Atlantic Union Bankshares Corp Q4 FY2024 earnings call

• Acquisition Updates: Closed acquisition of American National Bankshares on April 1, 2024. Proposed acquisition of Sandy Spring Bancorp received Fed approval, awaiting state approvals; expected to close on February 1, 2025. Believes the acquisition will benefit customers, markets, teammates, and shareholders.
• Macroeconomic Conditions: Markets in Virginia, Maryland, North Carolina remain healthy with low unemployment; economic health tied to employment.
• Quarterly Results: Loan growth ~3% annualized in Q4; deposit growth ~2% annualized after reducing brokered deposits; net interest margin impacted by NIM compression; loan production increased 29% QoQ; higher provision for loan losses due to specific reserve on C&I loan; credit remains solid with low NPAs.
• Sandy Spring Acquisition: Benefits include expanded branch network, product offerings, community benefits, and career opportunities; cultural compatibility and strategic logic believed in.

No detailed breakdown of product segments by revenue contribution provided in the transcript.

• Loan to deposit growth expected to be mid-single-digit in 2025.
• Fully taxable equivalent net interest income projected between $775M - $800M.
• Net interest margin projected between 3.45% - 3.6% in 2025, driven by Fed rate cuts and loan portfolio repricing.
• Adjusted operating noninterest income expected between $125M - $135M.
• Adjusted operating noninterest expenses estimated between $475M - $490M.
• Sandy Spring acquisition expected to have accretion impact on net interest margin, closer to 20-22 basis points.

• Macroeconomic uncertainties, including potential fewer Fed rate cuts affecting net interest margin.
• Risks associated with commercial real estate payoffs and potential charge-offs from specific credits.
• Regulatory approvals for Sandy Spring acquisition remaining pending.
• Competition from larger banks and private credit enterprises affecting deposit pricing and lending.

Q: Impact of DOGE developments on business model?

A: John Asbury discussed federal worker return to office, hiring freeze, and economic benefits to the area, as well as implications for government contractors and commercial real estate.

Q: Organic NIM expansion cadence and Sandy Spring guide?

A: Robert Gorman discussed Fed rate cuts, back book fixed rate loan repricing, maturing CDs, and Sandy Spring accretion impact.

Q: Sandy Spring acquisition closing timing and CRE loan sales?

A: John Asbury and Robert Gorman discussed expected closing on February 1, 2025, and ongoing CRE loan sales strategy.

Q: Loan pricing and competition with private credit?

A: David Ring discussed loan pricing being negotiated based on relationship and specific pricing models, with competitive environment for quality credit.

Q: Accretion on Sandy Spring acquisition and CRE market dynamics?

A: Robert Gorman discussed accretion impact and John Asbury and David Ring discussed CRE market potential for multifamily conversion and government efficiency impacts.