• Atlantic Union Bankshares Reports Third Quarter Results

    Source: Nasdaq GlobeNewswire / 25 Oct 2021 07:30:01   America/New_York

    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


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