Atlantic Union Bankshares Corp (AUB, Financial) released its Q3 2023 earnings report on October 19, 2023, highlighting strong operating results and strategic actions that have positively impacted the company's financial performance. The company reported net income available to common shareholders of $51.1 million and basic and diluted earnings per common share of $0.68 for the third quarter of 2023. Adjusted operating earnings available to common shareholders were $59.8 million, with adjusted diluted operating earnings per common share of $0.80.
Strategic Actions and Financial Performance
Atlantic Union's Q3 2023 results were significantly influenced by several strategic actions, including a merger with American National Bankshares Inc., cost-saving initiatives, and a sale-leaseback transaction. The merger with American National incurred pre-tax costs of approximately $2.0 million. The cost-saving measures, initiated in Q2 2023, are expected to reduce the annual expense run rate by approximately $17 million. The sale-leaseback transaction resulted in a pre-tax gain of approximately $27.7 million.
Income Statement Highlights
Net interest income for Q3 2023 was $151.9 million, a slight decrease from $152.1 million in Q2 2023. This decrease was attributed to higher deposit costs driven by increases in market interest rates, changes in the deposit mix, and growth in average deposit balances. However, these factors were partially offset by an increase in loan yields on variable rate loans and growth in average loans held for investment.
Asset Quality and Balance Sheet
Atlantic Union maintained stable asset quality, with nonperforming assets (NPAs) at 0.19% of total loans held for investment (LHFI), unchanged from the previous quarter. Net charge-offs were negligible at 0.01% of total average LHFI for Q3 2023. The allowance for credit losses totaled $140.9 million at the end of September 2023, a $4.7 million increase from the previous quarter.
As of September 30, 2023, total assets were $20.7 billion, an increase of $133.9 million or approximately 2.6% (annualized) from June 30, 2023. Total deposits were $16.8 billion, an increase of $374.5 million or approximately 9.1% (annualized) from June 30, 2023.
Looking Ahead
Atlantic Union's strong Q3 2023 results reflect the company's proactive measures to manage a challenging environment. The company remains committed to delivering sustainable, profitable growth and building long-term value for shareholders. The company's strategic actions, including the merger with American National Bankshares Inc., cost-saving initiatives, and a sale-leaseback transaction, are expected to continue to positively impact future financial results.
