atlanticunionbank.com Investor Relations Investors Overview News & Events Company Info ESG Financial Info Stock Data SEC Filings Governance Press Releases NEWS & EVENTS Atlantic Union Bankshares Reports Third Quarter Results October 25, 2021 7:30am EDT Download as PDF Related Documents AUDIO Earnings Webcast 10-Q Filing PDF HTML XBRL ZIP XLS HTML Earnings Supplement PDF Earnings Call Transcript PDF RICHMOND, Va., Oct. 25, 2021 (GLOBE NEWSWIRE) -- Atlantic Union Bankshares Corporation (the “Company” or “Atlantic Union”) (Nasdaq: AUB) today reported net income available to common shareholders of $71.6 million and basic and diluted earnings per common share of $0.94 for the third quarter ended September 30, 2021. Pre-tax pre-provision adjusted operating earnings(1) were $72.1 million for the third quarter ended September 30, 2021. Net income available to common shareholders was $207.2 million and basic and diluted earnings per common share were $2.66 for the nine months ended September 30, 2021. Adjusted operating earnings available to common shareholders(1) were $218.8 million, diluted operating earnings per common share(1) were $2.80, and pre-tax pre-provision adjusted operating earnings(1) were $217.7 million for the nine months ended September 30, 2021. “Atlantic Union delivered solid financial results in the third quarter as we continue to see the headwinds from COVID-19 abate,” said John C. Asbury, president and chief executive officer of Atlantic Union. “Loan balances exclusive of PPP declined during the third quarter, which we believe was a combination of historically high levels of commercial real estate pay-offs and suppressed commercial line utilization due to excess liquidity. We have seen a strong start to loan growth in October, our credit quality remains pristine, and our capital and liquidity positions continue to be strong.” “As we finish off 2021, we expect economic activity to pick up over the next several quarters and credit losses will remain historically low due to the positive economic outlook. Operating under the mantra of soundness, profitability and growth – in that order of priority - Atlantic Union remains committed to generating sustainable, profitable growth and building long term value for our shareholders.” Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) 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 had been adversely impacted by the COVID-19 global pandemic (“COVID-19”). The PPP loan funding program expired on May 31, 2021. The Company had PPP loans with a recorded investment of $481.7 million and unamortized deferred fees of $15.1 million as of September 30, 2021. The loans carry a 1% interest rate. In addition to an insignificant amount of PPP loan pay offs, the Company has processed $1.7 billion(*) of loan forgiveness on 13,000 PPP loans(*) since the inception of the program through September 30, 2021. In the third quarter of 2021, the Company processed $391.8 million (*) on 3,000 PPP loans for forgiveness. Share Repurchase Program On May 4, 2021, the Company’s Board of Directors authorized a share repurchase program (or the “Repurchase Program”) to purchase up to $125 million worth of the Company’s common stock in open market transactions or privately negotiated transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and/or Rule 10b-18 under the Exchange Act that was due to expire on June 30, 2022. As part of the Repurchase Program, 1.1 million shares (or $42.3 million) were repurchased during the quarter ended June 30, 2021, and 2.3 million shares (or $82.7 million) were repurchased during the quarter ended September 30, 2021, fully utilizing the $125 million authorized under the Repurchase Program. (*) Number and amount of PPP loans processed for forgiveness are rounded and approximate values NET INTEREST INCOME For the third quarter of 2021, net interest income was $137.5 million, a decrease from $140.5 million reported in the second quarter of 2021. Net interest income (FTE)(1) was $140.7 million in the third quarter of 2021, a decrease of $3.0 million from the second quarter of 2021. The decreases in net interest income and net interest income (FTE) were primarily driven by a decrease in PPP loan accretion included in interest income to $9.4 million in the third quarter of 2021 from $11.5 million in the second quarter of 2021. The third quarter net interest margin decreased 10 basis points to 3.05% from 3.15% in the previous quarter, while the net interest margin (FTE)(1) decreased 11 basis points to 3.12% from 3.23% during the same period as earning asset yields declined by 15 basis points compared to the second quarter due to the impact of the low interest rate environment on core loan and investment securities yields and the increase in low yielding cash balances due to excess liquidity, partially offset by a 4 basis point decline in the cost of funds compared to the second quarter driven by lower deposit costs. The Company’s net interest margin (FTE) (1) includes the impact of acquisition accounting fair value adjustments. Net accretion related to acquisition accounting was $4.0 million for the quarter ended September 30, 2021. The first, second, and third quarters of 2021 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, 2021 $ 4,287 $ 20 $ (198 ) $ 4,109 For the quarter ended June 30, 2021 4,132 12 (202 ) 3,942 For the quarter ended September 30, 2021 4,176 (8 ) (203 ) 3,965 For the remaining three months of 2021 (estimated) 1,627 (11 ) (203 ) 1,413 For the years ending (estimated): 2022 5,757 (43 ) (829 ) 4,885 2023 4,281 (32 ) (852 ) 3,397 2024 3,501 (4 ) (877 ) 2,620 2025 2,724 (1 ) (900 ) 1,823 2026 2,176 — (926 ) 1,250 Thereafter 9,433 — (8,946 ) 487 Total remaining acquisition accounting fair value adjustments at September 30, 2021 $ 29,499 $ (91 ) $ (13,533 ) $ 15,875 ASSET QUALITY Overview During the third quarter of 2021, nonperforming assets (“NPAs”) as a percentage of loans was consistent with the prior quarter and remained low at 0.28% at September 30, 2021. Accruing past due loan levels as a percentage of total loans held for investment at September 30, 2021 increased 12 basis points as compared to June 30, 2021 and were 5 basis points lower than accruing past due loan levels at September 30, 2020. The increase in past due loan levels from June 30, 2021 was primarily within the 30-59 days past due category and due to increases in past due credit relationships within the commercial & industrial portfolio. Net charge-offs of $113,000 were insignificant and consistent with the second quarter of 2021. The allowance for credit losses (“ACL”) totaled $109.3 million at September 30, 2021, a $19.0 million decrease from the prior quarter due to lower expected losses than previously estimated and improvements in the macroeconomic outlooks. Nonperforming Assets At September 30, 2021, NPAs totaled $37.2 million, a decrease of $927,000 from June 30, 2021. NPAs as a percentage of total outstanding loans at September 30, 2021 were 0.28%, consistent with June 30, 2021. Excluding the impact of the PPP loans(1), NPAs as a percentage of total adjusted loans held for investment were 0.29% at September 30, 2021, a decrease of 1 basis point from 0.30% at June 30, 2021. 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, 2021 2021 2021 2020 2020 Nonaccrual loans $ 35,472 $ 36,399 $ 41,866 $ 42,448 $ 39,023 Foreclosed properties 1,696 1,696 2,344 2,773 4,159 Total nonperforming assets $ 37,168 $ 38,095 $ 44,210 $ 45,221 $ 43,182 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, 2021 2021 2021 2020 2020 Beginning Balance $ 36,399 $ 41,866 $ 42,448 $ 39,023 $ 39,624 Net customer payments (4,719 ) (9,307 ) (4,133 ) (4,640 ) (2,803 ) Additions 4,177 4,162 3,821 8,211 2,790 Charge-offs (385 ) (183 ) (270 ) (146 ) (588 ) Loans returning to accruing status — (153 ) — — — Transfers to foreclosed property — 14 — — — Ending Balance $ 35,472 $ 36,399 $ 41,866 $ 42,448 $ 39,023 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, 2021 2021 2021 2020 2020 Beginning Balance $ 1,696 $ 2,344 $ 2,773 $ 4,159 $ 4,397 Additions of foreclosed property — 14 — — — Valuation adjustments — — — (35 ) — Proceeds from sales — (572 ) (419 ) (1,357 ) (254 ) Gains (losses) from sales — (90 ) (10 ) 6 16 Ending Balance $ 1,696 $ 1,696 $ 2,344 $ 2,773 $ 4,159 Past Due Loans Past due loans still accruing interest totaled $38.8 million or 0.30% of total loans held for investment at September 30, 2021, compared to $25.1 million or 0.18% of total loans held for investment at June 30, 2021, and $50.9 million or 0.35% of total loans held for investment at September 30, 2020. The increase in past due loans in the third quarter of 2021 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 commercial & industrial portfolio. Of the total past due loans still accruing interest, $11.0 million or 0.08% of total loans held for investment were loans past due 90 days or more at September 30, 2021, compared to $8.7 million or 0.06% of total loans held for investment at June 30, 2021, and $15.6 million or 0.11% of total loans held for investment at September 30, 2020. Net Charge-offs Including and excluding the impact of the PPP loans (1), net charge-offs totaled $113,000 or less than 0.01% of total average loans (annualized) for the quarter ended September 30, 2021, compared to $69,000 or less than 0.01% for the second quarter of 2021, and $1.4 million or 0.04% for the third quarter of 2020. Provision for Credit Losses For the quarter ended September 30, 2021, the Company recorded a negative provision for credit losses of $18.8 million, compared to a negative provision for credit losses of $27.4 million in the previous quarter, and which decreased $25.4 million compared to the provision for credit losses of $6.6 million recorded during the same quarter in 2020. The provision for credit losses for the third quarter of 2021 reflected a negative provision of $16.3 million for loan losses and a negative provision of $2.5 million for unfunded commitments. The decrease in the provision for credit losses as compared to the same quarter in 2020 was driven by the benign credit impacts since the pandemic began, the significant recovery in the economy since last year, as well as the improvement in the economic forecast utilized in estimating the ACL as of September 30, 2021. Allowance for Credit Losses At September 30, 2021, the ACL was $109.3 million and included an allowance for loan and lease losses (“ALLL”) of $101.8 million and a reserve for unfunded commitments (“RUC”) of $7.5 million. The ACL at September 30, 2021 decreased $19.0 million from June 30, 2021, due to lower expected losses than previously estimated as a result of an improved economic forecast outlook and improvement in credit trends during the third quarter of 2021. The ACL as a percentage of total loans was 0.83% at September 30, 2021 and 0.94% at June 30, 2021. When excluding PPP loans(1), which are 100% guaranteed by the SBA, the ACL as a percentage of total adjusted loans at September 30, 2021 decreased 14 basis points to 0.86% from the prior quarter. At September 30, 2021, the ALLL decreased $16.5 million and the RUC decreased $2.5 million from June 30, 2021. The ALLL as a percentage of the total loan portfolio was 0.77% at September 30, 2021 and 0.86% at June 30, 2021. When excluding PPP loans(1), which are 100% guaranteed by the SBA, the ALLL as a percentage of total adjusted loans decreased 12 basis points from the prior quarter to 0.80% at September 30, 2021. NONINTEREST INCOME Noninterest income increased $1.5 million to $30.0 million for the quarter ended September 30, 2021 from $28.5 million in the prior quarter, primarily driven by an increase in the unrealized gain on equity method investments of approximately $1.1 million that is included in other operating income, a $591,000 increase in deposit and other service charges, and increases in mortgage banking income of $199,000 and asset management fees of $210,000. These quarterly increases were partially offset by declines in other non-interest income categories including a $500,000 decrease in income on bank owned life insurance, as life insurance proceeds that were collected during the prior quarter were not matched during the third quarter of 2021. NONINTEREST EXPENSE Noninterest expense increased $3.3 million to $95.3 million for the quarter ended September 30, 2021 from $92.0 million in the prior quarter. This increase was mainly due to increases in salaries and benefits of $2.8 million, driven by performance based variable incentive compensation and profit-sharing expenses of $655,000, higher compensation costs of approximately $1.0 million as a result of branch banking pay structure changes made during the third quarter of 2021, and employee related recruiting, severance, and other cost increases of approximately $900,000. In addition, other expenses increased by $1.6 million for the quarter ended September 30, 2021 primarily due to OREO and related credit expenses increasing by $1.0 million, reflecting the impact of gains on the sale of closed branches recorded as a reduction to other expenses in the prior quarter. Noninterest expense increases were partially offset by declines in professional services fees of $616,000. Noninterest expense for the third quarter of 2021 also included approximately $200,000 in expenses related to PPP loan forgiveness processing, compared to approximately $250,000 in expenses for the quarter ended June 30, 2021. INCOME TAXES The effective tax rate for the three months ended September 30, 2021 was 18.0%, compared to 18.3% for the three months ended June 30, 2021. The decrease in the effective tax rate is primarily due to changes in the proportion of tax-exempt income to pre-tax income. BALANCE SHEET At September 30, 2021, total assets were $19.9 billion, a decrease of $53.7 million or approximately 1.1% (annualized) from June 30, 2021, and an increase of $5.0 million from September 30, 2020. Total assets have remained relatively consistent to these prior periods with loans decreasing due to PPP forgiveness, cash and cash equivalents increasing due to excess liquidity, and net growth in the investment securities portfolio. At September 30, 2021, loans held for investment (net of deferred fees and costs) totaled $13.1 billion, including $466.6 million in PPP loans, a decrease of $558.3 million or 16.2% (annualized) from June 30, 2021, and average loans at September 30, 2021 decreased $520.3 million or 14.8% (annualized) from the prior quarter. Excluding the effects of the PPP(1), loans held for investment (net of deferred fees and costs) at September 30, 2021 decreased $165.6 million or 5.1% (annualized) from June 30, 2021, and average loans decreased $19.9 million or 0.6% (annualized) from the prior quarter. Loans held for investment (net of deferred fees and costs) decreased $1.2 billion or 8.6% from September 30, 2020, while quarterly average loans decreased $907.0 million or 6.3% from the same period in the prior year. Excluding the effects of the PPP(1), loans held for investment (net of deferred fees and costs) at September 30, 2021 decreased $109.7 million or 0.9% from the same period in the prior year, and quarterly average loans during the third quarter of 2021 increased $44.0 million or 0.3% from the same period in the prior year. In addition to an insignificant amount of PPP loan payoffs, the Company processed $391.8 million(*) of loan forgiveness on 3,000 PPP loans(*) during the third quarter of 2021, compared to $705.0 million(*) of loan forgiveness on 5,000 PPP loans(*) during the second quarter of 2021. At September 30, 2021, total deposits were $16.6 billion, a decrease of $37.1 million or approximately 0.9% (annualized) from June 30, 2021, and average deposits increased $217.6 million or 5.2% (annualized) from the prior quarter. Deposits at September 30, 2021 increased $1.0 billion or 6.7% from September 30, 2020, and quarterly average deposits at September 30, 2021 increased $1.1 billion or 7.3% from the same period in the prior year. The increases in deposits from the prior year were primarily due to additional liquidity of bank customers due to higher levels of government assistance programs since the start of COVID. The following table shows the Company’s capital ratios at the quarters ended: September 30, June 30, September 30, 2021 2021 2020 Common equity Tier 1 capital ratio (2) 10.37 % 10.56 % 10.05 % Tier 1 capital ratio (2) 11.49 % 11.68 % 11.18 % Total capital ratio (2) 13.78 % 14.05 % 13.93 % Leverage ratio (Tier 1 capital to average assets) (2) 8.97 % 9.20 % 8.82 % Common equity to total assets 12.68 % 12.91 % 12.52 % Tangible common equity to tangible assets (1) 8.16 % 8.40 % 7.91 % _________________________ During the third quarter of 2021, the Company declared and paid cash dividends of $0.28 per common share, consistent with the second quarter of 2021, and an increase of $0.03, or approximately 12.0%, compared to the third quarter of 2020. During the third quarter of 2021, the Company also declared and paid a quarterly dividend on the outstanding shares of Series A Preferred Stock of $171.88 per share (equivalent to $0.43 per outstanding depositary share). On May 4, 2021, the Company’s Board of Directors authorized the Repurchase Program to purchase up to $125 million worth of the Company’s common stock in open market transactions or privately negotiated transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and/or Rule 10b-18 under the Exchange Act. The Repurchase Program was due to expire on June 30, 2022 and replaced the prior repurchase program that was due to expire on June 30, 2021. As part of the Repurchase Program, 1.1 million shares (or $42.3 million) were repurchased during the quarter ended June 30, 2021, and 2.3 million shares (or $82.7 million) were repurchased during the quarter ended September 30, 2021, fully utilizing the repurchase authorization under the Repurchase Program. ______________________________ (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. (2) All ratios at September 30, 2021 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed. (*) Number and amount of PPP loans processed for forgiveness are rounded and approximate values 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 130 branches and approximately 150 ATMs located throughout Virginia, and in portions of Maryland and North Carolina. Certain non-bank financial services affiliates of Atlantic Union Bank include: Atlantic Union Equipment Finance, Inc., which provides equipment financing; Dixon, Hubard, Feinour & Brown, Inc., which provides investment advisory services; Atlantic Union Financial Consultants, LLC, which provides brokerage services; and Union Insurance Group, LLC, which offers various lines of insurance products. THIRD QUARTER 2021 EARNINGS RELEASE CONFERENCE CALL The Company will hold a conference call and webcast for analysts on Monday, October 25, 2021 at 9:00 a.m. Eastern Time during which management will review the third quarter 2021 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 1236699. Management will conduct a listen-only webcast with accompanying slides, which can be found at: https://edge.media-server.com/mmc/p/zze37wck. 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 as of and for the periods ended September 30, 2021, 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 the effects of or changes in: 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; the quality or composition of the loan or investment portfolios and changes therein; demand for loan products and financial services in the Company’s market area; the Company’s ability to manage its growth or implement its growth strategy; the effectiveness of expense reduction plans; the introduction of new lines of business or new products and services; the Company’s ability to recruit and retain key employees; the incremental cost and/or decreased revenues associated with exceeding $10 billion in assets; real estate values in the Bank’s lending area; an insufficient ACL; changes in accounting principles; the Company’s liquidity and capital positions; concentrations of loans secured by real estate, particularly commercial real estate; the effectiveness of the Company’s credit processes and management of the Company’s credit risk; the Company’s ability to compete in the market for financial services and increased competition from fintech companies; technological risks and developments, and cyber threats, attacks, or events; 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 supply chains and methods used to distribute 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; the effect of steps the Company takes in response to COVID-19, the severity and duration of the pandemic, the uncertainty regarding new variants of COVID-19 that have emerged, the speed and efficacy of vaccine and treatment developments, 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; the discontinuation of LIBOR and its impact on the financial markets, and the Company’s ability to manage operational, legal and compliance risks related to the discontinuation of LIBOR and implementation of one or more alternate reference rates, performance by the Company’s counterparties or vendors; deposit flows; 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, as amended by the CAA, 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, as amended by the CAA; 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, 2020 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 09/30/21 06/30/21 09/30/20 09/30/21 09/30/20 Results of Operations (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Interest and dividend income $ 146,379 $ 150,852 $ 157,414 $ 444,904 $ 491,607 Interest expense 8,891 10,304 20,033 31,970 81,913 Net interest income 137,488 140,548 137,381 412,934 409,694 Provision for credit losses (18,850 ) (27,414 ) 6,558 (59,888 ) 100,954 Net interest income after provision for credit losses 156,338 167,962 130,823 472,822 308,740 Noninterest income 29,938 28,466 34,407 89,388 99,245 Noninterest expenses 95,343 91,971 93,222 299,251 291,681 Income before income taxes 90,933 104,457 72,008 262,959 116,304 Income tax expense 16,368 19,073 11,008 46,821 17,506 Net income 74,565 85,384 61,000 216,138 98,798 Dividends on preferred stock 2,967 2,967 2,691 8,901 2,691 Net income available to common shareholders $ 71,598 $ 82,417 $ 58,309 $ 207,237 $ 96,107 Interest earned on earning assets (FTE) (1) $ 149,543 $ 153,996 $ 160,315 $ 454,265 $ 500,069 Net interest income (FTE) (1) 140,652 143,692 140,282 422,295 418,156 Total revenue (FTE) (1) 170,590 172,158 174,689 511,683 517,401 Pre-tax pre-provision adjusted operating earnings (8) 72,074 77,043 78,548 217,679 217,040 Key Ratios Earnings per common share, diluted $ 0.94 $ 1.05 $ 0.74 $ 2.66 $ 1.22 Return on average assets (ROA) 1.47 % 1.72 % 1.23 % 1.45 % 0.70 % Return on average equity (ROE) 10.88 % 12.46 % 9.16 % 10.59 % 5.19 % Return on average tangible common equity (ROTCE) (2) (3) 18.79 % 21.44 % 16.49 % 18.31 % 9.64 % Efficiency ratio 56.95 % 54.42 % 54.27 % 59.57 % 57.31 % Net interest margin 3.05 % 3.15 % 3.08 % 3.10 % 3.26 % Net interest margin (FTE) (1) 3.12 % 3.23 % 3.14 % 3.17 % 3.32 % Yields on earning assets (FTE) (1) 3.31 % 3.46 % 3.59 % 3.41 % 3.97 % Cost of interest-bearing liabilities 0.30 % 0.35 % 0.64 % 0.36 % 0.90 % Cost of deposits 0.14 % 0.18 % 0.39 % 0.18 % 0.58 % Cost of funds 0.19 % 0.23 % 0.45 % 0.24 % 0.65 % Operating Measures (4) Adjusted operating earnings $ 74,558 $ 85,384 $ 60,986 $ 227,678 $ 98,626 Adjusted operating earnings available to common shareholders 71,591 82,417 58,295 218,777 95,935 Adjusted operating earnings per common share, diluted $ 0.94 $ 1.05 $ 0.74 $ 2.80 $ 1.22 Adjusted operating ROA 1.47 % 1.72 % 1.23 % 1.53 % 0.70 % Adjusted operating ROE 10.88 % 12.46 % 9.16 % 11.16 % 5.18 % Adjusted operating ROTCE (2) (3) 18.79 % 21.44 % 16.49 % 19.29 % 9.63 % Adjusted operating efficiency ratio (FTE) (1)(7) 53.91 % 51.35 % 51.05 % 53.53 % 53.01 % Per Share Data Earnings per common share, basic $ 0.94 $ 1.05 $ 0.74 $ 2.66 $ 1.22 Earnings per common share, diluted 0.94 1.05 0.74 2.66 1.22 Cash dividends paid per common share 0.28 0.28 0.25 0.81 0.75 Market value per share 36.85 36.22 21.37 36.85 21.37 Book value per common share 33.60 33.30 31.86 33.60 31.86 Tangible book value per common share (2) 20.55 20.59 19.13 20.55 19.13 Price to earnings ratio, diluted 9.88 8.60 7.26 10.36 13.11 Price to book value per common share ratio 1.10 1.09 0.67 1.10 0.67 Price to tangible book value per common share ratio (2) 1.79 1.76 1.12 1.79 1.12 Weighted average common shares outstanding, basic 76,309,355 78,819,697 78,714,353 77,988,151 78,904,792 Weighted average common shares outstanding, diluted 76,322,736 78,848,724 78,725,346 78,007,543 78,921,108 Common shares outstanding at end of period 75,645,031 77,928,948 78,718,850 75,645,031 78,718,850 As of & For Three Months Ended As of & For Nine Months Ended 09/30/21 06/30/21 09/30/20 09/30/21 09/30/20 Capital Ratios (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Common equity Tier 1 capital ratio (5) 10.37 % 10.56 % 10.05 % 10.37 % 10.05 % Tier 1 capital ratio (5) 11.49 % 11.68 % 11.18 % 11.49 % 11.18 % Total capital ratio (5) 13.78 % 14.05 % 13.93 % 13.78 % 13.93 % Leverage ratio (Tier 1 capital to average assets) (5) 8.97 % 9.20 % 8.82 % 8.97 % 8.82 % Common equity to total assets 12.68 % 12.91 % 12.52 % 12.68 % 12.52 % Tangible common equity to tangible assets (2) 8.16 % 8.40 % 7.91 % 8.16 % 7.91 % Financial Condition Assets $ 19,935,657 $ 19,989,356 $ 19,930,650 $ 19,935,657 $ 19,930,650 Loans held for investment (net of deferred fees and costs) 13,139,586 13,697,929 14,383,215 13,139,586 14,383,215 Securities 3,807,723 3,491,669 3,102,217 3,807,723 3,102,217 Earning Assets 17,795,784 17,824,283 17,885,975 17,795,784 17,885,975 Goodwill 935,560 935,560 935,560 935,560 935,560 Amortizable intangibles, net 46,537 49,917 61,068 46,537 61,068 Deposits 16,622,160 16,659,219 15,576,098 16,622,160 15,576,098 Borrowings 385,765 380,079 1,314,322 385,765 1,314,322 Stockholders' equity 2,694,439 2,747,597 2,660,885 2,694,439 2,660,885 Tangible common equity (2) 1,545,985 1,595,763 1,497,900 1,545,985 1,497,900 Loans held for investment, net of deferred fees and costs Construction and land development $ 877,351 $ 838,722 $ 1,207,190 $ 877,351 $ 1,207,190 Commercial real estate - owner occupied 2,027,299 2,069,658 2,107,333 2,027,299 2,107,333 Commercial real estate - non-owner occupied 3,730,720 3,712,607 3,497,929 3,730,720 3,497,929 Multifamily real estate 776,287 860,081 731,582 776,287 731,582 Commercial & Industrial 2,580,190 2,990,622 3,536,249 2,580,190 3,536,249 Residential 1-4 Family - Commercial 624,347 637,485 696,944 624,347 696,944 Residential 1-4 Family - Consumer 822,971 823,355 830,144 822,971 830,144 Residential 1-4 Family - Revolving 557,803 559,014 618,320 557,803 618,320 Auto 425,436 411,073 387,417 425,436 387,417 Consumer 182,039 195,036 276,023 182,039 276,023 Other Commercial 535,143 600,276 494,084 535,143 494,084 Total loans held for investment $ 13,139,586 $ 13,697,929 $ 14,383,215 $ 13,139,586 $ 14,383,215 Deposits NOW accounts $ 4,016,505 $ 3,777,540 $ 3,460,480 $ 4,016,505 $ 3,460,480 Money market accounts 4,152,986 4,450,724 4,269,696 4,152,986 4,269,696 Savings accounts 1,079,735 1,032,171 861,685 1,079,735 861,685 Time deposits of $250,000 and over 546,199 566,180 633,252 546,199 633,252 Other time deposits 1,497,897 1,610,032 1,930,320 1,497,897 1,930,320 Time deposits 2,044,096 2,176,212 2,563,572 2,044,096 2,563,572 Total interest-bearing deposits $ 11,293,322 $ 11,436,647 $ 11,155,433 $ 11,293,322 $ 11,155,433 Demand deposits 5,328,838 5,222,572 4,420,665 5,328,838 4,420,665 Total deposits $ 16,622,160 $ 16,659,219 $ 15,576,098 $ 16,622,160 $ 15,576,098 Averages Assets $ 20,056,570 $ 19,922,978 $ 19,785,167 $ 19,890,155 $ 18,837,580 Loans held for investment (net of deferred fees and costs) 13,451,674 13,971,939 14,358,666 13,827,002 13,639,401 Loans held for sale 30,035 36,790 45,201 43,162 50,902 Securities 3,679,977 3,420,329 2,891,210 3,438,285 2,721,161 Earning assets 17,910,389 17,868,938 17,748,152 17,824,607 16,809,423 Deposits 16,718,144 16,500,541 15,580,469 16,433,470 14,632,709 Time deposits 2,109,131 2,270,217 2,579,991 2,288,530 2,667,267 Interest-bearing deposits 11,512,825 11,446,768 11,260,244 11,483,654 10,875,752 Borrowings 395,984 399,855 1,183,839 456,184 1,324,457 Interest-bearing liabilities 11,908,809 11,846,623 12,444,083 11,939,838 12,200,209 Stockholders' equity 2,718,032 2,747,864 2,648,777 2,728,605 2,541,856 Tangible common equity (2) 1,567,937 1,594,311 1,483,848 1,574,961 1,469,918 As of & For Three Months Ended As of & For Nine Months Ended 09/30/21 06/30/21 09/30/20 09/30/21 09/30/20 Asset Quality (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Allowance for Credit Losses (ACL) Beginning balance, Allowance for loan and lease losses (ALLL) $ 118,261 $ 142,911 $ 169,977 $ 160,540 $ 42,294 Add: Day 1 impact from adoption of CECL — — — — 47,484 Add: Recoveries 2,153 1,876 1,566 6,498 5,137 Less: Charge-offs 2,266 1,945 2,978 7,852 14,806 Add: Provision for loan losses (16,350 ) (24,581 ) 5,557 (57,388 ) 94,013 Ending balance, ALLL $ 101,798 $ 118,261 $ 174,122 $ 101,798 $ 174,122 Beginning balance, Reserve for unfunded commitment (RUC) $ 10,000 $ 12,833 $ 11,000 $ 10,000 $ 900 Add: Day 1 impact from adoption of CECL — — — — 4,160 Add: Provision for unfunded commitments (2,500 ) (2,833 ) 1,000 (2,500 ) 6,940 Ending balance, RUC $ 7,500 $ 10,000 $ 12,000 $ 7,500 $ 12,000 Total ACL $ 109,298 $ 128,261 $ 186,122 $ 109,298 $ 186,122 ACL / total outstanding loans 0.83 % 0.94 % 1.29 % 0.83 % 1.29 % ACL / total adjusted loans(9) 0.86 % 1.00 % 1.46 % 0.86 % 1.46 % ALLL / total outstanding loans 0.77 % 0.86 % 1.21 % 0.77 % 1.21 % ALLL / total adjusted loans(9) 0.80 % 0.92 % 1.36 % 0.80 % 1.36 % Net charge-offs / total average loans 0.00 % 0.00 % 0.04 % 0.01 % 0.09 % Net charge-offs / total adjusted average loans(9) 0.00 % 0.00 % 0.04 % 0.01 % 0.11 % Provision for loan losses/ total average loans (0.48 % (0.71 )% 0.15 % (0.55 )% 0.92 % Provision for loan losses/ total adjusted average loans(9) (0.51 % (0.77 )% 0.17 % (0.60 )% 1.03 % ` Nonperforming Assets (6) Construction and land development $ 2,710 $ 2,685 $ 3,520 $ 2,710 $ 3,520 Commercial real estate - owner occupied 7,786 6,969 9,267 7,786 9,267 Commercial real estate - non-owner occupied 4,174 3,026 1,992 4,174 1,992 Multifamily real estate 113 113 33 113 33 Commercial & Industrial 2,062 1,908 1,592 2,062 1,592 Residential 1-4 Family - Commercial 2,445 4,200 5,743 2,445 5,743 Residential 1-4 Family - Consumer 12,150 13,489 12,620 12,150 12,620 Residential 1-4 Family - Revolving 3,723 3,726 3,664 3,723 3,664 Auto 255 179 517 255 517 Consumer 54 104 75 54 75 Nonaccrual loans $ 35,472 $ 36,399 $ 39,023 $ 35,472 $ 39,023 Foreclosed property 1,696 1,696 4,159 1,696 4,159 Total nonperforming assets (NPAs) $ 37,168 $ 38,095 $ 43,182 $ 37,168 $ 43,182 Construction and land development $ 304 $ 186 $ 93 $ 304 $ 93 Commercial real estate - owner occupied 1,886 2,276 1,726 1,886 1,726 Commercial real estate - non-owner occupied 1,175 827 168 1,175 168 Multifamily real estate — — 359 — 359 Commercial & Industrial 1,256 1,088 604 1,256 604 Residential 1-4 Family - Commercial 1,091 759 5,298 1,091 5,298 Residential 1-4 Family - Consumer 2,462 2,725 4,495 2,462 4,495 Residential 1-4 Family - Revolving 2,474 561 2,276 2,474 2,276 Auto 209 168 315 209 315 Consumer 173 156 327 173 327 Loans ≥ 90 days and still accruing $ 11,030 $ 8,746 $ 15,661 $ 11,030 $ 15,661 Total NPAs and loans ≥ 90 days $ 48,198 $ 46,841 $ 58,843 $ 48,198 $ 58,843 NPAs / total outstanding loans 0.28 % 0.28 % 0.30 % 0.28 % 0.30 % NPAs / total adjusted loans(9) 0.29 % 0.30 % 0.34 % 0.29 % 0.34 % NPAs / total assets 0.19 % 0.19 % 0.22 % 0.19 % 0.22 % ALLL / nonaccrual loans 286.98 % 324.90 % 446.20 % 286.98 % 446.20 % ALLL/ nonperforming assets 273.89 % 310.44 % 403.23 % 273.89 % 403.23 % As of & For Three Months Ended As of & For Nine Months Ended 09/30/21 06/30/21 09/30/20 09/30/21 09/30/20 Past Due Detail (6) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Construction and land development $ 744 $ 798 $ 2,625 $ 744 $ 2,625 Commercial real estate - owner occupied 735 1,450 4,924 735 4,924 Commercial real estate - non-owner occupied 1,302 1,501 1,291 1,302 1,291 Multifamily real estate — 156 — — — Commercial & Industrial 11,089 948 4,322 11,089 4,322 Residential 1-4 Family - Commercial 807 710 1,236 807 1,236 Residential 1-4 Family - Consumer 406 764 2,998 406 2,998 Residential 1-4 Family - Revolving 1,092 919 2,669 1,092 2,669 Auto 1,548 1,333 1,513 1,548 1,513 Consumer 790 545 1,020 790 1,020 Other Commercial 631 375 613 631 613 Loans 30-59 days past due $ 19,144 $ 9,499 $ 23,211 $ 19,144 $ 23,211 Construction and land development $ 58 $ 310 $ 223 $ 58 $ 223 Commercial real estate - owner occupied 61 2,008 1,310 61 1,310 Commercial real estate - non-owner occupied 570 78 1,371 570 1,371 Commercial & Industrial 3,328 1,733 1,448 3,328 1,448 Residential 1-4 Family - Commercial 698 565 937 698 937 Residential 1-4 Family - Consumer 2,188 992 3,976 2,188 3,976 Residential 1-4 Family - Revolving 587 678 1,141 587 1,141 Auto 202 165 453 202 453 Consumer 317 297 772 317 772 Other Commercial 600 — 427 600 427 Loans 60-89 days past due $ 8,609 $ 6,826 $ 12,058 $ 8,609 $ 12,058 Past Due and still accruing $ 38,783 $ 25,071 $ 50,930 $ 38,783 $ 50,930 Past Due and still accruing / total loans 0.30 % 0.18 % 0.35 % 0.30 % 0.35 % Troubled Debt Restructurings Performing $ 11,335 $ 13,053 $ 14,515 $ 11,335 $ 14,515 Nonperforming 7,365 6,231 7,045 7,365 7,045 Total troubled debt restructurings $ 18,700 $ 19,284 $ 21,560 $ 18,700 $ 21,560 Alternative Performance Measures (non-GAAP) Net interest income (FTE) (1) Net interest income (GAAP) $ 137,488 $ 140,548 $ 137,381 $ 412,934 $ 409,694 FTE adjustment 3,164 3,144 2,901 9,361 8,462 Net interest income (FTE) (non-GAAP) $ 140,652 $ 143,692 $ 140,282 $ 422,295 $ 418,156 Noninterest income (GAAP) 29,938 28,466 34,407 89,388 99,245 Total revenue (FTE) (non-GAAP) $ 170,590 $ 172,158 $ 174,689 $ 511,683 $ 517,401 Average earning assets $ 17,910,389 $ 17,868,938 $ 17,748,152 $ 17,824,607 $ 16,809,423 Net interest margin 3.05 % 3.15 % 3.08 % 3.10 % 3.26 % Net interest margin (FTE) 3.12 % 3.23 % 3.14 % 3.17 % 3.32 % Tangible Assets (2) Ending assets (GAAP) $ 19,935,657 $ 19,989,356 $ 19,930,650 $ 19,935,657 $ 19,930,650 Less: Ending goodwill 935,560 935,560 935,560 935,560 935,560 Less: Ending amortizable intangibles 46,537 49,917 61,068 46,537 61,068 Ending tangible assets (non-GAAP) $ 18,953,560 $ 19,003,879 $ 18,934,022 $ 18,953,560 $ 18,934,022 Tangible Common Equity (2) Ending equity (GAAP) $ 2,694,439 $ 2,747,597 $ 2,660,885 $ 2,694,439 $ 2,660,885 Less: Ending goodwill 935,560 935,560 935,560 935,560 935,560 Less: Ending amortizable intangibles 46,537 49,917 61,068 46,537 61,068 Less: Perpetual preferred stock 166,357 166,357 166,357 166,357 166,357 Ending tangible common equity (non-GAAP) $ 1,545,985 $ 1,595,763 $ 1,497,900 $ 1,545,985 $ 1,497,900 Average equity (GAAP) $ 2,718,032 $ 2,747,864 $ 2,648,777 $ 2,728,605 $ 2,541,856 Less: Average goodwill 935,560 935,560 935,560 935,560 935,560 Less: Average amortizable intangibles 48,179 51,637 63,016 51,728 67,130 Less: Average perpetual preferred stock 166,356 166,356 166,353 166,356 69,248 Average tangible common equity (non-GAAP) $ 1,567,937 $ 1,594,311 $ 1,483,848 $ 1,574,961 $ 1,469,918 ROTCE (2)(3) Net income available to common shareholders (GAAP) $ 71,598 $ 82,417 $ 58,309 $ 207,237 $ 96,107 Plus: Amortization of intangibles, tax effected 2,671 2,819 3,202 8,436 10,014 Net income available to common shareholders before amortization of intangibles (non-GAAP) $ 74,269 $ 85,236 $ 61,511 $ 215,673 $ 106,121 Return on average tangible common equity (ROTCE) 18.79 % 21.44 % 16.49 % 18.31 % 9.64 % As of & For Three Months Ended As of & For Nine Months Ended 09/30/21 06/30/21 09/30/20 09/30/21 09/30/20 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Operating Measures (4) Net income (GAAP) $ 74,565 $ 85,384 $ 61,000 $ 216,138 $ 98,798 Plus: Net loss related to balance sheet repositioning, net of tax — — — 11,609 9,539 Less: Gain on sale of securities, net of tax 7 — 14 69 9,711 Adjusted operating earnings (non-GAAP) 74,558 85,384 60,986 227,678 98,626 Less: Dividends on preferred stock 2,967 2,967 2,691 8,901 2,691 Adjusted operating earnings available to common shareholders (non-GAAP) $ 71,591 $ 82,417 $ 58,295 $ 218,777 $ 95,935 Noninterest expense (GAAP) $ 95,343 $ 91,971 $ 93,222 $ 299,251 $ 291,681 Less: Amortization of intangible assets 3,381 3,568 4,053 10,679 12,676 Less: Losses related to balance sheet repositioning — — — 14,695 10,306 Adjusted operating noninterest expense (non-GAAP) $ 91,962 $ 88,403 $ 89,169 $ 273,877 $ 268,699 Noninterest income (GAAP) $ 29,938 $ 28,466 $ 34,407 $ 89,388 $ 99,245 Plus: Losses related to balance sheet repositioning — — — — (1,769 ) Less: Gain on sale of securities 9 — 18 87 12,293 Adjusted operating noninterest income (non-GAAP) $ 29,929 $ 28,466 $ 34,389 $ 89,301 $ 88,721 Net interest income (FTE) (non-GAAP) (1) $ 140,652 $ 143,692 $ 140,282 $ 422,295 $ 418,156 Adjusted operating noninterest income (non-GAAP) 29,929 28,466 34,389 89,301 88,721 Total adjusted revenue (FTE) (non-GAAP) (1) $ 170,581 $ 172,158 $ 174,671 $ 511,596 $ 506,877 Efficiency ratio 56.95 % 54.42 % 54.27 % 59.57 % 57.31 % Adjusted operating efficiency ratio (FTE) (1)(7) 53.91 % 51.35 % 51.05 % 53.53 % 53.01 % Operating ROTCE (2)(3)(4) Adjusted operating earnings available to common shareholders (non-GAAP) $ 71,591 $ 82,417 $ 58,295 $ 218,777 $ 95,935 Plus: Amortization of intangibles, tax effected 2,671 2,819 3,202 8,436 10,014 Adjusted operating earnings available to common shareholders before amortization of intangibles (non-GAAP) $ 74,262 $ 85,236 $ 61,497 $ 227,213 $ 105,949 Average tangible common equity (non-GAAP) $ 1,567,937 $ 1,594,311 $ 1,483,848 $ 1,574,961 $ 1,469,918 Adjusted operating return on average tangible common equity (non-GAAP) 18.79 % 21.44 % 16.49 % 19.29 % 9.63 % Pre-tax pre-provision adjusted operating earnings (8) Net income (GAAP) $ 74,565 $ 85,384 $ 61,000 $ 216,138 $ 98,798 Plus: Provision for credit losses (18,850 ) (27,414 ) 6,558 (59,888 ) 100,954 Plus: Income tax expense 16,368 19,073 11,008 46,821 17,506 Plus: Net loss related to balance sheet repositioning — — — 14,695 12,075 Less: Gain on sale of securities 9 — 18 87 12,293 Pre-tax pre-provision adjusted operating earnings (non-GAAP) $ 72,074 $ 77,043 $ 78,548 $ 217,679 $ 217,040 Weighted average common shares outstanding, diluted 76,322,736 78,848,724 78,725,346 78,007,543 78,921,108 Pre-tax pre-provision earnings per share, diluted $ 0.94 $ 0.98 $ 1.00 $ 2.79 $ 2.75 Adjusted Loans (9) Loans held for investment (net of deferred fees and costs) (GAAP) $ 13,139,586 $ 13,697,929 $ 14,383,215 $ 13,139,586 $ 14,383,215 Less: PPP adjustments (net of deferred fees and costs) 466,609 859,386 1,600,577 466,609 1,600,577 Total adjusted loans (non-GAAP) $ 12,672,977 $ 12,838,543 $ 12,782,638 $ 12,672,977 $ 12,782,638 Average loans held for investment (net of deferred fees and costs) (GAAP) $ 13,451,674 $ 13,971,939 $ 14,358,666 $ 13,827,002 $ 13,639,401 Less: Average PPP adjustments (net of deferred fees and costs) 687,259 1,187,641 1,638,204 1,059,130 1,457,091 Total adjusted average loans (non-GAAP) $ 12,764,415 $ 12,784,298 $ 12,720,462 $ 12,767,872 $ 12,182,310 As of & For Three Months Ended As of & For Nine Months Ended 09/30/21 06/30/21 09/30/20 09/30/21 09/30/20 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Mortgage Origination Held for Sale Volume (10) Refinance Volume $ 49,154 $ 73,330 $ 125,571 $ 241,401 $ 303,995 Purchase Volume 93,819 88,747 96,010 250,523 210,691 Total Mortgage loan originations held for sale $ 142,973 $ 162,077 $ 221,581 $ 491,924 $ 514,686 % of originations held for sale that are refinances 34.4 % 45.2 % 56.7 % 49.1 % 59.1 % Wealth Assets under management (AUM) $ 6,377,518 $ 6,396,010 $ 5,455,268 $ 6,377,518 $ 5,455,268 Other Data End of period full-time employees 1,918 1,884 1,883 1,918 1,883 Number of full-service branches 130 129 135 130 135 Number of automatic transaction machines (ATMs) 149 149 157 149 157 (1) These are non-GAAP financial measures. Net interest income (FTE) and total adjusted revenue (FTE), which are used in computing net interest margin (FTE) and adjusted 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 assets and tangible common equity are used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible assets, 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. Adjusted operating measures exclude the gains or losses related to balance sheet repositioning (principally composed of gains and losses on debt extinguishment) and gains or losses on sale of securities. The Company believes these non-GAAP adjusted measures provide investors with important information about the combined economic results of the organization’s operations. (5) All ratios at September 30, 2021 are estimates and subject to change pending the Company’s filing of its FR Y9‑C. All other periods are presented as filed. (6) These balances reflect the impact of the CARES Act and the Joint Guidance, which provides relief for TDR designations and also provides guidance on past due reporting for modified loans. (7) The adjusted operating efficiency ratio (FTE) excludes the amortization of intangible assets, the gain on sale of securities and gains or losses related to balance sheet repositioning (principally composed of gains and losses on debt extinguishment). 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 adjusted measure provides investors with important information about the combined economic results of the organization’s operations. (8) This is a non-GAAP financial measure. Pre-tax pre-provision adjusted earnings excludes the provision for credit losses, which can fluctuate significantly from period-to-period under the CECL methodology, income tax expense, gains or losses related to balance sheet repositioning (principally composed of gains and losses on debt extinguishment), and gains or losses on sale of securities. The Company believes this adjusted measure provides investors with important information about 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 2020 and 2021. 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. (10) Periods ended September 30, 2020 have been restated to adjust for certain mortgage loans held for investment that were previously included. ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) September 30, December 31, September 30, 2021 2020 2020 ASSETS (unaudited) (audited) (unaudited) Cash and cash equivalents: Cash and due from banks $ 255,648 $ 172,307 $ 178,563 Interest-bearing deposits in other banks 807,225 318,974 335,111 Federal funds sold 377 2,013 7,292 Total cash and cash equivalents 1,063,250 493,294 520,966 Securities available for sale, at fair value 3,195,176 2,540,419 2,443,340 Securities held to maturity, at carrying value 535,722 544,851 546,661 Restricted stock, at cost 76,825 94,782 112,216 Loans held for sale, at fair value 35,417 96,742 52,607 Loans held for investment, net of deferred fees and costs 13,139,586 14,021,314 14,383,215 Less allowance for loan and lease losses 101,798 160,540 174,122 Total loans held for investment, net 13,037,788 13,860,774 14,209,093 Premises and equipment, net 159,588 163,829 156,934 Goodwill 935,560 935,560 935,560 Amortizable intangibles, net 46,537 57,185 61,068 Bank owned life insurance 430,341 326,892 325,538 Other assets 419,453 514,121 566,667 Total assets $ 19,935,657 $ 19,628,449 $ 19,930,650 LIABILITIES Noninterest-bearing demand deposits $ 5,328,838 $ 4,368,703 $ 4,420,665 Interest-bearing deposits 11,293,322 11,354,062 11,155,433 Total deposits 16,622,160 15,722,765 15,576,098 Securities sold under agreements to repurchase 95,181 100,888 91,086 Other short-term borrowings — 250,000 175,200 Long-term borrowings 290,584 489,829 1,048,036 Other liabilities 233,293 356,477 379,345 Total liabilities 17,241,218 16,919,959 17,269,765 Commitments and contingencies STOCKHOLDERS' EQUITY Preferred stock, $10.00 par value 173 173 173 Common stock, $1.33 par value 100,062 104,169 104,141 Additional paid-in capital 1,804,617 1,917,081 1,914,640 Retained earnings 760,164 616,052 579,269 Accumulated other comprehensive income (loss) 29,423 71,015 62,662 Total stockholders' equity 2,694,439 2,708,490 2,660,885 Total liabilities and stockholders' equity $ 19,935,657 $ 19,628,449 $ 19,930,650 Common shares outstanding 75,645,031 78,729,212 78,718,850 Common shares authorized 200,000,000 200,000,000 200,000,000 Preferred shares outstanding 17,250 17,250 17,250 Preferred shares authorized 500,000 500,000 500,000 ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Dollars in thousands, except share data) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2021 2021 2020 2021 2020 Interest and dividend income: Interest and fees on loans $ 124,999 $ 130,570 $ 138,402 $ 383,575 $ 432,763 Interest on deposits in other banks 291 86 137 454 1,154 Interest and dividends on securities: Taxable 11,230 10,519 10,275 32,102 33,170 Nontaxable 9,859 9,677 8,600 28,773 24,520 Total interest and dividend income 146,379 150,852 157,414 444,904 491,607 Interest expense: Interest on deposits 5,837 7,238 15,568 22,203 63,943 Interest on short-term borrowings 22 21 72 91 1,598 Interest on long-term borrowings 3,032 3,045 4,393 9,676 16,372 Total interest expense 8,891 10,304 20,033 31,970 81,913 Net interest income 137,488 140,548 137,381 412,934 409,694 Provision for credit losses (18,850 ) (27,414 ) 6,558 (59,888 ) 100,954 Net interest income after provision for credit losses 156,338 167,962 130,823 472,822 308,740 Noninterest income: Service charges on deposit accounts 7,198 6,607 6,041 19,314 18,549 Other service charges, commissions and fees 1,534 1,735 1,621 4,970 4,600 Interchange fees 2,203 2,203 1,979 6,252 5,300 Fiduciary and asset management fees 7,029 6,819 6,045 20,323 17,543 Mortgage banking income 4,818 4,619 8,897 17,692 16,744 Gains on securities transactions 9 — 18 87 12,293 Bank owned life insurance income 2,727 3,209 3,421 8,202 7,498 Loan-related interest rate swap fees 1,102 1,321 3,170 4,176 12,602 Other operating income 3,318 1,953 3,215 8,372 4,116 Total noninterest income 29,938 28,466 34,407 89,388 99,245 Noninterest expenses: Salaries and benefits 53,534 50,766 49,000 156,959 149,013 Occupancy expenses 7,251 7,140 7,441 21,705 21,798 Furniture and equipment expenses 4,040 3,911 3,895 11,919 11,042 Technology and data processing 7,534 7,219 6,564 21,657 19,187 Professional services 3,792 4,408 2,914 13,161 9,211 Marketing and advertising expense 2,548 2,738 2,631 7,330 7,413 FDIC assessment premiums and other insurance 2,172 2,319 1,811 6,798 7,578 Other taxes 4,432 4,435 4,124 13,303 12,364 Loan-related expenses 1,503 1,909 2,314 5,289 7,512 Amortization of intangible assets 3,381 3,568 4,053 10,679 12,676 Loss on debt extinguishment — — — 14,695 10,306 Other expenses 5,156 3,558 8,475 15,756 23,581 Total noninterest expenses 95,343 91,971 93,222 299,251 291,681 Income before income taxes 90,933 104,457 72,008 262,959 116,304 Income tax expense 16,368 19,073 11,008 46,821 17,506 Net income $ 74,565 $ 85,384 $ 61,000 216,138 98,798 Dividends on preferred stock 2,967 2,967 2,691 8,901 2,691 Net income available to common shareholders $ 71,598 $ 82,417 $ 58,309 $ 207,237 $ 96,107 Basic earnings per common share $ 0.94 $ 1.05 $ 0.74 $ 2.66 $ 1.22 Diluted earnings per common share $ 0.94 $ 1.05 $ 0.74 $ 2.66 $ 1.22 AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS) For the Quarter Ended September 30, 2021 June 30, 2021 Average Balance Interest Income / Expense (1) Yield / Rate (1)(2) Average Balance Interest Income / Expense (1) Yield / Rate (1)(2) (unaudited) (unaudited) Assets: Securities: Taxable $ 2,248,478 $ 11,230 1.98 % $ 2,028,637 $ 10,519 2.08 % Tax-exempt 1,431,499 12,480 3.46 % 1,391,692 12,249 3.53 % Total securities 3,679,977 23,710 2.56 % 3,420,329 22,768 2.67 % Loans, net (3) (4) 13,451,674 125,290 3.70 % 13,971,939 130,840 3.76 % Other earning assets 778,738 543 0.28 % 476,670 388 0.33 % Total earning assets 17,910,389 $ 149,543 3.31 % 17,868,938 $ 153,996 3.46 % Allowance for loan and lease losses (117,414 ) (137,997 ) Total non-earning assets 2,263,595 2,192,037 Total assets $ 20,056,570 $ 19,922,978 Liabilities and Stockholders' Equity: Interest-bearing deposits: Transaction and money market accounts $ 8,345,410 $ 1,501 0.07 % $ 8,159,890 $ 1,809 0.09 % Regular savings 1,058,284 55 0.02 % 1,016,661 55 0.02 % Time deposits (5) 2,109,131 4,281 0.81 % 2,270,217 5,374 0.95 % Total interest-bearing deposits 11,512,825 5,837 0.20 % 11,446,768 7,238 0.25 % Other borrowings (6) 395,984 3,054 3.06 % 399,855 3,066 3.08 % Total interest-bearing liabilities 11,908,809 $ 8,891 0.30 % 11,846,623 $ 10,304 0.35 % Noninterest-bearing liabilities: Demand deposits 5,205,319 5,053,773 Other liabilities 224,410 274,718 Total liabilities 17,338,538 17,175,114 Stockholders' equity 2,718,032 2,747,864 Total liabilities and stockholders' equity $ 20,056,570 $ 19,922,978 Net interest income $ 140,652 $ 143,692 Interest rate spread 3.01 % 3.11 % Cost of funds 0.19 % 0.23 % Net interest margin 3.12 % 3.23 % (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 $4.2 million and $4.1 million for the three months ended September 30, 2021 and June 30, 2021, respectively, in accretion of the fair market value adjustments related to acquisitions. (5) Interest expense on time deposits includes amortization of $8,000 for the three months ended September 30, 2021 and accretion of $12,000 for the three months ended June 30, 2021, for the fair market value adjustments related to acquisitions. (6) Interest expense on borrowings includes $203,000 and $202,000 for the three months ended September 30, 2021 and June 30, 2021, in amortization of the fair market value adjustments related to acquisitions. Contact: Robert M. Gorman - (804) 523‑7828 Executive Vice President / Chief Financial Officer Source: Atlantic Union Bank Released October 25, 2021 Email Alerts Contacts RSS News Feed ©2021 Atlantic Union Bankshares Corporation. All Rights Reserved. Privacy Policy Disclaimer Sitemap