Atlantic Union Bankshares Corporation Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

SEGMENT REPORTING AND REVENUE

SEGMENT REPORTING AND REVENUE

12 Months Ended

Dec. 31, 2024

Revenue from Contract with Customer [Abstract]

SEGMENT REPORTING AND REVENUE

18. SEGMENT REPORTING AND REVENUE

Operating Segments

Effective January 1, 2023, the Company made an organizational change to move certain lines of business in the wealth management division that primarily serve Wholesale Banking customers from the Consumer Banking segment to the Wholesale Banking segment. As a result, the Company revised its prior segment operating results for the year ended December 31, 2022, resulting in a reallocation of noninterest income ($12.5 million) and noninterest expense ($16.0 million) from the Consumer Banking segment to the Wholesale Banking segment. In addition, based on this organizational change, the Company also reallocated $9.6 million of goodwill from the Consumer Banking segment to the Wholesale Banking segment and revised its prior segment information for the year ended December 31, 2022. Goodwill was evaluated for impairment prior to and immediately following the organizational change. Refer to Note 6 “Goodwill and Intangible Assets” in this Form 10-K.

As of December 31, 2024, 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 table presents and reconciles income before income taxes compared to the Consolidated Statements of Income. Income before income taxes for the years ended December 31, 2024, 2023, and 2022 totaled $259.8 million, $239.9 million, and $280.0 million, respectively. The information is disaggregated by major source and reportable operating segment for the years ended December 31, (dollars in thousands):


	Wholesale Banking		Consumer Banking		Corporate Other ⁽¹⁾⁽²⁾		Total
2024
Interest income	$	1,222,101	$	619,855	$	(614,421)	$	1,227,535
Interest expense		844,408		318,839		(634,251)		528,996
Net interest income		377,693		301,016		19,830		698,539
Provision for credit losses		40,072		10,029		(12)		50,089
Net interest income after provision for credit losses		337,621		290,987		19,842		648,450
Noninterest income		44,811		59,344		14,723		118,878
Noninterest expenses		194,704		250,178		62,652		507,534
Income (loss) before income taxes	$	187,728	$	100,153	$	(28,087)	$	259,794
2023
Interest income	$	934,242	$	452,388	$	(432,180)	$	954,450
Interest expense		663,257		198,542		(518,362)		343,437
Net interest income		270,985		253,846		86,182		611,013
Provision for credit losses		34,229		(2,616)		5		31,618
Net interest income after provision for credit losses		236,756		256,462		86,177		579,395
Noninterest income		36,791		51,347		2,739		90,877
Noninterest expenses		164,283		228,374		37,714		430,371
Income before income taxes	$	109,264	$	79,435	$	51,202	$	239,901
2022 ⁽³⁾
Interest income	$	540,076	$	300,722	$	(180,363)	$	660,435
Interest expense		238,273		77,935		(240,034)		76,174
Net interest income		301,803		222,787		59,671		584,261
Provision for credit losses		11,758		7,231		39		19,028
Net interest income after provision for credit losses		290,045		215,556		59,632		565,233
Noninterest income		36,557		56,899		25,067		118,523
Noninterest expenses		158,159		219,813		25,830		403,802
Income before income taxes	$	168,443	$	52,642	$	58,869	$	279,954

⁽¹⁾ For the year ended December 31, 2022, noninterest expenses include $5.5 million in strategic branch closing and facility consolidation costs.

⁽²⁾ For the year ended December 31, 2023, noninterest expenses include $12.6 million ($9.8 million included within other expenses and $2.8 million included within salaries and benefits), in expenses associated with strategic cost saving initiatives, principally composed of severance costs related to headcount reductions, and charges for exiting certain leases.

⁽³⁾ As discussed above, the segment operating results for the year ended December 31, 2022 include a reallocation from Consumer Banking to Wholesale Banking.

The following table presents the Company’s operating segment results for key balance sheet metrics as of December 31, (dollars in thousands):


	Wholesale Banking		Consumer Banking		Corporate Other		Total
2024
LHFI, net of deferred fees and costs ⁽¹⁾	$	15,514,640	$	3,085,207	$	(129,226)	$	18,470,621
Goodwill ⁽²⁾		850,035		364,018		—		1,214,053
Deposits		7,193,403		11,899,197		1,305,019		20,397,619
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 $210.8 million and $78.0 million, respectively, related to the American National acquisition. Refer to Note 2 “Acquisitions” and Note 6 “Goodwill and Intangible Assets” for more information.

Revenue

Noninterest income disaggregated by major source for the years ended December 31, consisted of the following (dollars in thousands):


	2024		2023		2022
Noninterest income:
Service charges on deposit accounts ⁽¹⁾:
Overdraft fees	$	21,472	$	20,045	$	18,749
Maintenance fees & other		15,807		13,195		11,303
Other service charges, commissions, and fees ⁽¹⁾		7,511		7,860		6,765
Interchange fees ⁽¹⁾		12,134		9,678		9,110
Fiduciary and asset management fees ⁽¹⁾:
Trust asset management fees		14,520		12,396		12,720
Registered advisor management fees		16		—		5,088
Brokerage management fees		10,992		5,299		4,606
Mortgage banking income		4,202		2,743		7,085
Loss on sale of securities		(6,493)		(40,989)		(3)
Bank owned life insurance income		15,629		11,759		11,507
Loan-related interest rate swap fees		9,435		10,037		12,174
Other operating income ⁽²⁾⁽³⁾		13,653		38,854		19,419
Total noninterest income	$	118,878	$	90,877	$	118,523

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

⁽²⁾ Includes a $9.1 million gain related to the sale of DHFB for the year ended December 31, 2022.

⁽³⁾ Includes a $29.6 million gain related to the sale-leaseback transactions for the year ended December 31, 2023.

The following tables present noninterest income disaggregated by reportable operating segment for the years ended December 31, (dollars in thousands):


	Wholesale Banking		Consumer Banking		Corporate Other ^(1)(2)(3)		Total
2024
Noninterest income:
Service charges on deposit accounts	$	11,018	$	26,261	$	—	$	37,279
Other service charges and fees		1,843		5,684		(16)		7,511
Fiduciary and asset management fees		18,146		7,382		—		25,528
Mortgage banking income		—		4,202		—		4,202
Other income		13,804		15,815		14,739		44,358
Total noninterest income	$	44,811	$	59,344	$	14,723	$	118,878
2023
Noninterest income:
Service charges on deposit accounts	$	8,562	$	24,678	$	—	$	33,240
Other service charges and fees		1,654		6,206		—		7,860
Fiduciary and asset management fees		12,117		5,578		—		17,695
Mortgage banking income		—		2,743		—		2,743
Other income		14,458		12,142		2,739		29,339
Total noninterest income	$	36,791	$	51,347	$	2,739	$	90,877
2022 ⁽⁴⁾
Noninterest income:
Service charges on deposit accounts	$	6,814	$	23,238	$	—	$	30,052
Other service charges and fees		1,769		4,996		—		6,765
Fiduciary and asset management fees		12,424		9,990		—		22,414
Mortgage banking income		—		7,085		—		7,085
Other income		15,550		11,590		25,067		52,207
Total noninterest income	$	36,557	$	56,899	$	25,067	$	118,523

⁽¹⁾ For the year ended December 31, 2022, other income primarily includes a $9.1 million gain related to the sale of DHFB, income from BOLI, and equity method investment income.

⁽²⁾ For the year ended December 31, 2023, other income primarily includes a $29.6 million gain related to the sale-leaseback transactions, a $41.0 million loss incurred on the sale of AFS securities, and income from BOLI.

⁽³⁾ For the year ended December 31, 2024, other income primarily includes income from BOLI, equity method investment income, and $6.5 million of losses incurred on AFS securities.

⁽⁴⁾ As discussed above, noninterest income for the year ended December 31, 2022 includes a reallocation from Consumer Banking to Wholesale Banking.

Expense

The following tables present noninterest expense disaggregated by reportable operating segment for the years ended December 31, (dollars in thousands):


	Wholesale Banking		Consumer Banking		Corporate Other		Total
2024
Noninterest expenses:
Salaries and benefits	$	70,842	$	71,643	$	128,679	$	271,164
Occupancy expenses		857		17,966		11,409		30,232
Furniture and equipment expenses		161		3,716		10,705		14,582
Loan-related expenses		974		3,178		1,361		5,513
Other expenses ⁽¹⁾		121,870		153,675		(89,502)		186,043
Total noninterest expense	$	194,704	$	250,178	$	62,652	$	507,534
2023
Noninterest expenses:
Salaries and benefits	$	59,376	$	65,174	$	112,132	$	236,682
Occupancy expenses		736		12,990		11,420		25,146
Furniture and equipment expenses		195		3,171		10,916		14,282
Loan-related expenses		687		3,886		1,046		5,619
Other expenses ⁽¹⁾		103,289		143,153		(97,800)		148,642
Total noninterest expense	$	164,283	$	228,374	$	37,714	$	430,371
2022
Noninterest expenses:
Salaries and benefits	$	55,504	$	64,244	$	109,178	$	228,926
Occupancy expenses		617		13,199		12,197		26,013
Furniture and equipment expenses		259		3,185		11,394		14,838
Loan-related expenses		561		4,989		1,024		6,574
Other expenses ⁽¹⁾		101,218		134,196		(107,963)		127,451
Total noninterest expense	$	158,159	$	219,813	$	25,830	$	403,802

⁽¹⁾ Includes allocated expenses.