Atlantic Union Bankshares Corporation Q1 FY2026 earnings call

• Introduced new CFO Alex Dodd. - Highlighted solid first quarter financial results with disciplined execution and successful Sandy Spring Bank integration. - Quarterly loan growth, deposit base details, net interest margin, credit quality, and market insights. - Mentioned strategic plan and focus on demonstrating franchise's earnings power and capital generation ability. - Rob discussed detailed financial results including adjusted operating earnings, credit loss reserves, income statement components, loan and deposit figures, regulatory capital ratios, dividends, and updated full-year outlook.

Quarterly loan growth was approximately 2.2% annualized with total loans ending at $27.9 billion. Deposit base showed strong customer deposit growth, nearly offsetting planned reduction in high-cost broker deposits. Net interest margin, excluding accretion income, improved by four basis points quarter over quarter. Credit quality showed strength with annualized net charge-off ratio at two basis points, non-performing assets as a percentage of loans held for investment declined by six basis points, and criticized and classified assets decreased. Loan pipelines were higher, construction and development pipeline at record high. Deposits at $30.4 billion, loans held for investment net of unearned income at $27.9 billion.

• Expect loan balances to end 2026 between $29 and $30 billion, deposits between $31 and $32 billion. - Allowance for credit losses to loan balances projected in 115 to 120 basis points range. - Net charge-off ratio expected between 10 and 15 basis points. - Fully taxable equivalent net interest income projected between $1.34 billion and $1.35 billion. - Tax equivalent net interest margin projected between 3.90% and 4%. - Non-interest income expected between $220 and $230 million. - Adjusted operating non-interest expense estimated between $742 and $752 million. - Projected annual growth and tangible book value per share of 12 to 15%.

• Geopolitical developments like Iran conflict with potential impact on consumer and business confidence. - Uncertainty in macroeconomic environment and energy price shocks affecting loan growth forecasting. - Competition in lending and deposit markets impacting margins and growth. - Basel III end game proposal potential impact on risk-weighted assets and regulatory capital ratios. - Volatility in prepayment activity affecting accretion income forecasting.

Q: Asked about core margin trend and deposit cost direction.

A: Expect core margin to grind higher, deposit costs likely stable with broker deposits maturing.

Q: Inquired about expense guide and branch rationalization.

A: Branch rationalization not in current guidance but expense discipline expected.

Q: Questioned on deposit plan and core vs broker deposits.

A: Customer deposits expected 3%-4% growth, broker deposits runoff with potential to bring back if loan growth outpaces.

Q: Asked about accretion income guide and PAA.

A: Lowered accretion income guide to $145 - $150 million.

Q: Spoke about loan pipelines, customer sentiment, and Basel III impact.

A: Loan pipelines strong, Basel III expected to increase CET1 ratio, potential for buybacks.

Q: Inquired about net charge-off guidance and swap fees.

A: No line of sight to lower end of net charge-off guide, swap fees affected by rate stability.

Q: Questioned on NII guide and loan growth impact.

A: NII guide assumes loan growth range, potential offsets on expense or deposit side.

Q: Asked about loan maturities, loan and deposit competition.

A: Loan maturities and new loan yields, competitive lending dynamic.

Q: Inquired about deposit costs, securities runoff, and reserve methodology.

A: Deposit costs mix, securities runoff for funding, reserve methodology change for better modeling.