Atlantic Union Bankshares Corp

For the period ended Dec 31, 2023. Filed Feb 22, 2024.

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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.

FY2023 · Filed Feb 22, 2024

AUB$40.18+2.1%Stored close · as of Nov 9, 2026

Extracted filing text, with the paragraph anchors used by the comparison.

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Contents

INDEX


ITEM		PAGE
PART I

Item 1.	Business	1
Item 1A.	Risk Factors	17
Item 1B.	Unresolved Staff Comments	38
Item 1C.	Cybersecurity	38
Item 2.	Properties	40
Item 3.	Legal Proceedings	40
Item 4.	Mine Safety Disclosures	40

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	41
Item 6.	[Reserved]	42
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	76
Item 8.	Financial Statements and Supplementary Data	77
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	149
Item 9A.	Controls and Procedures	149
Item 9B.	Other Information	150
Item 9C.	Disclosure Regarding Foreign Jurisdiction That Prevent Inspections	150

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	151
Item 11.	Executive Compensation	151
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	152
Item 13.	Certain Relationships and Related Transactions, and Director Independence	152
Item 14.	Principal Accountant Fees and Services	152

PART IV

Item 15.	Exhibit and Financial Statement Schedules	152
	Signatures	157

Glossary of Acronyms and Defined Terms**

Access	–	Access National Corporation and its subsidiaries
ACL	–	Allowance for credit losses
AFS	–	Available for sale
ALCO	–	Asset liability management committee
ALLL	–	Allowance for loan and lease losses, a component of ACL
American National	–	American National Bankshares Inc.
AOCI	–	Accumulated other comprehensive income (loss)
ASC	–	Accounting Standards Codification
ASU	–	Accounting Standards Update
AUB	–	Atlantic Union Bankshares Corporation
the Bank	–	Atlantic Union Bank
BHCA	–	Bank Holding Company Act of 1956, as amended
BOLI	–	Bank-owned life insurance
bps	–	Basis points
BSA/AML	–	Bank Secrecy Act/Anti-Money Laundering regulations
BTFP	–	Bank Term Funding Program
CAMELS	–	Capital adequacy, asset quality, management, earnings, liquidity, and sensitivity
CECL	–	Current expected credit losses
CFPB	–	Consumer Financial Protection Bureau
the Company	–	Atlantic Union Bankshares Corporation and its subsidiaries
CRA	–	Community Reinvestment Act of 1977
depositary shares	–	Depositary shares, each representing a 1/400th ownership interest in a share of the
		Company’s Series A preferred stock, with a liquidation preference of $10,000 per share of Series A preferred stock (equivalent to $25 per depositary share)
DHFB	–	Dixon, Hubard, Feinour & Brown, Inc.
DIF	–	Deposit Insurance Fund
Dodd-Frank Act	–	Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
EPS	–	Earnings per common share
ESG	–	Environmental, social, and governance
ESOP	–	Employee Stock Ownership Plan
Exchange Act	–	Securities Exchange Act of 1934, as amended
FASB	–	Financial Accounting Standards Board
FDIA	–	Federal Deposit Insurance Act
FDIC	–	Federal Deposit Insurance Corporation
Federal Reserve	–	Board of Governors of the Federal Reserve System
FRB	–	Federal Reserve Bank of Richmond
FHLB	–	Federal Home Loan Bank of Atlanta
FHLMC	–	Federal Home Loan Mortgage Corporation
FinCEN	–	Financial Crimes Enforcement Network
FNB	–	FNB Corporation
FNMA	–	Federal National Mortgage Association
FOMC	–	Federal Open Market Committee
FTE	–	Fully taxable equivalent
GAAP	–	Accounting principles generally accepted in the United States
GNMA	–	Government National Mortgage Association
GSE	–	Government-sponsored enterprise
HTM	–	Held to maturity
ICE	–	Intercontinental Exchange Data Services
LHFI	–	Loans held for investment
LHFS	–	Loans held for sale
LIBOR	–	London Interbank Offered Rate
MBS	–	Mortgage-Backed Securities
merger agreement	–	Agreement and Plan of Merger dated July 24, 2023 by and between Atlantic Union
		Bankshares Corporation and American National Bankshares Inc.
MFC	–	Middleburg Financial Corporation

NOL	–	Net operating loss
NPA	–	Nonperforming assets
NYSE	–	New York Stock Exchange
OCI	–	Other comprehensive (loss) income
OFAC	–	Office of Foreign Assets Control
OREO	–	Other real estate owned
PCA	–	Prompt Corrective Action
PCD	–	Purchased credit deteriorated
PSU	–	Performance stock unit
ROU asset	–	Right of Use Asset
RPAs	–	Risk Participation Agreements
RSA	–	Restricted stock award
SBA	–	Small Business Administration
SEC	–	U.S. Securities and Exchange Commission
Securities Act	–	Securities Act of 1933, as amended
Series A preferred stock	–	6.875% Perpetual Non-Cumulative Preferred Stock, Series A, par value $10.00 per share
SOFR	–	Secured Overnight Financing Rate
TDR	–	Troubled debt restructuring
TLM	–	Troubled loan modification
VCDPA	–	Virginia Consumer Data Protection Act
VFG	–	Virginia Financial Group, Inc.
VIE	–	Variable Interest Entity
VOE	–	Voting Interest Entity
Virginia SCC	–	Virginia State Corporation Commission

iii

FORWARD-LOOKING STATEMENTS

Certain statements in this Form 10-K 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, statements regarding our expectations with regard to our business, financial and operating results, including our deposit base and funding and the impact of future economic conditions, anticipated changes in the interest rate environments and the related impacts on our net interest margin, changes in economic conditions, management’s belief regarding liquidity and capital resources, the expected impact of our cost saving measures initiated in the second quarter of 2023, and the expected impact of our balance sheet restructuring in the first and third quarters of 2023, statements regarding our pending merger with American National, and statements that include other projections, predictions, expectations, or beliefs about future events or results or otherwise are not statements of historical fact. Such forward-looking statements are based on certain 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 characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “seek to,” “opportunity,” “potential,” “continue, “confidence” or words of similar meaning or other statements concerning opinions or judgment of our management about future events. Although we believe that our expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of our existing knowledge of our business and operations, there can be no assurance that actual future results, performance, or achievements of, or trends affecting, us will not differ materially from any projected future results, performance, achievements or trends 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, the effects of or changes in:

●	market interest rates and their related impacts on macroeconomic conditions, customer and client behavior, our funding costs, and our loan and securities portfolios;

●	inflation and its impacts on economic growth and customer and client behavior;

●	adverse developments in the financial industry generally, such as bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior;

●	general economic and financial market conditions, in the United States generally and particularly in the markets in which we operate and which our loans are concentrated, including the effects of declines in real estate values, an increase in unemployment levels and slowdowns in economic growth;

●

the failure to close our previously announced merger with American National when expected or at all because required regulatory approvals and other conditions to closing are not received or satisfied on a timely basis or at all, and the risk that any regulatory approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed merger;

●	the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement;

●	any change in the purchase accounting assumptions used regarding the American National assets acquired and liabilities assumed to determine the fair value and credit marks, particularly in light of the current interest rate environment;

●	the possibility that the anticipated benefits of the proposed merger with American National, including anticipated cost savings and strategic gains, are not realized when expected or at all;

●	the proposed merger with American National being more expensive or taking longer to complete than anticipated, including as a result of unexpected factors or events;

●	the diversion of management’s attention from ongoing business operations and opportunities due to the proposed merger with American National;

●	potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed merger with American National;

●	the dilutive effect of shares of the Company’s common stock to be issued at the completion of the proposed merger with American National;

●	changes in the Company’s or American National’s share price before closing;

●	monetary and fiscal policies of the U.S. government, including policies of the U.S. Department of the Treasury and the Federal Reserve;

●	the quality or composition of our loan or investment portfolios and changes therein;

●	demand for loan products and financial services in our market areas;

●	our ability to manage our growth or implement our growth strategy;

●	the effectiveness of expense reduction plans;

●	the introduction of new lines of business or new products and services;

●	our ability to recruit and retain key employees;

●	changes in accounting principles, standards, rules, and interpretations, and the related impact on our financial statements;

●	an insufficient ACL or volatility in the ACL resulting from the CECL methodology, either alone or as that may be affected by changing economic conditions, credit concentrations, inflation, changing interest rates, or other factors;

●	our liquidity and capital positions;

●	concentrations of loans secured by real estate, particularly commercial real estate;

●	the effectiveness of our credit processes and management of our credit risk;

●	our ability to compete in the market for financial services and increased competition from fintech companies;

●	technological risks and developments, and cyber threats, attacks, or events;

●	operational, technological, cultural, regulatory, legal, credit, and other risks associated with the exploration, consummation and integration of potential future acquisitions, whether involving stock or cash considerations;

●

the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts or public health events (such as pandemics), and of governmental and societal responses thereto; these potential adverse effects may include, without limitation, adverse effects on the ability of our borrowers to satisfy their obligations to us, on the value of collateral securing loans, on the demand for our loans or our other products and services, on supply chains and methods used to distribute products and services, on incidents of cyberattack and fraud, on our liquidity or capital positions, on risks posed by reliance on third-party service providers, or on other aspects of our business operations and on financial markets and economic growth;

●	performance by our 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;

●	actual or potential claims, damages, and fines related to litigation or government actions, which may result in, among other things, additional costs, fines, penalties, restrictions on our business activities, reputational harm, or other adverse consequences;

●	the effects of changes in federal, state or local tax laws and regulations;

●	any event or development that would cause us to conclude that there was an impairment of any asset, including intangible assets, such as goodwill; and

●	other factors, many of which are beyond our control.

More information on risk factors that could affect our forward-looking statements is included under the section entitled “Risk Factors” set forth herein. All risk factors and uncertainties described herein should be considered in evaluating forward-looking statements, all forward-looking statements made in this Form 10-K are expressly qualified by the cautionary statements contained in this Form 10-K, and undue reliance should not be placed on such forward-looking statements. 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 our businesses or operations. Forward-looking statements speak only as of the date they are made. We do not intend or assume any obligation to update, revise or clarify any forward-looking statements that may be made from time to time by or on behalf of the Company, whether as a result of new information, future events or otherwise.

SUMMARY OF RISK FACTORS

An investment in our securities involves risks, including those summarized below. For a more complete discussion of these risk factors, see “Item 1A—Risk Factors.”

Risks Related to Our Lending Activities

●	Our ACL may be insufficient to absorb credit losses in our loan portfolio.

●	Events that negatively impact the real estate market could hurt our business.

●	Our loan portfolio contains commercial real estate, construction and development loans and commercial and industrial loans, which may expose us to additional credit risks, and may adversely affect our results of operations and financial condition.

●	The loans we make through federal programs are dependent on the federal government’s continuation and support of these programs and on our compliance with program requirements.

●	We use independent appraisals and other valuation techniques in evaluating and monitoring loans secured by real estate and other real estate owned, which may not accurately describe the net value of the asset.

●	If we fail to effectively manage credit risk, our business and financial condition will suffer.

●	Our focus on lending to small to mid-sized community-based businesses may increase our credit risk.

●	Nonperforming assets may adversely affect our business, results of operations, and financial condition.

●

Our mortgage revenue is cyclical and sensitive to interest rates, changes in economic conditions, decreased economic activity, and slowdowns in the housing market, any of which could adversely impact our profits, and we may be required to repurchase mortgage loans or indemnify buyers against losses, which could harm our liquidity, results of operations and financial condition.

●	We are subject to environmental risks.

Risks Related to Our Business, Industry, Markets and Market Interest Rates

●	Our business and results of operations may be adversely affected by the financial markets, fiscal, monetary, and regulatory policies, developments impacting the financial services industry specifically and economic conditions.

●	We may not be able to maintain a strong core deposit base or access other low-cost funding sources.

●	We face substantial competition that could adversely affect our growth and/or operating results.

●	Consumers may increasingly decide not to use banks to complete their financial transactions, which could have a material adverse effect on our financial condition and results of operations.

●	Changes in interest rates could adversely affect our income and cash flows.

●	We may incur losses if asset values decline, including due to changes in interest rates and prepayment speeds.

Risks Related to Our Operations

●

A failure and/or breach of our operating or securities systems or infrastructure, or those of our third-party providers, including as a result of cyber-attacks, could disrupt our business, result in disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and cause losses.

●	We face information security risks that could result in the disclosure of confidential information, adversely affect our business or reputation, and create significant legal and financial exposure.

●	Failure to complete our proposed merger with American National could negatively impact us.

●	Regulatory approvals for our proposed merger with American National may not be received, may take longer than expected or may impose conditions that are not presently anticipated, cannot be met, or that could have an adverse effect on the combined company following the merger.

●	Combining the Company and American National may be more difficult, costly or time consuming than expected and we may fail to realize the anticipated benefits and cost savings of the merger.

●	Interest rate volatility may adversely impact the fair value adjustments of investments and loans acquired in our proposed merger with American National.

●	Shareholder litigation could prevent or delay the completion of our proposed merger with American National or otherwise negatively impact our business, financial condition and results of operations.

●	Our business strategy includes continued growth, and our financial condition and results of operation could be negatively affected if we fail to grow or fail to manage our growth effectively.

●	We may be adversely affected by risks associated with future mergers and acquisitions, including execution risk, which could disrupt our business and dilute shareholder value.

●	The carrying value of goodwill and other intangible assets may be adversely affected.

●	Our risk-management framework may not be effective in mitigating risks and/or losses.

●	We could be adversely affected if our design, implementation, or use of models in our business and operations is flawed.

●	Failure to keep pace with technological change could adversely affect our business and competitive position, and we may experience operational challenges when implementing new technologies.

●	The implementation of new lines of business or new products and services may subject us to additional risk.

●	Our business could be adversely affected by the operational functions of such counterparties over which we have limited or no control that provide key components of our infrastructure.

●	Our financial condition could be adversely affected if we rely on misleading information.

●	We are subject to losses due to errors, omissions or fraud by our employees, clients, counterparties, or others.

●	If we are unable to attract, retain, develop, and motivate our human capital, our business, results of operations, and prospects could be adversely affected.

●	Our internal controls and procedures may fail or be circumvented, which could have a material adverse effect on our business, financial condition, and results of operation.

●	Our business needs and future growth may require additional capital, which may not be available or may be dilutive.

●	We are or may become involved from time to time to various claims and lawsuits or information-gathering requests, investigations, and proceedings by governmental and self-regulatory agencies that may lead to adverse consequences, including expenses and ultimate exposures that cannot be ascertained.

●	We may not be able to generate sufficient taxable income to fully realize our deferred tax assets.

Risks Related to the Regulatory Environment

●	We are subject to extensive regulation that could limit or restrict our activities.

●	Current and to-be-effective laws and regulations addressing consumer privacy and data use and security could increase our costs and failure to comply with such laws and regulation could impact our business, financial condition, and reputation.

●	If we fail to maintain sufficient capital, our financial condition, liquidity, and results of operations, as well as our ability to maintain regulatory compliance, would be adversely affected.

●	New regulations and new approaches to regulation or enforcement by the CFPB could adversely impact us.

●	Any deemed deficiency by the Bank with respect to the Bank Secrecy Act and other anti-money laundering regulations could result in significant liability and have a material adverse effect on our business strategy.

●	We are subject to numerous laws designed to protect consumers, including the CRA and fair lending laws, and failure to comply with these laws could lead to material penalties and other sanctions.

●	The Federal Reserve may require us to commit capital resources to support the Bank.

Risks Related to Our Securities

●	Our ability to pay dividends is limited, and we may be unable to pay dividends in the future.

●	The trading volumes in our common stock may not provide adequate liquidity for investors.

●	Future capital needs could result in dilution of shareholder investment and could adversely affect the market price of our common stock and preferred stock (or depositary shares).

●	Holders of our indebtedness and depositary shares have senior rights to those of our common shareholders.

●	Our governing documents and certain provisions of Virginia law could have an anti-takeover affect and may delay, make more difficult or prevent an attempted acquisition of the Company that you may favor.

●	Our stock price may be volatile, which could result in losses to our investors and litigation against us.

General Risk Factors

●	Failure to maintain our reputation may materially adversely affect our performance.

●	Changes in accounting standards could impact reported earnings.

●	We are subject to risks associated with climate change and other weather and natural disaster impacts.

●	We are subject to environmental, social and governance risks that could adversely affect our reputation, the trading price of our common stock and/or our business, operations, and earnings.

vii

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