			17,748,152			17,106,132			15,191,792			16,809,423			14,700,019
Deposits			15,580,469			14,960,386			12,812,211			14,632,709			12,250,199
Time deposits			2,579,991			2,667,268			2,769,574			2,667,267			2,554,058
Interest-bearing deposits			11,260,244			10,941,368			9,803,624			10,875,752			9,408,182
Borrowings			1,183,839			1,344,994			1,623,681			1,324,457			1,753,276
Interest-bearing liabilities			12,444,083			12,286,362			11,427,305			12,200,209			11,161,458
Stockholders' equity			2,648,777			2,489,969			2,528,435			2,541,856			2,429,912
Tangible common equity (2)			1,483,848			1,446,948			1,517,400			1,469,918			1,442,831

		As of & For Three Months Ended									As of & For Nine Months Ended
		09/30/20			06/30/20			09/30/19			09/30/20			09/30/19
Asset Quality		(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Allowance for Credit Losses (ACL)
Beginning balance, Allowance for loan and lease losses (ALLL)		$	169,977		$	141,043		$	42,463		$	42,294		$	41,045
Add: Day 1 impact from adoption of CECL			—			—			—			47,484			—
Add: Recoveries			1,566			1,411			1,574			5,137			4,940
Less: Charge-offs			2,978			4,677			9,317			14,806			21,190
Add: Provision for loan losses			5,557			32,200			9,100			94,013			19,025
Ending balance, ALLL		$	174,122		$	169,977		$	43,820		$	174,122		$	43,820
Beginning balance, Reserve for unfunded commitment (RUC)		$	11,000		$	9,000		$	1,100			900			900
Add: Day 1 impact from adoption of CECL			—			—			—			4,160			—
Add: Impact of acquisition accounting			—			—			—			—			1,033
Add: Provision for unfunded commitments			1,000			2,000			—			6,940			(833	)
Ending balance, RUC		$	12,000		$	11,000		$	1,100			12,000			1,100
Total ACL		$	186,122		$	180,977		$	44,920		$	186,122		$	44,920
ACL / total outstanding loans			1.29	%		1.26	%		0.36	%		1.29	%		0.36	%
ACL / total adjusted loans(9)			1.46	%		1.42	%		0.36	%		1.46	%		0.36	%
ALLL / total outstanding loans			1.21	%		1.19	%		0.36	%		1.21	%		0.36	%
ALLL / total adjusted loans(9)			1.36	%		1.34	%		0.36	%		1.36	%		0.36	%
Net charge-offs / total average loans			0.04	%		0.09	%		0.25	%		0.09	%		0.18	%
Net charge-offs / total adjusted average loans(9)			0.04	%		0.10	%		0.25	%		0.11	%		0.18	%
Provision for loan losses/ total average loans			0.15	%		0.93	%		0.29	%		0.92	%		0.22	%
Provision for loan losses/ total adjusted average loans(9)			0.17	%		1.02	%		0.29	%		1.03	%		0.22	%
	`
Nonperforming Assets(6)
Construction and land development		$	3,520		$	3,977		$	7,785		$	3,520		$	7,785
Commercial real estate - owner occupied			9,267			8,924			5,684			9,267			5,684
Commercial real estate - non-owner occupied			1,992			1,877			381			1,992			381
Multifamily real estate			33			33			—			33			—
Commercial & Industrial			1,592			2,708			1,585			1,592			1,585
Residential 1-4 Family - Commercial			5,743			5,784			3,879			5,743			3,879
Residential 1-4 Family - Consumer			12,620			12,029			8,292			12,620			8,292
Residential 1-4 Family - Revolving			3,664			3,626			1,641			3,664			1,641
Auto			517			584			604			517			604
Consumer			75			81			84			75			84
Other Commercial			—			1			97			—			97
Nonaccrual loans		$	39,023		$	39,624		$	30,032		$	39,023		$	30,032
Foreclosed property			4,159			4,397			6,385			4,159			6,385
Total nonperforming assets (NPAs)		$	43,182		$	44,021		$	36,417		$	43,182		$	36,417
Construction and land development		$	93		$	473		$	171		$	93		$	171
Commercial real estate - owner occupied			1,726			7,851			2,571			1,726			2,571
Commercial real estate - non-owner occupied			168			878			36			168			36
Multifamily real estate			359			366			1,212			359			1,212
Commercial & Industrial			604			178			265			604			265
Residential 1-4 Family - Commercial			5,298			578			916			5,298			916
Residential 1-4 Family - Consumer			4,495			5,099			3,815			4,495			3,815
Residential 1-4 Family - Revolving			2,276			1,995			1,674			2,276			1,674
Auto			315			181			183			315			183
Consumer			327			1,157			1,163			327			1,163
Other Commercial			—			499			30			—			30
Loans ≥ 90 days and still accruing		$	15,661		$	19,255		$	12,036		$	15,661		$	12,036
Total NPAs and loans ≥ 90 days		$	58,843		$	63,276		$	48,453		$	58,843		$	48,453
NPAs / total outstanding loans			0.30	%		0.31	%		0.30	%		0.30	%		0.30	%
NPAs / total adjusted loans(9)			0.34	%		0.35	%		0.30	%		0.34	%		0.30	%
NPAs / total assets			0.22	%		0.22	%		0.21	%		0.22	%		0.21	%
ALLL / nonaccrual loans			446.20	%		428.97	%		145.91	%		446.20	%		145.91	%
ALLL/ nonperforming assets			403.23	%		386.13	%		120.33	%		403.23	%		120.33	%

		As of & For Three Months Ended									As of & For Nine Months Ended
		09/30/20			06/30/20			09/30/19			09/30/20			09/30/19
Past Due Detail(6)		(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Construction and land development		$	2,625		$	1,683		$	1,062		$	2,625		$	1,062
Commercial real estate - owner occupied			4,924			1,679			4,977			4,924			4,977
Commercial real estate - non-owner occupied			1,291			930			5,757			1,291			5,757
Multifamily real estate			—			—			107			—			107
Commercial & Industrial			4,322			1,602			2,079			4,322			2,079
Residential 1-4 Family - Commercial			1,236			480			1,842			1,236			1,842
Residential 1-4 Family - Consumer			2,998			1,229			1,527			2,998			1,527
Residential 1-4 Family - Revolving			2,669			1,924			4,965			2,669			4,965
Auto			1,513			1,176			1,787			1,513			1,787
Consumer			1,020			844			2,000			1,020			2,000
Other Commercial			613			456			579			613			579
Loans 30-59 days past due		$	23,211		$	12,003		$	26,682		$	23,211		$	26,682
Construction and land development		$	223		$	294		$	351		$	223		$	351
Commercial real estate - owner occupied			1,310			430			—			1,310			—
Commercial real estate - non-owner occupied			1,371			369			1,878			1,371			1,878
Multifamily real estate			—			—			164			—			164
Commercial & Industrial			1,448			296			1,946			1,448			1,946
Residential 1-4 Family - Commercial			937			2,105			3,081			937			3,081
Residential 1-4 Family - Consumer			3,976			3,817			5,182			3,976			5,182
Residential 1-4 Family - Revolving			1,141			1,048			1,747			1,141			1,747
Auto			453			290			407			453			407
Consumer			772			561			1,666			772			1,666
Other Commercial			427			—			9			427			9
Loans 60-89 days past due		$	12,058		$	9,210		$	16,431		$	12,058		$	16,431
Past Due and still accruing		$	50,930		$	40,468		$	55,149		$	50,930		$	55,149
Past Due and still accruing / total adjusted loans(9)			0.40	%		0.32	%		0.45	%		0.40	%		0.45	%
Troubled Debt Restructurings
Performing		$	17,076		$	15,303		$	15,156		$	17,076		$	15,156
Nonperforming			7,045			5,042			3,582			7,045			3,582
Total troubled debt restructurings		$	24,121		$	20,345		$	18,738		$	24,121		$	18,738
Alternative Performance Measures (non-GAAP)
Net interest income (FTE)
Net interest income (GAAP)		$	137,381		$	137,305		$	136,601		$	409,694		$	402,743
FTE adjustment			2,901			2,805			2,804			8,462			8,468
Net interest income (FTE) (non-GAAP) (1)		$	140,282		$	140,110		$	139,405		$	418,156		$	411,211
Noninterest income (GAAP)			34,407			35,932			48,106			99,245			103,621
Total revenue (FTE) (non-GAAP) (1)		$	174,689		$	176,042		$	187,511		$	517,401		$	514,832
Average earning assets		$	17,748,152		$	17,106,132		$	15,191,792		$	16,809,423		$	14,700,019
Net interest margin			3.08	%		3.23	%		3.57	%		3.26	%		3.66	%
Net interest margin (FTE) (1)			3.14	%		3.29	%		3.64	%		3.32	%		3.74	%
Tangible Assets
Ending assets (GAAP)		$	19,930,650		$	19,752,317		$	17,441,035		$	19,930,650		$	17,441,035
Less: Ending goodwill			935,560			935,560			929,815			935,560			929,815
Less: Ending amortizable intangibles			61,068			65,105			78,241			61,068			78,241
Ending tangible assets (non-GAAP)		$	18,934,022		$	18,751,652		$	16,432,979		$	18,934,022		$	16,432,979
Tangible Common Equity (2)
Ending equity (GAAP)		$	2,660,885		$	2,618,226		$	2,525,031		$	2,660,885		$	2,525,031
Less: Ending goodwill			935,560			935,560			929,815			935,560			929,815
Less: Ending amortizable intangibles			61,068			65,105			78,241			61,068			78,241
Less: Perpetual preferred stock			166,357			166,364			—			166,357			—
Ending tangible common equity (non-GAAP)		$	1,497,900		$	1,451,197		$	1,516,975		$	1,497,900		$	1,516,975
Average equity (GAAP)		$	2,648,777		$	2,489,969		$	2,528,435		$	2,541,856		$	2,429,912
Less: Average goodwill			935,560			935,560			930,525			935,560			906,476
Less: Average amortizable intangibles			63,016			67,136			80,510			67,130			80,605
Less: Average perpetual preferred stock			166,353			40,325			-			69,248			-
Average tangible common equity (non-GAAP)		$	1,483,848		$	1,446,948		$	1,517,400		$	1,469,918		$	1,442,831

		As of & For Three Months Ended									As of & For Nine Months Ended
		09/30/20			06/30/20			09/30/19			09/30/20			09/30/19
		(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Operating Measures (4)
Net income (GAAP)		$	61,000		$	30,709		$	53,238		$	98,798		$	137,692
Plus: Merger and rebranding-related costs, net of tax			—			—			2,819			—			25,973
Net operating earnings (non-GAAP)			61,000			30,709			56,057			98,798			163,665
Less: Dividends on preferred stock			2,691			—			—			2,691			—
Net operating earnings available to common shareholders (non-GAAP)		$	58,309		$	30,709		$	56,057		$	96,107		$	163,665
Noninterest expense (GAAP)		$	93,222		$	102,814		$	111,687		$	291,681		$	324,022
Less: Merger Related Costs			—			—			2,435			—			26,928
Less: Rebranding Costs			—			—			1,133			—			5,553
Less: Amortization of intangible assets			4,053			4,223			4,764			12,676			13,919
Operating noninterest expense (non-GAAP)		$	89,169		$	98,591		$	103,355		$	279,005		$	277,622
Net interest income (FTE) (non-GAAP) (1)		$	140,282		$	140,110		$	139,405		$	418,156		$	411,211
Noninterest income (GAAP)			34,407			35,932			48,106			99,245			103,621
Total revenue (FTE) (non-GAAP) (1)		$	174,689		$	176,042		$	187,511		$	517,401		$	514,832
Efficiency ratio			54.27	%		59.35	%		60.47	%		57.31	%		63.99	%
Operating efficiency ratio (FTE) (1)(7)			51.04	%		56.00	%		55.12	%		53.92	%		53.92	%
Operating ROTCE (2)(3)(4)
Net operating earnings available to common shareholders (non-GAAP)		$	58,309		$	30,709		$	56,057		$	96,107		$	163,665
Plus: Amortization of intangibles, tax effected			3,202			3,336			3,764			10,014			10,996
Net operating earnings available to common shareholders before amortization of intangibles (non-GAAP)		$	61,511		$	34,045		$	59,821		$	106,121		$	174,661
Average tangible common equity (non-GAAP)		$	1,483,848		$	1,446,948		$	1,517,400		$	1,469,918		$	1,442,831
Operating return on average tangible common equity (non-GAAP)			16.49	%		9.46	%		15.64	%		9.64	%		16.18	%
Pre-tax pre-provision operating earnings (8)
Net income (GAAP)		$	61,000		$	30,709		$	53,238		$	98,798		$	137,692
Plus: Provision for credit losses			6,558			34,200			9,100			100,954			18,192
Plus: Income tax expense			11,008			5,514			10,724			17,506			26,330
Plus: Merger and rebranding-related costs			—			—			3,568			—			32,481
Pre-tax pre-provision operating earnings (non-GAAP)		$	78,566		$	70,423		$	76,630		$	217,258		$	214,695
Paycheck Protection Program adjustment impact (9)
Loans held for investment (net of deferred fees and costs)(GAAP)		$	14,383,215		$	14,308,646		$	12,306,997		$	14,383,215		$	12,306,997
Less: PPP adjustments			1,600,577			1,598,718			—			1,600,577			—
Loans held for investment (net of deferred fees and costs),net adjustments, excluding PPP (non-GAAP)		$	12,782,638		$	12,709,928		$	12,306,997		$	12,782,638		$	12,306,997
Average loans held for investment (GAAP)		$	14,358,666		$	13,957,711		$	12,240,254		$	13,639,401		$	11,821,612
Less: Average PPP adjustments			1,638,204			1,273,883			—			1,457,091			—
Average loans held for investment, net adjustments, excluding PPP (non-GAAP)		$	12,720,462		$	12,683,828		$	12,240,254		$	12,182,310		$	11,821,612
Mortgage Origination Volume
Refinance Volume		$	145,718		$	163,737		$	62,230		$	377,837		$	102,069
Construction Volume			6,448			12,966			3,915			27,251			4,275
Purchase Volume			130,185			83,248			78,113			277,925			194,445
Total Mortgage loan originations		$	282,351		$	259,951		$	144,258		$	683,013		$	300,789
% of originations that are refinances			51.6	%		63.0	%		43.1	%		55.3	%		33.9	%
Wealth
Assets under management ("AUM")		$	5,455,268		$	5,271,288		$	5,451,796		$	5,455,268		$	5,451,796
Other Data
End of period full-time employees			1,883			1,973			1,946			1,883			1,946
Number of full-service branches			135			149			149			135			149
Number of full automatic transaction machines ("ATMs")			157			169			169			157			169

---

(1) These are non-GAAP financial measures. Net interest income (FTE) and total revenue (FTE), which are used in computing net interest margin (FTE) and operating efficiency ratio (FTE), respectively, 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 common equity is used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes will assist investors in assessing the capital of the Company and its ability to absorb potential losses.
(3) These are non-GAAP financial measures. The Company believes that ROTCE is a meaningful supplement to GAAP financial measures and useful to investors because it measures the performance of a business consistently across time without regard to whether components of the business were acquired or developed internally.
(4) These are non-GAAP financial measures. Operating measures exclude merger and rebranding-related costs unrelated to the Company’s normal operations. The Company believes these measures are useful to investors as they exclude certain costs resulting from acquisition activity and allow investors to more clearly see the combined economic results of the organization’s operations.
(5) All ratios at September 30, 2020 are estimates and subject to change pending the Company’s filing of its FR Y9C. All other periods are presented as filed.
(6) Amounts are not directly comparable due to the Company’s adoption of CECL on January 1, 2020. Prior to January 1, 2020, nonaccrual and past due loan information excluded PCI-related loan balances. These balances also reflect the impact of the CARES Act and March 22 Joint Guidance, which provides relief for TDR designations and also provides guidance on past due reporting for modified loans.
(7) The operating efficiency ratio (FTE) excludes the amortization of intangible assets and merger-related 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 measure is useful to investors as it excludes certain costs resulting from acquisition activity allowing for greater comparability with others in the industry and allowing investors to more clearly see the combined economic results of the organization’s operations.
(8) This is a non-GAAP financial measure. Pre-tax pre-provision earnings excludes the provision for credit losses, which can fluctuate significantly from period-to-period under the recently adopted CECL methodology, merger and rebranding-related costs unrelated to the Company’s normal operations, and income tax expense. The Company believes this measure is useful to investors as it excludes certain costs resulting from acquisition activity as well as the potentially volatile provision measure, and allows for greater comparability with others in the industry and for investors to more clearly see the combined economic results of the organization’s operations.
(9) These are non-GAAP financial measures. PPP adjustment impact excludes the SBA guaranteed loans funded during the first half of 2020. 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 an 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.


ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)

	September 30,			June 30,			December 31,			September 30,
	2020			2020			2019			2019
ASSETS		(unaudited)			(unaudited)			(audited)			(unaudited)
Cash and cash equivalents:
Cash and due from banks	$	178,563		$	202,947		$	163,050		$	218,584
Interest-bearing deposits in other banks		335,111			636,211			234,810			370,673
Federal funds sold		7,292			2,862			38,172			2,663
Total cash and cash equivalents		520,966			842,020			436,032			591,920
Securities available for sale, at fair value		2,443,340			2,019,164			1,945,445			1,918,859
Securities held to maturity, at carrying value		546,661			547,561			555,144			556,579
Restricted stock, at cost		112,216			105,832			130,848			132,310
Loans held for sale, at fair value		52,607			55,067			55,405			72,208
Loans held for investment, net of deferred fees and costs		14,383,215			14,308,646			12,610,936			12,306,997
Less allowance for loan and lease losses		174,122			169,977			42,294			43,820
Total loans held for investment, net		14,209,093			14,138,669			12,568,642			12,263,177
Premises and equipment, net		156,934			164,321			161,073			168,122
Goodwill		935,560			935,560			935,560			929,815
Amortizable intangibles, net		61,068			65,105			73,669			78,241
Bank owned life insurance		325,538			327,075			322,917			320,779
Other assets		566,667			551,943			378,255			409,025
Total assets	$	19,930,650		$	19,752,317		$	17,562,990		$	17,441,035
LIABILITIES
Noninterest-bearing demand deposits	$	4,420,665		$	4,345,960		$	2,970,139		$	3,155,174
Interest-bearing deposits		11,155,433			11,259,179			10,334,842			9,889,538
Total deposits		15,576,098			15,605,139			13,304,981			13,044,712
Securities sold under agreements to repurchase		91,086			77,216			66,053			67,260
Other short-term borrowings		175,200			—			370,200			344,600
Long-term borrowings		1,048,036			1,047,814			1,077,495			1,137,321
Other liabilities		379,345			403,922			231,159			322,111
Total liabilities		17,269,765			17,134,091			15,049,888			14,916,004
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $10.00 par value		173			173			—			—
Common stock, $1.33 par value		104,141			104,126			105,827			107,330
Additional paid-in capital		1,914,640			1,911,985			1,790,305			1,831,667
Retained earnings		579,269			540,638			581,395			545,665
Accumulated other comprehensive income (loss)		62,662			61,304			35,575			40,369
Total stockholders' equity		2,660,885			2,618,226			2,513,102			2,525,031
Total liabilities and stockholders' equity	$	19,930,650		$	19,752,317		$	17,562,990		$	17,441,035
Common shares outstanding		78,718,850			78,713,056			80,001,185			81,147,896
Common shares authorized		200,000,000			200,000,000			200,000,000			200,000,000
Preferred shares outstanding		17,250			17,250			-			-
Preferred shares authorized		500,000			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										Nine Months Ended
	September 30,			June 30,				September 30,			September 30,			September 30,
	2020			2020				2019			2020			2019
	(Unaudited)			(Unaudited)				(Unaudited)			(Unaudited)			(Unaudited)
Interest and dividend income:
Interest and fees on loans	$	138,402		$	143,234			$	156,651		$	432,763		$	459,603
Interest on deposits in other banks		137			155				1,030			1,154			2,047
Interest and dividends on securities:
Taxable		10,275			11,267				12,625			33,170			39,059
Nontaxable		8,600			8,211				8,039			24,520			24,413
Total interest and dividend income		157,414			162,867				178,345			491,607			525,122
Interest expense:
Interest on deposits		15,568			19,861				30,849			63,943			84,088
Interest on short-term borrowings		72			186				2,200			1,598			14,313
Interest on long-term borrowings		4,393			5,515				8,695			16,372			23,978
Total interest expense		20,033			25,562				41,744			81,913			122,379
Net interest income		137,381			137,305				136,601			409,694			402,743
Provision for credit losses		6,558			34,200				9,100			100,954			18,192
Net interest income after provision for credit losses		130,823			103,105				127,501			308,740			384,551
Noninterest income:
Service charges on deposit accounts		6,041			4,930				7,675			18,549			22,331
Other service charges, commissions and fees		1,621			1,354				1,513			4,600			4,879
Interchange fees		1,979			1,697				2,108			5,300			12,765
Fiduciary and asset management fees		6,045			5,515				6,082			17,543			16,834
Mortgage banking income		8,897			5,826				3,374			16,744			7,614
Gains on securities transactions		18			10,339				7,104			12,293			7,306
Bank owned life insurance income		3,421			2,027				2,062			7,498			6,191
Loan-related interest rate swap fees		3,170			5,484				5,480			12,602			10,656
Other operating income		3,215			(1,240	)			12,708			4,116			15,045
Total noninterest income		34,407			35,932				48,106			99,245			103,621
Noninterest expenses:
Salaries and benefits		49,000			49,896				49,718			149,013			148,116
Occupancy expenses		7,441			7,224				7,493			21,798			22,427
Furniture and equipment expenses		3,895			3,406				3,719			11,042			10,656
Printing, postage, and supplies		904			999				1,268			3,194			3,763
Technology and data processing		6,564			6,454				5,787			19,187			17,203
Professional services		2,914			2,989				2,681			9,211			8,269
Marketing and advertising expense		2,631			2,043				2,600			7,413			7,891
FDIC assessment premiums and other insurance		1,811			2,907				381			7,578			5,620
Other taxes		4,124			4,120				3,971			12,364			11,779
Loan-related expenses		2,314			2,501				2,566			7,512			7,250
OREO and credit-related expenses		413			411				1,005			1,512			3,162
Amortization of intangible assets		4,053			4,223				4,764			12,676			13,919
Training and other personnel costs		746			876				1,618			3,192			4,240
Merger-related costs		—			—				2,435			—			26,928
Rebranding expense		—			—				1,133			—			5,553
Loss on debt extinguishment		—			10,306				16,397			10,306			16,397
Other expenses		6,412			4,459				4,151			15,683			10,849
Total noninterest expenses		93,222			102,814				111,687			291,681			324,022
Income from continuing operations before income taxes		72,008			36,223				63,920			116,304			164,150
Income tax expense		11,008			5,514				10,724			17,506			26,330
Income from continuing operations	$	61,000		$	30,709			$	53,196		$	98,798		$	137,820
Discontinued operations:
Income (loss) from operations of discontinued mortgage segment	$	—		$	—			$	56		$	—		$	(173	)
Income tax expense (benefit)		—			—				14			—			(45	)
Income (loss) on discontinued operations		—			—				42			—			(128	)
Net income		61,000			30,709				53,238			98,798			137,692
Dividends on preferred stock		2,691			-				-			2,691			-
Net income available to common shareholders	$	58,309		$	30,709			$	53,238		$	96,107		$	137,692
Basic earnings per common share	$	0.74		$	0.39			$	0.65		$	1.22		$	1.72
Diluted earnings per common share	$	0.74		$	0.39			$	0.65		$	1.22		$	1.72

AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)

	For the Quarter Ended
	September 30, 2020										June 30, 2020
	Average Balance				Interest Income / Expense (1)			Yield / Rate (1)(2)			Average Balance				Interest Income / Expense (1)			Yield / Rate (1)(2)
	(unaudited)											(unaudited)
Assets:
Securities:
Taxable	$	1,738,033			$	10,275		2.35	%		$	1,626,426			$	11,267		2.79	%
Tax-exempt		1,153,177				10,886		3.76	%			1,022,541				10,394		4.09	%
Total securities		2,891,210				21,161		2.91	%			2,648,967				21,661		3.29	%
Loans, net (3) (4)		14,358,666				138,635		3.84	%			13,957,711				143,339		4.13	%
Other earning assets		498,276				519		0.41	%			499,454				672		0.54	%
Total earning assets		17,748,152			$	160,315		3.59	%			17,106,132			$	165,672		3.90	%
Allowance for credit losses		(174,171	)									(150,868	)
Total non-earning assets		2,211,186										2,201,974
Total assets	$	19,785,167									$	19,157,238
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
Transaction and money market accounts	$	7,834,317			$	4,684		0.24	%		$	7,474,210			$	7,303		0.39	%
Regular savings		845,936				128		0.06	%			799,890				123		0.06	%
Time deposits (5)		2,579,991				10,756		1.66	%			2,667,268				12,435		1.88	%
Total interest-bearing deposits		11,260,244				15,568		0.55	%			10,941,368				19,861		0.73	%
Other borrowings (6)		1,183,839				4,465		1.50	%			1,344,994				5,701		1.70	%
Total interest-bearing liabilities		12,444,083			$	20,033		0.64	%			12,286,362			$	25,562		0.84	%
Noninterest-bearing liabilities:
Demand deposits		4,320,225										4,019,018
Other liabilities		372,082										361,889
Total liabilities		17,136,390										16,667,269
Stockholders' equity		2,648,777										2,489,969
Total liabilities and stockholders' equity	$	19,785,167									$	19,157,238
Net interest income					$	140,282									$	140,110
Interest rate spread								2.95	%									3.06	%
Cost of funds								0.45	%									0.61	%
Net interest margin								3.14	%									3.29	%

---

⁽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.
⁽⁴⁾ Interest income on loans includes $3.8 million and $6.4 million for the three months ended September 30, 2020 and June 30, 2020, respectively, in accretion of the fair market value adjustments related to acquisitions.
⁽⁵⁾ Interest expense on time deposits includes $26,000 and $34,000 for the three months ended September 30, 2020 and June 30, 2020, respectively, in accretion of the fair market value adjustments related to acquisitions.
⁽⁶⁾ Interest expense on borrowings includes $167,000 and $140,000 for the three months ended September 30, 2020 and June 30, 2020, in amortization of the fair market value adjustments related to acquisitions.

Contact:
Robert M. Gorman - (804) 5237828
Executive Vice President / Chief Financial Officer 

FAQ

What was Atlantic Union's net income for the third quarter of 2020?

Atlantic Union reported a net income of $58.3 million for Q3 2020.

How did Atlantic Union perform in terms of diluted earnings per share in Q3 2020?

The diluted earnings per common share for Atlantic Union in Q3 2020 were $0.74.

What is the total asset size of Atlantic Union as of September 30, 2020?

As of September 30, 2020, Atlantic Union's total assets were approximately $19.9 billion.

How many PPP loans did Atlantic Union process in 2020?

Atlantic Union processed over 11,000 PPP loans totaling $1.7 billion.

What is the Common equity Tier 1 capital ratio for Atlantic Union as of September 30, 2020?

The Common equity Tier 1 capital ratio for Atlantic Union was 10.04% as of September 30, 2020.