Atlantic Union Bankshares Corporation Reports Strong First Quarter Results

Richmond, VA - Atlantic Union Bankshares Corporation (NYSE: AUB), the holding company for Atlantic Union Bank, recently released its financial results for the first quarter of 2025. The company reported solid performance, with net income available to common shareholders of $46.9 million and earnings per share (EPS) of $0.52.

Financial Highlights:

• Net interest income increased 24.6% year-over-year to $184.2 million, driven by growth in interest-earning assets and higher net interest margin.
• Noninterest income rose 14.1% to $29.2 million, boosted by increases in service charges, fiduciary and asset management fees, and loan-related interest rate swap fees.
• Noninterest expense grew 27.5% to $134.2 million, primarily due to higher salaries, benefits, and amortization of intangible assets related to recent acquisitions.
• The company’s net interest margin expanded 27 basis points to 3.38% compared to the first quarter of 2024.
• Total assets increased 0.8% (annualized) to $24.6 billion, while loans held for investment (LHFI) declined 0.9% (annualized) to $18.4 billion.
• Total deposits grew 2.1% (annualized) to $20.5 billion, with an increase in demand deposits partially offset by a decrease in brokered deposits.
• The company’s regulatory capital ratios remained well above the well-capitalized thresholds, with a common equity Tier 1 ratio of 10.07% at March 31, 2025.

Acquisition and Loan Sale Update

In April 2025, Atlantic Union completed its merger with Sandy Spring Bancorp, Inc., the parent company of Sandy Spring Bank. The acquisition expanded Atlantic Union’s presence in Northern Virginia and Maryland, adding over 50 branches to the company’s footprint.

As part of the Sandy Spring acquisition, Atlantic Union plans to sell approximately $2 billion in commercial real estate (CRE) loans to third-party buyers. This loan sale process was initiated in the second quarter of 2025 and is expected to be completed by June 30, 2025.

Economic Environment and Industry Trends

The report discusses the impact of various global and national events on the company’s operations, including changes in economic conditions, market interest rates, trade policies, and regulatory requirements. Inflation eased in 2024 but remained elevated at 2.4% as of March 2025, leading the Federal Reserve to maintain its target federal funds rate range of 4.25% to 4.50%.

The higher interest rate environment and heightened competition for deposits have resulted in a shift toward higher-cost deposit products, moderating loan demand. Atlantic Union is closely monitoring these trends and deploying asset-liability management strategies to manage interest rate risk and maintain financial flexibility.

Segment Performance

Atlantic Union operates two main business segments: Wholesale Banking and Consumer Banking.

The Wholesale Banking segment, which includes commercial lending, wealth management, and equipment finance, reported a 2.4% increase in income before taxes compared to the first quarter of 2024. This was driven by higher net interest income from the American National acquisition, partially offset by an increase in the provision for credit losses.

The Consumer Banking segment, which includes consumer and small business lending as well as the home loan division, saw a 12.3% decrease in income before taxes. This was primarily due to higher noninterest expense from the American National acquisition, partially offset by an increase in net interest income.

Asset Quality and Credit Metrics

Atlantic Union’s asset quality metrics remained strong, but the company increased its allowance for credit losses (ACL) to $209.0 million at March 31, 2025, up from $193.7 million at the end of 2024. This increase was primarily due to the impact of heightened economic uncertainty on the company’s outlook.

Nonperforming assets (NPAs) increased to $69.4 million, or 0.38% of total loans, at the end of the first quarter, up from $58.4 million, or 0.32%, at the end of 2024. The increase was mainly attributable to one new nonaccrual relationship in the commercial and industrial loan portfolio.

Net charge-offs for the first quarter of 2025 were $2.3 million, or 0.05% of average loans on an annualized basis, down from $4.9 million, or 0.13%, in the same period of the prior year.

Liquidity and Capital

Atlantic Union maintains a strong liquidity position, with liquid assets totaling $9.2 billion, or 37.2% of total assets, at March 31, 2025. The company’s regulatory capital ratios also remain well above the well-capitalized thresholds, with a common equity Tier 1 ratio of 10.07% at the end of the first quarter.

During the first quarter of 2025, the company declared and paid a quarterly dividend of $0.34 per common share, consistent with the prior quarter and representing a 6.0% increase from the first quarter of 2024.

Outlook

Atlantic Union’s management team is closely monitoring the evolving economic and industry landscape, including the potential impacts of changes in trade policies, interest rates, and regulatory requirements. The company remains focused on prudent risk management, disciplined expense control, and strategic initiatives to drive long-term growth and shareholder value.

Overall, Atlantic Union Bankshares Corporation delivered a solid performance in the first quarter of 2025, demonstrating the strength of its diversified business model and the successful integration of recent acquisitions. The company’s strong capital position and liquidity provide a solid foundation to navigate the current economic environment and capitalize on future growth opportunities.