UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the Quarterly Period Ended | |
OR | |
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)
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
(Address of principal executive offices) (Zip Code)
(
(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 |
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.
☒ | 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 |
The number of shares of common stock outstanding as of April 28, 2022 was
ATLANTIC UNION BANKSHARES CORPORATION
FORM 10-Q
INDEX
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 |
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 |
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 | $ | | $ | | |
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 | | | |||
Long-term borrowings | | | |||
Other liabilities | | | |||
Total liabilities | | | |||
Commitments and contingencies (Note 7) | |||||
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 | $ | | $ | | |
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 (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 | $ | | $ | | ||
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 | | | ||||
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 | | | ||||
Technology and data processing | | | ||||
Professional services | | | ||||
Marketing and advertising expense | | | ||||
FDIC assessment premiums and other insurance | | | ||||
Other taxes | | | ||||
Loan-related expenses | | | ||||
Amortization of intangible assets | | | ||||
Loss on debt extinguishment | | | ||||
Other expenses | | | ||||
Total noninterest expenses | | | ||||
Income from continuing operations before income taxes | | | ||||
Income tax expense | | | ||||
Net income | | | ||||
Dividends on preferred stock | | | ||||
Net income available to common shareholders | $ | | $ | | ||
Basic earnings per common share | $ | | $ | | ||
Diluted earnings per common share | $ | | $ | | ||
Dividends declared per common share | $ | | $ | | ||
Basic weighted average number of common shares outstanding | | | ||||
Diluted weighted average number of common shares outstanding | | |
See accompanying notes to consolidated financial statements.
-3-
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 | $ | | $ | | |||
Other comprehensive income (loss): |
|
| |||||
Cash flow hedges: |
|
| |||||
Change in fair value of cash flow hedges (net of tax, $ |
| ( |
| ( | |||
Reclassification adjustment for gains included in net income (net of tax, $ |
| |
| ( | |||
AFS securities: |
|
| |||||
Unrealized holding losses arising during period (net of tax, $ |
| ( |
| ( | |||
Reclassification adjustment for gains included in net income (net of tax, $ |
| |
| ( | |||
HTM securities: |
|
| |||||
Reclassification adjustment for accretion of unrealized gain on AFS securities transferred to HTM (net of tax, $ |
| ( |
| ( | |||
Bank owned life insurance: |
|
| |||||
Reclassification adjustment for losses included in net income (4) |
| |
| | |||
Other comprehensive loss |
| ( |
| ( | |||
Comprehensive (loss) income | $ | ( | $ | |
(1)
(2)
(3)
(4)
See accompanying notes to consolidated financial statements.
-4-
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 | Stock | Capital | Earnings | Income (Loss) | Total | |||||||||||||
Balance - December 31, 2021 | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Net Income |
| |
| | ||||||||||||||
Other comprehensive loss (net of taxes of $ |
| ( |
| ( | ||||||||||||||
Dividends on common stock ($ |
| ( |
| ( | ||||||||||||||
Dividends on preferred stock ($ |
| ( |
| ( | ||||||||||||||
Stock purchased under stock repurchase plan ( | ( | ( | ( | |||||||||||||||
Issuance of common stock under Equity Compensation Plans, stock issuance for services rendered, and vesting of restricted stock, net of shares held for taxes ( |
| | | | ||||||||||||||
Stock-based compensation expense |
| |
| | ||||||||||||||
Balance - March 31, 2022 | $ | | $ | | $ | | $ | | $ | ( | $ | |
Balance - December 31, 2020 | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Net Income |
| |
| | ||||||||||||||
Other comprehensive loss (net of taxes of $ |
|
| ( |
| ( | |||||||||||||
Dividends on common stock ($ |
|
| ( |
| ( | |||||||||||||
Dividends on preferred stock ($ | ( | ( | ||||||||||||||||
Issuance of common stock under Equity Compensation Plans, stock issuance for services rendered, and vesting of restricted stock, net of shares held for taxes ( |
| | ( |
| | |||||||||||||
Stock-based compensation expense |
|
| |
| | |||||||||||||
Balance- March 31, 2021 | $ | | $ | | $ | | $ | | $ | | $ | |
See accompanying notes to consolidated financial statements.
-5-
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 | $ | | $ | | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|
|
|
| ||
Depreciation of premises and equipment |
| |
| | ||
Writedown of ROU assets and equipment |
| |
| | ||
Amortization, net |
| |
| | ||
Amortization (accretion) related to acquisitions, net |
| |
| ( | ||
Provision for credit losses |
| |
| ( | ||
Gains on securities transactions, net |
| |
| ( | ||
BOLI income |
| ( |
| ( | ||
Originations and purchases of loans held for sale |
| ( |
| ( | ||
Proceeds from sales of loans held for sale | | | ||||
Gains on sales of foreclosed properties and former bank premises, net | | ( | ||||
Losses on debt extinguishment | | | ||||
Stock-based compensation expenses |
| |
| | ||
Issuance of common stock for services |
| |
| | ||
Net decrease in other assets |
| |
| | ||
Net increase (decrease) in other liabilities |
| |
| ( | ||
Net cash provided by operating activities |
| |
| | ||
Investing activities: |
|
|
|
| ||
Purchases of AFS securities, restricted stock, and other investments |
| ( |
| ( | ||
Purchases of HTM securities |
| ( |
| | ||
Proceeds from sales of AFS securities and restricted stock |
| |
| | ||
Proceeds from maturities, calls and paydowns of AFS securities |
| |
| | ||
Proceeds from maturities, calls and paydowns of HTM securities |
| |
| | ||
Net increase in loans held for investment | ( | ( | ||||
Net increase in premises and equipment |
| ( |
| ( | ||
Proceeds from BOLI settlements | | |