Atlantic Union Bankshares Corporation (NYSE:AUB) Q4 2022 Results Earnings Conference Call January 24, 2023 9:00 AM ET Company Participants Bill Cimino - Senior Vice President and Director of Investor Relations John Asbury - President and Chief Executive Officer; Chief Executive Officer, Atlantic Union Bank Robert Gorman - Executive Vice President and Chief Financial Officer David Ring - Executive Vice President and Wholesale Banking Group Executive Doug Woolley - Chief Credit Officer Conference Call Partici ...

Financial Data and Key Metrics Changes - Reported net income available to common shareholders was $55.1 million, with earnings per common share at $0.74, an increase of approximately $4.2 million or $0.05 per common share from the second quarter [24] - Adjusted operating return on tangible common equity was 17.2% in the third quarter, up from 16.5% in the second quarter [25] - Total allowance for credit losses was $190 million, an increase of approximately $6 million from the second quarter, primarily due to net loan growth and increased macroeconomic uncertainty [26] Business Line Data and Key Metrics Changes - Upper single digit loan growth of approximately 8% for the quarter, with a year-to-date loan growth of approximately 10% excluding PPP [8] - Non-interest income increased by $12.7 million to $25.6 million, primarily due to a pre-tax gain from the sale of the RIA business in the second quarter [29] - Non-interest expense increased by $1.1 million to $99.9 million, driven by a $1.3 million increase in salaries and benefits expense [30] Market Data and Key Metrics Changes - Virginia's unemployment rate has recovered to pre-pandemic levels at 2.26%, remaining below the national average of 3.5% [7] - Total assets increased to $20 billion at September 30, a 5.8% annualized increase from June 30 levels, primarily due to loan growth [31] - Total deposits stood at $16.5 billion, an increase of $418 million or approximately 10% annualized from the prior quarter [32] Company Strategy and Development Direction - The company is focused on soundness, profitability, and growth, navigating challenges in the operating environment [6] - Plans to continue expanding asset-based lending and enhancing capabilities in government contracts finance, equipment finance, and foreign exchange [13] - The company remains open to M&A opportunities under the right circumstances, focusing on smaller, lower-risk infill opportunities [18] Management's Comments on Operating Environment and Future Outlook - Management believes the effects of any recession will be somewhat tempered in Virginia due to its stable economic environment [7] - The company expects to generate upper single-digit loan growth for the year, with a strong loan pipeline entering the fourth quarter [9] - Management anticipates continued expansion of net interest margin due to asset sensitivity and expected Federal Reserve rate hikes [38] Other Important Information - The company did not repurchase any shares during the quarter to preserve capital for organic loan growth [35] - The effective tax rate for the third quarter increased to 17% from 16.7% in the second quarter [31] - The company expects to achieve top-tier financial targets in the fourth quarter of 2022 and throughout 2023 [36] Q&A Session Summary Question: Can you provide an update on deposit data this quarter? - Management indicated that deposit betas are around 12% to 80% for this cycle, expecting to see an increase in deposit rates as competition grows [42] Question: What is the outlook for deposit growth moving forward? - Management projects a normalization of deposit growth to 3% to 5% as they expect some runoff from commercial client operating accounts [44] Question: How is the company managing expenses in light of revenue projections? - Management stated they are focused on generating positive operating leverage and can adjust expenses if revenue growth does not materialize as expected [52] Question: What is the company's view on credit quality and potential risks? - Management noted that while they do not see systemic credit quality issues, they are preparing for a potential mild recession in 2023 [39]

Atlantic Union Bankshares Corporation (NYSE:AUB) Q2 2022 Earnings Conference Call July 21, 2022 9:00 AM ET Company Participants Bill Cimino - SVP, IR John Asbury - President and CEO Robert Gorman - EVP and CFO David Ring - Wholesale Banking Executive Conference Call Participants Catherine Mealor - KBW Operator Good day, and thank you for standing by. Welcome to the Atlantic Union Bankshares Second Quarter 2022 Earnings Conference Call. [Operator Instructions] Please be advised today's conference is being re ...

Financial Data and Key Metrics Changes - Reported net income available to common shareholders was $40.7 million, with earnings per common share at $0.54, down approximately $4.1 million or $0.05 per common share from the fourth quarter [24] - Non-GAAP adjusted operating earnings available to common shareholders were $45.1 million, with adjusted operating earnings per common share at $0.60, down approximately $8.7 million or $0.11 per common share from the prior quarter [24] - Non-GAAP adjusted operating return on tangible common equity was 12.69%, and return on assets was 0.98% [24] Business Line Data and Key Metrics Changes - Loan growth was approximately 10.8% annualized, excluding PPP loans, with average loans on a linked-quarter annualized basis growing 12.8% [12] - New construction loan originations remained strong, with C&I line utilization increasing each month of the quarter [12][13] - Non-interest income declined to $30.2 million from $36.4 million in the prior quarter, primarily due to a gain from the sale of Visa Class B common stock in the previous quarter [30] Market Data and Key Metrics Changes - Total assets were $19.8 billion, a decrease of approximately 5.7% from December 31 levels [32] - Total deposits stood at $16.5 billion, a decline of $127 million or approximately 3% annualized from the prior quarter [33] - The unemployment rate in Virginia was reported at 3%, down from 3.4% in November, which is better than the national average of 3.6% [15] Company Strategy and Development Direction - The company aims to diversify income streams, focusing on both net interest income and non-interest income, with expected reductions in non-interest income due to changes in overdraft policies [19] - The strategic priorities include driving organic growth, leveraging financial technology, and selectively considering M&A opportunities [20] - The company plans to maintain top-tier financial performance regardless of the operating environment, with a focus on efficiency and scalability [21] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about economic growth despite challenges such as high inflation and geopolitical uncertainties [11] - The company anticipates that the Federal Reserve's rate hikes will positively impact net interest margins, projecting a potential increase in margins by the end of the year [44][36] - Management noted that American businesses have shown resilience and that the current economic environment is manageable [11] Other Important Information - The company closed 16 branches, reducing its retail branch network by approximately 25% since the pandemic began [17] - The effective tax rate for the first quarter increased to 17.5% from 14.4% in the fourth quarter [31] - The company repurchased approximately 630,000 common shares for $25 million during the first quarter [35] Q&A Session Summary Question: Capital management and buybacks - Management indicated that the AOCI impact did not materially affect the tangible common equity ratio and that they are evaluating capital management actions, including share buybacks [41][42] Question: Impact of rate hikes on margin - Management explained that for every 25 basis points increase in the Fed funds rate, there would be an approximate five basis points increase in core margin, projecting a potential margin of 345 to 350 by year-end [44][45] Question: Non-interest income guidance - Management confirmed that the guidance for non-interest income remains at $385 million to $390 million for the full year, with expectations of a decrease in seasonal expenses in the upcoming quarters [48][50] Question: Changes in overdraft policies - Management clarified that the expected reduction in fees due to changes in overdraft policies would be between $4.5 million to $6.5 million annually, with changes anticipated to begin in Q3 [60][62]