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, 2021

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 NASDAQ Global Select Market
Depositary Shares, Each Representing a 1/400^th Interest in a Share of 6.875% Perpetual Non-Cumulative Preferred Stock, Series A	AUBAP	The NASDAQ Global Select Market

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 28, 2021 was 75,653,113.

Table of Contents

Glossary of Acronyms and Defined Terms


2020 Form 10-K	–	Annual Report on Form 10-K for the year ended December 31, 2020
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
ASU	–	Accounting Standards Update
ATM	–	Automated teller machine
AUB	–	Atlantic Union Bankshares Corporation
AUBAP	–	Atlantic Union Bankshares Corporation trading symbol
the Bank	–	Atlantic Union Bank (formerly, Union Bank & Trust)
BOLI	–	Bank-owned life insurance
bps	–	Basis points
CAA	–	Consolidated Appropriations Act, 2021
CARES Act	–	Coronavirus Aid, Relief, and Economic Security Act
CECL	–	Current expected credit losses
the Company	–	Atlantic Union Bankshares Corporation (formerly, Union Bankshares Corporation) and its subsidiaries
COVID-19	–	COVID-19 global pandemic
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
FCMs	–	Futures Commission Merchants
FDIC	–	Federal Deposit Insurance Corporation
Federal Reserve	–	Board of Governors of the Federal Reserve System
Federal Reserve Bank or FRB	–	Federal Reserve Bank of Richmond
FHLB	–	Federal Home Loan Bank of Atlanta
FHLMC	–	Federal Home Loan Mortgage Corporation
FNMA	–	Federal National Mortgage Association
FOMC	–	Federal Open Markets Committee
FTE	–	Fully taxable equivalent
GAAP or U.S. GAAP	–	Accounting principles generally accepted in the United States
GNMA	–	Government National Mortgage Association
HTM	–	Held to maturity
ICE Data Services	–	Intercontinental Exchange Data Services
the Joint Guidance	–	The five federal bank regulatory agencies and the Conference of State Bank Supervisors guidance issued on March 22, 2020 (subsequently revised on April 7, 2020)
LHFI	–	Loans held for investment
LHFS	–	Loans held for sale
LIBOR	–	London Interbank Offered Rate

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)


	September 30,		December 31,
	2021		2020
ASSETS		(unaudited)		(audited)
Cash and cash equivalents:
Cash and due from banks	$	255,648	$	172,307
Interest-bearing deposits in other banks		807,225		318,974
Federal funds sold		377		2,013
Total cash and cash equivalents		1,063,250		493,294
Securities available for sale, at fair value		3,195,176		2,540,419
Securities held to maturity, at carrying value		535,722		544,851
Restricted stock, at cost		76,825		94,782
Loans held for sale, at fair value		35,417		96,742
Loans held for investment, net of deferred fees and costs		13,139,586		14,021,314
Less allowance for loan and lease losses		101,798		160,540
Total loans held for investment, net		13,037,788		13,860,774
Premises and equipment, net		159,588		163,829
Goodwill		935,560		935,560
Amortizable intangibles, net		46,537		57,185
Bank owned life insurance		430,341		326,892
Other assets		419,453		514,121
Total assets	$	19,935,657	$	19,628,449
LIABILITIES
Noninterest-bearing demand deposits	$	5,328,838	$	4,368,703
Interest-bearing deposits		11,293,322		11,354,062
Total deposits		16,622,160		15,722,765
Securities sold under agreements to repurchase		95,181		100,888
Other short-term borrowings		—		250,000
Long-term borrowings		290,584		489,829
Other liabilities		233,293		356,477
Total liabilities		17,241,218		16,919,959
Commitments and contingencies (Note 7)
STOCKHOLDERS' EQUITY
Preferred stock, $10.00 par value		173		173
Common stock, $1.33 par value		100,062		104,169
Additional paid-in capital		1,804,617		1,917,081
Retained earnings		760,164		616,052
Accumulated other comprehensive income (loss)		29,423		71,015
Total stockholders' equity		2,694,439		2,708,490
Total liabilities and stockholders' equity	$	19,935,657	$	19,628,449

Common shares outstanding		75,645,031		78,729,212
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)

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


	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2021		2020		2021		2020
Interest and dividend income:
Interest and fees on loans	$	124,999	$	138,402	$	383,575	$	432,763
Interest on deposits in other banks		291		137		454		1,154
Interest and dividends on securities:
Taxable		11,230		10,275		32,102		33,170
Nontaxable		9,859		8,600		28,773		24,520
Total interest and dividend income		146,379		157,414		444,904		491,607
Interest expense:
Interest on deposits		5,837		15,568		22,203		63,943
Interest on short-term borrowings		22		72		91		1,598
Interest on long-term borrowings		3,032		4,393		9,676		16,372
Total interest expense		8,891		20,033		31,970		81,913
Net interest income		137,488		137,381		412,934		409,694
Provision for credit losses		(18,850)		6,558		(59,888)		100,954
Net interest income after provision for credit losses		156,338		130,823		472,822		308,740
Noninterest income:
Service charges on deposit accounts		7,198		6,041		19,314		18,549
Other service charges, commissions and fees		1,534		1,621		4,970		4,600
Interchange fees		2,203		1,979		6,252		5,300
Fiduciary and asset management fees		7,029		6,045		20,323		17,543
Mortgage banking income		4,818		8,897		17,692		16,744
Gains on securities transactions		9		18		87		12,293
Bank owned life insurance income		2,727		3,421		8,202		7,498
Loan-related interest rate swap fees		1,102		3,170		4,176		12,602
Other operating income		3,318		3,215		8,372		4,116
Total noninterest income		29,938		34,407		89,388		99,245
Noninterest expenses:
Salaries and benefits		53,534		49,000		156,959		149,013
Occupancy expenses		7,251		7,441		21,705		21,798
Furniture and equipment expenses		4,040		3,895		11,919		11,042
Technology and data processing		7,534		6,564		21,657		19,187
Professional services		3,792		2,914		13,161		9,211
Marketing and advertising expense		2,548		2,631		7,330		7,413
FDIC assessment premiums and other insurance		2,172		1,811		6,798		7,578
Other taxes		4,432		4,124		13,303		12,364
Loan-related expenses		1,503		2,314		5,289		7,512
Amortization of intangible assets		3,381		4,053		10,679		12,676
Loss on debt extinguishment		—		—		14,695		10,306
Other expenses		5,156		8,475		15,756		23,581
Total noninterest expenses		95,343		93,222		299,251		291,681
Income from continuing operations before income taxes		90,933		72,008		262,959		116,304
Income tax expense		16,368		11,008		46,821		17,506
Net income		74,565		61,000		216,138		98,798
Dividends on preferred stock		2,967		2,691		8,901		2,691
Net income available to common shareholders	$	71,598	$	58,309	$	207,237	$	96,107

Basic earnings per common share	$	0.94	$	0.74	$	2.66	$	1.22
Diluted earnings per common share	$	0.94	$	0.74	$	2.66	$	1.22
Dividends declared per common share	$	0.28	$	0.25	$	0.81	$	0.75
Basic weighted average number of common shares outstanding		76,309,355		78,714,353		77,988,151		78,904,792
Diluted weighted average number of common shares outstanding		76,322,736		78,725,346		78,007,543		78,921,108

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 (UNAUDITED)

(Dollars in thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Net income	$	74,565	$	61,000	$	216,138	$	98,798
Other comprehensive income (loss):
Cash flow hedges:
Change in fair value of cash flow hedges		(545)		—		634		(699)
Reclassification adjustment for losses (gains) included in net income (net of tax, $0 and $0 for the three months and $12 and $394 for the nine months ended September 30, 2021 and 2020, respectively) ⁽¹⁾		—		—		(47)		1,481
AFS securities:
Unrealized holding gains (losses) arising during period (net of tax, $6,178 and $332 for the three months and $11,311 and $9,824 for the nine months ended September 30, 2021 and 2020, respectively)		(23,242)		1,250		(42,549)		36,956
Reclassification adjustment for gains included in net income (net of tax, $2 and $4 for the three months and $18 and $2,582 for the nine months ended September 30, 2021 and 2020, respectively) ⁽²⁾		(7)		(14)		(69)		(9,711)
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 $4 and $4 for the nine months ended September 30, 2021 and 2020, respectively) ⁽³⁾		(5)		(5)		(15)		(15)
Bank owned life insurance:
Unrealized holding losses arising during the period		—		—		—		(1,289)
Reclassification adjustment for losses included in net income ⁽⁴⁾		150		127		454		364
Other comprehensive income (loss)		(23,649)		1,358		(41,592)		27,087
Comprehensive income	$	50,916	$


ITEM		PAGE

	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020 (audited)	2

	Consolidated Statements of Income (unaudited) for the three and nine months ended September 30, 2021 and 2020	3

	Consolidated Statements of Comprehensive Income (unaudited) for the three and nine months ended September 30, 2021 and 2020	4

	Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three and nine months ended September 30, 2021 and 2020	5

	Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2021 and 2020	7

	Notes to Consolidated Financial Statements (unaudited)	9

	Review 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	88

Item 1A.	Risk Factors	88

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	88

Item 6.	Exhibits	89

	Signatures	90

NOW	–	Negotiable order of withdrawal
NPA	–	Nonperforming assets
OCI	–	Other comprehensive income
OREO	–	Other real estate owned
OTC	–	Over-the-counter
PCD	–	Purchased credit deteriorated
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 September 30, 2021
Repurchase Program	–	The share repurchase program, approved on May 4, 2021 by the Company’s Board of Directors, which authorizes the Company to purchase up to $125 million worth of the Company’s common stock
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”
Topic 740	–	ASU 2019-12, “Income Taxes: Simplifying the Accounting for Income Taxes”
Topic 848	–	ASU 2020-04, “Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting”