Atlantic Union Bankshares Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING AND REVENUE

SEGMENT REPORTING AND REVENUE

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

SEGMENT REPORTING AND REVENUE

14. SEGMENT REPORTING AND REVENUE

Operating Segments

The Company has two reportable operating segments, Wholesale Banking and Consumer Banking, with corporate support functions and intercompany eliminations being presented within Corporate Other.

Segment Results

The following tables present the Company’s operating segment results for the three and nine months ended September 30, (dollars in thousands):


Three Months Ended:	Wholesale Banking		Consumer Banking		Corporate Other⁽¹⁾		Total
2024
Net interest income	$	101,097	$	79,112	$	2,723	$	182,932
Provision for credit losses		217		2,389		(3)		2,603
Net interest income after provision for credit losses		100,880		76,723		2,726		180,329
Noninterest income		10,773		15,721		7,792		34,286
Noninterest expenses		50,880		64,335		7,367		122,582
Income before income taxes	$	60,773	$	28,109	$	3,151	$	92,033
2023
Net interest income	$	68,049	$	63,912	$	19,980	$	151,941
Provision for credit losses		9,310		(4,319)		—		4,991
Net interest income after provision for credit losses		58,739		68,231		19,980		146,950
Noninterest income		9,468		13,722		3,904		27,094
Noninterest expenses		40,039		54,994		13,475		108,508
Income before income taxes	$	28,168	$	26,959	$	10,409	$	65,536



Nine Months Ended:	Wholesale Banking		Consumer Banking		Corporate Other ⁽¹⁾		Total
2024
Net interest income	$	276,919	$	224,358	$	14,013	$	515,290
Provision for credit losses		25,803		6,801		(12)		32,592
Net interest income after provision for credit losses		251,116		217,557		14,025		482,698
Noninterest income		29,913		43,589		10,149		83,651
Noninterest expenses		144,152		184,446		49,261		377,859
Income before income taxes	$	136,877	$	76,700	$	(25,087)	$	188,490
2023
Net interest income	$	201,722	$	190,806	$	64,941	$	457,469
Provision for credit losses		25,853		(2,947)		5		22,911
Net interest income after provision for credit losses		175,869		193,753		64,936		434,558
Noninterest income		25,743		38,188		(3,013)		60,918
Noninterest expenses		123,207		168,971		30,264		322,442
Income before income taxes	$	78,405	$	62,970	$	31,659	$	173,034

⁽¹⁾For the three and nine months ended September 30, 2023, noninterest expenses include $8.7 million ($8.7 million included within other expenses and ($67,000) included within salaries and benefits) and $12.6 million ($9.8 million included within other expenses and $2.8 million included within salaries and benefits), respectively, in expenses associated with strategic cost saving initiatives, principally composed of severance costs related to headcount reductions and charges for exiting certain leases.

The following table presents the Company’s operating segment results for key balance sheet metrics as of the periods ended (dollars in thousands):


	Wholesale Banking		Consumer Banking		Corporate Other		Total
September 30, 2024
LHFI, net of deferred fees and costs ⁽¹⁾	$	15,366,703	$	3,113,472	$	(142,876)	$	18,337,299
Goodwill ⁽²⁾		845,239		362,245		5,226		1,212,710
Deposits		7,083,741		11,649,873		1,571,673		20,305,287
December 31, 2023
LHFI, net of deferred fees and costs ⁽¹⁾	$	12,688,833	$	2,958,811	$	(12,601)	$	15,635,043
Goodwill		639,180		286,031		—		925,211
Deposits		6,403,432		9,816,562		598,135		16,818,129

⁽¹⁾Corporate Other includes acquisition accounting fair value adjustments.

⁽²⁾Wholesale Banking and Consumer Banking includes $209.9 million and $77.6 million, respectively, related to the American National acquisition. Refer to Note 2 “Acquisitions” and Note 5 “Goodwill and Intangible Assets” for more information.

Revenue

Noninterest income disaggregated by major source for the three and nine months ended September 30, consisted of the following (dollars in thousands):


	Three Months Ended				Nine Months Ended
	2024		2023		2024		2023
Noninterest income:
Service charges on deposit accounts ⁽¹⁾:
Overdraft fees	$	5,800	$	5,210	$	15,649	$	14,873
Maintenance fees & other		3,992		3,347		11,798		9,704
Other service charges, commissions, and fees ⁽¹⁾		2,002		2,632		5,700		6,071
Interchange fees⁽¹⁾		3,371		2,314		8,791		7,098
Fiduciary and asset management fees ⁽¹⁾:
Trust asset management fees		3,624		3,120		10,761		9,329
Registered advisor management fees		5		—		11		—
Brokerage management fees		3,229		1,429		7,831		3,840
Mortgage banking income		1,214		666		3,274		1,969
Gain (loss) on sale of securities		4		(27,594)		(6,510)		(40,992)
Bank owned life insurance income		5,037		2,973		12,074		8,671
Loan-related interest rate swap fees		1,503		2,695		4,353		6,450
Other operating income		4,505		30,302		9,919		33,905
Total noninterest income	$	34,286	$	27,094	$	83,651	$	60,918

⁽¹⁾ Income within scope of ASC 606, Revenue from Contracts with Customers.

The following tables present noninterest income disaggregated by reportable operating segment for the three and nine months ended September 30, (dollars in thousands):


Three Months Ended:	Wholesale Banking		Consumer Banking		Corporate Other ⁽¹⁾⁽²⁾		Total
2024
Noninterest income:
Service charges on deposit accounts	$	2,833	$	6,959	$	—	$	9,792
Other service charges, commissions and fees		600		1,402		—		2,002
Fiduciary and asset management fees		4,933		1,925		—		6,858
Mortgage banking income		—		1,214		—		1,214
Other income		2,407		4,221		7,792		14,420
Total noninterest income	$	10,773	$	15,721	$	7,792	$	34,286
2023
Noninterest income:
Service charges on deposit accounts	$	2,184	$	6,373	$	—	$	8,557
Other service charges, commissions and fees		399		2,233		—		2,632
Fiduciary and asset management fees		3,050		1,499		—		4,549
Mortgage banking income		—		666		—		666
Other income		3,835		2,951		3,904		10,690
Total noninterest income	$	9,468	$	13,722	$	3,904	$	27,094



Nine Months Ended:	Wholesale Banking		Consumer Banking		Corporate Other ⁽¹⁾⁽²⁾		Total
2024
Noninterest income:
Service charges on deposit accounts	$	8,178	$	19,269	$	—	$	27,447
Other service charges, commissions and fees		1,413		4,304		(17)		5,700
Fiduciary and asset management fees		13,301		5,302		—		18,603
Mortgage banking income		—		3,274		—		3,274
Other income		7,021		11,440		10,166		28,627
Total noninterest income	$	29,913	$	43,589	$	10,149	$	83,651
2023
Noninterest income:
Service charges on deposit accounts	$	6,268	$	18,309	$	—	$	24,577
Other service charges, commissions and fees		1,140		4,931		—		6,071
Fiduciary and asset management fees		9,118		4,051		—		13,169
Mortgage banking income		—		1,969		—		1,969
Other income		9,217		8,928		(3,013)		15,132
Total noninterest income	$	25,743	$	38,188	$	(3,013)	$	60,918

⁽¹⁾ For the three and nine months ended September 30, 2023, other income primarily includes a $27.7 million gain related to the sale-leaseback transaction, losses incurred on the sale of AFS securities ($27.6 million and $41.0 million, respectively), and income from BOLI.

⁽²⁾ For the three months ended September 30, 2024, other income primarily includes income from BOLI and equity method investment income. For the nine months ended September 30, 2024, other income primarily includes income from BOLI, equity method investment income, and $6.5 million of losses incurred on AFS securities.