Atlantic Union Bankshares Corp Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Stephen Scouten - Piper Jaffray Inc - Analyst : Hey, good morning guys. Hey Rob, I wanted to just follow back on that expense messaging you just gave there. So if we're looking at $190 million and then you said add North Carolina, add inflation, and then it should be flat from there, or is there a baseline like of a 1Q26 kind of all in? I'm assuming all cost saves out kind of run rate you can give us as a starting point.

Question: Stephen Scouten - Piper Jaffray Inc - Analyst : Got it. And that and that one key 26 run rate should should encapsulate all the Sandy Spring costs at that point in time, correct?

Question: Stephen Scouten - Piper Jaffray Inc - Analyst : Got it. Okay. And John, you noted there were higher level of pay downs and I think you guys noted in the press release to lower line utilization there at quarter end. Do you have any data in terms of kind of what paydown levels were, this quarter maybe versus any prior quarters and kind of what would lead you to believe that maybe that pay down activity would slow a bit or is the better growth not so much about pay down levels slowing but production levels continue to ramp higher? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 1:00PM, AUB.N - Q3 2025 Atlantic Union Bankshares Corp Earnings Call John Asbury - Atlantic Union Bankshares Corp - President, Chief Executive Officer, Director, Chief Executive Officer - Atlantic Union Bank Yeah, I think it's probably more about production levels continuing to ramp higher and let's see, I'll call on Dave Ring here who leads all our commercial businesses, but we've seen for a while. Higher levels of pay downs, but as I think about Q3 versus Q2, I don't think it was out of line.

Question: Stephen Scouten - Piper Jaffray Inc - Analyst : Got it. And then, last thing for me, just around the margin, obviously the low end of that range kind of remained at the 375, but obviously the range was tightened, kind of removing some theoretical upside there. What kind of changed quarter that kind of takes that higher level off the table? Is it just where. We ended up here in the third quarter or is it more rate cuts being baked in or kind of lend any color there to what what's leading to that?

Question: Stephen Scouten - Piper Jaffray Inc - Analyst : Yeah, no doubt all this modelling is a little bit art, a little bit science, so definitely appreciate a lot.

Question: Catherine Mealor - Keefe Bruyette & Woods Inc - Analyst : Hi, my question is just back to the margin, maybe just getting into the pieces of it and the deposit side is as we think about another couple of rate cuts, I think of you as asset sensitive, but Sandy Spring lesson that a little bit, right? And so then as we think about on the expansion over the next few quarters, even with rate cuts, kind of help us think about first on the deposit side how much room you think you can lower deposit cost to keep the margin kind in that that level. And then secondly, if you could give us just some color on new loan yield rates and kind of where you're see, where you think low yields go outside of some of the the purchase accounting noise. Thanks.

Question: Catherine Mealor - Keefe Bruyette & Woods Inc - Analyst : Okay, that's awesome thank you. And then my second question is just on credit, I know you're, you didn't like having these, two C&I losses this quarter. Just kind of curious if you could give just a broader perception of the health of any other credit trends you're seeing within the portfolio. I think there's especially within DC and just kind of the health of the Sandy Spring portfolio now that you've got a couple quarters under your belt with that portfolio, just any kind of credit additional credit commentary would be helpful just to try to figure out whether those two were isolated events or if there's anything else we should be aware of happening within the portfolio. John Asbury - Atlantic Union Bankshares Corp - President, Chief Executive Officer, Director, Chief Executive Officer - Atlantic Union Bank Yeah. Those are certainly the two that you saw that had specific reserves. One of them was partially reserved and it was just an unusual situation that both actually were identified. And partial reserves were taken in Q4 of last year. One in the end was fully reserved, actually slightly more than the ultimate resolution. The other, just due to ongoing uncertainty, we elected to charge the rest of it off as we work to maximize recovery. So that's, totally unrelated. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 1:00PM, AUB.N - Q3 2025 Atlantic Union Bankshares Corp Earnings Call Broadly speaking, the overall credit trends look good. You can see that in our numbers. Obviously 0.49 nonperforming assets as a percentage of the total loan book is a pretty good number. Past dues down, criticized down, and we feel pretty good, obviously we're well aware of all the headlines that go on. In the greater Washington region, but we're hard pressed to point to any real problems as a result of that, the client base is actually quite resilient, so we feel pretty good about it. Rob, anything you would add?

Question: Catherine Mealor - Keefe Bruyette & Woods Inc - Analyst : Great. And was it fair to say the DC Noise is maybe more of a growth issue than a credit issue? John Asbury - Atlantic Union Bankshares Corp - President, Chief Executive Officer, Director, Chief Executive Officer - Atlantic Union Bank Yeah. I would say I do think that it impacts, confidence to some extent, but as Dave Ring pointed out, the pipelines are growing, and you've heard me make this point before. Don't think of us as a DC bank, about 23% of the total portfolio would be in the broad Greater Washington metro area. But Sandy itself was, is and always has been, the Bank on Maryland, and we are seeing opportunities there. So overall, we think that we're in the right spot, as we do not finance large office buildings, which definitely could be problematic. And from a government contract finance standpoint, I would expect to see more opportunity there over time since it's mostly focused on national security and defense. And even interestingly we were talking to the head of government contract finance yesterday, even with the government shutdown. Because the Defense Department is still operating, we're seeing contracts awarded like right now, so we do feel pretty good about the opportunity there over time. But yeah, I think it does put a damper on growth, particularly as it relates to commercial real estate investment, but it's very submarket specific as well, even in that greater metro DC area.

Question: Brian Wilczynski - Morgan Stanley - Analyst : Hi, Good morning. Maybe just sticking with the loan growth, I think during your prepared remarks you talked a little bit about higher competition that you saw in the third quarter across some of your markets. I was wondering if you could give some more detail on that, where it's coming from and just what you're seeing broadly. John Asbury - Atlantic Union Bankshares Corp - President, Chief Executive Officer, Director, Chief Executive Officer - Atlantic Union Bank Yeah, we're certainly accustomed to competition. I'm a 38 year commercial banker by background, and I don't ever remember a time when it's not been competitive, at least for the better credits, which is the types of things that we do. We sometimes see other banks kind of turn it on and turn it off, which we've never done. We've always been a consistent provider of capital, and that's part of how we differentiate ourselves in the marketplace. We are definitely in a turn it on environment right now. Where some who have pulled back or, fully open for business, we see that show up in terms of an element of pricing pressure, not that we've ever been, the low cost provider, but it's the banks are eager for business. Anything to add.

Question: Brian Wilczynski - Morgan Stanley - Analyst : That's really helpful. And then maybe just on Sandy Spring, you mentioned that the integration is now complete. I was wondering if you could talk a little bit more about some of the revenue related synergies. I think you mentioned briefly that the swap income was higher, but as you look out to Sandy Spring what are the opportunities that you see on the revenue side that you can lean into a little bit more over the next few quarters. John Asbury - Atlantic Union Bankshares Corp - President, Chief Executive Officer, Director, Chief Executive Officer - Atlantic Union Bank Yes, sort of moving, starting at the top of the house, the single best opportunity is simply the fact that they're no longer constrained by commercial real estate concentrations or issues, which means they are in fact fully open for business. So that's good from a lending standpoint. They do pick up additional capabilities. Interest rate hedging is a great example. Other examples that we'll see as it begins to mature would be foreign exchange. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 1:00PM, AUB.N - Q3 2025 Atlantic Union Bankshares Corp Earnings Call Where we have a good offering broadly they had a good treasury management offering, but we brought additional capabilities to the table as well.

Question: Brian Wilczynski - Morgan Stanley - Analyst : That's really helpful. Thanks for taking my questions.

Question: David Bishop - Hovde Group LLC - Analyst : Hey, good morning, John, and he's staying on that topic in terms of the Sandy Spring opportunity. John and Rob and Dave as you expand maybe their pure commercial C&I lending capabilities, you see the opportunity to sort of harvest more deposits behind, new loan relationships and maybe what legacy Sandy Springs was bringing to the table. Overall, they did a pretty good job gathering deposits and, we've done a pretty good job since April 1 of retaining those and trying to deepen and enhance the relationships to get more, but, I They actually brought some products to the table that we're going to leverage in that market around escrow, the title businesses, litigation services, things like that that'll bring pretty chunky nice big deposits into the bank. But in general, if you acquire a C&I client and you're giving them a line of credit. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 1:00PM, AUB.N - Q3 2025 Atlantic Union Bankshares Corp Earnings Call It comes with the deposits. It comes with the treasury management fees, and so we're really focused on new client acquisition in that market, and we do think, we give them the capacity and the ability to do more faster new client acquisition. Like I said earlier, 35% of our production this quarter was from new client acquisition. We expect that to kind of ramp up with Sandy over time. John Asbury - Atlantic Union Bankshares Corp - President, Chief Executive Officer, Director, Chief Executive Officer - Atlantic Union Bank Yeah, It's a good team with great leadership, and we compliment each other.

Question: David Bishop - Hovde Group LLC - Analyst : Perfect, I appreciate the caller.