Atlantic Union Bankshares' Assets Soar Post-Merger, Credit Provisions Rise

TL;DR

AUB-PA's massive asset growth from recent mergers is overshadowed by surging credit loss provisions and integration costs, making it a risky bet despite increased scale.

AI Summary

Atlantic Union Bankshares Corp (AUB-PA) reported a net income of $92.14 million for the three months ended September 30, 2025, an increase from $76.415 million in the same period of 2024. For the nine months, net income rose to $161.749 million from $151.346 million year-over-year. Total assets significantly increased to $37.07 billion as of September 30, 2025, up from $24.58 billion at December 31, 2024, primarily driven by the acquisitions of Sandy Spring Bancorp, Inc. on April 1, 2025, and American National Bankshares Inc. on April 1, 2024. Loans held for investment, net, surged to $27.07 billion from $18.29 billion, while total deposits grew to $30.67 billion from $20.40 billion. The provision for credit losses dramatically increased to $139.578 million for the nine months ended September 30, 2025, compared to $32.592 million in the prior year, reflecting the expanded loan portfolio and potential credit quality concerns. Merger-related costs also spiked to $118.652 million for the nine-month period, up from $33.005 million, impacting profitability. Diluted EPS decreased to $0.63 for the quarter and $1.22 for the nine months, down from $0.82 and $1.68 respectively, due to increased share count from acquisitions.

Why It Matters

This filing reveals Atlantic Union Bankshares' aggressive growth strategy through acquisitions, significantly expanding its asset base and market footprint. While net income increased, the substantial rise in provision for credit losses and merger-related costs signals potential integration challenges and heightened risk, which could impact future profitability and investor returns. For employees, these mergers often bring restructuring and uncertainty. Customers might see changes in services or branch networks as the bank consolidates operations. In the competitive banking landscape, this expansion positions Atlantic Union Bankshares as a larger regional player, but successful integration and risk management will be crucial for long-term value creation.

Risk Assessment

Risk Level: high — The risk level is high due to the significant increase in the provision for credit losses, which jumped from $32.592 million in the nine months ended September 30, 2024, to $139.578 million for the same period in 2025. This substantial increase, coupled with $118.652 million in merger-related costs for the nine months, indicates potential integration difficulties and heightened credit risk within the expanded loan portfolio.

Analyst Insight

Investors should exercise caution and closely monitor AUB-PA's credit quality metrics and integration progress in upcoming quarters. While the asset growth is impressive, the rising provision for credit losses suggests potential headwinds. Consider waiting for clearer signs of successful integration and stabilization of credit costs before making a significant investment.

Financial Highlights

debt To Equity

Not specified

revenue

Not specified

operating Margin

Not specified

total Assets

$37,072,733,000

total Debt

$860,312,000

net Income

$161,749,000

eps

$1.22

gross Margin

Not specified

cash Position

$794,665,000

revenue Growth

Not specified

Revenue Breakdown

Key Numbers

• $92.14M — Net Income (Q3 2025) (Increased from $76.415M in Q3 2024)
• $161.75M — Net Income (9M 2025) (Increased from $151.346M in 9M 2024)
• $37.07B — Total Assets (Sep 30, 2025) (Increased from $24.58B at Dec 31, 2024, due to acquisitions)
• $27.07B — Loans Held for Investment, Net (Sep 30, 2025) (Increased from $18.29B at Dec 31, 2024)
• $30.67B — Total Deposits (Sep 30, 2025) (Increased from $20.40B at Dec 31, 2024)
• $139.58M — Provision for Credit Losses (9M 2025) (Significantly increased from $32.592M in 9M 2024)
• $118.65M — Merger-Related Costs (9M 2025) (Increased from $33.005M in 9M 2024)
• $0.63 — Diluted EPS (Q3 2025) (Decreased from $0.82 in Q3 2024)
• $1.22 — Diluted EPS (9M 2025) (Decreased from $1.68 in 9M 2024)
• 141,732,071 — Common Shares Outstanding (Sep 30, 2025) (Increased from 89,770,231 at Dec 31, 2024, due to acquisitions)

Key Players & Entities

• Atlantic Union Bankshares Corporation (company) — registrant
• Sandy Spring Bancorp, Inc. (company) — acquired company on April 1, 2025
• American National Bankshares Inc. (company) — acquired company on April 1, 2024
• Morgan Stanley & Co. LLC (company) — forward purchaser in forward sale agreements
• $92.14 million (dollar_amount) — net income for three months ended September 30, 2025
• $161.749 million (dollar_amount) — net income for nine months ended September 30, 2025
• $37.07 billion (dollar_amount) — total assets as of September 30, 2025
• $139.578 million (dollar_amount) — provision for credit losses for nine months ended September 30, 2025
• $118.652 million (dollar_amount) — merger-related costs for nine months ended September 30, 2025

FAQ

Risk Factors

• Credit Risk and Loan Portfolio Quality [high — financial]: The provision for credit losses dramatically increased to $139.58 million for the nine months ended September 30, 2025, from $32.59 million in the prior year. This reflects the expanded loan portfolio, which grew from $18.29 billion to $27.07 billion, and suggests potential concerns about the credit quality of new or existing loans.
• Integration and Merger-Related Costs [medium — operational]: Merger-related costs surged to $118.65 million for the nine-month period, up from $33.00 million in the prior year. These costs, associated with the acquisitions of Sandy Spring Bancorp and American National Bankshares, can impact short-term profitability and operational efficiency during the integration phase.
• Dilution of Earnings Per Share [medium — financial]: Diluted EPS decreased to $0.63 for Q3 2025 and $1.22 for the nine months, down from $0.82 and $1.68 respectively. This dilution is attributed to an increased share count from 89.77 million to 141.73 million, a direct result of the shares issued for acquisitions.
• Interest Rate Sensitivity [medium — market]: While not explicitly detailed as a risk in the excerpt, the significant increase in interest income from loans and deposits suggests sensitivity to interest rate movements. Changes in rates can impact net interest margin and the valuation of securities.
• Deposit Growth and Funding Costs [medium — financial]: Total deposits grew substantially to $30.67 billion from $20.40 billion. Managing the cost of these deposits and ensuring stable funding sources, especially in a potentially rising rate environment, is crucial for maintaining profitability.

Industry Context

Atlantic Union Bankshares operates in a highly competitive banking sector, characterized by ongoing consolidation and the need for scale to compete effectively. The industry is sensitive to interest rate fluctuations, regulatory changes, and technological advancements. Recent acquisitions by AUB suggest a strategy to gain market share and operational efficiencies in a consolidating landscape.

Regulatory Implications

As a financial institution, AUB is subject to stringent regulatory oversight from bodies like the Federal Reserve and FDIC. Increased asset size and complexity post-acquisitions heighten compliance burdens and scrutiny regarding capital adequacy, risk management, and consumer protection. The significant increase in provisions for credit losses may also attract regulatory attention.

What Investors Should Do

1. Monitor credit quality trends closely.
2. Evaluate the success of post-acquisition integration.
3. Analyze net interest margin (NIM) trends.
4. Assess the impact of increased share count on valuation.

Key Dates

• 2024-04-01: Acquisition of American National Bankshares Inc. — Significantly expanded the company's asset base and loan portfolio, contributing to growth in subsequent periods.
• 2025-04-01: Acquisition of Sandy Spring Bancorp, Inc. — Further increased total assets and loan volume, driving the substantial growth observed in the current reporting period.
• 2025-09-30: End of Q3 2025 — Reporting date for the 10-Q, showing substantial asset growth and increased provisions for credit losses.

Glossary

Provision for credit losses

An expense set aside by a financial institution to cover potential losses from loans that may default. It reflects an estimate of uncollectible loans. (The significant increase in this provision ($139.58M in 9M 2025 vs $32.59M in 9M 2024) highlights potential concerns about the credit quality of the expanded loan portfolio.)

Merger-related costs

Expenses incurred by a company during the process of acquiring or merging with another company. These can include legal, accounting, and integration expenses. (The spike in these costs ($118.65M in 9M 2025 vs $33.00M in 9M 2024) directly impacted profitability due to recent acquisitions.)

Diluted EPS

Earnings per share calculated by dividing net income by the total number of outstanding common shares, including all dilutive potential common shares (like stock options and convertible securities). (The decrease in Diluted EPS ($0.63 in Q3 2025 vs $0.82 in Q3 2024) is a key indicator of shareholder value dilution due to an increased share count from acquisitions.)

Loans held for investment, net

The total value of loans originated by the bank that are intended to be held until maturity, net of any allowance for loan and lease losses. (This metric shows significant growth ($27.07B in Sep 30, 2025 vs $18.29B in Dec 31, 2024), reflecting the expanded lending capacity post-acquisitions.)

Goodwill

An intangible asset that arises when one company acquires another for a price greater than the fair market value of its net assets. It represents brand reputation, customer loyalty, etc. (The substantial increase in Goodwill ($1.73B in Sep 30, 2025 vs $1.21B in Dec 31, 2024) is a direct result of the acquisitions, indicating a significant premium paid over the net assets acquired.)

Year-Over-Year Comparison

Compared to the prior year's filing (presumably for the period ending September 30, 2024), Atlantic Union Bankshares has seen a significant expansion in its balance sheet, with total assets growing from $24.58 billion to $37.07 billion, primarily due to acquisitions. While net income has seen a modest increase, diluted EPS has declined due to a higher share count. The company has also significantly increased its provision for credit losses and merger-related costs, indicating the financial impact of its recent strategic growth initiatives.

Key Financial Figures

• $1.33 — ch registered Common Stock, par value $1.33 per share AUB The New York Stock Ex
• $10,000 — stock, with a liquidation preference of $10,000 per share of Series A preferred stock (
• $25 — Series A preferred stock (equivalent to $25 per depositary share). " Series A prefe
• $10.00 — ve Preferred Stock, Series A, par value $10.00 per share. " Sandy Spring " refers to

Filing Documents

• aub-20250930x10q.htm (10-Q) — 9748KB
• aub-20250930xex3d2.htm (EX-3.2) — 193KB
• aub-20250930xex15d1.htm (EX-15.1) — 3KB
• aub-20250930xex31d1.htm (EX-31.1) — 12KB
• aub-20250930xex31d2.htm (EX-31.2) — 12KB
• aub-20250930xex32d1.htm (EX-32.1) — 13KB
• 0000883948-25-000108.txt ( ) — 39108KB
• aub-20250930.xsd (EX-101.SCH) — 100KB
• aub-20250930_cal.xml (EX-101.CAL) — 160KB
• aub-20250930_def.xml (EX-101.DEF) — 513KB
• aub-20250930_lab.xml (EX-101.LAB) — 873KB
• aub-20250930_pre.xml (EX-101.PRE) — 758KB
• aub-20250930x10q_htm.xml (XML) — 12166KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 (audited) 2 Consolidated Statements of Income (unaudited) for the three and nine months ended September 30, 2025 and 2024 3 Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and nine months ended September 30, 2025 and 2024 4 Consolidated Statements of Changes in Stockholders' Equity (unaudited) for the nine months ended September 30, 2025 and 2024 5 Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2025 and 2024 7

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 9 Report of Independent Registered Public Accounting Firm 53 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 54 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 88 Item 4.

Controls and Procedures

Controls and Procedures 91

- OTHER INFORMATION

PART II - OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 91 Item 1A.

Risk Factors

Risk Factors 92 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 92 Item 5. Other Information 93 Item 6. Exhibits 94

Signatures

Signatures 95 Table of Contents Glossary of Acronyms and Defined Terms In this Quarterly Report on Form 10-Q, except as otherwise indicated or the context suggests otherwise, references to the " Company " refers to Atlantic Union Bankshares Corporation, a Virginia corporation, and the terms " we ", " us " and " our " refer to the Company and its direct and indirect subsidiaries, including Atlantic Union Bank, which we refer to as the " Bank ." The " Federal Reserve " refers to the Board of Governors of the Federal Reserve System, our primary federal regulator. " Our common stock " refers to the Company's common stock, par value $1.33 per share, and the term " depositary shares " means the Company's depositary shares, each representing a 1/400th ownership interest in a share of the Company's Series A preferred stock, with a liquidation preference of $10,000 per share of Series A preferred stock (equivalent to $25 per depositary share). " Series A preferred stock " refers to the Company's 6.875% Perpetual Non-Cumulative Preferred Stock, Series A, par value $10.00 per share. " Sandy Spring " refers to Sandy Spring Bancorp, Inc., which we acquired on April 1, 2025, pursuant to the Agreement and Plan of Merger dated October 21, 2024, by and between the Company and Sandy Spring, which we refer to as the " Sandy Spring merger agreement . " " American National " refers to American National Bankshares Inc., which we acquired on April 1, 2024, pursuant to the Agreement and Plan of Merger dated July 24, 2023, by and between the Company and American National. The " Forward Sale Agreements " refers to the forward sale agreements between the Company and Morgan Stanley & Co. LLC, as forward purchaser (the " Forward Purchaser "), each dated as of October 21, 2024, in connection with which the Forward Purchaser or its affiliate borrowed from third parties an aggregate of 11,338,028 shares of our common stock for sale in a registered public offering. ACL – Allow

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

– FINANCIAL STATEMENTS

ITEM 1 – FINANCIAL STATEMENTS ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2025 AND DECEMBER 31, 2024 (Dollars in thousands, except share data) September 30, December 31, 2025 2024 ASSETS (unaudited) (audited) Cash and cash equivalents: Cash and due from banks $ 342,490 $ 196,435 Interest-bearing deposits in other banks 447,323 153,695 Federal funds sold 4,852 3,944 Total cash and cash equivalents 794,665 354,074 Securities available for sale, at fair value 4,267,523 2,442,166 Securities held to maturity, at carrying value 883,786 803,851 Restricted stock, at cost 159,320 102,954 Loans held for sale 24,772 9,420 Loans held for investment, net of deferred fees and costs 27,361,173 18,470,621 Less: allowance for loan and lease losses 293,035 178,644 Total loans held for investment, net 27,068,138 18,291,977 Premises and equipment, net 168,315 112,704 Goodwill 1,726,386 1,214,053 Amortizable intangibles, net 333,236 84,563 Bank owned life insurance 669,102 493,396 Other assets 977,490 676,165 Total assets $ 37,072,733 $ 24,585,323 LIABILITIES Noninterest-bearing demand deposits $ 7,104,642 $ 4,277,048 Interest-bearing deposits 23,560,682 16,120,571 Total deposits 30,665,324 20,397,619 Securities sold under agreements to repurchase 91,630 56,275 Other short-term borrowings — 60,000 Long-term borrowings 768,682 418,303 Other liabilities 630,039 510,247 Total liabilities 32,155,675 21,442,444 Commitments and contingencies (Note 8) STOCKHOLDERS' EQUITY Preferred stock, $ 10.00 par value 173 173 Common stock, $ 1.33 par value 188,504 118,519 Additional paid-in capital 3,882,830 2,280,547 Retained earnings 1,128,659 1,103,326 Accumulated other comprehensive loss ( 283,108 ) ( 359,686 ) Total stockholders'

View Full Filing

View this 10-Q filing on SEC EDGAR