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Atlantic Union Bankshares Reports First Quarter Results

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RICHMOND, Va., April 28, 2020 (GLOBE NEWSWIRE) -- Atlantic Union Bankshares Corporation (the "Company" or "Atlantic Union") (NASDAQ:AUB) today reported net income of $7.1 million and diluted earnings per share of $0.09 for its first quarter ended March 31, 2020.  Pre-tax pre-provision earnings(1) were $68.3 million, or $0.86 per share(1), in the first quarter ended March 31, 2020.

"Atlantic Union began 2020 with momentum and an ambitious set of work ahead of us, but as the situation surrounding the COVID-19 coronavirus pandemic unfolded, we quickly adjusted our thinking," said John C. Asbury, President and CEO of Atlantic Union.  "We believe that we pivoted smoothly to a new operating model with over 90% of non-branch personnel working remotely, demonstrating we've built a resilient organization that can react and innovate rapidly to changing economic conditions.  We are laser focused on taking care of our teammates, our clients, and our communities during this uncertain time. 

Our first quarter financial results were impacted by the implementation of CECL and the deteriorating economic environment related to COVID-19, which resulted in a material increase in the Company's provision for credit losses.  We also recognize the possibility of a much lower for longer rate environment post COVID-19, and we will align the Company's expense structure accordingly in order to maintain top tier financial performance.  We continue to operate under the mantra of soundness, profitability, and growth – in that order of priority.  A sound bank is the highest priority for Atlantic Union.  Our conservative credit culture served our shareholders well during the "Great Recession," and we anticipate that this culture will carry us through the current crisis and what comes afterwards."

Adoption of Current Expected Credit Loss ("CECL")

On January 1, 2020, the Company adopted the CECL methodology for estimating credit losses, which resulted in an increase of $51.7 million in the allowance for credit losses ("ACL") on January 1, 2020.  The impact of the worsening economic forecast related to COVID-19 global pandemic ("COVID-19") subsequent to the adoption of CECL further increased the ACL by $55.1 million to $150.0 million at March 31, 2020.

Small Business Administration ("SBA") Paycheck Protection Program ("PPP")

The Company participated in the SBA PPP under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act, which was intended to provide economic relief to small businesses that have been adversely impacted by COVID-19.  As of April 16, 2020, the Company had secured funding for nearly 6,500 loans with a total value of approximately $1.4 billion.  The Company continues to fund eligible small business requests now that Congress has appropriated additional funds for the PPP.


(1) These are financial measures not calculated in accordance with generally accepted accounting principles ("GAAP"). For a reconciliation of these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.

NET INTEREST INCOME

For the first quarter of 2020, net interest income was $135.0 million, a slight decrease from $135.1 million reported in the fourth quarter of 2019. Net interest income (FTE)(1) was $137.8 million in the first quarter of 2020, consistent with the fourth quarter of 2019. The first quarter net interest margin increased 1 basis point to 3.49% from 3.48% in the previous quarter, while the net interest margin (FTE)(1) increased 1 basis point to 3.56% from 3.55% during the same period. The increases in the net interest margin and net interest margin (FTE) were principally due to a 6 basis point decrease in cost of funds, partially offset by a 5 basis point decrease in the yield on earning assets (FTE)(1).

The Company's net interest margin (FTE) includes the impact of acquisition accounting fair value adjustments. During the first quarter of 2020, net accretion related to acquisition accounting increased $2.8 million from the prior quarter to $9.4 million for the quarter ended March 31, 2020. The fourth quarter of 2019, first quarter of 2020, and the remaining estimated net accretion impact are reflected in the following table (dollars in thousands):

                         
          Deposit            
    Loan   Accretion   Borrowings      
    Accretion   (Amortization)   Amortization   Total
For the quarter ended December 31, 2019   $ 6,612   $ 148     $ (123 )   $ 6,637
For the quarter ended March 31, 2020     9,528     50       (138 )     9,440
For the remaining nine months of 2020     9,285     83       (495 )     8,873
For the years ending (estimated):                        
2021     9,938     14       (807 )     9,145
2022     7,974     (43 )     (829 )     7,102
2023     5,700     (32 )     (852 )     4,816
2024     4,576     (4 )     (877 )     3,695
2025     3,481     (1 )     (900 )     2,580
Thereafter     15,935           (9,873 )     6,062

(1) These are financial measures not calculated in accordance with GAAP. For a reconciliation of these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.

ASSET QUALITY

Overview 
During the first quarter of 2020, the Company experienced increases in nonperforming assets ("NPAs") primarily due to the inclusion of assets not previously reported as nonperforming that are now considered such under CECL. Past due loan levels as a percentage of total loans held for investment at March 31, 2020 were down from past due loan levels at December 31, 2019 and up from past due loan levels at March 31, 2019.  Net charge-off levels increased slightly from the fourth quarter of 2019 and were primarily related to the third-party consumer loan portfolio. The allowance for credit losses increased from December 31, 2019, as a result of the adoption of CECL as well as a worsening economic forecast due to the impact of COVID-19, which also led to an increase in the provision for credit losses.

Nonperforming Assets
At March 31, 2020, NPAs totaled $48.5 million, an increase of $15.5 million from December 31, 2019. NPAs as a percentage of total outstanding loans at March 31, 2020 were 0.38%, an increase of 12 basis points from 0.26% at December 31, 2019.  The increase in NPAs is due to the addition of $14.4 million of loans previously accounted for as purchased credit impaired ("PCI").  The Company's adoption of CECL resulted in a change in the accounting and reporting related to PCI loans which are now defined as purchased credit deteriorated ("PCD") and evaluated at the loan level instead of being evaluated in pools under PCI accounting.  All prior period nonaccrual and past due loan metrics discussed herein have not been restated for CECL accounting and exclude PCI-related loan balances.

The following table shows a summary of nonperforming asset balances at the quarter ended (dollars in thousands):

                                         
    March 31,   December 31,   September 30,   June 30,   March 31,
    2020   2019   2019   2019   2019
Nonaccrual loans   $ 44,022     $ 28,232     $ 30,032     $ 27,462     $ 24,841  
Foreclosed properties     4,444       4,708       6,385       6,506       7,353  
Total nonperforming assets   $ 48,466     $ 32,940     $ 36,417     $ 33,968     $ 32,194  
                                         

The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):

                               
    March 31,   December 31,   September 30,   June 30,   March 31,
    2020     2019     2019     2019     2019  
Beginning Balance   $ 28,232     $ 30,032     $ 27,462     $ 24,841     $ 26,953  
Net customer payments     (3,451 )     (5,741 )     (3,612 )     (3,108 )     (2,314 )
Additions     6,059       5,631       8,327       6,321       3,297  
Impact of CECL adoption     14,381                          
Charge-offs     (1,199 )     (1,690 )     (884 )     (592 )     (1,626 )
Loans returning to accruing status                 (1,103 )           (952 )
Transfers to foreclosed property                 (158 )           (517 )
Ending Balance   $ 44,022     $ 28,232     $ 30,032     $ 27,462     $ 24,841  
                                         

The following table shows the activity in foreclosed properties for the quarter ended (dollars in thousands):

                               
    March 31,   December 31,   September 30,   June 30,   March 31,
    2020     2019     2019     2019     2019  
Beginning Balance   $ 4,708     $ 6,385     $ 6,506     $ 7,353     $ 6,722  
Additions of foreclosed property     615       62       645       271       900  
Valuation adjustments     (44 )     (375 )     (62 )     (433 )     (51 )
Proceeds from sales     (854 )     (1,442 )     (737 )     (638 )     (171 )
Gains (losses) from sales     19       78       33       (47 )     (47 )
Ending Balance   $ 4,444     $ 4,708     $ 6,385     $ 6,506     $ 7,353  
                                         

Past Due Loans 
Past due loans still accruing interest totaled $75.1 million or 0.59% of total loans held for investment at March 31, 2020, compared to $76.6 million or 0.61% of total loans held for investment at December 31, 2019, and $51.4 million or 0.43% of total loans held for investment at March 31, 2019. Of the total past due loans still accruing interest $12.9 million or 0.10% of total loans held for investment were loans past due 90 days or more at March 31, 2020, compared to $13.4 million or 0.11% of total loans held for investment at December 31, 2019, and $11.0 million or 0.09% of total loans held for investment at March 31, 2019.

Net Charge-offs 
For the first quarter of 2020, net charge-offs were $5.0 million, or 0.16% of total average loans on an annualized basis, compared to $4.6 million, or 0.15%, for the prior quarter, and $4.2 million, or 0.15%, for the first quarter last year. The majority of net charge-offs in the first quarter of 2020 were related to the third-party consumer loan portfolio.

Provision for Credit Losses 
The provision for credit losses for the first quarter of 2020 was $60.2 million, an increase of $57.3 million compared to the previous quarter. The provision for credit losses for the first quarter of 2020 included $56.3 million in provision for loan losses and $3.9 million in provision for unfunded commitments. The increase in the provision for credit losses was due to the impact of the worsening economic forecast due to the impact of COVID-19 under CECL accounting for credit losses. 

Allowance for Credit Losses 
At March 31, 2020, the ACL was $150.0 million and included an allowance for loan and lease losses ("ALLL") of $141.0 million and a reserve for unfunded commitments ("RUC") of $9.0 million. The ACL increased $106.8 million from December 31, 2019, primarily due to the adoption of CECL (the "CECL Day 1 impact") as well as the impact of the worsening economic forecast related to COVID-19 subsequent to the adoption of CECL (the "CECL Day 2 impact").

The ALLL increased $98.7 million from December 31, 2019, due to the CECL Day 1 impact of $47.5 million and the CECL Day 2 impact of $51.2 million. The ALLL as a percentage of the total loan portfolio was 1.10% at March 31, 2020 and 0.34% at December 31, 2019. The ratio of the ALLL to nonaccrual loans was 320.4% at March 31, 2020, compared to 149.8% at December 31, 2019.

The RUC increased $8.1 million from December 31, 2019, due to the CECL Day 1 impact of $4.2 million and the CECL Day 2 impact of $3.9 million.

NONINTEREST INCOME

Noninterest income decreased $286,000 to $28.9 million for the quarter ended March 31, 2020 from $29.2 million in the prior quarter. Mortgage banking income was lower by $667,000 primarily due to hedging-related results negatively impacted by COVID-19-driven mortgage market volatility more than offsetting the impact of higher loan origination volumes.  Fiduciary and asset management fees declined $547,000 from the prior quarter primarily due to lower investment advisory fees resulting from the equity market driven drop in Assets Under Management during the quarter.  Service charges on deposit accounts declined $293,000 primarily due to lower overdraft fees, and interchange fees declined $229,000 from the prior quarter. In addition, the Company recorded a $1.8 million loss to unwind an interest rate swap related to short-term FHLB advances in the first quarter of 2020.  These declines were partially offset by increases in insurance-related revenue of $836,000, loan-related interest rate swap income of $478,000, and gains on sales of securities of $1.6 million from the prior quarter.

NONINTEREST EXPENSE

Noninterest expense increased $1.3 million for the quarter ended March 31, 2020 from $94.3 million in the prior quarter. Salaries and benefits increased $2.9 million primarily related to seasonal increases in payroll taxes, group insurance, and annual merit adjustments.  FDIC and other insurance expenses increased $1.6 million due to an FDIC small bank assessment credit received in the fourth quarter of 2019.  Other expenses in the first quarter of 2020 included $1.0 million in support of a community development initiative and approximately $380,000 of expenses incurred related to the Company's response to COVID-19.  These increases were partially offset by declines in marketing and advertising expense of approximately $936,000 as well as OREO and credit-related expense of approximately $859,000 due to lower OREO valuation adjustments.  Additionally, there were no merger-related or rebranding costs recognized in the first quarter of 2020 compared to $896,000 and $902,000, respectively, in the fourth quarter of 2019.

INCOME TAXES

The effective tax rate for the three months ended March 31, 2020 was 12.2% compared to 16.7% for the three months ended December 31, 2019.  The decline in effective tax rate is primarily related to excess tax benefits related to share-based compensation recorded.

BALANCE SHEET

At March 31, 2020, total assets were $17.8 billion, an increase of $284.4 million, or approximately 6.5% (annualized), from December 31, 2019, and an increase of $949.7 million, or approximately 5.6% from March 31, 2019. The increase in assets from the previous quarter was primarily due to loan growth during the first quarter of 2020. The increase from the prior year was primarily a result of loan growth.

At March 31, 2020, loans held for investment (net of deferred fees and costs) were $12.8 billion, an increase of $157.9 million, or 5.0% (annualized), from December 31, 2019, while average loans increased $266.2 million, or 8.7% (annualized), from the prior quarter. Loans held for investment increased $816.5 million, or 6.8% from March 31, 2019, while quarterly average loans increased $1.5 billion, or 13.2% from the prior year. The quarterly average increase from the first quarter of 2019 is due to the full-quarter impact of loans acquired in February of 2019.

At March 31, 2020, total deposits were $13.6 billion, an increase of $248.1 million, or approximately 7.5% (annualized), from December 31, 2019, while average deposits increased $43.9 million, or 1.3% (annualized), from prior quarter.  Deposits increased $1.1 billion, or 8.5% from March 31, 2019, while quarterly average deposits increased $1.9 billion, or 16.4% from the prior year.  The quarterly average increase from the first quarter of 2019 is due to the full-quarter impact of deposits acquired in February of 2019.

The following table shows the Company's capital ratios at the quarters ended:

               
    March 31,    December 31,    March 31,   
    2020   2019   2019  
Common equity Tier 1 capital ratio (1)   9.74 % 10.24 % 10.26 %
Tier 1 capital ratio (1)   9.74 % 10.24 % 10.26 %
Total capital ratio (1)   12.36 % 12.63 % 12.73 %
Leverage ratio (Tier 1 capital to average assets) (1)   8.44 % 8.79 % 9.51 %
Common equity to total assets   13.59 % 14.31 % 14.56 %
Tangible common equity to tangible assets (2)   8.43 % 9.08 % 9.09 %

(1)  All ratios at March 31, 2020 are estimates and subject to change pending the Company's filing of its FR Y9-C. All other periods are presented as filed.
(2)  For a reconciliation of this non-GAAP financial measure, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.

During the first quarter of 2020, the Company declared and paid cash dividends of $0.25 per common share, consistent with the fourth quarter of 2019 and an increase of $0.02, or 8.7% compared to the first quarter of 2019. On July 10, 2019, the Company announced that its Board of Directors had authorized a share repurchase program to purchase up to $150 million of the Company's common stock through June 30, 2021 in open market transactions or privately negotiated transactions.  On March 20, 2020, the Company suspended its share repurchase program, which had $20 million remaining in authorization at the time.  The Company repurchased an aggregate of approximately 3.7 million shares, at an average price of $35.48 per share, to date under the authorization, prior to suspension.

ABOUT ATLANTIC UNION BANKSHARES CORPORATION

Headquartered in Richmond, Virginia, Atlantic Union Bankshares Corporation (NASDAQ:AUB) is the holding company for Atlantic Union Bank. Atlantic Union Bank has 149 branches and approximately 170 ATMs located throughout Virginia, and in portions of Maryland and North Carolina. Middleburg Financial is a brand name used by Atlantic Union Bank and certain affiliates when providing trust, wealth management, private banking, and investment advisory products and services. Certain non-bank affiliates of Atlantic Union Bank include: Old Dominion Capital Management, Inc., and its subsidiary, Outfitter Advisors, Ltd., Dixon, Hubard, Feinour, & Brown, Inc., and Middleburg Investment Services, LLC, which provide investment advisory and/or brokerage services; and Union Insurance Group, LLC, which offers various lines of insurance products.

FIRST QUARTER 2020 EARNINGS RELEASE CONFERENCE CALL

Atlantic Union Bank will hold a conference call on Tuesday, April 28, 2020 at 9:00 a.m. Eastern Daylight Time during which management will review the first quarter 2020 financial results and provide an update on recent activities. Interested parties may participate in the call toll-free by dialing (866) 220‑4170; international callers wishing to participate may do so by dialing (864) 663‑5235. The conference ID number is 1273006.   Management will conduct a listen-only webcast with accompanying slides, which can be found at: https://edge.media-server.com/mmc/p/2tfrj3my.

A replay of the webcast, and the accompanying slides, will be available by the end of day on April 28 on the Company's website at: https://investors.atlanticunionbank.com/.

NON-GAAP FINANCIAL MEASURES

In reporting the results of the quarter ended March 31, 2020, the Company has provided supplemental performance measures on a tax-equivalent, tangible, operating, or pre-tax pre-provision basis. These non-GAAP financial measures are a supplement to GAAP, which is used to prepare the Company's financial statements, and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP. In addition, the Company's non-GAAP financial measures may not be comparable to non-GAAP financial measures of other companies. The Company uses the non-GAAP financial measures discussed herein in its analysis of the Company's performance. The Company's management believes that these non-GAAP financial measures provide additional understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented without the impact of items or events that may obscure trends in the Company's underlying performance. For a reconciliation of these measures to their most directly comparable GAAP measures and additional information about these non-GAAP financial measures, see Alternative Performance Measures (non-GAAP) section of the Key Financial Results.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include, without limitation, projections, predictions, expectations, or beliefs about future events or results that are not statements of historical fact. Such forward-looking statements are based on various assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties, and other factors, some of which cannot be predicted or quantified, that may cause actual results, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements. Forward-looking statements are often accompanied by words that convey projected future events or outcomes such as "expect," "believe," "estimate," "plan," "project," "anticipate," "intend," "will," "may," "view," "opportunity," "potential," or words of similar meaning or other statements concerning opinions or judgment of the Company and its management about future events. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of, or trends affecting, the Company will not differ materially from any projected future results, performance, or achievements expressed or implied by such forward-looking statements. Actual future results, performance, achievements or trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to:

  • changes in interest rates;
  • general economic and financial market conditions, in the United States generally and particularly in the markets in which the Company operates and which its loans are concentrated, including the effects of declines in real estate values, an increase in unemployment levels and slowdowns in economic growth, including as a result of COVID-19;
  • the quality or composition of the loan or investment portfolios and changes therein;
  • demand for loan products and financial services in the Company's market area;
  • the Company's ability to manage its growth or implement its growth strategy;
  • the introduction of new lines of business or new products and services;
  • the Company's ability to recruit and retain key employees;
  • the incremental cost and/or decreased revenues associated with exceeding $10 billion in assets;
  • real estate values in the Bank's lending area;
  • an insufficient ACL;
  • changes in accounting principles relating to loan loss recognition (CECL);
  • the Company's liquidity and capital positions;
  • concentrations of loans secured by real estate, particularly commercial real estate;
  • the effectiveness of the Company's credit processes and management of the Company's credit risk;
  • the Company's ability to compete in the market for financial services;
  • technological risks and developments, and cyber threats, attacks, or events;
  • the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts or public health events (such as COVID-19), and of governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of the Company's borrowers to satisfy their obligations to the Company, on the value of collateral securing loans, on the demand for the Company's loans or its other products and services, on incidents of cyberattack and fraud, on the Company's liquidity or capital positions, on risks posed by reliance on third-party service providers, on other aspects of the Company's business operations and on financial markets and economic growth;
  • performance by the Company's counterparties or vendors;
  • deposit flows;
  • the availability of financing and the terms thereof;
  • the level of prepayments on loans and mortgage-backed securities;
  • legislative or regulatory changes and requirements, including the impact of the CARES Act and other legislative and regulatory reactions to COVID-19;
  • potential claims, damages, and fines related to litigation or government actions, including litigation or actions arising from the Company's participation in and administration of programs related to COVID-19, including, among other things, the CARES Act;
  • the effects of changes in federal, state or local tax laws and regulations;
  • monetary and fiscal policies of the U.S. government including policies of the U.S. Department of the Treasury and the Federal Reserve;
  • changes to applicable accounting principles and guidelines; and
  • other factors, many of which are beyond the control of the Company.

Please refer to the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's Annual Report on Form 10‑K for the year ended December 31, 2019 and comparable "Risk Factors" sections of the Company's Quarterly Reports on Form 10‑Q and related disclosures in other filings, which have been filed with the SEC and are available on the SEC's website at www.sec.gov. All of the forward-looking statements made in this press release are expressly qualified by the cautionary statements contained or referred to herein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on the Company or its businesses or operations. Readers are cautioned not to rely too heavily on the forward-looking statements contained in this press release. Forward-looking statements speak only as of the date they are made and the Company does not undertake any obligation to update, revise or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(Dollars in thousands, except share data)

                     
    As of & For Three Months Ended  
    03/31/20   12/31/19   03/31/19  
Results of Operations   (unaudited)   (unaudited)   (unaudited)  
Interest and dividend income   $ 171,325   $ 174,211     $ 165,652    
Interest expense     36,317     39,081       38,105    
Net interest income     135,008     135,130       127,547    
Provision for credit losses     60,196     2,900       3,792    
Net interest income after provision for credit losses     74,812     132,230       123,755    
Noninterest income     28,907     29,193       24,938    
Noninterest expenses     95,645     94,318       106,728    
Income before income taxes     8,074     67,105       41,965    
Income tax expense     985     11,227       6,249    
Income from continuing operations     7,089     55,878       35,716    
Discontinued operations, net of tax         (42 )     (85 )  
Net income   $ 7,089   $ 55,836     $ 35,631    
                     
Interest earned on earning assets (FTE) (1)   $ 174,083   $ 176,868     $ 168,400    
Net interest income (FTE) (1)     137,766     137,787       130,295    
Total revenue (FTE) (1)     166,673     166,980       155,233    
Pre-tax pre-provision earnings (8)     68,270     71,761       64,201    
                     
Key Ratios                    
Earnings per common share, diluted   $ 0.09   $ 0.69     $ 0.47    
Return on average assets (ROA)     0.16 %   1.27   %   0.92   %
Return on average equity (ROE)     1.15 %   8.81   %   6.37   %
Efficiency ratio     58.35 %   57.40   %   69.99   %
Net interest margin     3.49 %   3.48   %   3.72   %
Net interest margin (FTE) (1)     3.56 %   3.55   %   3.80   %
Yields on earning assets (FTE) (1)     4.50 %   4.55   %   4.92   %
Cost of interest-bearing liabilities     1.23 %   1.33   %   1.44   %
Cost of deposits     0.86 %   0.92   %   0.86   %
Cost of funds     0.94 %   1.00   %   1.12   %
                     
Operating Measures (4)                    
Net operating earnings   $ 7,089   $ 57,258     $ 50,519    
Operating earnings per share, diluted   $ 0.09   $ 0.71     $ 0.66    
Operating ROA     0.16 %   1.30   %   1.31   %
Operating ROE     1.15 %   9.03   %   9.03   %
Operating ROTCE (2) (3)     2.87 %   16.01   %   16.37   %
Operating efficiency ratio (FTE) (1)(7)     54.74 %   52.65   %   54.10   %
                     
Per Share Data                    
Earnings per common share, basic   $ 0.09   $ 0.69     $ 0.47    
Earnings per common share, diluted     0.09     0.69       0.47    
Cash dividends paid per common share     0.25     0.25       0.23    
Market value per share     21.90     37.55       32.33    
Book value per common share     30.99     31.58       30.16    
Tangible book value per common share (2)     18.15     18.90       17.69    
Price to earnings ratio, diluted     60.50     13.72       16.96    
Price to book value per common share ratio     0.71     1.19       1.07    
Price to tangible book value per common share ratio (2)     1.21     1.99       1.83    
Weighted average common shares outstanding, basic     79,290,352     80,439,007       76,472,189    
Weighted average common shares outstanding, diluted     79,317,382     80,502,269       76,533,066    
Common shares outstanding at end of period     78,710,448     80,001,185       82,037,354    


                     
    As of & For Three Months Ended  
    03/31/20   12/31/19   03/31/19  
Capital Ratios   (unaudited)   (unaudited)   (unaudited)  
Common equity Tier 1 capital ratio (5)     9.74 %   10.24 %   10.26 %
Tier 1 capital ratio (5)     9.74 %   10.24 %   10.26 %
Total capital ratio (5)     12.36 %   12.63 %   12.73 %
Leverage ratio (Tier 1 capital to average assets) (5)     8.44 %   8.79 %   9.51 %
Common equity to total assets     13.59 %   14.31 %   14.56 %
Tangible common equity to tangible assets (2)     8.43 %   9.08 %   9.09 %
                     
Financial Condition                    
Assets   $ 17,847,376   $ 17,562,990   $ 16,897,655  
Loans held for investment     12,768,841     12,610,936     11,952,310  
Securities     2,655,306     2,631,437     2,804,353  
Earning Assets     15,813,780     15,576,208     14,909,318  
Goodwill     935,560     935,560     927,760  
Amortizable intangibles, net     69,298     73,669     88,553  
Deposits     13,553,035     13,304,981     12,489,330  
Borrowings     1,514,464     1,513,748     1,753,103  
Stockholders' equity     2,425,450     2,513,102     2,459,465  
Tangible common equity (2)     1,420,592     1,503,873     1,443,152  
                     
Loans held for investment, net of deferred fees and costs                    
Construction and land development   $ 1,318,252   $ 1,250,924   $ 1,326,679  
Commercial real estate - owner occupied     2,051,904     2,041,243     1,921,464  
Commercial real estate - non-owner occupied     3,328,012     3,286,098     2,970,453  
Multifamily real estate     679,390     633,743     591,431  
Commercial & Industrial     2,177,932     2,114,033     1,866,625  
Residential 1-4 Family - Commercial     721,800     724,337     743,101  
Residential 1-4 Family - Consumer     854,550     890,503     937,710  
Residential 1-4 Family - Revolving     652,135     659,504     672,087  
Auto     358,039     350,419     300,631  
Consumer     352,572     372,853     397,491  
Other Commercial     274,255     287,279     224,638  
Total loans held for investment   $ 12,768,841   $ 12,610,936   $ 11,952,310  
                     
Deposits                    
NOW accounts   $ 3,180,913   $ 2,905,714   $ 2,643,228  
Money market accounts     3,817,959     3,951,856     3,579,249  
Savings accounts     745,402     727,847     798,670  
Time deposits of $250,000 and over     696,520     684,797     463,198  
Other time deposits     2,044,668     2,064,628     2,040,872  
Time deposits     2,741,188     2,749,425     2,504,070  
Total interest-bearing deposits   $ 10,485,462   $ 10,334,842   $ 9,525,217  
Demand deposits     3,067,573     2,970,139     2,964,113  
Total deposits   $ 13,553,035   $ 13,304,981   $ 12,489,330  
                     
Averages                    
Assets   $ 17,559,921   $ 17,437,552   $ 15,699,743  
Loans held for investment     12,593,923     12,327,692     11,127,390  
Loans held for sale     50,721     75,038     14,999  
Securities     2,621,437     2,608,942     2,645,429  
Earning assets     15,563,670     15,418,605     13,891,248  
Deposits     13,346,857     13,302,955     11,469,935  
Time deposits     2,755,500     2,847,366     2,325,218  
Interest-bearing deposits     10,421,419     10,265,986     8,934,995  
Borrowings     1,442,525     1,369,035     1,790,656  
Interest-bearing liabilities     11,863,944     11,635,021     10,725,651  
Stockholders' equity     2,485,646     2,515,303     2,268,395  
Tangible common equity (2)     1,478,803     1,509,001     1,334,051  


                     
    As of & For Three Months Ended  
    03/31/20   12/31/19   03/31/19  
Asset Quality   (unaudited)   (unaudited)   (unaudited)  
Allowance for Credit Losses (ACL)                    
Beginning balance, Allowance for loan and lease losses (ALLL)   $ 42,294   $ 43,820     $ 41,045    
Add: Day 1 impact from adoption of CECL     47,484              
Add: Recoveries     2,160     2,292       1,696    
Less: Charge-offs     7,151     6,918       5,939    
Add: Provision for loan losses     56,256     3,100       4,025    
Ending balance, ALLL   $ 141,043   $ 42,294     $ 40,827    
                     
Beginning balance, Reserve for unfunded commitment (RUC)   $ 900   $ 1,100     $ 900    
Add: Day 1 impact from adoption of CECL     4,160              
Add: Impact of acquisition accounting               1,033    
Add: Provision for unfunded commitments     3,940     (200 )     (233 )  
Ending Balance, RUC   $ 9,000   $ 900     $ 1,700    
                     
Total ACL   $ 150,043   $ 43,194     $ 42,527    
                     
ALLL / total outstanding loans     1.10 %   0.34   %   0.34   %
Net charge-offs / total average loans     0.16 %   0.15   %   0.15   %
Provision for loan losses/ total average loans     1.80 %   0.10   %   0.15   %
  `                  
Nonperforming Assets(6)                    
Construction and land development   $ 3,234   $ 3,703     $ 5,513    
Commercial real estate - owner occupied     11,250     6,003       3,307    
Commercial real estate - non-owner occupied     1,642     381       1,787    
Multifamily real estate     53              
Commercial & Industrial     3,431     1,735       721    
Residential 1-4 Family - Commercial     7,040     4,301       4,244    
Residential 1-4 Family - Consumer     13,088     9,292       7,119    
Residential 1-4 Family - Revolving     3,547     2,080       1,395    
Auto     550     563       523    
Consumer and all other     187     174       232    
Nonaccrual loans   $ 44,022   $ 28,232     $ 24,841    
Foreclosed property     4,444     4,708       7,353    
Total nonperforming assets (NPAs)   $ 48,466   $ 32,940     $ 32,194    
Construction and land development   $ 317   $ 189     $ 1,997    
Commercial real estate - owner occupied     1,690     1,062       2,908    
Commercial real estate - non-owner occupied     2,037     1,451          
Multifamily real estate     377     474          
Commercial & Industrial     517     449       313    
Residential 1-4 Family - Commercial     777     674       1,490    
Residential 1-4 Family - Consumer     4,407     4,515       2,476    
Residential 1-4 Family - Revolving     2,005     3,357       518    
Auto     127     272       153    
Consumer and all other     622     953       1,098    
Loans ≥ 90 days and still accruing   $ 12,876   $ 13,396     $ 10,953    
Total NPAs and loans ≥ 90 days   $ 61,342   $ 46,336     $ 43,147    
NPAs / total outstanding loans     0.38 %   0.26   %   0.27   %
NPAs / total assets     0.27 %   0.19   %   0.19   %
ALLL / nonaccrual loans     320.39 %   149.81   %   164.35   %
ALLL/ nonperforming assets     291.01 %   128.40   %   126.82   %
Past Due Detail(6)                    
Construction and land development   $ 2,786   $ 4,563     $ 1,019    
Commercial real estate - owner occupied     10,779     3,482       4,052    
Commercial real estate - non-owner occupied     2,087     457       760    
Multifamily real estate     623     223       596    
Commercial & Industrial     4,893     8,698       2,565    
Residential 1-4 Family - Commercial     4,145     1,479       4,059    
Residential 1-4 Family - Consumer     15,667     16,244       5,889    
Residential 1-4 Family - Revolving     4,308     10,190       5,020    
Auto     1,967     2,525       2,152    
Consumer and all other     1,613     2,592       1,963    
Loans 30-59 days past due   $ 48,868   $ 50,453     $ 28,075    


                     
    As of & For Three Months Ended  
    03/31/20   12/31/19   03/31/19  
Past Due Detail cont'd(6)   (unaudited)   (unaudited)   (unaudited)  
Construction and land development   $ 316   $ 482   $ 526  
Commercial real estate - owner occupied     1,444     2,184     480  
Commercial real estate - non-owner occupied     2,765         4,129  
Multifamily real estate     1,994          
Commercial & Industrial     1,218     1,598     438  
Residential 1-4 Family - Commercial     1,066     2,207     1,365  
Residential 1-4 Family - Consumer     570     3,072     2,196  
Residential 1-4 Family - Revolving     1,286     1,784     1,753  
Auto     311     236     297  
Consumer and all other     2,362     1,233     1,197  
Loans 60-89 days past due   $ 13,332   $ 12,796   $ 12,381  
                     
Troubled Debt Restructurings                    
Performing   $ 14,865   $ 15,686   $ 20,809  
Nonperforming     5,491     3,810     4,682  
Total troubled debt restructurings   $ 20,356   $ 19,496   $ 25,491  
                     
Alternative Performance Measures (non-GAAP)                    
Net interest income (FTE)                    
Net interest income (GAAP)   $ 135,008   $ 135,130   $ 127,547  
FTE adjustment     2,758     2,657     2,748  
Net interest income (FTE) (non-GAAP) (1)   $ 137,766   $ 137,787   $ 130,295  
Noninterest income (GAAP)     28,907     29,193     24,938  
Total revenue (FTE) (non-GAAP) (1)   $ 166,673   $ 166,980   $ 155,233  
                     
Average earning assets   $ 15,563,670   $ 15,418,605   $ 13,891,248  
Net interest margin     3.49 %   3.48 %   3.72 %
Net interest margin (FTE) (1)     3.56 %   3.55 %   3.80 %
                     
Tangible Assets                    
Ending assets (GAAP)   $ 17,847,376   $ 17,562,990   $ 16,897,655  
Less: Ending goodwill     935,560     935,560     927,760  
Less: Ending amortizable intangibles     69,298     73,669     88,553  
Ending tangible assets (non-GAAP)   $ 16,842,518   $ 16,553,761   $ 15,881,342  
                     
Tangible Common Equity (2)                    
Ending equity (GAAP)   $ 2,425,450   $ 2,513,102   $ 2,459,465  
Less: Ending goodwill     935,560     935,560     927,760  
Less: Ending amortizable intangibles     69,298     73,669     88,553  
Ending tangible common equity (non-GAAP)   $ 1,420,592   $ 1,503,873   $ 1,443,152  
                     
Average equity (GAAP)   $ 2,485,646   $ 2,515,303   $ 2,268,395  
Less: Average goodwill     935,560     930,457     858,658  
Less: Average amortizable intangibles     71,283     75,845     75,686  
Average tangible common equity (non-GAAP)   $ 1,478,803   $ 1,509,001   $ 1,334,051  
                     
Operating Measures (4)                    
Net income (GAAP)   $ 7,089   $ 55,836   $ 35,631  
Plus: Merger and rebranding-related costs, net of tax         1,422     14,888  
Net operating earnings (non-GAAP)   $ 7,089   $ 57,258   $ 50,519  
                     
Noninterest expense (GAAP)   $ 95,645   $ 94,318   $ 106,728  
Less: Merger Related Costs         896     18,122  
Less: Rebranding Costs         902     407  
Less: Amortization of intangible assets     4,401     4,603     4,218  
Operating noninterest expense (non-GAAP)   $ 91,244   $ 87,917   $ 83,981  
                     
Net interest income (FTE) (non-GAAP) (1)   $ 137,766   $ 137,787   $ 130,295  
                     
Noninterest income (GAAP)     28,907     29,193     24,938  
                     
Efficiency ratio     58.35 %   57.40 %   69.99 %
Operating efficiency ratio (FTE)(7)     54.74 %   52.65 %   54.10 %


                     
    As of & For Three Months Ended  
    03/31/20   12/31/19   03/31/19  
    (unaudited)   (unaudited)   (unaudited)  
Operating ROTCE (2)(3)                    
Operating Net Income (non-GAAP)   $ 7,089   $ 57,258   $ 50,519  
Plus: Amortization of intangibles, tax effected     3,477     3,636     3,332  
Net Income before amortization of intangibles (non-GAAP)   $ 10,566   $ 60,894   $ 53,851  
                     
Average tangible common equity (non-GAAP)   $ 1,478,803   $ 1,509,001   $ 1,334,051  
Operating return on average tangible common equity (non-GAAP)     2.87 %   16.01 %   16.37 %
                     
Pre-tax pre-provision earnings (8)                    
Net income (GAAP)   $ 7,089   $ 55,836   $ 35,631  
Plus: Provision for credit losses     60,196     2,900     3,792  
Plus: Income tax expense     985     11,227     6,249  
Plus: Merger and rebranding-related costs         1,798     18,529  
Pre-tax pre-provision earnings (non-GAAP)   $ 68,270   $ 71,761   $ 64,201  
                     
Mortgage Origination Volume                    
Refinance Volume   $ 68,382   $ 50,555   $ 11,969  
Construction Volume     7,837     14,571      
Purchase Volume     64,492     63,836     32,107  
Total Mortgage loan originations   $ 140,711   $ 128,962   $ 44,076  
% of originations that are refinances     48.6 %   39.2 %   27.2 %
                     
Wealth                    
Assets under management ("AUM")   $ 4,783,228   $ 5,650,757   $ 5,425,804  
                     
Other Data                    
End of period full-time employees     2,011     1,989     1,947  
Number of full-service branches     149     149     155  
Number of full automatic transaction machines ("ATMs")     169     169     197  

(1) These are non-GAAP financial measures. Net interest income (FTE) and total revenue (FTE), which are used in computing net interest margin (FTE) and operating efficiency ratio (FTE), respectively, provide valuable additional insight into the net interest margin and the efficiency ratio by adjusting for differences in tax treatment of interest income sources. The entire FTE adjustment is attributable to interest income on earning assets, which is used in computing yield on earning assets. Interest expense and the related cost of interest-bearing liabilities and cost of funds ratios are not affected by the FTE components.

(2) These are non-GAAP financial measures. Tangible common equity is used in the calculation of certain profitability, capital, and per share ratios. The Company believes tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes will assist investors in assessing the capital of the Company and its ability to absorb potential losses.

(3) These are non-GAAP financial measures. The Company believes that ROTCE is a meaningful supplement to GAAP financial measures and useful to investors because it measures the performance of a business consistently across time without regard to whether components of the business were acquired or developed internally.

(4) These are non-GAAP financial measures. Operating measures exclude merger and rebranding-related costs unrelated to the Company's normal operations.  The Company believes these measures are useful to investors as they exclude certain costs resulting from acquisition activity and allow investors to more clearly see the combined economic results of the organization's operations.

(5) All ratios at March 31, 2020 are estimates and subject to change pending the Company's filing of its FR Y9‑C. All other periods are presented as filed.

(6) Amounts are not directly comparable due to the Company's adoption of CECL on January 1, 2020. Prior to January 1, 2020, nonaccrual and past due loan information excluded PCI-related loan balances.

(7) The operating efficiency ratio (FTE) excludes the amortization of intangible assets and merger-related costs. This measure is similar to the measure utilized by the Company when analyzing corporate performance and is also similar to the measure utilized for incentive compensation. The Company believes this measure is useful to investors as it excludes certain costs resulting from acquisition activity allowing for greater comparability with others in the industry and allowing investors to more clearly see the combined economic results of the organization's operations.

(8) This is a non-GAAP financial measure. Pre-tax pre-provision earnings excludes the provision for credit losses, which can fluctuate significantly from period-to-period under the recently adopted CECL methodology, merger and rebranding-related costs unrelated to the Company's normal operations, and income tax expense.  The Company believes this measure is useful to investors as it excludes certain costs resulting from acquisition activity as well as the potentially volatile provision measure, and allows for greater comparability with others in the industry and for investors to more clearly see the combined economic results of the organization's operations.


ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)

                 
  March 31,   December 31,   March 31,
  2020   2019   2019
ASSETS   (unaudited)     (audited)     (unaudited)
Cash and cash equivalents:                
Cash and due from banks $  197,521   $ 163,050   $ 165,041
Interest-bearing deposits in other banks    292,154     234,810     116,900
Federal funds sold    15,284     38,172     1,652
Total cash and cash equivalents    504,959     436,032     283,593
Securities available for sale, at fair value    1,972,903     1,945,445     2,109,062
Securities held to maturity, at carrying value    552,176     555,144     559,380
Restricted stock, at cost    130,227     130,848     135,911
Loans held for sale, at fair value    76,690     55,405     28,712
Loans held for investment, net of deferred fees and costs    12,768,841     12,610,936     11,952,310
Less allowance for loan and lease losses    141,043     42,294     40,827
Total loans held for investment, net    12,627,798     12,568,642     11,911,483
Premises and equipment, net    161,139     161,073     172,522
Goodwill    935,560     935,560     927,760
Amortizable intangibles, net    69,298     73,669     88,553
Bank owned life insurance    324,980     322,917     317,990
Other assets    491,646     377,587     361,580
Assets of discontinued operations    —     668     1,109
Total assets $  17,847,376   $ 17,562,990   $ 16,897,655
LIABILITIES                
Noninterest-bearing demand deposits $  3,067,573   $ 2,970,139   $ 2,964,113
Interest-bearing deposits    10,485,462     10,334,842     9,525,217
Total deposits    13,553,035     13,304,981     12,489,330
Securities sold under agreements to repurchase    56,781     66,053     73,774
Other short-term borrowings    380,000     370,200     939,700
Long-term borrowings    1,077,683     1,077,495     739,629
Other liabilities    354,427     230,519     194,565
Liabilities of discontinued operations    —     640     1,192
Total liabilities    15,421,926     15,049,888     14,438,190
Commitments and contingencies                
STOCKHOLDERS' EQUITY                
Common stock, $1.33 par value, shares authorized of 200,000,000 at both March 31, 2020 and December 31, 2019, and 100,000,000 at March 31, 2019, respectively; shares issued and outstanding of 78,710,448 at March 31, 2020, 80,001,185 at December 31, 2019, and 82,037,354 at March 31, 2019.    104,086     105,827     108,475
Additional paid-in capital    1,743,429     1,790,305     1,859,588
Retained earnings    529,606     581,395     483,005
Accumulated other comprehensive income (loss)    48,329     35,575     8,397
Total stockholders' equity    2,425,450     2,513,102     2,459,465
Total liabilities and stockholders' equity $  17,847,376   $ 17,562,990   $ 16,897,655
                 



ATLANTIC UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data)

                 
  Three Months Ended
  March 31,   December 31,   March 31,
  2020   2019     2019  
  (Unaudited)   (Unaudited)   (Unaudited)
Interest and dividend income:                
Interest and fees on loans $  151,127   $ 152,513     $ 144,115  
Interest on deposits in other banks    862     1,686       473  
Interest and dividends on securities:                
Taxable    11,627     12,378       13,081  
Nontaxable    7,709     7,634       7,983  
Total interest and dividend income    171,325     174,211       165,652  
Interest expense:                
Interest on deposits    28,513     30,884       24,430  
Interest on short-term borrowings    1,340     1,166       6,551  
Interest on long-term borrowings    6,464     7,031       7,124  
Total interest expense    36,317     39,081       38,105  
Net interest income    135,008     135,130       127,547  
Provision for credit losses    60,196     2,900       3,792  
Net interest income after provision for credit losses    74,812     132,230       123,755  
Noninterest income:                
Service charges on deposit accounts    7,578     7,871       7,158  
Other service charges, commissions and fees    1,624     1,544       1,664  
Interchange fees    1,625     1,854       5,045  
Fiduciary and asset management fees    5,984     6,531       5,054  
Mortgage banking income    2,022     2,689       1,454  
Gains on securities transactions    1,936     369       151  
Bank owned life insurance income    2,049     2,119       2,055  
Loan-related interest rate swap fees    3,948     3,470       1,460  
Other operating income    2,141     2,746       897  
Total noninterest income    28,907     29,193       24,938  
Noninterest expenses:                
Salaries and benefits    50,117     47,233       48,007  
Occupancy expenses    7,133     7,366       7,399  
Furniture and equipment expenses    3,741     3,559       3,396  
Printing, postage, and supplies    1,290     1,293       1,242  
Technology and data processing    6,169     6,483       5,676  
Professional services    3,307     3,636       2,958  
Marketing and advertising expense    2,739     3,675       2,383  
FDIC assessment premiums and other insurance    2,861     1,254       2,639  
Other taxes    4,120     3,970       3,764  
Loan-related expenses    2,697     2,793       2,289  
OREO and credit-related expenses    688     1,547       684  
Amortization of intangible assets    4,401     4,603       4,218  
Training and other personnel costs    1,571     2,136       1,144  
Merger-related costs    —     896       18,122  
Rebranding expense    —     902       407  
Other expenses    4,811     2,972       2,400  
Total noninterest expenses    95,645     94,318       106,728  
Income from continuing operations before income taxes    8,074     67,105       41,965  
Income tax expense    985     11,227       6,249  
Income from continuing operations $  7,089   $ 55,878     $ 35,716  
Discontinued operations:                
Income (loss) from operations of discontinued mortgage segment $  —   $ (56 )   $ (115 )
Income tax expense (benefit)    —     (14 )     (30 )
Income (loss) on discontinued operations    —     (42 )     (85 )
Net income    7,089     55,836       35,631  
Basic earnings per common share $  0.09   $ 0.69     $ 0.47  
Diluted earnings per common share $  0.09   $ 0.69     $ 0.47  
                     
                     

AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)

                               
  For the Quarter Ended
  March 31, 2020   December 31, 2019
  Average
Balance
  Interest
Income /
 Expense (1)
  Yield /
Rate (1)(2)
  Average
Balance
  Interest
Income /
 Expense (1)
  Yield /
Rate (1)(2)
         
  (unaudited)     (unaudited)
Assets:                              
Securities:                              
Taxable $  1,664,449     $  11,627   2.81 %   $ 1,666,082     $ 12,378   2.95 %
Tax-exempt    956,988        9,759   4.10 %     942,860       9,663   4.07 %
Total securities    2,621,437        21,386   3.28 %     2,608,942       22,041   3.35 %
Loans, net (3) (4)    12,593,923        151,313   4.83 %     12,327,692       152,345   4.90 %
Other earning assets    348,310        1,384   1.60 %     481,971       2,482   2.04 %
Total earning assets    15,563,670     $  174,083   4.50 %     15,418,605     $ 176,868   4.55 %
Allowance for credit losses    (90,141 )               (44,739 )          
Total non-earning assets    2,086,392                 2,063,686            
Total assets $  17,559,921               $ 17,437,552            
                               
Liabilities and Stockholders' Equity:                              
Interest-bearing deposits:                              
Transaction and money market accounts $  6,933,345     $  14,521   0.84 %   $ 6,683,093     $ 16,042   0.95 %
Regular savings    732,574        157   0.09 %     735,527       190   0.10 %
Time deposits (5)    2,755,500        13,835   2.02 %     2,847,366       14,652   2.04 %
Total interest-bearing deposits    10,421,419        28,513   1.10 %     10,265,986       30,884   1.19 %
Other borrowings (6)    1,442,525        7,804   2.18 %     1,369,035       8,197   2.38 %
Total interest-bearing liabilities    11,863,944        36,317   1.23 %     11,635,021     $ 39,081   1.33 %
                               
Noninterest-bearing liabilities:                              
Demand deposits    2,925,438                 3,036,969            
Other liabilities    284,893                 250,259            
Total liabilities    15,074,275                 14,922,249            
Stockholders' equity    2,485,646                 2,515,303            
Total liabilities and stockholders' equity $  17,559,921               $ 17,437,552            
Net interest income       $  137,766             $ 137,787    
                               
Interest rate spread             3.27 %               3.22 %
Cost of funds             0.94 %               1.00 %
Net interest margin             3.56 %               3.55 %

(1)  Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 21%.
(2)  Rates and yields are annualized and calculated from actual, not rounded amounts in thousands, which appear above.
(3)  Nonaccrual loans are included in average loans outstanding.
(4)  Interest income on loans includes $9.5 million and $6.6 million for the three months ended March 31, 2020 and December 31, 2019, respectively, in accretion of the fair market value adjustments related to acquisitions.
(5)  Interest expense on time deposits includes $50,000 and $148,000 for the three months ended March 31, 2020 and December 31, 2019, respectively, in accretion of the fair market value adjustments related to acquisitions.
(6)  Interest expense on borrowings includes $138,000 and $123,000 for the three months ended March 31, 2020 and December 31, 2019, in amortization of the fair market value adjustments related to acquisitions.

Contact: 
Robert M. Gorman - (804) 523‑7828
Executive Vice President / Chief Financial Officer

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