Atlantic Union Bankshares Corp Q4 2024 Earnings Call Transcript

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

Question: Catherine Mealor - Keefe Bruyette & Woods Inc. - Analyst : Just a question back on the margin. Just -- I think, Rob, you touched on this a little bit, but just wanted to dig into. Can you talk about just the impact of Sandy Spring, the acquisition? And how we should think about the move in rates since that deal was announced to where we are today? And that impact on kind of the core margin versus accretable yield and how that might impact the month?

Question: Catherine Mealor - Keefe Bruyette & Woods Inc. - Analyst : Okay. And then how do we think about -- so the loan mark makes sense to me. So on the other side of the balance sheet, with less rate cuts, I would think there would be less ability to lower [SaaS] deposit costs as you kind of move through next year. How do you think about that as an offset?

Question: Catherine Mealor - Keefe Bruyette & Woods Inc. - Analyst : Okay. That's very helpful. And maybe one other is on credit. It seems like the reserve build this quarter was really all related to that one C&I loan. It looks like you're building in a little bit of a cushion for a modest reserve build on a core basis next year. Just kind of thinking about that conservatively or anything that you're seeing that would drive that over the next year in particular?

Question: Catherine Mealor - Keefe Bruyette & Woods Inc. - Analyst : Makes sense. Thank you very much.

Question: Stephen Scouten - Piper Sandler & Co. - Analyst : Just quick clarification on the expected closing of Sandy Spring. I think you said April 1. Shareholder vote, February 5. Is it possible that depending upon what you hear in the timing from Virginia and Maryland, that could close earlier? Or is it just -- is that going to stay the plan given conversion dates and other kind of internal plan? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 23, 2025 / 2:00PM, AUB.N - Q4 2024 Atlantic Union Bankshares Corp Earnings Call

Question: Stephen Scouten - Piper Sandler & Co. - Analyst : Yep. No, that makes perfect sense. And then I know you guys were commenting on higher payoffs within your stand-alone portfolio. Are you -- has Sandy Spring, to your knowledge, experienced some of the same dynamics? And do you have any updated commentary on what that could potentially do for the potential needed size of the CRE loan sale?

Question: Stephen Scouten - Piper Sandler & Co. - Analyst : Yeah, for sure. Makes a lot of sense. Okay. And then maybe just last thing for me. I mean, there's a lot of moving parts here for sure, like you said, some new dynamics around payoffs. You've got Sandy Spring combination pending. You've got mid-single-digit growth as the guidance, which can be a fairly wide range. Can you give maybe some thoughts around what would cause you to be maybe at the lower end of that range and what could deliver towards the higher end of that range? And even like where you'd almost want to cap that out? I know -- you guys aren't trying to grow 10%, let's say. So just kind of how you think about those dynamics and the ranges that could come about?

Question: Stephen Scouten - Piper Sandler & Co. - Analyst : Yeah. Without a doubt, I appreciate all the color and commentary. Very helpful, guys.

Question: David Bishop - Hovde Group - Analyst : I think John, maybe a sort of holistic question for you. As you get bigger across the lower or Mid-Atlantic here in Maryland and Virginia and North Carolina, obviously, you're already bumping up and competing against you said, sort of the three big uglies. Do you think from a deposit pricing and maybe beta perspective, you're more tied to what they do in terms of sort of moving funding cost? Or do you still have the ability to sort of relationship price, as you noted, and bring down (inaudible)?

Question: Steve Moss - Raymond James - Analyst : -- Redialing, the call dropped off. So I missed the last couple of commentary. Okay. So I guess maybe just with regard to purchase accounting here and the NII guide. Just curious, what's the -- how much accretion do you guys expect for 2025?

Question: Steve Moss - Raymond James - Analyst : Yeah, that -- Yeah.

Question: Steve Moss - Raymond James - Analyst : In terms of the -- the stand-alone guide, yeah.

Question: Steve Moss - Raymond James - Analyst : Okay.

Question: Steve Moss - Raymond James - Analyst : Okay. Appreciate that. And then I'm not sure if this was asked and answered, but you guys are talking about market dynamics and competition with private credit, but I was just kind of thinking overall, what are you guys seeing for loan pricing these days? Obviously, moving to five years could help, but definitely hearing tighter spreads from a number of people.

Question: Steve Moss - Raymond James - Analyst : Okay. And then in terms of the nonperformer, it sounds like it's an asset based loan with some fraud. Just kind of curious, is that a -- what's the prospect for recoveries there? Is that really a preliminary provision? Could we kind of see a higher provision for that specific credit?

Question: Steve Moss - Raymond James - Analyst : Okay. Got it. And then in terms of the Sandy Spring transaction here, rates having backed up a bit, I think, John, you alluded to, you fully expect to sell the entire $2 billion of CRE you mentioned before. And therefore, I assume just given where rates are, you guys are also likely take the entire equity raise down as it stands these days?

Question: Steve Moss - Raymond James - Analyst : Right, 100%. Okay. Great. Really appreciate all the color.

Question: David Bishop - Hovde Group - Analyst : Have you heard -- can you hear me?

Question: David Bishop - Hovde Group - Analyst : I don't know if you're -- my question before I get cut off. I'm not sure what happened out there in ether. My question, I guess, from a big picture perspective as you get bigger and you compete with the large three big uglies, do you think your deposit beta more mirrors them to be more captive what they're doing in the market from a pricing perspective? Or you can still sort of retain that flexibility to sort of one-off like relationship?

Question: David Bishop - Hovde Group - Analyst : Okay. Great. Yeah, I'll have to read the transcript to get the blow by blow, but I appreciate that. And then I guess one final question and maybe you alluded to it in Steve's question. But as it relates to read the press headlines in terms of what Trump wants to do in DC. with all the buildings, I know the FBI is already moving out and such, and they're pretty old. But do you get the sense there's a decent amount of capital from -- I know you've been shying away from CRE out there, but you get the sense that there's a decent amount of sponsors and developers that would like to get their hands on these properties and maybe redevelopment into multifamily housing? Just curious, what do you think that aspect.