Atlantic Union Bankshares Corp

Previous wording

Certain statements in this Quarterly Report 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 the recently completed acquisition of Sandy Spring, including expectations with regard to the benefits of the Sandy Spring acquisition; statements regarding our intended sale of approximately $2 billion of CRE loans; statements regarding our future ability to recognize the benefits of certain tax assets; statements regarding our business, financial and operating results, including our deposit base and funding; the impact of changes in economic conditions, anticipated changes in the interest rate environment and the related impacts on our net interest margin; changes in economic, fiscal or trade policy and the potential impacts on our business, loan demand and economic conditions in our markets and nationally; management’s beliefs regarding our liquidity, capital resources, asset quality, CRE loan portfolio and our customer relationships; 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,” “opportunity,” “seek to,” “potential,” “continue,” “confidence,” or words of similar meaning or other statements concerning opinions or judgment of the Company and 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:

Current wording

Certain statements in this Quarterly Report 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 the recently completed acquisition of Sandy Spring, including expectations with regard to the benefits of the Sandy Spring acquisition; statements regarding our future ability to recognize the benefits of certain tax assets; statements regarding our business, financial and operating results, including our deposit base and funding; the impact of changes in economic conditions, anticipated changes in the interest rate environment and the related impacts on our net interest margin, changes in economic, fiscal or trade policy and the potential impacts on our business, loan demand and economic conditions in our markets and nationally; management’s beliefs regarding our liquidity, capital resources, asset quality, CRE loan portfolio and our customer relationships; 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,” “opportunity,” “seek to,” “potential,” “continue,” “confidence,” or words of similar meaning or other statements concerning opinions or judgment of the Company and 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

Previous wording

In November 2024, the FASB issued ASU No. 2024-03Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. This guidance requires enhanced disclosure of income statement expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are evaluating the impact of ASU No. 2024-03 on our consolidated financial statements.

Current wording

In November 2024, the FASB issued ASU No. 2024-03Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. This guidance requires enhanced disclosure of income statement expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. ASU No. 2024-03 is not expected to have an impact on our financial condition or results of operations but could change certain disclosures in our SEC filings.

Previous wording

Headquartered in Richmond, Virginia, Atlantic Union Bankshares Corporation (NYSE: AUB) is the holding company for Atlantic Union Bank. Atlantic Union Bank has branches and ATMs located throughout Virginia and in portions of Maryland and North Carolina. Certain non-bank financial services affiliates of Atlantic Union Bank include: Atlantic Union Equipment Finance, Inc., which provides equipment financing; Atlantic Union Financial Consultants, LLC, which provides brokerage services; and Union Insurance Group, LLC, which offers various lines of insurance products.

Current wording

Headquartered in Richmond, Virginia, Atlantic Union Bankshares Corporation (NYSE: AUB) is the holding company for Atlantic Union Bank. Atlantic Union Bank has branches and ATMs located in Virginia, Maryland and North Carolina. Certain non-bank financial services affiliates of Atlantic Union Bank include: Atlantic Union Equipment Finance, Inc., which provides equipment financing; Atlantic Union Financial Consultants, LLC, which provides brokerage services; and Union Insurance Group, LLC, which offers various lines of insurance products.

Previous wording

On April 1, 2025, we completed our merger with Sandy Spring, the bank holding company for Sandy Spring Bank. Under the terms of the Sandy Spring merger agreement, at the effective time of the merger, each outstanding share of Sandy Spring common stock, other than shares of restricted Sandy Spring common stock and certain shares held by the Company or Sandy Spring, was converted into 0.900 shares of our common stock. With the acquisition of Sandy Spring, we acquired over 50 branches in Virginia, Maryland, and Washington D.C, enhancing our presence in Northern Virginia and Maryland.

Current wording

Under the terms of the Sandy Spring merger agreement, at the effective time of the merger, each outstanding share of Sandy Spring common stock, other than shares of restricted Sandy Spring common stock and certain shares held by the Company or Sandy Spring, was converted into the right to receive 0.900 shares of our common stock. With the acquisition of Sandy Spring, we acquired over 50 branches in Virginia, Maryland, and Washington D.C, enhancing our presence in Northern Virginia and Maryland.

Previous wording

The underwriters were granted a 30-day option to purchase up to an additional 1,478,873 shares of our common stock. On October 21, 2024, the underwriters exercised in full their option to purchase the additional 1,478,873 shares of our common stock pursuant to the underwriting agreement and, in connection therewith, we entered into an additional forward sale agreement with the Forward Purchaser relating to 1,478,873 shares of our common stock, on terms substantially similar to those contained in the initial forward sale agreement (such additional forward sale agreement together with the initial forward sale agreement, the “Forward Sale Agreements”).

Current wording

The underwriters were granted a 30-day option to purchase up to an additional 1,478,873 shares of our common stock. On October 21, 2024, the underwriters exercised in full their option to purchase the additional 1,478,873 shares of our common stock pursuant to the underwriting agreement and, in connection therewith, we entered into an additional forward sale agreement with the Forward Purchaser relating to the 1,478,873 shares of our common stock, on terms substantially similar to those contained in the initial forward sale agreement (such additional forward sale agreement together with the initial forward sale agreement, the “Forward Sale Agreements”).

Previous wording

We did not initially receive any proceeds from the sale of our common stock sold by the Forward Seller to the underwriters named in the underwriting agreement. On April 1, 2025, we physically settled in full the Forward Sale Agreements by delivering 11,338,028 shares of our common stock to the Forward Purchaser. We received net proceeds from such sale of shares of our common stock and full physical settlement of the Forward Sale Agreements, before expenses, of approximately $385.0 million.

Current wording

On April 1, 2025, we physically settled in full the Forward Sale Agreements by delivering 11,338,028 shares of our common stock to the Forward Purchaser. We received net proceeds from such sale of shares of our common stock and full physical settlement of the Forward Sale Agreements, before expenses, of approximately $385.0 million.

Previous wording

We are continually monitoring the impact of various global and national events on our results of operations and financial condition, including changes in economic conditions, including inflation and recessionary conditions, changes in market interest rates, geopolitical conflicts, deposit competition, liquidity strains, changes in government policy, including changes in, or the imposition of, tariffs and/or trade barriers, and changes in legislative or regulatory requirements. The timing and impact of such events on our results of operation and financial condition will depend on future developments, which are highly uncertain and difficult to predict.

Current wording

We are continually monitoring the impact of various global and national events on our results of operations and financial condition, including changes in economic conditions, such as inflation and recessionary conditions, changes in market interest rates, geopolitical conflicts, deposit competition, liquidity strains, changes in government policy, including changes in, or the imposition of, tariffs and/or trade barriers, and changes in legislative or regulatory requirements. The timing and impact of such events on our results of operation and financial condition will depend on future developments, which are highly uncertain and difficult to predict. In July 2025, the One Big Beautiful Bill Act was signed into law, which includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key provisions from the Tax Cuts and Jobs Act of 2017 and expanding certain incentives from the Inflation Reduction Act of 2022 while accelerating the phase-out of others. We are still evaluating the impact on our income tax expense and taxes payable from the tax provisions of the One Big Beautiful Bill Act.

Previous wording

During the first quarter of 2025, financial markets, international relations and global supply chains were impacted by changes and developments in U.S. trade policies and practices, including with respect to tariffs. Due to the rapidly evolving state of U.S. trade policies, the amount and duration of any tariffs and their ultimate impact on us, our customers, financial markets and the U.S. and global economies is currently uncertainty. However, increased and prolonged economic uncertainty, elevated tariff levels or their wide-spread use in U.S. trade policies, as well as related tensions caused by such tariffs, could adversely affect the U.S. and global economies and financial markets, including by increasing inflation and leading to a slowdown of future economic growth and ultimately recessionary conditions.

Current wording

In the first half of 2025, financial markets, international relations and global supply chains were impacted by changes and developments in U.S. trade policies and practices, including tariffs. Due to the rapidly evolving state of U.S. trade policies, the amount and duration of any tariffs and their ultimate impact on us, our customers, financial markets and the U.S. and global economies is currently uncertainty. However, there is a risk that these policy changes could have a negative impact on certain of our customers causing increased difficulty in repaying their loans or other obligations which could result in a higher level of credit losses in our loan portfolios with a corresponding impact on our results of operations. In addition, increased and prolonged economic uncertainty, the potential for elevated tariff levels or their wide-spread use in U.S. trade policies, as well as related tensions caused by such tariffs, could adversely affect the U.S. and global economies and financial markets, including by increasing inflation and leading to a slowdown of future economic growth and ultimately recessionary conditions.

Previous wording

Inflation eased substantially in 2024, but it was estimated at 2.4% as of March 2025, which is still over the FOMC’s 2.0% target. In late 2024, the Federal Reserve shifted its interest rate policy as inflationary pressure began to ease and economic growth moderated and lowered rates three times between September and December in 2024, resulting in the current Federal Funds target rate range of 4.25% to 4.50%. The FOMC, at both its January and March 2025 meetings, maintained the Federal Funds target rate range at 4.25% to 4.50%, but with uncertainty elevated over the potential impacts of changes in U.S. and global trade and other economic policies and tensions, it is difficult to predict how the Federal Reserve will balance possible inflationary pressure with the potential of slower economic growth.

Current wording

Inflation eased substantially in 2024, but it was estimated at 2.7% as of June 2025, which is still over the FOMC’s 2.0% target. In late 2024, the Federal Reserve shifted its interest rate policy as inflationary pressure began to ease and economic growth moderated, lowering rates three times between September and December in 2024, which resulted in the current Federal Funds target rate range of 4.25% to 4.50%. While the FOMC, has maintained the Federal Funds target rate range at 4.25% to 4.50% so far in 2025, with uncertainty elevated over the potential impacts of changes in U.S. and global trade and other economic policies and tensions, it is difficult to predict how the Federal Reserve will balance possible inflationary pressure with the potential of slower economic growth.

Previous wording

We will continue to deploy various asset liability management strategies to seek to manage our risk related to interest rate fluctuations and monitor balance sheet trends, deposit flows, and liquidity needs to ensure that we are able to meet the needs of our customers and maintain financial flexibility. Refer to “Liquidity” within this Item 2 for additional information about our liquidity and “Quantitative and Qualitative Disclosures about Market Risk” in Part I, Item 3 of this Quarterly Report for additional information about our interest rate sensitivity.

Current wording

We will continue to deploy various asset liability management strategies to seek to manage our risk related to interest rate fluctuations and monitor balance sheet trends, deposit flows, and liquidity needs to enable us to meet the needs of our customers and maintain financial flexibility. Refer to “Liquidity” within this Item 2 for additional information about our liquidity and “Quantitative and Qualitative Disclosures about Market Risk” in Part I, Item 3 of this Quarterly Report for additional information about our interest rate sensitivity.

Previous wording

In 2024, the higher-for-longer interest rate environment and heightened competition for deposits led to a shift within deposit composition toward higher cost products, which has continued into 2025, although the pace of movement slowed in late 2024 and so far in 2025. The interest rate environment has also affected the affordability of credit to consumers and businesses, moderating loan demand. At March 31, 2025, our total deposits increased from December 31, 2024 by $105.3 million primarily due to an increase in demand deposits, and our LHFI and short-term borrowings decreased by $42.9 million and $59.3 million, respectively, from December 31, 2024, due primarily to declines in the construction and land development and commercial and industrial loan portfolios and paydowns on FHLB borrowings. At March 31, 2025, noninterest bearing deposits comprised 21.8% of total deposits, compared to 21.0% at December 31, 2024. As of March 31, 2025, we estimate that approximately 70.4% of our deposits were insured or collateralized, and that we maintained available liquidity sources to cover approximately 140.1% of uninsured and uncollateralized deposits. At March 31, 2025, our brokered deposits decreased by $109.4 million to $1.1 billion from December 31, 2024.

Current wording

In 2024, the higher-for-longer interest rate environment and heightened competition for deposits led to a shift within deposit composition toward higher cost products, which has continued through the first half of 2025, although the pace of movement slowed in late 2024 and so far in 2025. The interest rate environment has also affected the affordability of credit to consumers and businesses, moderating loan demand. At June 30, 2025, our LHFI, total deposits, and total borrowings increased from December 31, 2024 by $8.9 billion, $10.6 billion, and $358.2 million, respectively, primarily due to the Sandy Spring acquisition. At June 30, 2025, noninterest bearing deposits comprised 22.7% of total deposits, compared to 21.0% at December 31, 2024. As of June 30, 2025, we estimate that approximately 68.0% of our deposits were insured or collateralized, and that we maintained available liquidity sources to cover approximately 157.2% of uninsured and uncollateralized deposits. At June 30, 2025, our brokered deposits decreased by $54.3 million to $1.2 billion from December 31, 2024.

Previous wording

First Quarter Net Income & Performance Metrics

Current wording

Second Quarter Net Income & Performance Metrics

Previous wording

The following tables show interest income on earning assets and related average yields, as well as interest expense on interest-bearing liabilities and related average rates paid for the three months ended March 31, (dollars in thousands):

Current wording

The following tables show interest income on earning assets and related average yields, as well as interest expense on interest-bearing liabilities and related average rates paid for the three and six months ended June 30, (dollars in thousands):

Previous wording

In the first quarter of 2025, our net interest margin increased 27 bps to 3.38% from 3.11% in the first quarter of 2024, and our net interest margin (FTE)(+) increased 26 bps to 3.45% in the first quarter of 2025 from 3.19% for the same period of 2024. The increases were primarily driven by lower cost of funds as both the costs of deposits and borrowings declined, and higher earning assets yields resulting from higher yields on investments, which wholly offset a slight decline in loan yields that benefited from higher accretion due to the American National acquisition.

Current wording

In the second quarter of 2025, our net interest margin increased 39 bps to 3.78% from 3.39% in the second quarter of 2024, and our net interest margin (FTE)(+) increased 37 bps to 3.83% in the second quarter of 2025 from 3.46% for the same period of 2024. The increases were primarily driven by the net accretion of purchase accounting adjustments on loans, deposits, and long-term borrowings related to the Sandy Spring acquisition.

Previous wording

Our net interest margin and net interest margin (FTE)(+) includes the impact of acquisition accounting fair value adjustments. Net accretion income related to acquisition accounting was $12.6 million for the first quarter of 2025 compared to $602,000 for the first quarter of 2024, an increase of $12.0 million due to the impacts from the American National acquisition. The impact of accretion and amortization for the periods presented are reflected in the following table (dollars in thousands):

Current wording

Our net interest margin and net interest margin (FTE)(+) includes the impact of acquisition accounting fair value adjustments. Net accretion income related to acquisition accounting was $45.4 million for the second quarter of 2025 compared to $14.3 million for the second quarter of 2024, an increase of $31.1 million primarily due to the impacts from the Sandy Spring acquisition. The impact of accretion and amortization for the periods presented are reflected in the following table (dollars in thousands):

Previous wording

For the first quarter of 2025, our net interest income was $184.2 million, an increase of $36.3 million from the first quarter of 2024 and our net interest income (FTE)(+) was $187.9 million, an increase of $36.3 million from the first quarter of 2024. The increases were the result of a $3.0 billion increase in average interest earning assets and higher net accretion income, partially offset by a $2.3 billion increase in average interest-bearing liabilities, primarily related to the acquisition of American National and organic growth.

Current wording

For the first six months of 2025 net interest income was $505.5 million, an increase of $173.2 million from the same period of 2024, and our net interest income (FTE)(+) was $513.7, an increase of $173.8 million from the same period of 2024. The increases in both net interest income and net interest income (FTE)(+) were primarily the result of a $7.6 billion increase in average interest earning assets, partially offset by a $5.7 billion increase in average interest-bearing liabilities, in each case primarily related to the Sandy Spring acquisition, as well as organic loan growth and lower cost of funds.

Previous wording

The following table shows interest income on earning assets and related average yields as well as interest expense on interest-bearing liabilities and related average rates paid for the three months ended March 31, (dollars in thousands):

Current wording

The following table shows interest income on earning assets and related average yields as well as interest expense on interest-bearing liabilities and related average rates paid for the three and six months ended June 30, (dollars in thousands):

Previous wording

(5)Interest expense on time deposits includes accretion of the fair market value related to acquisitions, as disclosed above.

Current wording

(5)Interest expense on time deposits includes accretion (amortization) of the fair market value related to acquisitions, as disclosed above.

Previous wording

The Volume Rate Analysis table below presents changes in our net interest income (FTE)(+) and interest expense and distinguishes between the changes related to increases or decreases in our average outstanding balances of interest-earning assets and interest-bearing liabilities (volume), and the changes related to increases or decreases in average interest rates on such assets and liabilities (rate). Changes attributable to both volume and rate have been allocated proportionally. Results, on a taxable equivalent basis, are as follows for the three months ended March 31, (dollars in thousands):

Current wording

The Volume Rate Analysis table below presents changes in our net interest income (FTE)(+) and interest expense and distinguishes between the changes related to increases or decreases in our average outstanding balances of interest-earning assets and interest-bearing liabilities (volume), and the changes related to increases or decreases in average interest rates on such assets and liabilities (rate). Changes attributable to both volume and rate have been allocated proportionally. Results, on a taxable equivalent basis, are as follows for the three and six months ended June 30, (dollars in thousands):

Previous wording

(2)The rate-related changes in interest expense on deposits includes the impact of higher accretion of the acquisition-related fair market value adjustments, as disclosed above.

Current wording

(2)The rate-related changes in interest expense on deposits includes the impact of higher accretion (amortization) of the acquisition-related fair market value adjustments, as disclosed above.

Previous wording

Our adjusted operating noninterest expense(+), which excludes amortization of intangible assets ($5.4 million in the first quarter 2025 and $1.9 million in the first quarter 2024), merger-related costs ($4.9 million in the first quarter 2025 and $1.9 million in the first quarter 2024), and a FDIC special assessment ($840,000 in the first quarter 2024) increased $23.1 million or 22.9% to $123.8 million for the quarter ended March 31, 2025, compared to $100.7 million for the quarter ended March 31, 2024. The increase in adjusted operating noninterest expense(+) was primarily due to the impact of the American National acquisition, which drove the majority of the $13.5 million increase in salaries and benefits, the $2.1 million increase in technology and data processing, the $2.0 million increase in occupancy expenses, and the $605,000 increase in furniture and equipment expenses. In addition to the American National acquisition impact, professional services increased $1.6 million related to projects that occurred during the first quarter of 2025, other expenses increased $1.6 million primarily due to an increase in non-credit related losses on customer transactions, and marketing and advertising expense increased $866,000.

Current wording

Our adjusted operating noninterest expense(+), which excludes merger-related costs ($83.8 million in 2025 and $31.7 million in 2024), amortization of intangible assets ($23.8 million in 2025 and $7.9 million in 2024), and a FDIC special assessment ($840,000 in 2024) increased $91.3 million or 42.5% to $306.2 million for the six months ended June 30, 2025, compared to $214.9 million for the six months ended June 30, 2024. The increase in adjusted operating noninterest expense(+) was primarily due to the impact of the Sandy Spring acquisition, which drove the majority of the $54.9 million increase in salaries and benefits, the $9.0 million increase in technology and data processing, the $6.9 million increase in occupancy expenses, the $5.0 million increase in professional services, the $4.9 million increase in FDIC assessment premiums and other insurance, and the $3.1 million increase in furniture and equipment expenses. In addition to the acquisition impacts, other expenses increased $6.0 million, primarily due to an increase in non-credit related losses on customer transactions and marketing and advertising expense increased $1.6 million.

Previous wording

The following table presents operating results for the three months ended March 31, for the Wholesale Banking segment (dollars in thousands):

Current wording

The following table presents operating results for the three and six months ended June 30, for the Wholesale Banking segment (dollars in thousands):

Previous wording

Wholesale Banking income before income taxes increased by $966,000 for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase for the three months ended March 31, 2025 was primarily due to an increase in net interest income driven by the impact of the American National acquisition, partially offset by an increase in the provision for credit losses primarily reflecting the impacts of the increased uncertainty in the economic outlook. Wholesale Banking noninterest income also increased for the three months ended March 31, 2025 compared to the same period in 2024, primarily due to the impact of the American National acquisition, which drove the majority of the increases in fiduciary and asset management fees and service charges on deposits. In addition to the American National impact, Wholesale Banking noninterest income increased due to an increase in loan-related interest rate swap fees due to higher transaction volumes. The increase in income before income taxes was partially offset by an increase in noninterest expense primarily due to the impact of the American National acquisition, which drove the majority of the increases in salaries and benefits.

Current wording

Wholesale Banking income before income taxes decreased by $19.6 million and $18.7 million, respectively, for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024. The decreases were primarily due to increases in the provision for credit losses primarily driven by the Day 1 initial provision expense on non-PCD loans and unfunded commitments acquired from Sandy Spring. In addition, Wholesale Banking noninterest expense increased for the three and six months ended June 30, 2025 compared to the same periods in 2024, primarily due to the impact of the Sandy Spring acquisition, which drove the majority of the increases in salaries and benefits. The decreases in income before income taxes were partially offset by increases in net interest income, driven by the impact of the Sandy Spring acquisition. Wholesale Banking noninterest income also increased for the three and six months ended June 30, 2025 compared to the same periods in 2024, primarily due to the impact of Sandy Spring acquisition, which drove the majority of the increases in fiduciary and asset management fees.

Previous wording

Wholesale Banking deposits increased $370.4 million to $7.6 billion at March 31, 2025, compared to December 31, 2024, primarily due to increases in money market accounts and demand deposits.

Current wording

Wholesale Banking deposits increased $4.5 billion to $11.7 billion at June 30, 2025, compared to December 31, 2024, primarily due to increases in interest-bearing customer deposits and demand deposits, primarily driven by the Sandy Spring acquisition.

Previous wording

Our Consumer Banking segment provides loan and deposit services to consumers and small businesses throughout Virginia, Maryland, and North Carolina. Consumer Banking includes the home loan division and investment management, and advisory services businesses.

Current wording

Our Consumer Banking segment provides loan and deposit services to consumers and small businesses throughout Virginia, Maryland, and North Carolina. Consumer Banking also includes the home loan division and investment management and advisory services businesses.

Previous wording

The following table presents operating results for the three months ended March 31, for the Consumer Banking segment (dollars in thousands):

Current wording

The following table presents operating results for the three and six months ended June 30, for the Consumer Banking segment (dollars in thousands):

Previous wording

Consumer Banking income before income taxes decreased by $2.8 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease for the three months ended March 31, 2025 was primarily due to an increase in Consumer Banking noninterest expense primarily due to the impact of the American National acquisition, which drove the majority of the increases in salaries and benefits and occupancy expense. This decrease was partially offset by an increase in net interest income driven by the impact of the American National acquisition. In addition, Consumer Banking noninterest income increased for the three months ended March 31, 2025 compared to the same period in 2024, primarily due to the impact of the American National acquisition, which drove the majority of the increases in service charges on deposit accounts, interchange fee income, and fiduciary and asset management fees.

Current wording

Consumer Banking income before income taxes decreased by $16.3 million and $19.2 million, respectively, for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024. The decreases were primarily due to increases in noninterest expense, primarily due to the impact of the Sandy Spring acquisition, which drove the majority of the increases in salaries and benefits. In addition, the Consumer Banking provision for credit losses increased for the three and six months ended June 30, 2025 compared to the same periods in 2024, primarily driven by the Day 1 initial provision expense on non-PCD loans and unfunded commitments acquired from Sandy Spring. The decreases in income before income taxes were partially offset by increases in net interest income driven by the impact of the Sandy Spring acquisition. Consumer Banking noninterest income also increased for the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to the impact of Sandy Spring acquisition, which drove the majority of the increases in service charges on deposit accounts and interchange fees. In addition to the acquisition impact, the increases in noninterest income were driven by increases in mortgage banking income, which includes the impact of Sandy Spring’s mortgage business, as well as increases in mortgage loan origination volumes.

Previous wording

Our effective tax rate for both quarters ended March 31, 2025 and December 31, 2024 was 19.0%.

Current wording

Our effective tax rate for the three months ended June 30, 2025 and 2024 was (13.2%) and 31.2%, respectively, and the effective tax rate for the six months ended June 30, 2025 and 2024 was 11.9% and 22.3%, respectively. The decreases in the effective tax rate for both the three and six months ended June 30, 2025 reflects the impact of a $8.0 million income tax benefit recorded this quarter related to re-evaluating our state deferred tax asset, as a result of the Sandy Spring acquisition, as well as the impact of the $4.8 million valuation allowance established during the second quarter of 2024.

Previous wording

As of each reporting date, we consider existing evidence, both positive and negative, that could impact our view regarding our future realization of deferred tax assets. At March 31, 2025 and December 31, 2024, we had a valuation allowance of $4.4 million.

Current wording

As of each reporting date, we consider existing evidence, both positive and negative, that could impact our view regarding our future realization of deferred tax assets. Our valuation allowance was $11.1 million and $4.4 million as of June 30, 2025 and December 31, 2024, respectively. The increase in the valuation allowance was due to the Sandy Spring acquisition and Sandy Spring’s historical valuation allowance relating to net operating losses in certain state filing jurisdictions. The prior year valuation allowance balance primarily includes the initial recording of the deferred tax asset valuation.

Previous wording

At March 31, 2025, our consolidated balance sheet includes the impact of the American National acquisition, which closed April 1, 2024, but excludes the impact of the Sandy Spring acquisition.

Current wording

At June 30, 2025, our consolidated balance sheet includes the impact of the Sandy Spring acquisition, which closed April 1, 2025, as discussed in Note 1 “Summary of Significant Accounting Policies” in Part I, Item 1 of this Quarterly Report. Under ASC 805,Business Combinations, we may adjust provisional fair values of assets acquired and liabilities assumed in a business combination for a measurement period of up to one year beyond the acquisition date as additional information about the facts and circumstances that existed as of the acquisition date becomes available. If applicable, any future measurement period adjustments will be recorded through goodwill upon identification. Below is a summary of the related impact of the Sandy Spring acquisition on our balance sheet as of the acquisition date:

Previous wording

LHFI were $18.4 billion at March 31, 2025, a decrease of $42.9 million or 0.9% (annualized) from December 31, 2024. At March 31, 2025, quarterly average LHFI increased $2.7 billion or 17.1% from the same period in the prior year. Refer to "Loan Portfolio" within this Item 2 and Note 4 "Loans and Allowance for Loan and Lease Losses" in Part I, Item 1 of this Quarterly Report for additional information on our loan activity.

Current wording

LHFI were $27.3 billion at June 30, 2025, an increase of $8.9 billion or 96.7% (annualized) from December 31, 2024, primarily due to the Sandy Spring acquisition, as well as organic loan growth. At June 30, 2025, quarterly average LHFI increased $8.9 billion or 49.2% from the same period in the prior year. Refer to "Loan Portfolio" within this Item 2 and Note 4 "Loans and Allowance for Loan and Lease Losses" in Part I, Item 1 of this Quarterly Report for additional information on our loan activity.

Previous wording

At March 31, 2025, we had total investments of $3.4 billion, an increase of $56.2 million or 6.8% (annualized) from December 31, 2024. AFS securities totaled $2.5 billion at March 31, 2025, compared to $2.4 billion at December 31, 2024. At March 31, 2025, total net unrealized losses on the AFS securities portfolio were $382.0 million, compared to $402.6 million at December 31, 2024. HTM securities totaled $821.1 million at March 31, 2024, compared to $803.9 million at December 31, 2024, with net unrealized losses of $48.6 million at March 31, 2025, compared to $44.5 million at December 31, 2024.

Current wording

At June 30, 2025, we had total investments of $4.8 billion, an increase of $1.4 billion or 86.0% (annualized) from December 31, 2024. The increase in total investments was primarily due to the Sandy Spring acquisition. AFS securities totaled $3.8 billion at June 30, 2025, compared to $2.4 billion at December 31, 2024. As part of the Sandy Spring acquisition, we restructured $485.2 million of securities acquired from Sandy Spring and reinvested the proceeds into higher yielding securities. At June 30, 2025, total net unrealized losses on the AFS securities portfolio were $372.8 million, compared to $402.6 million at December 31, 2024. HTM securities totaled $827.1 million at June 30, 2025, compared to $803.9 million at December 31, 2024, with net unrealized losses of $49.2 million at June 30, 2025, compared to $44.5 million at December 31, 2024.

Previous wording

Total deposits at March 31, 2025 were $20.5 billion, an increase of $105.3 million or approximately 2.1% (annualized) from December 31, 2024. At March 31, 2025, quarterly average deposits increased $3.3 billion or 19.4% from the same period in the prior year. Total deposits increased from December 31, 2024 due to an increase in demand deposits of $194.1 million, partially offset by a decrease in brokered deposits. Refer to “Deposits” within this Item 2 for additional information on this topic.

Current wording

Total deposits at June 30, 2025 were $31.0 billion, an increase of $10.6 billion or approximately 104.5% (annualized) from December 31, 2024. At June 30, 2025, quarterly average deposits increased $11.2 billion or 56.0% from the same period in the prior year. Total deposits increased from December 31, 2024 primarily due to increases in interest-bearing customer deposits and demand deposits, primarily related to the Sandy Spring acquisition. Refer to “Deposits” within this Item 2 for additional information on this topic.

Previous wording

Total borrowings at March 31, 2025 were $475.7 million, a decrease of $58.9 million or 44.7% (annualized) from December 31, 2024, primarily due to repayment of short-term FHLB advances using funds from customer deposit growth. Refer to Note 7 “Borrowings” in Part I, Item 1 of this Quarterly Report for additional information on our borrowing activity.

Current wording

Total borrowings at June 30, 2025 were $892.8 million, an increase of $358.2 million or 135.1% (annualized) from December 31, 2024, primarily due to the long-term subordinated debt of $358.0 million assumed in connection with the Sandy Spring acquisition. Refer to Note 7 “Borrowings” in Part I, Item 1 of this Quarterly Report for additional information on our borrowing activity.

Previous wording

At March 31, 2025, our stockholders’ equity was $3.2 billion, an increase of $42.3 million from December 31, 2024. Our consolidated regulatory capital ratios continue to exceed the minimum capital requirements and are considered “well-

Current wording

At June 30, 2025, our stockholders’ equity was $4.8 billion, an increase of $1.7 billion from December 31, 2024, primarily driven by the issuance of common stock in connection with the Sandy Spring acquisition. Our consolidated regulatory capital ratios continue to exceed the minimum capital requirements and are considered “well-capitalized” for regulatory purposes. Refer to “Capital Resources” within this Item 2, as well as Note 10 "Stockholders’ Equity" in Part I, Item 1 of this Quarterly Report for additional information on our capital resources.

Previous wording

During the first quarter of 2025, we declared and paid a quarterly dividend on our outstanding shares of Series A Preferred Stock of $171.88 per share (equivalent to $0.43 per outstanding depositary share), consistent with the fourth quarter of 2024 and the first quarter of 2024. During the first quarter of 2025, we also declared and paid cash dividends of $0.34 per common share, consistent with the fourth quarter of 2024 and an increase of $0.02 per share or 6.0% from the first quarter of 2024.

Current wording

During the second quarter of 2025, we declared and paid a quarterly dividend on our outstanding shares of Series A Preferred Stock of $171.88 per share (equivalent to $0.43 per outstanding depositary share), consistent with the fourth quarter of 2024 and the second quarter of 2024. During the second quarter of 2025, we also declared and paid cash dividends of $0.34 per common share, consistent with the fourth quarter of 2024 and an increase of $0.02 per share or 6.3% from the second quarter of 2024.

Previous wording

At March 31, 2025, we had total investments of $3.4 billion or 13.8% of total assets as compared to $3.3 billion or 13.6% of total assets at December 31,2024. This increase was primarily due to purchases of mortgage-backed securities and an increase in market value of the existing AFS securities portfolio. We seek to diversify our investment portfolio to minimize risk, and we focus on purchasing MBS for cash flow and reinvestment opportunities and securities issued by states and political subdivisions due to the tax benefits and the higher tax-equivalent yield offered from these securities. The majority of our MBS are agency-backed securities, which have a government guarantee. For information regarding the hedge transaction related to AFS securities, see Note 9 “Derivatives” in Part I, Item 1 of this Quarterly Report.

Current wording

At June 30, 2025, we had total investments of $4.8 billion or 12.8% of total assets as compared to $3.3 billion or 13.6% of total assets at December 31,2024. This increase was primarily due to the Sandy Spring acquisition. We seek to diversify our investment portfolio to minimize risk, and we focus on purchasing MBS for cash flow and reinvestment opportunities and securities issued by states and political subdivisions due to the tax benefits and the higher tax-equivalent yield offered from these securities. The majority of our MBS are agency-backed securities, which have a government guarantee. For information regarding the hedge transaction related to AFS securities, see Note 9 “Derivatives” in Part I, Item 1 of this Quarterly Report.

Previous wording

Liquidity represents an institution’s ability to meet present and future financial obligations through either the sale or maturity of existing assets or the acquisition of additional funds through liability management. Our largest source of liquidity on a consolidated basis is our customer deposit base generated by our wholesale and consumer businesses. These deposits provide relatively stable and low-cost funding. Total deposits at March 31, 2025 were $20.5 billion, an increase of $105.3 million or approximately 2.1% (annualized) from December 31, 2024. Total deposits increased from December 31, 2024 primarily due to an increase in demand deposits of $194.1 million, partially offset by a decrease in brokered deposits. Refer to “Deposits” within this Item 2 for additional information on this topic.

Current wording

Liquidity represents an institution’s ability to meet present and future financial obligations through either the sale or maturity of existing assets or the acquisition of additional funds through liability management. Our largest source of liquidity on a consolidated basis is our customer deposit base generated by our wholesale and consumer businesses. These deposits provide relatively stable and low-cost funding. Total deposits at June 30, 2025 were $31.0 billion, an increase of $10.6 billion or approximately 51.8% from December 31, 2024. Total deposits increased from December 31, 2024 primarily due to an increase in interest-bearing customer deposits of $7.9 billion and demand deposits of $2.8 billion, partially offset by a decrease in brokered deposits. Refer to “Deposits” within this Item 2 for additional information on this topic.

Previous wording

We consider our liquid assets to include cash, interest-bearing deposits with banks, money market investments, federal funds sold, LHFS, and securities and loans maturing or re-pricing within one year. As of March 31, 2025, our liquid assets totaled $9.2 billion or 37.2% of total assets, and liquid earning assets totaled $9.0 billion or 40.6% of total earning assets. We also provide asset liquidity by managing loan and securities maturities and cash flows. As of March 31, 2025, loan payments of approximately $8.4 billion or 45.4% of total LHFI are expected within one year based on contractual terms, adjusted for expected prepayments, and approximately $354.1 million or 10.4% of total investments as of March 31, 2025 are scheduled to be paid down within one year based on contractual terms, adjusted for expected prepayments.

Current wording

We consider our liquid assets to include cash, interest-bearing deposits with banks, money market investments, federal funds sold, LHFS, and securities and loans maturing or re-pricing within one year. As of June 30, 2025, our liquid assets totaled $13.5 billion or 36.3% of total assets, and liquid earning assets totaled $13.2 billion or 39.5% of total earning assets. We also provide asset liquidity by managing loan and securities maturities and cash flows. As of June 30, 2025, loan payments of approximately $11.3 billion or 41.2% of total LHFI are expected within one year based on contractual terms, adjusted for expected prepayments, and approximately $662.8 million or 13.9% of total investments as of June 30, 2025 are scheduled to be paid down within one year based on contractual terms, adjusted for expected prepayments.

Previous wording

We are also a lessor in sales-type and direct financing leases for equipment, as noted in Note 6 “Leases” in Part I, Item I of this Quarterly Report. Our future commitments related to the aforementioned leases totaled $636.1 million and $621.3 million, respectively, at March 31, 2025 and December 31, 2024.

Current wording

We are also a lessor in sales-type and direct financing leases for equipment, as noted in Note 6 “Leases” in Part I, Item I of this Quarterly Report. Our future commitments related to the aforementioned leases totaled $620.1 million and $621.3 million, respectively, at June 30, 2025 and December 31, 2024.