Author's note: I present an update on my best small- and mid-cap stock ideas that insiders are buying only to subscribers of my exclusive marketplace, The Insiders Forum . Our model portfolio has more than doubled the return of its benchmark, the Russell 2000, since its launch. To join our community and gain access to our market-beating returns, just click here .Shares of Maryland and Virginia’s number one regional bank, Atlantic Union Bankshares Corporation (NYSE: AUB ) , have risen some 50% after nearly h ...

Core Insights - Atlantic Union Bankshares Corporation (NYSE: AUB) reported an adjusted profit of $0.95 per share for Q2 2025, exceeding expectations by $0.15, marking the best performance for the company in recent times [1] Financial Performance - The adjusted profit of $0.95 per share represents a significant achievement for Atlantic Union Bankshares, indicating strong financial health and operational efficiency [1]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the periods ended June 30, 2025, and 2024 [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20(unaudited)%20and%20December%2031%2C%202024%20(audited)) Consolidated Balance Sheet Highlights (Dollars in thousands) | Metric | June 30, 2025 (unaudited) | December 31, 2024 (audited) | | :--- | :--- | :--- | | **ASSETS** | | | | Total cash and cash equivalents | $1,588,648 | $354,074 | | Securities available for sale | $3,809,281 | $2,442,166 | | Loans held for investment, net | $27,012,759 | $18,291,977 | | Goodwill | $1,710,912 | $1,214,053 | | Total assets | $37,289,371 | $24,585,323 | | **LIABILITIES** | | | | Total deposits | $30,972,175 | $20,397,619 | | Total liabilities | $32,456,732 | $21,442,444 | | **STOCKHOLDERS' EQUITY** | | | | Total stockholders' equity | $4,832,639 | $3,142,879 | - Total assets increased by **$12.7 billion** (approximately 51.6%) from December 31, 2024, to June 30, 2025, primarily driven by the Sandy Spring acquisition[15](index=15&type=chunk)[274](index=274&type=chunk) - Loans held for investment, net, increased by **$8.7 billion** (approximately 47.7%) from December 31, 2024, to June 30, 2025, largely due to the Sandy Spring acquisition and organic loan growth[15](index=15&type=chunk)[276](index=276&type=chunk) [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income%20(unaudited)%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) Consolidated Statements of Income Highlights (Dollars in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total interest and dividend income | $510,372 | $320,888 | $816,208 | $583,802 | | Total interest expense | $189,001 | $136,354 | $310,672 | $251,444 | | Net interest income | $321,371 | $184,534 | $505,536 | $332,358 | | Provision for credit losses | $105,707 | $21,751 | $123,345 | $29,989 | | Total noninterest income | $81,522 | $23,812 | $110,685 | $49,365 | | Total noninterest expenses | $279,698 | $150,005 | $413,882 | $255,279 | | Net Income | $19,791 | $25,161 | $69,610 | $74,930 | | Net income available to common shareholders | $16,824 | $22,194 | $63,676 | $68,996 | | Basic earnings per common share | $0.12 | $0.25 | $0.55 | $0.84 | | Diluted earnings per common share | $0.12 | $0.25 | $0.55 | $0.84 | - Net income available to common shareholders decreased by **$5.37 million (24.2%)** for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to increased provision for credit losses and noninterest expenses[17](index=17&type=chunk)[229](index=229&type=chunk)[255](index=255&type=chunk) - Diluted EPS decreased from **$0.25 in Q2 2024 to $0.12 in Q2 2025**, and from **$0.84 in H1 2024 to $0.55 in H1 2025**[17](index=17&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(unaudited)%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) Consolidated Statements of Comprehensive Income (Loss) Highlights (Dollars in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $19,791 | $25,161 | $69,610 | $74,930 | | Other comprehensive income (loss) | $12,929 | $(8,289) | $38,900 | $(39,238) | | Comprehensive income | $32,720 | $16,872 | $108,510 | $35,692 | - Other comprehensive income (loss) significantly improved, moving from a loss of **$8.29 million in Q2 2024** to an income of **$12.93 million in Q2 2025**, primarily due to changes in fair value of cash flow hedges and unrealized holding gains on AFS securities[18](index=18&type=chunk)[155](index=155&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(unaudited)%20for%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024) Consolidated Statements of Changes in Stockholders' Equity Highlights (Dollars in thousands) | Metric | December 31, 2024 Balance | June 30, 2025 Balance | December 31, 2023 Balance | June 30, 2024 Balance | | :--- | :--- | :--- | :--- | :--- | | Common Stock | $118,519 | $188,454 | $99,147 | $118,475 | | Additional Paid-In Capital | $2,280,547 | $3,876,831 | $1,782,286 | $2,273,312 | | Retained Earnings | $1,103,326 | $1,087,967 | $1,018,070 | $1,034,313 | | Accumulated Other Comprehensive Income (Loss) | $(359,686) | $(320,786) | $(343,349) | $(382,587) | | Total Stockholders' Equity | $3,142,879 | $4,832,639 | $2,556,327 | $3,043,686 | - Total stockholders' equity increased by **$1.69 billion** from December 31, 2024, to June 30, 2025, primarily due to the issuance of common stock related to the Sandy Spring acquisition and forward sale settlement[22](index=22&type=chunk)[281](index=281&type=chunk) - Common stock increased by **$69.9 million**, and additional paid-in capital increased by **$1.6 billion**, reflecting the issuance of 41.0 million shares for the Sandy Spring acquisition and 11.3 million shares for forward sale settlement[22](index=22&type=chunk)[39](index=39&type=chunk)[152](index=152&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)%20for%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024) Consolidated Statements of Cash Flows Highlights (Dollars in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,965,957 | $142,651 | | Net cash provided by (used in) investing activities | $87,401 | $(382,202) | | Net cash (used in) provided by financing activities | $(818,784) | $307,434 | | Increase in cash and cash equivalents | $1,234,574 | $67,883 | | Cash, cash equivalents and restricted cash at end of the period | $1,588,648 | $446,014 | - Net cash provided by operating activities significantly increased to **$1.97 billion in H1 2025** from $142.65 million in H1 2024, driven by higher net income and provision for credit losses[24](index=24&type=chunk) - Investing activities shifted from a net cash outflow of **$382.20 million in H1 2024** to a net cash inflow of **$87.40 million in H1 2025**, largely due to net cash received in acquisitions and proceeds from sales of loans held for sale[24](index=24&type=chunk) - Financing activities resulted in a net cash outflow of **$818.78 million in H1 2025**, compared to an inflow of $307.43 million in H1 2024, primarily due to net decreases in deposits and short-term borrowings[24](index=24&type=chunk) [Notes to Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) [1. Summary of Significant Accounting Policies](index=14&type=section&id=1.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines the Company's adherence to GAAP, consolidation practices, and accounting policies for acquired loans - The Company's consolidated financial statements conform to GAAP and include Atlantic Union Bankshares Corporation and its wholly-owned subsidiaries[28](index=28&type=chunk) - The Company completed the acquisition of Sandy Spring Bancorp, Inc on April 1, 2025, and American National Bankshares Inc on April 1, 2024, with their results included from the acquisition dates[30](index=30&type=chunk) - Acquired loans are recorded at fair value at acquisition; PCD loans establish an initial ALLL, and the difference between amortized cost and par value is a noncredit discount/premium amortized into interest income[32](index=32&type=chunk)[36](index=36&type=chunk) [2. Acquisitions](index=16&type=section&id=2.%20ACQUISITIONS) This note details the purchase consideration and financial impact of the Sandy Spring and American National acquisitions - On April 1, 2025, the Company acquired Sandy Spring Bancorp, Inc for approximately **$1.3 billion**, issuing 41.0 million shares of common stock, enhancing its presence in Virginia, Maryland, and Washington D.C[39](index=39&type=chunk) Sandy Spring Acquisition Financial Impact (Dollars in thousands) | Metric | Amount | | :--- | :--- | | Purchase price consideration | $1,275,969 | | Fair value of assets acquired | $12,988,972 | | Fair value of liabilities assumed | $12,209,862 | | Goodwill recorded | $496,859 | - On April 1, 2024, the Company acquired American National Bankshares Inc for **$505.5 million**, issuing 14.3 million shares, expanding its franchise in central and western Virginia and North Carolina[45](index=45&type=chunk) American National Acquisition Financial Impact (Dollars in thousands) | Metric | Amount | | :--- | :--- | | Purchase price consideration | $505,473 | | Fair value of assets acquired | $2,946,897 | | Fair value of liabilities assumed | $2,730,266 | | Goodwill recorded | $288,842 | [3. Securities and Other Investments](index=21&type=section&id=3.%20SECURITIES%20AND%20OTHER%20INVESTMENTS) This section details the Company's AFS and HTM securities portfolios, including fair values and unrealized gains and losses Total AFS Securities (Dollars in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Amortized Cost | $4,182,109 | $2,844,763 | | Estimated Fair Value | $3,809,281 | $2,442,166 | | Gross Unrealized Losses | $(384,400) | $(405,975) | Total HTM Securities (Dollars in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Carrying Value | $827,135 | $803,851 | | Estimated Fair Value | $777,925 | $759,335 | | Gross Unrealized Losses | $(49,904) | $(45,259) | - The Company concluded **no credit-related impairment existed** for AFS securities in an unrealized loss position, citing high credit quality and market volatility as the primary cause of losses[67](index=67&type=chunk) Net Realized Gains (Losses) on Securities Sales (Dollars in thousands) | Period | Net Realized Gains (Losses) | | :--- | :--- | | Three Months Ended June 30, 2025 | $16 | | Three Months Ended June 30, 2024 | $(6,516) | | Six Months Ended June 30, 2025 | $(87) | | Six Months Ended June 30, 2024 | $(6,513) | [4. Loans and Allowance for Loan and Lease Losses](index=29&type=section&id=4.%20LOANS%20AND%20ALLOWANCE%20FOR%20LOAN%20AND%20LEASE%20LOSSES) This note details the loan portfolio, a significant CRE loan sale, and ALLL activity, including acquisition impacts - On June 26, 2025, the Company sold **$2.0 billion** of performing CRE loans acquired from Sandy Spring, generating a **$15.7 million pre-tax gain**[84](index=84&type=chunk) Loans Held for Investment (LHFI) (Dollars in thousands) | Loan Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Construction and Land Development | $2,444,151 | $1,731,108 | | CRE – Owner Occupied | $3,940,371 | $2,370,119 | | CRE – Non-Owner Occupied | $6,912,692 | $4,935,590 | | Multifamily Real Estate | $2,083,559 | $1,240,209 | | Commercial & Industrial | $5,141,691 | $3,864,695 | | Residential 1-4 Family – Commercial | $1,131,288 | $719,425 | | Residential 1-4 Family – Consumer | $2,746,046 | $1,293,817 | | Residential 1-4 Family – Revolving | $1,154,085 | $756,944 | | Auto | $245,554 | $316,368 | | Consumer | $119,526 | $104,882 | | Other Commercial | $1,409,370 | $1,137,464 | | Total LHFI, net of deferred fees and costs | $27,328,333 | $18,470,621 | Allowance for Loan and Lease Losses (ALLL) Activity (Dollars in thousands) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Balance at beginning of period | $193,796 | $178,644 | | Initial allowance on Sandy Spring PCD loans | $28,265 | $28,265 | | Initial Provision - Sandy Spring non-PCD loans | $89,538 | $89,538 | | Provision charged to operations | $4,641 | $22,071 | | Balance at end of period | $315,574 | $315,574 | - Nonaccrual LHFI increased to **$162.6 million** at June 30, 2025, from $58.0 million at December 31, 2024, primarily due to PCD loans acquired from Sandy Spring[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)[113](index=113&type=chunk) [5. Goodwill and Intangible Assets](index=40&type=section&id=5.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) This note provides information on goodwill and other intangible assets arising from recent acquisitions - Goodwill increased to **$1.71 billion** at June 30, 2025, from $1.21 billion at December 31, 2024, primarily due to **$496.9 million** recorded from the Sandy Spring acquisition[108](index=108&type=chunk)[109](index=109&type=chunk) Goodwill and Other Acquired Intangible Assets (Dollars in thousands) | Metric | June 30, 2025 Net Carrying Value | December 31, 2024 Net Carrying Value | | :--- | :--- | :--- | | Goodwill | $1,710,912 | $1,214,053 | | Core Deposit Intangibles (CDIs) | $296,750 | $74,133 | | Other amortizable intangibles | $54,631 | $10,430 | - Amortization expense for intangibles totaled **$18.4 million for Q2 2025** (up from $6.0 million in Q2 2024) and **$23.8 million for H1 2025** (up from $7.9 million in H1 2024)[113](index=113&type=chunk) [6. Leases](index=42&type=section&id=6.%20LEASES) This note outlines the Company's lessor and lessee arrangements, primarily for equipment and real estate Net Investment in Sales-Type and Direct Financing Leases (Dollars in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Lease receivables, net | $533,895 | $529,657 | | Unguaranteed residual values, net | $37,881 | $34,546 | | Total net investment | $571,776 | $564,203 | Lessee Lease Portfolio Information (Dollars in thousands) | Metric | June 30, 2025 Operating | June 30, 2025 Finance | December 31, 2024 Operating | December 31, 2024 Finance | | :--- | :--- | :--- | :--- | :--- | | ROU assets | $111,487 | $3,291 | $74,782 | $3,751 | | Lease liabilities | $124,973 | $5,109 | $79,642 | $5,769 | | Weighted-average remaining lease term (years) | 8.23 | 3.58 | 10.96 | 4.08 | Total Lease Cost (Dollars in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Operating Lease Cost | $5,860 | $3,438 | $9,348 | $6,546 | | Finance Lease Cost | $245 | $249 | $490 | $498 | | Total Lease Cost | $6,105 | $3,687 | $9,838 | $7,044 | [7. Borrowings](index=44&type=section&id=7.%20BORROWINGS) This note details the Company's short-term and long-term borrowings, including additions from the Sandy Spring acquisition Total Short-Term Borrowings (Dollars in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Securities sold under agreements to repurchase | $127,351 | $56,275 | | FHLB Advances | $— | $60,000 | | Total short-term borrowings | $127,351 | $116,275 | | Average outstanding balance during the period | $236,865 | $445,339 | | Average interest rate during the period | 3.80% | 5.22% | - The Company assumed **$358.0 million in subordinated debt** in connection with the Sandy Spring acquisition, significantly increasing long-term borrowings[124](index=124&type=chunk) Total Long-Term Borrowings (Dollars in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trust Preferred Capital Securities | $179,000 | $179,000 | | Subordinated Debt | $608,000 | $250,000 | | Fair Value Discount | $(27,126) | $(16,239) | | Total Long-term Borrowings | $765,416 | $418,303 | - The Company maintains significant available liquidity sources, including **$1.2 billion** in federal funds lines, **$7.4 billion** in FHLB collateral-dependent lines, and **$3.5 billion** with the Federal Reserve Discount Window[121](index=121&type=chunk) [8. Commitments and Contingencies](index=49&type=section&id=8.%20COMMITMENTS%20AND%20CONTINGENCIES) This note details off-balance sheet instruments, litigation matters including a CFPB Consent Order, and pledged collateral Commitments with Off-Balance Sheet Risk (Dollars in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Commitments to extend credit | $9,483,098 | $5,987,562 | | Letters of credit | $226,035 | $145,985 | | Total commitments with off-balance sheet risk | $9,709,133 | $6,133,547 | - The Company entered into a Consent Order with the CFPB on December 7, 2023, to resolve alleged violations related to overdraft practices, maintaining a probable and estimable liability[131](index=131&type=chunk)[132](index=132&type=chunk) Total Pledged Assets (Dollars in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $100,203 | $134,668 | | AFS Securities (market value) | $1,796,666 | $1,526,012 | | HTM Securities (market value) | $602,937 | $610,838 | | Loans (book value) | $13,421,842 | $8,447,750 | | Total pledged assets | $15,921,648 | $10,719,268 | [9. Derivatives](index=51&type=section&id=9.%20DERIVATIVES) This note summarizes the Company's derivative instruments used for managing interest rate and credit risk Derivative Instruments Summary (Dollars in thousands) | Derivative Type | June 30, 2025 Notional Amount | June 30, 2025 Assets | June 30, 2025 Liabilities | December 31, 2024 Notional Amount | December 31, 2024 Assets | December 31, 2024 Liabilities | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash flow hedges | $900,000 | $1,266 | $1,532 | $900,000 | $— | $6,467 | | Fair value hedges (Loans) | $70,257 | $898 | $— | $72,807 | $1,469 | $— | | Fair value hedges (Securities) | $50,000 | $606 | $— | $50,000 | $1,157 | $— | | Non-hedging interest rate contracts | $8,511,903 | $106,793 | $173,678 | $7,529,494 | $94,772 | $192,683 | | Foreign exchange contracts | $16,421 | $110 | $1,849 | $12,449 | $47 | $398 | - The Company uses interest rate contracts to hedge various exposures and modify interest rate characteristics of balance sheet accounts[140](index=140&type=chunk)[147](index=147&type=chunk) [10. Stockholders' Equity](index=53&type=section&id=10.%20STOCKHOLDERS'%20EQUITY) This note details changes in stockholders' equity, including the settlement of Forward Sale Agreements and AOCI components - On April 1, 2025, the Company physically settled Forward Sale Agreements by delivering 11,338,028 shares of common stock, receiving net proceeds of approximately **$385.0 million**[152](index=152&type=chunk) - **No active share repurchase programs** were in effect during the quarters ended June 30, 2025, and 2024[153](index=153&type=chunk)[366](index=366&type=chunk) Accumulated Other Comprehensive Income (Loss) (AOCI) (Dollars in thousands) | Metric | AOCI (loss) – March 31, 2025 | AOCI (loss) – June 30, 2025 | AOCI (loss) – December 31, 2024 | AOCI (loss) – June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Unrealized Gains (Losses) on AFS Securities | $(301,307) | $(294,373) | $(317,142) | $(330,804) | | Change in Fair Value of Cash Flow Hedge | $(32,742) | $(26,540) | $(43,078) | $(52,775) | | Total AOCI (loss) | $(333,715) | $(320,786) | $(359,686) | $(382,587) | [11. Fair Value Measurements](index=56&type=section&id=11.%20FAIR%20VALUE%20MEASUREMENTS) This note details the Company's fair value measurements for financial instruments, categorized by a three-level hierarchy - The Company uses a fair value hierarchy (Level 1, 2, 3) based on observable and unobservable inputs for valuation[159](index=159&type=chunk) Financial Assets Measured at Fair Value on a Recurring Basis (June 30, 2025, Dollars in thousands) | Asset Type | Level 1 | Level 2 | Level 3 | Total Balance | | :--- | :--- | :--- | :--- | :--- | | AFS securities | $137,093 | $3,672,188 | $— | $3,809,281 | | LHFS | $— | $32,987 | $— | $32,987 | | Financial Derivatives | $— | $109,673 | $— | $109,673 | Fair Value of Financial Instruments (June 30, 2025, Dollars in thousands) | Instrument | Carrying Value | Total Fair Value | | :--- | :--- | :--- | | Cash and cash equivalents | $1,588,648 | $1,588,648 | | AFS securities | $3,809,281 | $3,809,281 | | HTM securities | $827,135 | $777,925 | | LHFI, net | $27,328,333 | $26,928,260 | | Deposits | $30,972,175 | $30,956,133 | | Borrowings | $892,767 | $807,087 | [12. Income Taxes](index=62&type=section&id=12.%20INCOME%20TAXES) This note discusses the Company's effective tax rates, deferred tax assets, and the impact of recent acquisitions Effective Tax Rates | Period | 2025 Effective Tax Rate | 2024 Effective Tax Rate | | :--- | :--- | :--- | | Three Months Ended June 30 | (13.2)% | 31.2% | | Six Months Ended June 30 | 11.9% | 22.3% | - The decrease in effective tax rates for both periods in 2025 reflects an **$8.0 million income tax benefit** from re-evaluating state deferred tax assets due to the Sandy Spring acquisition[172](index=172&type=chunk) - The valuation allowance increased to **$11.1 million** at June 30, 2025, from $4.4 million at December 31, 2024, primarily due to the Sandy Spring acquisition[173](index=173&type=chunk) - New tax legislation, the One Big Beautiful Bill Act, enacted on July 4, 2025, will be recognized as a discrete event in the quarter ended September 30, 2025[174](index=174&type=chunk) [13. Earnings Per Share](index=63&type=section&id=13.%20EARNINGS%20PER%20SHARE) This note provides the calculations for basic and diluted Earnings Per Share (EPS) Earnings Per Share (Dollars in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income available to common shareholders | $16,824 | $22,194 | $63,676 | $68,996 | | Weighted average shares outstanding, basic | 141,680 | 89,768 | 115,596 | 82,483 | | Weighted average shares outstanding, diluted | 141,738 | 89,768 | 116,057 | 82,483 | | Basic earnings per common share | $0.12 | $0.25 | $0.55 | $0.84 | | Diluted earnings per common share | $0.12 | $0.25 | $0.55 | $0.84 | - Diluted EPS decreased from **$0.25 in Q2 2024 to $0.12 in Q2 2025**, and from **$0.84 in H1 2024 to $0.55 in H1 2025**, reflecting lower net income and a higher number of shares outstanding[177](index=177&type=chunk) [14. Segment Reporting and Revenue](index=64&type=section&id=14.%20SEGMENT%20REPORTING%20AND%20REVENUE) This note disaggregates financial performance into Wholesale Banking, Consumer Banking, and Corporate Other segments Income Before Income Taxes by Segment (Three Months Ended June 30, Dollars in thousands) | Segment | 2025 Income Before Income Taxes | 2024 Income Before Income Taxes | | :--- | :--- | :--- | | Wholesale Banking | $17,416 | $37,054 | | Consumer Banking | $8,312 | $24,625 | | Corporate Other | $(8,240) | $(25,089) | | Total | $17,488 | $36,590 | Key Balance Sheet Metrics by Segment (June 30, 2025, Dollars in thousands) | Segment | LHFI, net of deferred fees and costs | Total Deposits | | :--- | :--- | :--- | | Wholesale Banking | $22,889,472 | $11,733,733 | | Consumer Banking | $5,228,222 | $17,908,932 | | Corporate Other | $(789,361) | $1,329,510 | | Total | $27,328,333 | $30,972,175 | Total Noninterest Income (Three Months Ended June 30, Dollars in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Service charges on deposit accounts | $12,220 | $9,086 | | Fiduciary and asset management fees | $17,723 | $6,907 | | Mortgage banking income | $2,821 | $1,193 | | Other operating income | $33,658 | $2,624 | Total Noninterest Expense (Three Months Ended June 30, Dollars in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Salaries and benefits | $109,942 | $68,531 | | Amortization of intangible assets | $18,433 | $5,995 | | Merger-related costs | $78,900 | $29,778 | [15. Subsequent Events](index=70&type=section&id=15.%20SUBSEQUENT%20EVENTS) This note discloses the declaration of quarterly dividends for preferred and common stock after the reporting period - On July 24, 2025, the Board of Directors declared a quarterly dividend of **$171.88 per share** on Series A preferred stock, payable September 2, 2025[189](index=189&type=chunk) - A quarterly dividend of **$0.34 per share** of common stock was declared, payable August 18, 2025[190](index=190&type=chunk) [Report of Independent Registered Public Accounting Firm](index=71&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) - Ernst & Young LLP provided an **unqualified review opinion** on the consolidated interim financial statements for conformity with U.S. GAAP[191](index=191&type=chunk) - The information in the consolidated balance sheet as of December 31, 2024, is **fairly stated in all material respects**, as previously audited[192](index=192&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=72&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition, operating results, and capital resources [Economic Environment and Industry Events](index=80&type=section&id=Economic%20Environment%20and%20Industry%20Events) - The Company monitors global and national events, including inflation (estimated at **2.7%** as of June 2025), interest rate changes (Federal Funds target rate **4.25%-4.50%**), and deposit competition[220](index=220&type=chunk)[222](index=222&type=chunk) - Higher-for-longer interest rates and deposit competition continued to shift deposit composition towards higher-cost products in H1 2025, though at a slower pace[224](index=224&type=chunk) - At June 30, 2025, approximately **68.0% of deposits were insured or collateralized**, with available liquidity covering **157.2%** of uninsured/uncollateralized deposits[224](index=224&type=chunk) [Summary of Financial Results](index=82&type=section&id=Summary%20of%20Financial%20Results) Net Income & EPS Summary | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income available to common shareholders | $16.8M | $22.2M | $63.7M | $69.0M | | Basic and diluted EPS | $0.12 | $0.25 | $0.55 | $0.84 | | Adjusted operating earnings available to common shareholders (+) | $135.1M | $67.9M | $186.7M | $116.9M | | Adjusted diluted operating EPS (+) | $0.95 | $0.76 | $1.61 | $1.42 | - The Sandy Spring acquisition (April 1, 2025) significantly impacted the balance sheet: **$13.0 billion in acquired assets** and **$12.2 billion in assumed liabilities**[229](index=229&type=chunk) Balance Sheet Highlights (Dollars in billions) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $37.3 | $24.6 | | LHFI | $27.3 | $18.5 | | Total investments | $4.8 | $3.3 | | Total deposits | $31.0 | $20.4 | | Total borrowings | $0.89 | $0.53 | [Net Interest Income](index=84&type=section&id=Net%20Interest%20Income) Net Interest Income (FTE) and Margin (FTE) (Dollars in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net interest income (FTE) (+) | $325,733 | $188,348 | $513,656 | $339,895 | | Net interest margin (FTE) (+) | 3.83% | 3.46% | 3.68% | 3.33% | | Average interest-earning assets | $34.1B | $21.9B | $28.1B | $20.5B | | Average interest-bearing liabilities | $25.5B | $16.5B | $21.1B | $15.4B | - Net interest income (FTE) increased by **$137.4 million (72.9%) in Q2 2025** and **$173.8 million (51.1%) in H1 2025**, primarily due to growth in average interest-earning assets from the Sandy Spring acquisition[233](index=233&type=chunk)[237](index=237&type=chunk) - Net interest margin (FTE) increased by **37 bps in Q2 2025** and **35 bps in H1 2025**, mainly driven by net accretion of purchase accounting adjustments from the Sandy Spring acquisition[234](index=234&type=chunk)[238](index=238&type=chunk) Acquisition Accounting Accretion and Amortization (Dollars in thousands) | Period | Loan Accretion | Deposit (Amortization) | Borrowings Amortization | Total | | :--- | :--- | :--- | :--- | :--- | | Q1 2024 | $819 | $(1) | $(216) | $602 | | Q2 2024 | $15,660 | $(1,035) | $(285) | $14,340 | | Q1 2025 | $13,286 | $(415) | $(287) | $12,584 | | Q2 2025 | $45,744 | $1,884 | $(2,256) | $45,372 | [Noninterest Income](index=91&type=section&id=Noninterest%20Income) Noninterest Income (Dollars in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total noninterest income | $81,522 | $23,812 | $110,685 | $49,365 | | Service charges on deposit accounts | $12,220 | $9,086 | $21,905 | $17,655 | | Fiduciary and asset management fees | $17,723 | $6,907 | $24,420 | $11,745 | | Mortgage banking income | $2,821 | $1,193 | $3,794 | $2,060 | | Gain (loss) on sale of securities | $16 | $(6,516) | $(87) | $(6,513) | | Bank owned life insurance income | $7,327 | $3,791 | $10,864 | $7,037 | | Other operating income | $33,658 | $2,624 | $34,922 | $5,413 | - Total noninterest income increased by **$57.7 million (242.4%) in Q2 2025** and **$61.3 million (124.2%) in H1 2025**, primarily due to a **$15.7 million pre-tax gain on a CRE loan sale** and the impact of the Sandy Spring acquisition[249](index=249&type=chunk)[252](index=252&type=chunk) - Adjusted operating noninterest income (+) increased by **$21.2 million (69.8%) in Q2 2025** and **$24.9 million (44.5%) in H1 2025**, mainly driven by the Sandy Spring acquisition's impact on fiduciary fees and service charges[250](index=250&type=chunk)[253](index=253&type=chunk) [Noninterest Expense](index=93&type=section&id=Noninterest%20Expense) Noninterest Expense (Dollars in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total noninterest expense | $279,698 | $150,005 | $413,882 | $255,279 | | Salaries and benefits | $109,942 | $68,531 | $185,357 | $130,413 | | Occupancy expenses | $12,782 | $7,836 | $21,362 | $14,462 | | Technology and data processing | $17,248 | $10,274 | $27,435 | $18,401 | | Amortization of intangible assets | $18,433 | $5,995 | $23,832 | $7,889 | | Merger-related costs | $78,900 | $29,778 | $83,840 | $31,652 | - Total noninterest expense increased by **$129.7 million (86.5%) in Q2 2025** and **$158.6 million (62.1%) in H1 2025**, primarily due to higher merger-related costs and salaries from the Sandy Spring acquisition[255](index=255&type=chunk)[258](index=258&type=chunk) - Adjusted operating noninterest expense (+) increased by **$68.2 million (59.6%) in Q2 2025** and **$91.3 million (42.5%) in H1 2025**, driven by the Sandy Spring acquisition's impact on operating costs[256](index=256&type=chunk)[259](index=259&type=chunk) [Segment Results](index=95&type=section&id=Segment%20Results) [Wholesale Banking](index=95&type=section&id=Wholesale%20Banking) The Wholesale Banking segment experienced a decrease in income before taxes due to increased credit provisions and expenses from the Sandy Spring acquisition Wholesale Banking Income Before Income Taxes (Dollars in thousands) | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | $17,416 | $37,054 | | Six Months Ended June 30 | $58,298 | $76,970 | - LHFI for Wholesale Banking increased by **$7.4 billion to $22.9 billion** at June 30, 2025, from December 31, 2024, primarily due to the Sandy Spring acquisition and organic loan growth[262](index=262&type=chunk) - Wholesale Banking deposits increased by **$4.5 billion to $11.7 billion** at June 30, 2025, from December 31, 2024, mainly due to the Sandy Spring acquisition[263](index=263&type=chunk) [Consumer Banking](index=96&type=section&id=Consumer%20Banking) The Consumer Banking segment saw a decrease in income before taxes due to higher expenses and credit provisions from the Sandy Spring acquisition Consumer Banking Income Before Income Taxes (Dollars in thousands) | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | $8,312 | $24,625 | | Six Months Ended June 30 | $28,569 | $47,726 | - LHFI for Consumer Banking increased by **$2.1 billion to $5.2 billion** at June 30, 2025, from December 31, 2024, primarily due to growth from the Sandy Spring acquisition[265](index=265&type=chunk) - Consumer Banking deposits increased by **$6.0 billion to $17.9 billion** at June 30, 2025, from December 31, 2024, driven by the Sandy Spring acquisition[266](index=266&type=chunk) [Income Taxes](index=97&type=section&id=Income%20Taxes) - The estimated annual effective tax rate increased to **21.7%** as of June 30, 2025, from 19.0% in Q1 2025, due to Sandy Spring operating in a higher state tax jurisdiction[267](index=267&type=chunk) Effective Tax Rates | Period | 2025 Effective Tax Rate | 2024 Effective Tax Rate | | :--- | :--- | :--- | | Three Months Ended June 30 | (13.2)% | 31.2% | | Six Months Ended June 30 | 11.9% | 22.3% | - The valuation allowance increased to **$11.1 million** at June 30, 2025, from $4.4 million at December 31, 2024, primarily due to the Sandy Spring acquisition's impact on state net operating losses[270](index=270&type=chunk) [Discussion and Analysis of Financial Condition](index=97&type=section&id=Discussion%20and%20Analysis%20of%20Financial%20Condition) [Balance Sheet](index=97&type=section&id=Balance%20Sheet) The balance sheet reflects significant growth in assets, loans, and deposits, primarily driven by the Sandy Spring acquisition - Total assets reached **$37.3 billion** at June 30, 2025, an increase of **$12.7 billion** (104.2% annualized) from December 31, 2024, primarily due to the Sandy Spring acquisition[274](index=274&type=chunk) - LHFI increased by **$8.9 billion** (96.7% annualized) to **$27.3 billion**, driven by the Sandy Spring acquisition and organic growth[276](index=276&type=chunk) - Total deposits increased by **$10.6 billion** (104.5% annualized) to **$31.0 billion**, mainly from the Sandy Spring acquisition[279](index=279&type=chunk) - Stockholders' equity grew by **$1.7 billion to $4.8 billion**, primarily due to common stock issuance for the Sandy Spring acquisition[281](index=281&type=chunk) [Securities](index=101&type=section&id=Securities) The investment portfolio increased significantly due to the Sandy Spring acquisition and is diversified with a focus on highly-rated securities - Total investments increased to **$4.8 billion** at June 30, 2025, from $3.3 billion at December 31, 2024, primarily due to the Sandy Spring acquisition[284](index=284&type=chunk) Total Investments (Dollars in thousands) | Security Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total AFS securities, at fair value | $3,809,281 | $2,442,166 | | Total HTM securities, at carrying value | $827,135 | $803,851 | | Total restricted stock, at cost | $140,606 | $102,954 | | Total investments | $4,777,022 | $3,348,971 | - Net unrealized losses on AFS securities decreased by **$29.8 million to $372.8 million** at June 30, 2025, while net unrealized losses on HTM securities increased by **$4.7 million to $49.2 million**[231](index=231&type=chunk)[277](index=277&type=chunk) [Liquidity](index=103&type=section&id=Liquidity) The Company maintains strong liquidity from its customer deposit base, supplemented by various borrowing facilities and boosted by a recent loan sale - Total deposits, the largest source of liquidity, increased by **$10.6 billion (51.8%) to $31.0 billion** at June 30, 2025[289](index=289&type=chunk) - Liquid assets totaled **$13.5 billion** (36.3% of total assets) at June 30, 2025[291](index=291&type=chunk) - The sale of **$2.0 billion in CRE loans** generated **$1.87 billion in net proceeds**, increasing cash balances and used to repay short-term borrowings[292](index=292&type=chunk) - Additional liquidity sources include federal funds lines (**$1.2 billion available**), FHLB line of credit (**$7.4 billion capacity**), and Federal Reserve Discount Window (**$3.5 billion capacity**)[121](index=121&type=chunk)[293](index=293&type=chunk) [Cash Requirements](index=105&type=section&id=Cash%20Requirements) The Company's cash requirements primarily involve repaying borrowings, leases, and debt, which are expected to be met through general liquidity Contractual Obligations (June 30, 2025, Dollars in thousands) | Obligation | Total | Less than 1 year | More than 1 year | | :--- | :--- | :--- | :--- | | Long-term debt | $608,000 | $— | $608,000 | | Trust preferred capital notes | $184,542 | $— | $184,542 | | Leases | $163,700 | $12,982 | $150,718 | | Repurchase agreements | $127,351 | $127,351 | $— | | Total contractual obligations | $1,083,593 | $140,333 | $943,260 | [Off-Balance Sheet Obligations](index=105&type=section&id=Off-Balance%20Sheet%20Obligations) The Company engages in off-balance sheet activities, including credit commitments and letters of credit, to meet customer financing needs - Off-balance sheet obligations include commitments to extend credit and letters of credit, totaling **$9.71 billion** at June 30, 2025[138](index=138&type=chunk)[298](index=298&type=chunk)[300](index=300&type=chunk) - The Company's exposure to credit loss from these instruments is represented by their contractual amount, with credit policies consistent with on-balance sheet instruments[299](index=299&type=chunk) [Impact of Inflation and Changing Prices](index=107&type=section&id=Impact%20of%20Inflation%20and%20Changing%20Prices) Inflation primarily affects operating costs, but changes in interest rates have a greater impact on the Company's financial condition - Inflation affects the Company mainly through increased operating costs[302](index=302&type=chunk) - Changes in interest rates generally affect the Company's financial condition more significantly than changes in the inflation rate[302](index=302&type=chunk) [Loan Portfolio](index=107&type=section&id=Loan%20Portfolio) The loan portfolio increased significantly to $27.3 billion, driven by the Sandy Spring acquisition, with CRE remaining the largest category - LHFI totaled **$27.3 billion** at June 30, 2025, up from $18.5 billion at December 31, 2024, primarily due to the Sandy Spring acquisition[303](index=303&type=chunk) - CRE loans represent the highest concentration of credit, totaling **$16.5 billion** (60.42% of total LHFI) at June 30, 2025[311](index=311&type=chunk) - CRE concentration as a percentage of capital decreased to **283.8%** at June 30, 2025 (from 292.7% at Dec 31, 2024), driven by the Sandy Spring acquisition and a **$2.0 billion CRE loan sale**[214](index=214&type=chunk)[306](index=306&type=chunk) - The office portfolio is generally in suburban markets with strong occupancy, and the Company does not finance large, major metropolitan central business district office buildings[313](index=313&type=chunk) [Asset Quality](index=111&type=section&id=Asset%20Quality) [Overview](index=111&type=section&id=Overview) Asset quality metrics show an increase in nonperforming assets due to acquired PCD loans, while net charge-offs remained low - Nonaccrual LHFI increased to **$162.6 million** at June 30, 2025, from $58.0 million at December 31, 2024, primarily due to PCD loans acquired from Sandy Spring[314](index=314&type=chunk) - NPAs as a percentage of LHFI increased to **0.60%** at June 30, 2025, from 0.32% at December 31, 2024[314](index=314&type=chunk) - Net charge-offs were **$2.9 million for H1 2025**, compared to $6.7 million for H1 2024[314](index=314&type=chunk) - The ACL increased by **$148.7 million to $342.4 million** at June 30, 2025, reflecting the Sandy Spring acquisition's initial ACL of $129.2 million and deteriorating macroeconomic forecasts[314](index=314&type=chunk) [Nonperforming Assets](index=113&type=section&id=Nonperforming%20Assets) Nonperforming assets increased significantly due to the inclusion of nonperforming PCD loans from the Sandy Spring acquisition Nonperforming Assets (Dollars in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Nonaccrual LHFI | $162,615 | $57,969 | | Foreclosed properties | $774 | $404 | | Total NPAs | $163,389 | $58,373 | | NPAs to total LHFI | 0.60% | 0.32% | - The increase in NPAs was primarily due to **$49.4 million** in acquired construction and land development loans and **$27.1 million** in acquired commercial real estate non-owner occupied loans from Sandy Spring[317](index=317&type=chunk) [Past Due Loans](index=114&type=section&id=Past%20Due%20Loans) Past due loans still accruing interest increased, with a notable rise in loans past due 90 days or more - Past due LHFI still accruing interest totaled **$77.7 million** (0.28% of total LHFI) at June 30, 2025, up from $57.7 million (0.31%) at December 31, 2024[320](index=320&type=chunk) - Loans past due 90 days or more and still accruing interest increased to **$39.8 million** (0.15% of total LHFI) at June 30, 2025, from $14.1 million (0.08%) at December 31, 2024[320](index=320&type=chunk) [Troubled Loan Modifications](index=114&type=section&id=Troubled%20Loan%20Modifications) The amortized cost basis of Troubled Loan Modifications decreased slightly, with no material allowance or unfunded commitments - TLMs had an amortized cost basis of **$20.2 million** at June 30, 2025, compared to $24.1 million at June 30, 2024[321](index=321&type=chunk) - **No material allowance** was held on TLMs, and no material unfunded commitments existed for TLMs at June 30, 2025 and 2024[321](index=321&type=chunk) [Net Charge-offs](index=114&type=section&id=Net%20Charge-offs) Net charge-offs remained low for the second quarter of 2025, showing a decrease compared to the prior year Net Charge-offs (Dollars in thousands) | Period | Net Charge-offs | Net Charge-offs to average loans (annualized) | | :--- | :--- | :--- | | Three Months Ended June 30, 2025 | $(666) | 0.01% | | Three Months Ended June 30, 2024 | $(1,740) | 0.04% | | Six Months Ended June 30, 2025 | $(2,944) | 0.03% | | Six Months Ended June 30, 2024 | $(6,657) | 0.08% | [Provision for Credit Losses](index=115&type=section&id=Provision%20for%20Credit%20Losses) The provision for credit losses increased significantly in Q2 2025, driven by the Day 1 provision for the Sandy Spring acquisition - Provision for credit losses was **$105.7 million for Q2 2025**, an increase of $83.9 million from $21.8 million in Q2 2024[323](index=323&type=chunk) - Included in the Q2 2025 provision was **$89.5 million** for Day 1 initial provision expense on non-PCD loans and **$11.4 million** on unfunded commitments from the Sandy Spring acquisition[323](index=323&type=chunk) [Allowance for Credit Losses](index=115&type=section&id=Allowance%20for%20Credit%20Losses) The Allowance for Credit Losses increased significantly due to the Sandy Spring acquisition and deteriorating macroeconomic forecasts Allowance for Credit Losses (Dollars in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total ALLL | $315,574 | $178,644 | | Total Reserve for Unfunded Commitments | $26,778 | $15,041 | | Total ACL | $342,352 | $193,685 | | ALLL to total LHFI | 1.15% | 0.97% | | ACL to total LHFI | 1.25% | 1.05% | - The initial ACL related to the Sandy Spring acquisition was **$129.2 million**, comprising $117.8 million ALLL and $11.4 million RUC[324](index=324&type=chunk) [Deposits](index=117&type=section&id=Deposits) Total deposits increased significantly due to the Sandy Spring acquisition, with growth across most categories - Total deposits increased by **$10.6 billion (51.8%) to $31.0 billion** at June 30, 2025, from December 31, 2024, primarily due to the Sandy Spring acquisition[330](index=330&type=chunk) Deposit Balances by Category (Dollars in thousands) | Deposit Type | June 30, 2025 Amount | June 30, 2025 % of total | December 31, 2024 Amount | December 31, 2024 % of total | | :--- | :--- | :--- | :--- | :--- | | Total interest-bearing customer deposits | $22,769,474 | 73.5% | $14,902,676 | 73.0% | | Brokered deposits | $1,163,580 | 3.8% | $1,217,895 | 6.0% | | Demand deposits | $7,039,121 | 22.7% | $4,277,048 | 21.0% | | Total Deposits | $30,972,175 | 100.0% | $20,397,619 | 100.0% | - Uninsured deposits totaled **$11.3 billion** and collateralized deposits were **$1.3 billion** at June 30, 2025[331](index=331&type=chunk) [Capital Resources](index=119&type=section&id=Capital%20Resources) The Company maintains a strong capital position, with all regulatory capital ratios exceeding 'well-capitalized' standards - All regulatory capital ratios continue to exceed minimum requirements, classifying the Company as **'well-capitalized'**[335](index=335&type=chunk) Regulatory Capital Ratios | Ratio | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Common equity Tier 1 capital ratio | 9.77% | 9.96% | 9.47% | | Tier 1 capital ratio | 10.32% | 10.76% | 10.26% | | Total capital ratio | 13.73% | 13.61% | 12.99% | | Leverage ratio | 8.65% | 9.29% | 9.05% | | Common equity to total assets | 12.51% | 12.11% | 11.62% | | Tangible common equity to tangible assets (+) | 7.39% | 7.21% | 6.71% | [Non-GAAP Financial Measures](index=121&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) - The Company provides non-GAAP financial measures to offer additional understanding of ongoing operations and enhance comparability[339](index=339&type=chunk) Net Interest Income (FTE) Reconciliation (Dollars in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net interest income (GAAP) | $321,371 | $184,534 | $505,536 | $332,358 | | FTE adjustment | $4,362 | $3,814 | $8,120 | $7,537 | | Net interest income (FTE) (non-GAAP) | $325,733 | $188,348 | $513,656 | $339,895 | Tangible Common Equity Reconciliation (Dollars in thousands) | Metric | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Ending Equity (GAAP) | $4,832,639 | $3,142,879 | $3,043,686 | | Less: Ending goodwill | $1,710,912 | $1,214,053 | $1,207,484 | | Less: Ending amortizable intangibles | $351,381 | $84,563 | $95,980 | | Less: Perpetual preferred stock | $166,357 | $166,357 | $166,357 | | Ending tangible common equity (non-GAAP) | $2,603,989 | $1,677,906 | $1,573,865 | Adjusted Operating Earnings & EPS Reconciliation (Dollars in thousands, except per share amounts) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (GAAP) | $19,791 | $25,161 | $69,610 | $74,930 | | Plus: Merger-related costs, net of tax | $63,349 | $24,236 | $67,992 | $25,799 | | Plus: CECL Day 1 non-PCD loans and RUC provision expense, net of tax | $77,742 | $11,520 | $77,742 | $11,520 | | Adjusted operating earnings available to common shareholders (non-GAAP) | $135,145 | $67,872 | $186,719 | $116,898 | | Adjusted operating earnings per common share, diluted (non-GAAP) | $0.95 | $0.76 | $1.61 | $1.42 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=124&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section addresses the Company's exposure to market risk, primarily interest rate risk, and its management strategies [Interest Rate Sensitivity](index=124&type=section&id=Interest%20Rate%20Sensitivity) The Company manages interest rate risk through its asset liability management committee, utilizing various simulation models - Market risk is primarily composed of interest rate risk, monitored by the asset liability management committee[346](index=346&type=chunk) - Three modeling tools are used: static gap analysis, earnings simulation modeling, and economic value simulation[347](index=347&type=chunk) [Earnings Simulation Modeling](index=126&type=section&id=Earnings%20Simulation%20Modeling) This model measures the sensitivity of net interest income to interest rate changes, showing the Company was less asset sensitive at June 30, 2025 Change in Net Interest Income from Yield Curve Shocks | Change in Yield Curve | June 30, 2025 (%) | December 31, 2024 (%) | June 30, 2024 (%) | | :--- | :--- | :--- | :--- | | +300 bps | 5.49 | 6.23 | 8.00 | | +200 bps | 4.03 | 4.50 | 5.58 | | +100 bps | 2.21 | 2.48 | 2.97 | | -100 bps | (1.53) | (2.35) | (3.18) | | -200 bps | (2.82) | (5.85) | (6.58) | | -300 bps | (3.07) | (10.64) | (10.78) | - The Company was **less asset sensitive** at June 30, 2025, compared to prior periods, due to changing market characteristics and balance sheet strategies[353](index=353&type=chunk) [Economic Value Simulation Modeling](index=127&type=section&id=Economic%20Value%20Simulation%20Modeling) This model estimates the fair value of assets and liabilities, showing the Company was more liability sensitive in a rising rate environment Change in Economic Value of Equity from Yield Curve Shocks | Change in Yield Curve | June 30, 2025 (%) | December 31, 2024 (%) | June 30, 2024 (%) | | :--- | :--- | :--- | :--- | | +300 bps | (9.75) | (6.98) | (6.82) | | +200 bps | (6.40) | (4.75) | (4.39) | | +100 bps | (3.18) | (2.47) | (2.07) | | -100 bps | 2.40 | 1.88 | 1.15 | | -200 bps | 3.52 | 0.94 | 0.86 | | -300 bps | 2.13 | (1.09) | (1.54) | - At June 30, 2025, the economic value of equity was generally **more liability sensitive** in a rising interest rate environment compared to prior periods[356](index=356&type=chunk) [Item 4. Controls and Procedures](index=128&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details management's evaluation of disclosure controls and procedures, concluding their effectiveness as of June 30, 2025 [Evaluation of Disclosure Controls and Procedures](index=128&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025 - The Company's disclosure controls and procedures were evaluated as **effective** at the reasonable assurance level as of June 30, 2025[358](index=358&type=chunk) [Changes in Internal Control Over Financial Reporting](index=128&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) There were no material changes in the Company's internal control over financial reporting during the quarter - **No material changes** occurred in the Company's internal control over financial reporting during the quarter ended June 30, 2025[360](index=360&type=chunk) [PART II - OTHER INFORMATION](index=128&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=128&type=section&id=Item%201.%20Legal%20Proceedings) This section outlines the Company's involvement in legal proceedings, including a previously disclosed Consent Order with the CFPB - The Company is party to various legal proceedings, but management believes the ultimate outcome will **not have a material adverse effect** on the business[362](index=362&type=chunk) - The Bank entered into a Consent Order with the CFPB on December 7, 2023, to resolve alleged overdraft practice violations, requiring at least **$5.0 million in restitution** and a **$1.2 million civil monetary penalty**[363](index=363&type=chunk) [Item 1A. Risk Factors](index=130&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the Company's 2024 Form 10-K - **No material changes** to risk factors were identified during the quarter ended June 30, 2025, from those disclosed in the 2024 Form 10-K[364](index=364&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=130&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on common stock repurchases, noting no authorized share repurchase program was in effect - **No authorized share repurchase program** was in effect as of June 30, 2025[366](index=366&type=chunk) Common Stock Repurchases (Three Months Ended June 30, 2025) | Period | Total shares purchased | Average price paid per share ($) | | :--- | :--- | :--- | | April 1 - April 30, 2025 | 5,931 | 30.05 | | May 1 - May 31, 2025 | 371 | 28.95 | | June 1 - June 30, 2025 | 1,426 | 30.36 | | Total | 7,728 | 30.06 | - The shares purchased were withheld upon vesting of restricted shares to satisfy tax withholding obligations[366](index=366&type=chunk) [Item 5. Other Information](index=130&type=section&id=Item%205.%20Other%20Information) This section confirms no directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the quarter - **No directors or officers** adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[367](index=367&type=chunk) [Item 6. Exhibits](index=131&type=section&id=Item%206.%20Exhibits) This section provides a list of exhibits filed as part of the Quarterly Report, including merger agreements and certifications - Exhibits include the Agreement and Plan of Merger with Sandy Spring Bancorp, Inc, Amended and Restated Articles of Incorporation and Bylaws, various stock and incentive plans, and certifications[369](index=369&type=chunk) - Interactive data files formatted in Inline eXtensible Business Reporting Language (iXBRL) for the quarter ended June 30, 2025, are included[369](index=369&type=chunk) [Signatures](index=134&type=section&id=Signatures) This section contains the duly authorized signatures of the registrant's President and CEO, and Executive Vice President and CFO - The report is signed by John C Asbury, President and Chief Executive Officer, and Robert M Gorman, Executive Vice President and Chief Financial Officer, on August 5, 2025[374](index=374&type=chunk)

Core Insights - The company, Quad 7 Capital, is known for its investment strategy called BAD BEAT Investing, which has been operational for nearly 12 years and emphasizes both long and short trades [1] - The team consists of 7 analysts with diverse expertise in various fields, including business, policy, economics, and game theory [1] - The investment approach focuses on short- and medium-term investments, income generation, special situations, and momentum trades [1] Group 1 - The company has a proven track record of success, highlighted by a significant market call in February 2020 to sell everything and go short [1] - Since May 2020, the company has maintained an average position of 95% long and 5% short [1] - The investment group aims to educate investors on becoming proficient traders through a comprehensive playbook, providing in-depth research with clear entry and exit targets [1] Group 2 - Benefits of BAD BEAT Investing include understanding market dynamics, executing well-researched trade ideas weekly, and access to multiple chat rooms for discussion [2] - Members receive daily summaries of key analyst upgrades and downgrades, along with learning opportunities in basic options trading [2] - The company provides extensive trading tools to enhance the trading experience for its members [2]

Financial Data and Key Metrics Changes - The reported net income available to common shareholders was $16.8 million, with earnings per common share at $0.12. Adjusted operating earnings were $135.1 million or $0.95 per common share, resulting in an adjusted operating return on tangible common equity of 23.8% and an adjusted operating return on assets of 1.46% [18][19] - The CET1 capital ratio was 9.8%, and the loan to deposit ratio was approximately 88% at quarter end [10][24] - The tax equivalent net interest margin expanded by 38 basis points to 3.83%, driven by the incremental net accretion of purchase accounting adjustments related to the Sandy Spring acquisition [20][21] Business Line Data and Key Metrics Changes - The total loan portfolio fair value mark discount was $789.7 million, with loans held for investment totaling $8.6 billion and loans held for sale at $1.9 billion [17] - Non-interest income increased by $52.3 million to $81.5 million, primarily due to gains from the sale of commercial real estate loans and equity interest [22] - Reported non-interest expense increased by $145.5 million to $279.7 million, largely driven by merger-related costs [23] Market Data and Key Metrics Changes - Approximately 23% of total loans are in the Washington Metro Area, with the remaining 77% across other regions [14] - The unemployment rate in Maryland was reported at 3.3%, while Virginia's rate was 3.5%, indicating a robust economic environment [15] Company Strategy and Development Direction - The acquisition of Sandy Spring Bank is expected to bolster the company's position as a premier regional bank in the Lower Mid Atlantic, with plans for organic growth in North Carolina [9][30] - The company plans to open 10 new branches in North Carolina starting in 2026, focusing on markets with significant population growth [31][32] - The strategic plan will be shared during an Analyst Day in December, highlighting the next phase of growth and expansion [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the integration of Sandy Spring and the potential for sustainable growth, despite economic uncertainties [7][12] - The company has lowered its forecast for the 2025 net charge-off ratio to between 15 and 20 basis points, reflecting a stable credit quality outlook [13] - Management noted an improvement in business sentiment and loan pipelines, indicating a positive trajectory for loan growth in the second half of the year [11][66] Other Important Information - The company paid a common stock dividend of $0.34 per share, an increase of 6.3% from the previous year [25] - The effective tax rate for the second quarter was a negative 13.2%, reflecting an income tax benefit related to the reevaluation of state deferred tax assets [23] Q&A Session Summary Question: Loan growth outlook and plans for the Carolinas - Management indicated strong momentum in the loan pipeline and expressed optimism about growth in the Carolinas, particularly with the integration of American National Bank [38][40] Question: Expense outlook and efficiency ratio - The company is targeting a mid-40s efficiency ratio, inclusive of investments in the Carolinas, while maintaining a focus on technology investments [41][42] Question: Capital levels and deployment strategies - The CET1 ratio is expected to increase, with plans to invest in organic growth and consider share repurchases as capital accumulates [44][47] Question: Credit quality and government contractor segment - Credit quality remains stable, with the government contractor finance portfolio performing well due to increased defense spending [52][54] Question: Trends in loan yields and pricing competition - Loan yields have remained stable, with fixed-rate loans repricing in the 6.25% to 6.5% range [80][81] Question: Integration opportunities from the Sandy Spring acquisition - Management highlighted the potential for liquidity and new product offerings to enhance the former Sandy Spring franchise [85][86]

Financial Data and Key Metrics Changes - The reported net income available to common shareholders was $16.8 million, with earnings per common share at $0.12. Adjusted operating earnings were $135.1 million or $0.95 per common share, resulting in an adjusted operating return on tangible common equity of 23.8% and an adjusted operating return on assets of 1.46% [18][19] - The CET1 capital ratio was 9.8%, and the loan to deposit ratio was approximately 88% at quarter end [9][24] - The tax equivalent net interest margin expanded by 38 basis points to 3.83%, driven by the addition of Sandy Spring acquired loans and deposits [19][20] Business Line Data and Key Metrics Changes - The total loan portfolio fair value mark discount was $789.7 million, with loans held for investment totaling $27.3 billion, an increase of $8.9 billion from the prior quarter [16][24] - Non-interest income increased by $52.3 million to $81.5 million, primarily due to gains from the sale of commercial real estate loans and equity interest [20][21] - Reported non-interest expense increased by $145.5 million to $279.7 million, driven by merger-related costs and the full quarter impact of the Sandy Spring acquisition [22][23] Market Data and Key Metrics Changes - Approximately 23% of total loans are in the Washington Metro Area, with the remaining 77% across other regions [12] - The unemployment rate in Maryland was reported at 3.3%, while Virginia's rate was 3.5%, indicating a robust economic environment [14] Company Strategy and Development Direction - The company is focused on organic growth opportunities in North Carolina, planning to open 10 new branches starting in 2026 [31][32] - The acquisition of Sandy Spring Bank is seen as a strategic move to enhance market presence in Maryland and Virginia, with a goal to leverage this for further growth [30][29] - The company aims to maintain a mid-40s efficiency ratio while investing in technology and organic growth initiatives [40][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the integration of Sandy Spring and the potential for sustainable growth, despite economic uncertainties [6][8] - The company anticipates solid loan growth in the second half of the year, supported by a robust loan pipeline [10][66] - The outlook for net charge-offs has been lowered to between 15 and 20 basis points for the full year, reflecting confidence in asset quality [12][25] Other Important Information - The company plans to host an Analyst Day in December to share a new three-year strategic plan [28] - The effective tax rate for the second quarter was a negative 13.2%, with an expected increase to 21% to 22% for the full year [23] Q&A Session Summary Question: How should we think about the pro forma growth outlook on a larger balance sheet and plans for The Carolinas? - Management indicated a strong pipeline and record levels of loan growth, particularly in The Carolinas, with optimism for the second half of the year [37][39] Question: What is the expense outlook beyond what has been provided for this year? - The company is targeting a mid-40s efficiency ratio, inclusive of investments in The Carolinas [40][41] Question: How are capital levels being managed, and is there interest in exploring the reversal of the CECL double count? - The CET1 ratio is expected to increase, with plans to evaluate the CECL double count impact and consider share repurchases in the future [43][46] Question: What is the credit quality perspective on the legacy Atlantic Union basis? - The overall credit quality remains stable, with the increase in NPAs attributed to the Sandy Spring portfolio [50][52] Question: What opportunities are there for growth in the DC market? - Management emphasized the focus on Maryland and Northern Virginia, with confidence in the existing team and capabilities to drive growth [95][100]

Core Viewpoint - Atlantic Union (AUB) reported quarterly earnings of $0.95 per share, exceeding the Zacks Consensus Estimate of $0.80 per share, and showing an increase from $0.63 per share a year ago, indicating a positive earnings surprise of +18.75% [1] Financial Performance - The company posted revenues of $407.26 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 9.78%, compared to $212.16 million in the same quarter last year [2] - Over the last four quarters, Atlantic Union has exceeded consensus EPS estimates only once and has topped consensus revenue estimates two times [2] Stock Performance - Atlantic Union shares have declined approximately 11.1% since the beginning of the year, while the S&P 500 has gained 8.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.85 on revenues of $375.32 million, and for the current fiscal year, it is $3.01 on revenues of $1.34 billion [7] - The estimate revisions trend for Atlantic Union was mixed ahead of the earnings release, which may change following the recent report [6] Industry Context - The Banks - Northeast industry, to which Atlantic Union belongs, is currently ranked in the top 23% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Q2 2025 net income available to common shareholders was $16824 thousand, or $0.12 per diluted share[40] - Adjusted operating earnings available to common shareholders increased $836 million to $135145 thousand[43] - Q2 2025 adjusted operating return on tangible common equity was 238%[26] - Q2 2025 adjusted operating return on assets was 146%[26] - Q2 2025 adjusted operating efficiency ratio (FTE) was 4831%[26] Loan and Deposit Growth - Assuming the Sandy Spring acquisition closed on March 31 instead of April 1, and excluding both the loan fair value marks on the acquired loans and the effect of the CRE loan sale transaction, loan growth was approximately 4% annualized in Q2 2025[25] - Paid down approximately $340 million in brokered deposits[25] - At June 30, 2025, loans held for investment totaled $273 billion, an increase of $89 billion from the prior quarter[58] - At June 30, 2025, total deposits were $310 billion, an increase of $105 billion from the prior quarter[58] - Noninterest-bearing demand deposits accounted for 23% of total deposit balances at the end of the second quarter of 2025[58] Asset Quality and Capital - Q2 2025 net charge-offs at 1 basis point of total average loans held for investment annualized[26] - Increased Allowance for Credit Loss to 125% of loans held for investment[26] - Loan/Deposit ratio of 882% at June 30, 2025[25] - Common Equity Tier 1 Ratio (CET1) is 98%[59]

[Q2 2025 Financial Performance and Strategic Update](index=1&type=section&id=ATLANTIC%20UNION%20BANKSHARES%20REPORTS%20SECOND%20QUARTER%20FINANCIAL%20RESULTS) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported Q2 2025 net income of $16.8 million, heavily impacted by acquisition-related costs Q2 2025 Earnings Summary | Metric | GAAP | Adjusted (Non-GAAP) | | :--- | :--- | :--- | | Net Income to Common Shareholders | $16.8 million | $135.1 million | | Diluted EPS | $0.12 | $0.95 | Key Pre-Tax Adjustments for Q2 2025 | Adjustment Item | Amount (Pre-tax) | | :--- | :--- | | Merger-related costs (Sandy Spring) | $78.9 million | | CECL Day 1 initial provision (Sandy Spring) | $100.9 million | | Gain on sale of CRE loans | $15.7 million | | Gain on sale of Cary Street Partners equity | $14.3 million | [Strategic Activities](index=1&type=section&id=Strategic%20Activities) The quarter was defined by the Sandy Spring acquisition, a major CRE loan sale, and other capital actions - Completed the acquisition of Sandy Spring Bancorp on April 1, 2025, adding **$13.0 billion in total assets**, **$8.6 billion in loans held for investment (LHFI)**, and **$11.2 billion in deposits**, resulting in preliminary goodwill of **$496.9 million**[2](index=2&type=chunk) - Completed the sale of approximately **$2.0 billion** of performing CRE loans acquired from Sandy Spring, generating a pre-tax gain of **$15.7 million**[6](index=6&type=chunk)[8](index=8&type=chunk) - Received net proceeds of approximately **$385.0 million** from the full physical settlement of forward sale agreements by delivering 11,338,028 shares of common stock[4](index=4&type=chunk)[38](index=38&type=chunk) - Sold its equity interest in Cary Street Partners LLC (CSP), resulting in a pre-tax gain of **$14.3 million**[5](index=5&type=chunk)[8](index=8&type=chunk) [Detailed Financial Analysis](index=2&type=section&id=Detailed%20Financial%20Analysis) [Net Interest Income](index=2&type=section&id=NET%20INTEREST%20INCOME) Net interest income rose substantially to $321.4 million, driven by the Sandy Spring acquisition and purchase accounting Net Interest Income and Margin (Q2 2025 vs Q1 2025) | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $321.4M | $184.2M | +$137.2M | | Net Interest Margin (NIM) | 3.78% | 3.38% | +40 bps | | NIM (FTE) | 3.83% | 3.45% | +38 bps | | Earning Asset Yields | 6.05% | 5.68% | +37 bps | | Cost of Funds | 2.22% | 2.23% | -1 bp | Impact of Acquisition Accounting on NII (in thousands) | For the quarter ended | Loan Accretion | Deposit Accretion | Borrowings (Amortization) | Total | | :--- | :--- | :--- | :--- | :--- | | March 31, 2025 | $13,286 | $(415) | $(287) | $12,584 | | June 30, 2025 | $45,744 | $1,884 | $(2,256) | $45,372 | [Asset Quality](index=3&type=section&id=ASSET%20QUALITY) Asset quality metrics shifted due to acquired PCD loans, with NPAs rising and the ACL growing significantly - The Allowance for Credit Losses (ACL) increased by **$133.3 million to $342.4 million**, primarily due to the Sandy Spring acquisition[12](index=12&type=chunk)[15](index=15&type=chunk) - Net charge-offs were minimal at **$666,000**, or **0.01%** of total average loans (annualized) for Q2 2025[18](index=18&type=chunk) - The provision for credit losses was **$105.7 million**, which included **$100.9 million** in Day 1 initial provision expense related to the Sandy Spring acquisition[19](index=19&type=chunk) [Nonperforming Assets (NPAs)](index=3&type=section&id=Nonperforming%20Assets) NPAs increased to $163.4 million, primarily driven by PCD loans from the Sandy Spring acquisition Nonperforming Assets (in thousands) | Period | Nonaccrual loans | Foreclosed properties | Total NPAs | | :--- | :--- | :--- | :--- | | June 30, 2025 | $162,615 | $774 | $163,389 | | March 31, 2025 | $69,015 | $404 | $69,419 | - The increase in NPAs was primarily due to PCD loans acquired from Sandy Spring, including **$49.4 million** in construction and land development and **$27.1 million** in commercial real estate non-owner occupied loans[13](index=13&type=chunk) - Accruing past due loans increased to **0.28%** of total LHFI, up from 0.27% in the prior quarter[14](index=14&type=chunk) [Allowance for Credit Losses (ACL)](index=3&type=section&id=Allowance%20for%20Credit%20Losses) The ACL grew to $342.4 million, reflecting the acquisition and a significant CECL Day 1 provision - The initial ACL related to the Sandy Spring acquisition was **$129.2 million**, consisting of a **$117.8 million ALLL** and an **$11.4 million RUC**[3](index=3&type=chunk)[15](index=15&type=chunk) - An additional **$89.5 million** reserve on acquired non-PCD loans was established through provision expense, representing the CECL "double count"[3](index=3&type=chunk)[16](index=16&type=chunk) ACL Ratios | Metric | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | ACL as % of total LHFI | 1.25% | 1.13% | | ALLL as % of total LHFI | 1.15% | 1.05% | [Noninterest Income](index=5&type=section&id=NONINTEREST%20INCOME) Noninterest income surged to $81.5 million, boosted by gains on asset sales and acquired fee businesses - Total noninterest income increased by **$52.3 million to $81.5 million** in Q2 2025 compared to Q1 2025[20](index=20&type=chunk) - Key drivers of the increase were a **$15.7 million gain** on a CRE loan sale and a **$14.3 million gain** on the sale of an equity interest in CSP[20](index=20&type=chunk) - Adjusted operating noninterest income increased by **$22.2 million to $51.5 million**, largely due to the Sandy Spring acquisition, which led to an **$11.0 million** increase in fiduciary and asset management fees[21](index=21&type=chunk) [Noninterest Expense](index=5&type=section&id=NONINTEREST%20EXPENSE) Noninterest expense increased to $279.7 million, largely due to $78.9 million in merger-related costs - Total noninterest expense increased by **$145.5 million to $279.7 million** in Q2 2025, driven by **$78.9 million** in merger-related costs[22](index=22&type=chunk)[23](index=23&type=chunk) - Adjusted operating noninterest expense increased by **$58.6 million to $182.4 million**, primarily due to the impact of the Sandy Spring acquisition[23](index=23&type=chunk) - The largest component of the adjusted expense increase was a **$34.5 million** rise in salaries and benefits[23](index=23&type=chunk) [Income Taxes](index=7&type=section&id=INCOME%20TAXES) The annual effective tax rate rose to 21.7% post-acquisition, with a one-time benefit impacting the quarterly rate - The estimated annual effective tax rate (AETR) increased from **19.0% in Q1 to 21.7% in Q2** due to the Sandy Spring acquisition[24](index=24&type=chunk) - The effective tax rate for Q2 2025 was **(13.2%)**, reflecting an **$8.0 million** income tax benefit related to the re-evaluation of state deferred tax assets post-acquisition[25](index=25&type=chunk) [Balance Sheet and Capital](index=7&type=section&id=BALANCE%20SHEET%20AND%20CAPITAL) [Balance Sheet Overview](index=7&type=section&id=BALANCE%20SHEET) Total assets grew to $37.3 billion following the Sandy Spring acquisition, with significant increases in loans and deposits Balance Sheet Highlights (as of June 30, 2025) | Metric | June 30, 2025 | March 31, 2025 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $37.3B | $24.6B | +$12.7B | | LHFI | $27.3B | $18.4B | +$8.9B | | Total Deposits | $31.0B | $20.5B | +$10.5B | | Cash and cash equivalents | $1.6B | $0.4B | +$1.2B | - The Sandy Spring acquisition added assets with a fair value of **$13.0 billion** and liabilities with a fair value of **$12.2 billion**[31](index=31&type=chunk) [Capital and Dividends](index=8&type=section&id=Capital%20and%20Dividends) Capital ratios remained strong post-acquisition, with a CET1 ratio of 9.77% and a continued quarterly dividend Regulatory Capital Ratios (Estimated) | Ratio | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Common equity Tier 1 | 9.77% | 10.07% | 9.47% | | Tier 1 capital | 10.32% | 10.87% | 10.26% | | Total capital | 13.73% | 13.88% | 12.99% | | Tangible common equity / Tangible assets | 7.39% | 7.39% | 6.71% | - Declared and paid a quarterly cash dividend of **$0.34 per common share**, a **6.3% increase** from the second quarter of 2024[37](index=37&type=chunk) [Supplementary Information](index=9&type=section&id=Supplementary%20Information) [About the Company & Conference Call](index=9&type=section&id=ABOUT%20ATLANTIC%20UNION%20BANKSHARES%20CORPORATION) Atlantic Union Bankshares, now operating across three states, scheduled a conference call to discuss Q2 results - Atlantic Union Bankshares Corporation (NYSE: AUB) is the holding company for Atlantic Union Bank, with operations in Virginia, Maryland, and North Carolina[39](index=39&type=chunk) - A conference call to review Q2 2025 financial results was scheduled for 9:00 a.m. Eastern Time on Thursday, July 24, 2025[40](index=40&type=chunk) [Non-GAAP Financial Measures](index=9&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) The report uses non-GAAP measures like adjusted earnings to clarify underlying operational performance - The company uses non-GAAP measures to supplement GAAP financial statements, which should not be considered in isolation[42](index=42&type=chunk) - Management believes these measures provide additional understanding of ongoing operations and enhance comparability with prior periods[42](index=42&type=chunk) [Forward-Looking Statements](index=10&type=section&id=FORWARD-LOOKING%20STATEMENTS) The report contains forward-looking statements subject to risks including economic conditions and integration challenges - Statements regarding the benefits of the Sandy Spring acquisition and future operating results are forward-looking and subject to risk[43](index=43&type=chunk) - Key risks include changes in market interest rates, economic conditions, integration challenges with Sandy Spring, and regulatory changes[43](index=43&type=chunk)[45](index=45&type=chunk) [Financial Tables](index=13&type=section&id=Financial%20Tables) [Key Financial Results (Unaudited)](index=13&type=section&id=KEY%20FINANCIAL%20RESULTS%20(UNAUDITED)) This section provides detailed unaudited tables on operations, performance ratios, capital, and asset quality [Consolidated Balance Sheets](index=19&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) The balance sheets detail the company's financial position, reflecting significant growth from the recent acquisition [Consolidated Statements of Income (Unaudited)](index=20&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20(UNAUDITED)) This table itemizes revenues and expenses for the three and six months ended June 30, 2025, and prior periods [Average Balances, Yields, and Rates (Taxable Equivalent Basis)](index=21&type=section&id=AVERAGE%20BALANCES,%20INCOME%20AND%20EXPENSES,%20YIELDS%20AND%20RATES%20(TAXABLE%20EQUIVALENT%20BASIS)%20(UNAUDITED)) This analysis breaks down the components of net interest income and margin drivers on a taxable equivalent basis

Core Viewpoint - The market anticipates Atlantic Union (AUB) will report a year-over-year increase in earnings driven by higher revenues when it releases its results for the quarter ended June 2025 [1] Earnings Expectations - The earnings report is expected on July 24, with a consensus EPS estimate of $0.80, reflecting a +27% year-over-year change, and revenues projected at $370.96 million, up 74.9% from the previous year [3] - A positive earnings surprise could lead to a stock price increase, while a miss may result in a decline [2] Estimate Revisions - The consensus EPS estimate has been revised 0.89% higher in the last 30 days, indicating a reassessment by analysts [4] - The Most Accurate Estimate for Atlantic Union is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.94%, suggesting a bearish outlook from analysts [12] Earnings Surprise History - In the last reported quarter, Atlantic Union was expected to post earnings of $0.69 per share but only achieved $0.57, resulting in a -17.39% surprise [13] - The company has not surpassed consensus EPS estimates in any of the last four quarters [14] Industry Comparison - Another player in the Zacks Banks - Northeast industry, First Bank (FRBA), is expected to report earnings of $0.43 per share for the same quarter, indicating a year-over-year change of -8.5% [18] - First Bank's revenues are projected at $35.47 million, up 13.6% from the previous year, but it also has a negative Earnings ESP of -1.18% [19][20]