Atlantic Union Bankshares (AUB) Q2 2024 earnings summary

Executive summary

• Closed merger with American National Bankshares on April 1, 2024, adding $2.9 billion in assets, $2.2 billion in loans, $2.6 billion in deposits, and 26 branches, expanding presence in Virginia and North Carolina.

• Completed core systems integration by Memorial Day, more than doubling new account openings in converted branches.

• Net income available to common shareholders was $22.2 million ($0.25 per share) for Q2 2024; adjusted operating earnings were $56.4 million ($0.63 per share), reflecting merger impacts.

• The merger increased market density in Western and Southern Virginia and North Carolina, providing a platform for future organic growth.

• Maintains a strong balance sheet, capital levels, and a granular, growing deposit base.

Financial highlights

• Net interest income for Q2 2024 was $184.5 million, up $36.7 million sequentially and $32.5 million year-over-year, driven by the acquisition and organic loan growth.

• Net interest margin increased to 3.46% from 3.19% in Q1 2024; earning asset yields rose to 5.96%.

• Noninterest expense rose to $150.0 million, including $29.8 million in merger-related costs and higher operating expenses.

• Allowance for credit losses was $175.7 million, or 0.96% of total loans; net charge-offs were 0.04% of average loans.

• Adjusted operating return on tangible common equity was 15.85%; adjusted operating ROA was 0.97%.

Outlook and guidance

• Year-end 2024 loan balances projected at $18.5–$19 billion; deposit balances at $20–$20.5 billion.

• Full-year net interest income expected at $730–$740 million; Q4 run rate targeted at $195–$200 million.

• Full-year net interest margin projected at 3.4%–3.5%, with Q4 target of 3.55%–3.60%, assuming two 25 bp Fed rate cuts starting in September.

• Adjusted operating non-interest income for 2024 expected at $115–$120 million; non-interest expense at $445–$450 million.

• Management expects to realize cost savings and business synergies from the American National acquisition, including branch closures.