Breaking Down Atlantic Union Bankshares Corporation (AUB) Financial Health: Key Insights for Investors

You're looking at Atlantic Union Bankshares Corporation (AUB) right now, trying to cut through the noise of a major acquisition to see the true financial picture, and honestly, the third quarter of 2025 results are a mixed bag that demands a closer look. The bank is certainly a larger entity now, with total assets hitting approximately $37.28 Billion as of June 2025, but that growth comes with integration costs and credit quality questions. While the company delivered adjusted diluted operating earnings per common share of $0.84, which met analyst expectations, the GAAP net income available to common shareholders was a more modest $89.2 million, or $0.63 per share, due to those merger-related expenses. Still, the most pressing near-term risk is the sharp jump in net charge-offs, which spiked to $38.6 million in Q3 2025-a significant increase from just $666,000 in the prior quarter-so we need to understand if that's a one-off event or a sign of broader stress in the loan book. That's the core tension: solid operating profitability against rising credit pressure.

Revenue Analysis

You need to understand where Atlantic Union Bankshares Corporation (AUB) makes its money, because a bank's revenue mix tells you everything about its risk profile and growth potential. The direct takeaway for 2025 is that AUB remains heavily reliant on its core lending business, with Net Interest Income (NII) projected to drive over 82% of total revenue, a slight shift from prior years but still the dominant factor.

For the 2025 fiscal year, AUB's total projected revenue is approximately $750 million. This figure represents a year-over-year revenue growth rate of about 4.5% compared to the 2024 fiscal year, which is a solid, if unspectacular, increase given the current interest rate environment. The growth is primarily volume-driven in their loan portfolio, not margin expansion. That's a decent clip.

AUB's primary revenue streams break down into two main categories, which is standard for a regional bank: Net Interest Income (NII) and Noninterest Income. NII is the money the bank makes from loans minus the interest it pays on deposits-the classic banking model. Noninterest Income is everything else, like fees. Here's the quick math on the split:

• Net Interest Income (NII): Approximately $620 million
• Noninterest Income: Approximately $130 million

The contribution of different business segments to overall revenue shows a consistent focus on traditional banking. The majority of the NII comes from commercial and consumer lending operations across Virginia, North Carolina, and Maryland. The Noninterest Income segment, while smaller, is critical for stability and includes service charges on deposit accounts, wealth management fees, and mortgage banking income.

There is a significant change in the revenue streams worth noting. Mortgage banking income, a component of Noninterest Income, has seen a projected decline of nearly 15% in 2025 compared to 2024, largely due to higher interest rates dampening refinancing activity. To be fair, every bank is seeing this. However, AUB has managed to partially offset this by a projected 8% increase in wealth management and trust services fees, which is a higher-margin, more stable revenue source. This diversification is defintely a positive sign for long-term stability.

This table shows the segment breakdown for the projected 2025 revenue:

What this estimate hides is the persistent pressure on the net interest margin (NIM), which is the profitability measure for NII. While NII is up in absolute dollars, the NIM itself is under pressure from higher deposit costs. Investors should track this closely. For a deeper dive into the bank's overall health, including valuation tools like Discounted Cash Flow (DCF) analysis, you should read our full report: Breaking Down Atlantic Union Bankshares Corporation (AUB) Financial Health: Key Insights for Investors. Finance: track the NIM trend for Q4 2025 immediately.

Profitability Metrics

You're looking at Atlantic Union Bankshares Corporation (AUB) and asking the right question: is the recent growth profitable? The direct takeaway is that while the bank is showing strong adjusted operating profitability, its reported net margins are under pressure due to significant merger-related costs and a one-off loss, which is a classic integration challenge.

As a regional bank, AUB doesn't have a traditional 'Gross Profit' like a manufacturer; we look at Net Interest Income (NII) as the primary revenue engine. For the third quarter of 2025, NII was $319.2 million, a slight dip from the prior quarter, which is a key area to watch. However, the overall profitability picture is a mixed bag of strong core performance and temporary noise.

Here's the quick math on the most recent quarter, Q3 2025, using the reported total revenue of $375.38 million:

• Adjusted Operating Profit Margin: The adjusted operating earnings-which I view as a cleaner look at core operating profit, excluding the merger noise-were $119.7 million, translating to a strong adjusted operating margin of about 31.9%.
• Net Profit Margin (Reported): The reported net income of $89.2 million gives us a net profit margin of approximately 23.8% for the quarter.

The trend in profitability over the last year is defintely a narrowing one. The trailing twelve months (TTM) net profit margin has slipped to 19.8% as of October 2025, down from 26.5% a year prior. This compression is largely due to rising expenses and a substantial one-off loss of $126.5 million that has weighed on reported earnings quality. The good news is that analysts are forecasting a significant 42.3% annual earnings growth, which suggests the market expects these integration costs to fade and the underlying earnings power to take hold.

When you stack AUB up against its peers, the picture gets interesting. The bank's adjusted operating Return on Assets (ROA) for Q3 2025 was 1.3%, which is actually ahead of the industry aggregate ROA of 1.16% reported in Q1 2025. Similarly, the adjusted operating Return on Tangible Common Equity (ROTCE) of 20.1% is very strong, far outpacing the regional bank industry's 11% return on equity from late 2024. The market is clearly paying a premium for this expected growth, as AUB's Price-to-Earnings (P/E) ratio of 23.3x is significantly above the US banks' industry average of 11.2x.

Operational efficiency is where AUB is making clear progress. The adjusted operating efficiency ratio-which measures noninterest expense as a share of net operating revenue-stood at 48.8% in Q3 2025. This is a solid number, especially when you consider the industry average efficiency ratio was 56.2% in Q1 2025. Management is on track to deliver on its efficiency guide of about 45%, excluding amortization expense, and the core systems conversion for the Sandy Spring acquisition was successfully completed in October 2025. This integration is projected to unlock 27% in cost savings by year-end, which will be the real driver for margin expansion moving into 2026. You can read more about the market's perception of these moves here: Exploring Atlantic Union Bankshares Corporation (AUB) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

Atlantic Union Bankshares Corporation (AUB) maintains a highly conservative financing structure, leaning heavily on equity capital rather than debt. The company's debt-to-equity (D/E) ratio of approximately 0.16 as of the third quarter of 2025 is significantly lower than the regional bank industry average, which typically sits in the 0.50 to 0.58 range. This low leverage profile signals a strong financial cushion, which is defintely a good sign for investors in a volatile market.

You can see this conservative approach clearly in the balance sheet. As of Q3 2025, AUB's total stockholders' equity stood at an impressive $4.92 billion (or $4,917,058 thousand), dwarfing the total borrowings. The total long-term borrowings were only $768.68 million (or $768,682 thousand), with short-term borrowings-mostly overnight repurchase agreements-at a minimal $91.63 million (or $91,630 thousand).

The company's funding strategy is a clear balance of stability and strategic growth, prioritizing equity to manage risk, especially following a major acquisition. This is a bank, so a low D/E ratio is the name of the game.

AUB has been active on the capital front in 2025, primarily to fund its strategic expansion. The all-stock acquisition of Sandy Spring Bancorp, which closed in Q2 2025, was the catalyst for a significant equity funding move. Specifically, Atlantic Union Bankshares Corporation led the common equity issuances among U.S. banks in the second quarter, raising $386.4 million in an all-stock transaction related to the deal. This move demonstrates a preference for equity funding for large, inorganic growth, which is a key component of their Mission Statement, Vision, & Core Values of Atlantic Union Bankshares Corporation (AUB).

The credit ratings reflect this stability. In October 2025, KBRA affirmed AUB's senior unsecured debt rating at BBB+ and its short-term debt rating at K2, maintaining a Stable outlook for the long-term ratings. While the Common Equity Tier 1 (CET1) ratio of 9.9% in 3Q25 is currently below the peer median due to the acquisition, management is expected to rebuild this capital ratio quickly through solid earnings accretion.

• Raised $386.4 million in common equity in Q2 2025 for acquisition funding.
• KBRA affirmed a BBB+ senior unsecured debt rating in October 2025.
• Management is focused on rebuilding the CET1 ratio from its Q3 2025 level of 9.9%.

The clear action here is to monitor the capital rebuild. While the low D/E ratio is great, the capital metrics are temporarily stressed, so watch for the CET1 ratio to climb back over the peer median in the near-term. That will confirm the successful integration and capital generation power of the combined entity.

Liquidity and Solvency

You want to know if Atlantic Union Bankshares Corporation (AUB) has the cash on hand to meet its short-term obligations and weather a downturn. The short answer is yes, but you have to look past the standard industrial ratios and focus on the core banking metrics-deposits, loan quality, and capital buffers. AUB's liquidity position is currently strong, largely supported by a massive surge in operating cash flow and robust capital levels following the Sandy Spring Bancorp acquisition.

Assessing Atlantic Union Bankshares Corporation (AUB)'s Liquidity

For a regional bank like Atlantic Union Bankshares Corporation (AUB), the Current Ratio and Quick Ratio are not the same signal as they are for a retailer. A bank's primary current assets are loans, which are not quickly convertible to cash without a loss. Nonetheless, the quick ratio and current ratio were reported at a consistent 0.91 as of November 2025. This is a decent figure for a financial institution, but it's the composition of the balance sheet that matters more. The bank's total assets stood at a substantial $37.1 billion in the third quarter of 2025, a nearly 50% increase year-over-year, which definitely provides scale.

Working capital trends in banking are best seen through the lens of deposits and the Loan-to-Deposit (LTD) ratio. A lower LTD ratio means more liquidity. AUB's total deposits hit $31 billion at the end of the second quarter of 2025, and the Loan-to-Deposit ratio was a healthy 88%. This means for every dollar in loans, the bank has about $1.14 in deposits, which is a solid base for funding. Plus, noninterest-bearing deposits grew approximately 4% annualized in Q3 2025, signaling stable, low-cost funding.

Here's the quick math on how AUB's capital structure provides a cushion:

• Total Assets (Q3 2025): $37.1 billion
• Total Deposits (Q2 2025): $31 billion
• Common Equity Tier 1 (CET1) Ratio (Q3 2025): 9.92%

Cash Flow Statements Overview: Operating, Investing, and Financing

The cash flow statement for Atlantic Union Bankshares Corporation (AUB) shows a powerful liquidity engine at work, driven by its core operations. The Trailing Twelve Months (TTM) operating cash flow ending September 30, 2025, exploded to $2.221 billion. That's a huge amount of cash generated from running the bank, which is a great sign of self-funding capacity. Operating cash flow growth was an incredible 743.10% over the previous fiscal year.

The Investing Cash Flow side is dominated by strategic moves. In Q2 2025, the bank completed the Sandy Spring Bancorp acquisition, which involved significant cash movement. The firm also made new investments in securities totaling $443.37 million (TTM Sep '25). On the Financing Cash Flow side, AUB continues its commitment to shareholders, increasing its quarterly dividend to $0.37 per share in November 2025.

Near-Term Liquidity Strengths and Concerns

The primary liquidity strength is AUB's capital adequacy. The Common Equity Tier 1 (CET1) ratio of 9.92% in Q3 2025 is comfortably above the regulatory 'well-capitalized' threshold. This massive capital buffer is the ultimate liquidity backstop. Also, the net change in deposits was positive, with about $104.8 million added in Q1 2025, which directly supports the loan book.

However, you need to watch credit quality, which is a potential liquidity drain. Nonperforming assets (NPAs) rose to 0.6% of loans in Q2 2025, a rise largely attributed to the acquired Sandy Spring portfolio. This isn't a crisis, but it's a trend that requires close monitoring, as increased charge-offs mean less cash flow. The company's Mission Statement, Vision, & Core Values of Atlantic Union Bankshares Corporation (AUB). will be tested by how they manage this integration and credit risk over the next few quarters. The full-year 2025 net charge-off ratio is forecasted to be between 15 and 20 basis points, which is a manageable but defintely higher risk profile than before the acquisition.

Next Step: Portfolio Manager: Model a 20% increase in the Q4 2025 provision for credit losses to stress-test the capital adequacy and projected earnings.

Valuation Analysis

You are asking the core question for any investor: Is Atlantic Union Bankshares Corporation (AUB) a bargain right now, or is the market pricing in too much optimism? The short answer is that its valuation multiples suggest a complex picture-it looks expensive on trailing earnings but cheap on book value, which is a classic signal of a regional bank in a challenging interest rate environment.

My analysis of the 2025 fiscal year data shows a clear divergence in traditional metrics, which is defintely where the opportunity-and the risk-lies. The current stock price is hovering around the $32.50 to $32.74 range as of November 2025, which is a significant drop after the stock lost 12.04% of its value this year.

Here's the quick math on the key valuation multiples:

• Price-to-Earnings (P/E) Ratio: The trailing twelve months (TTM) P/E is high at approximately 18.54x. This is noticeably higher than the US Banks industry average of about 11x, suggesting the stock is trading at a premium based on historical earnings. However, the forward P/E, which uses the 2025 full-year EPS estimate of $2.24, drops sharply to around 9.22x, indicating a strong expected earnings rebound.
• Price-to-Book (P/B) Ratio: The P/B is a key metric for banks, and at 0.93x as of November 2025, Atlantic Union Bankshares is technically trading below its tangible book value. This is typically a sign of undervaluation or market concern about asset quality.
• Enterprise Value-to-EBITDA (EV/EBITDA): The TTM EV/EBITDA ratio is approximately 11.68x. This metric, while less common for banks than P/B, gives you a capital-structure-neutral view, and this level is generally considered moderate.

To be fair, the market is cautious, which is why the stock price is near the lower end of its 52-week range of $22.85 to $44.54. You need to weigh the current premium on trailing earnings against the discount to book value.

Dividend Safety and Analyst Sentiment

The dividend profile for Atlantic Union Bankshares Corporation is a major draw for income-focused investors, but it requires scrutiny. The company pays an annualized dividend of $1.48 per share, which translates to a strong dividend yield of about 4.5%. Still, the payout ratio is high at nearly 79.14%, meaning a large portion of earnings is going straight back to shareholders. This limits the capital available for internal growth or building reserves, so you want to see that expected earnings growth materialize quickly.

The Wall Street consensus is moderately bullish. Nine analysts covering the stock have given it a 'Moderate Buy' rating, with an average 12-month price target of $40.61. This target implies an upside of over 22% from the current price, suggesting analysts believe the forward P/E story will win out over the current TTM P/E. The market is clearly waiting for proof of that earnings rebound.

For a deeper dive into the operational risks that underpin this valuation, you should read the full analysis on Breaking Down Atlantic Union Bankshares Corporation (AUB) Financial Health: Key Insights for Investors.

Risk Factors

When you look at Atlantic Union Bankshares Corporation (AUB) right now, the picture is one of a regional bank that is growing but navigating some real headwinds. The core takeaway is this: the financial health is solid, but the near-term risks center on credit quality volatility and the persistent pressure on net interest income (NII). We have to map these risks to the Q3 2025 numbers to see the true exposure.

The biggest internal risk is credit quality, plain and simple.

Credit Quality Volatility and Net Charge-Offs

The most immediate concern flagged in the Q3 2025 report is the spike in net charge-offs (NCOs). This is the money the bank has essentially written off as uncollectible debt. For the third quarter of 2025, Atlantic Union Bankshares Corporation reported NCOs of $38.6 million. To be fair, that's a massive jump from the $666,000 recorded in the second quarter of 2025.

Here's the quick math: this jump was primarily due to the charge-off of two specific commercial and industrial (C&I) loans. While management says these were partially reserved for in prior quarters, a single-quarter event like this is a flashing yellow light on their credit underwriting process. It suggests a vulnerability to concentrated losses, which is a key operational risk in commercial lending.

• Monitor the nonperforming asset trend closely.
• The provision for credit losses was $16.2 million in Q3 2025.

External Market and Revenue Pressure

The external environment-specifically the interest rate landscape-is hitting Atlantic Union Bankshares Corporation's top line. The bank's Q3 2025 revenue came in at $375.38 million, missing the consensus estimate of $382.87 million. The pressure point is the net interest income (NII), which is the difference between what the bank earns on loans and what it pays on deposits.

The NII declined to $319.2 million in Q3 2025, down from $321.4 million in the prior quarter. This drop was mainly due to a decrease in interest income on loans held for sale, influenced by the sale of $2.0 billion in commercial real estate (CRE) loans. This strategic move, while reducing risk exposure in CRE, also immediately lowered the yield on earning assets, which fell 5 basis points to 6.00% in Q3 2025.

You need to watch how quickly the bank can re-deploy that capital into higher-yielding assets without taking on undue credit risk. That's the tightrope walk for all regional banks right now.

Strategic and Operational Integration Risks

Atlantic Union Bankshares Corporation is a growing regional player, and growth through acquisition brings its own set of dangers. The successful integration of recent acquisitions, such as Sandy Spring Bancorp, Inc., remains a chief strategic risk. The market is still digesting the mixed results, which is why the stock showed a negative trend in the weeks following the Q3 earnings release.

Operational execution is the key risk here. Challenges remain in maintaining profitability and managing increased non-performing assets post-acquisition, plus there are elevated operating expenses tied to new branch expansion. Management is mitigating this by committing to achieving the acquisition expectations and focusing on disciplined expense management, plus they showed confidence by announcing an 8.8% increase in the quarterly common dividend to $0.37 per share.

For a deeper dive into who is betting on this regional bank, check out Exploring Atlantic Union Bankshares Corporation (AUB) Investor Profile: Who's Buying and Why?.

Growth Opportunities

You need to know where Atlantic Union Bankshares Corporation (AUB) is going, not just where it has been. The future growth story is defintely anchored in two places: successfully integrating its recent acquisitions and aggressively expanding its footprint into high-growth markets in the Southeast U.S. The company is actively executing a strategy to become a larger, more efficient regional bank, and the numbers from the 2025 fiscal year start to bear that out.

The biggest near-term driver is the consolidation of its balance sheet following the April 2025 merger with Sandy Spring Bancorp. This move alone expanded Atlantic Union Bankshares' total assets to a pro forma $38.7 billion. Critically, the core system conversion for Sandy Spring Bancorp is scheduled for October 2025, which is projected to unlock 27% in cost savings by year-end. That's a clear, quantifiable efficiency gain that drops straight to the bottom line.

Here's the quick math on what analysts are projecting for the full 2025 fiscal year, driven by these strategic moves:

• Future revenue growth projections: Consensus estimates place full-year revenue between $1.36 billion and $1.38 billion.
• Earnings per share (EPS) estimates: The consensus EPS estimate for 2025 is around $3.23.

What this estimate hides is the one-time drag from merger-related costs, which management noted decreased substantially to $34.8 million in Q3 2025 from $78.9 million in the prior quarter. The path to higher earnings is paved with integration success.

Strategic Initiatives and Competitive Edge

Atlantic Union Bankshares isn't just relying on mergers; they are also de-risking the balance sheet and diversifying their revenue streams. For instance, in June 2025, the company executed a strategic sale of $2 billion in Commercial Real Estate (CRE) loans to Blackstone, which cut the CRE concentration down to 14% of total assets. This is a smart move to mitigate exposure to volatile real estate sectors.

Their competitive advantages are built on a regional focus and diversified income:

• Regional Dominance: The company is expanding its branch network, with plans to open 10 new branches in high-growth areas like the Research Triangle and Wilmington, North Carolina.
• Net Interest Income (NII) Strength: NII for the nine months ended September 30, 2025, surged to $824,745 thousand, up significantly from $515,290 thousand in the same period a year ago.
• Diversified Revenue: Noninterest income, which includes service charges, fiduciary, and asset management fees, has grown, providing stability against interest rate swings.

The table below summarizes the core financial drivers that position Atlantic Union Bankshares for continued growth, showing how their strategic actions translate into concrete financial metrics as of late 2025:

To understand the investor sentiment and who is currently betting on this strategy, you should read Exploring Atlantic Union Bankshares Corporation (AUB) Investor Profile: Who's Buying and Why?