Exhibit 99.1

Contact:              Robert M. Gorman - (804) 523‑7828

Executive Vice President / Chief Financial Officer

ATLANTIC UNION BANKSHARES REPORTS THIRD QUARTER RESULTS

Richmond, Va., October 17, 2019 – Atlantic Union Bankshares Corporation (the “Company” or “Atlantic Union”) (Nasdaq: AUB) today reported net income of $53.2 million and earnings per share of $0.65 for its third quarter ended September 30, 2019. Net operating earnings(1) were $56.1 million and operating earnings per share(1) were $0.69  for its third quarter ended September 30, 2019; these operating results exclude $1.9 million in after-tax merger and $895,000 in after-tax rebranding-related costs.

Net income was $137.7 million and earnings per share were $1.72 for the nine months ended September 30, 2019. Net operating earnings(1) were $163.7 million and operating earnings per share(1) were $2.04 for the nine months ended September 30, 2019; these operating results exclude $21.6 million in after-tax merger and $4.4 million in after-tax rebranding-related costs but include after tax losses from discontinued operations of $128,000 and approximately $1.0 million in after-tax expenses related to branch closure costs.

“Atlantic Union delivered solid financial results in the third quarter despite the challenges of the current interest rate environment,” said John C. Asbury, President and Chief Executive Officer for the Company. “As in the first and second quarters of 2019, third quarter results were noisy as we worked toward completing the Access National Bank integration work and our rebranding efforts and took strategic actions that impacted our reported quarterly financial results such as repositioning the balance sheet for lower interest rates.  Nevertheless, the Company continues to perform well and remains committed to deliver on our previously communicated financial performance targets.

 

“October marks my three-year anniversary of having joined the Company and the considerable enthusiasm and optimism I felt walking in the door is now greater still. It has been an exciting transformation we have experienced, and continue to experience. The future looks bright for Atlantic Union as we set out to execute the next phase of our strategic plan.”

 

Select highlights for the third quarter of 2019

(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 2019, net interest income was $136.6 million, a decrease of $2.0 million from the second quarter of 2019. Net interest income (FTE)(1) was $139.4 million in the third quarter of 2019, a decrease of $2.1 million from the second quarter of 2019. The decreases in both net interest income and net interest income (FTE) were primarily driven by $2.7 million lower acquisition accounting accretion income during the three months ended September 30, 2019 compared to the three months ended June 30, 2019. The third quarter net interest margin decreased 14 basis points to 3.57% from 3.71% in the previous quarter, while the net interest margin (FTE)(1) decreased 14 basis points to 3.64% from 3.78% during the same periods. The decreases in the net interest margin and net interest margin (FTE) were principally due to a 19 basis point decrease in the yield on earning assets, partially offset by a 5 basis point decrease in the cost of funds.

The Company’s net interest margin (FTE) includes the impact of acquisition accounting fair value adjustments. During the third quarter of 2019, net accretion related to acquisition accounting decreased $2.7 million from the prior quarter to $5.1 million for the quarter ended September 30, 2019. The second and third quarters of 2019, and the remaining estimated net accretion impact are reflected in the following table (dollars in thousands):

 

 

ASSET QUALITY/LOAN LOSS PROVISION

Overview

During the third quarter of 2019, the Company experienced increases in nonperforming assets (“NPA”) and past due loan levels as a percentage of total loans from the prior quarter.  Net charge-off levels increased from the second quarter of 2019 and were primarily related to the consumer loan portfolio and a construction and land development loan; as a result, and due to loan growth, the provision for loan losses increased from the second quarter of 2019.

All nonaccrual and past due loan metrics discussed below exclude purchased credit impaired (“PCI”) loans totaling $89.7 million  (net of fair value mark of $24.0 million) at September 30, 2019.

 

Nonperforming Assets

At September 30, 2019, NPAs totaled $36.4 million, an increase of $2.4 million, or 7.2%, from June 30, 2019 and an increase of $1.5 million, or 4.3%, from September 30, 2018. The increase in NPAs was primarily driven by the addition

of a construction and land development loan.

 

NPAs as a percentage of total outstanding loans at September 30, 2019 were 0.30%, an increase of 2 basis points from 0.28% at June 30, 2019 and a decline of 7 basis points from 0.37% at September 30, 2018. As the Company’s NPAs have been at or near historic lows over the last several quarters, certain changes from quarter to quarter might stand out in comparison to one another but do not have a significant impact on the Company’s overall asset quality position. 

 

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

 

 

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

 

 

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

 

Past Due Loans

Past due loans still accruing interest totaled $55.1 million or 0.45% of total loans held for investment at September 30, 2019 compared to $43.1 million or 0.35% of total loans held for investment at June 30, 2019, and $46.6 million or 0.49% of total loans held for investment at September 30, 2018.  Subsequent to quarter-end, approximately $12.0 million of the accruing past due loans became current. Of the total past due loans still accruing interest $12.0 million or 0.10% of total loans held for investment were loans past due 90 days or more at September 30, 2019, compared to $8.8 million or 0.07% of total loans held for investment at June 30, 2019, and $9.5 million or 0.10% of total loans held for investment at September 30, 2018. 

Net Charge-offs

For the third quarter of 2019, net charge-offs were $7.7 million or 0.25% of total average loans on an annualized basis, compared to $4.3 million or 0.14%, for the prior quarter, and $3.2 million or 0.13%, for the third quarter of 2018. The majority of net charge-offs in the third quarter of 2019 were related to consumer loans and a construction and land development loan. On a year to date basis, net charge-offs were $16.2 million, or 0.18% of total average loans on an annualized basis.

Provision for Loan Losses

The provision  for loan losses for the third quarter of 2019 was $9.1 million, an increase of $3.2 million compared to the previous quarter and an increase of $6.0 million compared to the third quarter of 2018. The increase in the provision for loan losses from the previous quarter and prior year was primarily due to an increase in net charge-offs and loan growth.

Allowance for Loan Losses (“ALL”)

The ALL increased $1.4 million from June 30, 2019 to $43.8 million at September 30, 2019, primarily due to loan growth during the quarter. The ALL as a percentage of the total loan portfolio was  0.36% at September 30, 2019, 0.35% at June 30, 2019, and 0.44% at September 30, 2018.  

The ratio of the ALL to nonaccrual loans was 145.9% at September 30, 2019, compared to 154.6% at June 30, 2019 and 146.9% at September 30, 2018.  The current level of the allowance for loan losses reflects specific reserves related to nonperforming loans, current risk ratings on loans, net charge-off activity, loan growth, delinquency trends, and other credit risk factors that the Company considers important in assessing the adequacy of the allowance for loan losses.

NONINTEREST INCOME

Noninterest income increased $17.5 million to $48.1 million for the quarter ended September 30, 2019 from $30.6 million in the prior quarter primarily driven by approximately $9.3 million in life insurance proceeds received during the quarter related to a Xenith-acquired loan that had been charged off prior to the Company’s acquisition of Xenith and a gain on sale of investment securities of approximately $7.1 million recorded during the quarter. In addition, loan related interest rate swap income increased $1.8 million and mortgage banking income increased approximately $600,000 from the prior quarter.  Partially offsetting these increases was a decline of $3.5 million in net interchange income primarily due to reduced debit card interchange transaction fees as a result of the Durbin Amendment which was effective for the Company on July 1, 2019.

NONINTEREST EXPENSE

Noninterest expense increased $6.1 million to $111.7 million for the quarter ended September 30, 2019 from $105.6 million in the prior quarter. Excluding merger-related costs, amortization of intangible assets, and rebranding-related costs, operating noninterest expense(1) increased $13.1 million, or 14.5%, in the third quarter of 2019, to $103.4 million when compared to the second quarter of 2019. The increase in operating noninterest expense was primarily due to the recognition of approximately $16.4 million loss on debt extinguishment resulting from the repayment of approximately $140.0 million in FHLB advances and the termination of the related cash flow hedges.  In addition, third quarter operating noninterest expense included approximately $309,000 in OREO valuation adjustments driven by updated appraisals received during the quarter, $275,000 in recruiting costs related to the new equipment finance division, $1.0 million in support of a community development initiative as well as an FDIC small bank assessment expense credit of approximately $2.4 million as the deposit insurance fund reserve ratio exceeded 1.38% in the second quarter.

(1) For a reconciliation of this non-GAAP financial measure, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results

 

 

INCOME TAXES

The effective tax rate for the three months ended September 30, 2019 was 16.8% compared to 16.0% for the three months ended June 30, 2019. The increase in the effective tax rate as compared to the previous quarter was  primarily due to the lower proportion of tax-exempt income to pre-tax income.  

BALANCE SHEET

At September 30, 2019, total assets were $17.4 billion, an increase of $281.7 million, or approximately 6.6% (annualized), from June 30, 2019, primarily due to higher cash and cash equivalent balances and loan growth during the third quarter of 2019.

At September 30, 2019, loans held for investment (net of deferred fees and costs) were $12.3 billion, an increase of $86.5 million, or 2.8% (annualized), from June 30, 2019, while average loans increased $155.3 million, or 5.1% (annualized), from the prior quarter.

 

At September 30, 2019, total deposits were $13.0 billion, an increase of $529.2 million, or approximately 16.9% (annualized), from June 30, 2019, while average deposits increased $358.5 million, or 11.5% (annualized), from prior quarter. 

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

 

During the third quarter of 2019, the Company declared and paid cash dividends of $0.25 per common share, an increase of $0.02, or 8.7%, compared to both the second quarter of 2019 and third quarter of 2018. On July 10, 2019, the Company announced that its Board of Directors has authorized a share repurchase program to purchase up to $150 million of the Company’s common stock through June 30, 2021 in open market transactions or privately negotiated transactions. As of September 30, 2019, authority remained to repurchase approximately $115 million of the Company’s common stock.

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 149 branches and approximately 170 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., Dixon, Hubard, Feinour, & Brown, Inc., and Middleburg Investment Services, LLC, which provide investment advisory and/or brokerage services; and Union Insurance Group, LLC, which offers various lines of insurance products.

THIRD QUARTER 2019 EARNINGS RELEASE CONFERENCE CALL

Atlantic Union Bank will hold a conference call on Thursday,  October 17th, 2019 at 9:00 a.m. Eastern Daylight Time during which management will review the third quarter 2019 financial results and provide an update on recent activities. Interested parties may participate in the call toll-free by dialing (877) 668‑4908; international callers wishing to participate may do so by dialing (973) 453‑3058. The conference ID number is 8187156.

NON-GAAP FINANCIAL MEASURES

In reporting the results of the quarter and nine months ended September 30, 2019, the Company has provided supplemental performance measures on a tax-equivalent, tangible, or operating 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 include, without limitation, 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 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:

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 10‑K for the year ended December 31, 2018 and comparable “Risk Factors” sections of the Company’s Quarterly Reports on Form 10‑Q 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)