AUB

Atlantic Union Bankshares Corp. Q1 2026 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended March 31, 2026. Atlantic Union Bankshares Corporation (AUB) is a financial holding company headquartered in Richmond, Virginia, operating primarily through its subsidiary, Atlantic Union Bank. The reporting period reflects the full integration of the Sandy Spring Bancorp, Inc. acquisition, which closed on April 1, 2025. The Company operates two primary segments: Wholesale Banking and Consumer Banking.

Key Financial Metrics

Material Changes vs. Prior Period

• Profitability Surge: Net income more than doubled year-over-year, driven by significant loan growth from the Sandy Spring acquisition and a 40 basis point expansion in the Net Interest Margin (FTE) to 3.85%.
• Expense Growth: Noninterest expenses increased 56% year-over-year, primarily due to the inclusion of Sandy Spring operations, higher salaries and benefits, and increased amortization of intangible assets ($15.4 million vs. $5.4 million in Q1 2025).
• Deposit Mix: Total deposits decreased slightly ($80.4 million) from the prior quarter (Dec 31, 2025) due to a reduction in brokered deposits, partially offset by growth in interest-bearing customer deposits.
• Asset Quality: Nonperforming assets decreased to 0.36% of total loans from 0.42% at year-end 2025. Net charge-offs were $1.6 million, down from $2.3 million in Q1 2025.
• Accounting Methodology Change: Effective January 1, 2026, the Company reorganized its loan portfolio segments from two (Commercial and Consumer) to three (CRE, Commercial and Industrial, and Consumer) to enhance credit modeling granularity.

Guidance, Outlook, and Risks

• Subsequent Events: On May 5, 2026, the Board authorized a new $250 million share repurchase program valid through May 5, 2027. Additionally, the Company completed the sale of its interest in Bearing Insurance Group, LLC, expecting a pre-tax gain of approximately $32.3 million in Q2 2026.
• Dividends: The Board declared a quarterly common dividend of $0.37 per share and a preferred dividend of $171.88 per share (equivalent to $0.43 per depositary share).
• Interest Rate Sensitivity: As of March 31, 2026, the Company is asset sensitive. Earnings simulation modeling indicates net interest income would increase by 3.67% in a +100 bps rate shock scenario and decrease by 3.11% in a -100 bps scenario.
• Risk Factors: Key risks include exposure to Commercial Real Estate (CRE), which comprises 59.75% of the loan portfolio. The Company notes that CRE concentration as a percentage of capital is 272.0%, exceeding the 300% threshold for heightened regulatory scrutiny only if the portfolio grows by 50% over 36 months (it grew 93.4% due to the acquisition). Other risks include economic uncertainty, inflation, and potential impacts of the "Basel III endgame" capital rules.

Investor Verification Checklist

• Acquisition Integration: Verify the realization of cost synergies and revenue accretion from the Sandy Spring Bancorp acquisition, which drove the majority of balance sheet growth.
• CRE Exposure: Review the composition of the $16.7 billion CRE portfolio, specifically the non-owner occupied segment ($7.2 billion) and office exposure ($1.5 billion), given the high concentration relative to capital.
• Deposit Stability: Monitor the trend of brokered deposits, which declined significantly in Q1 2026, and assess the stability of core customer deposits.
• Capital Ratios: Confirm regulatory capital ratios remain "well-capitalized" (CET1 ratio was 10.21% as of March 31, 2026) in light of the new share repurchase authorization.
• Non-GAAP Measures: Review the reconciliation of Adjusted Operating Earnings ($126.2 million) to understand core performance excluding merger costs and intangible amortization.