Annual report pursuant to Section 13 and 15(d)

REGULATORY MATTERS AND CAPITAL

v3.22.4
REGULATORY MATTERS AND CAPITAL
12 Months Ended
Dec. 31, 2022
Regulatory Capital Requirements [Abstract]  
REGULATORY MATTERS AND CAPITAL

12. REGULATORY MATTERS AND CAPITAL

Capital resources represent funds, earned or obtained, over which financial institutions can exercise greater or longer control in comparison with deposits and borrowed funds. Management seeks to maintain a capital structure that will assure an adequate level of capital to support anticipated asset growth and to absorb potential losses, yet allow management to effectively leverage its capital to maximize return to shareholders. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on financial statements of the Company and the Bank. Under capital adequacy guidelines and the regulatory framework for PCA, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. PCA provisions are not applicable to financial holding companies and bank holding companies, but only to their bank subsidiaries.

As of December 31, 2022 and 2021, the most recent notification from the FRB categorized the Bank as “well capitalized” under the regulatory framework for PCA. To be categorized as “well-capitalized,” an institution must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 leverage, and common equity Tier 1 ratios as set forth in the following tables. There are no conditions or events since that notification that management believes have changed the Bank’s category.

On March 27, 2020, the banking agencies issued an interim final rule that allows the Company to phase in the impact of adopting the CECL methodology up to two years, with a three-year transition period to phase out the cumulative benefit to regulatory capital provided during the two-year delay.  The Company is allowed to include the impact of the CECL transition, which is defined as the CECL Day 1 impact to capital plus 25% of the Company’s provision for credit losses during 2020, in regulatory capital through 2021. The Company elected to phase in the regulatory capital impact as permitted under the aforementioned interim final rule. The CECL transition amount will be phased out of regulatory capital over a three-year period beginning in 2022 and ending in 2024.

The Company and the Bank’s capital amounts and ratios are also presented in the following table at December 31, 2022 and 2021 (dollars in thousands):

Required in Order to Be

 

Required for Capital

Well Capitalized Under

 

Actual

Adequacy Purposes

PCA

 

    

Amount

    

Ratio

    

Amount

    

Ratio

    

Amount

    

Ratio

 

As of December 31, 2022

 

  

 

  

 

  

 

  

 

  

 

  

Common equity Tier 1 capital to risk weighted assets:

 

  

 

  

 

  

 

  

 

  

 

  

Consolidated

$

1,684,088

 

9.95

%  

$

761,648

4.50%

NA

NA

Atlantic Union Bank

 

2,154,594

 

12.81

%  

 

756,883

4.50%

1,093,276

6.50%

Tier 1 capital to risk weighted assets:

 

 

 

Consolidated

 

1,850,444

 

10.93

%  

 

1,014,869

6.00%

NA

NA

Atlantic Union Bank

 

2,154,594

 

12.81

%  

 

1,009,178

6.00%

1,345,570

8.00%

Total capital to risk weighted assets:

 

 

 

Consolidated

 

2,319,160

 

13.70

%  

 

1,354,254

8.00%

NA

NA

Atlantic Union Bank

 

2,238,106

 

13.30

%  

 

1,346,229

8.00%

1,682,786

10.00%

Tier 1 capital to average adjusted assets:

 

 

 

Consolidated

 

1,850,444

 

9.42

%  

 

785,751

4.00%

NA

NA

Atlantic Union Bank

 

2,154,594

 

11.02

%  

 

782,067

4.00%

977,583

5.00%

As of December 31, 2021

 

  

 

  

 

  

 

  

 

  

 

  

Common equity Tier 1 capital to risk weighted assets:

 

  

 

  

 

  

 

  

 

  

 

  

Consolidated

$

1,569,752

 

10.24

%  

$

689,832

 

4.50%

NA

 

NA

Atlantic Union Bank

 

1,990,753

 

13.03

%  

 

687,520

 

4.50%

993,085

 

6.50%

Tier 1 capital to risk weighted assets:

 

 

 

 

 

 

Consolidated

 

1,736,108

 

11.32

%  

 

920,199

 

6.00%

NA

 

NA

Atlantic Union Bank

 

1,990,753

 

13.03

%  

 

916,694

 

6.00%

1,222,258

 

8.00%

Total capital to risk weighted assets:

 

 

 

 

 

 

Consolidated

 

2,173,543

 

14.17

%  

 

1,227,124

 

8.00%

NA

 

NA

Atlantic Union Bank

 

2,044,123

 

13.38

%  

 

1,222,196

 

8.00%

1,527,745

 

10.00%

Tier 1 capital to average adjusted assets:

 

 

 

 

 

 

Consolidated

 

1,736,108

 

9.01

%  

 

770,747

 

4.00%

NA

 

NA

Atlantic Union Bank

 

1,990,753

 

10.37

%  

 

767,889

 

4.00%

959,862

 

5.00%