10-Q: Atlantic Union Bankshares Reports Strong Q3 2026 Earnings

Atlantic Union Bankshares Corporation announced solid financial results for the third quarter of 2026, with net income available to common shareholders rising significantly year-over-year, driven by loan growth and improved net interest margin.

Summary

• Atlantic Union Bankshares Corporation reported net income available to common shareholders of $133.7 million for the third quarter of 2026, a substantial increase from $89.2 million in the same period of 2025.
• Diluted earnings per common share were $0.94 for Q3 2026, up from $0.63 in Q3 2025.
• Net interest income increased to $328.4 million in Q3 2026 from $319.2 million in Q3 2025, driven by loan growth and decreased interest expense.
• Total assets grew to $38.4 billion as of September 30, 2026, up from $37.6 billion at December 31, 2025.
• Total deposits increased to $31.0 billion as of September 30, 2026, from $30.5 billion at December 31, 2025.
• The company repurchased approximately 1.8 million shares for $72.5 million under its $250 million share repurchase program authorized in May 2026.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a generally positive report, with strong net income growth and improved net interest margin, though some asset quality metrics and market risks warrant attention.

Positives

• Net income available to common shareholders increased by 49.9% to $133.7 million for Q3 2026 compared to $89.2 million for Q3 2025.
• Diluted earnings per common share rose to $0.94 in Q3 2026 from $0.63 in Q3 2025.
• Net interest income increased by $9.2 million to $328.4 million in Q3 2026 compared to Q3 2025.
• Net interest margin improved by 5 basis points to 3.82% in Q3 2026 compared to Q3 2025.
• Total assets increased by $765.9 million to $38.4 billion as of September 30, 2026.
• Total deposits increased by $493.9 million to $31.0 billion as of September 30, 2026.
• The company has a strong regulatory capital position, with its common equity Tier 1 capital ratio at 10.39% as of September 30, 2026.

Negatives

• Total securities decreased by $484.3 million to $4.8 billion as of September 30, 2026, primarily due to principal repayments and market interest rate impacts on AFS securities.
• Net unrealized losses on AFS securities increased by $179.3 million to $475.0 million as of September 30, 2026.
• Net unrealized losses on HTM securities increased by $55.7 million to $83.1 million as of September 30, 2026.
• Noninterest expense increased by $1.2 million or 0.7% on an adjusted basis for Q3 2026 compared to Q3 2025, primarily due to higher salaries and benefits.
• Mortgage banking income decreased by $1.3 million in Q3 2026 compared to Q3 2025 due to lower origination volumes and gain on sale margins.

Risks

• Market interest rate fluctuations can adversely affect net interest income and the fair value of financial instruments.
• Economic conditions, including inflation and recessionary pressures, could impact loan demand, customer repayment ability, and credit quality.
• Increased competition from fintech companies and other financial institutions could affect market share and profitability.
• Cybersecurity threats and technological risks pose a potential threat to operations and data security.
• Concentrations in the CRE loan portfolio, particularly non-owner occupied and office space loans, carry inherent risks related to real estate market conditions and economic downturns.
• The company's significant amount of AFS securities with unrealized losses could lead to realized losses if sold before recovery of amortized cost basis.

Future Outlook

The company's outlook is influenced by economic conditions, interest rate movements, and competitive dynamics. Management is focused on managing interest rate risk, maintaining strong capital ratios, and pursuing strategic growth initiatives, including expansion into North Carolina. The company expects to continue its share repurchase program and manage its balance sheet to support loan growth and liquidity needs.

Management Comments

• "Our net interest income was $328.4 million, an increase of $9.2 million from the third quarter of 2025..."
• "Our noninterest income increased $3.0 million or 5.9% to $54.8 million for the quarter ended September 30, 2026, compared to the quarter ended September 30, 2025."
• "Our noninterest expense decreased $34.1 million or 14.3% to $204.3 million for the quarter ended September 30, 2026, compared to the quarter ended September 30, 2025, primarily driven by a $34.8 million decrease in pre-tax merger-related costs."
• "We continue to monitor our exposure to office space, within our non-owner occupied CRE portfolio."
• "Management believes our overall liquidity to be sufficient to satisfy our depositors requirements and to meet our customers credit needs."

Industry Context

StockSavvy.ai notes that Atlantic Union Bankshares' performance aligns with broader trends in the regional banking sector, showing resilience in net interest income despite fluctuating interest rate environments. The increase in fiduciary and asset management fees reflects a growing trend in wealth management services within banks. However, the rise in unrealized losses on securities portfolios highlights the sensitivity of banks to interest rate changes, a common challenge across the industry.

Comparison to Industry Standards

• The company's Common Equity Tier 1 capital ratio of 10.39% as of September 30, 2026, exceeds the Basel III requirement of 7.0% (plus capital conservation buffer), indicating strong capital adequacy compared to regulatory standards.
• The net interest margin of 3.82% for Q3 2026 is competitive within the regional banking sector, though specific industry benchmarks vary by bank size and business mix.
• The provision for credit losses for the nine months ended September 30, 2026, was $20.2 million, a significant decrease from $139.6 million in the prior year, suggesting improved credit quality or a normalization after significant provisions related to the Sandy Spring acquisition.
• The company's nonaccrual loans as a percentage of total loans (0.36% as of September 30, 2026) are low, indicating good asset quality relative to industry averages, though specific peer comparisons would provide more context.

Legal Proceedings

• In the ordinary course of operations, the company and its subsidiaries are subject to various legal proceedings. Management believes the ultimate resolution of these matters will not have a material adverse effect on the company's financial condition, results of operations, or cash flows.

Stakeholder Impact

• Shareholders: Increased net income and EPS, along with an active share repurchase program and declared dividends, are positive for shareholders. However, unrealized losses on securities portfolios could impact future returns if realized.
• Creditors: Strong capital ratios and liquidity position suggest continued ability to meet debt obligations.
• Employees: Increased salaries and benefits expense may indicate growth or investment in personnel, potentially benefiting employees.
• Customers: Continued loan growth and deposit stability suggest ongoing service provision. Potential impacts from interest rate changes on loan and deposit products should be considered.

Next Steps

• Continue to monitor and manage interest rate risk through asset liability management strategies.
• Execute the share repurchase program, with approximately $177.5 million remaining available as of September 30, 2026.
• Pursue strategic expansion initiatives, including growth in North Carolina.
• Continue to manage loan portfolio quality and provision for credit losses.
• Monitor economic conditions and their potential impact on the company's financial performance and asset quality.

Key Dates

Recommendation

The company demonstrates solid operational performance with strong earnings growth and improved margins. However, the significant unrealized losses in the securities portfolio, coupled with ongoing interest rate sensitivity and economic uncertainties, warrant a cautious approach. While positives like capital strength and strategic growth are present, the potential for realized losses on securities and broader economic risks suggest a 'hold' recommendation pending further clarity on market conditions and the impact of interest rate changes.

Keywords

Atlantic Union Bankshares, Form 10-Q, Quarterly Report, Financial Statements, Net Income, Earnings Per Share, Loan Portfolio, Securities