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]

Core Insights - The year 2025 has been challenging for smaller bank stocks in America, particularly regional banks, which have underperformed compared to industry-tracking ETFs that have achieved double-digit total returns [1] Group 1: Industry Performance - Smaller bank stocks in America have faced a tumultuous year, with regional banks lagging behind the performance of broader industry-tracking ETFs [1] Group 2: Company Focus - Atlantic Union, a Virginia-based bank, is highlighted within the group of regional banks that have not matched the performance of larger industry players [1]

Merger and Acquisition - The merger with Sandy Spring Bancorp was completed on April 1, 2025, enhancing the company's presence with over 50 branches in Virginia, Maryland, and Washington D.C.[192] - Sandy Spring had total assets of approximately $13.8 billion, total loans of approximately $11.4 billion, and total deposits of approximately $11.2 billion as of March 31, 2025[193]. - Forward-looking statements include expectations regarding the benefits of the Sandy Spring acquisition and the impact of economic conditions on business performance[177]. - Net accretion income related to acquisition accounting was $12.6 million for Q1 2025, compared to $602,000 for Q1 2024, reflecting the impact of the American National acquisition[211]. - Noninterest income increased by $3.6 million or 14.1% to $29.2 million in Q1 2025, driven by higher fiduciary and asset management fees due to the American National acquisition[219]. - Wholesale Banking segment net interest income increased by $18.5 million to $99.3 million for Q1 2025, compared to Q1 2024, driven by the American National acquisition[224]. - Consumer Banking segment net interest income rose by $6.5 million to $75.8 million for Q1 2025, compared to Q1 2024, also influenced by the American National acquisition[227]. - Adjusted operating noninterest expense increased by 22.9% to $123.8 million in Q1 2025, primarily influenced by the American National acquisition[222]. Financial Performance - Net income available to common shareholders for Q1 2025 was $46.9 million, with basic and diluted EPS of $0.53 and $0.52, respectively, compared to $46.8 million and EPS of $0.62 in Q1 2024[207]. - Total assets increased to $24.6 billion as of March 31, 2025, reflecting a $47.3 million or approximately 0.8% increase from December 31, 2024[207]. - Total deposits rose to $20.5 billion, an increase of $105.3 million or 2.1% from December 31, 2024, driven by a $194.1 million increase in demand deposits[207]. - Net interest income for Q1 2025 was $184.2 million, up $36.3 million from Q1 2024, attributed to a $3.0 billion increase in average interest-earning assets[209]. - The net interest margin increased by 27 basis points to 3.38% in Q1 2025 from 3.11% in Q1 2024, driven by lower costs of funds and higher yields on investments[210]. - Noninterest expense surged by $28.9 million or 27.5% to $134.2 million in Q1 2025, primarily due to a $13.5 million increase in salaries and benefits and $3.5 million in amortization of intangible assets[221]. - Total liabilities rose by $5.0 million to $21.4 billion at March 31, 2025, primarily driven by an increase in deposits[237]. - Stockholders' equity increased by $42.3 million to $3.2 billion at March 31, 2025, with regulatory capital ratios exceeding minimum requirements[240]. Risk Management - The company is subject to various risks including changes in market interest rates, economic conditions, and regulatory changes that could impact financial performance[179]. - The company has identified critical accounting estimates that may significantly affect financial results, including the allowance for loan and lease losses and acquisition accounting[183]. - The company actively manages risks in concentrated portfolios through credit underwriting and monitoring processes[266]. - The company has implemented centralized credit administration and risk management processes to mitigate risks in concentrated portfolios[266]. - The company refrains from originating loans to foreign entities and selectively originates loans to higher-risk borrowers[274]. Loan and Deposit Information - Total loans held for investment (LHFI) decreased to $18.4 billion, down $42.9 million or 0.9% from December 31, 2024, primarily due to declines in construction and land development loans[207]. - Total deposits as of March 31, 2025, were $20.5 billion, reflecting an increase of $105.3 million or 0.5% from December 31, 2024[286]. - Interest-bearing customer deposits totaled $16.0 billion as of March 31, 2025, accounting for 78.2% of total deposits, compared to 79.0% on December 31, 2024[287]. - Total deposits in Wholesale Banking increased by $370.4 million to $7.6 billion at March 31, 2025, compared to December 31, 2024, mainly due to higher money market accounts and demand deposits[226]. - Approximately 45.4% of total LHFI, or $8.4 billion, is expected to be paid within one year based on contractual terms[252]. Economic Conditions - The company continues to monitor the impact of global economic conditions, including inflation estimated at 2.4% as of March 2025, which is above the FOMC's target of 2.0%[201]. - The allowance for credit losses (ACL) rose to $209.0 million as of March 31, 2025, reflecting an increase of $15.3 million from December 31, 2024, due to economic uncertainty[273]. - Provision for credit losses in Wholesale Banking increased to $15.0 million in Q1 2025 from $5.4 million in Q1 2024, reflecting increased economic uncertainty[224]. Asset Management - Total earning assets increased to $22.1 billion in Q1 2025, up from $19.1 billion in Q1 2024, reflecting a growth of 15.8%[212]. - Total investments increased by $56.2 million to $3.4 billion at March 31, 2025, accounting for 13.8% of total assets[243]. - The weighted average yield on total held-to-maturity (HTM) securities was 3.56% as of March 31, 2025[246]. - The total balance of CRE non-owner occupied loans was $5,072,694, representing 27.53% of total loans[268]. - The company has increased its borrowing capacity at the Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB) to enhance liquidity during market turbulence[253].

Financial Data and Key Metrics Changes - The company reported net income available to common shareholders of $46.9 million, with diluted earnings per common share at $0.52. Adjusted operating earnings were $51.6 million or $0.57 per diluted common share, resulting in an adjusted operating return on tangible common equity of 13.2% and adjusted operating return on assets of 0.90% [25][32] - The tax equivalent net interest income increased to $187.9 million, up approximately $8.88 million from the previous quarter, driven by lower deposit costs [26][27] - The net interest margin expanded by 12 basis points to 3.45%, attributed to an 18 basis point reduction in the cost of funds [27][32] - Noninterest income decreased by $6 million to $29.2 million, primarily due to a decline in loan-related interest rate swap fees and other operating income [28] Business Line Data and Key Metrics Changes - Loans held for investment decreased by $42.9 million or 0.9% annualized from the previous quarter, primarily due to declines in construction and land development loans [31] - Total deposits increased by $105.3 million or 2.1% annualized, with noninterest-bearing deposits rising by $194 million during the quarter [14][31] - The total allowance for credit losses increased to $209 million, up approximately $15.3 million from the previous quarter, reflecting increased economic uncertainty [25][32] Market Data and Key Metrics Changes - The company noted that the Greater Washington region, where it operates, is projected to be a significant AI growth hub and has a highly educated workforce [39][41] - The unemployment rate in the Greater Washington area is expected to rise but remains below the national average, providing some capacity to absorb federal job cuts [41][42] Company Strategy and Development Direction - The company aims for upper single-digit loan growth in the long term, with mid-single-digit growth expected in the medium term due to current economic conditions [99][100] - The acquisition of Sandy Spring is seen as a strategic move to enhance the company's market presence, with plans to expand in North Carolina over time [52][53] - The company is focused on soundness, profitability, and growth, prioritizing these aspects in its operational strategy [33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain economic outlook and potential impacts from trade policies, but expressed confidence in asset quality and market strength [16][17] - The company does not forecast a recession for 2025, despite acknowledging the risks associated with economic uncertainty [71][128] - Management highlighted a strong pipeline for business opportunities, indicating that disruptions in the market could lead to unforeseen benefits [110] Other Important Information - The company updated its full-year 2025 financial outlook to include the expected impact of the Sandy Spring acquisition, projecting loan balances between $28 billion and $29 billion and deposit balances between $31 billion and $32 billion [70] - The company plans to complete a $2 billion commercial real estate loan sale by the end of the current quarter, which is expected to align with initial projections [58][60] Q&A Session Summary Question: Update on Sandy Spring deal marks - The loan mark as of March 31 is about 7% of loans, higher than the initial projection of 6% [78] Question: Credit mark changes with Sandy Spring - The credit mark came in better than projected at about 1.3% for the entire portfolio [85] Question: Risks associated with the commercial real estate loan sale - Current projections for the loan sale remain stable, with no major negative impacts anticipated [87] Question: Long-term loan growth perspective - The company aims for upper single-digit loan growth in the long term, with mid-single-digit growth expected in the medium term [99][100] Question: Current portfolio health and economic outlook - There are no significant signs of deterioration in the portfolio, but uncertainty from tariffs is being monitored closely [124][128]

Financial Data and Key Metrics Changes - The company reported net income available to common shareholders of $46.9 million, with diluted earnings per common share at $0.52. Adjusted operating earnings were $51.6 million or $0.57 per diluted common share, resulting in an adjusted operating return on tangible common equity of 13.2% and adjusted operating return on assets of 0.90% [25][32] - The tax equivalent net interest income increased to $187.9 million, up approximately $8.88 million from the previous quarter, driven by lower deposit costs and a net interest margin of 3.45%, which is a 12 basis point increase from the prior quarter [26][27] - Noninterest income decreased by $6 million to $29.2 million, primarily due to a decline in loan-related interest rate swap fees and other operating income [28] Business Line Data and Key Metrics Changes - Loans held for investment decreased by $42.9 million or 0.9% annualized from the previous quarter, primarily due to declines in construction and land development loans, while multifamily real estate loans increased [31] - Total deposits increased by $105.3 million or 2.1% annualized, with noninterest-bearing deposits rising by $194 million, representing 22% of total deposits, up from 21% at the end of the previous quarter [14][31] Market Data and Key Metrics Changes - The company acknowledged the economic outlook's uncertainty and the potential impacts of new trade policies, but maintained confidence in asset quality and market strength [16][17] - The Greater Washington region, where the company operates, is projected to remain resilient despite expected increases in unemployment, with a strong focus on national security and defense-related sectors [39][42] Company Strategy and Development Direction - The company aims for sustainable profitable growth and long-term value creation for shareholders, with a focus on soundness, profitability, and growth [33] - Following the acquisition of Sandy Spring, the company plans to leverage its expanded franchise to enhance market share and capitalize on growth opportunities in attractive markets [52][53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic uncertainties and projected a low net charge-off ratio between 15 and 25 basis points for the full year 2025 [16][70] - The company updated its financial outlook for 2025, projecting loan balances between $28 billion and $29 billion and deposit balances between $31 billion and $32 billion, while expecting a full-year net interest margin between 3.75% and 4% [70][73] Other Important Information - The company has taken prudent actions to build the allowance for credit losses in response to economic uncertainty, with total allowance for credit losses increasing to $209 million [25][32] - The acquisition of Sandy Spring is expected to enhance the company's market position, with approximately 46% of the pro forma combined loan portfolio marked for credit and interest rates [35][36] Q&A Session Summary Question: Update on Sandy Spring deal marks - The loan mark as of March 31 is about 7% of loans, approximately $800 million, which is higher than the original projection of $600 million [78] Question: Credit mark changes with Sandy Spring - The credit mark came in better than projected at about 1.3% for the entire portfolio, compared to an original estimate of 1.5% [85] Question: Risks associated with the commercial real estate loan sale - The company does not foresee major negatives affecting the projected discount for the loan sale, which remains at about 10% [87] Question: Long-term loan growth perspective - The company aims for upper single-digit loan growth in the long term, with mid-single-digit growth expected in the medium term [99] Question: Credit quality and economic outlook - There are no current signs of deterioration in the portfolio, but the company is closely monitoring the impact of tariffs and economic uncertainty [124][128]

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Core Insights - Atlantic Union (AUB) reported revenue of $217.08 million for the quarter ended March 2025, reflecting a year-over-year increase of 22.6% but a slight miss of 1.64% against the Zacks Consensus Estimate of $220.7 million [1] - The earnings per share (EPS) for the quarter was $0.57, down from $0.65 in the same quarter last year, resulting in an EPS surprise of -17.39% compared to the consensus estimate of $0.69 [1] Financial Performance Metrics - Efficiency Ratio stood at 62.9%, significantly higher than the three-analyst average estimate of 56.1% [4] - Net Interest Margin was reported at 3.4%, matching the average estimate based on three analysts [4] - Total Non-Interest Income was $29.16 million, below the average estimate of $32.58 million from three analysts [4] - Average Balance of Total Earning Assets was $22.11 billion, slightly lower than the average estimate of $22.43 billion [4] - Net Interest Income (FTE) was $187.92 million, marginally below the average estimate of $188.12 million [4] Stock Performance - Shares of Atlantic Union have declined by 17.4% over the past month, contrasting with the Zacks S&P 500 composite's decline of 5.1% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Atlantic Union (AUB) came out with quarterly earnings of $0.57 per share, missing the Zacks Consensus Estimate of $0.69 per share. This compares to earnings of $0.65 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -17.39%. A quarter ago, it was expected that this holding company for Atlantic Union Bank would post earnings of $0.76 per share when it actually produced earnings of $0.67, delivering a surprise of -11.84%. Over th ...

Financial Performance - For Q1 2025, Atlantic Union reported net income of $46.9 million, with basic and diluted earnings per share of $0.53 and $0.52, respectively[1]. - Net income available to common shareholders for Q1 2025 was $46,851,000, down 14.3% from $54,818,000 in Q4 2024 but stable compared to $46,802,000 in Q1 2024[37]. - Net income for Q1 2025 was $49,818,000, a decrease of 13.5% from $57,785,000 in Q4 2024, but slightly up from $49,769,000 in Q1 2024[41]. - Adjusted operating earnings available to common shareholders for Q1 2025 were $51,575,000, down 16.0% from $61,397,000 in Q4 2024, but up 5.0% from $49,027,000 in Q1 2024[41]. - The efficiency ratio for Q1 2025 was 62.90%, compared to 59.35% in Q4 2024 and 60.72% in Q1 2024, indicating a decline in operational efficiency[37]. - The return on average assets (ROA) decreased to 0.82% in Q1 2025 from 0.92% in Q4 2024 and 0.94% in Q1 2024, indicating a decline in asset efficiency[37]. - The return on average tangible common equity (ROTCE) was 12.04% for the three months ended March 31, 2025, compared to 13.32% for the same period in 2024, indicating a decline in profitability metrics[40]. Revenue and Income Sources - Net interest income for Q1 2025 was $184.2 million, an increase of $916,000 from the previous quarter, primarily due to lower deposit costs[8]. - Noninterest income decreased by $6.0 million to $29.2 million in Q1 2025, primarily due to lower loan-related interest rate swap fees[19]. - Interest and dividend income for Q1 2025 was $305,836,000, a decrease of 4.3% from $319,204,000 in Q4 2024 and an increase of 16.3% from $262,915,000 in Q1 2024[37]. - Total revenue (FTE) (non-GAAP) was $217,084 thousand for the three months ended March 31, 2025, compared to $177,098 thousand for the same period in 2024, marking a year-over-year increase of 22.6%[40]. Assets and Liabilities - Total assets reached $24.6 billion, an increase of approximately 15.2% from the previous year[22]. - Total assets increased to $24,632,611,000 in Q1 2025 from $24,585,323,000 in Q4 2024 and $21,378,120,000 in Q1 2024, reflecting a year-over-year growth of 15.6%[38]. - Loans held for investment (LHFI) totaled $18.4 billion, a decrease of $42.9 million or 0.9% from the prior quarter, but an increase of 16.3% from the previous year[23]. - Total deposits were $20.5 billion, an increase of $3.2 billion or 18.7% from March 31, 2024[25]. - Total borrowings decreased to $475.7 million, down $582.0 million or 55% year-over-year[26]. Capital and Equity - Common equity Tier 1 capital ratio improved to 10.07% from 9.86% year-over-year[27]. - The common equity Tier 1 capital ratio improved to 10.07% in Q1 2025 from 9.96% in Q4 2024 and 9.86% in Q1 2024, indicating stronger capital position[38]. - The ending tangible common equity (non-GAAP) was $1,725,641 thousand as of March 31, 2025, up from $1,440,072 thousand a year earlier, reflecting a year-over-year increase of 19.8%[40]. Credit Quality - Nonperforming assets as a percentage of total loans held for investment (LHFI) was 0.38% as of March 31, 2025, reflecting an increase of 6 basis points from the prior quarter[11]. - The allowance for credit losses (ACL) totaled $209.0 million, representing an increase of $15.3 million from the previous quarter[15]. - The provision for loan losses was $17,430 thousand for the three months ended March 31, 2025, compared to $8,925 thousand for the same period in 2024, indicating a year-over-year increase of 95.5%[39]. - Nonperforming assets (NPAs) totaled $69,419 thousand as of March 31, 2025, compared to $58,373 thousand at December 31, 2024, representing a quarter-over-quarter increase of 18.0% and a year-over-year increase of 90.6%[39]. - The net charge-offs to total average loans held for investment (annualized) was 0.05% for the three months ended March 31, 2025, compared to 0.13% for the same period in 2024, showing an improvement in asset quality[39]. Mergers and Acquisitions - The merger with Sandy Spring Bancorp was completed on April 1, 2025, resulting in the acquisition of 53 branches and creating the largest regional banking franchise in the lower Mid-Atlantic[2]. - The increase in deposit balances was primarily due to the American National acquisition[25]. Future Outlook - The company plans to hold a conference call on April 24, 2025, to discuss financial results and recent activities[31].

Group 1 - Atlantic Union (AUB) is expected to report a year-over-year increase in earnings and revenues for the quarter ended March 2025, with earnings projected at $0.69 per share, reflecting a +6.2% change, and revenues expected to be $220.7 million, up 24.6% from the previous year [3][12] - The stock price may increase if the actual earnings exceed expectations in the upcoming earnings report scheduled for April 24, while a miss could lead to a decline in stock price [2][4] - The consensus EPS estimate has been revised 1.82% lower over the last 30 days, indicating a reassessment by analysts [4][10] Group 2 - The Zacks Earnings ESP model indicates that Atlantic Union has an Earnings ESP of 0%, suggesting no recent analyst revisions that differ from the consensus estimate [10][11] - The company currently holds a Zacks Rank of 4 (Sell), making it challenging to predict an earnings beat conclusively [11][18] - Atlantic Union has not surpassed consensus EPS estimates in any of the last four quarters, with the last reported quarter showing a surprise of -11.84% [12][13] Group 3 - In comparison, Orrstown Financial Services (ORRF) is expected to post earnings of $0.95 per share for the same quarter, indicating a +8% year-over-year change, with revenues projected at $61.25 million, up 82.8% from the previous year [17] - Orrstown's consensus EPS estimate has been revised 3.2% lower, resulting in an Earnings ESP of -0.87% and a Zacks Rank of 4 (Sell), complicating predictions for an earnings beat [18]