Atlantic Union Bankshares reports strong Q4 2025 results, focusing on financial performance, strategic initiatives, and future growth outlook.

Atlantic Union Bankshares delivered robust financial results in the fourth quarter and for the full year 2025, showcasing resilience amid macroeconomic challenges. The company reported a significant increase in net income and earnings per share, while also reaffirming strong guidance for the upcoming year. This article will delve into the key financial performance metrics, strategic initiatives, and future outlook as highlighted during the earnings call.

Financial Performance

In the fourth quarter of 2025, Atlantic Union Bankshares reported a net income available to common shareholders of $109 million, translating to $0.77 per common share. For the full year, net income reached $261.8 million, or $2.03 per share. Notably, adjusted operating earnings for the fourth quarter were $138.4 million, or $0.97 per share, with an impressive adjusted operating return on tangible common equity of 22.1%.

Key financial metrics from the fourth quarter include:

• Tax-equivalent net interest income: $334.8 million, a $11.2 million increase from the previous quarter.
• Adjusted operating return on assets: 1.5%.
• Adjusted operating efficiency ratio: 47.8%.

Throughout 2025, the company maintained a healthy credit loss reserve, which stood at $321.3 million at the end of the fourth quarter, reflecting an increase driven by loan growth. The total allowance for credit losses as a percentage of total loans held for investment slightly decreased to 116 basis points.

Despite the challenges posed by rising interest rates and competitive pressures, Atlantic Union Bankshares managed to enhance its loan and deposit portfolios. Loans held for investment grew by $435 million, or 6.3% annualized, from the previous quarter, while total deposits reached $30.5 billion.

Strategic Initiatives

The company has been implementing strategic initiatives to solidify its market position and enhance operational efficiency. A significant focus has been on the integration of the Sandy Spring acquisition, which involved $157.3 million in pre-tax merger-related costs. Management emphasized that they are beginning to see tangible benefits from these strategic investments, which include:

• Expansion into North Carolina: The company is actively hiring and establishing a presence in this growing market, with plans for ten new branches.
• Operational enhancements: A commitment to reducing costs and improving efficiencies has led to an adjusted operating non-interest expense of $186.9 million for the fourth quarter, a modest increase attributed primarily to merger-related costs and increased marketing expenditures.
• Strengthening of the loan pipeline: Management noted a modest increase in the loan pipeline and a positive outlook for loan growth, driven by a diversified approach across various sectors, including commercial and specialty banking.

The company also reported a $0.37 per share common stock dividend, an 8.8% increase from the previous quarter, reflecting its commitment to returning value to shareholders.

Future Outlook

Looking ahead, Atlantic Union Bankshares is maintaining its full-year 2026 financial outlook as announced during the December Investor Day. The company projects:

• Loan balances to end the year between $29 billion and $30 billion.
• Deposit balances to reach between $31.5 billion and $32.5 billion.
• An allowance for credit losses to remain within the 115 to 120 basis points range.
• A net charge-off ratio expected to be between 10 and 15 basis points.
• Tax equivalent net interest income projected between $1.35 billion and $1.375 billion.

Management expressed confidence in achieving these targets, indicating that anticipated cuts in the Federal Reserve's interest rates will benefit their cost of funds and potentially enhance net interest margin. The expected range for net interest margin in 2026 is between 3.90% and 4%.

With robust growth and strong operational performance, Atlantic Union is positioning itself to generate annual growth in tangible book value per share of 12% to 15%, aiming to place itself within the top quartile of its peer group.

Conclusion

In summary, Atlantic Union Bankshares has demonstrated strong financial performance in 2025, navigating through significant challenges while executing strategic initiatives that position it for future growth. The company's ongoing focus on operational efficiency, market expansion, and shareholder returns reflects its commitment to delivering long-term value. As the company prepares for 2026, investors can look forward to a stable outlook underscored by the potential for sustained profitability and growth.