8-K - AUB - Equibles

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 22, 2020

ATLANTIC UNION BANKSHARES CORPORATION

(Exact name of registrant as specified in its charter)

Virginia	001-39325	54-1598552
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)

1051 East Cary Street

Suite 1200

Richmond , Virginia **** 23219

(Address of principal executive offices, including Zip Code)

Registrant’s telephone number, including area code: (804) 633-5031

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1.33 per share	AUB	The NASDAQ Global Select Market
Depositary Shares, Each Representing a 1/400^th^ Interest in a Share of 6.875% Perpetual Non-Cumulative Preferred Stock, Series A	AUBAP	The NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	☐
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Item 2.02 Results of Operations and Financial Condition.

On October 22, 2020, Atlantic Union Bankshares Corporation (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2020. A copy of the press release is being furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

Attached as Exhibit 99.2 and incorporated herein by reference is a presentation that the Company will use in connection with a webcast and conference call for analysts at 9:00 a.m. Eastern Time on Thursday, October 22, 2020. This presentation is also available under the Presentations link in the Investor Relations section of the Company’s website at https://investors.atlanticunionbank.com.

The information disclosed in or incorporated by reference into this Item 2.02, including Exhibits 99.1 and 99.2, is furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description of Exhibit
99.1		Press release dated October 22, 2020 regarding third quarter results.
99.2		Atlantic Union Bankshares Corporation presentation.
104		Cover Page Interactive Data File – the cover page iXBRL tags are embedded within the Inline XBRL document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ATLANTIC UNION BANKSHARES CORPORATION
Date: October 22, 2020	By:	/s/ Robert M. Gorman
		Robert M. Gorman
		Executive Vice President and
		Chief Financial Officer

Exhibit 99.1

Contact: Robert M. Gorman - (804) 523-7828

Executive Vice President / Chief Financial Officer

ATLANTIC UNION BANKSHARES REPORTS THIRD QUARTER RESULTS

Richmond, Va., October 22, 2020 – Atlantic Union Bankshares Corporation (the “Company” or “Atlantic Union”) (Nasdaq: AUB) today reported net income available to common shareholders of $58.3 million and diluted earnings per common share of $0.74 for its third quarter ended September 30, 2020. Pre-tax pre-provision operating earnings^(1)^ were $78.6 million for the third quarter ended September 30, 2020.

Net income available to common shareholders was $96.1 million and diluted earnings per common share were $1.22 for the nine months ended September 30, 2020. Pre-tax pre-provision operating earnings ^(1)^ were $217.3 million for the nine months ended September 30, 2020.

“During the third quarter, Atlantic Union delivered strong financial results and continued to demonstrate the resilience, agility and innovation required to successfully navigate through the challenging economic, credit and interest rate headwinds of COVID-19,” said John C. Asbury, president and chief executive officer of Atlantic Union.

“Operating under the mantra of soundness, profitability and growth – in that order of priority - Atlantic Union continues to be in a strong financial position with ample liquidity and a well-fortified capital base. Our financial performance has and will continue to benefit from the decisive actions the Company has taken to reduce its expense run rate to more closely align with revenue growth pressures driven by the lower for longer interest rate environment. These expense reduction actions include the consolidation of 14 branches in September, or nearly 10% of our branch network.

Looking forward, we believe that Atlantic Union will emerge from the challenges of COVID-19 as a stronger company that is well positioned to generate sustainable, profitable growth and is committed to leveraging the Atlantic Union franchise to build long term value for our shareholders.”

Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”)

During 2020, the Company participated in the SBA PPP under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which was intended to provide economic relief to small businesses that have been adversely impacted by the COVID-19 global pandemic (“COVID-19”). The Company processed over 11,000 PPP loans, which totaled $1.7 billion with a recorded investment of $1.6 billion as of September 30, 2020, which included unamortized deferred fees of $32.6 million. The loans carry a 1% interest rate.

Expense Reduction Measures

During 2020, the Company undertook several actions, including the consolidation of 14 branches, which was completed in September 2020, to reduce expenses in light of the current and expected operating environment. These actions resulted in expenses during the third quarter of 2020 of approximately $2.6 million, primarily related to lease termination costs and real estate write-downs.

^(1)^ These are financial measures not calculated in accordance with generally accepted accounting principles (“GAAP”). For a reconciliation of these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results

NET INTEREST INCOME

For the third quarter of 2020, net interest income was $137.4 million, an increase from $137.3 million reported in the second quarter of 2020. Net interest income (FTE)^(1)^was $140.3 million in the third quarter of 2020, an increase of $172,000 from the second quarter of 2020. The third quarter net interest margin decreased 15 basis points to 3.08% from 3.23% in the previous quarter, while the net interest margin (FTE)^(1)^decreased 15 basis points to 3.14% from 3.29% during the same period. The decreases in the net interest margin and net interest margin (FTE) were principally due to a 31 basis point decrease in the yield on earning assets (FTE)^(1)^ offset by a 16 basis point decrease in cost of funds. The decline in the Company’s earning asset yields was driven by lower loan accretion income, an increase in the earning asset mix of lower yielding investment securities and the impact of lower market interest rates. The cost of funds decline was driven by lower deposit costs and wholesale borrowing costs driven by lower interest rate environment and a favorable funding mix.

The Company’s net interest margin (FTE) includes the impact of acquisition accounting fair value adjustments. Net accretion related to acquisition accounting decreased $2.7 million from the prior quarter to $3.7 million for the quarter ended September 30, 2020. The second and third quarters of 2020, and the remaining estimated net accretion impact are reflected in the following table (dollars in thousands):


			Deposit
	Loan		Accretion		Borrowings
	Accretion		(Amortization)		Amortization		Total
For the quarter ended March 31, 2020	$	9,528		50		(138)	$	9,440
For the quarter ended June 30, 2020		6,443		34		(140)		6,337
For the quarter ended September 30, 2020		3,814		26		(167)		3,673
For the remaining three months of 2020 (estimated)		2,530		23		(187)		2,366
For the years ending (estimated):
2021		9,242		14		(807)		8,449
2022		7,449		(43)		(829)		6,577
2023		5,346		(32)		(852)		4,462
2024		4,334		(4)		(877)		3,453
2025		3,248		(1)		(900)		2,347
Thereafter		14,485		—		(9,873)		4,612
Total remaining acquisition accounting fair value adjustments at September 30, 2020		46,634		(43)		(14,325)		32,266

ASSET QUALITY

Overview

During the third quarter of 2020, the Company experienced a slight decrease in nonperforming assets (“NPAs”). Past due loan levels as a percentage of total loans held for investment at September 30, 2020 were higher than past due loan levels at June 30, 2020 and lower than past due loan levels at September 30, 2019. The increase in past due loan levels from June 30, 2020 was primarily within the 30-59 days past due category. Net charge-off levels and the provision for loan losses for the third quarter of 2020 decreased from the second quarter of 2020.

Loan Modifications for Borrowers Affected by COVID-19

On March 22, 2020, the five federal bank regulatory agencies and the Conference of State Bank Supervisors issued joint

guidance (subsequently revised on April 7, 2020) with respect to loan modifications for borrowers affected by COVID-19 (the “March 22 Joint Guidance”). The March 22 Joint Guidance encourages banks, savings associations, and credit unions to make loan modifications for borrowers affected by COVID-19 and, importantly, assures those financial institutions that they will not (i) receive supervisory criticism for such prudent loan modifications and (ii) be required by examiners to automatically categorize COVID-19-related loan modifications as TDRs. The federal banking regulators have confirmed with the Financial Accounting Standards Board (or FASB) that short-term loan modifications made on a good faith basis in response to COVID-19 to borrowers who were current (i.e., less than 30 days past due on contractual payments) when the modification program was implemented are not considered TDRs.

^(1)^ These are financial measures not calculated in accordance with GAAP. For a reconciliation of these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results

In addition, Section 4013 of the CARES Act provides banks, savings associations, and credit unions with the ability to make loan modifications related to COVID-19 without categorizing the loan as a TDR or conducting the analysis to make the determination, which is intended to streamline the loan modification process. Any such suspension is effective for the term of the loan modification; however, the suspension is only permitted for loan modifications made during the effective period of Section 4013 and only for those loans that were not more than thirty days past due as of December 31, 2019.

The Company has made certain loan modifications pursuant to the March 22 Joint Guidance or Section 4013 of the CARES Act and as of September 30, 2020 approximately $769.6 million remain under their modified terms, a decline of $831.3 million as compared to June 30, 2020. The majority of the Company’s modifications as of September 30, 2020 were in the commercial real estate portfolios.

Nonperforming Assets

At September 30, 2020, NPAs totaled $43.2 million, a decrease of $839,000 from June 30, 2020. NPAs as a percentage of total outstanding loans at September 30, 2020 were 0.30%, a decrease of 1 basis point from 0.31% at June 30, 2020.

Excluding the impact of the PPP loans^(1)^, NPAs as a percentage of total outstanding loans were 0.34%, a decrease of 1 basis point from June 30, 2020.

The Company’s adoption of current expected credit loss (“CECL”) on January 1, 2020 resulted in a change in the accounting and reporting related to purchased credit impaired (“PCI”) loans, which are now defined as purchased credit deteriorated (“PCD”) and evaluated at the loan level instead of being evaluated in pools under PCI accounting. All prior period nonaccrual and past due loan metrics discussed herein have not been restated for CECL accounting and exclude PCI-related loan balances.

The following table shows a summary of nonperforming asset balances at the quarter ended (dollars in thousands):


	****	September 30,		****	June 30,		****	March 31,		****	December 31,		****	September 30,
		2020			2020			2020			2019			2019
Nonaccrual loans		$	39,023		$	39,624		$	44,022		$	28,232		$	30,032
Foreclosed properties			4,159			4,397			4,444			4,708			6,385
Total nonperforming assets		$	43,182		$	44,021		$	48,466		$	32,940		$	36,417

The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):


	****	September 30,		****	June 30,		****	March 31,		****	December 31,		****	September 30,
		2020			2020			2020			2019			2019
Beginning Balance		$	39,624		$	44,022		$	28,232		$	30,032		$	27,462
Net customer payments			(2,803)			(6,524)			(3,451)			(5,741)			(3,612)
Additions			2,790			3,206			6,059			5,631			8,327
Impact of CECL adoption			—			—			14,381			—			—
Charge-offs			(588)			(1,088)			(1,199)			(1,690)			(884)
Loans returning to accruing status			—			8			—			—			(1,103)
Transfers to foreclosed property			—			—			—			—			(158)
Ending Balance		$	39,023		$	39,624		$	44,022		$	28,232		$	30,032

The following table shows the activity in foreclosed properties for the quarter ended (dollars in thousands):


	****	September 30,		****	June 30,		****	March 31,		****	December 31,		****	September 30,
		2020			2020			2020			2019			2019
Beginning Balance		$	4,397		$	4,444		$	4,708		$	6,385		$	6,506
Additions of foreclosed property			—			—			615			62			645
Valuation adjustments			—			—			(44)			(375)			(62)
Proceeds from sales			(254)			(55)			(854)			(1,442)			(737)
Gains (losses) from sales			16			8			19			78			33
Ending Balance		$	4,159		$	4,397		$	4,444		$	4,708		$	6,385

Past Due Loans

Past due loans still accruing interest totaled $50.9 million or 0.35% of total loans held for investment at September 30, 2020, compared to $40.5 million or 0.28% of total loans held for investment at June 30, 2020, and $55.1 million or 0.45% of total loans held for investment at September 30, 2019. Excluding the impact of the PPP loans^(1)^, past due loans still accruing interest were 0.40% of total loans held for investment at September 30, 2020, compared to 0.32% of total loans held for investment at June 30, 2020. The increase in past due loans in the third quarter of 2020 as compared to the second quarter was primarily within the 30-59 days past due category and due to increases in past due credit relationships within the owner occupied commercial real estate, commercial & industrial, and residential 1-4 family – consumer portfolios.

Of the total past due loans still accruing interest, $15.6 million or 0.11% of total loans held for investment were loans past due 90 days or more at September 30, 2020, compared to $19.3 million or 0.13% of total loans held for investment at June 30, 2020, and $12.0 million or 0.10% of total loans held for investment at September 30, 2019.

Net Charge-offs

For the third quarter of 2020, net charge-offs were $1.4 million, or 0.04% of total average loans on an annualized basis, compared to $3.3 million, or 0.09%, for the second quarter of 2020, and $7.7 million, or 0.25%, for the third quarter last year. Excluding the impact of the PPP loans^(1)^, net charge-offs were 0.04% of total average loans on an annualized basis, compared to 0.10% for the second quarter of 2020. The majority of net charge-offs in the third quarter of 2020 were related to the third-party consumer loan portfolio*.*

Provision for Credit Losses

The provision for credit losses for the third quarter of 2020 was $6.6 million, a decrease of $27.6 million compared to the previous quarter and a decrease of $2.5 million compared to the same quarter in 2019. The provision for credit losses for the third quarter of 2020 consisted of $5.6 million in provision for loan losses and $1.0 million in provision for unfunded commitment.

Allowance for Credit Losses (“ACL”)

At September 30, 2020, the ACL was $186.1 million and included an allowance for loan and lease losses (“ALLL”) of $174.1 million and a reserve for unfunded commitments (“RUC”) of $12.0 million. The ACL increased $5.1 million from June 30, 2020, primarily due to the continued economic uncertainty related to COVID-19.

The ALLL increased $4.1 million and the RUC increased $1.0 million from June 30, 2020. The ALLL as a percentage of the total loan portfolio was 1.21% at September 30, 2020 and 1.19% at June 30, 2020. The ACL as percentage of total loans was 1.29% at September 30, 2020 and 1.26% at June 30, 2020. When excluding PPP loans^(1)^, which are 100% guaranteed by the SBA, the ALLL as a percentage of adjusted loans increased 2 basis points to 1.36% from the prior quarter and the ACL as a percentage of adjusted loans increased 4 basis points to 1.46% from the prior quarter. The ratio of the ALLL to nonaccrual loans was 446.2% at September 30, 2020, compared to 429.0% at June 30, 2020.

NONINTEREST INCOME

Noninterest income decreased $1.5 million to $34.4 million for the quarter ended September 30, 2020 from $35.9 million in the prior quarter primarily driven by a $10.3 million gain on sale of investment securities recorded during the second quarter and a decline of $2.3 million in loan-related interest rate swap income due to lower transaction volumes during the third quarter, which were significantly offset by increases in several other non-interest income categories. These positive offsets include an increase in mortgage banking income of $3.1 million primarily due to increased mortgage loan origination volumes due to the current low interest rate environment. In addition, in the third quarter of 2020, $1.7 million in unrealized gains were recognized related to equity method investments that experienced unrealized losses during the second quarter, bank owned life insurance income increased $1.4 million primarily related to death benefit proceeds received during the quarter, and service charges on deposit accounts increased $1.1 million primarily due to higher NSF and overdraft fees.

NONINTEREST EXPENSE

Noninterest expense decreased $9.6 million to $93.2 million for the quarter ended September 30, 2020 from $102.8 million in the prior quarter primarily driven by the recognition of approximately $10.3 million loss on debt extinguishment in the second quarter resulting from the prepayment of approximately $200.0 million in long-term FHLB advances. In addition, during the third quarter of 2020, there was a decline in the FDIC assessment of approximately $1.1 million due to the positive impact of PPP loans on the Company’s assessment rate. Noninterest expense also included approximately $2.6 million in costs related to the Company’s expense reduction plans, including the closure of 14 branches in September, approximately $639,000 in costs related to the Company’s response to COVID-19, and an increase in marketing expenses related to donations made by the Company to support organizations that fight the injustices of inequality and contribute to change in our communities.

INCOME TAXES

The effective tax rate for the three months ended September 30, 2020 was 15.3% compared to 15.2% for the three months ended June 30, 2020.

BALANCE SHEET

At September 30, 2020, total assets were $19.9 billion, an increase of $178.3 million, or approximately 3.6% (annualized), from June 30, 2020, and an increase of $2.5 billion, or approximately 14.3% from September 30, 2019. The increase in assets from the prior quarter was driven by an increase in the Company’s securities portfolio partially offset by a reduction in cash balances while growth from the prior year was primarily a result of both organic and PPP loan growth.

At September 30, 2020, loans held for investment (net of deferred fees and costs) were $14.4 billion, an increase of $74.6 million, or 2.1% (annualized), from June 30, 2020, while average loans increased $401.0 million, or 11.4% (annualized), from the prior quarter. Loans held for investment (net of deferred fees and costs) increased $2.1 billion, or 16.9% from September 30, 2019, while quarterly average loans increased $2.1 billion, or 17.3% from the prior year. Excluding the effects of the PPP^(2)^, loans held for investment (net of deferred fees and costs) increased $475.6 million, or 3.9%, while quarterly average loans increased $480.2 million, or 3.9% from the prior year.

At September 30, 2020, total deposits were $15.6 billion, a slight decrease of $29.0 million, or approximately 0.7% (annualized), from June 30, 2020, while average deposits increased $620.1 million, or 16.5% (annualized), from the prior quarter. Deposits increased $2.5 billion, or 19.4% from September 30, 2019, while quarterly average deposits increased $2.8 billion, or 21.6% from the prior year. The increase in deposits from the prior year was primarily due to the impact of PPP loan related deposits and government stimulus.

The following table shows the Company’s capital ratios at the quarters ended:


	****	September 30,	****	June 30,	****	September 30,	****
		2020		2020		2019	****
Common equity Tier 1 capital ratio ^(1)^		10.04	%	9.88	%	10.48	%
Tier 1 capital ratio ^(1)^		11.18	%	11.03	%	10.48	%
Total capital ratio ^(1)^		13.92	%	13.81	%	12.93	%
Leverage ratio (Tier 1 capital to average assets) ^(1)^		8.82	%	8.82	%	8.94	%
Common equity to total assets		12.52	%	12.41	%	14.48	%
Tangible common equity to tangible assets ^(2)^		7.91	%	7.74	%	9.23	%

(1)	All ratios at September 30, 2020 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed.
(2)	These are financial measures not calculated in accordance with GAAP. For a reconciliation of these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.
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On June 9, 2020, the Company issued and sold 6,900,000 depositary shares, each representing a 1/400th ownership interest in a share of the Company’s 6.875% Perpetual Non-Cumulative Preferred Stock, Series A (“Series A Preferred Stock”), par value $10.00 per share of Series A Preferred Stock, with a liquidation preference of $10,000 per share of

Series A Preferred Stock. The net proceeds received from the issuance of the Series A Preferred Stock was approximately $166.4 million, after deducting the underwriting discount and other offering expenses payable by the Company. The Series A Preferred Stock is included in Tier 1 capital.

During the third quarter of 2020, the Company declared and paid cash dividends of $0.25 per common share, consistent with the second quarter of 2020 and the third quarter of 2019. During the third quarter of 2020, the Board also declared and paid a quarterly dividend on the outstanding shares of Series A Preferred Stock of $156.60 per share (equivalent to $0.39 per outstanding depositary share). On July 10, 2019, the Company announced that its Board of Directors had authorized a share repurchase program (effective July 8, 2019) to purchase up to $150 million of the Company’s common stock through June 30, 2021 in open market transactions or privately negotiated transactions. On March 20, 2020, the Company suspended its share repurchase program, which had $20 million remaining in the authorization when it was suspended. The Company repurchased an aggregate of approximately 3.7 million shares, at an average price of $35.48 per share, under the authorization prior to the suspension.

ABOUT ATLANTIC UNION BANKSHARES CORPORATION

Headquartered in Richmond, Virginia, Atlantic Union Bankshares Corporation (Nasdaq: AUB) is the holding company for Atlantic Union Bank. Atlantic Union Bank has 135 branches and approximately 155 ATMs located throughout Virginia, and in portions of Maryland and North Carolina. Middleburg Financial is a brand name used by Atlantic Union Bank and certain affiliates when providing trust, wealth management, private banking, and investment advisory products and services. Certain non-bank affiliates of Atlantic Union Bank include: Old Dominion Capital Management, Inc., and its subsidiary, Outfitter Advisors, Ltd., and Dixon, Hubard, Feinour, & Brown, Inc., which provide investment advisory services; Middleburg Investment Services, LLC, which provides brokerage services; and Union Insurance Group, LLC, which offers various lines of insurance products.

THIRD QUARTER 2020 EARNINGS RELEASE CONFERENCE CALL

The Company will hold a conference call on Thursday, October 22, 2020 at 9:00 a.m. Eastern Time during which management will review the third quarter 2020 financial results and provide an update on recent activities. Interested parties may participate in the call toll-free by dialing (866) 220-4170; international callers wishing to participate may do so by dialing (864) 663-5235. The conference ID number is 9936549. Management will conduct a listen-only webcast with accompanying slides, which can be found at: https://edge.media-server.com/mmc/p/s65vcnnd.

A replay of the webcast, and the accompanying slides, will be available on the Company’s website for 90 days at: https://investors.atlanticunionbank.com/.

NON-GAAP FINANCIAL MEASURES

In reporting the results of the quarter ended September 30, 2020, the Company has provided supplemental performance measures on a tax-equivalent, tangible, operating, adjusted or pre-tax pre-provision basis. These non-GAAP financial measures are a supplement to GAAP, which is used to prepare the Company’s financial statements, and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP. In addition, the Company’s non-GAAP financial measures may not be comparable to non-GAAP financial measures of other companies. The Company uses the non-GAAP financial measures discussed herein in its analysis of the Company’s performance. The Company’s management believes that these non-GAAP financial measures provide additional understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented without the impact of items or events that may obscure trends in the Company’s underlying performance. For a reconciliation of these measures to their most directly comparable GAAP measures and additional information about these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including without limitation, statements made in Mr. Asbury’s quotes, are statements that include, projections, predictions, expectations, or beliefs about future events or results that are not statements of historical fact. Such forward-looking statements are based on various assumptions as of

the time they are made, and are inherently subject to known and unknown risks, uncertainties, and other factors, some of which cannot be predicted or quantified, that may cause actual results, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements. Forward-looking statements are often accompanied by words that convey projected future events or outcomes such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” or words of similar meaning or other statements concerning opinions or judgment of the Company and its management about future events. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of, or trends affecting, the Company will not differ materially from any projected future results, performance, or achievements expressed or implied by such forward-looking statements. Actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to:

●	changes in interest rates;
●	general economic and financial market conditions, in the United States generally and particularly in the markets in which the Company operates and which its loans are concentrated, including the effects of declines in real estate values, an increase in unemployment levels and slowdowns in economic growth, including as a result of COVID-19;
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●	the quality or composition of the loan or investment portfolios and changes therein;
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●	demand for loan products and financial services in the Company’s market area;
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●	the Company’s ability to manage its growth or implement its growth strategy;
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●	the effectiveness of expense reduction plans;
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●	the introduction of new lines of business or new products and services;
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●	the Company’s ability to recruit and retain key employees;
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●	the incremental cost and/or decreased revenues associated with exceeding $10 billion in assets;
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●	real estate values in the Bank’s lending area;
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●	an insufficient ACL;
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●	changes in accounting principles relating to loan loss recognition (CECL);
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●	the Company’s liquidity and capital positions;
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●	concentrations of loans secured by real estate, particularly commercial real estate;
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●	the effectiveness of the Company’s credit processes and management of the Company’s credit risk;
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●	the Company’s ability to compete in the market for financial services and increased competition relating to fintech;
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●	technological risks and developments, and cyber threats, attacks, or events;
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●	the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts or public health events (such as COVID-19), and of governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of the Company's borrowers to satisfy their obligations to the Company, on the value of collateral securing loans, on the demand for the Company's loans or its other products and services, on incidents of cyberattack and fraud, on the Company’s liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of the Company's business operations and on financial markets and economic growth;
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●	the effect of steps the Company takes in response to COVID-19, the severity and duration of the pandemic, including whether there is a resurgence of COVID-19 infections in connection with the seasonal flu, the impact of loosening or tightening of government restrictions, the pace of recovery when the pandemic subsides and the heightened impact it has on many of the risks described herein;
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●	performance by the Company’s counterparties or vendors;
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●	deposit flows;
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●	the availability of financing and the terms thereof;
---	---
●	the level of prepayments on loans and mortgage-backed securities;
---	---
●	legislative or regulatory changes and requirements, including the impact of the CARES Act and other legislative and regulatory reactions to COVID-19;
---	---
●	potential claims, damages, and fines related to litigation or government actions, including litigation or actions arising from the Company’s participation in and administration of programs related to COVID-19, including, among other things, the CARES Act;
---	---
●	the effects of changes in federal, state or local tax laws and regulations;
---	---
●	monetary and fiscal policies of the U.S. government, including policies of the U.S. Department of the Treasury and the Federal Reserve;
---	---
●	changes to applicable accounting principles and guidelines; and
---	---
●	other factors, many of which are beyond the control of the Company.
---	---

Please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and comparable “Risk Factors” sections of the Company’s Quarterly Reports on Form 10-Q and related disclosures in other filings, which have been filed with the SEC and are available on the SEC’s website at www.sec.gov. All of the forward-looking statements made in this press release are expressly qualified by the cautionary statements contained or referred to herein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on the Company or its businesses or operations. Readers are cautioned not to rely too heavily on the forward-looking statements contained in this press release. Forward-looking statements speak only as of the date they are made and the Company does not undertake any obligation to update, revise or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

KEY FINANCIAL RESULTS

(Dollars in thousands, except share data)


		As of & For Three Months Ended									As of & For Nine Months Ended
	****	09/30/20		****	06/30/20		****	09/30/19		****	09/30/20			09/30/19
Results of Operations		(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Interest and dividend income		$	157,414		$	162,867		$	178,345		$	491,607		$	525,122
Interest expense			20,033			25,562			41,744			81,913			122,379
Net interest income			137,381			137,305			136,601			409,694			402,743
Provision for credit losses			6,558			34,200			9,100			100,954			18,192
Net interest income after provision for credit losses			130,823			103,105			127,501			308,740			384,551
Noninterest income			34,407			35,932			48,106			99,245			103,621
Noninterest expenses			93,222			102,814			111,687			291,681			324,022
Income before income taxes			72,008			36,223			63,920			116,304			164,150
Income tax expense			11,008			5,514			10,724			17,506			26,330
Income from continuing operations			61,000			30,709			53,196			98,798			137,820
Discontinued operations, net of tax			—			—			42			—			(128)
Net income			61,000			30,709			53,238			98,798			137,692
Dividends on preferred stock			2,691			—			—			2,691			—
Net income available to common shareholders		$	58,309		$	30,709		$	53,238		$	96,107		$	137,692

Interest earned on earning assets (FTE) ^(1)^		$	160,315		$	165,672		$	181,149		$	500,069		$	533,590
Net interest income (FTE) ^(1)^			140,282			140,110			139,405			418,156			411,211
Total revenue (FTE) ^(1)^			174,689			176,042			187,511			517,401			514,832
Pre-tax pre-provision operating earnings ^(8)^			78,566			70,423			76,630			217,258			214,695

Key Ratios
Earnings per common share, diluted		$	0.74		$	0.39		$	0.65		$	1.22		$	1.72
Return on average assets (ROA)			1.23	%		0.64	%		1.23	%		0.70	%		1.11	%
Return on average equity (ROE)			9.16	%		4.96	%		8.35	%		5.19	%		7.58	%
Efficiency ratio			54.27	%		59.35	%		60.47	%		57.31	%		63.99	%
Net interest margin			3.08	%		3.23	%		3.57	%		3.26	%		3.66	%
Net interest margin (FTE) ^(1)^			3.14	%		3.29	%		3.64	%		3.32	%		3.74	%
Yields on earning assets (FTE) ^(1)^			3.59	%		3.90	%		4.73	%		3.97	%		4.85	%
Cost of interest-bearing liabilities			0.64	%		0.84	%		1.45	%		0.90	%		1.47	%
Cost of deposits			0.39	%		0.53	%		0.95	%		0.58	%		0.92	%
Cost of funds			0.45	%		0.61	%		1.09	%		0.65	%		1.11	%

Operating Measures^(4)^
Net operating earnings		$	61,000		$	30,709		$	56,057		$	98,798		$	163,665
Net operating earnings available to common shareholders			58,309			30,709			56,057			96,107			163,665
Operating earnings per share, diluted		$	0.74		$	0.39		$	0.69		$	1.22		$	2.04
Operating ROA			1.23	%		0.64	%		1.29	%		0.70	%		1.32	%
Operating ROE			9.16	%		4.96	%		8.80	%		5.19	%		9.01	%
Operating ROTCE ^(2) (3)^			16.49	%		9.46	%		15.64	%		9.64	%		16.18	%
Operating efficiency ratio (FTE) ^(1)(7)^			51.04	%		56.00	%		55.12	%		53.92	%		53.92	%

Per Share Data
Earnings per common share, basic		$	0.74		$	0.39		$	0.65		$	1.22		$	1.72
Earnings per common share, diluted			0.74			0.39			0.65			1.22			1.72
Cash dividends paid per common share			0.25			0.25			0.25			0.75			0.71
Market value per share			21.37			23.16			37.25			21.37			37.25
Book value per common share			31.86			31.32			31.29			31.86			31.29
Tangible book value per common share ^(2)^			19.13			18.54			18.80			19.13			18.80
Price to earnings ratio, diluted			7.26			14.77			14.44			13.11			16.20
Price to book value per common share ratio			0.67			0.74			1.19			0.67			1.19
Price to tangible book value per common share ratio ^(2)^			1.12			1.25			1.98			1.12			1.98
Weighted average common shares outstanding, basic			78,714,353			78,711,765			81,769,193			78,904,792			80,120,725
Weighted average common shares outstanding, diluted			78,725,346			78,722,690			81,832,868			78,921,108			80,183,113
Common shares outstanding at end of period			78,718,850			78,713,056			81,147,896			78,718,850			81,147,896


		As of & For Three Months Ended									As of & For Nine Months Ended
	****	09/30/20		****	06/30/20		****	09/30/19		****	09/30/20			09/30/19		****
Capital Ratios		(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Common equity Tier 1 capital ratio ^(5)^			10.04	%		9.88	%		10.48	%		10.04	%		10.48	%
Tier 1 capital ratio ^(5)^			11.18	%		11.03	%		10.48	%		11.18	%		10.48	%
Total capital ratio ^(5)^			13.92	%		13.81	%		12.93	%		13.92	%		12.93	%
Leverage ratio (Tier 1 capital to average assets) ^(5)^			8.82	%		8.82	%		8.94	%		8.82	%		8.94	%
Common equity to total assets			12.52	%		12.41	%		14.48	%		12.52	%		14.48	%
Tangible common equity to tangible assets ^(2)^			7.91	%		7.74	%		9.23	%		7.91	%		9.23	%

Financial Condition
Assets		$	19,930,650		$	19,752,317		$	17,441,035		$	19,930,650		$	17,441,035
Loans held for investment			14,383,215			14,308,646			12,306,997			14,383,215			12,306,997
Securities			3,102,217			2,672,557			2,607,748			3,102,217			2,607,748
Earning Assets			17,885,975			17,680,876			15,365,753			17,885,975			15,365,753
Goodwill			935,560			935,560			929,815			935,560			929,815
Amortizable intangibles, net			61,068			65,105			78,241			61,068			78,241
Deposits			15,576,098			15,605,139			13,044,712			15,576,098			13,044,712
Borrowings			1,314,322			1,125,030			1,549,181			1,314,322			1,549,181
Stockholders' equity			2,660,885			2,618,226			2,525,031			2,660,885			2,525,031
Tangible common equity ^(2)^			1,497,900			1,451,197			1,516,975			1,497,900			1,516,975

Loans held for investment, net of deferred fees and costs
Construction and land development		$	1,207,190		$	1,247,939		$	1,201,149		$	1,207,190		$	1,201,149
Commercial real estate - owner occupied			2,107,333			2,067,087			1,979,052			2,107,333			1,979,052
Commercial real estate - non-owner occupied			3,497,929			3,455,125			3,198,580			3,497,929			3,198,580
Multifamily real estate			731,582			717,719			659,946			731,582			659,946
Commercial & Industrial			3,536,249			3,555,971			2,058,133			3,536,249			2,058,133
Residential 1-4 Family - Commercial			696,944			715,384			721,185			696,944			721,185
Residential 1-4 Family - Consumer			830,144			841,051			913,245			830,144			913,245
Residential 1-4 Family - Revolving			618,320			627,765			660,963			618,320			660,963
Auto			387,417			380,053			328,456			387,417			328,456
Consumer			276,023			311,362			386,848			276,023			386,848
Other Commercial			494,084			389,190			199,440			494,084			199,440
Total loans held for investment		$	14,383,215		$	14,308,646		$	12,306,997		$	14,383,215		$	12,306,997

Deposits
NOW accounts		$	3,460,480		$	3,618,523		$	2,515,777		$	3,460,480		$	2,515,777
Money market accounts			4,269,696			4,158,325			3,737,426			4,269,696			3,737,426
Savings accounts			861,685			824,164			739,505			861,685			739,505
Time deposits of $250,000 and over			633,252			689,693			717,090			633,252			717,090
Other time deposits			1,930,320			1,968,474			2,179,740			1,930,320			2,179,740
Time deposits			2,563,572			2,658,167			2,896,830			2,563,572			2,896,830
Total interest-bearing deposits		$	11,155,433		$	11,259,179		$	9,889,538		$	11,155,433		$	9,889,538
Demand deposits			4,420,665			4,345,960			3,155,174			4,420,665			3,155,174
Total deposits		$	15,576,098		$	15,605,139		$	13,044,712		$	15,576,098		$	13,044,712

Averages
Assets		$	19,785,167		$	19,157,238		$	17,203,328		$	18,837,580		$	16,639,041
Loans held for investment			14,358,666			13,957,711			12,240,254			13,639,401			11,821,612
Loans held for sale			45,201			56,846			75,558			50,902			46,095
Securities			2,891,210			2,648,967			2,660,270			2,721,161			2,681,463
Earning assets			17,748,152			17,106,132			15,191,792			16,809,423			14,700,019
Deposits			15,580,469			14,960,386			12,812,211			14,632,709			12,250,199
Time deposits			2,579,991			2,667,268			2,769,574			2,667,267			2,554,058
Interest-bearing deposits			11,260,244			10,941,368			9,803,624			10,875,752			9,408,182
Borrowings			1,183,839			1,344,994			1,623,681			1,324,457			1,753,276
Interest-bearing liabilities			12,444,083			12,286,362			11,427,305			12,200,209			11,161,458
Stockholders' equity			2,648,777			2,489,969			2,528,435			2,541,856			2,429,912
Tangible common equity ^(2)^			1,483,848			1,446,948			1,517,400			1,469,918			1,442,831


		As of & For Three Months Ended									As of & For Nine Months Ended
	****	09/30/20		****	06/30/20		****	09/30/19		****	09/30/20			09/30/19		****
Asset Quality		(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Allowance for Credit Losses (ACL)
Beginning balance, Allowance for loan and lease losses (ALLL)		$	169,977		$	141,043		$	42,463		$	42,294		$	41,045
Add: Day 1 impact from adoption of CECL			—			—			—			47,484			—
Add: Recoveries			1,566			1,411			1,574			5,137			4,940
Less: Charge-offs			2,978			4,677			9,317			14,806			21,190
Add: Provision for loan losses			5,557			32,200			9,100			94,013			19,025
Ending balance, ALLL		$	174,122		$	169,977		$	43,820		$	174,122		$	43,820

Beginning balance, Reserve for unfunded commitment (RUC)		$	11,000		$	9,000		$	1,100			900			900
Add: Day 1 impact from adoption of CECL			—			—			—			4,160			—
Add: Impact of acquisition accounting			—			—			—			—			1,033
Add: Provision for unfunded commitments			1,000			2,000			—			6,940			(833)
Ending balance, RUC		$	12,000		$	11,000		$	1,100			12,000			1,100
Total ACL		$	186,122		$	180,977		$	44,920		$	186,122		$	44,920

ACL / total outstanding loans			1.29	%		1.26	%		0.36	%		1.29	%		0.36	%
ACL / total adjusted loans^(9)^			1.46	%		1.42	%		0.36	%		1.46	%		0.36	%
ALLL / total outstanding loans			1.21	%		1.19	%		0.36	%		1.21	%		0.36	%
ALLL / total adjusted loans^(9)^			1.36	%		1.34	%		0.36	%		1.36	%		0.36	%
Net charge-offs / total average loans			0.04	%		0.09	%		0.25	%		0.09	%		0.18	%
Net charge-offs / total adjusted average loans^(9)^			0.04	%		0.10	%		0.25	%		0.11	%		0.18	%
Provision for loan losses/ total average loans			0.15	%		0.93	%		0.29	%		0.92	%		0.22	%
Provision for loan losses/ total adjusted average loans^(9)^			0.17	%		1.02	%		0.29	%		1.03	%		0.22	%
	`
Nonperforming Assets^(6)^
Construction and land development		$	3,520		$	3,977		$	7,785		$	3,520		$	7,785
Commercial real estate - owner occupied			9,267			8,924			5,684			9,267			5,684
Commercial real estate - non-owner occupied			1,992			1,877			381			1,992			381
Multifamily real estate			33			33			—			33			—
Commercial & Industrial			1,592			2,708			1,585			1,592			1,585
Residential 1-4 Family - Commercial			5,743			5,784			3,879			5,743			3,879
Residential 1-4 Family - Consumer			12,620			12,029			8,292			12,620			8,292
Residential 1-4 Family - Revolving			3,664			3,626			1,641			3,664			1,641
Auto			517			584			604			517			604
Consumer			75			81			84			75			84
Other Commercial			—			1			97			—			97
Nonaccrual loans		$	39,023		$	39,624		$	30,032		$	39,023		$	30,032
Foreclosed property			4,159			4,397			6,385			4,159			6,385
Total nonperforming assets (NPAs)		$	43,182		$	44,021		$	36,417		$	43,182		$	36,417
Construction and land development		$	93		$	473		$	171		$	93		$	171
Commercial real estate - owner occupied			1,726			7,851			2,571			1,726			2,571
Commercial real estate - non-owner occupied			168			878			36			168			36
Multifamily real estate			359			366			1,212			359			1,212
Commercial & Industrial			604			178			265			604			265
Residential 1-4 Family - Commercial			5,298			578			916			5,298			916
Residential 1-4 Family - Consumer			4,495			5,099			3,815			4,495			3,815
Residential 1-4 Family - Revolving			2,276			1,995			1,674			2,276			1,674
Auto			315			181			183			315			183
Consumer			327			1,157			1,163			327			1,163
Other Commercial			—			499			30			—			30
Loans ≥ 90 days and still accruing		$	15,661		$	19,255		$	12,036		$	15,661		$	12,036
Total NPAs and loans ≥ 90 days		$	58,843		$	63,276		$	48,453		$	58,843		$	48,453
NPAs / total outstanding loans			0.30	%		0.31	%		0.30	%		0.30	%		0.30	%
NPAs / total adjusted loans^(9)^			0.34	%		0.35	%		0.30	%		0.34	%		0.30	%
NPAs / total assets			0.22	%		0.22	%		0.21	%		0.22	%		0.21	%
ALLL / nonaccrual loans			446.20	%		428.97	%		145.91	%		446.20	%		145.91	%
ALLL/ nonperforming assets			403.23	%		386.13	%		120.33	%		403.23	%		120.33	%


		As of & For Three Months Ended									As of & For Nine Months Ended
	****	09/30/20		****	06/30/20		****	09/30/19		****	09/30/20			09/30/19		****
Past Due Detail^(6)^		(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Construction and land development		$	2,625		$	1,683		$	1,062		$	2,625		$	1,062
Commercial real estate - owner occupied			4,924			1,679			4,977			4,924			4,977
Commercial real estate - non-owner occupied			1,291			930			5,757			1,291			5,757
Multifamily real estate			—			—			107			—			107
Commercial & Industrial			4,322			1,602			2,079			4,322			2,079
Residential 1-4 Family - Commercial			1,236			480			1,842			1,236			1,842
Residential 1-4 Family - Consumer			2,998			1,229			1,527			2,998			1,527
Residential 1-4 Family - Revolving			2,669			1,924			4,965			2,669			4,965
Auto			1,513			1,176			1,787			1,513			1,787
Consumer			1,020			844			2,000			1,020			2,000
Other Commercial			613			456			579			613			579
Loans 30-59 days past due		$	23,211		$	12,003		$	26,682		$	23,211		$	26,682
Construction and land development		$	223		$	294		$	351		$	223		$	351
Commercial real estate - owner occupied			1,310			430			—			1,310			—
Commercial real estate - non-owner occupied			1,371			369			1,878			1,371			1,878
Multifamily real estate			—			—			164			—			164
Commercial & Industrial			1,448			296			1,946			1,448			1,946
Residential 1-4 Family - Commercial			937			2,105			3,081			937			3,081
Residential 1-4 Family - Consumer			3,976			3,817			5,182			3,976			5,182
Residential 1-4 Family - Revolving			1,141			1,048			1,747			1,141			1,747
Auto			453			290			407			453			407
Consumer			772			561			1,666			772			1,666
Other Commercial			427			—			9			427			9
Loans 60-89 days past due		$	12,058		$	9,210		$	16,431		$	12,058		$	16,431

Past Due and still accruing		$	50,930		$	40,468		$	55,149		$	50,930		$	55,149
Past Due and still accruing / total adjusted loans^(9)^			0.40	%		0.32	%		0.45	%		0.40	%		0.45	%

Troubled Debt Restructurings
Performing		$	17,076		$	15,303		$	15,156		$	17,076		$	15,156
Nonperforming			7,045			5,042			3,582			7,045			3,582
Total troubled debt restructurings		$	24,121		$	20,345		$	18,738		$	24,121		$	18,738

Alternative Performance Measures (non-GAAP)
Net interest income (FTE)
Net interest income (GAAP)		$	137,381		$	137,305		$	136,601		$	409,694		$	402,743
FTE adjustment			2,901			2,805			2,804			8,462			8,468
Net interest income (FTE) (non-GAAP)^(1)^		$	140,282		$	140,110		$	139,405		$	418,156		$	411,211
Noninterest income (GAAP)			34,407			35,932			48,106			99,245			103,621
Total revenue (FTE) (non-GAAP) ^(1)^		$	174,689		$	176,042		$	187,511		$	517,401		$	514,832

Average earning assets		$	17,748,152		$	17,106,132		$	15,191,792		$	16,809,423		$	14,700,019
Net interest margin			3.08	%		3.23	%		3.57	%		3.26	%		3.66	%
Net interest margin (FTE) ^(1)^			3.14	%		3.29	%		3.64	%		3.32	%		3.74	%

Tangible Assets
Ending assets (GAAP)		$	19,930,650		$	19,752,317		$	17,441,035		$	19,930,650		$	17,441,035
Less: Ending goodwill			935,560			935,560			929,815			935,560			929,815
Less: Ending amortizable intangibles			61,068			65,105			78,241			61,068			78,241
Ending tangible assets (non-GAAP)		$	18,934,022		$	18,751,652		$	16,432,979		$	18,934,022		$	16,432,979

Tangible Common Equity ^(2)^
Ending equity (GAAP)		$	2,660,885		$	2,618,226		$	2,525,031		$	2,660,885		$	2,525,031
Less: Ending goodwill			935,560			935,560			929,815			935,560			929,815
Less: Ending amortizable intangibles			61,068			65,105			78,241			61,068			78,241
Less: Perpetual preferred stock			166,357			166,364			—			166,357			—
Ending tangible common equity (non-GAAP)		$	1,497,900		$	1,451,197		$	1,516,975		$	1,497,900		$	1,516,975

Average equity (GAAP)		$	2,648,777		$	2,489,969		$	2,528,435		$	2,541,856		$	2,429,912
Less: Average goodwill			935,560			935,560			930,525			935,560			906,476
Less: Average amortizable intangibles			63,016			67,136			80,510			67,130			80,605
Less: Average perpetual preferred stock			166,353			40,325			-			69,248			-
Average tangible common equity (non-GAAP)		$	1,483,848		$	1,446,948		$	1,517,400		$	1,469,918		$	1,442,831


		As of & For Three Months Ended									As of & For Nine Months Ended
	****	09/30/20		****	06/30/20		****	09/30/19		****	09/30/20			09/30/19		****
		(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Operating Measures^(4)^
Net income (GAAP)		$	61,000		$	30,709		$	53,238		$	98,798		$	137,692
Plus: Merger and rebranding-related costs, net of tax			—			—			2,819			—			25,973
Net operating earnings (non-GAAP)			61,000			30,709			56,057			98,798			163,665
Less: Dividends on preferred stock			2,691			—			—			2,691			—
Net operating earnings available to common shareholders (non-GAAP)		$	58,309		$	30,709		$	56,057		$	96,107		$	163,665

Noninterest expense (GAAP)		$	93,222		$	102,814		$	111,687		$	291,681		$	324,022
Less: Merger Related Costs			—			—			2,435			—			26,928
Less: Rebranding Costs			—			—			1,133			—			5,553
Less: Amortization of intangible assets			4,053			4,223			4,764			12,676			13,919
Operating noninterest expense (non-GAAP)		$	89,169		$	98,591		$	103,355		$	279,005		$	277,622

Net interest income (FTE) (non-GAAP)^(1)^		$	140,282		$	140,110		$	139,405		$	418,156		$	411,211
Noninterest income (GAAP)			34,407			35,932			48,106			99,245			103,621
Total revenue (FTE) (non-GAAP) ^(1)^		$	174,689		$	176,042		$	187,511		$	517,401		$	514,832

Efficiency ratio			54.27	%		59.35	%		60.47	%		57.31	%		63.99	%
Operating efficiency ratio (FTE) ^(1)(7)^			51.04	%		56.00	%		55.12	%		53.92	%		53.92	%

Operating ROTCE ^(2)(3)(4)^
Net operating earnings available to common shareholders (non-GAAP)		$	58,309		$	30,709		$	56,057		$	96,107		$	163,665
Plus: Amortization of intangibles, tax effected			3,202			3,336			3,764			10,014			10,996
Net operating earnings available to common shareholders before amortization of intangibles (non-GAAP)		$	61,511		$	34,045		$	59,821		$	106,121		$	174,661

Average tangible common equity (non-GAAP)		$	1,483,848		$	1,446,948		$	1,517,400		$	1,469,918		$	1,442,831
Operating return on average tangible common equity (non-GAAP)			16.49	%		9.46	%		15.64	%		9.64	%		16.18	%

Pre-tax pre-provision operating earnings ^(8)^
Net income (GAAP)		$	61,000		$	30,709		$	53,238		$	98,798		$	137,692
Plus: Provision for credit losses			6,558			34,200			9,100			100,954			18,192
Plus: Income tax expense			11,008			5,514			10,724			17,506			26,330
Plus: Merger and rebranding-related costs			—			—			3,568			—			32,481
Pre-tax pre-provision operating earnings (non-GAAP)		$	78,566		$	70,423		$	76,630		$	217,258		$	214,695

Paycheck Protection Program adjustment impact ^(9)^
Loans held for investment (net of deferred fees and costs)(GAAP)		$	14,383,215		$	14,308,646		$	12,306,997		$	14,383,215		$	12,306,997
Less: PPP adjustments			1,600,577			1,598,718			—			1,600,577			—
Loans held for investment (net of deferred fees and costs),net adjustments, excluding PPP (non-GAAP)		$	12,782,638		$	12,709,928		$	12,306,997		$	12,782,638		$	12,306,997

Average loans held for investment (GAAP)		$	14,358,666		$	13,957,711		$	12,240,254		$	13,639,401		$	11,821,612
Less: Average PPP adjustments			1,638,204			1,273,883			—			1,457,091			—
Average loans held for investment, net adjustments, excluding PPP (non-GAAP)		$	12,720,462		$	12,683,828		$	12,240,254		$	12,182,310		$	11,821,612

Mortgage Origination Volume
Refinance Volume		$	145,718		$	163,737		$	62,230		$	377,837		$	102,069
Construction Volume			6,448			12,966			3,915			27,251			4,275
Purchase Volume			130,185			83,248			78,113			277,925			194,445
Total Mortgage loan originations		$	282,351		$	259,951		$	144,258		$	683,013		$	300,789
% of originations that are refinances			51.6	%		63.0	%		43.1	%		55.3	%		33.9	%

Wealth
Assets under management ("AUM")		$	5,455,268		$	5,271,288		$	5,451,796		$	5,455,268		$	5,451,796

Other Data
End of period full-time employees			1,883			1,973			1,946			1,883			1,946
Number of full-service branches			135			149			149			135			149
Number of full automatic transaction machines ("ATMs")			157			169			169			157			169

(1)	These are non-GAAP financial measures. Net interest income (FTE) and total revenue (FTE), which are used in computing net interest margin (FTE) and operating efficiency ratio (FTE), respectively, provide valuable additional insight into the net interest margin and the efficiency ratio by adjusting for differences in tax treatment of interest income sources. The entire FTE adjustment is attributable to interest income on earning assets, which is used in computing yield on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the FTE components.
(2)	These are non-GAAP financial measures. Tangible common equity is used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes will assist investors in assessing the capital of the Company and its ability to absorb potential losses.
---	---
(3)	These are non-GAAP financial measures. The Company believes that ROTCE is a meaningful supplement to GAAP financial measures and useful to investors because it measures the performance of a business consistently across time without regard to whether components of the business were acquired or developed internally.
---	---
(4)	These are non-GAAP financial measures. Operating measures exclude merger and rebranding-related costs unrelated to the Company’s normal operations. The Company believes these measures are useful to investors as they exclude certain costs resulting from acquisition activity and allow investors to more clearly see the combined economic results of the organization’s operations.
---	---
(5)	All ratios at September 30, 2020 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed.
---	---
(6)	Amounts are not directly comparable due to the Company’s adoption of CECL on January 1, 2020. Prior to January 1, 2020, nonaccrual and past due loan information excluded PCI-related loan balances. These balances also reflect the impact of the CARES Act and March 22 Joint Guidance, which provides relief for TDR designations and also provides guidance on past due reporting for modified loans.
---	---
(7)	The operating efficiency ratio (FTE) excludes the amortization of intangible assets and merger-related costs. This measure is similar to the measure utilized by the Company when analyzing corporate performance and is also similar to the measure utilized for incentive compensation. The Company believes this measure is useful to investors as it excludes certain costs resulting from acquisition activity allowing for greater comparability with others in the industry and allowing investors to more clearly see the combined economic results of the organization’s operations.
---	---
(8)	This is a non-GAAP financial measure. Pre-tax pre-provision earnings excludes the provision for credit losses, which can fluctuate significantly from period-to-period under the recently adopted CECL methodology, merger and rebranding-related costs unrelated to the Company’s normal operations, and income tax expense. The Company believes this measure is useful to investors as it excludes certain costs resulting from acquisition activity as well as the potentially volatile provision measure, and allows for greater comparability with others in the industry and for investors to more clearly see the combined economic results of the organization’s operations.
---	---
(9)	These are non-GAAP financial measures. PPP adjustment impact excludes the SBA guaranteed loans funded during the first half of 2020. The Company believes loans held for investment (net of deferred fees and costs), excluding PPP is useful to investors as it provides more clarity on the Company’s organic growth. The Company also believes that the related non-GAAP financial measures of past due loans still accruing interest as a percentage of total loans held for investment (net of deferred fees and costs), excluding PPP, are useful to investors as loans originated under the PPP carry an SBA guarantee. The Company believes that the ALLL as a percentage of loans held for investment (net of deferred fees and costs), excluding PPP, is useful to investors because of the size of the Company’s PPP originations and the impact of the embedded credit enhancement provided by the SBA guarantee.
---	---

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)


	September 30,		June 30,		December 31,		September 30,
	2020		2020		2019		2019
ASSETS		(unaudited)		(unaudited)		(audited)		(unaudited)
Cash and cash equivalents:
Cash and due from banks	$	178,563	$	202,947	$	163,050	$	218,584
Interest-bearing deposits in other banks		335,111		636,211		234,810		370,673
Federal funds sold		7,292		2,862		38,172		2,663
Total cash and cash equivalents		520,966		842,020		436,032		591,920
Securities available for sale, at fair value		2,443,340		2,019,164		1,945,445		1,918,859
Securities held to maturity, at carrying value		546,661		547,561		555,144		556,579
Restricted stock, at cost		112,216		105,832		130,848		132,310
Loans held for sale, at fair value		52,607		55,067		55,405		72,208
Loans held for investment, net of deferred fees and costs		14,383,215		14,308,646		12,610,936		12,306,997
Less allowance for loan and lease losses		174,122		169,977		42,294		43,820
Total loans held for investment, net		14,209,093		14,138,669		12,568,642		12,263,177
Premises and equipment, net		156,934		164,321		161,073		168,122
Goodwill		935,560		935,560		935,560		929,815
Amortizable intangibles, net		61,068		65,105		73,669		78,241
Bank owned life insurance		325,538		327,075		322,917		320,779
Other assets		566,667		551,943		378,255		409,025
Total assets	$	19,930,650	$	19,752,317	$	17,562,990	$	17,441,035
LIABILITIES
Noninterest-bearing demand deposits	$	4,420,665	$	4,345,960	$	2,970,139	$	3,155,174
Interest-bearing deposits		11,155,433		11,259,179		10,334,842		9,889,538
Total deposits		15,576,098		15,605,139		13,304,981		13,044,712
Securities sold under agreements to repurchase		91,086		77,216		66,053		67,260
Other short-term borrowings		175,200		—		370,200		344,600
Long-term borrowings		1,048,036		1,047,814		1,077,495		1,137,321
Other liabilities		379,345		403,922		231,159		322,111
Total liabilities		17,269,765		17,134,091		15,049,888		14,916,004
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $10.00 par value		173		173		—		—
Common stock, $1.33 par value		104,141		104,126		105,827		107,330
Additional paid-in capital		1,914,640		1,911,985		1,790,305		1,831,667
Retained earnings		579,269		540,638		581,395		545,665
Accumulated other comprehensive income (loss)		62,662		61,304		35,575		40,369
Total stockholders' equity		2,660,885		2,618,226		2,513,102		2,525,031
Total liabilities and stockholders' equity	$	19,930,650	$	19,752,317	$	17,562,990	$	17,441,035

Common shares outstanding		78,718,850		78,713,056		80,001,185		81,147,896
Common shares authorized		200,000,000		200,000,000		200,000,000		200,000,000
Preferred shares outstanding		17,250		17,250		-		-
Preferred shares authorized		500,000		500,000		500,000		500,000

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except share data)


	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,		September 30,
	2020		2020		2019		2020		2019
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Interest and dividend income:
Interest and fees on loans	$	138,402	$	143,234	$	156,651	$	432,763	$	459,603
Interest on deposits in other banks		137		155		1,030		1,154		2,047
Interest and dividends on securities:
Taxable		10,275		11,267		12,625		33,170		39,059
Nontaxable		8,600		8,211		8,039		24,520		24,413
Total interest and dividend income		157,414		162,867		178,345		491,607		525,122
Interest expense:
Interest on deposits		15,568		19,861		30,849		63,943		84,088
Interest on short-term borrowings		72		186		2,200		1,598		14,313
Interest on long-term borrowings		4,393		5,515		8,695		16,372		23,978
Total interest expense		20,033		25,562		41,744		81,913		122,379
Net interest income		137,381		137,305		136,601		409,694		402,743
Provision for credit losses		6,558		34,200		9,100		100,954		18,192
Net interest income after provision for credit losses		130,823		103,105		127,501		308,740		384,551
Noninterest income:
Service charges on deposit accounts		6,041		4,930		7,675		18,549		22,331
Other service charges, commissions and fees		1,621		1,354		1,513		4,600		4,879
Interchange fees		1,979		1,697		2,108		5,300		12,765
Fiduciary and asset management fees		6,045		5,515		6,082		17,543		16,834
Mortgage banking income		8,897		5,826		3,374		16,744		7,614
Gains on securities transactions		18		10,339		7,104		12,293		7,306
Bank owned life insurance income		3,421		2,027		2,062		7,498		6,191
Loan-related interest rate swap fees		3,170		5,484		5,480		12,602		10,656
Other operating income		3,215		(1,240)		12,708		4,116		15,045
Total noninterest income		34,407		35,932		48,106		99,245		103,621
Noninterest expenses:
Salaries and benefits		49,000		49,896		49,718		149,013		148,116
Occupancy expenses		7,441		7,224		7,493		21,798		22,427
Furniture and equipment expenses		3,895		3,406		3,719		11,042		10,656
Printing, postage, and supplies		904		999		1,268		3,194		3,763
Technology and data processing		6,564		6,454		5,787		19,187		17,203
Professional services		2,914		2,989		2,681		9,211		8,269
Marketing and advertising expense		2,631		2,043		2,600		7,413		7,891
FDIC assessment premiums and other insurance		1,811		2,907		381		7,578		5,620
Other taxes		4,124		4,120		3,971		12,364		11,779
Loan-related expenses		2,314		2,501		2,566		7,512		7,250
OREO and credit-related expenses		413		411		1,005		1,512		3,162
Amortization of intangible assets		4,053		4,223		4,764		12,676		13,919
Training and other personnel costs		746		876		1,618		3,192		4,240
Merger-related costs		—		—		2,435		—		26,928
Rebranding expense		—		—		1,133		—		5,553
Loss on debt extinguishment		—		10,306		16,397		10,306		16,397
Other expenses		6,412		4,459		4,151		15,683		10,849
Total noninterest expenses		93,222		102,814		111,687		291,681		324,022
Income from continuing operations before income taxes		72,008		36,223		63,920		116,304		164,150
Income tax expense		11,008		5,514		10,724		17,506		26,330
Income from continuing operations	$	61,000	$	30,709	$	53,196	$	98,798	$	137,820
Discontinued operations:
Income (loss) from operations of discontinued mortgage segment	$	—	$	—	$	56	$	—	$	(173)
Income tax expense (benefit)		—		—		14		—		(45)
Income (loss) on discontinued operations		—		—		42		—		(128)
Net income		61,000		30,709		53,238		98,798		137,692
Dividends on preferred stock		2,691		-		-		2,691		-
Net income available to common shareholders	$	58,309	$	30,709	$	53,238	$	96,107	$	137,692

Basic earnings per common share	$	0.74	$	0.39	$	0.65	$	1.22	$	1.72
Diluted earnings per common share	$	0.74	$	0.39	$	0.65	$	1.22	$	1.72

AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)


	For the Quarter Ended
	September 30, 2020								June 30, 2020
	AverageBalance		****	InterestIncome / Expense ^(1)^		****	Yield /Rate^(1)(2)^	****	AverageBalance		****	InterestIncome / Expense ^(1)^		****	Yield /Rate^(1)(2)^
	(unaudited)									(unaudited)
Assets:
Securities:
Taxable	$	1,738,033		$	10,275		2.35%		$	1,626,426		$	11,267		2.79%
Tax-exempt		1,153,177			10,886		3.76%			1,022,541			10,394		4.09%
Total securities		2,891,210			21,161		2.91%			2,648,967			21,661		3.29%
Loans, net ^(3) (4)^		14,358,666			138,635		3.84%			13,957,711			143,339		4.13%
Other earning assets		498,276			519		0.41%			499,454			672		0.54%
Total earning assets		17,748,152		$	160,315		3.59%			17,106,132		$	165,672		3.90%
Allowance for credit losses		(174,171)								(150,868)
Total non-earning assets		2,211,186								2,201,974
Total assets	$	19,785,167							$	19,157,238

Liabilities and Stockholders' Equity:
Interest-bearing deposits:
Transaction and money market accounts	$	7,834,317		$	4,684		0.24%		$	7,474,210		$	7,303		0.39%
Regular savings		845,936			128		0.06%			799,890			123		0.06%
Time deposits ^(5)^		2,579,991			10,756		1.66%			2,667,268			12,435		1.88%
Total interest-bearing deposits		11,260,244			15,568		0.55%			10,941,368			19,861		0.73%
Other borrowings ^(6)^		1,183,839			4,465		1.50%			1,344,994			5,701		1.70%
Total interest-bearing liabilities		12,444,083		$	20,033		0.64%			12,286,362		$	25,562		0.84%

Noninterest-bearing liabilities:
Demand deposits		4,320,225								4,019,018
Other liabilities		372,082								361,889
Total liabilities		17,136,390								16,667,269
Stockholders' equity		2,648,777								2,489,969
Total liabilities and stockholders' equity	$	19,785,167							$	19,157,238
Net interest income				$	140,282							$	140,110

Interest rate spread							2.95%								3.06%
Cost of funds							0.45%								0.61%
Net interest margin							3.14%								3.29%

(1)	Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 21%.
(2)	Rates and yields are annualized and calculated from actual, not rounded amounts in thousands, which appear above.
---	---
(3)	Nonaccrual loans are included in average loans outstanding.
---	---
(4)	Interest income on loans includes $3.8 million and $6.4 million for the three months ended September 30, 2020 and June 30, 2020, respectively, in accretion of the fair market value adjustments related to acquisitions.
---	---
(5)	Interest expense on time deposits includes $26,000 and $34,000 for the three months ended September 30, 2020 and June 30, 2020, respectively, in accretion of the fair market value adjustments related to acquisitions.
---	---
(6)	Interest expense on borrowings includes $167,000 and $140,000 for the three months ended September 30, 2020 and June 30, 2020, in amortization of the fair market value adjustments related to acquisitions.
---	---

Exhibit 99.2

3rd Quarter 2020<br>Earnings<br>Presentation<br>Nasdaq: AUB<br>October 22, 2020
Forward Looking Statements<br>2<br>Certain statements in this presentation may constitute “forward-looking statements” within the<br>meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements<br>are statements that include, without limitation, projections, predictions, expectations or beliefs<br>about future events or results that are not statements of historical fact. Such forward-looking<br>statements are based on various assumptions as of the time they are made, and are<br>inherently subject to known and unknown risks, uncertainties, and other factors, some of<br>which cannot be predicted or quantified, that may cause actual results, performance or<br>achievements to be materially different from those expressed or implied by such forward-<br>looking statements. Forward-looking statements are often accompanied by words that convey<br>projected future events or outcomes such as “expect,” “believe,” “estimate,” “plan,” “project,”<br>“anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” or words of similar<br>meaning or other statements concerning opinions or judgment of Atlantic Union Bankshares<br>Corporation (“Atlantic Union” or the “Company”) and its management about future events.<br>Although Atlantic Union believes that its expectations with respect to forward-looking<br>statements are based upon reasonable assumptions within the bounds of its existing<br>knowledge of its business and operations, there can be no assurance that actual results,<br>performance, or achievements of, or trends affecting, the Company will not differ materially<br>from any projected future results, performance, or achievements or trends expressed or<br>implied by such forward-looking statements. Actual future results, performance,<br>achievements or trends may differ materially from historical results or those anticipated<br>depending on a variety of factors, including, but not limited to:<br> changes in interest rates;<br> general economic and financial market conditions, in the United States generally and<br>particularly in the markets in which the Company operates and which its loans are<br>concentrated, including the effects of declines in real estate values, an increase in<br>unemployment levels and slowdowns in economic growth, including as a result of COVID-<br>19;<br> the quality or composition of the loan or investment portfolios and changes therein;<br> demand for loan products and financial services in the Company’s market area;<br> the Company’s ability to manage its growth or implement its growth strategy;<br> the effectiveness of expense reduction plans;<br> the introduction of new lines of business or new products and services;<br> the Company’s ability to recruit and retain key employees;<br> the incremental cost and/or decreased revenues associated with exceeding $10 billion in<br>assets;<br> real estate values in the Bank’s lending area;<br> an insufficient ACL;<br> changes in accounting principles relating to loan loss recognition (CECL);<br> the Company’s liquidity and capital positions;<br> concentrations of loans secured by real estate, particularly commercial real estate;<br> the effectiveness of the Company’s credit processes and management of the Company’s<br>credit risk;<br> the Company’s ability to compete in the market for financial services and increased<br>competition relating to fintech;<br> technological risks and developments, and cyber threats, attacks, or events;<br> the potential adverse effects of unusual and infrequently occurring events, such as<br>weather-related disasters, terrorist acts or public health events (such as COVID-19), and of<br>governmental and societal responses thereto; these potential adverse effects may include,<br>without limitation, adverse effects on the ability of the Company's borrowers to satisfy their<br>obligations to the Company, on the value of collateral securing loans, on the demand for<br>the Company's loans or its other products and services, on incidents of cyberattack and<br>fraud, on the Company’s liquidity or capital positions, on risks posed by reliance on third-<br>party service providers, on other aspects of the Company's business operations and on<br>financial markets and economic growth;<br> the effect of steps the Company takes in response to COVID-19, the severity and duration<br>of the pandemic, including whether there is a resurgence of COVID-19 infections in<br>connection with the seasonal flu, the impact of loosening or tightening of government<br>restrictions, the pace of recovery when the pandemic subsides and the heightened impact<br>it has on many of the risks described herein;<br> performance by the Company’s counterparties or vendors;<br> deposit flows;<br> the availability of financing and the terms thereof;<br> the level of prepayments on loans and mortgage-backed securities;<br> legislative or regulatory changes and requirements, including the impact of the CARES Act<br>and other legislative and regulatory reactions to COVID-19;<br> potential claims, damages, and fines related to litigation or government actions, including<br>litigation or actions arising from the Company’s participation in and administration of<br>programs related to COVID-19, including, among other things, the CARES Act;<br> the effects of changes in federal, state or local tax laws and regulations;<br> monetary and fiscal policies of the U.S. government, including policies of the U.S.<br>Department of the Treasury and the Federal Reserve;<br> changes to applicable accounting principles and guidelines; and<br> other factors, many of which are beyond the control of the Company.<br>Please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial<br>Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K<br>for the year ended December 31, 2019, comparable “Risk Factors” sections of the Company’s<br>Quarterly Reports on Form 10-Q, and related disclosures in other filings, which have been<br>filed with the Securities and Exchange Commission (the “SEC”), and are available on the<br>SEC’s website at www.sec.gov. All of the forward-looking statements made in this<br>presentation are expressly qualified by the cautionary statements contained or referred to<br>herein. The actual results or developments anticipated may not be realized or, even if<br>substantially realized, they may not have the expected consequences to or effects on the<br>Company or its businesses or operations. You are cautioned not to rely too heavily on the<br>forward-looking statements contained in this presentation. Forward-looking statements speak<br>only as of the date they are made and the Company does not undertake any obligation to<br>update, revise or clarify these forward-looking statements, whether as a result of new<br>information, future events or otherwise.
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Additional Information<br>3<br>Non-GAAP Financial Measures<br>This presentation contains certain financial information determined by<br>methods other than in accordance with generally accepted accounting<br>principles in the United States (“GAAP”). These non-GAAP disclosures<br>have limitations as an analytical tool and should not be considered in<br>isolation or as a substitute for analysis of our results as reported under<br>GAAP, nor are they necessarily comparable to non-GAAP performance<br>measures that may be presented by other companies. The Company<br>uses the non-GAAP financial measures discussed herein in its analysis<br>of the Company’s performance. The Company’s management believes<br>that these non-GAAP financial measures provide additional<br>understanding of ongoing operations, enhance comparability of results of<br>operations with prior periods and show the effects of significant gains<br>and charges in the periods presented without the impact of items or<br>events that may obscure trends in the Company’s underlying<br>performance.<br>Please see “Reconciliation of Non-GAAP Disclosures” at the end of this<br>presentation for a reconciliation to the nearest GAAP financial measure.<br>No Offer or Solicitation<br>This presentation does not constitute an offer to sell or a solicitation of an<br>offer to buy any securities. No offer of securities shall be made except by<br>means of a prospectus meeting the requirements of the Securities Act of<br>1933, as amended, and no offer to sell or solicitation of an offer to buy<br>shall be made in any jurisdiction in which such offer, solicitation or sale<br>would be unlawful.<br>About Atlantic Union Bankshares Corporation<br>Headquartered in Richmond, Virginia, Atlantic Union Bankshares<br>Corporation (Nasdaq: AUB) is the holding company for Atlantic Union<br>Bank. Atlantic Union Bank has 135 branches and approximately 155<br>ATMs located throughout Virginia, and in portions of Maryland and North<br>Carolina. Middleburg Financial is a brand name used by Atlantic Union<br>Bank and certain affiliates when providing trust, wealth management,<br>private banking, and investment advisory products and services. Certain<br>non-bank affiliates of Atlantic Union Bank include: Old Dominion Capital<br>Management, Inc., and its subsidiary, Outfitter Advisors, Ltd., and Dixon,<br>Hubard, Feinour, & Brown, Inc., which provide investment advisory<br>services; Middleburg Investment Services, LLC, which provides<br>brokerage services; and Union Insurance Group, LLC, which offers<br>various lines of insurance products.
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2020 Operating Environment – New Reality<br>4<br>Soundness Profitability Growth<br>AUB(135)<br>AUB LPO (3)<br>At September 30,2020<br>Assets $19.9B<br>Loans $14.4B<br>Deposits $15.6B<br>Managing through COVID-<br>19 pandemic:<br>• Pivoted to a new remote<br>work and branch<br>operating model<br>• Focused on Teammates,<br>clients, communities and<br>shareholders<br>• Mobilized SBA Paycheck<br>Protection Program<br>• Adapting to meet new<br>reality<br>AUB governing philosophy –“Soundness, Profitability, & Growth – in that order of priority”<br>Focused on the safety,<br>soundness and profitability<br>of the Company:<br>• Take care of our<br>Teammates and clients<br>• Mitigate credit risk<br>• Align the expense base<br>to the new revenue<br>reality<br>• Achieve and maintain<br>top-tier financial<br>performance<br>Regardless of the operating environment our goal of achieving<br>and maintaining top-tier financial performance remains the same
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Teammates<br>• 90% of non-branch Teammates are<br>working remotely<br>• Recognition bonuses for eligible<br>Teammates<br>• Continuing to pay Teammates that have<br>potential exposure<br>• COVID-19 related testing and treatment<br>is free under medical plans<br>• Extra cleaning and protective measures<br>put in place<br>• Educate Teammates on preventative<br>action<br>• Comprehensive communications<br>program<br>Clients<br>• Proactive outreach to Business,<br>Wealth/Investment Services clients<br>• Paycheck Protection Program<br>• Customer hardship programs<br>• Regular communications and updates<br>• Enhancements to digital platforms<br>• Focus on credit<br>Shareholders<br>• Conservative credit culture<br>• Strong balance sheet<br>• Strong capital base<br>• Ample liquidity<br>• Top tier financial performance<br>Community<br>• Aligned charitable giving with COVID-19<br>• Accelerated charitable contributions<br>Holistic Response to COVID-19<br>5
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Banking Differently<br>6<br>Digital logins 21% from January 1, 2020 to September 30, 2020<br>Mobile check deposit 18% from January 1, 2020 to September 30, 2020<br>Zelle utilization 290% from September 30, 2019 to September 30, 2020<br>Card Control active users 102% from April 1, 2020 to September 30, 2020<br>More to come in Q4<br>• Branch lobbies reopened on October 14<br>• Adding Zoom video chat option to branch appointments<br>• Expanding pilot of branch teammates taking call center overflow calls<br>• Enabling e-statements at the account level<br>• Expanding the pilot of the enhanced wealth CRM platform
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Covid-19 Loan Modifications<br>7<br>• As of October 16, ~$523 million in loans are in some form of a COVID Modification of<br>which 93% of the balances are Commercial loans.<br>• ~$1.2 billion in Commercial loans rolled off their initial modification,<br>• 40 clients totaling ~$90MM (~8% of dollars) rolled into a 2nd 90-day modification.<br>• 9 of the 2nd modifications totaling ~$48 million are hotels<br>• ~70% of the remaining commercial loan modifications as of October 16 are under a<br>payment deferral modification and ~30% have an interest only modification<br>1) Consumer modifications as of October 15, 2020,except 3rd party consumer which is as of September 30,2020<br>Note: Figures may not total to 100% due to rounding<br>Remaining COVID-19 Loan Modifications<br>Loan Class Count Balances % Bal. Avg. Balance<br>Commercial & Industrial 146 $ 111,696,047 21.4% $ 765,041<br>Commercial Real Estate 171 $ 367,059,933 70.2% $ 2,146,549<br>Construction, Land & Development 8 $ 9,144,148 1.7% $ 1,143,018<br>Consumer1 505 $ 34,726,562 6.6% $ 68,765<br>Residential 1-4 Family 77 $ 26,283,465 5.0% $ 341,344<br>Residential 1-4 Family - Revolving 15 $ 1,763,770 0.3% $ 117,585<br>Indirect Auto 188 $ 3,982,928 0.8% $ 21,186<br>Other Consumer 225 $ 2,696,400 0.5% $ 11,984<br>Total 830 $ 522,626,690 100.0% $ 629,672<br>COVID-19 Balance Mods as of October 16, 2020 as % Total<br>Loan Portfolio as of September 30, 2020 3.6%<br>COVID-19 Balance Mods as of October 16, 2020 as % Total Loan Portfolio as of<br>September 30, 2020 excluding PPP 4.1%
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Asset Quality – COVID-19 Sensitive Loan Segments<br>8 Note: Figures may not total to 100% due to rounding<br>1) Disrupted segment data as of September 30, 2020<br>Total Loan Portfolio $ 14.4 billion at September 30, 2020 Segments Disrupted by COVID-191: $2.3 Billion<br>Portfolio Highlights No significant exposure to Energy, Cruise or Passenger Aviation sectors<br>Less Sensitive<br>83.8%<br>Retail Trade<br>3.8%<br>Restaurants<br>1.6%<br>Hospitality,<br>4.7%<br>Senior Living<br>2.0% Health Care<br>4.1%<br>C&D 8.4%<br>CRE - Owner<br>Occupied 14.7%<br>C&I 24.6% Non-Owner<br>Occupied CRE<br>29.4%<br>1-4 Family<br>10.6%<br>Other 3.4%<br>Residential 1-4<br>family - Revolving<br>4.3%<br>Consumer 4.6%
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COVID-19 Sensitive Loan Segment Details<br>9<br>Retail Trade: ~80% secured by real estate; 21% of clients in PPP<br>Restaurants: Early modifications made; 85% secured by real estate; 24% of clients in PPP<br>Senior Living: All clients have come off of modification<br>Hotel: Primarily flagged non-resort hotel properties; 35% of clients in PPP<br>Health Care: ~82% secured by real estate; 26% of clients in PPP<br>Note: Figures may not total to 100% due to rounding<br>Total Portfolio as of September 30, 2020<br>Remaining Modifications as of<br>October 16, 2020<br>Count Balance Exposure<br>% of Total<br>Loans<br>Ex PPP Count Balance<br>% of<br>Portfolio<br>Retail Trade 1,194 $546,125,148 $638,028,796 4.3% 22 $11,765,721 2.2%<br>Restaurant 570 $223,069,527 $230,546,641 1.7% 33 $23,018,003 10.3%<br>Senior Living 53 $293,068,903 $314,351,514 2.3% - $ 0 0 %<br>Hotels 239 $676,329,303 $776,381,633 5.3% 30 $143,005,884 21.1%<br>Health Care 996 $591,364,539 $670,588,662 4.6% 26 $21,152,643 3.6%<br>Total Sensitive Segments 3,052 $2,329,957,419 $2,629,897,245 18.2% 111 $198,942,251 8.5%
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2020 Operating Environment – Adapting to the New Reality<br>10<br>Soundness Profitability Growth<br>During challenging times, it is important to remember our governing philosophy –“Soundness,<br>Profitability, & Growth – in that order of priority”<br> This core philosophy is serving us well as we manage the Company through the current coronavirus<br>pandemic crisis.<br>We are managing through an unprecedented crisis that requires intense focus on the safety,<br>soundness and profitability of the Company at this time. Growth is not our main focus. What we are<br>doing now is:<br> Taking care of our Teammates and clients – they will remember how we treated them during this<br>period.<br> Mitigating credit risk – batten down the hatches and protect the Bank working with our business<br>and consumer clients to assist them through these tough times.<br> Aligning the expense base to the new revenue reality – ensure sustained top tier financial<br>performance on the other side.<br>We believe that by effectively managing through this crisis, we will become a stronger company that<br>is well positioned to take advantage of growth opportunities as economic activity resumes aided by<br>government support and stimulus.
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Q3 2020 Financial Performance At-a-Glance<br>11<br>Summarized Income Statement<br>3Q2020 2Q2020<br>Net interest income $ 137,381 $ 137,305<br>Provision for credit losses 6,558 34,200<br>Noninterest income 34,407 35,932<br>Noninterest expense 93,222 102,814<br>Taxes 11,008 5,514<br>Net income (GAAP) 61,000 30,709<br>+ Provision for credit losses 6,558 34,200<br>+ Taxes 11,008 5,514<br>PTPP operating earnings (non-GAAP) $ 78,566 $ 70,423<br>Dollars in thousands<br>PTPP = Pre-tax Pre-provision<br>Reported Earnings Metrics - GAAP<br>3Q2020 2Q2020<br>Net income $ 61,000 $ 30,709<br>Net income available common shareholders $ 58,309 $ 30,709<br>Common EPS, diluted $ 0.74 $ 0.39<br>ROE 9.16% 4.96%<br>ROA 1.23% 0.64%<br>Efficiency ratio 54.27% 59.35%<br>Net interest margin 3.08% 3.23%<br>Dollars in thousands except per share amounts<br>Operating Earnings Metrics – non-GAAP<br>3Q2020 2Q2020<br>PTPP operating earnings $ 78,566 $ 70,423<br>PTPP operating ROTCE 21.43% 20.75%<br>PTPP operating ROA 1.58% 1.48%<br>Operating ROTCE 16.49% 9.46%<br>Operating efficiency ratio (FTE) 51.04% 56.00%<br>Net interest margin (FTE) 3.14% 3.29%<br>Dollars in thousands<br>For non-GAAP financial measures, see reconciliation to most directly comparable GAAP measures in<br>“Appendix – Reconciliation of Non-GAAP Disclosures”<br>.. Net income available to common shareholders for<br>the third quarter was $58.3 million or 74 cents per<br>share, up significantly from $30.7 million or 39<br>cents per share in the second quarter primarily due<br>to the $27.6 million decline in the provision for<br>credit losses and lower expenses compared to the<br>previous quarter.<br>.. Pre-tax, pre-provision (PTPP) operating earnings<br>(non-GAAP) increased $8.1 million to $78.6 million<br>from $70.4 million in the second quarter primarily<br>due to lower expenses.<br>.. Third quarter net income and PTPP operating<br>earnings include the financial impacts of $2.6<br>million in expense related to the consolidation of 14<br>branches.
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Q3 Allowance For Credit Loss (ACL) and Provision for Credit Losses<br>12<br>Q3 Macroeconomic Forecast<br>Q3 Additional Considerations<br>Moody’s September Forecast<br>• US GDP returns to pre-COVID levels<br>in 2022. 2021 GDP forecasted at<br>3.5% growth relative to Moody’s<br>June forecast of 1.6% for 2021.<br>• US Unemployment Rate averages<br>8.4% in 2021 improved from<br>Moody’s June forecast of 9.3%<br>average in 2021.<br>• Virginia’s 2 year Unemployment Rate<br>averages 6.3% and ends at just over<br>5% by the end of the 2-year forecast<br>period, an improvement from a 2<br>year average rate of 6.8% and an<br>ending rate of 6% in the June<br>forecast.<br>• 2-year reasonable and supportable<br>period; followed by reversion to the<br>historical loss average over 2 years<br>• Additional qualitative factors for<br>COVID-19 sensitive portfolios and<br>uncertainty regarding path of virus<br>and future government stimulus<br>• Model results adjusted for existing<br>stimulus and payment deferrals<br>Regulatory Capital: Opted into 2 year CECL adoption capital impact delay with 25% of cumulative Day 2 impact added back to Common<br>Equity Tier 1 capital through 2021. 3-year regulatory CECL capital phase-in begins in 2022<br>$ in millions<br>Allowance for Loan &<br>Lease Losses<br>Reserve for Unfunded<br>Commitments<br>Allowance for<br>Credit Losses<br>12/31/2019<br>Ending Balance %<br>of loans<br>$42MM<br>..34%<br>$1MM<br>< .01%<br>$43MM<br>..34%<br>CECL Adoption<br>through Q2 2020<br>+$128MM<br>• $48MM - Day 1 increase<br>from consumer loans<br>(life of loan) and<br>“double-count” on<br>acquired loans<br>• $80MM - Day 2 increase<br>attributable to COVID-<br>19; large increase for<br>COVID-19 sensitive<br>portfolios<br>+$10MM<br>• $4MM – Day 1<br>adjustment for<br>lifetime losses<br>• $6MM – Day 2<br>increase due to<br>higher expected loss<br>and funding rates<br>related to COVID-19<br>environment<br>+$138MM<br>• Day 1 - $52 million<br>Capital Cumulative<br>Effect Adjustment of<br>CECL Adoption<br>• Day 2 - $94 million<br>Provision For Credit<br>Losses including $8<br>million net charge-offs<br>in Q1<br>6/30/2020<br>Ending Balance %<br>of loans<br>$170MM<br>(1.19%;<br>1.34% excl. PPP loans)<br>$11MM<br>(.07%;<br>..08% excl. PPP loans)<br>$181MM<br>(1.26%;<br>1.42% excl. PPP loans)<br>Q3 2020<br>+$4MM<br>• Increase due to COVID-<br>sensitive industries and<br>uncertainty regarding<br>future stimulus and<br>path of virus<br>+$1MM<br>• Increase due to<br>higher loss rate<br>forecasts in COVID-<br>sensitive industries<br>and uncertainty<br>+$5MM<br>• $6.6 million Provision<br>for Credit Losses<br>including $1.4 million<br>net charge-offs in Q3<br>9/30/2020<br>Ending Balance %<br>of loans<br>$174MM<br>(1.21%;<br>1.36% excl. PPP loans)<br>$12MM<br>(.08%;<br>..10% excl. PPP loans)<br>$186MM<br>(1.29%;<br>1.46% excl. PPP loans)
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3.29%<br>3.14%<br>2.50%<br>2.60%<br>2.70%<br>2.80%<br>2.90%<br>3.00%<br>3.10%<br>3.20%<br>3.30%<br>3.40%<br>Quarter 2 NIM<br>Core Loan Yield<br>Loan Accretion<br>PPP Loans with<br>Fees<br>Securities Yield<br>Deposit Costs<br>Funding Mix and<br>Borrowing Costs<br>Quarter 3 NIM<br>Net Interest Margin: Drivers of Change Q2 2020 to Q3 2020<br>-18 bps -7 bps<br>1 bp<br>-6 bps<br>12 bps<br>4 bps<br>13<br>Q3 2020 Net Interest Margin<br>Market Rates<br>3Q2020 2Q2020<br>EOP Avg EOP Avg<br>Fed funds 0.25% 0.25% 0.25% 0.25%<br>Prime 3.25% 3.25% 3.25% 3.25%<br>1-month Libor 0.15% 0.16% 0.17% 0.35%<br>2-year Treasury 0.13% 0.14% 0.16% 0.19%<br>10 - year Treasury 0.69% 0.65% 0.66% 0.71%<br>Margin Overview<br>3Q2020 2Q2020<br>Net interest margin 3.14% 3.29%<br>Loan yield 3.84% 4.13%<br>Investment yield 2.91% 3.29%<br>Earning asset yield 3.59% 3.90%<br>Cost of deposits 0.39% 0.53%<br>Cost of borrowings 1.50% 1.70%<br>Cost of funds 0.45% 0.61%<br>Presented on an FTE basis<br>Approximately 12% of the loan portfolio (ex. PPP) have floors<br>Loan Portfolio Pricing Mix<br>with PPP w/o PPP<br>Fixed 57% 51%<br>1 Month Libor 29% 32%<br>Prime 9% 11%<br>Other 5% 6%<br>Total 100% 100%<br>Total Loan Yield<br>-24 bps
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14<br>Noninterest income decreased from the prior quarter to $34.4 million<br>from $35.9 million due to:<br>.. A $10.3 million in gain on the sale of investment securities occurred<br>in the second quarter<br>.. Mortgage banking income increased $3.1 million due to increased<br>mortgage loan origination volumes<br>.. Service charges on deposit accounts increased $1.1 million due to<br>higher overdraft volumes<br>.. Wealth management fees increased by $530,000<br>.. BOLI income increased $1.4 million due to death benefit proceeds<br>received in the quarter<br>.. Other income includes the recapture of $1.7 million of the $2.5<br>million in COVID-19 driven unrealized SBIC fund investment losses<br>recorded in the second quarter<br>.. Interest rate swap income decreased $2.3 million due to lower<br>transaction volumes.<br>$ in thousands 3Q2020 2Q2020<br>Service charges on deposit accounts $ 6,041 $ 4,930<br>Other service charges, commissions and<br>fees 1,621 1,354<br>Interchange fees 1,979 1,697<br>Fiduciary and asset management fees 6,045 5,515<br>Mortgage banking income 8,897 5,826<br>Gains on securities transactions 18 10,339<br>Bank owned life insurance income 3,421 2,027<br>Loan-related interest rate swap fees 3,170 5,484<br>Other operating income 3,215 (1,240)<br>Total noninterest income $ 34,407 $ 35,932<br>$ in thousands 3Q2020 2Q2020<br>Salaries and benefits $ 49,000 $ 49,896<br>Occupancy expenses 7,441 7,224<br>Furniture and equipment expenses 3,895 3,406<br>Printing, postage, and supplies 904 999<br>Technology and data processing 6,564 6,454<br>Professional services 2,914 2,989<br>Marketing and advertising expense 2,631 2,043<br>FDIC assessment premiums and other insurance 1,811 2,907<br>Other taxes 4,124 4,120<br>Loan-related expenses 2,314 2,501<br>OREO and credit-related expenses 413 411<br>Amortization of intangible assets 4,053 4,223<br>Training and other personnel costs 746 876<br>Loss on debt extinguishment - 10,306<br>Other expenses 6,412 4,459<br>Total noninterest expenses $ 93,222 $ 102,814<br>Q3 2020 Noninterest Income and Noninterest Expense<br>Noninterest Income Noninterest Expense<br>Noninterest expense decreased from the prior quarter to $93.2 million from<br>$102.8 million due to:<br>.. A $10.3 million loss on debt extinguishment resulting from the<br>prepayment of long-term Federal Home Loan Bank advances in the<br>second quarter<br>.. $2.6 million in branch closure costs incurred in the third quarter<br>compared to $3.4 million in the second quarter<br>.. COVID-19 related expenses increased to $639,000 from $620,000 in the<br>prior quarter<br>.. Marketing expense increased due to donations related to the Company’s<br>diversity, equality and inclusion efforts<br>.. A decline of $1.1 million in FDIC assessment due to the PPP loan impact<br>on the Company’s assessment rate
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15<br>Q3 2020 Loan and Deposit Growth<br>For non-GAAP financial measures, see reconciliation to most directly comparable GAAP measures in<br>“Appendix – Reconciliation of Non-GAAP Disclosures”<br>• At quarter end, loans held for investment increased $74.6<br>million, or 2.1% (annualized) from the prior quarter<br>• For the quarter, total Commercial loans grew ~4.6% on<br>an annualized basis primarily driven by growth in<br>equipment finance loan and lease balances<br>• Consumer loans declined ~9% annualized in the<br>quarter driven by net attrition in the mortgage and<br>home equity line loan portfolios and third party<br>consumer balance run-off partially offset by growth in<br>indirect auto balances<br>• Average loan yields declined 29 basis points during the<br>quarter due to lower loan accretion income and the<br>impact of the lower interest rate environment<br>• Deposits declined $29.0 million, or 0.7% (annualized) in<br>the third quarter from the prior quarter due to lower NOW<br>and time deposit balances mostly offset by growth in<br>demand deposits, money market and savings account<br>balances<br>• Low cost transaction accounts comprised 51% of total<br>deposit balances at the end of the third quarter which is<br>in-line with the second quarter levels<br>• The cost of deposits declined by 14 basis points during<br>the quarter due to the positive impact from favorable<br>changes in the overall deposit mix between quarters as<br>well as continued repricing of interest-bearing deposits<br>as market interest rates remained low<br>• The loans to deposits ratio was ~92% at quarter end,<br>below the Company’s 95% target level<br>Loan Growth (Dollars in thousands) 3Q2020 2Q2020<br>Annualized<br>Growth<br>Commercial & Industrial $ 3,536,249 $ 3,555,971 -2.2%<br>Commercial real estate - owner occupied 2,107,333 2,067,087 7.8%<br>Other Commercial 494,084 389,190 107.8%<br>Total Commercial & Industrial 6,137,666 6,012,248 8.3%<br>Commercial real estate - non-owner occupied 3,497,929 3,455,125 5.0%<br>Construction and land development 1,207,190 1,247,939 -13.1%<br>Multifamily real estate 731,582 717,719 7.7%<br>Residential 1-4 Family - Commercial 696,944 715,384 -10.3%<br>Total CRE & Construction 6,133,645 6,136,167 -0.2%<br>Total Commercial Loans 12,271,311 12,148,415 4.0%<br>Residential 1-4 Family - Consumer 830,144 841,051 -5.2%<br>Residential 1-4 Family - Revolving 618,320 627,765 -6.0%<br>Auto 387,417 380,053 7.8%<br>Consumer 276,023 311,362 -45.4%<br>Total Consumer Loans 2,111,904 2,160,231 -8.9%<br>Total Loans Held for Investment 14,383,215 14,308,646 2.1%<br>Less: PPP Loans 1,600,577 1,598,718 0.5%<br>Total Loans Held for Investment, ex PPP $ 12,782,638 $ 12,709,928 2.3%<br>Average Loan Yield 3.84% 4.13%<br>Deposit Growth (Dollars in thousands) 3Q2020 2Q2020<br>Annualized<br>Growth<br>NOW accounts 3,460,480 3,618,523 -17.5%<br>Money market accounts 4,269,696 4,158,325 10.7%<br>Savings accounts 861,685 824,164 18.2%<br>Time deposits > $250,000 633,252 689,693 -32.7%<br>Other time deposits 1,930,320 1,968,474 -7.8%<br>Total Time deposits 2,563,572 2,658,167 -14.2%<br>Total interest-bearing deposits 11,155,433 11,259,179 -3.7%<br>Demand deposits 4,420,665 4,345,960 6.9%<br>Total deposits $15,576,098 $15,605,139 -0.7%<br>Average Cost of Deposits 0.39% 0.53%<br>Loan to Deposit Ratio 92.3% 91.7%
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Liquidity Position and Sources<br>16<br>• Strong liquidity metrics: ~$7.3 billion in cash, unpledged securities, and secured and<br>unsecured borrowing capacity. Loans to Total Deposits Ratio of 92%.<br>• Paycheck Protection Program loans of approximately $1.6 billion outstanding which are<br>funded with deposits, wholesale borrowings, and $189 million borrowed from the<br>Federal Reserve’s Paycheck Protection Program Liquidity Facility (PPPLF).<br>• Holding company cash of $152.4 million with available dividend capacity (net of current<br>year’s dividends paid) of $210 million from bank to holding company without prior<br>regulatory approval.<br>Liquidity Sources (September 30, 2020) Amount ($mm)<br>Total Cash and Cash Equivalents $521<br>Unpledged Investment Securities (market value) $1,846<br>FHLB Borrowing Availability $2,302<br>Fed Discount Window Availability $233<br>PPP Liquidity Facility Availability $1,441<br>Fed Funds Lines $942<br>Line of Credit at Correspondent Bank $25<br>Total Liquidity Sources $7,311
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Strong Capital Position at September 30, 2020<br>17<br>Capital Ratio<br>Regulatory<br>Well<br>Capitalized<br>Atlantic<br>Union<br>Bankshares<br>Atlantic<br>Union Bank<br>Common Equity Tier 1<br>Ratio (CET1) 7.0% 10.0% 12.0%<br>Tier 1 Capital Ratio 8.5% 11.2% 12.0%<br>Total Risk Based Capital<br>Ratio 10.5% 13.9% 12.8%<br>Leverage Ratio 5.0% 8.8% 9.5%<br>Tangible Common<br>Equity Ratio (non-GAAP) - 7.9% 9.4%<br>*Capital information presented herein is based on estimates and subject to change pending the Company’s filing of its regulatory reports<br>Stress Testing<br>• As a matter of sound enterprise risk management<br>practice, the Company periodically conducts capital,<br>credit and liquidity stress tests for scenarios such as<br>the current operating environment<br>• Results from these internal stress tests provides<br>confidence that throughout the pandemic crisis AUB<br>will remain well-capitalized and that it has the<br>necessary liquidity and access to multiple funding<br>sources to meet the challenges of COVID-19<br>Capital Management<br>• Atlantic Union capital management objectives are to:<br>• Maintain designation as a “well capitalized” institution<br>• Ensure capital levels are commensurate with the<br>Company’s risk profile, capital stress test projections,<br>and strategic plan objectives<br>• The Company’s capital ratio’s are well above regulatory<br>well capitalized levels as of 9/30/2020<br>• During the third quarter, the Company paid dividends of<br>$0.25 per common share and $156.60 per outstanding<br>share of Series A Preferred Stock<br>(4) Non-GAAP financial measure. For non-GAAP financial measures,<br>see reconciliation to most directly comparable GAAP measures in<br>“Appendix – Reconciliation of Non-GAAP Disclosures”<br>Quarterly Roll Forward<br>Common<br>Equity Tier 1<br>Ratio<br>Tangible<br>Common<br>Equity Ratio4<br>Tangible<br>Book Value<br>per Share4<br>At 6/30/2020 9.88% 7.74% $18.54<br>Pre-Provision Net Income 0.44% 0.34% 0.82<br>After-Tax Provision -0.04% -0.03% (0.07)<br>CECL Transition Adjustment (1) 0.01% -- --<br>Common Dividends (2) -0.14% -0.10% (0.25)<br>AOCI -- 0.01% 0.02<br>Other 0.06% 0.04% 0.08<br>Asset Growth -0.18% -0.08% --<br>At 9/30/20 - Reported 10.03% 7.91% $19.13<br>PPP Loan Balances Impact (3) -- 0.75% --<br>At 9/30/20 - Excluding PPP Balances 10.03% 8.66% $19.13<br>(1) 25% of the increase in ACL as compared to the Day 1 estimate of CECL<br>(2) 25 cents per share<br>(3) Approximately $1.6 billion
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Appendix
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Reconciliation of Non-GAAP Disclosures<br>19<br>Operating Earnings Per Share<br>The Company has provided supplemental performance measures on a tax-equivalent, tangible, operating, or pre-<br>tax pre-provision basis. These non-GAAP financial measures are a supplement to GAAP, which is used to<br>prepare the Company’s financial statements, and should not be considered in isolation or as a substitute for<br>comparable measures calculated in accordance with GAAP. In addition, the Company’s non-GAAP financial<br>measures may not be comparable to non-GAAP financial measures of other companies. The Company uses the<br>non-GAAP financial measures discussed herein in its analysis of the Company’s performance. The Company’s<br>management believes that these non-GAAP financial measures provide additional understanding of ongoing<br>operations, enhance comparability of results of operations with prior periods and show the effects of significant<br>gains and charges in the periods presented without the impact of items or events that may obscure trends in the<br>Company’s underlying performance.
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Reconciliation of Non-GAAP Disclosures<br>20<br>Operating Earnings Per Share<br>Pre-tax pre-provision (PTPP) earnings excludes the provision for credit losses, which can fluctuate significantly from period-to-period under the recently adopted CECL methodology, and income<br>tax expense. The Company believes this measure is useful to investors as it excludes certain costs resulting from acquisition activity as well as the potentially volatile provision measure, and<br>allows for greater comparability with others in the industry and for investors to more clearly see the combined economic results of the organization’s operations. In addition, the Company believes<br>that PTPP earnings excluding the amortization of intangibles helps illustrate the Company’s core operating performance.<br>Additionally, the Company believes that return on tangible common equity (ROTCE) is a meaningful supplement to GAAP financial measures and useful to investors because it measures the<br>performance of a business consistently across time without regard to whether components of the business were acquired or developed internally.<br>PRE-TAX PRE-PROVISION OPERATING EARNINGS<br>For the three months<br>ended<br>(Dollars in thousands, except per share amounts) 3Q2020 2Q2020<br>Net income<br>Net income (GAAP) $ 61,000 $ 30,709<br>Plus: Provision for credit losses 6,558 34,200<br>Plus: Income tax expense 11,008 5,514<br>PTPP operating earnings (non-GAAP) $ 78,566 $ 70,423<br>Return on assets (ROA)<br>Average assets $ 19,785,167 $ 19,157,238<br>ROA (GAAP) 1.23% 0.64%<br>PTPP operating ROA (non-GAAP) 1.58% 1.48%<br>Return on equity (ROE)<br>Net income available to common shareholders (GAAP) $ 58,309 $ 30,709<br>Plus: Amortization of intangibles, tax effected 3,202 3,336<br>Net operating earnings available to common shareholders before<br>amortization of intangibles (non-GAAP)<br>$ 61,511 $ 34,045<br>PTPP operating earnings (non-GAAP) $ 78,566 $ 70,423<br>Plus: Amortization of intangibles 4,053 4,223<br>Less: Dividends on preferred stock 2,691 -<br>PTPP operating earnings available to common shareholders before<br>amortization of intangibles (non-GAAP)<br>$ 79,928 $ 74,646<br>Average common equity (GAAP) $ 2,648,777 $ 2,489,969<br>Less: Average intangible assets 998,576 1,002,696<br>Less: Average perpetual preferred stock 166,353 40,325<br>Average tangible common equity (non-GAAP) $ 1,483,848 $ 1,446,948<br>ROE (GAAP) 9.16% 4.96%<br>Operating ROTCE (non-GAAP) 16.49% 9.46%<br>PTPP operating ROTCE (non-GAAP) 21.43% 20.75%
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Reconciliation of Non-GAAP Disclosures<br>21<br>Operating Earnings Per Share The operating efficiency ratio (FTE) excludes the amortization of intangible assets and merger-related costs. This measure is similar to the<br>measure utilized by the Company when analyzing corporate performance and is also similar to the measure utilized for incentive compensation.<br>The Company believes this measure is useful to investors as it excludes certain costs resulting from acquisition activity allowing for greater<br>comparability with others in the industry and allowing investors to more clearly see the combined economic results of the organization’s<br>operations.<br>OPERATING EFFICIENCY RATIO<br>For the three months ended<br>(Dollars in thousands) 3Q2020 2Q2020<br>Noninterest expense (GAAP) $ 93,222 $ 102,814<br>Less: Amortization of intangible assets 4,053 4,223<br>Operating noninterest expense (non-GAAP) $ 89,169 $ 98,591<br>Net interest income (GAAP) $ 137,381 $ 137,305<br>Net interest income (FTE) (non-GAAP) 140,282 140,110<br>Noninterest income (GAAP) 34,407 35,932<br>Efficiency ratio (GAAP) 54.27% 59.35%<br>Operating efficiency ratio (FTE) (non-GAAP) 51.04% 56.00%
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Reconciliation of Non-GAAP Disclosures<br>22<br>Operating Earnings Per Share<br>Net interest income (FTE), which is used in computing net interest margin (FTE) , provides valuable additional insight into<br>the net interest margin by adjusting for differences in tax treatment of interest income sources. The entire FTE adjustment<br>is attributable to interest income on earning assets, which is used in computing yield on earning assets. Interest expense<br>and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the FTE components.<br>NET INTEREST MARGIN<br>For the three months ended<br>(Dollars in thousands) 3Q2020 2Q2020<br>Net interest income (GAAP) $ 137,381 $ 137,305<br>FTE adjustment 2,901 2,805<br>Net interest income (FTE) (non-GAAP) $ 140,282 $ 140,110<br>Average earning assets $ 17,748,152 $ 17,106,132<br>Net interest margin (GAAP) 3.08% 3.23%<br>Net interest margin (FTE) 3.14% 3.29%
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Reconciliation of Non-GAAP Disclosures<br>23<br>Operating Earnings Per Share Tangible common equity is used in the calculation of certain profitability, capital, and per share ratios. The Company<br>believes tangible common equity and the related ratios are meaningful measures of capital adequacy because they<br>provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes<br>will assist investors in assessing the capital of the Company and its ability to absorb potential losses.<br>TANGIBLE COMMON EQUITY<br>As of September 30, 2020<br>(Dollars in thousands)<br>Atlantic Union<br>Bankshares<br>Atlantic Union<br>Bank<br>Assets (GAAP) $ 19,930,650 $ 19,882,017<br>Less: Intangible assets 996,628 996,628<br>Tangible assets (non-GAAP) $ 18,934,022 $ 18,885,389<br>Less: PPP loans 1,600,577<br>Tangible assets, excl PPP (non-GAAP) $ 17,333,445<br>Common equity (GAAP) $ 2,494,528 $ 2,776,489<br>Less: Intangible assets 996,628 996,628<br>Tangible common equity (non-GAAP) $ 1,497,900 $ 1,779,861<br>Common equity to assets (GAAP) 12.5% 14.0%<br>Tangible common equity to tangible assets (non-GAAP) 7.9% 9.4%<br>Tangible common equity to tangible assets, excl PPP (non-GAAP) 8.6%<br>Book value per common share (GAAP) $ 31.86<br>Tangible book value per common share (non-GAAP) $ 19.13
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Reconciliation of Non-GAAP Disclosures<br>24<br>($ IN THOUSANDS)<br>Operating Earnings Per Share The Company believes loans held for investment (net of deferred fees and costs), excluding PPP is useful to investors<br>as it provides more clarity on the Company’s organic growth. The Company also believes that the ALLL as a<br>percentage of loans held for investment (net of deferred fees and costs), excluding PPP, is useful to investors because<br>of the size of the Company’s PPP organizations originations and the impact of the embedded credit enhancement<br>provided by the SBA guarantee.<br>ALLOWANCE FOR CREDIT LOSSES RATIO<br>(Dollars in thousands)<br>As of September 30,<br>2020 As of June 30, 2020<br>Allowance for loan losses (ALLL) $ 174,122 $ 169,977<br>Reserve for unfunded commitment 12,000 11,000<br>Allowance for credit losses (ACL) $ 186,122 $ 180,977<br>Total loans held for investment (GAAP) $ 14,383,215 $ 14,308,646<br>Less: PPP adjustments 1,600,577 1,598,718<br>Total loans held for investment, excluding PPP (non-GAAP) $ 12,782,638 $ 12,709,928<br>ALLL to total loans held for investment (GAAP) 1.21% 1.19%<br>ALLL to total loans held for investment, excluding PPP (non-GAAP) 1.36% 1.34%<br>ACL to total loans held for investment (GAAP) 1.29% 1.26%<br>ACL to total loans held for investment, excluding PPP (non-GAAP) 1.46% 1.42%
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25<br>Paycheck Protection Program (PPP)<br>• AUB had 11.1% of dollar share for VA loans,<br>compared to deposit market share of 7%<br>• AUB effectively shared the top spot for number of<br>PPP loans originated in VA and was #1 among VA<br>headquartered banks<br>• AUB had nearly twice the count as the nearest VA<br>headquartered bank<br>• AUB outperformed other banks based on relative<br>branch footprint<br>• 9,581 loans of < $150,000 totaling $356.6 million<br>1) Dollars of SBA loans approved excludes $50 million in approved loans withdrawn under the safe harbor provision<br>Deposit data as of 6/30.19 and excludes branches with deposits greater than $5 billion<br>PPP data as of June 30, 2020. Figures may not total to 100% due to rounding<br>16%<br>12%<br>12%<br>11%<br>10%<br>10%<br>6%<br>5%<br>4%<br>3%<br>3%<br>2%<br>2%<br>2%<br>1%<br>Professional, Scientific, Technical Svcs<br>Construction<br>Other Svcs (ex Public)<br>Health Care & Social Assistance<br>Accommodation & Food Svcs<br>Retail Trade<br>Real Estate & Rental & Leasing<br>Waste Mgt & Remediation<br>Education & Information Services<br>Finance & Insurance<br>Arts, Recreation, Entertainment<br>Manufacturing<br>Transportation and Warehousing<br>Wholesale Trade<br>Agriculture and Related<br>Industry Distribution of PPP Loans<br>SBA Tier<br># of SBA<br>Mix<br>$ of SBA<br>Mix<br>Average Median<br>Approved Approved1 Loan Loan<br>$2 million to $10 million 119 1% $ 409,000,000 25% $ 3,437,000 $ 3,068,000<br>>$350,000 to <$2 million 846 7% $ 630,000,000 38% $ 745,000 $ 600,000<br>Up to $350,000 10,711 92% $ 612,000,000 37% $ 57,000 $ 30,000<br>Total 11,676 100% $ 1,650,000,000 100% $ 141,000 $ 36,000
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26<br>Paycheck Protection Program (PPP)<br>Note: Virginia<br>branches: AUB 140<br>Truist 445<br>Italics indicates a VA HQ'd Lender<br>Rank Lender Count of Loans % of Total<br>1 Truist Bank 10,203 9.3%<br>2 Atlantic Union Bank 10,197 9.3%<br>3 Bank of America, National Association 8,487 7.8%<br>4 Wells Fargo Bank, National Association 6,247 5.7%<br>5 Towne Bank 5,126 4.7%<br>6 Celtic Bank Corporation 2,934 2.7%<br>7 United Bank 2,845 2.6%<br>8 Kabbage, Inc. 2,667 2.4%<br>9 Cross River Bank 2,512 2.3%<br>10 The First Bank and Trust Company 2,216 2.0%<br>Top 10 Financial Institutions Lending in VA 53,434 49%<br>All Institutions in Lending in VA 109,227 100%<br>SBA PPP Approved Loans for Virginia<br>Ranking of Top 10 Lenders in VA<br>VA HQ'd<br>Bank Rank Lender Count of Loans % of Total<br>1 Atlantic Union Bank 10,197 27.7%<br>2 Towne Bank 5,126 13.9%<br>3 The First Bank and Trust Company 2,216 6.0%<br>4 Sonabank 2,192 5.9%<br>5 Navy FCU 1,356 3.7%<br>6 Citizens and Farmers Bank 1,214 3.3%<br>7 Capital One, National Association 1,204 3.3%<br>8 The Old Point National Bank of Phoebus 1,096 3.0%<br>9 Burke & Herbert Bank & Trust Company 1,049 2.8%<br>10 Chesapeake Bank 933 2.5%<br>Top 10 Financial Institutions Headquartered in VA 26,583 72%<br>All Institutions Headquartered in VA 36,843 100%<br>SBA PPP Approved Loans for Virginia<br>Ranking of Banks Headquartered in VA
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