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 September 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.)

4300 Cox Road

Glen Allen, Virginia 23060

(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 October 26, 2023 was 75,016,179.

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
ALCO	–	Asset liability management committee
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
CME SOFR	–	Chicago Mercantile Exchange Secured Overnight Financing Rate
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
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
FRB	–	Federal Reserve Bank of Richmond
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
FTE	–	Fully taxable equivalent
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.

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2023 AND DECEMBER 31, 2022

(Dollars in thousands, except share data)


	September 30,		December 31,
	2023		2022
ASSETS		(unaudited)		(audited)
Cash and cash equivalents:
Cash and due from banks	$	233,526	$	216,384
Interest-bearing deposits in other banks		159,718		102,107
Federal funds sold		5,701		1,457
Total cash and cash equivalents		398,945		319,948
Securities available for sale, at fair value		2,084,928		2,741,816
Securities held to maturity, at carrying value		843,269		847,732
Restricted stock, at cost		104,785		120,213
Loans held for sale		6,608		3,936
Loans held for investment, net of deferred fees and costs		15,283,620		14,449,142
Less: allowance for loan and lease losses		125,627		110,768
Total loans held for investment, net		15,157,993		14,338,374
Premises and equipment, net		94,510		118,243
Goodwill		925,211		925,211
Amortizable intangibles, net		21,277		26,761
Bank owned life insurance		449,452		440,656
Other assets		649,258		578,248
Total assets	$	20,736,236	$	20,461,138
LIABILITIES
Noninterest-bearing demand deposits	$	4,144,949	$	4,883,239
Interest-bearing deposits		12,641,556		11,048,438
Total deposits		16,786,505		15,931,677
Securities sold under agreements to repurchase		134,936		142,837
Other short-term borrowings		495,000		1,176,000
Long-term borrowings		390,733		389,863
Other liabilities		540,261		448,024
Total liabilities		18,347,435		18,088,401
Commitments and contingencies (Note 7)
STOCKHOLDERS' EQUITY
Preferred stock, $10.00 par value		173		173
Common stock, $1.33 par value		99,120		98,873
Additional paid-in capital		1,779,281		1,772,440
Retained earnings		988,133		919,537
Accumulated other comprehensive loss		(477,906)		(418,286)
Total stockholders' equity		2,388,801		2,372,737
Total liabilities and stockholders' equity	$	20,736,236	$	20,461,138

Common shares outstanding		74,997,132		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 NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

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


	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2023		2022		2023		2022
Interest and dividend income:
Interest and fees on loans	$	221,380	$	144,673	$	616,544	$	382,139
Interest on deposits in other banks		1,309		941		3,815		1,229
Interest and dividends on securities:
Taxable		16,055		14,750		48,373		43,110
Nontaxable		8,415		10,792		26,220		31,889
Total interest and dividend income		247,159		171,156		694,952		458,367
Interest expense:
Interest on deposits		83,590		15,386		200,690		25,966
Interest on short-term borrowings		6,499		1,229		22,106		1,805
Interest on long-term borrowings		5,129		3,826		14,687		10,183
Total interest expense		95,218		20,441		237,483		37,954
Net interest income		151,941		150,715		457,469		420,413
Provision for credit losses		4,991		6,412		22,911		12,771
Net interest income after provision for credit losses		146,950		144,303		434,558		407,642
Noninterest income:
Service charges on deposit accounts		8,557		6,784		24,577		22,421
Other service charges, commissions and fees		2,632		1,770		6,071		5,134
Interchange fees		2,314		2,461		7,098		6,539
Fiduciary and asset management fees		4,549		4,134		13,169		18,329
Mortgage banking income		666		1,390		1,969		6,707
Loss on sale of securities		(27,594)		—		(40,992)		(2)
Bank owned life insurance income		2,973		3,445		8,671		8,858
Loan-related interest rate swap fees		2,695		2,050		6,450		8,510
Other operating income		30,302		3,550		33,905		17,527
Total noninterest income		27,094		25,584		60,918		94,023
Noninterest expenses:
Salaries and benefits		57,449		56,600		179,996		170,203
Occupancy expenses		6,053		6,408		18,503		19,685
Furniture and equipment expenses		3,449		3,673		10,765		10,860
Technology and data processing		7,923		8,273		24,631		23,930
Professional services		3,291		3,504		11,138		12,274
Marketing and advertising expense		2,219		2,343		7,387		7,008
FDIC assessment premiums and other insurance		4,258		3,094		12,231		8,344
Franchise and other taxes		4,510		4,507		13,508		13,506
Loan-related expenses		1,388		1,575		4,560		5,218
Amortization of intangible assets		2,193		2,480		6,687		8,434
Other expenses		15,775		7,466		33,036		24,550
Total noninterest expenses		108,508		99,923		322,442		304,012
Income before income taxes		65,536		69,964		173,034		197,653
Income tax expense		11,519		11,894		28,123		33,667
Net income		54,017		58,070		144,911		163,986
Dividends on preferred stock		2,967		2,967		8,901		8,901
Net income available to common shareholders	$	51,050	$	55,103	$	136,010	$	155,085

Basic earnings per common share	$	0.68	$	0.74	$	1.81	$	2.07
Diluted earnings per common share	$	0.68	$	0.74	$	1.81	$	2.07
Dividends declared per common share	$	0.30	$	0.30	$	0.90	$	0.86
Basic weighted average number of common shares outstanding		74,999,128		74,703,699		74,942,851		75,029,000
Diluted weighted average number of common shares outstanding		74,999,128		74,705,054		74,943,999		75,034,084

See accompanying notes to consolidated financial statements.

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Table of Contents

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Dollars in thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net income	$	54,017	$	58,070	$	144,911	$	163,986
Other comprehensive (loss) income:
Cash flow hedges:
Change in fair value of cash flow hedges (net of tax, $2,547 and $6,417 for the three months and $3,241 and $15,691 for the nine months ended September 30, 2023 and 2022, respectively)		(9,581)		(24,142)		(12,192)		(59,027)
AFS securities:
Unrealized holding losses arising during period (net of tax, $21,051 and $32,388 for the three months and $21,178 and $112,226 for the nine months ended September 30, 2023 and 2022, respectively)		(79,193)		(121,841)		(79,669)		(422,183)
Reclassification adjustment for losses included in net income (net of tax, $5,795 and $0 for the three months and $8,609 and $0 for the nine months ended September 30, 2023 and 2022, respectively) ⁽¹⁾		21,799		—		32,383		2
HTM securities:
Reclassification adjustment for accretion of unrealized gain on AFS securities transferred to HTM (net of tax) ⁽²⁾		(2)		(4)		(7)		(14)
Bank owned life insurance:
Unrealized holding gains arising during the period		—		—		10		—
Reclassification adjustment for (gains) losses included in net income ⁽³⁾		(62)		151		(145)		468
Other comprehensive (loss) income:		(67,039)		(145,836)		(59,620)		(480,754)
Comprehensive (loss) income	$	(13,022)	$	(87,766)	$	85,291	$	(316,768)

⁽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)

NINE MONTHS ENDED SEPTEMBER 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)


ITEM		PAGE

	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements

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

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

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

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

	Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2023 and 2022	7

	Notes to Consolidated Financial Statements (unaudited)	9

	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	86

Item 4.	Controls and Procedures	88

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	89

Item 1A.	Risk Factors	89

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	90

Item 5.	Other Information	90

Item 6.	Exhibits	91

	Signatures	92

merger	–	Proposed merger of American National Bankshares Inc. with and into Atlantic Union Bankshares Corporation pursuant to the merger agreement
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.