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Atlantic Union Bankshares Reports Fourth Quarter and Full Year Results

/EIN News/ -- RICHMOND, Va., Jan. 21, 2020 (GLOBE NEWSWIRE) -- Atlantic Union Bankshares Corporation (the “Company” or “Atlantic Union”) (Nasdaq: AUB) today reported net income of $55.8 million and earnings per share of $0.69 for its fourth quarter ended December 31, 2019. Net operating earnings(1) were $57.3 million and operating earnings per share(1) were $0.71 for its fourth quarter ended December 31, 2019; these operating results exclude $709,000 in after-tax merger and $713,000 in after-tax rebranding-related costs.

Net income was $193.5 million and earnings per share were $2.41 for the year ended December 31, 2019. Net operating earnings(1) were $220.9 million and operating earnings per share(1) were $2.75 for the year ended December 31, 2019; these operating results exclude $22.3 million in after-tax merger and $5.1 million in after-tax rebranding-related costs but include after tax losses from discontinued operations of $170,000 and approximately $1.0 million in after-tax expenses related to branch closure costs.

Atlantic Union closed out an eventful 2019 with a solid fourth quarter - continuing to execute on our strategic plan and further improving performance against our key financial metrics despite the challenging interest rate environment,” said John C. Asbury, CEO of Atlantic Union Bankshares.  “As we begin 2020 we continue to believe we have a great opportunity before us to create something uniquely valuable for our shareholders and the communities we serve and remain keenly focused on reaching the full potential of this powerful franchise.”

Select highlights for the fourth quarter of 2019

  • Return on Average Assets (“ROA”) was 1.27% compared to 1.23% in the third quarter of 2019. Operating ROA(1) was 1.30% compared to 1.29% in the third quarter of 2019.
  • Return on Average Equity (“ROE”) was 8.81% compared to 8.35% in the third quarter of 2019. Operating ROE(1) was 9.03% compared to 8.80% in the third quarter of 2019.
  • Operating Return on Average Tangible Common Equity (“ROTCE”)(1) was 16.01% compared to 15.64% in the third quarter of 2019.
  • Efficiency ratio improved to 57.40% from 60.47% in the third quarter of 2019. Operating efficiency ratio (FTE)(1) improved to 52.65% from 55.12% in the third quarter of 2019.

Select highlights for the full year 2019

  • ROA was 1.15% compared to 1.11% for the year ended 2018. Operating ROA(1) was 1.31% compared to 1.35% for the year ended 2018.
  • ROE was 7.89% compared to 7.85% for the year ended 2018. Operating ROE(1) was 9.01% compared to 9.57% for the year ended 2018.
  • Operating ROTCE(1) was 16.14% compared to 17.35% for the year ended 2018.
  • Efficiency ratio improved to 62.37% from 63.62% for the year ended 2018. Operating efficiency ratio (FTE)(1) increased to 53.61% from 52.90% for the year ended 2018.

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

NET INTEREST INCOME

For the fourth quarter of 2019, net interest income was $135.1 million, a decrease of $1.5 million from the third quarter of 2019. Net interest income (FTE)(1) was $137.8 million in the fourth quarter of 2019, a decrease of $1.6 million from the third quarter of 2019. The decreases in both net interest income and net interest income (FTE) were primarily driven by lower earning asset yields during the three months ended December 31, 2019 compared to the three months ended September 30, 2019. The fourth quarter net interest margin decreased 9 basis points to 3.48% from 3.57% in the previous quarter, while the net interest margin (FTE)(1) decreased 9 basis points to 3.55% from 3.64% during the same periods. The decreases in the net interest margin and net interest margin (FTE) were principally due to an 18 basis point decrease in the yield on earning assets, partially offset by a 9 basis point decrease in the cost of funds.

The Company’s net interest margin (FTE) includes the impact of acquisition accounting fair value adjustments. During the fourth quarter of 2019, net accretion related to acquisition accounting increased $1.5 million from the prior quarter to $6.6 million for the quarter ended December 31, 2019. The third and fourth quarters of 2019, 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 September 30, 2019   $ 5,018   $ 179     $ (97 )   $ 5,100
For the quarter ended December 31, 2019     6,612     148       (123 )     6,637
For the year ended December 31, 2019     24,846     833       (360 )     25,319
For the years ending (estimated): (2)                        
2020     14,253     132       (633 )     13,752
2021     10,823     14       (807 )     10,030
2022     8,911     (43 )     (829 )     8,039
2023     6,302     (32 )     (852 )     5,418
2024     4,817     (4 )     (877 )     3,936
Thereafter     20,084     (1 )     (10,773 )     9,310

ASSET QUALITY/LOAN LOSS PROVISION

Overview

During the fourth quarter of 2019, the Company experienced decreases in nonperforming assets (“NPA”) primarily due to nonaccrual customer payments and sales of foreclosed properties. Past due loan levels as a percentage of total loans held for investment at December 31, 2019 were higher than past due loan levels at September 30, 2019 and down from past due loan levels at December 31, 2018. The increase in past due loans from the prior quarter was primarily driven by a seasonal increase related to residential 1-4 family – consumer loans that were 30 days past due as of year-end of which the majority subsequently became current. Net charge-off levels decreased from the third quarter of 2019 and were primarily related to the third party consumer loan portfolio; as a result, the provision for loan losses decreased from the third quarter of 2019.

All nonaccrual and past due loan metrics discussed below exclude purchased credit impaired (“PCI”) loans totaling $86.7 million (net of fair value mark of $18.2 million) at December 31, 2019.


(1) For a reconciliation of this non-GAAP financial measure, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.
(2) Estimated loan accretion presented is prior to the adoption of Accounting Standard Codification (ASC) 326 – Financial Instruments – Credit Losses (CECL).

Nonperforming Assets

At December 31, 2019, NPAs totaled $32.9 million, a decrease of $3.5 million or 9.6%, from September 30, 2019 and a decrease of $735,000 or 2.2%, from December 31, 2018. NPAs as a percentage of total outstanding loans at December 31, 2019 were 0.26%, a decline of 4 basis points from 0.30% at September 30, 2019 and a decline of 9 basis points from 0.35% at December 31, 2018. As the Company’s NPAs have been at or near historic lows over the last several quarters, certain changes from quarter to quarter might stand out in comparison to one another but do not have a significant impact on the Company’s overall asset quality position.

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

                                         
    December 31,    September 30,    June 30,    March 31,    December 31, 
    2019   2019   2019   2019   2018
Nonaccrual loans   $  28,232     $  30,032     $  27,462     $  24,841     $  26,953  
Foreclosed properties      4,708        6,385        6,506        7,353        6,722  
Total nonperforming assets   $  32,940     $  36,417     $  33,968     $  32,194     $  33,675  
                                         

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

                               
    December 31,    September 30,    June 30,    March 31,    December 31, 
    2019     2019     2019     2019     2018  
Beginning Balance   $  30,032     $  27,462     $  24,841     $  26,953     $  28,110  
Net customer payments      (5,741 )      (3,612 )      (3,108 )      (2,314 )      (3,077 )
Additions      5,631        8,327        6,321        3,297        4,659  
Charge-offs      (1,690 )      (884 )      (592 )      (1,626 )      (2,069 )
Loans returning to accruing status      —        (1,103 )      —        (952 )      (420 )
Transfers to foreclosed property      —        (158 )      —        (517 )      (250 )
Ending Balance   $  28,232     $  30,032     $  27,462     $  24,841     $  26,953  
                                         

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

                               
    December 31,    September 30,    June 30,    March 31,    December 31, 
    2019     2019     2019     2019     2018  
Beginning Balance   $  6,385     $  6,506     $  7,353     $  6,722     $  6,800  
Additions of foreclosed property      62        645        271        900        432  
Valuation adjustments      (375 )      (62 )      (433 )      (51 )      (140 )
Proceeds from sales      (1,442 )      (737 )      (638 )      (171 )      (286 )
Gains (losses) from sales      78        33        (47 )      (47 )      (84 )
Ending Balance   $  4,708     $  6,385     $  6,506     $  7,353     $  6,722  
                                         

Past Due Loans

Past due loans still accruing interest totaled $76.6 million or 0.61% of total loans held for investment at December 31, 2019, compared to $55.1 million or 0.45% of total loans held for investment at September 30, 2019, and $61.9 million or 0.64% of total loans held for investment at December 31, 2018. Of the total past due loans still accruing interest $13.4 million or 0.11% of total loans held for investment were loans past due 90 days or more at December 31, 2019, compared to $12.0 million or 0.10% of total loans held for investment at September 30, 2019, and $8.9 million or 0.09% of total loans held for investment at December 31, 2018. The increase in past due loans was primarily driven by a seasonal increase related to residential 1-4 family - consumer loans that were 30 days past due as of year-end of which the majority subsequently became current.

Net Charge-offs

For the fourth quarter of 2019, net charge-offs were $4.6 million or 0.15% of total average loans on an annualized basis, compared to $7.7 million or 0.25% for the prior quarter, and $5.0 million or 0.21% for the fourth quarter last year. The majority of net charge-offs in the fourth quarter of 2019 were related to consumer loans. For the year ended December 31, 2019, net charge-offs were $20.9 million or 0.17% of total average loans compared to $11.1 million or 0.12%, for the year ended 2018.

Provision for Loan Losses

The provision for loan losses for the fourth quarter of 2019 was $3.1 million, a decrease of $6.0 million compared to the previous quarter and a decrease of $1.7 million compared to the fourth quarter in 2018. The decrease in the provision for loan losses from the previous quarter and from the prior year were primarily driven by lower levels of net charge-offs.

Allowance for Loan Losses (“ALL”)

The ALL decreased $1.5 million from September 30, 2019 to $42.3 million at December 31, 2019, primarily due to lower incurred losses embedded in the third party consumer portfolio as it continues to pay down and an improved economic environment, partially offset by loan growth during the quarter. The ALL as a percentage of the total loan portfolio was 0.34% at December 31, 2019, 0.36% at September 30, 2019, and 0.42% at December 31, 2018.

The ratio of the ALL to nonaccrual loans was 149.8% at December 31, 2019, compared to 145.9% at September 30, 2019 and 152.3% at December 31, 2018. The current level of the allowance for loan losses reflects specific reserves related to nonperforming loans, current risk ratings on loans, net charge-off activity, loan growth, delinquency trends, and other credit risk factors that the Company considers important in assessing the adequacy of the allowance for loan losses.

NONINTEREST INCOME

Noninterest income decreased $18.9 million to $29.2 million for the quarter ended December 31, 2019 from $48.1 million in the prior quarter. The decrease from prior quarter was primarily driven by approximately $9.3 million in life insurance proceeds received during the third quarter related to a Xenith-acquired loan that had been charged off prior to the Company’s acquisition of Xenith and a gain on sale of investment securities of approximately $7.1 million recorded during the third quarter. In addition, the fourth quarter noninterest income included a decline of approximately $2.0 million in loan related interest rate swap income due to lower transaction volumes and seasonally lower mortgage banking revenue of $685,000.

NONINTEREST EXPENSE

Noninterest expense decreased $17.4 million for the quarter ended December 31, 2019 from $111.7 million in the prior quarter. Excluding merger-related costs, amortization of intangible assets, and rebranding-related costs, operating noninterest expense(1) decreased $15.4 million or 14.9%, in the fourth quarter of 2019. The decrease in operating noninterest expense was primarily due to the recognition of approximately $16.4 million loss on debt extinguishment in the third quarter resulting from the repayment of approximately $140.0 million in FHLB advances and the termination of the related cash flow hedges. Salaries and benefits declined by $2.5 million, primarily due to lower incentive compensation expense and higher deferred costs related to new loan originations. These decreases were partially offset by increases in marketing expense of approximately $1.1 million, professional fees of $955,000 related to higher consulting costs, FDIC and other insurance expenses of $873,000 primarily due to a lower FDIC small bank assessment credit earned in the fourth quarter, and OREO and credit-related expense of approximately $542,000 due to OREO valuation adjustments driven by updated appraisals received during the quarter.  


(1) For a reconciliation of this non-GAAP financial measure, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results

INCOME TAXES

The effective tax rate for the three months ended December 31, 2019 was 16.7% compared to 16.8% for the three months ended September 30, 2019.

BALANCE SHEET

At December 31, 2019, total assets were $17.6 billion, an increase of $122.0 million, or approximately 2.8% (annualized), from September 30, 2019, and an increase of $3.8 billion, or approximately 27.6% from December 31, 2018. The increase in assets from the previous quarter was primarily due to loan growth during the fourth quarter of 2019. The increase from the prior year was primarily a result of the Access acquisition and loan growth.

At December 31, 2019, loans held for investment (net of deferred fees and costs) were $12.6 billion, an increase of $303.9 million, or 9.9% (annualized), from September 30, 2019, while average loans increased $87.4 million, or 2.9% (annualized), from the prior quarter. Loans held for investment increased $2.9 billion, or 29.8% from December 31, 2018, while quarterly average loans increased $2.8 billion, or 29.0% from the prior year. The increase from the prior year was primarily a result of the Access acquisition.

At December 31, 2019, total deposits were $13.3 billion, an increase of $260.3 million, or approximately 8.0% (annualized), from September 30, 2019, while average deposits increased $490.7 million, or 15.3% (annualized), from prior quarter.  Deposits increased $3.3 billion, or 33.4% from December 31, 2018, while quarterly average deposits increased $3.4 billion, or 33.7% from the prior year. The increase from the prior year was primarily a result of the Access acquisition.

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

               
    December 31,    September 30,    December 31,   
    2019   2019   2018  
Common equity Tier 1 capital ratio (2)    10.24  10.48  9.93 %
Tier 1 capital ratio (2)    10.24  10.48  11.09 %
Total capital ratio (2)    12.64  12.93  12.88 %
Leverage ratio (Tier 1 capital to average assets) (2)    8.79  8.94  9.71 %
Common equity to total assets    14.31  14.48  13.98 %
Tangible common equity to tangible assets (1)    9.08  9.23  8.84 %

(1) For a reconciliation of this non-GAAP financial measure, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results
(2) All ratios at December 31, 2019 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed.

During the fourth quarter of 2019, the Company declared and paid cash dividends of $0.25 per common share, consistent with the third quarter of 2019 and an increase of $0.02, or 8.7% compared to the fourth quarter of 2018. On July 10, 2019, the Company announced that its Board of Directors has authorized a share repurchase program to purchase up to $150 million of the Company’s common stock through June 30, 2021 in open market transactions or privately negotiated transactions. As of December 31, 2019, authority remained to repurchase approximately $70 million of the Company’s common stock.

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 149 branches and approximately 170 ATMs located throughout Virginia, and in portions of Maryland and North Carolina. Middleburg Financial is a brand name used by Atlantic Union Bank and certain affiliates when providing trust, wealth management, private banking, and investment advisory products and services. Certain non-bank affiliates of Atlantic Union Bank include: Old Dominion Capital Management, Inc., and its subsidiary, Outfitter Advisors, Ltd., Dixon, Hubard, Feinour, & Brown, Inc., and Middleburg Investment Services, LLC, which provide investment advisory and/or brokerage services; and Union Insurance Group, LLC, which offers various lines of insurance products.

FOURTH QUARTER AND FULL YEAR 2019 EARNINGS RELEASE CONFERENCE CALL

Atlantic Union Bank will hold a conference call on Tuesday, January 21, 2020 at 9:00 a.m. Eastern Time during which management will review the fourth quarter and full year 2019 financial results and provide an update on recent activities. Interested parties may participate in the call toll-free by dialing (877) 668‑4908; international callers wishing to participate may do so by dialing (973) 453‑3058. The conference ID number is 2394624.

NON-GAAP FINANCIAL MEASURES

In reporting the results of the quarter and full year ended December 31, 2019, the Company has provided supplemental performance measures on a tax-equivalent, tangible, or operating 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 include, without limitation, 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 that may cause actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Forward-looking statements are often accompanied by words that convey projected future events or outcomes such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” or words of similar meaning or other statements concerning opinions or judgment of the Company and its management about future events. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of, or trends affecting, the Company will not differ materially from any projected future results, performance, or achievements expressed or implied by such forward-looking statements. Actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to:

  • changes in interest rates;
  • general economic and financial market conditions in the United States generally and particularly in the markets in which the Company operates and which its loans are concentrated, including the effects of declines in real estate values, an increase in unemployment levels, and slowdowns in economic growth;
  • the Company’s ability to manage its growth or implement its growth strategy;
  • the introduction of new lines of business or new products and services;
  • the possibility that any of the anticipated benefits of the acquisition of Access will not be realized or will not be realized within the expected time period, the expected revenue synergies and cost savings from the acquisition may not be fully realized or realized within the expected time frame, revenues following the acquisition may be lower than expected, or customer and employee relationships and business operations may be disrupted by the acquisition;
  • 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 allowance for loan losses;
  • the quality or composition of the loan or investment portfolios;
  • 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;
  • demand for loan products and financial services in the Company’s market area;
  • the Company’s ability to compete in the market for financial services;
  • technological risks and developments, and cyber threats, attacks, or events;
  • 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;
  • 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, 2018 and comparable “Risk Factors” sections of the Company’s Quarterly Reports on Form 10‑Q and related disclosures in other filings, which have been filed with the SEC and are available on the SEC’s website at www.sec.gov. All of the forward-looking statements made in this press release are expressly qualified by the cautionary statements contained or referred to herein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on the Company or its businesses or operations. Readers are cautioned not to rely too heavily on the forward-looking statements contained in this press release. Forward-looking statements speak only as of the date they are made and the Company does not undertake any obligation to update, revise or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.


ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(Dollars in thousands, except share data)

                                 
    As of & For Three Months Ended   As of & For Year Ended  
    12/31/19   09/30/19   12/31/18   12/31/19   12/31/18  
Results of Operations   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)  
Interest and dividend income   $ 174,211     $ 178,345   $ 140,636     $ 699,332     $ 528,788    
Interest expense     39,081       41,744     31,547       161,460       102,097    
Net interest income     135,130       136,601     109,089       537,872       426,691    
Provision for credit losses     2,900       9,100     4,725       21,092       13,736    
Net interest income after provision for credit losses     132,230       127,501     104,364       516,780       412,955    
Noninterest income     29,193       48,106     23,487       132,815       104,241    
Noninterest expenses     94,318       111,687     74,533       418,340       337,767    
Income before income taxes     67,105       63,920     53,318       231,255       179,429    
Income tax expense     11,227       10,724     9,041       37,557       30,016    
Income from continuing operations     55,878       53,196     44,277       193,698       149,413    
Discontinued operations, net of tax     (42 )     42     (192 )     (170 )     (3,165 )  
Net income   $ 55,836     $ 53,238   $ 44,085     $ 193,528     $ 146,248    
                                 
Interest earned on earning assets (FTE) (1)   $ 176,868     $ 181,149   $ 142,970     $ 710,453     $ 536,981    
Net interest income (FTE) (1)     137,787       139,405     111,424       548,993       434,884    
                                 
Key Ratios                                
Earnings per common share, diluted   $ 0.69     $ 0.65   $ 0.67     $ 2.41     $ 2.22    
Return on average assets (ROA)     1.27   %   1.23 %   1.29   %   1.15   %   1.11   %
Return on average equity (ROE)     8.81   %   8.35 %   9.21   %   7.89   %   7.85   %
Efficiency ratio     57.40   %   60.47 %   56.22   %   62.37   %   63.62   %
Net interest margin     3.48   %   3.57 %   3.62   %   3.61   %   3.67   %
Net interest margin (FTE) (1)     3.55   %   3.64 %   3.70   %   3.69   %   3.74   %
Yields on earning assets (FTE) (1)     4.55   %   4.73 %   4.74   %   4.77   %   4.62   %
Cost of interest-bearing liabilities     1.33   %   1.45 %   1.34   %   1.43   %   1.12   %
Cost of deposits     0.92   %   0.95 %   0.76   %   0.92   %   0.61   %
Cost of funds     1.00   %   1.09 %   1.04   %   1.08   %   0.88   %
                                 
Operating Measures (4)                                
Net operating earnings   $ 57,258     $ 56,057   $ 46,248     $ 220,923     $ 178,313    
Operating earnings per share, diluted   $ 0.71     $ 0.69   $ 0.70     $ 2.75     $ 2.71    
Operating ROA     1.30   %   1.29 %   1.36   %   1.31   %   1.35   %
Operating ROE     9.03   %   8.80 %   9.66   %   9.01   %   9.57   %
Operating ROTCE (2) (3)     16.01   %   15.64 %   17.18   %   16.14   %   17.35   %
Operating efficiency ratio (FTE) (1)(6)     52.65   %   55.12 %   51.34   %   53.61   %   52.90   %
                                 
Per Share Data                                
Earnings per common share, basic   $ 0.69     $ 0.65   $ 0.67     $ 2.41     $ 2.22    
Earnings per common share, diluted     0.69       0.65     0.67       2.41       2.22    
Cash dividends paid per common share     0.25       0.25     0.23       0.96       0.88    
Market value per share     37.55       37.25     28.23       37.55       28.23    
Book value per common share     31.58       31.29     29.34       31.58       29.34    
Tangible book value per common share (2)     18.90       18.80     17.51       18.90       17.51    
Price to earnings ratio, diluted     13.72       14.44     10.62       15.58       12.72    
Price to book value per common share ratio     1.19       1.19     0.96       1.19       0.96    
Price to tangible book value per common share ratio (2)     1.99       1.98     1.61       1.99       1.61    
Weighted average common shares outstanding, basic     80,439,007       81,769,193     65,982,304       80,200,950       65,859,165    
Weighted average common shares outstanding, diluted     80,502,269       81,832,868     66,013,326       80,263,557       65,908,573    
Common shares outstanding at end of period     80,001,185       81,147,896     65,977,149       80,001,185       65,977,149    


                                 
    As of & For Three Months Ended   As of & For Year Ended  
    12/31/19   09/30/19   12/31/18   12/31/19   12/31/18  
Capital Ratios   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)  
Common equity Tier 1 capital ratio (5)     10.24 %   10.48 %   9.93 %   10.24 %   9.93 %
Tier 1 capital ratio (5)     10.24 %   10.48 %   11.09 %   10.24 %   11.09 %
Total capital ratio (5)     12.64 %   12.93 %   12.88 %   12.64 %   12.88 %
Leverage ratio (Tier 1 capital to average assets) (5)     8.79 %   8.94 %   9.71 %   8.79 %   9.71 %
Common equity to total assets     14.31 %   14.48 %   13.98 %   14.31 %   13.98 %
Tangible common equity to tangible assets (2)     9.08 %   9.23 %   8.84 %   9.08 %   8.84 %
                                 
Financial Condition                                
Assets   $ 17,562,990   $ 17,441,035   $ 13,765,599   $ 17,562,990   $ 13,765,599  
Loans held for investment     12,610,936     12,306,997     9,716,207     12,610,936     9,716,207  
Securities     2,631,437     2,607,748     2,391,695     2,631,437     2,391,695  
Earning Assets     15,576,208     15,365,753     12,202,023     15,576,208     12,202,023  
Goodwill     935,560     929,815     727,168     935,560     727,168  
Amortizable intangibles, net     73,669     78,241     48,685     73,669     48,685  
Deposits     13,304,981     13,044,712     9,970,960     13,304,981     9,970,960  
Borrowings     1,513,748     1,549,181     1,756,278     1,513,748     1,756,278  
Stockholders' equity     2,513,102     2,525,031     1,924,581     2,513,102     1,924,581  
Tangible common equity (2)     1,503,873     1,516,975     1,148,728     1,503,873     1,148,728  
                                 
Loans held for investment, net of deferred fees and costs                                
Construction and land development   $ 1,250,924   $ 1,201,149   $ 1,194,821   $ 1,250,924   $ 1,194,821  
Commercial real estate - owner occupied     2,041,243     1,979,052     1,337,345     2,041,243     1,337,345  
Commercial real estate - non-owner occupied     3,286,098     3,198,580     2,467,410     3,286,098     2,467,410  
Multifamily real estate     633,743     659,946     548,231     633,743     548,231  
Commercial & Industrial     2,114,033     2,058,133     1,317,135     2,114,033     1,317,135  
Residential 1-4 Family - Commercial     724,337     721,185     640,419     724,337     640,419  
Residential 1-4 Family - Consumer     890,503     913,245     673,909     890,503     673,909  
Residential 1-4 Family - Revolving     659,504     660,963     613,383     659,504     613,383  
Auto     350,419     328,456     301,943     350,419     301,943  
Consumer     372,853     386,848     379,694     372,853     379,694  
Other Commercial     287,279     199,440     241,917     287,279     241,917  
Total loans held for investment   $ 12,610,936   $ 12,306,997   $ 9,716,207   $ 12,610,936   $ 9,716,207  
                                 
Deposits                                
NOW accounts   $ 2,905,713   $ 2,515,777   $ 2,288,523   $ 2,905,713   $ 2,288,523  
Money market accounts     3,951,856     3,737,426     2,875,301     3,951,856     2,875,301  
Savings accounts     727,847     739,505     622,823     727,847     622,823  
Time deposits of $250,000 and over     684,797     717,090     292,224     684,797     292,224  
Other time deposits     2,064,628     2,179,740     1,797,482     2,064,628     1,797,482  
Time deposits     2,749,425     2,896,830     2,089,706     2,749,425     2,089,706  
Total interest-bearing deposits   $ 10,334,841   $ 9,889,538   $ 7,876,353   $ 10,334,841   $ 7,876,353  
Demand deposits     2,970,140     3,155,174     2,094,607     2,970,140     2,094,607  
Total deposits   $ 13,304,981   $ 13,044,712   $ 9,970,960   $ 13,304,981   $ 9,970,960  
                                 
Averages                                
Assets   $ 17,437,552   $ 17,203,328   $ 13,538,160   $ 16,840,310   $ 13,181,609  
Loans held for investment     12,327,692     12,240,254     9,557,160     11,949,171     9,584,785  
Loans held for sale     75,038     75,558         53,390     21,085  
Securities     2,608,942     2,660,270     2,340,051     2,663,184     1,877,018  
Earning assets     15,418,605     15,191,792     11,961,234     14,881,142     11,620,893  
Deposits     13,302,955     12,812,211     9,951,983     12,515,552     9,717,663  
Time deposits     2,847,366     2,769,574     2,083,270     2,627,987     2,078,073  
Interest-bearing deposits     10,265,986     9,803,624     7,789,642     9,624,396     7,617,174  
Borrowings     1,369,035     1,623,681     1,575,173     1,656,426     1,489,542  
Interest-bearing liabilities     11,635,021     11,427,305     9,364,815     11,280,822     9,106,716  
Stockholders' equity     2,515,303     2,528,435     1,899,249     2,451,435     1,863,216  
Tangible common equity (2)     1,509,001     1,517,400     1,121,788     1,459,509     1,086,272  


                                 
    As of & For Three Months Ended   As of & For Year Ended  
    12/31/19   09/30/19   12/31/18   12/31/19   12/31/18  
Asset Quality   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)  
Allowance for Loan Losses (ALL)                                
Beginning balance   $  43,820   $  42,463   $  41,294     $  41,045   $  38,208    
Add: Recoveries      2,292      1,574      1,086        7,232      5,168    
Less: Charge-offs      6,918      9,317      6,131        28,108      16,230    
Add: Provision for loan losses      3,100      9,100      4,800        22,125      14,084    
Add: Provision for loan losses included in discontinued operations      —      —      (4 )      —      (185 )  
Ending balance   $  42,294   $  43,820   $  41,045     $  42,294   $  41,045    
                                 
ALL / total outstanding loans     0.34   0.36   0.42   %   0.34   0.42   %
Net charge-offs / total average loans     0.15   0.25   0.21   %   0.17   0.12   %
Provision / total average loans     0.10   0.29   0.20   %   0.19   0.15   %
                                 
Total PCI loans, net of fair value mark   $  86,681   $  89,735   $  90,221     $  86,681   $  90,221    
Remaining fair value mark on purchased performing loans      50,067      54,067      30,281        50,067      30,281    
                                 
Nonperforming Assets                                
Construction and land development   $  3,703   $  7,785   $  8,018     $  3,703   $  8,018    
Commercial real estate - owner occupied      6,003      5,684      3,636        6,003      3,636    
Commercial real estate - non-owner occupied      381      381      1,789        381      1,789    
Commercial & Industrial      1,735      1,585      1,524        1,735      1,524    
Residential 1-4 Family - Commercial      4,301      3,879      2,481        4,301      2,481    
Residential 1-4 Family - Consumer      9,292      8,292      7,276        9,292      7,276    
Residential 1-4 Family - Revolving      2,080      1,641      1,518        2,080      1,518    
Auto      563      604      576        563      576    
Consumer and all other      174      181      135        174      135    
Nonaccrual loans   $  28,232   $  30,032   $  26,953     $  28,232   $  26,953    
Foreclosed property      4,708      6,385      6,722        4,708      6,722    
Total nonperforming assets (NPAs)   $  32,940   $  36,417   $  33,675     $  32,940   $  33,675    
Construction and land development   $  189   $  171   $  180     $  189   $  180    
Commercial real estate - owner occupied      1,062      2,571      3,193        1,062      3,193    
Commercial real estate - non-owner occupied      1,451      36      —        1,451      —    
Multifamily real estate      474      1,212      —        474      —    
Commercial & Industrial      449      265      132        449      132    
Residential 1-4 Family - Commercial      674      916      1,409        674      1,409    
Residential 1-4 Family - Consumer      4,515      3,815      2,437        4,515      2,437    
Residential 1-4 Family - Revolving      3,357      1,674      440        3,357      440    
Auto      272      183      195        272      195    
Consumer and all other      953      1,193      870        953      870    
Loans ≥ 90 days and still accruing   $  13,396   $  12,036   $  8,856     $  13,396   $  8,856    
Total NPAs and loans ≥ 90 days   $  46,336   $  48,453   $  42,531     $  46,336   $  42,531    
NPAs / total outstanding loans      0.26   0.30   0.35   %    0.26   0.35   %
NPAs / total assets      0.19   0.21   0.24   %    0.19   0.24   %
ALL / nonaccrual loans     149.81   145.91   152.28   %   149.81   152.28   %
ALL / nonperforming assets     128.40   120.33   121.89   %   128.40   121.89   %
Past Due Detail                                
Construction and land development   $  4,563   $  1,062   $  759     $  4,563   $  759    
Commercial real estate - owner occupied      3,482      4,977      8,755        3,482      8,755    
Commercial real estate - non-owner occupied      457      5,757      338        457      338    
Multifamily real estate      223      107      —        223      —    
Commercial & Industrial      8,698      2,079      3,353        8,698      3,353    
Residential 1-4 Family - Commercial      1,479      1,842      6,619        1,479      6,619    
Residential 1-4 Family - Consumer      16,244      1,527      12,049        16,244      12,049    
Residential 1-4 Family - Revolving      10,190      4,965      4,611        10,190      4,611    
Auto      2,525      1,787      3,320        2,525      3,320    
Consumer and all other      2,592      2,579      1,630        2,592      1,630    
Loans 30-59 days past due   $  50,453   $  26,682   $  41,434     $  50,453   $  41,434    


                                 
    As of & For Three Months Ended   As of & For Year Ended  
    12/31/19   09/30/19   12/31/18   12/31/19   12/31/18  
Past Due Detail cont'd   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)  
Construction and land development   $ 482   $ 351   $ 6   $ 482   $ 6  
Commercial real estate - owner occupied     2,184         1,142     2,184     1,142  
Commercial real estate - non-owner occupied         1,878     41         41  
Multifamily real estate         164     146         146  
Commercial & Industrial     1,598     1,946     389     1,598     389  
Residential 1-4 Family - Commercial     2,207     3,081     1,577     2,207     1,577  
Residential 1-4 Family - Consumer     3,072     5,182     5,143     3,072     5,143  
Residential 1-4 Family - Revolving     1,784     1,747     1,644     1,784     1,644  
Auto     236     407     403     236     403  
Consumer and all other     1,233     1,675     1,096     1,233     1,096  
Loans 60-89 days past due   $ 12,796   $ 16,431   $ 11,587   $ 12,796   $ 11,587  
                                 
Troubled Debt Restructurings                                
Performing   $ 15,686   $ 15,156   $ 19,201   $ 15,686   $ 19,201  
Nonperforming     3,810     3,582     7,397     3,810     7,397  
Total troubled debt restructurings   $ 19,496   $ 18,738   $ 26,598   $ 19,496   $ 26,598  
                                 
Alternative Performance Measures (non-GAAP)                                
Net interest income (FTE)                                
Net interest income (GAAP)   $ 135,130   $ 136,601   $ 109,089   $ 537,872   $ 426,691  
FTE adjustment     2,657     2,804     2,335     11,121     8,193  
Net interest income (FTE) (non-GAAP) (1)   $ 137,787   $ 139,405   $ 111,424   $ 548,993   $ 434,884  
Average earning assets     15,418,605     15,191,792     11,961,234     14,881,142     11,620,893  
Net interest margin     3.48 %   3.57 %   3.62 %   3.61 %   3.67 %
Net interest margin (FTE) (1)     3.55 %   3.64 %   3.70 %   3.69 %   3.74 %
                                 
Tangible Assets                                
Ending assets (GAAP)   $ 17,562,990   $ 17,441,035   $ 13,765,599   $ 17,562,990   $ 13,765,599  
Less: Ending goodwill     935,560     929,815     727,168     935,560     727,168  
Less: Ending amortizable intangibles     73,669     78,241     48,685     73,669     48,685  
Ending tangible assets (non-GAAP)   $ 16,553,761   $ 16,432,979   $ 12,989,746   $ 16,553,761   $ 12,989,746  
                                 
Tangible Common Equity (2)                                
Ending equity (GAAP)   $ 2,513,102   $ 2,525,031   $ 1,924,581   $ 2,513,102   $ 1,924,581  
Less: Ending goodwill     935,560     929,815     727,168     935,560     727,168  
Less: Ending amortizable intangibles     73,669     78,241     48,685     73,669     48,685  
Ending tangible common equity (non-GAAP)   $ 1,503,873   $ 1,516,975   $ 1,148,728   $ 1,503,873   $ 1,148,728  
                                 
Average equity (GAAP)   $ 2,515,303   $ 2,528,435   $ 1,899,249   $ 2,451,435   $ 1,863,216  
Less: Average goodwill     930,457     930,525     727,544     912,521     725,597  
Less: Average amortizable intangibles     75,845     80,510     49,917     79,405     51,347  
Average tangible common equity (non-GAAP)   $ 1,509,001   $ 1,517,400   $ 1,121,788   $ 1,459,509   $ 1,086,272  
                                 
Operating Measures (4)                                
Net income (GAAP)   $ 55,836   $ 53,238   $ 44,085   $ 193,528   $ 146,248  
Plus: Merger and rebranding-related costs, net of tax     1,422     2,819     2,163     27,395     32,065  
Net operating earnings (non-GAAP)   $ 57,258   $ 56,057   $ 46,248   $ 220,923   $ 178,313  
                                 
Noninterest expense (GAAP)   $ 94,318   $ 111,687   $ 74,533   $ 418,340   $ 337,767  
Less: Merger Related Costs     896     2,435     2,314     27,824     39,728  
Less: Rebranding Costs     902     1,133         6,455      
Less: Amortization of intangible assets     4,603     4,764     2,954     18,521     12,839  
Operating noninterest expense (non-GAAP)   $ 87,917   $ 103,355   $ 69,265   $ 365,540   $ 285,200  
                                 
Net interest income (FTE) (non-GAAP) (1)   $ 137,787   $ 139,405   $ 111,424   $ 548,993   $ 434,884  
                                 
Noninterest income (GAAP)     29,193     48,106     23,487     132,815     104,241  
                                 
Efficiency ratio     57.40 %   60.47 %   56.22 %   62.37 %   63.62 %
Operating efficiency ratio (FTE)(6)     52.65 %   55.12 %   51.34 %   53.61 %   52.90 %


                                 
    As of & For Three Months Ended   As of & For Year Ended  
    12/31/19   09/30/19   12/31/18   12/31/19   12/31/18  
    (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)  
Operating ROTCE (2)(3)                                
Operating Net Income (non-GAAP)   $ 57,258   $ 56,057   $ 46,248   $ 220,923   $ 178,313  
Plus: Amortization of intangibles, tax effected     3,636     3,764     2,334     14,632     10,143  
Net Income before amortization of intangibles (non-GAAP)   $ 60,894   $ 59,821   $ 48,582   $ 235,555   $ 188,456  
                                 
Average tangible common equity (non-GAAP)   $ 1,509,001   $ 1,517,400   $ 1,121,788   $ 1,459,509   $ 1,086,272  
Operating return on average tangible common equity (non-GAAP)     16.01 %   15.64 %   17.18 %   16.14 %   17.35 %
                                 
Mortgage Origination Volume                                
Refinance Volume   $ 50,555   $ 62,230   $   $ 152,624   $ 35,599  
Construction Volume     14,571     3,915         18,846     13,867  
Purchase Volume     63,836     78,113         258,282     43,082  
Total Mortgage loan originations   $ 128,962   $ 144,258   $   $ 429,752   $ 92,548  
% of originations that are refinances     39.2 %   43.1 %   0.00 %   35.5 %   38.5 %
                                 
Wealth                                
Assets under management ("AUM")   $ 5,650,757   $ 5,451,796   $ 3,379,340   $ 5,650,757   $ 3,379,340  
                                 
Other Data                                
End of period full-time employees     1,989     1,946     1,609     1,989     1,609  
Number of full-service branches     149     149     140     149     140  
Number of full automatic transaction machines ("ATMs")     169     169     188     169     188  
                                 

(1) These are non-GAAP financial measures. Net interest income (FTE), which is used in computing net interest margin (FTE) and operating efficiency ratio (FTE), provides valuable additional insight into the net interest margin and the efficiency ratio by adjusting for differences in tax treatment of interest income sources. The entire FTE adjustment is attributable to interest income on earning assets, which is used in computing yield on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the FTE components.

(2) These are non-GAAP financial measures. Tangible common equity is used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes will assist investors in assessing the capital of the Company and its ability to absorb potential losses.

(3) These are non-GAAP financial measures. The Company believes that ROTCE is a meaningful supplement to GAAP financial measures and useful to investors because it measures the performance of a business consistently across time without regard to whether components of the business were acquired or developed internally.

In periods prior to December 31, 2018, the Company has not added amortization of intangibles, tax effected to operating net income (non-GAAP) when calculating operating ROTCE. The Company has adjusted its presentation for all periods in this release.

(4) These are non-GAAP financial measures. Operating measures exclude merger and rebranding-related costs unrelated to the Company’s normal operations. The Company believes these measures are useful to investors as they exclude certain costs resulting from acquisition activity and allow investors to more clearly see the combined economic results of the organization’s operations.

(5) All ratios at December 31, 2019 are estimates and subject to change pending the Company’s filing of its FR Y9‑C. All other periods are presented as filed.

(6) The operating efficiency ratio (FTE) excludes the amortization of intangible assets and merger-related costs. This measure is similar to the measure utilized by the Company when analyzing corporate performance and is also similar to the measure utilized for incentive compensation. The Company believes this measure is useful to investors as it excludes certain costs resulting from acquisition activity allowing for greater comparability with others in the industry and allowing investors to more clearly see the combined economic results of the organization’s operations.

In prior periods, the Company has not excluded the amortization of intangibles from noninterest expense when calculating the operating efficiency ratio (FTE). The Company has adjusted its presentation for all periods in this release to exclude the amortization of intangibles from noninterest expense.

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)

                 
  December 31,   September 30,   December 31,
  2019   2019   2018  
ASSETS   (unaudited)     (unaudited)     (audited)
Cash and cash equivalents:                
Cash and due from banks $  163,050   $ 218,584   $ 166,927  
Interest-bearing deposits in other banks    234,810     370,673     94,056  
Federal funds sold    38,172     2,663     216  
Total cash and cash equivalents    436,032     591,920     261,199  
Securities available for sale, at fair value    1,945,445     1,918,859     1,774,821  
Securities held to maturity, at carrying value    555,144     556,579     492,272  
Restricted stock, at cost    130,848     132,310     124,602  
Loans held for sale, at fair value    55,405     72,208      
Loans held for investment, net of deferred fees and costs    12,610,936     12,306,997     9,716,207  
Less allowance for loan losses    42,294     43,820     41,045  
Total loans held for investment, net    12,568,642     12,263,177     9,675,162  
Premises and equipment, net    161,073     168,122     146,967  
Goodwill    935,560     929,815     727,168  
Amortizable intangibles, net    73,669     78,241     48,685  
Bank owned life insurance    322,917     320,779     263,034  
Other assets    377,587     408,162     250,210  
Assets of discontinued operations    668     863     1,479  
Total assets $  17,562,990   $ 17,441,035   $ 13,765,599  
LIABILITIES                
Noninterest-bearing demand deposits $  2,970,139   $ 3,155,174   $ 2,094,607  
Interest-bearing deposits    10,334,842     9,889,538     7,876,353  
Total deposits    13,304,981     13,044,712     9,970,960  
Securities sold under agreements to repurchase    66,053     67,260     39,197  
Other short-term borrowings    370,200     344,600     1,048,600  
Long-term borrowings    1,077,495     1,137,321     668,481  
Other liabilities    230,519     321,348     112,093  
Liabilities of discontinued operations    640     763     1,687  
Total liabilities    15,049,888     14,916,004     11,841,018  
Commitments and contingencies                
STOCKHOLDERS' EQUITY                
Common stock, $1.33 par value, shares authorized of 200,000,000 at both December 31, 2019 and September 30, 2019, and 100,000,000 at December 31, 2018, respectively; shares issued and outstanding of 80,001,185 at December 31, 2019, 81,147,896 at September 30, 2019, and 65,977,149 at December 31, 2018.    105,827     107,330     87,250  
Additional paid-in capital    1,790,305     1,831,667     1,380,259  
Retained earnings    581,395     545,665     467,345  
Accumulated other comprehensive income (loss)    35,575     40,369     (10,273 )
Total stockholders' equity    2,513,102     2,525,031     1,924,581  
Total liabilities and stockholders' equity $  17,562,990   $ 17,441,035   $ 13,765,599  
                   
                   

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data)

                             
  Three Months Ended   Year Ended
  December 31,   September 30,   December 31,   December 31,   December 31,
  2019     2019   2018     2019     2018  
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Audited)
Interest and dividend income:                            
Interest and fees on loans $  152,513     $ 156,651   $ 121,846     $  612,115     $ 469,856  
Interest on deposits in other banks    1,686       1,030     309        3,733       2,125  
Interest and dividends on securities:                            
Taxable    12,378       12,625     11,623        51,437       36,851  
Nontaxable    7,634       8,039     6,858        32,047       19,956  
Total interest and dividend income    174,211       178,345     140,636        699,332       528,788  
Interest expense:                            
Interest on deposits    30,884       30,849     19,149        114,972       59,336  
Interest on short-term borrowings    1,166       2,200     5,663        15,479       18,458  
Interest on long-term borrowings    7,031       8,695     6,735        31,009       24,303  
Total interest expense    39,081       41,744     31,547        161,460       102,097  
Net interest income    135,130       136,601     109,089        537,872       426,691  
Provision for credit losses    2,900       9,100     4,725        21,092       13,736  
Net interest income after provision for credit losses    132,230       127,501     104,364        516,780       412,955  
Noninterest income:                            
Service charges on deposit accounts    7,871       7,675     6,873        30,202       25,439  
Other service charges and fees    1,544       1,513     1,467        6,423       5,603  
Interchange fees, net    1,854       2,108     4,640        14,619       18,803  
Fiduciary and asset management fees    6,531       6,082     4,643        23,365       16,150  
Mortgage banking income, net    2,689       3,374            10,303        
Gains (losses) on securities transactions, net    369       7,104     161        7,675       383  
Bank owned life insurance income    2,119       2,062     2,072        8,311       7,198  
Loan-related interest rate swap fees, net    3,470       5,480     1,376        14,126       3,554  
Gain on Shore Premier sale    —                  —       19,966  
Other operating income    2,746       12,708     2,255        17,791       7,145  
Total noninterest income    29,193       48,106     23,487        132,815       104,241  
Noninterest expenses:                            
Salaries and benefits    47,233       49,718     38,581        195,349       159,378  
Occupancy expenses    7,366       7,493     6,590        29,793       25,368  
Furniture and equipment expenses    3,559       3,719     2,967        14,216       11,991  
Printing, postage, and supplies    1,293       1,268     1,125        5,056       4,650  
Technology and data processing    6,483       5,787     4,675        23,686       18,397  
Professional services    3,636       2,681     2,183        11,905       10,283  
Marketing and advertising expense    3,675       2,600     2,211        11,566       10,043  
FDIC assessment premiums and other insurance    1,254       381     1,214        6,874       6,644  
Other taxes    3,970       3,971     2,882        15,749       11,542  
Loan-related expenses    2,793       2,566     2,109        10,043       7,206  
OREO and credit-related expenses    1,547       1,005     1,026        4,708       4,131  
Amortization of intangible assets    4,603       4,764     2,954        18,521       12,839  
Training and other personnel costs    2,136       1,618     1,104        6,376       4,259  
Merger-related costs    896       2,435     2,314        27,824       39,728  
Rebranding expense    902       1,133            6,455        
Loss on debt extinguishment    —       16,397            16,397        
Other expenses    2,972       4,151     2,598        13,822       11,308  
Total noninterest expenses    94,318       111,687     74,533        418,340       337,767  
Income from continuing operations before income taxes    67,105       63,920     53,318        231,255       179,429  
Income tax expense    11,227       10,724     9,041        37,557       30,016  
Income from continuing operations $  55,878     $ 53,196   $ 44,277     $  193,698     $ 149,413  
Discontinued operations:                            
Income (loss) from operations of discontinued mortgage
segment
$  (56 )   $ 56   $ (509 )   $  (230 )   $ (4,280 )
Income tax expense (benefit)    (14 )     14     (317 )      (60 )     (1,115 )
Income (loss) on discontinued operations    (42 )     42     (192 )      (170 )     (3,165 )
Net income    55,836       53,238     44,085        193,528       146,248  
Basic earnings per common share $  0.69     $ 0.65   $ 0.67     $  2.41     $ 2.22  
Diluted earnings per common share $  0.69     $ 0.65   $ 0.67     $  2.41     $ 2.22  
                                     
                                     

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

                               
  For the Quarter Ended
  December 31, 2019   September 30, 2019
  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 $  1,666,082     $  12,378   2.95 %   $ 1,670,270     $ 12,625   3.00 %
Tax-exempt    942,860        9,663   4.07 %     990,000       10,181   4.08 %
Total securities    2,608,942        22,041   3.35 %     2,660,270       22,806   3.40 %
Loans, net (3) (4)    12,327,692        152,345   4.90 %     12,240,254       156,471   5.07 %
Other earning assets    481,971        2,482   2.04 %     291,268       1,872   2.55 %
Total earning assets    15,418,605     $  176,868   4.55 %     15,191,792     $ 181,149   4.73 %
Allowance for loan losses    (44,739 )               (46,229 )          
Total non-earning assets    2,063,686                 2,057,765            
Total assets $  17,437,552               $ 17,203,328            
                               
Liabilities and Stockholders' Equity:                              
Interest-bearing deposits:                              
Transaction and money market accounts $  6,683,093     $  16,042   0.95 %   $ 6,290,112     $ 16,389   1.03 %
Regular savings    735,527        190   0.10 %     743,938       266   0.14 %
Time deposits (5)    2,847,366        14,652   2.04 %     2,769,574       14,194   2.03 %
Total interest-bearing deposits    10,265,986        30,884   1.19 %     9,803,624       30,849   1.25 %
Other borrowings (6)    1,369,035        8,197   2.38 %     1,623,681       10,895   2.66 %
Total interest-bearing liabilities    11,635,021        39,081   1.33 %     11,427,305     $ 41,744   1.45 %
                               
Noninterest-bearing liabilities:                              
Demand deposits    3,036,969                 3,008,587            
Other liabilities    250,259                 239,001            
Total liabilities    14,922,249                 14,674,893            
Stockholders' equity    2,515,303                 2,528,435            
Total liabilities and stockholders' equity $  17,437,552               $ 17,203,328            
Net interest income       $  137,787             $ 139,405    
                               
Interest rate spread             3.22 %               3.28 %
Cost of funds             1.00 %               1.09 %
Net interest margin             3.55 %               3.64 %

(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 $6.6 million and $5.0 million for the three months ended December 31, 2019 and September 30, 2019, respectively, in accretion of the fair market value adjustments related to acquisitions.
(5) Interest expense on time deposits includes $148,000 and $179,000 for the three months ended December 31, 2019 and September 30, 2019, respectively, in accretion of the fair market value adjustments related to acquisitions.
(6) Interest expense on borrowings includes $123,000 and $97,000 for the three months ended December 31, 2019 and September 30, 2019, 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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