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 March 31, 2022

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 April 28, 2022 was 75,014,103.

Table of Contents

Glossary of Acronyms and Defined Terms


2021 Form 10-K	–	Annual Report on Form 10-K for the year ended December 31, 2021
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 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
BVAL	–	Bloomberg Valuation Service
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)
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
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	–	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
MBS	–	Mortgage-Backed Securities
NASDAQ	–	National Association of Securities Dealers Automated Quotation exchange
NOW	–	Negotiable order of withdrawal

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2022 AND DECEMBER 31, 2021

(Dollars in thousands, except share data)


	March 31,		December 31,
	2022		2021
ASSETS		(unaudited)		(audited)
Cash and cash equivalents:
Cash and due from banks	$	178,225	$	180,963
Interest-bearing deposits in other banks		213,140		618,714
Federal funds sold		4,938		2,824
Total cash and cash equivalents		396,303		802,501
Securities available for sale, at fair value		3,193,280		3,481,650
Securities held to maturity, at carrying value		756,872		628,000
Restricted stock, at cost		77,033		76,825
Loans held for sale, at fair value		21,227		20,861
Loans held for investment, net of deferred fees and costs		13,459,349		13,195,843
Less: allowance for loan and lease losses		102,591		99,787
Total loans held for investment, net		13,356,758		13,096,056
Premises and equipment, net		130,998		134,808
Goodwill		935,560		935,560
Amortizable intangibles, net		40,273		43,312
Bank owned life insurance		434,012		431,517
Other assets		440,114		413,706
Total assets	$	19,782,430	$	20,064,796
LIABILITIES
Noninterest-bearing demand deposits	$	5,370,063	$	5,207,324
Interest-bearing deposits		11,114,160		11,403,744
Total deposits		16,484,223		16,611,068
Securities sold under agreements to repurchase		115,027		117,870
Long-term borrowings		389,005		388,724
Other liabilities		295,840		237,063
Total liabilities		17,284,095		17,354,725
Commitments and contingencies (Note 7)
STOCKHOLDERS' EQUITY
Preferred stock, $10.00 par value		173		173
Common stock, $1.33 par value		99,651		100,101
Additional paid-in capital		1,786,640		1,807,368
Retained earnings		803,354		783,794
Accumulated other comprehensive income (loss)		(191,483)		18,635
Total stockholders' equity		2,498,335		2,710,071
Total liabilities and stockholders' equity	$	19,782,430	$	20,064,796

Common shares outstanding		75,335,956		75,663,648
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 MONTHS ENDED MARCH 31, 2022 AND 2021

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


	Three Months Ended
	March 31,		March 31,
	2022		2021
Interest and dividend income:
Interest and fees on loans	$	114,200	$	128,006
Interest on deposits in other banks		131		77
Interest and dividends on securities:
Taxable		13,666		10,353
Nontaxable		10,459		9,237
Total interest and dividend income		138,456		147,673
Interest expense:
Interest on deposits		4,483		9,128
Interest on short-term borrowings		21		48
Interest on long-term borrowings		3,021		3,599
Total interest expense		7,525		12,775
Net interest income		130,931		134,898
Provision for credit losses		2,800		(13,624)
Net interest income after provision for credit losses		128,131		148,522
Noninterest income:
Service charges on deposit accounts		7,596		5,509
Other service charges, commissions and fees		1,655		1,701
Interchange fees		1,810		1,847
Fiduciary and asset management fees		7,255		6,475
Mortgage banking income		3,117		8,255
Bank owned life insurance income		2,697		2,265
Loan-related interest rate swap fees		3,860		1,754
Other operating income		2,163		3,179
Total noninterest income		30,153		30,985
Noninterest expenses:
Salaries and benefits		58,298		52,660
Occupancy expenses		6,883		7,315
Furniture and equipment expenses		3,597		3,968
Technology and data processing		7,796		6,904
Professional services		4,090		4,960
Marketing and advertising expense		2,163		2,044
FDIC assessment premiums and other insurance		2,485		2,307
Other taxes		4,499		4,436
Loan-related expenses		1,776		1,877
Amortization of intangible assets		3,039		3,730
Loss on debt extinguishment		—		14,695
Other expenses		10,695		7,041
Total noninterest expenses		105,321		111,937
Income from continuing operations before income taxes		52,963		67,570
Income tax expense		9,273		11,381
Net income		43,690		56,189
Dividends on preferred stock		2,967		2,967
Net income available to common shareholders	$	40,723	$	53,222

Basic earnings per common share	$	0.54	$	0.67
Diluted earnings per common share	$	0.54	$	0.67
Dividends declared per common share	$	0.28	$	0.25
Basic weighted average number of common shares outstanding		75,544,644		78,863,468
Diluted weighted average number of common shares outstanding		75,556,127		78,884,235

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 MONTHS ENDED MARCH 31, 2022 AND 2021

(Dollars in thousands)


	Three Months Ended
	March 31,
	2022		2021
Net income	$	43,690	$	56,189
Other comprehensive income (loss):
Cash flow hedges:
Change in fair value of cash flow hedges (net of tax, $6,197 and $380 for the three months ended March 31, 2022 and 2021, respectively)		(23,313)		(1,428)
Reclassification adjustment for gains included in net income (net of tax, $0 and $12 for the three months ended March 31, 2022 and 2021, respectively) ⁽¹⁾		—		(47)
AFS securities:
Unrealized holding losses arising during period (net of tax, $49,700 and $8,806 for the three months ended March 31, 2022 and 2021, respectively)		(186,967)		(33,125)
Reclassification adjustment for gains included in net income (net of tax, $0 and $16 for the three months ended March 31, 2022 and 2021, respectively) ⁽²⁾		—		(62)
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 ended March 31, 2022 and 2021, respectively) ⁽³⁾		(5)		(5)
Bank owned life insurance:
Reclassification adjustment for losses included in net income ⁽⁴⁾		167		153
Other comprehensive loss		(210,118)		(34,514)
Comprehensive (loss) income	$	(166,428)	$	21,675

⁽¹⁾ The gross amounts are generally reported in the interest income and interest expense sections of 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 as "Gains on securities transactions" on the Company’s Consolidated Statements of Income with the corresponding income tax effect being reflected as a component of income tax expense.

⁽³⁾ 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.

⁽⁴⁾ 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)

THREE MONTHS ENDED MARCH 31, 2022 AND 2021

(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, 2021

100,101

173

1,807,368

783,794

18,635

2,710,071

Net Income

43,690

Other comprehensive loss (net of taxes of $49,701)

(210,118)

Dividends on common stock ($0.28 per share)

(21,163)

Dividends on preferred stock ($171.88 per share)

(2,967)

Stock purchased under stock repurchase plan (629,691 shares)

(837)

(24,181)

(25,018)

Issuance of common stock under Equity Compensation Plans, stock issuance for services rendered, and vesting of restricted stock, net of shares held for taxes (291,723 shares)

387

1,044

1,431

Stock-based compensation expense

2,409

Balance - March 31, 2022

99,651

173

1,786,640

803,354

(191,483)

2,498,335


Balance - December 31, 2020	$	104,169	$	173	$	1,917,081	$	616,052	$	71,015	$	2,708,490
Net Income								56,189				56,189
Other comprehensive loss (net of taxes of $8,835)										(34,514)		(34,514)
Dividends on common stock ($0.25 per share)								(19,700)				(19,700)
Dividends on preferred stock ($171.88 per share)								(2,967)				(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 (243,884 shares)		324				(289)						35
Stock-based compensation expense						2,199						2,199
Balance- March 31, 2021	$	104,493	$	173	$	1,918,991	$	649,574	$	36,501	$	2,709,732

See accompanying notes to consolidated financial statements.

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Table of Contents

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2022 AND 2021

(Dollars in thousands)


	2022		2021
Operating activities:
Net income	$	43,690	$	56,189
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation of premises and equipment		3,599		3,969
Writedown of ROU assets and equipment		4,570		1,065
Amortization, net		8,619		7,904
Amortization (accretion) related to acquisitions, net		875		(532)
Provision for credit losses		2,800		(13,624)
Gains on securities transactions, net		—		(78)
BOLI income		(2,697)		(2,265)
Originations and purchases of loans held for sale		(91,957)		(185,885)
Proceeds from sales of loans held for sale		91,434		231,250
Gains on sales of foreclosed properties and former bank premises, net		—		(706)
Losses on debt extinguishment		—		14,695
Stock-based compensation expenses		2,409		2,199
Issuance of common stock for services		217		—
Net decrease in other assets		46,434		42,567
Net increase (decrease) in other liabilities		1,454		(72,375)
Net cash provided by operating activities		111,447		84,373
Investing activities:
Purchases of AFS securities, restricted stock, and other investments		(62,773)		(355,992)
Purchases of HTM securities		(130,533)		—
Proceeds from sales of AFS securities and restricted stock		—		45,436
Proceeds from maturities, calls and paydowns of AFS securities		109,974		124,053
Proceeds from maturities, calls and paydowns of HTM securities		550		432
Net increase in loans held for investment		(258,502)		(250,762)
Net increase in premises and equipment		(797)		(3,520)
Proceeds from BOLI settlements		2,068


ITEM		PAGE

	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021 (audited)	2

	Consolidated Statements of Income (unaudited) for the three months ended March 31, 2022 and 2021	3

	Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three months ended March 31, 2022 and 2021	4

	Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three months ended March 31, 2022 and 2021	5

	Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2022 and 2021	6

	Notes to Consolidated Financial Statements (unaudited)	8

	Review Report of Independent Registered Public Accounting Firm	47

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	48

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	70

Item 4.	Controls and Procedures	72

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	73

Item 1A.	Risk Factors	73

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	73

Item 6.	Exhibits	75

	Signatures	77

NPA	–	Nonperforming assets
OCI	–	Other comprehensive income
OREO	–	Other real estate owned
OTC	–	Over-the-counter
PD/LGD	–	Probability of default/loss given default
PPP	–	Paycheck Protection Program
Quarterly Report	–	Quarterly Report on Form 10-Q for the quarter ended March 31, 2022
Repurchase Program	–	The share repurchase program, approved on December 10, 2021 by the Company’s Board of Directors, which authorizes the Company to purchase up to $100.0 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
SOFR	–	Secured Overnight Financing Rate
SSFA	–	Simplified supervisory formula approach
TDR	–	Troubled debt restructuring
Topic 606	–	ASU No. 2014-09, “Revenue from Contracts with Customers: Topic 606”
Topic 848	–	ASU 2020-04, “Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting”
VFG	–	Virginia Financial Group, Inc.
2031 Notes	–	$250.0 million of 2.875% fixed-to-floating rate subordinate notes issued by the Company during the fourth quarter of 2021 with a maturity date of December 15, 2031