UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2023

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-39325

ATLANTIC UNION BANKSHARES CORPORATION

(Exact name of registrant as specified in its charter)


Virginia	54-1598552
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1051 East Cary Street

Suite 1200

Richmond, Virginia 23219

(Address of principal executive offices) (Zip Code)

(804) 633-5031

(Registrant’s telephone number, including area code)

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



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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐
		Smaller reporting company	☐
		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. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


	Yes ☐ No ☒

The number of shares of common stock outstanding as of July 28, 2023 was 75,004,706.

Table of Contents

Glossary of Acronyms and Defined Terms

In this Form 10-Q, unless the context suggests otherwise, the terms “we”, “us”, and “our” refer to Atlantic Union Bankshares Corporation and its direct and indirect subsidiaries, including Atlantic Union Bank.


2022 Form 10-K	–	Annual Report on Form 10-K for the year ended December 31, 2022
ACL	–	Allowance for credit losses
AFS	–	Available for sale
ALLL	–	Allowance for loan and lease losses, a component of ACL
American National	–	American National Bankshares Inc.
AOCI	–	Accumulated other comprehensive income (loss)
ASC	–	Accounting Standards Codification
ASU	–	Accounting Standards Update
AUB	–	Atlantic Union Bankshares Corporation
the Bank	–	Atlantic Union Bank
BOLI	–	Bank-owned life insurance
bps	–	Basis points
BTFP	–	Bank Term Funding Program
CECL	–	Current expected credit losses
CFPB	–	Consumer Financial Protection Bureau
the Company	–	Atlantic Union Bankshares Corporation and its subsidiaries
depositary shares	–	Depositary shares, each representing a 1/400th ownership interest in a share of the Company’s Series A preferred stock, with a liquidation preference of $10,000 per share of Series A preferred stock (equivalent to $25 per depositary share)
DHFB	–	Dixon, Hubard, Feinour & Brown, Inc.
EPS	–	Earnings per common share
Exchange Act	–	Securities Exchange Act of 1934, as amended
FASB	–	Financial Accounting Standards Board
FDIC	–	Federal Deposit Insurance Corporation
Federal Reserve	–	Board of Governors of the Federal Reserve System
FRB	–	Federal Reserve Bank of Richmond
FHLB	–	Federal Home Loan Bank of Atlanta
FHLMC	–	Federal Home Loan Mortgage Corporation
FNB	–	FNB Corporation
FNMA	–	Federal National Mortgage Association
FOMC	–	Federal Open Market Committee
FTE	–	Fully taxable equivalent
FR Y9-C	–	Consolidated financial statements for a U.S. bank holding company, a savings and loan holding company, a U.S. intermediate holding company, and a securities holding company
GAAP	–	Accounting principles generally accepted in the United States
GNMA	–	Government National Mortgage Association
HTM	–	Held to maturity
ICE	–	Intercontinental Exchange Data Services
LHFI	–	Loans held for investment
LHFS	–	Loans held for sale
LIBOR	–	London Interbank Offered Rate
MBS	–	Mortgage-Backed Securities
merger agreement	–	Agreement and Plan of Merger dated July 24, 2023 by and between Atlantic Union Bankshares Corporation and American National Bankshares Inc.
merger	–	Proposed merger of American National Bankshares Inc. with and into Atlantic Union Bankshares Corporation pursuant to the merger agreement

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2023 AND DECEMBER 31, 2022

(Dollars in thousands, except share data)


	June 30,		December 31,
	2023		2022
ASSETS		(unaudited)		(audited)
Cash and cash equivalents:
Cash and due from banks	$	199,778	$	216,384
Interest-bearing deposits in other banks		227,015		102,107
Federal funds sold		1,474		1,457
Total cash and cash equivalents		428,267		319,948
Securities available for sale, at fair value		2,182,448		2,741,816
Securities held to maturity, at carrying value		849,610		847,732
Restricted stock, at cost		111,178		120,213
Loans held for sale		10,327		3,936
Loans held for investment, net of deferred fees and costs		15,066,930		14,449,142
Less: allowance for loan and lease losses		120,683		110,768
Total loans held for investment, net		14,946,247		14,338,374
Premises and equipment, net		114,786		118,243
Goodwill		925,211		925,211
Amortizable intangibles, net		23,469		26,761
Bank owned life insurance		446,441		440,656
Other assets		564,348		578,248
Total assets	$	20,602,332	$	20,461,138
LIABILITIES
Noninterest-bearing demand deposits	$	4,310,306	$	4,883,239
Interest-bearing deposits		12,101,681		11,048,438
Total deposits		16,411,987		15,931,677
Securities sold under agreements to repurchase		130,461		142,837
Other short-term borrowings		799,400		1,176,000
Long-term borrowings		390,440		389,863
Other liabilities		445,574		448,024
Total liabilities		18,177,862		18,088,401
Commitments and contingencies (Note 7)
STOCKHOLDERS' EQUITY
Preferred stock, $10.00 par value		173		173
Common stock, $1.33 par value		99,088		98,873
Additional paid-in capital		1,776,494		1,772,440
Retained earnings		959,582		919,537
Accumulated other comprehensive loss		(410,867)		(418,286)
Total stockholders' equity		2,424,470		2,372,737
Total liabilities and stockholders' equity	$	20,602,332	$	20,461,138

Common shares outstanding		74,998,075		74,712,622
Common shares authorized		200,000,000		200,000,000
Preferred shares outstanding		17,250		17,250
Preferred shares authorized		500,000		500,000

See accompanying notes to consolidated financial statements.

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Table of Contents

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(Dollars in thousands, except share and per share data)


	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2023		2022		2023		2022
Interest and dividend income:
Interest and fees on loans	$	205,172	$	123,266	$	395,165	$	237,466
Interest on deposits in other banks		1,014		157		2,507		288
Interest and dividends on securities:
Taxable		15,565		14,695		32,317		28,361
Nontaxable		8,496		10,637		17,804		21,097
Total interest and dividend income		230,247		148,755		447,793		287,212
Interest expense:
Interest on deposits		65,267		6,097		117,100		10,580
Interest on short-term borrowings		8,044		555		15,607		576
Interest on long-term borrowings		4,852		3,336		9,558		6,358
Total interest expense		78,163		9,988		142,265		17,514
Net interest income		152,084		138,767		305,528		269,698
Provision for credit losses		6,069		3,559		17,920		6,359
Net interest income after provision for credit losses		146,015		135,208		287,608		263,339
Noninterest income:
Service charges on deposit accounts		8,118		8,040		16,020		15,637
Other service charges, commissions and fees		1,693		1,709		3,439		3,364
Interchange fees		2,459		2,268		4,784		4,078
Fiduciary and asset management fees		4,359		6,939		8,620		14,194
Mortgage banking income		449		2,200		1,303		5,317
Gain (loss) on sale of securities		2		(2)		(13,398)		(2)
Bank owned life insurance income		2,870		2,716		5,698		5,413
Loan-related interest rate swap fees		2,316		2,600		3,755		6,460
Other operating income		1,931		11,816		3,603		13,978
Total noninterest income		24,197		38,286		33,824		68,439
Noninterest expenses:
Salaries and benefits		62,019		55,305		122,547		113,603
Occupancy expenses		6,094		6,395		12,450		13,278
Furniture and equipment expenses		3,565		3,590		7,317		7,187
Technology and data processing		8,566		7,862		16,708		15,658
Professional services		4,433		4,680		7,847		8,770
Marketing and advertising expense		2,817		2,502		5,168		4,665
FDIC assessment premiums and other insurance		4,074		2,765		7,973		5,250
Franchise and other taxes		4,499		4,500		8,997		8,999
Loan-related expenses		1,619		1,867		3,171		3,643
Amortization of intangible assets		2,216		2,915		4,494		5,954
Other expenses		5,759		6,387		17,262		17,082
Total noninterest expenses		105,661		98,768		213,934		204,089
Income before income taxes		64,551		74,726		107,498		127,689
Income tax expense		9,310		12,500		16,604		21,773
Net income		55,241		62,226		90,894		105,916
Dividends on preferred stock		2,967		2,967		5,934		5,934
Net income available to common shareholders	$	52,274	$	59,259	$	84,960	$	99,982

Basic earnings per common share	$	0.70	$	0.79	$	1.13	$	1.33
Diluted earnings per common share	$	0.70	$	0.79	$	1.13	$	1.33
Dividends declared per common share	$	0.30	$	0.28	$	0.60	$	0.56
Basic weighted average number of common shares outstanding		74,995,450		74,847,899		74,914,247		75,194,347
Diluted weighted average number of common shares outstanding		74,995,557		74,849,871		74,915,977		75,201,326

See accompanying notes to consolidated financial statements.

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Table of Contents

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(Dollars in thousands)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net income	$	55,241	$	62,226	$	90,894	$	105,916
Other comprehensive (loss) income:
Cash flow hedges:
Change in fair value of cash flow hedges (net of tax, $4,340 and $3,076 for the three months and $694 and $9,273 for the six months ended June 30, 2023 and 2022, respectively)		(16,325)		(11,572)		(2,611)		(34,885)
AFS securities:
Unrealized holding losses arising during period (net of tax, $8,651 and $30,137 for the three months and $126 and $79,837 for the six months ended June 30, 2023 and 2022, respectively)		(32,544)		(113,374)		(476)		(300,341)
Reclassification adjustment for (gains) losses included in net income (net of tax, $0 and $0 for the three months and $2,814 and $0 for the six months ended June 30, 2023 and 2022, respectively) ⁽¹⁾		(2)		1		10,584		1
HTM securities:
Reclassification adjustment for accretion of unrealized gain on AFS securities transferred to HTM (net of tax, $1 and $1 for the three months and $2 and $3 for six months ended June 30, 2023 and 2022, respectively) ⁽²⁾		(2)		(5)		(5)		(10)
Bank owned life insurance:
Unrealized holding gains arising during the period		—		—		10		—
Reclassification adjustment for losses included in net income ⁽³⁾		(61)		150		(83)		317
Other comprehensive (loss) income:		(48,934)		(124,800)		7,419		(334,918)
Comprehensive income (loss)	$	6,307	$	(62,574)	$	98,313	$	(229,002)

⁽¹⁾ The gross amounts reclassified into earnings are reported as "Other operating income" on the Company’s Consolidated Statements of Income with the corresponding income tax effect being reflected as a component of income tax expense.

⁽²⁾ The gross amounts reclassified into earnings are reported within interest income on the Company’s Consolidated Statements of Income with the corresponding income tax effect being reflected as a component of income tax expense.

⁽³⁾ Reclassifications in earnings are reported in "Salaries and benefits" expense on the Company’s Consolidated Statements of Income.

See accompanying notes to consolidated financial statements.

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Table of Contents

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(Dollars in thousands, except share and per share amounts)

Accumulated

Additional

Other

Common

Preferred

Paid-In

Retained

Comprehensive

Stock

Capital

Earnings

Income (Loss)

Total

Balance - December 31, 2022

98,873

173

1,772,440

919,537

(418,286)

2,372,737

Net Income

35,653

Other comprehensive income (net of taxes of $14,983)

56,353

Dividends on common stock ($0.30 per share)

(22,417)

Dividends on preferred stock ($171.88 per share)

(2,967)

Issuance of common stock under Equity Compensation Plans, stock issuance for services rendered, and vesting of restricted stock, net of shares held for taxes (149,684 shares)

199

(1,654)

(1,455)

Stock-based compensation expense

2,332

Balance - March 31, 2023

99,072

173

1,773,118

929,806

(361,933)

2,440,236

Net Income

55,241

Other comprehensive loss (net of taxes of $12,992)

(48,934)

Dividends on common stock ($0.30 per share)

(22,498)

Dividends on preferred stock ($171.88 per share)

(2,967)

Issuance of common stock under Equity Compensation Plans, stock issuance for services rendered, and vesting of restricted stock, net of shares held for taxes (11,822 shares)


ITEM		PAGE

	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022 (audited)	2

	Consolidated Statements of Income (unaudited) for the three and six months ended June 30, 2023 and 2022	3

	Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and six months ended June 30, 2023 and 2022	4

	Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the six months ended June 30, 2023 and 2022	5

	Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2023 and 2022	6

	Notes to Consolidated Financial Statements (unaudited)	8

	Report of Independent Registered Public Accounting Firm	52

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	53

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	84

Item 4.	Controls and Procedures	86

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	87

Item 1A.	Risk Factors	87

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	89

Item 5.	Other Information	89

Item 6.	Exhibits	90

	Signatures	91

MFC	–	Middleburg Financial Corporation
NPA	–	Nonperforming assets
NYSE	–	New York Stock Exchange
OCI	–	Other comprehensive (loss) income
PD/LGD	–	Probability of default/loss given default
ROU asset	–	Right of Use Asset
RPAs	–	Risk Participation Agreements
SEC	–	Securities and Exchange Commission
Series A preferred stock	–	6.875% Perpetual Non-Cumulative Preferred Stock, Series A, par value $10.00 per share
SOFR	–	Secured Overnight Financing Rate
TLM	–	Troubled loan modification
TDR	–	Troubled debt restructuring
VFG	–	Virginia Financial Group, Inc.