Atlantic Union Bankshares (US:AUB)2025-05-07 19:25Merger 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].