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, 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 October 27, 2022 was 74,711,507.

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
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
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
CODM	–	Chief operating decision maker
the Company	–	Atlantic Union Bankshares Corporation (formerly, Union Bankshares Corporation) and its subsidiaries
COVID-19	–	COVID-19 global pandemic
CSP	–	Cary Street Partners Financial LLC
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
FRB	–	Federal Reserve Bank of Richmond
FHLB	–	Federal Home Loan Bank of Atlanta
FHLMC	–	Federal Home Loan Mortgage Corporation
FNB	–	FNB Corporation
FNMA	–	Federal National Mortgage Association
FOMC	–	Federal Open Markets Committee
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 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

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2022 AND DECEMBER 31, 2021

(Dollars in thousands, except share data)


	September 30,		December 31,
	2022		2021
ASSETS		(unaudited)		(audited)
Cash and cash equivalents:
Cash and due from banks	$	177,969	$	180,963
Interest-bearing deposits in other banks		211,785		618,714
Federal funds sold		1,188		2,824
Total cash and cash equivalents		390,942		802,501
Securities available for sale, at fair value		2,717,323		3,481,650
Securities held to maturity, at carrying value		841,349		628,000
Restricted stock, at cost		82,050		76,825
Loans held for sale, at fair value		12,889		20,861
Loans held for investment, net of deferred fees and costs		13,918,720		13,195,843
Less: allowance for loan and lease losses		108,009		99,787
Total loans held for investment, net		13,810,711		13,096,056
Premises and equipment, net		126,374		134,808
Goodwill		925,211		935,560
Amortizable intangibles, net		29,142		43,312
Bank owned life insurance		437,988		431,517
Other assets		576,252		413,706
Total assets	$	19,950,231	$	20,064,796
LIABILITIES
Noninterest-bearing demand deposits	$	5,290,938	$	5,207,324
Interest-bearing deposits		11,255,278		11,403,744
Total deposits		16,546,216		16,611,068
Securities sold under agreements to repurchase		146,182		117,870
Other short-term borrowings		133,800		—
Long-term borrowings		389,576		388,724
Other liabilities		453,307		237,063
Total liabilities		17,669,081		17,354,725
Commitments and contingencies (Note 7)
STOCKHOLDERS' EQUITY
Preferred stock, $10.00 par value		173		173
Common stock, $1.33 par value		98,845		100,101
Additional paid-in capital		1,769,858		1,807,368
Retained earnings		874,393		783,794
Accumulated other comprehensive (loss) income		(462,119)		18,635
Total stockholders' equity		2,281,150		2,710,071
Total liabilities and stockholders' equity	$	19,950,231	$	20,064,796

Common shares outstanding		74,703,774		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 AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

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


	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2022		2021		2022		2021
Interest and dividend income:
Interest and fees on loans	$	144,673	$	124,999	$	382,139	$	383,575
Interest on deposits in other banks		941		291		1,229		454
Interest and dividends on securities:
Taxable		14,750		11,230		43,110		32,102
Nontaxable		10,792		9,859		31,889		28,773
Total interest and dividend income		171,156		146,379		458,367		444,904
Interest expense:
Interest on deposits		15,386		5,837		25,966		22,203
Interest on short-term borrowings		1,229		22		1,805		91
Interest on long-term borrowings		3,826		3,032		10,183		9,676
Total interest expense		20,441		8,891		37,954		31,970
Net interest income		150,715		137,488		420,413		412,934
Provision for credit losses		6,412		(18,850)		12,771		(59,888)
Net interest income after provision for credit losses		144,303		156,338		407,642		472,822
Noninterest income:
Service charges on deposit accounts		6,784		7,198		22,421		19,314
Other service charges, commissions and fees		1,770		1,534		5,134		4,970
Interchange fees		2,461		2,203		6,539		6,252
Fiduciary and asset management fees		4,134		7,029		18,329		20,323
Mortgage banking income		1,390		4,818		6,707		17,692
Bank owned life insurance income		3,445		2,727		8,858		8,202
Loan-related interest rate swap fees		2,050		1,102		8,510		4,176
Other operating income		3,550		3,327		17,525		8,459
Total noninterest income		25,584		29,938		94,023		89,388
Noninterest expenses:
Salaries and benefits		56,600		53,534		170,203		156,959
Occupancy expenses		6,408		7,251		19,685		21,705
Furniture and equipment expenses		3,673		4,040		10,860		11,919
Technology and data processing		8,273		7,534		23,930		21,657
Professional services		3,504		3,792		12,274		13,161
Marketing and advertising expense		2,343		2,548		7,008		7,330
FDIC assessment premiums and other insurance		3,094		2,172		8,344		6,798
Franchise and other taxes		4,507		4,432		13,506		13,303
Loan-related expenses		1,575		1,503		5,218		5,289
Amortization of intangible assets		2,480		3,381		8,434		10,679
Loss on debt extinguishment		—		—		—		14,695
Other expenses		7,466		5,156		24,550		15,756
Total noninterest expenses		99,923		95,343		304,012		299,251
Income from continuing operations before income taxes		69,964		90,933		197,653		262,959
Income tax expense		11,894		16,368		33,667		46,821
Net income		58,070		74,565		163,986		216,138
Dividends on preferred stock		2,967		2,967		8,901		8,901
Net income available to common shareholders	$	55,103	$	71,598	$	155,085	$	207,237

Basic earnings per common share	$	0.74	$	0.94	$	2.07	$	2.66
Diluted earnings per common share	$	0.74	$	0.94	$	2.07	$	2.66
Dividends declared per common share	$	0.30	$	0.28	$	0.86	$	0.81
Basic weighted average number of common shares outstanding		74,703,699		76,309,355		75,029,000		77,988,151
Diluted weighted average number of common shares outstanding		74,705,054		76,322,736		75,034,084		78,007,543

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, 2022 AND 2021

(Dollars in thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net income	$	58,070	$	74,565	$	163,986	$	216,138
Other comprehensive (loss) income:
Cash flow hedges:
Change in fair value of cash flow hedges (net of tax, $6,417 and $145 for the three months and $15,691 and $169 for the nine months ended September 30, 2022 and 2021, respectively)		(24,142)		(545)		(59,027)		634
Reclassification adjustment for (gains) included in net income (net of tax, $0 and $0 for the three months and $0 and $12 for the nine months ended September 30, 2022 and 2021, respectively) ⁽¹⁾		—		—		—		(47)
AFS securities:
Unrealized holding (losses) arising during period (net of tax, $32,388 and $6,178 for the three months and $112,226 and $11,311 for the nine months ended September 30, 2022 and 2021, respectively)		(121,841)		(23,242)		(422,183)		(42,549)
Reclassification adjustment for (gains) losses included in net income (net of tax, $0 and $2 for the three months and $0 and $18 for the nine months ended September 30, 2022 and 2021, respectively) ⁽²⁾		—		(7)		2		(69)
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, 2022 and 2021, respectively) ⁽³⁾		(4)		(5)		(14)		(15)
Bank owned life insurance:
Reclassification adjustment for losses included in net income ⁽⁴⁾		151		150		468		454
Other comprehensive (loss) income:		(145,836)		(23,649)		(480,754)		(41,592)
Comprehensive (loss) income	$	(87,766)	$	50,916	$	(316,768)	$	174,546

⁽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 "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.

⁽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)

NINE MONTHS ENDED SEPTEMBER 30, 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, 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)

(


ITEM		PAGE

	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021 (audited)	2

	Consolidated Statements of Income (unaudited) for the three and nine months ended September 30, 2022 and 2021	3

	Consolidated Statements of Comprehensive (Loss) Income (unaudited) for the three and nine months ended September 30, 2022 and 2021	4

	Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three and nine months ended September 30, 2022 and 2021	5

	Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2022 and 2021	7

	Notes to Consolidated Financial Statements (unaudited)	9

	Review Report of Independent Registered Public Accounting Firm	53

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	54

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	84

Item 4.	Controls and Procedures	86

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	87

Item 1A.	Risk Factors	87

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	87

Item 6.	Exhibits	88

	Signatures	89

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
MFC	–	Middleburg Financial Corporation
NASDAQ	–	National Association of Securities Dealers Automated Quotation exchange
NM	–	Not meaningful
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 September 30, 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
RPAs	–	Risk Participation Agreements
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.