Atlantic Union Bankshares Corporation (AUB) Earnings

Management highlights

- Overall Financial & Strategic Progress * Reported strong Q2 2026 results, with no merger-related costs incurred for the first time in two years, and realized a $32.3 million pre-tax gain from the sale of its equity interest in Bearing Insurance * Excluding the one-time gain, adjusted operating results showed solid loan growth, margin improvement, disciplined expense management, strong credit performance, and consistent capital generation, with investments from the past two years starting to deliver stronger earnings capacity * No additional acquisitions are planned in the current strategic phase, with focus now on demonstrating sustained performance and capital generation - Loan Growth & Production * Average loans reached $28.2 billion, growing 6% annualized in Q2; period-end loans hit $28.7 billion, growing 10.4% annualized from Q1, with year-to-date annualized loan growth at 6.4% * Record Q2 loan production that exceeded the traditionally strong Q4 2025 production by ~8%, with growth distributed across commercial lending, construction lending, multifamily, and select consumer categories; loan pipelines remain healthy * Former Sandy Spring Bank teams (post-acquisition) generated 27% of interest rate swap transactions and 32% of foreign exchange revenue in Q2, creating expected future revenue synergies - Deposit Performance * Total period-end deposits reached $30.5 billion, growing ~1% annualized from Q1; average deposits decreased 2.4% annualized in the quarter, consistent with 2026 low single-digit deposit growth guidance * Reduced broker deposits by $53 million in Q2 and $571 million year-to-date, with broker deposits representing just 2% of total deposits at quarter-end, providing future balance sheet flexibility * Loan-to-deposit ratio ended at 94.1%, within the company's preferred 90-95% range - Margin & Profitability * Reported FTE net interest margin increased 9 basis points quarter-over-quarter to 3.94%, driven primarily by higher accretion income; core net interest margin (excluding purchase accounting adjustments) improved 1 basis point to 3.46% * Reported GAAP net income available to common shareholders was $158 million ($1.11 EPS); adjusted operating net income was $134 million ($0.94 EPS), with adjusted ROTCE of 20.11% and adjusted ROA of 1.47% — already hitting medium-term targets for both metrics at mid-year * Adjusted operating efficiency ratio came in at 47.47% - Credit Quality * Annualized net charge-offs were 3 basis points for Q2 and year-to-date; non-performing assets were 39 basis points of loans held for investment, with criticized and classified assets improving to 4.4% of total loans from 4.5% last quarter * Unemployment rates in the company's core markets (Virginia, North Carolina, Maryland) remain at or below the national average, with continued expectations for manageable unemployment levels - Capital & Strategy Expansion * All regulatory capital ratios are comfortably above well-capitalized requirements, with a CET1 ratio of 10.41% within the preferred 10-10.5% range * Tangible book value per share grew 13% year-over-year to $20.77 at quarter-end; the company repurchased $10 million of common shares in Q2, leaving $240 million remaining under its share repurchase authorization * Ongoing branch densification and expansion in Raleigh and Wilmington, North Carolina: 10 new branches are planned (7 in Raleigh, 3 in Wilmington), with the first opening in August 2026, all teams for the first three branches hired, and full completion expected by 2027

Guidance

- Loan growth: Full-year 2026 loan growth is now tracking toward the higher end of the company's mid-single-digit outlook, with projected year-end loan balances between $29 billion and $30 billion - Deposit growth: Full-year 2026 year-end deposit balances are maintained at a projected range of $31 billion to $32 billion, consistent with prior low single-digit growth guidance - Credit quality: Full-year 2026 net charge-off guidance was lowered to a range of 5 to 10 basis points, from the prior higher range; the allowance for credit losses is projected to remain in the 115 to 120 basis point range - Net interest income & margin: The 2026 fully tax equivalent net interest income range was updated to $1.32 billion to $1.33 billion; the fully tax equivalent net interest margin range was tightened to 3.90% to 3.95%. The guidance assumes a 25 basis point Fed rate hike in September and stable term rates - Non-interest income & expense: 2026 non-interest income is projected between $220 million and $230 million; adjusted operating non-interest expense is projected between $742 million and $752 million, including the impact of North Carolina expansion and other 2026 strategic initiatives - Returns: The company expects 12% year-over-year growth in tangible book value per share for 2026, and expects full-year 2026 financial returns to place Atlantic Union in the top quartile of its peer group - PAA (price to adjusted assets): The prior 2026 range of 140 to 150 basis points is maintained, with 145 as a reasonable midpoint assumption - Securities portfolio: The company plans to keep the securities portfolio stable at ~13% of total assets for the remainder of 2026, after drawing it down over the prior two quarters to fund loan growth

Segment performance

The transcript does not break out financial performance for separate product segments. All results are reported on a consolidated company-wide basis.

Risks & headwinds

- Continued macroeconomic and geopolitical uncertainty, including ongoing conflict involving Iran, that could impact economic conditions and borrower performance - Rising deposit costs and ongoing funding competition in the second half of 2026, driven by ongoing customer migration from non-interest bearing deposits to higher-yielding interest-bearing deposit products - Uncertainty around future interest rate movements, which can impact net interest margin and balance sheet sensitivity - Future non-performing assets and net charge-offs may fluctuate quarter-over-quarter, even though current levels are very low - Uncertainty around the pace and magnitude of future deposit mix shifts, which could impact net interest income relative to guidance

Analyst Q&A

• Q: What are current new loan production spreads, how much repricing benefit comes from maturing variable rate loans, and how much benefit from the projected September Fed hike is included in guidance? /

  A: New fixed and variable rate loan production both carry spreads of ~200 basis points in Q2, with minor spread compression from large one-off loans. Each quarter, $800-$900 million of variable rate loans yielding ~5% mature, and are reissued at ~610 basis points, delivering a 100-110 basis point quarterly benefit. Guidance includes a 25 basis point September hike, which will deliver a full-year benefit of less than 1 basis point to NIM, and a 3 basis point benefit in Q4. Core NIM is expected to grind modestly higher over time from repricing, but will grow slower than originally expected due to higher funding costs.

• Q: What is driving the downward NII guidance revision, and what pace of deposit cost increases is assumed? Is this driven by higher market rates or deposit mix shifts? /

  A: The entire revision comes from balance sheet funding trends, not loan performance. Customers have continued migrating to higher-yielding interest-bearing deposits faster than originally expected. Q2 saw a 3 basis point total increase in cost of deposits, with a 2 basis point increase in June alone. Competitive pressures are elevated but stable, so the guidance shift is purely a mix shift effect, not broad rate increases. The projected pace of cost increases for the second half is slower than the June rate, factoring in expected CD and money market growth.

• Q: How much growth is coming from the legacy Sandy Spring (Maryland) markets and what is the progress of the North Carolina expansion? /

  A: The legacy Sandy Spring footprint (which makes up ~1/3 of the total company portfolio) is delivering double-digit pipeline and production growth in the greater Washington/Maryland region, with no post-acquisition hangover, and is contributing roughly a proportional share of total pipeline as expected. For the North Carolina densification effort focused on Raleigh and Wilmington, the first new branch will open in August 2026, two more will open in Q4 2026, and all 10 planned branches are expected to open by 2027. All teams for the first three branches are fully hired, and North Carolina is already delivering double-digit loan balance growth, in line with internal expectations.

• Q: What is the company's plan for its $240 million remaining share repurchase authorization, and how is it prioritized relative to other capital uses? /

  A: The company plans to complete the full repurchase authorization, with execution spread evenly over the next 12 months in base forecasts, but activity will depend on share price. Capital priority is first supporting organic loan growth: if loan growth outperforms guidance, repurchase activity will slow. Repurchases are only executed when the share price is below the company's intrinsic value model, with an expected 4-year earn-back period; activity may pause if shares trade above the internal target price. The company targets a CET1 ratio between 10% and 10.5%, and deploys excess capital above this range via repurchases.