Atlantic Union Bankshares Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

EMPLOYEE BENEFITS AND STOCK BASED COMPENSATION (Tables)

EMPLOYEE BENEFITS AND STOCK BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2023

Employee Benefits and Share-based Compensation, Noncash [Abstract]

The following 401(k) Plan match and other discretionary contributions were made to the Company’s employees, in accordance with the descriptions above for the years ended December 31, (dollars in thousands):


	2023		2022		2021
401(k) Plan Company Match	$	7,091	$	7,037	$	6,515
401(k) Plan ESOP Source Contribution		804		750		750
Cash		696		667		674
Total	$	8,591	$	8,454	$	7,939

Schedule of Recognized Stock-Based Compensation Expense

The Company recognized stock-based compensation expense, which is included in “Salaries and benefits” expense on the Company’s Consolidated Statements of Income as follows for the years ended December 31, (dollars in thousands, except per share data):


	Year Ended December 31,
	2023		2022		2021
Stock-based compensation expense	$	11,101	$	10,609	$	10,091
Reduction of income tax expense		2,331		2,228		2,119
Per share compensation cost	$	0.12	$	0.11	$	0.10

Summary of Stock Option Activity

The following table summarizes the stock option activity during the year ended December 31, 2023:


				Weighted
		Weighted		Average
	Stock	Average		Remaining	Aggregate
	Options	Exercise		Contractual	Intrinsic
	(shares)	Price		Life	Value
Outstanding as of December 31, 2022	83,367	$	36.32	0.57	$	105,665
Granted	—		—
Exercised	(23,796)		32.67
Forfeited	—		—
Expired	(48,578)		39.13
Outstanding as of December 31, 2023	10,993		31.83	0.06		51,777
Exercisable as of December 31, 2023	10,993		31.83	0.06		51,777

Summary of Restricted Stock Activity

The following table summarizes the restricted stock activity for the year ended December 31, 2023:


		Weighted
	Number of	Average
	Shares of	Grant-Date Fair
	RSAs	Value
Unvested as of December 31, 2022	372,106	$	37.63
Granted	349,224		36.11
Net settle for taxes	(59,264)		37.25
Vested	(154,741)		36.20
Forfeited	(30,695)		37.68
Unvested as of December 31, 2023	476,630		37.03

Summary of Performance Stock Activity

The Plan permits the granting of PSUs. PSUs are granted to certain employees at no cost to the recipient and are subject to vesting based on achieving certain performance metrics. Outstanding PSUs may be paid in cash or shares of common stock or a combination thereof. Holders of PSUs have no right to vote the shares represented by the units until vested. In 2023, there were two performance measures underlying the PSUs awarded, each weighted at 50%, as follows: (1) relative total shareholder return compared to the other companies comprising the KBW NASDAQ Regional Banking Index, which is a market-based condition; and (2) relative return on average tangible common equity, which is a performance-based condition.


	Number of	Weighted Average
	Shares of	Grant-
	PSUs	Date Fair Value
Unvested as of December 31, 2022	230,441	$	35.86
Granted	91,152		36.82
Net settle for taxes	(9,088)		32.50
Vested	(27,644)		32.50
Forfeited	(55,599)		33.73
Unvested as of December 31, 2023⁽¹⁾	229,262		37.29

⁽¹⁾ The number of PSUs with a performance-based condition is presented based on achieving the performance measure at the target level of performance.

Schedule of Performance Stock Units Valuation Assumptions

During the year ended December 31, 2023, the fair value of PSUs with a performance-based condition was equal to the closing sale price of the Company’s common stock on the grant date. During the years ended December 31, 2023, 2022 and 2021, the fair value of PSUs with a market-based condition was estimated using the Monte Carlo simulation lattice model that uses the assumptions noted in the following table as of December 31,:


	2023		2022		2021
Dividend yield⁽¹⁾	3.19	%	3.95	%	2.66	%
Expected life in years⁽²⁾	2.85		2.25		2.85
Expected volatility⁽³⁾	40.39	%	36.32	%	45.75	%
Risk-free interest rate⁽⁴⁾	4.39	%	4.18	%	0.20	%

⁽¹⁾ Calculated as the ratio of the current dividend paid per the stock price on the date of grant.

⁽²⁾ Represents the remaining performance period as of the grant date.

⁽³⁾ Based on the historical volatility for the period commensurate with the expected life of the PSUs.

⁽⁴⁾ Based upon the zero-coupon U.S. Treasury rate commensurate with the expected life of the PSUs on the grant date.

Estimated Unamortized Compensation Expense Recognized in Future

The estimated unamortized compensation expense, net of estimated forfeitures, related to, restricted stock, performance stock and stock options issued and outstanding as of December 31, 2023 that will be recognized in future periods is as follows (dollars in thousands):


	Restricted		Performance			Stock
	Stock		Stock			Options	Total
2024	$	6,911	$	2,094	$	—	$	9,005
2025		4,031		1,110		—		5,141
2026		626		—		—		626
2027		32		—		—		32
Total	$	11,600	$	3,204	$	—	$	14,804