UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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For the Quarterly Period Ended | |
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OR | |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
(Address of principal executive offices) (Zip Code)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
| Trading symbol(s) |
| Name of each exchange on which registered |
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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.
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).
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.
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☒ | 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).
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| Yes |
The number of shares of common stock outstanding as of July 29, 2020 was
ATLANTIC UNION BANKSHARES CORPORATION
FORM 10-Q
INDEX
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ITEM |
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| PAGE |
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| | Consolidated Balance Sheets as of June 30, 2020 (unaudited) and December 31, 2019 (audited) | | 2 |
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| | | 4 | |
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| | | 5 | |
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| | Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2020 and 2019 | | 7 |
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| | | 9 | |
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| | Review Report of Independent Registered Public Accounting Firm | | 58 |
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| Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 59 | |
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| | 91 | ||
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| | 93 | ||
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| | 94 | ||
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| | 94 | ||
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| | 96 | ||
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| | 97 | ||
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| | | 98 |
Glossary of Acronyms and Defined Terms
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2019 Form 10-K | – | Annual Report on Form 10-K for the year ended December 31, 2019 |
Access | – | Access National Corporation and its subsidiaries |
ACL | – | Allowance for credit losses |
AFS | – | Available for sale |
ALCO | – | Asset Liability Committee |
ALLL | – | Allowance for loan and lease losses, a component of ACL |
AOCI | – | Accumulated other comprehensive income (loss) |
ASC | – | Accounting Standards Codification |
ASC 326 | – | ASU 2016-13, Financial Instruments and Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
ASC 820 | – | ASC 820, Fair Value Measurements and Disclosures |
ASC 842 | – | ASU 2016-02, Leases (Topic 842) |
ASU | – | Accounting Standards Update |
ATM | – | Automated teller machine |
the Bank | – | Atlantic Union Bank (formerly, Union Bank & Trust) |
BOLI | – | Bank-owned life insurance |
bps | – | Basis points |
BSA | – | Bank Secrecy Act |
CARES Act | – | Coronavirus Aid, Relief, and Economic Security Act |
CCPs | – | Central Counterparty Clearinghouses |
CECL | – | Current expected credit losses |
CME | – | Chicago Mercantile Exchange |
the Company | – | Atlantic Union Bankshares Corporation (formerly, Union Bankshares Corporation) and its subsidiaries |
COVID-19 | – | Novel strain of coronavirus first identified in December 2019 in Wuhan, China |
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) |
Dodd-Frank Act | – | Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 |
EPS | – | Earnings per share |
Exchange Act | – | Securities Exchange Act of 1934, as amended |
FASB | – | Financial Accounting Standards Board |
FCMs | – | Futures Commission Merchants |
FDIC | – | Federal Deposit Insurance Corporation |
Federal Reserve | – | Board of Governors of the Federal Reserve System |
Federal Reserve Act | – | Federal Reserve Act of 1913, as amended |
Federal Reserve Bank | – | Federal Reserve Bank of Richmond |
FHLB | – | Federal Home Loan Bank of Atlanta |
FOMC | – | Federal Open Markets Committee |
FTE | – | Fully taxable equivalent |
GAAP or U.S. GAAP | – | Accounting principles generally accepted in the United States |
HTM | – | Held to maturity |
IDC | – | Interactive Data Corporation |
LCH | – | London Clearing House |
LIBOR | – | London Interbank Offered Rate |
March 22 Joint Guidance | – | The five federal bank regulatory agencies and the Conference of State Bank Supervisors guidance |
MSLP | – | Main Street Lending Program |
MBS | – | Mortgage Backed Securities |
MD&A | – | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
NOW | – | Negotiable order of withdrawal |
NPA | – | Nonperforming assets |
NSF | – | Nonsufficient funds |
OCI | – | Other comprehensive income |
OREO | – | Other real estate owned |
OTTI | – | Other than temporary impairment |
PCD | – | Purchased credit deteriorated |
PCI | – | Purchased credit impaired |
PD/LGD | – | Probability of default/loss given default |
PPPLF | – | Paycheck Protection Program Liquidity Facility |
PPP | – | Paycheck Protection Program |
Quarterly Report | – | Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 |
ROA | – | Return on average assets |
ROE | – | Return on average common equity |
ROTCE | – | Return on average tangible common equity |
ROU Asset | – | Right of Use Asset |
RUC | – | Reserve for unfunded commitments |
RVI | – | Residual value insurance |
SBA | – | Small Business Administration |
SEC | – | Securities and Exchange Commission |
Series A preferred stock | – | 6.875% Perpetual Non-Cumulative Preferred Stock, Series A, par value $10.00 per share |
SSFA | – | Simplified supervisory formula approach |
TDR | – | Troubled debt restructuring |
Topic 606 | – | ASU No. 2014-09, “Revenue from Contracts with Customers: Topic 606” |
TFSB | – | The Federal Savings Bank |
UMG | – | Union Mortgage Group, Inc. |
WHO | – | World Health Organization |
Xenith | – | Xenith Bankshares, Inc. |
PART I – FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
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| June 30, | | December 31, | ||
| 2020 |
| 2019 | ||
ASSETS | | (unaudited) | | | (audited) |
Cash and cash equivalents: | | | | | |
Cash and due from banks | $ | | | $ | |
Interest-bearing deposits in other banks | | | | | |
Federal funds sold | | | | | |
Total cash and cash equivalents | | | | | |
Securities available for sale, at fair value | | | | | |
Securities held to maturity, at carrying value | | | | | |
Restricted stock, at cost | | | | | |
Loans held for sale, at fair value | | | | | |
Loans held for investment, net of deferred fees and costs | | | | | |
Less allowance for loan and lease losses | | | | | |
Total loans held for investment, net | | | | | |
Premises and equipment, net | | | | | |
Goodwill | | | | | |
Amortizable intangibles, net | | | | | |
Bank owned life insurance | | | | | |
Other assets | | | | | |
Total assets | $ | | | $ | |
LIABILITIES | | | | | |
Noninterest-bearing demand deposits | $ | | | $ | |
Interest-bearing deposits | | | | | |
Total deposits | | | | | |
Securities sold under agreements to repurchase | | | | | |
Other short-term borrowings | | | | | |
Long-term borrowings | | | | | |
Other liabilities | | | | | |
Total liabilities | | | | | |
Commitments and contingencies (Note 8) | | | | | |
STOCKHOLDERS' EQUITY | | | | | |
Preferred stock, $ | | | | | |
Common stock, $ | | | | | |
Additional paid-in capital | | | | | |
Retained earnings | | | | | |
Accumulated other comprehensive income (loss) | | | | | |
Total stockholders' equity | | | | | |
Total liabilities and stockholders' equity | $ | | | $ | |
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Common shares outstanding | | | | | |
Common shares authorized | | | | | |
Preferred shares outstanding | | | | | |
Preferred shares authorized | | | | | |
See accompanying notes to consolidated financial statements.
-2-
ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share and per share data)
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| Three Months Ended | | Six Months Ended | ||||||||
| June 30, | | June 30, | | June 30, | | June 30, | ||||
| 2020 |
| 2019 |
| 2020 |
| 2019 | ||||
| (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | ||||
Interest and dividend income: | | | | | | | | | | | |
Interest and fees on loans | $ | | | $ | | | $ | | | $ | |
Interest on deposits in other banks | | | | | | | | | | | |
Interest and dividends on securities: | | | | | | | | | | | |
Taxable | | | | | | | | | | | |
Nontaxable | | | | | | | | | | | |
Total interest and dividend income | | | | | | | | | | | |
Interest expense: | | | | | | | | | | | |
Interest on deposits | | | | | | | | | | | |
Interest on short-term borrowings | | | | | | | | | | | |
Interest on long-term borrowings | | | | | | | | | | | |
Total interest expense | | | | | | | | | | | |
Net interest income | | | | | | | | | | | |
Provision for credit losses | | | | | | | | | | | |
Net interest income after provision for credit losses | | | | | | | | | | | |
Noninterest income: | | | | | | | | | | | |
Service charges on deposit accounts | | | | | | | | | | | |
Other service charges, commissions and fees | | | | | | | | | | | |
Interchange fees | | | | | | | | | | | |
Fiduciary and asset management fees | | | | | | | | | | | |
Mortgage banking income | | | | | | | | | | | |
Gains on securities transactions | | | | | | | | | | | |
Bank owned life insurance income | | | | | | | | | | | |
Loan-related interest rate swap fees | | | | | | | | | | | |
Other operating income | | ( | | | | | | | | | |
Total noninterest income | | | | | | | | | | | |
Noninterest expenses: | | | | | | | | | | | |
Salaries and benefits | | | | | | | | | | | |
Occupancy expenses | | | | | | | | | | | |
Furniture and equipment expenses | | | | | | | | | | | |
Printing, postage, and supplies | | | | | | | | | | | |
Technology and data processing | | | | | | | | | | | |
Professional services | | | | | | | | | | | |
Marketing and advertising expense | | | | | | | | | | | |
FDIC assessment premiums and other insurance | | | | | | | | | | | |
Other taxes | | | | | | | | | | | |
Loan-related expenses | | | | | | | | | | | |
OREO and credit-related expenses | | | | | | | | | | | |
Amortization of intangible assets | | | | | | | | | | | |
Training and other personnel costs | | | | | | | | | | | |
Merger-related costs | | | | | | | | | | | |
Rebranding expense | | | | | | | | | | | |
Loss on debt extinguishment | | | | | — | | | | | | — |
Other expenses | | | | | | | | | | | |
Total noninterest expenses | | | | | | | | | | | |
Income from continuing operations before income taxes | | | | | | | | |