Atlantic union bankshares reports fourth quarter financial results
Richmond, va.--(business wire)--atlantic union bankshares corporation (the “company” or “atlantic union”) (nyse: aub) reported net income available to common shareholders and adjusted operating earnings available to common shareholders(1) of $67.6 million and basic and diluted earnings per common share of $0.90 for the fourth quarter ended december 31, 2022. pre-tax pre-provision adjusted operating earnings available to common shareholders(1) totaled $85.6 million for the fourth quarter ended december 31, 2022. “atlantic union bankshares delivered strong fourth quarter financial results as we hit our profitability and efficiency targets - with low double-digit annualized loan growth, strong credit quality, an expanding net interest margin and positive operating leverage,” said john c. asbury, president and chief executive officer of atlantic union. “our markets continue to show resiliency and positive dynamics, which combined with our asset sensitivity lead us to believe we are well-positioned for 2023.” “operating under the mantra of soundness, profitability and growth – in that order of priority - atlantic union remains committed to generating sustainable, profitable growth and building long term value for our shareholders.” net interest income for the fourth quarter of 2022, net interest income was $163.8 million, an increase of $13.1 million from $150.7 million for the third quarter of 2022. net interest income (fte)(1) was $168.0 million in the fourth quarter of 2022, an increase of $13.4 million from the third quarter of 2022. the increases in net interest income and net interest income (fte)(1) were primarily driven by higher loan yields on the company’s variable rate loans due to rising market interest rates, average loan growth, and increases in investment income primarily due to higher yield on taxable securities. these increases were partially offset by an increase in interest expense due to higher cost of funds, primarily due to an increase in short-term interest rates on borrowings and deposits, increased use of short-term funding and higher average deposits from the prior quarter. the fourth quarter net interest margin and net interest margin (fte)(1) increased 27 basis points from the prior quarter to 3.61% and 3.70%, respectively, at december 31, 2022. earning asset yields increased by 66 basis points in the fourth quarter of 2022 compared to the third quarter of 2022 due to the impact of rising market interest rates on loans and investment securities yields. the cost of funds increased from the prior quarter by 39 basis points to 84 basis points at december 31, 2022, driven by higher deposit and borrowing costs as noted above. the company’s net interest margin (fte) (1) includes the impact of acquisition accounting fair value adjustments. net accretion related to acquisition accounting was $1.3 million for the quarter ended december 31, 2022, representing an increase of $157,000 from the prior quarter. the four quarters of 2022 and the remaining estimated net accretion impact are reflected in the following table (dollars in thousands): loan deposit borrowings accretion amortization amortization total for the quarter ended march 31, 2022 $ 2,253 $ (10 ) $ (203 ) $ 2,040 for the quarter ended june 30, 2022 2,879 (11 ) (207 ) 2,661 for the quarter ended september 30, 2022 1,326 (11 ) (209 ) 1,106 for the quarter ended december 31, 2022 1,484 (12 ) (209 ) 1,263 total for the year ended december 31, 2022 $ 7,942 $ (44 ) $ (828 ) $ 7,070 for the years ending (estimated): 2023 3,169 (31 ) (852 ) 2,286 2024 2,597 (4 ) (877 ) 1,716 2025 2,036 (1 ) (900 ) 1,135 2026 1,650 — (926 ) 724 2027 1,259 — (953 ) 306 thereafter 6,423 — (7,993 ) (1,570 ) total remaining acquisition accounting fair value adjustments at december 31, 2022 $ 17,134 $ (36 ) $ (12,501 ) $ 4,597 asset quality overview nonperforming assets (“npas”) as a percentage of loans decreased 2 basis points to 0.19% at december 31, 2022, compared to the prior quarter. accruing past due loan levels as a percentage of total loans held for investment at december 31, 2022 totaled 21 basis points, which is consistent with september 30, 2022, and represents a 2 basis point decrease from december 31, 2021. net charge-off levels remained low at 0.02% of total average loans (annualized) for the fourth quarter of 2022, consistent with the quarters ended september 30, 2022 and december 31, 2021. the allowance for credit losses (“acl”) totaled $124.4 million at december 31, 2022, a $5.4 million increase from the prior quarter. nonperforming assets at december 31, 2022, npas totaled $27.1 million, a decrease of $1.5 million from september 30, 2022. the following table shows a summary of npa balances at the quarter ended (dollars in thousands): december 31, september 30, june 30, march 31, december 31, 2022 2022 2022 2022 2021 nonaccrual loans $ 27,038 $ 26,500 $ 29,070 $ 29,032 $ 31,100 foreclosed properties 76 2,087 2,065 1,696 1,696 total nonperforming assets $ 27,114 $ 28,587 $ 31,135 $ 30,728 $ 32,796 the following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands): december 31, september 30, june 30, march 31, december 31, 2022 2022 2022 2022 2021 beginning balance $ 26,500 $ 29,070 $ 29,032 $ 31,100 $ 35,472 net customer payments (1,805 ) (3,725 ) (2,472 ) (4,132 ) (5,068 ) additions 2,935 1,302 3,203 2,087 1,294 charge-offs (461 ) (125 ) (311 ) (23 ) (598 ) loans returning to accruing status (131 ) — — — — transfers to foreclosed property — (22 ) (382 ) — — ending balance $ 27,038 $ 26,500 $ 29,070 $ 29,032 $ 31,100 past due loans past due loans still accruing interest totaled $30.0 million or 0.21% of total loans held for investment at december 31, 2022, compared to $29.0 million or 0.21% of total loans held for investment at september 30, 2022, and $29.9 million or 0.23% of total loans held for investment at december 31, 2021. of the total past due loans still accruing interest, $7.5 million or 0.05% of total loans held for investment were loans past due 90 days or more at december 31, 2022, compared to $7.4 million or 0.05% of total loans held for investment at september 30, 2022, and $9.1 million or 0.07% of total loans held for investment at december 31, 2021. allowance for credit losses at december 31, 2022, the acl was $124.4 million and included an allowance for loan and lease losses (“alll”) of $110.8 million and a reserve for unfunded commitments (“ruc”) of $13.6 million. the acl at december 31, 2022 increased $5.4 million from september 30, 2022 due to increased uncertainty in the macroeconomic outlook and the impact of loan growth in the fourth quarter of 2022. the acl as a percentage of total loans was 0.86% at december 31, 2022, consistent with september 30, 2022. the alll as a percentage of total loans was 0.77% at december 31, 2022, compared to 0.78% at september 30, 2022. net charge-offs net charge-offs were $810,000 or 0.02% of total average loans on an annualized basis for the quarter ended december 31, 2022, compared to $587,000 or 0.02% (annualized) for the third quarter of 2022, and $511,000 or 0.02% (annualized) for the fourth quarter of 2021. on a year-to-date basis through december 31, 2022, net charge-offs totaled $2.3 million or 0.02% of total average loans. provision for credit losses for the quarter ended december 31, 2022, the company recorded a provision for credit losses of $6.3 million, compared to a provision for credit losses of $6.4 million in the previous quarter, and a negative provision for credit losses of $1.0 million in the fourth quarter of 2021. the provision for credit losses for the fourth quarter of 2022 reflected a provision of $3.6 million for loan losses and a $2.7 million provision for unfunded commitments. noninterest income noninterest income decreased $1.1 million to $24.5 million for the quarter ended december 31, 2022 from $25.6 million in the prior quarter primarily due to declines in equity method investment income, partially offset by increases in loan syndication, small business administration (“sba”) 7a, and foreign exchange revenues, each included within other operating income. in addition, mortgage banking income decreased $1.0 million from the prior quarter due to lower mortgage origination volumes and gain on sale margins, and bank owned life insurance income decreased $796,000, reflecting the impact of the prior quarter’s mortality benefit. these noninterest income category decreases were partially offset by increases in loan-related interest rate swap fees of $1.6 million due to an increase in average deal size among swaps executed in the current quarter. noninterest expense noninterest expense for the quarter ended december 31, 2022 decreased to $99.8 million from $99.9 million in the prior quarter. notable noninterest expense activity in the fourth quarter of 2022 included a gain related to the sale and leaseback of an office building, refunds of prior period fdic assessment expenses, costs related to the closure of five branches expected to close in the first quarter of 2023 and other restructuring expenses, the write-down of obsolete software, increased variable incentive compensation and profit-sharing expenses, as well as professional services increases related to strategic projects. income taxes the effective tax rate for the three months ended december 31, 2022 was 14.3%, compared to 17.0% for the three months ended september 30, 2022. the decrease in the effective tax rate reflects the impact of changes in the proportion of tax-exempt income to pre-tax income. balance sheet at december 31, 2022, total assets were $20.5 billion, an increase of $510.9 million or approximately 10.2% (annualized) from september 30, 2022, and an increase of $396.3 million or approximately 2.0% from december 31, 2021. total assets increased from the prior quarter primarily due to the $530.4 million increase in total loans held for investment (net of deferred fees and costs) driven by loan growth, which was funded primarily by a $1.0 billion increase in short-term borrowings and partially by a $70.1 million decrease in cash and cash equivalents. at december 31, 2022, loans held for investment (net of deferred fees and costs) totaled $14.4 billion, including $7.3 million in paycheck protection program (“ppp”) loans, an increase of $530.4 million or 15.1% (annualized) from $13.9 billion, including $12.1 million in ppp loans, at september 30, 2022. average loans held for investment (net of deferred fees and costs) totaled $14.1 billion at december 31, 2022, an increase of $384.0 million or 11.1% (annualized) from the prior quarter. excluding ppp loans (net of deferred fees and costs)(1), adjusted loans held for investment (net of deferred fees and costs) at december 31, 2022 increased $535.3 million or 15.3% (annualized) from september 30, 2022 and adjusted average loans increased $390.0 million or 11.3% (annualized) from the prior quarter. at december 31, 2022, loans held for investment (net of deferred fees and costs) increased $1.3 billion or 9.5% from december 31, 2021, and quarterly average loans increased $1.0 billion or 7.9% from the same period in the prior year. excluding ppp loans (net of deferred fees and costs)(1), adjusted loans held for investment (net of deferred fees and costs) at december 31, 2022 increased $1.4 billion or 10.7% from december 31, 2021, and adjusted quarterly average loans during the fourth quarter of 2022 increased $1.3 billion or 10.3% from the fourth quarter of 2021. at december 31, 2022, total deposits were $15.9 billion, a decrease of $614.5 million or approximately 14.7% (annualized) from september 30, 2022. average deposits at december 31, 2022 increased from the prior quarter by $123.5 million or 3.0% (annualized). total deposits at december 31, 2022 decreased $679.4 million or 4.1% from december 31, 2021, and quarterly average deposits during the fourth quarter of 2022 also decreased $249.5 million or 1.5% from the fourth quarter of 2021. total deposits decreased from the prior quarter and prior year primarily due to the impact of customer behavior in response to inflation and higher market interest rates, in addition to seasonal outflows. the following table shows the company’s capital ratios at the quarters ended: december 31, september 30, december 31, 2022 2022 2021 common equity tier 1 capital ratio (2) 9.95 % 9.96 % 10.24 % tier 1 capital ratio (2) 10.94 % 10.98 % 11.32 % total capital ratio (2) 13.70 % 13.80 % 14.17 % leverage ratio (tier 1 capital to average assets) (2) 9.42 % 9.32 % 9.01 % common equity to total assets 10.78 % 10.60 % 12.68 % tangible common equity to tangible assets (1) 6.43 % 6.11 % 8.20 % _________________________ at december 31, 2022, the company’s common equity to total assets capital ratio and tangible common equity to tangible assets capital ratio decreased from the prior year primarily due to the unrealized losses on the available for sale (“afs”) securities portfolio recorded in other comprehensive income due to market interest rate increases, while these ratios increased from the prior quarter due to the increase in the value of the afs securities portfolio, as long-term rates decreased during the fourth quarter of 2022. during the fourth quarter of 2022, the company declared and paid a quarterly dividend on the outstanding shares of series a preferred stock of $171.88 per share (equivalent to $0.43 per outstanding depositary share), consistent with the third quarter of 2022 and the fourth quarter of 2021. during the fourth quarter of 2022, the company also declared and paid cash dividends of $0.30 per common share, consistent with the third quarter of 2022 and an increase of $0.02 or approximately 7.1% from the fourth quarter of 2021. _________________________ (1) these are financial measures not calculated in accordance with generally accepted accounting principles (“gaap”). for a reconciliation of these non-gaap financial measures, see alternative performance measures (non-gaap) section of the key financial results. (2) all ratios at december 31, 2022 are estimates and subject to change pending the company’s filing of its fr y9-c. all other periods are presented as filed. about atlantic union bankshares corporation headquartered in richmond, virginia, atlantic union bankshares corporation (nyse: aub) is the holding company for atlantic union bank. atlantic union bank has 114 branches and approximately 130 atms located throughout virginia, and in portions of maryland and north carolina. certain non-bank financial services affiliates of atlantic union bank include: atlantic union equipment finance, inc., which provides equipment financing; atlantic union financial consultants, llc, which provides brokerage services; and union insurance group, llc, which offers various lines of insurance products. on january 18, 2023, the company completed the transfer of the listing of its common stock and its depositary shares, each representing a 1/400th interest in a share of the company’s 6.875% perpetual non-cumulative preferred stock, series a, from the nasdaq stock market llc to the new york stock exchange, under the ticker symbols of “aub” and “aub.pra”, respectively. fourth quarter and fiscal year 2022 earnings release conference call the company will hold a conference call and webcast for investors at 9:00 a.m. eastern time on tuesday, january 24, 2023 during which management will review the financial results for the fourth quarter and fiscal year 2022 and provide an update on recent activities. the listen-only webcast and the accompanying slides can be accessed at: https://edge.media-server.com/mmc/p/d6afrqsq. for analysts who wish to participate in the conference call, please register at the following url: https://register.vevent.com/register/bi10abddc24ec746bdb44736355d7d0588. to participate in the conference call, you must use the link to receive an audio dial-in number and an access pin. a replay of the webcast, and the accompanying slides, will be available on the company’s website for 90 days at: https://investors.atlanticunionbank.com/. non-gaap financial measures in reporting the results as of and for the periods ended december 31, 2022, the company has provided supplemental performance measures on a tax-equivalent, tangible, operating, adjusted or pre-tax pre-provision basis. these non-gaap financial measures are a supplement to gaap, which is used to prepare the company’s financial statements, and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with gaap. in addition, the company’s non-gaap financial measures may not be comparable to non-gaap financial measures of other companies. the company uses the non-gaap financial measures discussed herein in its analysis of the company’s performance. the company’s management believes that these non-gaap financial measures provide additional understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented without the impact of items or events that may obscure trends in the company’s underlying performance. for a reconciliation of these measures to their most directly comparable gaap measures and additional information about these non-gaap financial measures, see “alternative performance measures (non-gaap)” in the tables within the section “key financial results.” forward-looking statements this press release and statements by our management may constitute “forward-looking statements” within the meaning of the private securities litigation reform act of 1995. forward-looking statements are statements that include, without limitation, statements made in mr. asbury’s quotations, statements regarding future economic conditions and the impacts of the current economic uncertainties, estimates with respect to the remaining net accretion related to acquisition accounting, and statements that include other projections, predictions, expectations, or beliefs about future events or results, including the company’s ability to meet its top tier financial targets, or otherwise are not statements of historical fact. such forward-looking statements are based on certain assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties, and other factors, some of which cannot be predicted or quantified, that may cause actual results, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements. forward-looking statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” “continue,” “confidence,” or words of similar meaning or other statements concerning opinions or judgment of the company and its management about future events. although the company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual future results, performance, or achievements of, or trends affecting, the company will not differ materially from any projected future results, performance, achievements or trends expressed or implied by such forward-looking statements. actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to the effects of or changes in: market interest rates and their related impacts on macroeconomic conditions, customer and client behavior, the company’s funding costs and the company’s loan and securities portfolios; inflation and its impacts on economic growth and customer and client behavior; general economic and financial market conditions, in the united states generally and particularly in the markets in which the company operates and which its loans are concentrated, including the effects of declines in real estate values, an increase in unemployment levels and slowdowns in economic growth; monetary and fiscal policies of the u.s. government, including policies of the u.s. department of the treasury and the federal reserve; the quality or composition of the company’s loan or investment portfolios and changes therein; demand for loan products and financial services in the company’s market areas; the company’s ability to manage its growth or implement its growth strategy; the effectiveness of expense reduction plans; the introduction of new lines of business or new products and services; the company’s ability to recruit and retain key employees; real estate values in the company’s lending area; an insufficient acl; changes in accounting principles, standards, rules, and interpretations, and the related impact on the company’s financial statements; volatility in the acl resulting from the cecl methodology, either alone or as that may be affected by conditions arising out of the covid-19 pandemic, inflation, changing interest rates, or other factors; the company’s liquidity and capital positions; concentrations of loans secured by real estate, particularly commercial real estate; the effectiveness of the company’s credit processes and management of the company’s credit risk; the company’s ability to compete in the market for financial services and increased competition from fintech companies; technological risks and developments, and cyber threats, attacks, or events; operational, technological, cultural, regulatory, legal, credit, and other risks associated with the exploration, consummation and integration of potential future acquisitions, whether involving stock or cash considerations; the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts (such as the ongoing conflict between russia and ukraine) or public health events (such as covid-19), and of governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of the company's borrowers to satisfy their obligations to the company, on the value of collateral securing loans, on the demand for the company's loans or its other products and services, on supply chains and methods used to distribute products and services, on incidents of cyberattack and fraud, on the company’s liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of the company's business operations and on financial markets and economic growth; the effect of steps the company takes in response to the covid-19 pandemic, the severity and duration of the pandemic, the uncertainty regarding new variants of covid-19 that have emerged, the speed and efficacy of vaccine and treatment developments, the impact of loosening or tightening of government restrictions, the pace of recovery when the pandemic subsides and the heightened impact it has on many of the risks described herein; the discontinuation of libor and its impact on the financial markets, and the company’s ability to manage operational, legal and compliance risks related to the discontinuation of libor and implementation of one or more alternate reference rates; performance by the company’s counterparties or vendors; deposit flows; the availability of financing and the terms thereof; the level of prepayments on loans and mortgage-backed securities; legislative or regulatory changes and requirements; potential claims, damages, and fines related to litigation or government actions; the effects of changes in federal, state or local tax laws and regulations; any event or development that would cause the company to conclude that there was an impairment of any asset, including intangible assets, such as goodwill; and other factors, many of which are beyond the control of the company. please also refer to such other factors as discussed throughout part i, item 1a. “risk factors” and part ii, item 7, “management’s discussion and analysis of financial condition and results of operations” of the company’s annual report on form 10‑k for the year ended december 31, 2021 and related disclosures in other filings, which have been filed with the u.s. securities and exchange commission (“sec”) and are available on the sec’s website at www.sec.gov. all risk factors and uncertainties described herein and therein should be considered in evaluating forward-looking statements, and all of the forward-looking statements are expressly qualified by the cautionary statements contained or referred to herein and therein. the actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on the company or its businesses or operations. readers are cautioned not to rely too heavily on the forward-looking statements, and undue reliance should not be placed on such forward-looking statements. forward-looking statements speak only as of the date they are made. the company does not intend or assume any obligation to update, revise or clarify any forward-looking statements that may be made from time to time by or on behalf of the company, whether as a result of new information, future events or otherwise. atlantic union bankshares corporation and subsidiaries key financial results (dollars in thousands, except share data) as of & for three months ended as of & for year ended 12/31/22 09/30/22 12/31/21 12/31/22 12/31/21 (unaudited) (unaudited) (unaudited) (unaudited) (audited) results of operations interest and dividend income $ 202,068 $ 171,156 $ 147,456 $ 660,435 $ 592,359 interest expense 38,220 20,441 9,129 76,174 41,099 net interest income 163,848 150,715 138,327 584,261 551,260 provision for credit losses 6,257 6,412 (1,000 ) 19,028 (60,888 ) net interest income after provision for credit losses 157,591 144,303 139,327 565,233 612,148 noninterest income 24,500 25,584 36,417 118,523 125,806 noninterest expenses 99,790 99,923 119,944 403,802 419,195 income before income taxes 82,301 69,964 55,800 279,954 318,759 income tax expense 11,777 11,894 8,021 45,444 54,842 net income 70,524 58,070 47,779 234,510 263,917 dividends on preferred stock 2,967 2,967 2,967 11,868 11,868 net income available to common shareholders $ 67,557 $ 55,103 $ 44,812 $ 222,642 $ 252,049 interest earned on earning assets (fte) (1) $ 206,186 $ 174,998 $ 150,684 $ 675,308 $ 604,950 net interest income (fte) (1) 167,966 154,557 141,555 599,134 563,851 total revenue (fte) (1) 192,466 180,141 177,972 717,657 689,657 pre-ppp total adjusted revenue (fte) (1) (10) 192,447 179,687 161,423 703,772 636,215 pre-tax pre-provision adjusted operating earnings (8) 88,559 76,376 66,199 295,411 284,779 pre-ppp pre-tax pre-provision adjusted operating earnings (8) (10) 88,539 75,922 54,787 290,605 236,561 key ratios earnings per common share, diluted $ 0.90 $ 0.74 $ 0.59 $ 2.97 $ 3.26 return on average assets (roa) 1.39 % 1.15 % 0.94 % 1.18 % 1.32 % return on average equity (roe) 12.05 % 9.45 % 6.98 % 9.51 % 9.68 % return on average tangible common equity (rotce) (2) (3) 22.92 % 17.21 % 11.98 % 17.33 % 16.72 % efficiency ratio 52.98 % 56.68 % 68.64 % 57.46 % 61.91 % efficiency ratio (fte) (1) 51.85 % 55.47 % 67.39 % 56.27 % 60.78 % net interest margin 3.61 % 3.34 % 3.03 % 3.27 % 3.08 % net interest margin (fte) (1) 3.70 % 3.43 % 3.10 % 3.36 % 3.15 % yields on earning assets (fte) (1) 4.54 % 3.88 % 3.30 % 3.78 % 3.38 % cost of interest-bearing liabilities 1.24 % 0.68 % 0.30 % 0.64 % 0.34 % cost of deposits 0.72 % 0.37 % 0.12 % 0.34 % 0.16 % cost of funds 0.84 % 0.45 % 0.20 % 0.42 % 0.23 % operating measures (4) adjusted operating earnings $ 70,525 $ 58,070 $ 56,784 $ 230,879 $ 285,174 adjusted operating earnings available to common shareholders 67,558 55,103 53,817 219,011 273,306 adjusted operating earnings per common share, diluted $ 0.90 $ 0.74 $ 0.71 $ 2.92 $ 3.53 adjusted operating roa 1.39 % 1.15 % 1.11 % 1.16 % 1.43 % adjusted operating roe 12.05 % 9.45 % 8.30 % 9.37 % 10.46 % adjusted operating rotce (2) (3) 22.92 % 17.21 % 14.25 % 17.06 % 18.07 % adjusted operating efficiency ratio (fte) (1)(7) 50.61 % 54.09 % 57.96 % 54.68 % 54.52 % per share data earnings per common share, basic $ 0.90 $ 0.74 $ 0.59 $ 2.97 $ 3.26 earnings per common share, diluted 0.90 0.74 0.59 2.97 3.26 cash dividends paid per common share 0.30 0.30 0.28 1.16 1.09 market value per share 35.14 30.38 37.29 35.14 37.29 book value per common share 29.68 28.46 33.80 29.68 33.80 tangible book value per common share (2) 16.87 15.61 20.79 16.87 20.79 price to earnings ratio, diluted 9.79 10.37 15.93 11.83 11.44 price to book value per common share ratio 1.18 1.07 1.10 1.18 1.10 price to tangible book value per common share ratio (2) 2.08 1.95 1.79 2.08 1.79 weighted average common shares outstanding, basic 74,712,040 74,703,699 75,654,336 74,949,109 77,399,902 weighted average common shares outstanding, diluted 74,713,972 74,705,054 75,667,759 74,953,398 77,417,801 common shares outstanding at end of period 74,712,622 74,703,774 75,663,648 74,712,622 75,663,648 atlantic union bankshares corporation and subsidiaries key financial results (dollars in thousands, except share data) as of & for three months ended as of & for year ended 12/31/22 09/30/22 12/31/21 12/31/22 12/31/21 (unaudited) (unaudited) (unaudited) (unaudited) (audited) capital ratios common equity tier 1 capital ratio (5) 9.95 % 9.96 % 10.24 % 9.95 % 10.24 % tier 1 capital ratio (5) 10.94 % 10.98 % 11.32 % 10.94 % 11.32 % total capital ratio (5) 13.70 % 13.80 % 14.17 % 13.70 % 14.17 % leverage ratio (tier 1 capital to average assets) (5) 9.42 % 9.32 % 9.01 % 9.42 % 9.01 % common equity to total assets 10.78 % 10.60 % 12.68 % 10.78 % 12.68 % tangible common equity to tangible assets (2) 6.43 % 6.11 % 8.20 % 6.43 % 8.20 % financial condition assets $ 20,461,138 $ 19,950,231 $ 20,064,796 $ 20,461,138 $ 20,064,796 loans held for investment (net of deferred fees and costs) 14,449,142 13,918,720 13,195,843 14,449,142 13,195,843 securities 3,709,761 3,640,722 4,186,475 3,709,761 4,186,475 earning assets 18,271,430 17,790,324 18,030,138 18,271,430 18,030,138 goodwill 925,211 925,211 935,560 925,211 935,560 amortizable intangibles, net 26,761 29,142 43,312 26,761 43,312 deposits 15,931,677 16,546,216 16,611,068 15,931,677 16,611,068 borrowings 1,708,700 669,558 506,594 1,708,700 506,594 stockholders' equity 2,372,737 2,281,150 2,710,071 2,372,737 2,710,071 tangible common equity (2) 1,254,408 1,160,440 1,564,842 1,254,408 1,564,842 loans held for investment, net of deferred fees and costs construction and land development $ 1,101,260 $ 1,068,201 $ 862,236 $ 1,101,260 $ 862,236 commercial real estate - owner occupied 1,982,608 1,953,872 1,995,409 1,982,608 1,995,409 commercial real estate - non-owner occupied 3,996,130 3,900,325 3,789,377 3,996,130 3,789,377 multifamily real estate 802,923 774,970 778,626 802,923 778,626 commercial & industrial 2,983,349 2,709,047 2,542,243 2,983,349 2,542,243 residential 1-4 family - commercial 538,063 542,612 607,337 538,063 607,337 residential 1-4 family - consumer 940,275 891,353 816,524 940,275 816,524 residential 1-4 family - revolving 585,184 588,452 560,796 585,184 560,796 auto 592,976 561,277 461,052 592,976 461,052 consumer 152,545 172,776 176,992 152,545 176,992 other commercial 773,829 755,835 605,251 773,829 605,251 total loans held for investment $ 14,449,142 $ 13,918,720 $ 13,195,843 $ 14,449,142 $ 13,195,843 deposits interest checking accounts $ 4,186,505 $ 4,354,351 $ 4,176,032 $ 4,186,505 $ 4,176,032 money market accounts 3,922,536 3,962,473 4,249,858 3,922,536 4,249,858 savings accounts 1,130,899 1,173,566 1,121,297 1,130,899 1,121,297 time deposits of $250,000 and over 405,060 415,984 452,193 405,060 452,193 other time deposits 1,403,438 1,348,904 1,404,364 1,403,438 1,404,364 time deposits 1,808,498 1,764,888 1,856,557 1,808,498 1,856,557 total interest-bearing deposits $ 11,048,438 $ 11,255,278 $ 11,403,744 $ 11,048,438 $ 11,403,744 demand deposits 4,883,239 5,290,938 5,207,324 4,883,239 5,207,324 total deposits $ 15,931,677 $ 16,546,216 $ 16,611,068 $ 15,931,677 $ 16,611,068 averages assets $ 20,174,152 $ 19,980,500 $ 20,236,889 $ 19,949,388 $ 19,977,551 loans held for investment (net of deferred fees and costs) 14,117,433 13,733,447 13,082,412 13,671,714 13,639,325 loans held for sale 7,809 15,063 26,775 14,519 39,031 securities 3,644,196 3,818,607 3,998,058 3,896,337 3,579,378 earning assets 18,000,596 17,879,222 18,138,285 17,853,216 17,903,671 deposits 16,611,749 16,488,224 16,861,219 16,451,718 16,541,286 time deposits 1,764,596 1,745,224 1,941,420 1,735,983 2,201,039 interest-bearing deposits 11,415,032 11,163,945 11,489,510 11,172,759 11,485,130 borrowings 816,818 703,272 445,344 700,271 453,452 interest-bearing liabilities 12,231,850 11,867,217 11,934,854 11,873,030 11,938,582 stockholders' equity 2,321,208 2,436,999 2,715,610 2,465,049 2,725,330 tangible common equity (2) 1,201,732 1,315,085 1,568,828 1,333,751 1,573,415 atlantic union bankshares corporation and subsidiaries key financial results (dollars in thousands, except share data) as of & for three months ended as of & for year ended 12/31/22 09/30/22 12/31/21 12/31/22 12/31/21 (unaudited) (unaudited) (unaudited) (unaudited) (audited) asset quality allowance for credit losses (acl) beginning balance, allowance for loan and lease losses (alll) $ 108,009 $ 104,184 $ 101,798 $ 99,787 $ 160,540 add: recoveries 1,332 1,214 1,720 5,076 8,218 less: charge-offs 2,142 1,801 2,231 7,409 10,083 add: provision for loan losses 3,569 4,412 (1,500 ) 13,314 (58,888 ) ending balance, alll $ 110,768 $ 108,009 $ 99,787 $ 110,768 $ 99,787 beginning balance, reserve for unfunded commitment (ruc) $ 11,000 $ 9,000 $ 7,500 $ 8,000 $ 10,000 add: provision for unfunded commitments 2,675 2,000 500 5,675 (2,000 ) ending balance, ruc $ 13,675 $ 11,000 $ 8,000 $ 13,675 $ 8,000 total acl $ 124,443 $ 119,009 $ 107,787 $ 124,443 $ 107,787 acl / total outstanding loans 0.86 % 0.86 % 0.82 % 0.86 % 0.82 % acl / total adjusted loans(9) 0.86 % 0.86 % 0.83 % 0.86 % 0.83 % alll / total outstanding loans 0.77 % 0.78 % 0.76 % 0.77 % 0.76 % alll / total adjusted loans(9) 0.77 % 0.78 % 0.76 % 0.77 % 0.76 % net charge-offs / total average loans 0.02 % 0.02 % 0.02 % 0.02 % 0.01 % net charge-offs / total adjusted average loans(9) 0.02 % 0.02 % 0.02 % 0.02 % 0.01 % provision for loan losses/ total average loans 0.10 % 0.13 % (0.05 ) % 0.10 % (0.43 ) % provision for loan losses/ total adjusted average loans(9) 0.10 % 0.13 % (0.05 ) % 0.10 % (0.46 ) % nonperforming assets (6) construction and land development $ 307 $ 421 $ 2,697 $ 307 $ 2,697 commercial real estate - owner occupied 7,178 4,883 5,637 7,178 5,637 commercial real estate - non-owner occupied 1,263 1,923 3,641 1,263 3,641 multifamily real estate — — 113 — 113 commercial & industrial 1,884 2,289 1,647 1,884 1,647 residential 1-4 family - commercial 1,904 1,962 2,285 1,904 2,285 residential 1-4 family - consumer 10,846 11,121 11,397 10,846 11,397 residential 1-4 family - revolving 3,453 3,583 3,406 3,453 3,406 auto 200 318 223 200 223 consumer 3 — 54 3 54 nonaccrual loans $ 27,038 $ 26,500 $ 31,100 $ 27,038 $ 31,100 foreclosed property 76 2,087 1,696 76 1,696 total nonperforming assets (npas) $ 27,114 $ 28,587 $ 32,796 $ 27,114 $ 32,796 construction and land development $ 100 $ 115 $ 299 $ 100 $ 299 commercial real estate - owner occupied 2,167 3,517 1,257 2,167 1,257 commercial real estate - non-owner occupied 607 621 433 607 433 commercial & industrial 459 526 1,897 459 1,897 residential 1-4 family - commercial 275 308 990 275 990 residential 1-4 family - consumer 1,955 680 3,013 1,955 3,013 residential 1-4 family - revolving 1,384 1,255 882 1,384 882 auto 344 148 241 344 241 consumer 108 86 120 108 120 other commercial 91 95 — 91 — loans ≥ 90 days and still accruing $ 7,490 $ 7,351 $ 9,132 $ 7,490 $ 9,132 total npas and loans ≥ 90 days $ 34,604 $ 35,938 $ 41,928 $ 34,604 $ 41,928 npas / total outstanding loans 0.19 % 0.21 % 0.25 % 0.19 % 0.25 % npas / total adjusted loans(9) 0.19 % 0.21 % 0.25 % 0.19 % 0.25 % npas / total assets 0.13 % 0.14 % 0.16 % 0.13 % 0.16 % alll / nonaccrual loans 409.68 % 407.58 % 320.86 % 409.68 % 320.86 % alll/ nonperforming assets 408.53 % 377.83 % 304.27 % 408.53 % 304.27 % atlantic union bankshares corporation and subsidiaries key financial results (dollars in thousands, except share data) as of & for three months ended as of & for year ended 12/31/22 09/30/22 12/31/21 12/31/22 12/31/21 (unaudited) (unaudited) (unaudited) (unaudited) (audited) past due detail (6) construction and land development $ 1,253 $ 120 $ 1,357 $ 1,253 $ 1,357 commercial real estate - owner occupied 2,305 7,337 1,230 2,305 1,230 commercial real estate - non-owner occupied 1,121 — 1,965 1,121 1,965 multifamily real estate 1,229 — 84 1,229 84 commercial & industrial 824 796 1,161 824 1,161 residential 1-4 family - commercial 1,231 1,410 1,844 1,231 1,844 residential 1-4 family - consumer 5,951 1,123 3,368 5,951 3,368 residential 1-4 family - revolving 1,843 1,115 1,493 1,843 1,493 auto 2,747 1,876 1,866 2,747 1,866 consumer 351 409 689 351 689 other commercial — — 37 — 37 loans 30-59 days past due $ 18,855 $ 14,186 $ 15,094 $ 18,855 $ 15,094 construction and land development $ 45 $ 107 $ — $ 45 $ — commercial real estate - owner occupied 635 763 152 635 152 commercial real estate - non-owner occupied 48 457 127 48 127 commercial & industrial 174 3,128 1,438 174 1,438 residential 1-4 family - commercial — 97 272 — 272 residential 1-4 family - consumer 1,690 1,449 2,925 1,690 2,925 residential 1-4 family - revolving 511 1,081 363 511 363 auto 450 257 249 450 249 consumer 125 101 186 125 186 loans 60-89 days past due $ 3,678 $ 7,440 $ 5,712 $ 3,678 $ 5,712 past due and still accruing $ 30,023 $ 28,977 $ 29,938 $ 30,023 $ 29,938 past due and still accruing / total loans 0.21 % 0.21 % 0.23 % 0.21 % 0.23 % troubled debt restructurings performing $ 9,273 $ 10,333 $ 10,313 $ 9,273 $ 10,313 nonperforming 4,917 5,298 7,642 4,917 7,642 total troubled debt restructurings $ 14,190 $ 15,631 $ 17,955 $ 14,190 $ 17,955 alternative performance measures (non-gaap) net interest income (fte) (1) net interest income (gaap) $ 163,848 $ 150,715 $ 138,327 $ 584,261 $ 551,260 fte adjustment 4,118 3,842 3,228 14,873 12,591 net interest income (fte) (non-gaap) $ 167,966 $ 154,557 $ 141,555 $ 599,134 $ 563,851 noninterest income (gaap) 24,500 25,584 36,417 118,523 125,806 total revenue (fte) (non-gaap) $ 192,466 $ 180,141 $ 177,972 $ 717,657 $ 689,657 average earning assets $ 18,000,596 $ 17,879,222 $ 18,138,285 $ 17,853,216 $ 17,903,671 net interest margin 3.61 % 3.34 % 3.03 % 3.27 % 3.08 % net interest margin (fte) 3.70 % 3.43 % 3.10 % 3.36 % 3.15 % tangible assets (2) ending assets (gaap) $ 20,461,138 $ 19,950,231 $ 20,064,796 $ 20,461,138 $ 20,064,796 less: ending goodwill 925,211 925,211 935,560 925,211 935,560 less: ending amortizable intangibles 26,761 29,142 43,312 26,761 43,312 ending tangible assets (non-gaap) $ 19,509,166 $ 18,995,878 $ 19,085,924 $ 19,509,166 $ 19,085,924 tangible common equity (2) ending equity (gaap) $ 2,372,737 $ 2,281,150 $ 2,710,071 $ 2,372,737 $ 2,710,071 less: ending goodwill 925,211 925,211 935,560 925,211 935,560 less: ending amortizable intangibles 26,761 29,142 43,312 26,761 43,312 less: perpetual preferred stock 166,357 166,357 166,357 166,357 166,357 ending tangible common equity (non-gaap) $ 1,254,408 $ 1,160,440 $ 1,564,842 $ 1,254,408 $ 1,564,842 average equity (gaap) $ 2,321,208 $ 2,436,999 $ 2,715,610 $ 2,465,049 $ 2,725,330 less: average goodwill 925,211 925,211 935,560 930,315 935,560 less: average amortizable intangibles 27,909 30,347 44,866 34,627 49,999 less: average perpetual preferred stock 166,356 166,356 166,356 166,356 166,356 average tangible common equity (non-gaap) $ 1,201,732 $ 1,315,085 $ 1,568,828 $ 1,333,751 $ 1,573,415 rotce (2)(3) net income available to common shareholders (gaap) $ 67,557 $ 55,103 $ 44,812 $ 222,642 $ 252,049 plus: amortization of intangibles, tax effected 1,881 1,959 2,548 8,544 10,984 net income available to common shareholders before amortization of intangibles (non-gaap) $ 69,438 $ 57,062 $ 47,360 $ 231,186 $ 263,033 return on average tangible common equity (rotce) 22.92 % 17.21 % 11.98 % 17.33 % 16.72 % atlantic union bankshares corporation and subsidiaries key financial results (dollars in thousands, except share data) as of & for three months ended as of & for year ended 12/31/22 09/30/22 12/31/21 12/31/22 12/31/21 (unaudited) (unaudited) (unaudited) (unaudited) (audited) operating measures (4) net income (gaap) $ 70,524 $ 58,070 $ 47,779 $ 234,510 $ 263,917 plus: net loss related to balance sheet repositioning, net of tax — — — — 11,609 plus: branch closing and facility consolidation costs, net of tax — — 13,063 4,351 13,775 less: (loss) gain on sale of securities, net of tax (1 ) — — (2 ) 69 less: gain on sale of dhfb, net of tax — — — 7,984 — less: gain on visa, inc. class b common stock, net of tax — — 4,058 — 4,058 adjusted operating earnings (non-gaap) 70,525 58,070 56,784 230,879 285,174 less: dividends on preferred stock 2,967 2,967 2,967 11,868 11,868 adjusted operating earnings available to common shareholders (non-gaap) $ 67,558 $ 55,103 $ 53,817 $ 219,011 $ 273,306 noninterest expense (gaap) $ 99,790 $ 99,923 $ 119,944 $ 403,802 $ 419,195 less: amortization of intangible assets 2,381 2,480 3,225 10,815 13,904 less: losses related to balance sheet repositioning — — — — 14,695 less: branch closing and facility consolidation costs — — 16,536 5,508 17,437 adjusted operating noninterest expense (non-gaap) $ 97,409 $ 97,443 $ 100,183 $ 387,479 $ 373,159 noninterest income (gaap) $ 24,500 $ 25,584 $ 36,417 $ 118,523 $ 125,806 less: (loss) gain on sale of securities (1 ) — — (3 ) 87 less: gain on sale of dhfb — — — 9,082 — less: gain on visa, inc. class b common stock — — 5,137 — 5,137 adjusted operating noninterest income (non-gaap) $ 24,501 $ 25,584 $ 31,280 $ 109,444 $ 120,582 net interest income (fte) (non-gaap) (1) $ 167,966 $ 154,557 $ 141,555 $ 599,134 $ 563,851 adjusted operating noninterest income (non-gaap) 24,501 25,584 31,280 109,444 120,582 total adjusted revenue (fte) (non-gaap) (1) $ 192,467 $ 180,141 $ 172,835 $ 708,578 $ 684,433 less: ppp accretion interest income and fees 20 454 11,412 4,806 48,218 pre-ppp total adjusted revenue (fte) (non-gaap) (1) (10) $ 192,447 $ 179,687 $ 161,423 $ 703,772 $ 636,215 efficiency ratio 52.98 % 56.68 % 68.64 % 57.46 % 61.91 % efficiency ratio (fte) (1) 51.85 % 55.47 % 67.39 % 56.27 % 60.78 % adjusted operating efficiency ratio (fte) (1)(7) 50.61 % 54.09 % 57.96 % 54.68 % 54.52 % operating roa & roe (4) adjusted operating earnings (non-gaap) $ 70,525 $ 58,070 $ 56,784 $ 230,879 $ 285,174 average assets (gaap) $ 20,174,152 $ 19,980,500 $ 20,236,889 $ 19,949,388 $ 19,977,551 return on average assets (roa) (gaap) 1.39 % 1.15 % 0.94 % 1.18 % 1.32 % adjusted operating return on average assets (roa) (non-gaap) 1.39 % 1.15 % 1.11 % 1.16 % 1.43 % average equity (gaap) $ 2,321,208 $ 2,436,999 $ 2,715,610 $ 2,465,049 $ 2,725,330 return on average equity (roe) (gaap) 12.05 % 9.45 % 6.98 % 9.51 % 9.68 % adjusted operating return on average equity (roe) (non-gaap) 12.05 % 9.45 % 8.30 % 9.37 % 10.46 % operating rotce (2)(3)(4) adjusted operating earnings available to common shareholders (non-gaap) $ 67,558 $ 55,103 $ 53,817 $ 219,011 $ 273,306 plus: amortization of intangibles, tax effected 1,881 1,959 2,548 8,544 10,984 adjusted operating earnings available to common shareholders before amortization of intangibles (non-gaap) $ 69,439 $ 57,062 $ 56,365 $ 227,555 $ 284,290 average tangible common equity (non-gaap) $ 1,201,732 $ 1,315,085 $ 1,568,828 $ 1,333,751 $ 1,573,415 adjusted operating return on average tangible common equity (non-gaap) 22.92 % 17.21 % 14.25 % 17.06 % 18.07 % pre-tax pre-provision adjusted operating earnings (8) net income (gaap) $ 70,524 $ 58,070 $ 47,779 $ 234,510 $ 263,917 plus: provision for credit losses 6,257 6,412 (1,000 ) 19,028 (60,888 ) plus: income tax expense 11,777 11,894 8,021 45,444 54,842 plus: net loss related to balance sheet repositioning — — — — 14,695 plus: branch closing and facility consolidation costs — — 16,536 5,508 17,437 less: (loss) gain on sale of securities (1 ) — — (3 ) 87 less: gain on sale of dhfb — — — 9,082 — less: gain on visa, inc. class b common stock — — 5,137 — 5,137 pre-tax pre-provision adjusted operating earnings (non-gaap) $ 88,559 $ 76,376 $ 66,199 $ 295,411 $ 284,779 less: dividends on preferred stock 2,967 2,967 2,967 11,868 11,868 pre-tax pre-provision adjusted operating earnings available to common shareholders (non-gaap) $ 85,592 $ 73,409 $ 63,232 $ 283,543 $ 272,911 pre-tax pre-provision adjusted operating earnings (non-gaap) $ 88,559 $ 76,376 $ 66,199 $ 295,411 $ 284,779 less: ppp accretion interest income and fees 20 454 11,412 4,806 48,218 pre-ppp pre-tax pre-provision adjusted operating earnings (non-gaap) (10) $ 88,539 $ 75,922 $ 54,787 $ 290,605 $ 236,561 weighted average common shares outstanding, diluted 74,713,972 74,705,054 75,667,759 74,953,398 77,417,801 pre-tax pre-provision earnings per common share, diluted $ 1.15 $ 0.98 $ 0.84 $ 3.78 $ 3.53 atlantic union bankshares corporation and subsidiaries key financial results (dollars in thousands, except share data) as of & for three months ended as of & for year ended 12/31/22 09/30/22 12/31/21 12/31/22 12/31/21 (unaudited) (unaudited) (unaudited) (unaudited) (audited) adjusted loans (9) loans held for investment (net of deferred fees and costs) (gaap) $ 14,449,142 $ 13,918,720 $ 13,195,843 $ 14,449,142 $ 13,195,843 less: ppp loans (net of deferred fees and costs) 7,286 12,146 150,363 7,286 150,363 total adjusted loans (non-gaap) $ 14,441,856 $ 13,906,574 $ 13,045,480 $ 14,441,856 $ 13,045,480 average loans held for investment (net of deferred fees and costs) (gaap) $ 14,117,433 $ 13,733,447 $ 13,082,412 $ 13,671,714 $ 13,639,325 less: average ppp loans (net of deferred fees and costs) 8,217 14,280 288,204 41,896 864,814 total adjusted average loans (non-gaap) $ 14,109,216 $ 13,719,167 $ 12,794,208 $ 13,629,818 $ 12,774,511 mortgage origination held for sale volume refinance volume $ 2,312 $ 5,637 $ 46,575 $ 55,725 $ 287,976 purchase volume 29,262 66,360 71,969 238,310 322,492 total mortgage loan originations held for sale $ 31,574 $ 71,997 $ 118,544 $ 294,035 $ 610,468 % of originations held for sale that are refinances 7.3 % 7.8 % 39.3 % 19.0 % 47.2 % wealth assets under management ("aum") $ 4,271,728 $ 4,065,059 $ 6,741,022 $ 4,271,728 $ 6,741,022 other data end of period full-time employees 1,877 1,890 1,876 1,877 1,876 number of full-service branches 114 114 130 114 130 number of automatic transaction machines ("atms") 131 131 148 131 148 _________________________ (1) these are non-gaap financial measures. net interest income (fte), total revenue (fte), and total adjusted revenue (fte), which are used in computing net interest margin (fte), efficiency ratio (fte) and adjusted operating efficiency ratio (fte), provide valuable additional insight into the net interest margin and the efficiency ratio by adjusting for differences in tax treatment of interest income sources. the entire fte adjustment is attributable to interest income on earning assets, which is used in computing yield on earning assets. interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the fte components. (2) these are non-gaap financial measures. tangible assets and tangible common equity are used in the calculation of certain profitability, capital, and per share ratios. the company believes tangible assets, tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the company believes will assist investors in assessing the capital of the company and its ability to absorb potential losses. the company believes tangible common equity is an important indication of its ability to grow organically and through business combinations as well as its ability to pay dividends and to engage in various capital management strategies. (3) these are non-gaap financial measures. the company believes that rotce is a meaningful supplement to gaap financial measures and useful to investors because it measures the performance of a business consistently across time without regard to whether components of the business were acquired or developed internally. (4) these are non-gaap financial measures. adjusted operating measures exclude the losses related to balance sheet repositioning (principally composed of losses on debt extinguishment), gains or losses on sale of securities, gains on the sale of visa, inc. class b common stock, gain on the sale of dixon, hubard, feinour & brown, inc. (“dhfb”), as well as strategic branch closure initiatives and related facility consolidation costs (principally composed of real estate, leases and other assets write downs, as well as severance and expense reduction initiatives). the company believes these non-gaap adjusted measures provide investors with important information about the continuing economic results of the organization’s operations. prior periods reflect adjustments for previously announced strategic branch closure and expense reduction initiatives. (5) all ratios at december 31, 2022 are estimates and subject to change pending the company’s filing of its fr y9 c. all other periods are presented as filed. (6) these balances reflect the impact of the coronavirus aid, relief, and economic security act and the joint guidance issued by the five federal bank regulatory agencies and the conference of state bank supervisors on march 22, 2020, as subsequently revised on april 7, 2020, which provides relief for tdr designations and also provides guidance on past due reporting for modified loans made between march 1, 2020 and january 1, 2022. (7) the adjusted operating efficiency ratio (fte) excludes the amortization of intangible assets, gains or losses on sale of securities, gains on the sale of visa, inc. class b common stock, gain on the sale of dhfb, losses related to balance sheet repositioning (principally composed of losses on debt extinguishment), as well as strategic branch closure initiatives and related facility consolidation costs. this measure is similar to the measure utilized by the company when analyzing corporate performance and is also similar to the measure utilized for incentive compensation. the company believes this adjusted measure provides investors with important information about the combined economic results of the organization’s operations. prior periods reflect adjustments for previously announced strategic branch closure and expense reduction initiatives. (8) these are non-gaap financial measures. pre-tax pre-provision adjusted earnings excludes the provision for credit losses, which can fluctuate significantly from period-to-period under the cecl methodology, income tax expense, losses related to balance sheet repositioning (principally composed of losses on debt extinguishment), gains or losses on sale of securities, gains on the sale of visa, inc. class b common stock, gain on the sale of dhfb, as well as strategic branch closure initiatives and related facility consolidation costs. the company believes this adjusted measure provides investors with important information about the combined economic results of the organization’s operations. prior periods reflect adjustments for previously announced strategic branch closure and expense reduction initiatives. (9) these are non-gaap financial measures. ppp adjustment impact excludes the unforgiven portion of ppp loans. the company believes loans held for investment (net of deferred fees and costs), excluding ppp is useful to investors as it provides more clarity on the company’s organic growth. the company also believes that the related non-gaap financial measures of past due loans still accruing interest as a percentage of total loans held for investment (net of deferred fees and costs), excluding ppp, are useful to investors as loans originated under the ppp carry a sba guarantee. the company believes that the alll as a percentage of loans held for investment (net of deferred fees and costs), excluding ppp, is useful to investors because of the size of the company’s ppp originations and the impact of the embedded credit enhancement provided by the sba guarantee. (10) these are non-gaap financial measures. the company believes excluding ppp accretion interest income and fees from operating earnings is useful to investors as it provides more clarity on the company’s non-ppp related income. atlantic union bankshares corporation and subsidiaries consolidated balance sheets (dollars in thousands, except share data) december 31, september 30, december 31, 2022 2022 2021 assets (unaudited) (unaudited) (audited) cash and cash equivalents: cash and due from banks $ 216,384 $ 177,969 $ 180,963 interest-bearing deposits in other banks 102,107 211,785 618,714 federal funds sold 1,457 1,188 2,824 total cash and cash equivalents 319,948 390,942 802,501 securities available for sale, at fair value 2,741,816 2,717,323 3,481,650 securities held to maturity, at carrying value 847,732 841,349 628,000 restricted stock, at cost 120,213 82,050 76,825 loans held for sale, at fair value 3,936 12,889 20,861 loans held for investment, net of deferred fees and costs 14,449,142 13,918,720 13,195,843 less: allowance for loan and lease losses 110,768 108,009 99,787 total loans held for investment, net 14,338,374 13,810,711 13,096,056 premises and equipment, net 118,243 126,374 134,808 goodwill 925,211 925,211 935,560 amortizable intangibles, net 26,761 29,142 43,312 bank owned life insurance 440,656 437,988 431,517 other assets 578,248 576,252 413,706 total assets $ 20,461,138 $ 19,950,231 $ 20,064,796 liabilities noninterest-bearing demand deposits $ 4,883,239 $ 5,290,938 $ 5,207,324 interest-bearing deposits 11,048,438 11,255,278 11,403,744 total deposits 15,931,677 16,546,216 16,611,068 securities sold under agreements to repurchase 142,837 146,182 117,870 other short-term borrowings 1,176,000 133,800 — long-term borrowings 389,863 389,576 388,724 other liabilities 448,024 453,307 237,063 total liabilities 18,088,401 17,669,081 17,354,725 commitments and contingencies stockholders' equity preferred stock, $10.00 par value 173 173 173 common stock, $1.33 par value 98,873 98,845 100,101 additional paid-in capital 1,772,440 1,769,858 1,807,368 retained earnings 919,537 874,393 783,794 accumulated other comprehensive income (loss) (418,286 ) (462,119 ) 18,635 total stockholders' equity 2,372,737 2,281,150 2,710,071 total liabilities and stockholders' equity $ 20,461,138 $ 19,950,231 $ 20,064,796 common shares outstanding 74,712,622 74,703,774 75,663,648 common shares authorized 200,000,000 200,000,000 200,000,000 preferred shares outstanding 17,250 17,250 17,250 preferred shares authorized 500,000 500,000 500,000 atlantic union bankshares corporation and subsidiaries consolidated statements of income (dollars in thousands, except share data) three months ended year ended december 31, september 30, december 31, december 31, december 31, 2022 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (unaudited) (audited) interest and dividend income: interest and fees on loans $ 173,475 $ 144,673 $ 125,195 $ 555,614 $ 508,770 interest on deposits in other banks 1,383 941 401 2,612 855 interest and dividends on securities: taxable 16,196 14,750 11,757 59,306 43,859 nontaxable 11,014 10,792 10,103 42,903 38,875 total interest and dividend income 202,068 171,156 147,456 660,435 592,359 interest expense: interest on deposits 30,236 15,386 4,915 56,201 27,117 interest on short-term borrowings 3,588 1,229 17 5,393 108 interest on long-term borrowings 4,396 3,826 4,197 14,580 13,874 total interest expense 38,220 20,441 9,129 76,174 41,099 net interest income 163,848 150,715 138,327 584,261 551,260 provision for credit losses 6,257 6,412 (1,000 ) 19,028 (60,888 ) net interest income after provision for credit losses 157,591 144,303 139,327 565,233 612,148 noninterest income: service charges on deposit accounts 7,631 6,784 7,808 30,052 27,122 other service charges, commissions and fees 1,631 1,770 1,625 6,765 6,595 interchange fees 2,571 2,461 2,027 9,110 8,279 fiduciary and asset management fees 4,085 4,134 7,239 22,414 27,562 mortgage banking income 379 1,390 3,330 7,085 21,022 bank owned life insurance income 2,649 3,445 3,286 11,507 11,488 loan-related interest rate swap fees 3,664 2,050 1,443 12,174 5,620 other operating income 1,890 3,550 9,659 19,416 18,118 total noninterest income 24,500 25,584 36,417 118,523 125,806 noninterest expenses: salaries and benefits 58,723 56,600 57,970 228,926 214,929 occupancy expenses 6,328 6,408 7,013 26,013 28,718 furniture and equipment expenses 3,978 3,673 4,031 14,838 15,950 technology and data processing 9,442 8,273 8,543 33,372 30,200 professional services 4,456 3,504 4,680 16,730 17,841 marketing and advertising expense 2,228 2,343 2,545 9,236 9,875 fdic assessment premiums and other insurance 1,896 3,094 2,684 10,241 9,482 franchise and other taxes 4,500 4,507 4,436 18,006 17,740 loan-related expenses 1,356 1,575 1,715 6,574 7,004 amortization of intangible assets 2,381 2,480 3,225 10,815 13,904 loss on debt extinguishment — — — — 14,695 other expenses 4,502 7,466 23,102 29,051 38,857 total noninterest expenses 99,790 99,923 119,944 403,802 419,195 income before income taxes 82,301 69,964 55,800 279,954 318,759 income tax expense 11,777 11,894 8,021 45,444 54,842 net income $ 70,524 $ 58,070 $ 47,779 234,510 263,917 dividends on preferred stock 2,967 2,967 2,967 11,868 11,868 net income available to common shareholders $ 67,557 $ 55,103 $ 44,812 $ 222,642 $ 252,049 basic earnings per common share $ 0.90 $ 0.74 $ 0.59 $ 2.97 $ 3.26 diluted earnings per common share $ 0.90 $ 0.74 $ 0.59 $ 2.97 $ 3.26 average balances, income and expenses, yields and rates (taxable equivalent basis) (unaudited) (dollars in thousands) for the quarter ended december 31, 2022 september 30, 2022 average balance interest income / expense (1) yield / rate (1)(2) average balance interest income / expense (1) yield / rate (1)(2) assets: securities: taxable $ 2,016,845 $ 16,196 3.19 % $ 2,193,279 $ 14,750 2.67 % tax-exempt 1,627,351 13,942 3.40 % 1,625,328 13,661 3.33 % total securities 3,644,196 30,138 3.28 % 3,818,607 28,411 2.95 % loans, net (3) 14,117,433 174,531 4.90 % 13,733,447 145,433 4.20 % other earning assets 238,967 1,517 2.52 % 327,168 1,154 1.40 % total earning assets 18,000,596 $ 206,186 4.54 % 17,879,222 $ 174,998 3.88 % allowance for loan and lease losses (109,535 ) (104,746 ) total non-earning assets 2,283,091 2,206,024 total assets $ 20,174,152 $ 19,980,500 liabilities and stockholders' equity: interest-bearing deposits: transaction and money market accounts $ 8,495,299 $ 24,712 1.15 % $ 8,247,650 $ 11,342 0.55 % regular savings 1,155,137 110 0.04 % 1,171,071 64 0.02 % time deposits 1,764,596 5,414 1.22 % 1,745,224 3,980 0.90 % total interest-bearing deposits 11,415,032 30,236 1.05 % 11,163,945 15,386 0.55 % other borrowings 816,818 7,984 3.88 % 703,272 5,055 2.85 % total interest-bearing liabilities $ 12,231,850 $ 38,220 1.24 % $ 11,867,217 $ 20,441 0.68 % noninterest-bearing liabilities: demand deposits 5,196,717 5,324,279 other liabilities 424,377 352,005 total liabilities 17,852,944 17,543,501 stockholders' equity 2,321,208 2,436,999 total liabilities and stockholders' equity $ 20,174,152 $ 19,980,500 net interest income $ 167,966 $ 154,557 interest rate spread 3.30 % 3.20 % cost of funds 0.84 % 0.45 % net interest margin 3.70 % 3.43 % _________________________ (1) income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 21%. (2) rates and yields are annualized and calculated from actual, not rounded amounts in thousands, which appear above. (3) nonaccrual loans are included in average loans outstanding.
